Filed
with the Securities and Exchange Commission on April 11, 2019
Registration
No. 333-226151
UNITED
STATES
SECURITIES AND EXCHANGE COMMISSION
Washington,
D.C. 20549
POST-EFFECTIVE
AMENDMENT NO. 1
TO
FORM
F-1
REGISTRATION
STATEMENT
UNDER
THE
SECURITIES ACT OF 1933
Auris
Medical Holding Ltd.
(Exact
Name of Registrant as Specified in Its Charter)
Not
Applicable
(Translation
of Registrant’s name into English)
Bermuda
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2834
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NOT
APPLICABLE
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(State
or Other Jurisdiction of
Incorporation or Organization)
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(Primary
Standard Industrial
Classification Code Number)
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(I.R.S.
Employer
Identification Number)
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Clarendon
House
2
Church Street
Hamilton
HM 11
Bermuda
Tel:
(441) 295-5950
(Address, Including Zip Code, and Telephone Number,
Including Area Code, of Registrant’s Principal Executive Offices)
Agent
for Service of Process Info
Cogency Global, Inc.
10 East 40th Street, 10th Floor
New York, NY 10016
(212) 947-7200
(Name, Address, Including Zip Code, and Telephone Number,
Including Area Code, of Agent For Service)
Copy
to:
Michael J. Lerner, Esq.
Steven M. Skolnick, Esq.
Lowenstein Sandler LLP
1251 Avenue of the Americas
New York, NY 10020
Tel: (212) 262-6700
Approximate
date of commencement of proposed sale to the public:
As soon as practicable after the effective date of this Registration
Statement.
If
any of the securities being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415 under
the Securities Act of 1933, check the following box. ☒
If
this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the
following box and list the Securities Act registration statement number of the earlier effective registration statement for the
same offering. ☐
If
this form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list
the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
If
this form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list
the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
Indicate
by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933.
Emerging
growth company ☒
If
an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the
registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards
provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☐
The
Registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date
until the Registrant shall file a further amendment which specifically states that this registration statement shall
thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the
registration statement shall become effective on such date as the Commission, acting pursuant to such Section 8(a), may
determine.
EXPLANATORY
NOTE
Auris
Medical Holding AG, a stock corporation organized under the laws of Switzerland (“Auris Medical (Switzerland)”) filed
(i) a registration statement with the Securities and Exchange Commission (the “SEC”) on Form F-1 (Registration number
333-225676) which was declared effective by the SEC on July 12, 2018 and (ii) a registration statement with the SEC on Form F−1/MEF
(Registration number 333-226151) which was filed on July 12, 2018 and became effective upon filing in accordance with Rule 462(b)
under the Securities Act of 1933, as amended (the “Securities Act”). Pursuant to Rule 429 under the Securities Act,
the prospectuses contained in both previous registration statements (collectively, the “Form F-1”) have been combined
in the prospectus contained in this Post-Effective Amendment No. 1 to Form F-1 (“Post-Effective Amendment”).
The
Form F-1 registered the offer and sale of 20,641,024 units, each unit consisting of one common share of Auris Medical (Switzerland),
nominal value CHF 0.02 per share, one Series A warrant to purchase 0.35 of a common share and one Series B warrant to purchase
0.25 of a common share.
Effective
as of March 18, 2019, Auris Medical (Switzerland) continued its corporate existence from Switzerland to Bermuda (the “Redomestication”),
and changed its name to “Auris Medical Holding Ltd.” Auris Medical Holding Ltd., a Bermuda company (“Auris Medical
(Bermuda)”) is the successor issuer to Auris Medical (Switzerland) under Rule 12g-3(a) of the Securities Exchange Act of
1934, as amended (the “Exchange Act”). Auris Medical (Switzerland) and Auris Medical (Bermuda), as issuer and successor
issuer, respectively, under Rule 12g-3(a) of the Exchange Act, are collectively referred to herein as the “Registrant.”
This
Post-Effective Amendment is being filed by the Registrant (i) to update the Form F-1 pursuant to Rule 414(d) under the Securities
Act as a result of the Redomestication, (ii) to incorporate by reference into the Form F-1 the Registrant’s Annual Report
on Form 20-F for the year ended December 31, 2018 filed with the SEC on March 14, 2019 and (iii) to include certain other information
in the Form F-1. This Post-Effective Amendment contains an updated prospectus relating to the offer and sale of the Registrant’s
common shares issuable upon exercise of warrants.
Auris
Medical (Bermuda) expressly adopts the Form F-1, as modified by this Post-Effective Amendment, as its own registration statement
for all purposes of the Securities Act and the Exchange Act. For the purposes of this Post-Effective Amendment and the Form F-1,
references to the “Company,” “Auris,” “we,” “our,” “us” and similar
terms mean, as of any time prior to the Redomestication, Auris Medical (Switzerland) and, as of any time after the Redomestication,
Auris Medical (Bermuda). The information contained in this Post-Effective Amendment sets forth additional information to reflect
the Redomestication. All documents filed by the Company under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act before the
effective date of the Redomestication will not reflect the change in our jurisdiction.
All
filing fees payable in connection with the registration of the securities registered by the Form F-1 were paid by the Registrant
at the time of the initial filing of the Form F-1.
The
information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement
filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and is
not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.
PRELIMINARY
PROSPECTUS SUBJECT TO COMPLETION DATED APRIL 11, 2019
5,000,289
Common Shares
Issuable
upon Exercise of Warrants
Auris
Medical Holding Ltd.
We
are offering up to 5,000,289 of our common shares, par value CHF 0.02 per share (each a “common share”), of which
(i) 3,377,533 common shares are issuable upon the exercise of Series A warrants, each Series A warrant entitling the holder to
purchase 0.35 of a common share (each a “Series A warrant”) at an exercise price per whole common share of CHF 0.39
and (ii) 1,622,756 common shares are issuable upon the exercise of Series B warrants, each Series B warrant entitling the holder
to purchase 0.25 of a common share (each a “Series B warrant” and, together with the Series A warrants, the “warrants”)
at an exercise price per whole common share of CHF 0.39. The warrants were offered and sold by us pursuant to a prospectus dated
July 12, 2018 as part of a public offering of units, each unit consisting of one common share, one Series A warrant to purchase
0.35 of a common share and one Series B warrant to purchase 0.25 of a common share. Such prospectus also covered the offer and
sale by us of the common shares underlying the warrants. No securities are being offered pursuant to this prospectus other than
the common shares that will be issued upon the exercise of the warrants.
In
order to obtain the common shares offered hereby, holders of warrants must pay an exercise price of CHF 0.39 per whole common
share. The exercise price of the Series B warrants is subject to adjustment in the event that we issue certain securities at any
time while the Series B warrants are outstanding. See “Description of Series B Warrants - Exercise Price.” The Series
A warrants were exercisable upon issuance, and will expire on July 17, 2025. The Series B warrants were exercisable upon issuance,
and will expire on June 18, 2020. We will receive proceeds from the exercise of the warrants but not from the sale of the underlying
common shares.
Currently,
our common shares are listed on the Nasdaq Capital Market under the symbol “EARS.” The closing price of our common
shares on Nasdaq on April 9, 2019 was $0.33 per common share.
We
are an “emerging growth company” and a “foreign private issuer” as defined under the federal securities
laws and, as such, are subject to reduced public company reporting requirements. See “Prospectus Summary - Implications
of Being an “Emerging Growth Company and a Foreign Private Issuer.”
Investing
in our securities involves a high degree of risk. See “Risk Factors” beginning on page 3
.
Neither
the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or
passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.
Prospectus
dated , 2019
TABLE
OF CONTENTS
Unless
otherwise indicated or the context otherwise requires, all references in this prospectus to “Auris Medical Holding Ltd.”
or “Auris,” the “Company,” “we,” “our,” “ours,” “us” or
similar terms refer to (i) Auris Medical Holding AG (formerly Auris Medical AG), or Auris Medical (Switzerland), together with
its subsidiaries, prior to our corporate reorganization by way of the Merger (as defined below) on March 13, 2018 (i.e. to the
transferring entity), (ii) to Auris Medical Holding AG (formerly Auris Medical NewCo Holding AG), together with its subsidiaries
after the Merger (i.e. to the surviving entity) and prior to the Redomestication (as defined below) and (iii) to Auris Medical
Holding Ltd., a Bermuda company, or Auris Medical (Bermuda), the successor issuer to Auris Medical (Switzerland) under Rule 12g-3(a)
of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), after the effective time at which Auris Medical
(Switzerland) continued its corporate existence from Switzerland to Bermuda (the “Redomestication”), which occurred
March 18, 2019. The trademarks, trade names and service marks appearing in this prospectus are property of their respective owners.
On
March 13, 2018, Auris NewCo Holding AG merged (the “Merger”) with Auris Medical Holding AG (“Auris OldCo”),
a corporation (Aktiengesellschaft) organized in accordance with Swiss law and domiciled in Switzerland. The Merger took place
following Auris OldCo shareholder approval at an extraordinary general meeting of shareholders held on March 12, 2018. Auris NewCo
Holding AG changed its name to Auris Medical Holding AG following consummation of the Merger.
Unless
indicated or the context otherwise requires, (i) all references in this prospectus to our common shares as of any date prior to
March 13, 2018 refer to the common shares of Auris Medical (Switzerland) (having a nominal value of CHF 0.40 per share) prior
to the 10:1 “reverse share split” effected through the Merger, (ii) all references to our common shares as of, and
after, March 13, 2018 and prior to the Redomestication refer to the common shares of Auris Medical (Switzerland) (having a nominal
value of CHF 0.02 per share) after the 10:1 “reverse share split” effected through the Merger and (iii) all references
to our common shares as of, and after, the Redomestication on March 18, 2019 refer to the common shares of Auris Medical (Bermuda)
(having a par value of CHF 0.02 per share).
The
terms “dollar,” “USD” or “$” refer to U.S. dollars and the term “Swiss Franc”
and “CHF” refer to the legal currency of Switzerland.
We
have not authorized anyone to provide any information other than that contained in this prospectus or in any free writing prospectus
prepared by or on behalf of us or to which we may have referred you. We take no responsibility for, and can provide no assurance
as to the reliability of, any other information that others may give you. We have not authorized any other person to provide you
with different or additional information. We are not making an offer to sell the common shares in any jurisdiction where the offer
or sale is not permitted. This offering is being made in the United States and elsewhere solely on the basis of the information
contained in this prospectus. You should assume that the information appearing in this prospectus is accurate only as of the date
on the front cover of this prospectus, regardless of the time of delivery of this prospectus or any sale of the common shares.
Our business, financial condition, results of operations and prospects may have changed since the date on the front cover of this
prospectus.
Prospectus
Summary
This
summary highlights information contained elsewhere in this prospectus. This summary may not contain all the information that may
be important to you, and we urge you to read this entire prospectus carefully, including the “Risk Factors,” “Business”
and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections and our
consolidated financial statements, including the notes thereto, included elsewhere in this prospectus or incorporated by reference
herein, before deciding to invest in our common shares.
Our
Business
We
are a clinical-stage biopharmaceutical company focused on the development of novel products that address important unmet medical
needs in neurotology and central nervous system disorders. We are focusing on the development of intranasal betahistine for the
treatment of vertigo (AM-125) and for the prevention of antipsychotic-induced weight gain and somnolence (AM-201). These programs
have gone through two Phase 1 trials and will move into proof-of-concept studies in 2019. In addition, we have two Phase 3 programs
under development: (i) Keyzilen® (AM-101), which is being developed for the treatment of acute inner ear tinnitus and (ii)
Sonsuvi® (AM-111), which is being developed for the treatment of acute inner ear hearing loss. Sonsuvi® has been granted
orphan drug status by the FDA and the EMA and has been granted fast track designation by the FDA.
Recent
Developments
Redomestication
On
March 18, 2019, we changed our jurisdiction of incorporation from Switzerland to Bermuda. We discontinued as a Swiss company
and, pursuant to Article 163 of the Swiss Federal Act on Private International Law and pursuant to Section 132C of the Companies
Act 1981 of Bermuda (the “Companies Act”), continued our existence under the Companies Act as an exempted company
incorporated in Bermuda. We changed our name from “Auris Medical Holding AG” to “Auris Medical Holding Ltd.”
in connection with the Redomestication. Our common shares continued to trade on the Nasdaq Capital Market after the Redomestication
under the symbol “EARS.”
Corporate
Information
We
are an exempted company limited by shares incorporated in Bermuda. We began our current operations in 2003. On April 22, 2014,
we changed our name from Auris Medical AG to Auris Medical Holding AG and transferred our operational business to our newly incorporated
subsidiary Auris Medical AG, which is now our main operating subsidiary. On March 13, 2018, we effected a corporate reorganization
through the Merger into a newly formed holding company for the purpose of effecting the equivalent of a 10-1 “reverse share
split.” On March 18, 2019, we continued our corporate existence from Switzerland to Bermuda. Our registered office in Bermuda
is located at Clarendon House, 2 Church Street, Hamilton HM 11.
We
maintain a website at www.aurismedical.com where general information about us is available. Investors can obtain copies of our
filings with the Securities and Exchange Commission, or the SEC or the Commission, from this site free of charge, as well as from
the SEC website at www.sec.gov. We are not incorporating the contents of our website into this prospectus.
Implications
of Being an “Emerging Growth Company” and a Foreign Private Issuer
We
qualify as an “emerging growth company” as defined in the Jumpstart our Business Startups Act of 2012, or the JOBS
Act. An emerging growth company may take advantage of specified reduced reporting and other burdens that are otherwise applicable
generally to public companies. These provisions include an exemption from the auditor attestation requirement in the assessment
of our internal control over financial reporting pursuant to the Sarbanes-Oxley Act of 2002.
We
may take advantage of these provisions for up to five years from our initial public offering in 2014 or such earlier time that
we are no longer an emerging growth company. We would cease to be an emerging growth company if we have more than $1.07 billion
in annual revenue, have more than $700 million in market value of our common shares held by non-affiliates or issue more than
$1.0 billion of non-convertible debt over a three- year period. We may choose to take advantage of some but not all of these reduced
burdens.
We
currently report under the Securities Exchange Act of 1934, as amended, or the Exchange Act, as a non-U.S. company with foreign
private issuer, or FPI, status. Even after we no longer qualify as an emerging growth company, as long as we qualify as a foreign
private issuer under the Exchange Act we will continue to be exempt from certain provisions of the Exchange Act that are applicable
to U.S. domestic public companies, including:
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the
sections of the Exchange Act regulating the solicitation of proxies, consents or authorizations in respect of a security registered
under the Exchange Act;
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the
sections of the Exchange Act requiring insiders to file public reports of their stock ownership and trading activities and liability
for insiders who profit from trades made in a short period of time; and
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the
rules under the Exchange Act requiring the filing with the Securities and Exchange Commission, or SEC, of quarterly reports on
Form 10-Q containing unaudited financial and other specified information, or current reports on Form 8-K, upon the occurrence
of specified significant events.
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THE
OFFERING
This
summary highlights information presented in greater detail elsewhere in this prospectus. This summary is not complete and does
not contain all the information you should consider before investing in our common shares. You should carefully read this entire
prospectus before investing in our common shares including “Risk Factors,” our consolidated financial statements and
the documents incorporated herein.
Issuer
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Auris
Medical Holding Ltd.
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Securities
offered
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Up to 5,000,289 of our common shares, par value CHF 0.02 per share (each a “common share”), of which (i) 3,377,533 common shares are issuable upon the exercise of Series A warrants (each a “Series A warrant”) at an exercise price per common share of CHF 0.39 and (ii) 1,622,756 common shares are issuable upon the exercise of Series B warrants (each a “Series B warrant” and, together with the Series A warrants, the “warrants”) at an exercise price per common share of CHF 0.39.
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Description
of warrants
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The Series A warrants were exercisable upon issuance, and expire July 17, 2025. The Series B warrants were exercisable upon issuance, and expire on June 18, 2020.
The warrants have an exercise price per common share of CHF 0.39.
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Common
shares outstanding before this offering
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37,495,859
shares
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Common
shares to be outstanding after this offering, assuming exercise of all of the warrants
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42,496,148
shares
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Use
of proceeds
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We
will receive proceeds from the exercise of the warrants but not from the sale of the underlying common shares. We intend to
use any proceeds from the exercise of the warrants for working capital and general corporate purposes. See “Use
of Proceeds.”
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Limitations
on beneficial ownership
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Under
the warrants, a holder does not have the right to exercise any portion of a warrant if such holder (together with its affiliates)
would beneficially own in excess of 4.99% of the number of our common shares outstanding immediately after giving effect to
the exercise, as such percentage ownership is determined in accordance with the terms of the warrants. A holder may give not
less than 61 days’ prior notice to the Company to increase such beneficial ownership limit, up to 9.99%. The foregoing
beneficial ownership restrictions will not apply to the extent a holder (together with its affiliates) beneficially owned
in excess of the foregoing beneficial ownership thresholds prior to the date of issuance.
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Risk
factors
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An
investment in our common shares involves a high degree of risk. Please refer to “Risk Factors” in this prospectus
and under “Item 3. Key Information—D. Risk factors” in our Annual Report on Form 20-F for the year ended
December 31, 2018, incorporated by reference herein, and other information included or incorporated by reference in this prospectus
for a discussion of factors you should carefully consider before investing in our common shares.
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Dividend
policy
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We
have never paid or declared any cash dividends on our shares, and we do not anticipate paying any cash dividends on our common
shares in the foreseeable future. See “Dividend Policy.”
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Nasdaq
Capital Market symbol
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“EARS.”
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The
number of our common shares issued and outstanding after this offering is based on 37,495,859 common shares outstanding as of
April 5, 2019, which number excludes:
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992,777
of our common shares issuable upon the exercise of options outstanding as of April 5, 2019 at a weighted average exercise price
of $1.10 per common share; and
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794,500
common shares issuable upon exercise of warrants issued on February 21, 2017 in a public offering at an exercise price of
$12.00 per common share, 750,002 common shares issuable upon the exercise of warrants issued on January 30, 2018 at an exercise
price of $5.00 per common share, 3,377,533 common shares issuable upon the exercise of Series A warrants issued on July
17, 2018 at an exercise price of CHF 0.39 per common share and 1,622,756 common shares issuable upon the exercise of Series B
warrants issued on July 17, 2018 at an exercise price of CHF 0.39 per common share.
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RISK
FACTORS
Any
investment in our securities involves a high degree of risk. You should carefully consider the risks described below and in “Item
3. Key Information - D. Risk factors” in our Annual Report on Form 20-F for the year ended December 31, 2018,
incorporated by reference herein, and all of the information included or incorporated by reference in this prospectus before deciding
whether to purchase our securities. The risks and uncertainties described below are not the only risks and uncertainties we face.
Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also impair our business
operations. If any of the events or circumstances described in the following risk factors actually occur, our business, financial
condition and results of operations would suffer. In that event, the price of our common shares could decline, and you may lose
all or part of your investment. The risks discussed below also include forward-looking statements and our actual results may differ
substantially from those discussed in these forward-looking statements. See “Forward-Looking Statements.”
Risks
Related to this Offering
We
will have broad discretion in how we use the proceeds, and we may use the proceeds in ways in which you and other stockholders
may disagree.
We
intend to use the net proceeds we receive from this offering for working capital and general corporate purposes. Our management
will have broad discretion in the application of the proceeds from this offering and could spend the proceeds in ways that do
not necessarily improve our operating results or enhance the value of our common shares.
If
you purchase common shares in this offering by exercising warrants, you will suffer immediate dilution of your investment.
The
public offering price of our common shares is substantially higher than the as adjusted net tangible book value per common share.
Therefore, if you purchase common shares in this offering by exercising warrants, you will pay a price per common share that substantially
exceeds our as adjusted net tangible book value per common share after this offering. To the extent outstanding options are exercised,
you will incur further dilution. Based on the exercise price per common share of the warrants, you will experience immediate dilution
of $0.346 per common share, representing the difference between our as adjusted net tangible book value per common share
after giving effect to this offering and the exercise price. See “Dilution.”
Presentation
of Financial and Other Information
We
report under IFRS in Swiss Francs. None of the consolidated financial statements were prepared in accordance with generally accepted
accounting principles in the United States.
The
terms “dollar,” “USD” or “$” refer to U.S. dollars, the term, “Swiss Francs” or
“CHF” refers to the legal currency of Switzerland and the terms “€” or “euro” are to
the currency introduced at the start of the third stage of European economic and monetary union pursuant to the treaty establishing
the European Community, as amended. Unless otherwise indicated, all references to currency amounts in this prospectus are in Swiss
Francs.
We
have made rounding adjustments to some of the figures included in this prospectus. Accordingly, numerical figures shown as totals
in some tables may not be an arithmetic aggregation of the figures that preceded them.
Market
and Industry Data
This
prospectus and the documents incorporated by reference herein contain industry, market and competitive position data that are
based on industry publications and studies conducted by third parties as well as our own internal estimates and research. These
industry publications and third party studies generally state that the information that they contain has been obtained from sources
believed to be reliable, although they do not guarantee the accuracy or completeness of such information.
Cautionary
Statement Regarding Forward-Looking Statements
This
prospectus contains statements that constitute forward-looking statements, including statements concerning our industry, our operations,
our anticipated financial performance and financial condition, and our business plans and growth strategy and product development
efforts. These statements constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933,
as amended, and Section 21E of the Exchange Act. The words “may,” “might,” “will,” “should,”
“estimate,” “project,” “plan,” “anticipate,” “expect,” “intend,”
“outlook,” “believe” and other similar expressions are intended to identify forward-looking statements.
Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of their dates. These
forward-looking statements are based on estimates and assumptions by our management that, although we believe to be reasonable,
are inherently uncertain and subject to a number of risks and uncertainties.
Forward-looking
statements appear in a number of places in this prospectus and include, but are not limited to, statements regarding our intent,
belief or current expectations. Forward-looking statements are based on our management’s beliefs and assumptions and on
information currently available to our management. Such statements are subject to risks and uncertainties, and actual results
may differ materially from those expressed or implied in the forward-looking statements due to various factors, including, but
not limited to:
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our operation as a development-stage company
with limited operating history and a history of operating losses;
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our need for substantial additional funding
to continue the development of our product candidates before we can expect to become profitable from sales of our products
and the possibility that we may be unable to raise additional capital when needed;
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the outcome of our review of strategic options
and of any action that we may pursue as a result of such review;
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our dependence on the success of AM-125, AM-201,
Keyzilen® (AM-101) and Sonsuvi® (AM-111), which are still in clinical development, may eventually prove to be unsuccessful;
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the chance that we may become exposed to costly
and damaging liability claims resulting from the testing of our product candidates in the clinic or in the commercial stage;
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the chance our clinical trials may not be completed
on schedule, or at all, as a result of factors such as delayed enrollment or the identification of adverse effects;
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uncertainty surrounding whether any of our product
candidates will receive regulatory approval, which is necessary before they can be commercialized;
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if our product candidates obtain regulatory
approval, our product candidates being subject to expensive, ongoing obligations and continued regulatory overview;
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enacted and future legislation may increase
the difficulty and cost for us to obtain marketing approval and commercialization;
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the chance that we do not obtain orphan drug
exclusivity for Sonsuvi®, which would allow our competitors to sell products that treat the same conditions;
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dependence on governmental authorities and health
insurers establishing adequate reimbursement levels and pricing policies;
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our products may not gain market acceptance,
in which case we may not be able to generate product revenues;
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our reliance on our current strategic relationships
with INSERM or Xigen and the potential success or failure of strategic relationships, joint ventures or mergers and acquisitions
transactions;
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our reliance on third parties to conduct our
nonclinical and clinical trials and on third-party, single-source suppliers to supply or produce our product candidates;
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our ability to obtain, maintain and protect
our intellectual property rights and operate our business without infringing or otherwise violating the intellectual property
rights of others;
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our
ability to meet the continuing listing requirements of Nasdaq and remain listed on The Nasdaq Capital Market;
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the chance that certain intangible assets related
to our product candidates will be impaired; and
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other
risk factors set forth in our most recent Annual Report on Form 20-F.
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Our
actual results or performance could differ materially from those expressed in, or implied by, any forward-looking statements relating
to those matters. Accordingly, no assurances can be given that any of the events anticipated by the forward-looking statements
will transpire or occur, or if any of them do so, what impact they will have on our results of operations, cash flows or financial
condition. Except as required by law, we are under no obligation, and expressly disclaim any obligation, to update, alter or otherwise
revise any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new
information, future events or otherwise.
USE
OF PROCEEDS
To
the extent that the warrants are exercised for cash, we will receive the gross cash proceeds from such exercise of up to a total
potential of approximately $2.0 million, based on the current exercise price of the warrants. We cannot predict when
or if the warrants will be exercised, and it is possible that the warrants may expire and never be exercised. The exercise
price of the Series B warrants is subject to adjustment in the event that we issue certain securities at any time while the Series
B warrants are outstanding. See “Description of Series B Warrants - Exercise Price.”
We
intend to use the net proceeds from the issuance of the securities for working capital and general corporate purposes. Such purposes
may include research and development expenditures and capital expenditures.
Our
management will have broad discretion in the application of the net proceeds of this offering, and investors will be relying on
our judgment regarding the application of the net proceeds. In addition, we might decide to postpone or not pursue certain preclinical
activities or clinical trials if the net proceeds from this offering and our other sources of cash are less than expected.
Pending
their use, we plan to invest the net proceeds of this offering in short-and intermediate-term interest-bearing investments.
Dividend
Policy
We
have never paid a dividend, and we do not anticipate paying dividends in the foreseeable future. We intend to retain all available
funds and any future earnings to fund the development and expansion of our business. As a result, investors in our common shares
will benefit in the foreseeable future only if our common shares appreciate in value.
Any
future determination to declare and pay dividends to holders of our common shares will be made at the discretion of our board
of directors, which may take into account several factors, including general economic conditions, our financial condition and
results of operations, available cash and current and anticipated cash needs, capital requirements, contractual, legal, tax and
regulatory restrictions, the implications of the payment of dividends by us to our shareholders and any other factors that our
board of directors may deem relevant. In addition, pursuant to the Companies Act, a company may not declare or pay dividends if
there are reasonable grounds for believing that (1) the company is, or would after the payment be, unable to pay its liabilities
as they become due or (2) that the realizable value of its assets would thereby be less than its liabilities. Under our bye-laws
(the “Bye-laws”), each of our common shares is entitled to dividends if, as and when dividends are declared by our
board of directors, subject to any preferred dividend right of the holders of any preferred shares.
We
are a holding company with no material direct operations. As a result, we would be dependent on dividends, other payments or loans
from our subsidiaries in order to pay a dividend. Our subsidiaries are subject to legal requirements of their respective jurisdictions
of organization that may restrict their paying dividends or other payments, or making loans, to us.
Market
For Our Common Shares
Our
common shares are quoted on the Nasdaq Capital Market under the symbol “EARS.” The following table sets forth on a
per share basis the low and high closing sale prices of our common shares as reported by the Nasdaq Capital Market for the periods
presented.
|
|
High
|
|
|
Low
|
|
Year Ended:
|
|
|
|
|
|
|
December 31, 2015
|
|
$
|
6.38
|
|
|
$
|
3.02
|
|
December 31, 2016
|
|
$
|
7.79
|
|
|
$
|
0.89
|
|
December 31, 2017
|
|
$
|
1.27
|
|
|
$
|
0.39
|
|
Year Ended December 31, 2017:
|
|
|
|
|
|
|
|
|
First Quarter
|
|
$
|
1.27
|
|
|
$
|
0.67
|
|
Second Quarter
|
|
$
|
0.92
|
|
|
$
|
0.61
|
|
Third Quarter
|
|
$
|
0.93
|
|
|
$
|
0.64
|
|
Fourth Quarter
|
|
$
|
0.95
|
|
|
$
|
0.39
|
|
Year Ended December 31, 2018:
|
|
|
|
|
|
|
|
|
January 31, 2018
|
|
$
|
0.62
|
|
|
$
|
0.37
|
|
February 28, 2018
|
|
$
|
0.38
|
|
|
$
|
0.24
|
|
March 31, 2018 (through March 13, 2018*)
|
|
$
|
0.32
|
|
|
$
|
0.25
|
|
March 31, 2018 (from March 14, 2018 to March 31, 2018)
|
|
$
|
1.75
|
|
|
$
|
1.51
|
|
Second Quarter
|
|
$
|
1.98
|
|
|
$
|
0.77
|
|
Third Quarter
|
|
$
|
0.71
|
|
|
$
|
0.24
|
|
Fourth Quarter
|
|
$
|
1.48
|
|
|
$
|
0.31
|
|
Month Ended:
|
|
|
|
|
|
|
|
|
January 31, 2019
|
|
$
|
0.49
|
|
|
$
|
0.40
|
|
February 28, 2019
|
|
$
|
0.45
|
|
|
$
|
0.36
|
|
March 31, 2019
|
|
$
|
0.41
|
|
|
$
|
0.34
|
|
April 9, 2019
|
|
$
|
0.35
|
|
|
$
|
0.33
|
|
|
*
|
On
March 13, 2018, we effected the equivalent of a 10:1 “reverse share split” through the Merger.
|
As
of April 5, 2019, we had 37,495,859 common shares issued and outstanding held by 6 registered holders, one of which is Cede &
Co., a nominee for The Depository Trust Company (“DTC”). All of the common shares held by brokerage firms, banks and
other financial institutions as nominees for beneficial owners are deposited into participant accounts at DTC and therefore are
considered to be held of record by Cede & Co. as one shareholder.
Capitalization
The
table below sets forth our cash and cash equivalents and our total capitalization (defined as total debt and shareholders’
equity) as of December 31, 2018:
|
●
|
on
an actual basis; and
|
|
●
|
on
an as adjusted basis to give effect to our issuance of the 5,000,289 common shares offered hereby upon exercise of the warrants
at an exercise price of CHF 0.39 per common share.
|
Investors
should read this table in conjunction with our audited consolidated financial statements and related notes as of and for the year
ended December 31, 2018 and management’s discussion and analysis thereon, each as incorporated by reference into this prospectus.
U.S.
dollar amounts have been translated into Swiss Francs at a rate of CHF 0.9832 to USD 1.00, the official exchange rate quoted as
of December 31, 2018 by the U.S. Federal Reserve Bank. Such Swiss Franc amounts are not necessarily indicative of the amounts
of Swiss Francs that could actually have been purchased upon exchange of U.S. dollars on December 31, 2018 and have been provided
solely for the convenience of the reader. On April 5, 2019, the exchange rate as reported by the U.S. Federal Reserve Bank was
CHF 1.0003 to USD 1.00.
|
|
December 31, 2018
|
|
|
|
Actual
|
|
|
As Adjusted
|
|
|
|
(in thousands of CHF except
share and per share data)
|
|
Cash and cash equivalents(1)
|
|
|
5,393
|
|
|
|
7,321
|
|
Total debt(2)
|
|
|
1,435
|
|
|
|
1,435
|
|
Derivative Financial Instruments(3)
|
|
|
675
|
|
|
|
460
|
|
Shareholders’ equity:
|
|
|
|
|
|
|
|
|
Share capital(1)
|
|
|
|
|
|
|
|
|
Common shares, par value CHF 0.02 per share; 35,516,785 common shares issued and outstanding on an actual basis, 40,517,074 common shares issued and outstanding on an as adjusted basis
|
|
|
710
|
|
|
|
810
|
|
Share premium
|
|
|
149,287
|
|
|
|
151,330
|
|
Foreign currency translation reserve
|
|
|
(44
|
)
|
|
|
(44
|
)
|
Accumulated deficit
|
|
|
(146,303
|
)
|
|
|
(146,303
|
)
|
Total shareholders’ equity attributable to owners of the company
|
|
|
3,650
|
|
|
|
5,793
|
|
Total capitalization
|
|
|
5,760
|
|
|
|
7,688
|
|
|
(1)
|
Since
December 31, 2018, we have issued 1,979,074 of our common shares for an aggregate amount of $978,415. These subsequent issuances
and the proceeds therefrom are not reflected in the table as they occurred after December 31, 2018.
|
|
(2)
|
Total
debt is comprised of the $12.5 million drawn on July 19, 2016 under our secured term loan facility with Hercules as administrative
agent. The loan was initially recognized at transaction value less the fair value of the warrant issued to Hercules in connection
with the loan as of the transaction date and less directly attributable transactions costs. Following the initial recognition,
the loan is measured at amortized cost using the effective interest method. As of December 31, 2018, the loan has a carrying value
of CHF 1,435,400 classified as current liability. The amortization payments, including the end of term charge, due within the
12 months after December 31, 2018, amount to CHF 1,435,400 million. As of January 28, 2019, the amount outstanding under our secured
term loan facility with Hercules was $1.1 million. On January 31, 2019, we made the final payment to Hercules under the facility,
comprising the last amortization rate as well as an end of term charge.
|
|
(3)
|
The
fair value calculation of the warrants is determined according to the Black-Scholes option pricing model. Assumptions are made
regarding inputs such as volatility and the risk free rate in order to determine the fair value of the warrant. The fair value
of the warrants is calculated based on assumptions made at December 31, 2018.
|
The
above discussion and table are based on 35,516,785 common shares outstanding as of December 31, 2018, which number excludes:
|
●
|
992,777
of our common shares issuable upon the exercise of options outstanding as of December 31, 2018 at a weighted average exercise
price of $1.10 per common share;
|
|
●
|
15,673
common shares issuable upon the exercise of a warrant issued to Hercules, at an exercise price of $39.40 per common share,
794,500 common shares issuable upon exercise of warrants issued on February 21, 2017 in a public offering at an exercise price
of $12.00 per common share, 750,002 common shares issuable upon the exercise of warrants issued on January 30, 2018 at
an exercise price of $5.00 per common share, 3,377,533 common shares issuable upon the exercise of Series A warrants issued
on July 17, 2018 at an exercise price of CHF 0.39 per common share and 1,622,756 common shares issuable upon the exercise of Series
B warrants issued on July 17, 2018 at an exercise price of CHF 0.39 per common share.
|
DILUTION
If you exercise warrants in this offering for our common shares,
your interest will be diluted to the extent of the difference between the price per common share you will pay and the as adjusted
net tangible book value per common share after the exercise.
As of December 31, 2018, we had a net tangible book value of $0.1
million, corresponding to a net tangible book value of $0.003 per common share. Net tangible book value per share represents
the amount of our total assets less our total liabilities, excluding intangible assets, divided by 35,516,785, the total number
of our common shares outstanding as of December 31, 2018.
Assuming that we issue all 5,000,289 of the common shares upon
exercise of the warrants at a per share cash exercise price of CHF 0.39, our as adjusted net tangible book value estimated as of
December 31, 2018 would have been $2.0 million, representing $0.051 per common share. This represents an immediate increase in
net tangible book value of $0.048 per common share to existing shareholders and an immediate dilution in net tangible book
value of $0.346 per common share to new investors acquiring common shares upon the exercise of the warrants. Dilution for
this purpose represents the difference between the exercise price per common share paid upon exercise of warrants and net tangible
book value per common share immediately after the exercise.
The following table illustrates this dilution to new investors.
Exercise price per common share
|
|
$
|
0.397
|
|
Net tangible book value per common share as of December 31, 2018
|
|
$
|
0.003
|
|
Increase in net tangible book value per common share attributable to new investors
|
|
$
|
0.048
|
|
As adjusted net tangible book value per common share after the exercise
|
|
$
|
0.051
|
|
Dilution per common share to new investors
|
|
$
|
0.346
|
|
Percentage of dilution in net tangible book value per common share for new investors
|
|
|
87
|
%
|
The above discussion and table are based on 35,516,785 common
shares outstanding as of December 31, 2018, which number excludes:
|
●
|
992,777
of our common shares issuable upon the exercise of options outstanding as of December 31, 2018 at a weighted average exercise
price of $1.10 per common share;
|
|
●
|
15,673
common shares issuable upon the exercise of a warrant issued to Hercules, at an exercise price of $39.40 per common share,
794,500 common shares issuable upon exercise of warrants issued on February 21, 2017 in a public offering at an exercise price
of $12.00 per common share, 750,002 common shares issuable upon the exercise of warrants issued on January 30, 2018 at
an exercise price of $5.00 per common share, 3,377,533 common shares issuable upon the exercise of Series A warrants issued
on July 17, 2018 at an exercise price of CHF 0.39 per common share and 1,622,756 common shares issuable upon the exercise of Series
B warrants issued on July 17, 2018 at an exercise price of CHF 0.39 per common share.
|
To the extent that outstanding options or warrants are exercised,
you may experience further dilution. In addition, we may choose to raise additional capital due to market conditions or strategic
considerations even if we believe we have sufficient funds for our current or future operating plans. To the extent that additional
capital is raised through the sale of equity or convertible debt securities, the issuance of these securities may result in further
dilution to our shareholders.
Swiss Franc amounts have been translated into U.S. dollars at
a rate of CHF 0.9832 to USD 1.00, the official exchange rate quoted as of December 31, 2018 by the U.S. Federal Reserve Bank. Such
U.S. dollar amounts are not necessarily indicative of the amounts of U.S. dollars that could actually have been purchased upon
exchange of Swiss Francs on December 31, 2018 and have been provided solely for the convenience of the reader.
Exchange
Rates
The following table sets forth, for the periods indicated, the
high, low, average and period-end exchange rates for the purchase of U.S. dollars expressed in CHF per U.S. dollar. The average
rate is calculated by using the average of the U.S. Federal Reserve Bank’s reported exchange rates on each day during a monthly
period and on the last day of each month during an annual period. On April 5, 2019, the exchange rate as reported by the U.S. Federal
Reserve Bank was CHF 1.0003 to USD 1.00.
|
|
Period-End
|
|
|
Average for
Period
|
|
|
Low
|
|
|
High
|
|
|
|
(CHF per U.S. dollar)
|
|
Year Ended December 31:
|
|
|
|
|
|
|
|
|
|
|
|
|
2013
|
|
|
0.8904
|
|
|
|
0.9269
|
|
|
|
0.8856
|
|
|
|
0.9814
|
|
2014
|
|
|
0.9934
|
|
|
|
0.9147
|
|
|
|
0.8712
|
|
|
|
0.9934
|
|
2015
|
|
|
1.0017
|
|
|
|
0.9628
|
|
|
|
0.8488
|
|
|
|
1.0305
|
|
2016
|
|
|
1.0160
|
|
|
|
0.9848
|
|
|
|
0.9536
|
|
|
|
1.0334
|
|
2017
|
|
|
0.9738
|
|
|
|
0.9842
|
|
|
|
0.9456
|
|
|
|
1.0266
|
|
2018
|
|
|
0.9832
|
|
|
|
0.9784
|
|
|
|
0.9232
|
|
|
|
1.0083
|
|
Month Ended:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
January 31, 2019
|
|
|
0.9938
|
|
|
|
0.9897
|
|
|
|
0.9767
|
|
|
|
0.9988
|
|
February 28, 2019
|
|
|
0.9974
|
|
|
|
1.0014
|
|
|
|
0.9940
|
|
|
|
1.0073
|
|
March 31, 2019
|
|
|
0.9962
|
|
|
|
1.0005
|
|
|
|
0.9918
|
|
|
|
1.0110
|
|
April 5, 2019
|
|
|
1.0003
|
|
|
|
0.9990
|
|
|
|
0.9970
|
|
|
|
1.0003
|
|
Description
of Share Capital and BYE-LAWS
General
We are an exempted company incorporated under the laws of Bermuda.
We began our current operations in 2003 as a corporation organized in accordance with Swiss law and domiciled in Switzerland under
the name Auris Medical AG, and our name was changed to Auris Medical Holding AG on April 22, 2014. Following the Merger on March
13, 2018, the surviving entity was named Auris Medical Holding AG. Upon the issuance of a certificate of continuance by the Registrar
of Companies in Bermuda on March 18, 2019, the Redomestication was effected and we continued in Bermuda pursuant to Section 132C
of the Companies Act as a Bermuda company with the name “Auris Medical Holding Ltd.” Our registered office is located
at Clarendon House 2 Church Street, Hamilton HM 11, Bermuda.
Our Memorandum of Continuance provides that the objects of our
business are unrestricted, and we have the capacity, rights, powers and privileges of a natural person.
There have been no material changes to our share capital, mergers,
amalgamations or consolidations of us or any of our subsidiaries, no material changes in the mode of conducting our business, no
material changes in the types of products produced or services rendered and no name changes. There have been no bankruptcy, receivership
or similar proceedings with respect to us or our subsidiaries.
There have been no public takeover offers by third parties for
our shares nor any public takeover offers by us for the shares of another company which have occurred during the last or current
financial years.
Share Capital
As of April 5, 2019, our authorized share capital consisted
of 200,000,000 common shares, par value CHF 0.02 per share, and 20,000,000 preference shares, par value CHF 0.02 per share, and
there were 37,495,859 common shares issued and outstanding, excluding 992,777 common shares issuable upon exercise of options and
6,544,791 common shares issuable upon exercise of warrants, and no preference shares issued and outstanding. All of the Company’s
issued and outstanding shares are fully paid.
Pursuant to the Bye-laws, subject to any resolution of the shareholders
to the contrary, our board of directors is authorized to issue any of our authorized but unissued shares. There are no limitations
on the right of non-Bermudians or non-residents of Bermuda to hold or vote our shares.
Common Shares
Holders of common shares have no pre-emptive, redemption, conversion
or sinking fund rights. Holders of common shares are entitled to one vote per share on all matters submitted to a vote of holders
of common shares. Unless a different majority is required by law or by the Bye-laws, resolutions to be approved by holders of common
shares require approval by a simple majority of votes cast at a meeting at which a quorum is present.
In the event of our liquidation, dissolution or winding up,
the holders of common shares are entitled to share equally and ratably in our assets, if any, remaining after the payment of all
of our debts and liabilities, subject to any liquidation preference on any issued and outstanding preference shares.
Preferred Shares
Pursuant to Bermuda law and our Bye-laws, our board of directors
by resolution may establish one or more series of preference shares having such number of shares, designations, dividend rates,
relative voting rights, conversion or exchange rights, redemption rights, liquidation rights and other relative participation,
optional or other special rights, qualifications, limitations or restrictions as may be fixed by the board without any further
shareholder approval. Such rights, preferences, powers and limitations as may be established could have the effect of discouraging
an attempt to obtain control of us.
Dividend Rights
Under Bermuda law, the board of directors may declare a dividend
without shareholder approval, but a company may not declare or pay dividends if there are reasonable grounds for believing that:
(i) the company is, or would after the payment be, unable to pay its liabilities as they become due; or (ii) the realizable value
of its assets would thereby be less than its liabilities. Under the Bye-laws, each common share is entitled to dividends if, as
and when dividends are declared by our board of directors, subject to any preferred dividend right of the holders of any preference
shares.
Variation of Rights
If at any time we have more than one class of shares, the rights
attaching to any class, unless otherwise provided for by the terms of issue of the relevant class, may be varied either: (i) with
the consent in writing of the holders of 75% of the issued shares of that class; or (ii) with the sanction of a resolution passed
by a majority of the votes cast at a general meeting of the relevant class of shareholders at which a quorum consisting of at least
two or more persons holding or representing issued and outstanding shares of the relevant class is present. The Bye-laws specify
that the creation or issue of shares ranking equally with existing shares will not, unless expressly provided by the terms of issue
of existing shares, vary the rights attached to existing shares. In addition, the creation or issue of preference shares ranking
prior to common shares will not be deemed to vary the rights attached to common shares or, subject to the terms of any other series
of preference shares, to vary the rights attached to any other series of preference shares.
Transfer of Shares
Our board of directors may in its absolute discretion and without
assigning any reason refuse to register the transfer of a share that it is not fully paid. Our board of directors may also refuse
to recognize an instrument of transfer of a share unless it is accompanied by the relevant share certificate and such other evidence
of the transferor’s right to make the transfer as our board of directors shall reasonably require. Subject to these restrictions,
a holder of common shares may transfer the title to all or any of his common shares by completing a form of transfer in the form
set out in the Bye-laws (or as near thereto as circumstances admit) or in such other common form as the board may accept. The instrument
of transfer must be signed by the transferor and transferee, although in the case of a fully paid share our board of directors
may accept the instrument signed only by the transferor.
Share Split and Reverse Share Split effected by consolidating
our common shares
Our board of directors may in its absolute discretion and without
further approval of shareholders divide, consolidate or sub-divide our share capital in any manner permitted by the Companies Act,
including approving a reverse share split by consolidating our common shares (together with a corresponding increase in the par
value thereof) in a ratio determined by the board of directors. The Bye-laws also provide that upon an alteration or reduction
of share capital where fractions of shares or some other difficult would arise, our board of directors may deal with or resolve
the same in any manner as it thinks fit.
Meeting of Shareholders
Under Bermuda law, a company is required to convene at least
one general meeting of shareholders each calendar year (the “annual general meeting”). However, the members may by
resolution waive this requirement, either for a specific year or period of time, or indefinitely. When the requirement has been
so waived, any member may, on notice to the company, terminate the waiver, in which case an annual general meeting must be called.
Bermuda law provides that a special general meeting of shareholders
may be called by the board of directors of a company and must be called upon the request of shareholders holding not less than
10% of the paid-up capital of the company carrying the right to vote at general meetings. Bermuda law also requires that shareholders
be given at least five days’ advance notice of a general meeting, but the accidental omission to give notice to any person
does not invalidate the proceedings at a meeting. The Bye-laws provide that the board of directors may convene an annual general
meeting or a special general meeting. Under the Bye-laws, at least 14 days’ notice of an annual general meeting or a special
general meeting must be given to each shareholder entitled to vote at such meeting. This notice requirement is subject to the ability
to hold such meetings on shorter notice if such notice is agreed: (i) in the case of an annual general meeting by all of the shareholders
entitled to attend and vote at such meeting; or (ii) in the case of a special general meeting by a majority in number of the shareholders
entitled to attend and vote at the meeting holding not less than 95% in nominal value of the shares entitled to vote at such meeting.
The quorum required for a general meeting of shareholders is two or more persons present in person at the start of the meeting
and representing in person or by proxy issued and outstanding common shares.
Access to Books and Records and Dissemination of Information
Members of the general public have a right to inspect the public
documents of a company available at the office of the Registrar of Companies in Bermuda. These documents include the company’s
memorandum of association (or memorandum of continuance), including its objects and powers, and certain alterations to the memorandum
of association (or memorandum of continuance). The shareholders have the additional right to inspect the bye-laws of the company,
minutes of general meetings and the company’s audited financial statements, which must be presented to the annual general
meeting. The register of members of a company is also open to inspection by shareholders and by members of the general public without
charge. The register of members is required to be open for inspection for not less than two hours in any business day (subject
to the ability of a company to close the register of members for not more than thirty days in a year). A company is required to
maintain its share register in Bermuda but may, subject to the provisions of the Companies Act, establish a branch register outside
of Bermuda. A company is required to keep at its registered office a register of directors and officers that is open for inspection
for not less than two hours in any business day by members of the public without charge. A company is also required to file with
the Registrar of Companies in Bermuda a list of its directors to be maintained on a register, which register will be available
for public inspection subject to such conditions as the Registrar may impose and on payment of such fee as may be prescribed. Bermuda
law does not, however, provide a general right for shareholders to inspect or obtain copies of any other corporate records.
Election and Removal of Directors
The Bye-laws provide that our board shall consist of three directors
or such greater number as the board may determine. Our board of directors will initially consist of five directors. Each director
shall hold office for such term as the shareholders may determine or, in their absence of such determination, until the next annual
general meeting or until their successors are elected or appointed or their office is otherwise vacated.
Any shareholder or shareholders holding or representing not
less than 5% of the total voting rights wishing to propose for election as a director someone who is not an existing director or
is not proposed by our board must give notice of the intention to propose the person for election. Where a director is to be elected
at an annual general meeting, that notice must be given not less than 90 days nor more than 120 days before the anniversary of
the last annual general meeting prior to the giving of the notice or, in the event the annual general meeting is called for a date
that is not 30 days before or after such anniversary the notice must be given not later than 10 days following the earlier of the
date on which notice of the annual general meeting was posted to members or the date on which public disclosure of the date of
the annual general meeting was made. Where a director is to be elected at a special general meeting, that notice must be given
not later than 10 days following the earlier of the date on which notice of the special general meeting was posted to members or
the date on which public disclosure of the date of the special general meeting was made.
A director may be removed, with cause, by the shareholders,
provided notice of the shareholders meeting convened to remove the director is given to the director. The notice must contain a
statement of the intention to remove the director and must be served on the director not less than fourteen days before the meeting.
The director is entitled to attend the meeting and be heard on the motion for his removal.
Proceedings of Board of Directors
The Bye-laws provide that our business is to be managed and
conducted by our board of directors. Bermuda law permits individual and corporate directors and there is no requirement in the
Bye-laws or Bermuda law that directors hold any of our shares. There is also no requirement in the Bye-laws or Bermuda law that
our directors must retire at a certain age.
The remuneration of our directors is determined by our board
of directors, and there is no requirement that a specified number or percentage of “independent” directors
must approve any such determination. Our directors may also be paid all travel, hotel and other expenses properly incurred by them
in connection with our business or their duties as directors.
Provided a director discloses a direct or indirect interest
in any contract or arrangement with us as required by Bermuda law, such director is entitled to vote in respect of any such contract
or arrangement in which he or she is interested unless he or she is disqualified from voting by the chairman of the relevant board
meeting.
Indemnification of Directors and Officers
Section 98 of the Companies Act provides generally that a Bermuda
company may indemnify its directors, officers and auditors against any liability which by virtue of any rule of law would otherwise
be imposed on them in respect of any negligence, default, breach of duty or breach of trust, except in cases where such liability
arises from fraud or dishonesty of which such director, officer or auditor may be guilty in relation to the company. Section 98
further provides that a Bermuda company may indemnify its directors, officers and auditors against any liability incurred by them
in defending any proceedings, whether civil or criminal, in which judgment is awarded in their favor or in which they are acquitted
or granted relief by the Supreme Court of Bermuda pursuant to section 281 of the Companies Act.
The Bye-laws that provide that we shall indemnify our officers
and directors in respect of their actions and omissions, except in respect of their fraud or dishonesty. The Bye-laws provide that
the shareholders waive all claims or rights of action that they might have, individually or in right of the company, against any
of the company’s directors or officers for any act or failure to act in the performance of such director’s or officer’s
duties, except in respect of any fraud or dishonesty of such director or officer. Section 98A of the Companies Act permits us to
purchase and maintain insurance for the benefit of any officer or director in respect of any loss or liability attaching to him
in respect of any negligence, default, breach of duty or breach of trust, whether or not we may otherwise indemnify such officer
or director. We have purchased and maintain a directors’ and officers’ liability policy for such a purpose.
Amendment of Memorandum of Continuance and Bye-laws
Bermuda law provides that the memorandum of association (or
memorandum of continuance) of a company may be amended by a resolution passed at a general meeting of shareholders. The Bye-laws
provide that no bye-law shall be rescinded, altered or amended, and no new bye-law shall be made, unless it shall have been approved
by a resolution of our board of directors and by a resolution of our shareholders. In the case of certain bye-laws, such as the
Bye-laws relating to election and removal of directors, approval of business combinations and amendment of bye-law provisions,
the required resolutions must include the affirmative vote of at least 66 2∕3% of our directors then in office and of at
least 66 2∕3% percent of the votes attaching to all shares in issue.
Under Bermuda law, the holders of an aggregate of not less than
20% in par value of a company’s issued share capital or any class thereof have the right to apply to the Supreme Court of
Bermuda for an annulment of any amendment of the memorandum of association (or memorandum of continuance) adopted by shareholders
at any general meeting, other than an amendment which alters or reduces a company’s share capital as provided in the Companies
Act. Where such an application is made, the amendment becomes effective only to the extent that it is confirmed by the Bermuda
court. An application for an annulment of an amendment of the memorandum of association (or memorandum of continuance) must be
made within twenty-one days after the date on which the resolution altering the company’s memorandum of association (or memorandum
of continuance) is passed and may be made on behalf of persons entitled to make the application by one or more of their number
as they may appoint in writing for the purpose. No application may be made by shareholders voting in favor of the amendment.
Amalgamations, Mergers and Business Combinations
The amalgamation or merger of a Bermuda company with another
company or corporation (other than certain affiliated companies) requires an amalgamation or merger agreement that is approved
by the company’s board of directors and by its shareholders. Unless the company’s bye-laws provide otherwise, the approval
of 75% of the shareholders voting at such meeting is required to approve the amalgamation or merger agreement, and the quorum for
such meeting must be two persons holding or representing more than one-third of the issued shares of the company. The Bye-laws
provide that an amalgamation or a merger (other than with a wholly owned subsidiary or as described below) that has been approved
by the board must only be approved by a majority of the votes cast at a general meeting of the shareholders at which the quorum
shall be two or more persons present in person and representing in person or by proxy issued and outstanding common voting shares.
Any amalgamation or merger or other business combination (as defined in the Bye-laws) not approved by our board of directors must
be approved by the holders of not less than 66 2∕3% of all votes attaching to all shares then in issue entitling the holder
to attend and vote on the resolution.
Under Bermuda law, in the event of an amalgamation or merger
of a Bermuda company with another company or corporation, a shareholder of the Bermuda company who did not vote in favor of the
amalgamation or merger and who is not satisfied that fair value has been offered for such shareholder’s shares may, within
one month of notice of the shareholders meeting, apply to the Supreme Court of Bermuda to appraise the fair value of those shares.
The Bye-laws contain provisions regarding “business combinations”
with “interested shareholders”. Pursuant to the Bye-laws, in addition to any other approval that may be required by
applicable law, any business combination with an interested shareholder within a period of three years after the date of the transaction
in which the person became an interested shareholder must be approved by our board and authorized at an annual or special general
meeting by the affirmative vote of at least 66 2∕3% of our issued and outstanding voting shares that are not owned by the
interested shareholder, unless: (i) prior to the time that the shareholder becoming an interested shareholder, our board of directors
approved either the business combination or the transaction that resulted in the shareholder becoming an interested shareholder;
or (ii) upon consummation of the transaction that resulted in the shareholder becoming an interested shareholder, the interested
shareholder owned at least 85% of our issued and outstanding voting shares at the time the transaction commenced. For purposes
of these provisions, “business combinations” include mergers, amalgamations, consolidations and certain sales, leases,
exchanges, mortgages, pledges, transfers and other dispositions of assets, issuances and transfers of shares and other transactions
resulting in a financial benefit to an interested shareholder. An “interested shareholder” is a person that beneficially
owns 15% or more of our issued and outstanding voting shares and any person affiliated or associated with us that owned 15% or
more of our issued and outstanding voting shares at any time three years prior to the relevant time.
Compulsory Acquisition of Shares Held by Minority Holders
An acquiring party is generally able to acquire compulsorily
the common shares of minority holders in the following ways:
(1) By a procedure under the Companies Act known as a “scheme
of arrangement.” A scheme of arrangement could be effected by obtaining the agreement of the company and of holders of its
shares (or any class of shares), representing in the aggregate a majority in number and at least 75% in value of the shares or
class of shares present and voting at a court ordered meeting held to consider the scheme or arrangement. The scheme of arrangement
must then be sanctioned by the Bermuda Supreme Court. If a scheme of arrangement receives all necessary agreements and sanctions,
upon the filing of the court order with the Registrar of Companies in Bermuda, all holders of common shares could be compelled
to sell their shares under the terms of the scheme or arrangement.
(2) If the acquiring party is a company it may compulsorily
acquire all the shares of the target company, by acquiring pursuant to a tender offer 90% of the shares or class of shares not
already owned by, or by a nominee for, the acquiring party (the offeror), or any of its subsidiaries. If an offeror has, within
four months after the making of an offer for all the shares or class of shares not owned by, or by a nominee for, the offeror,
or any of its subsidiaries, obtained the approval of the holders of 90% or more of all the shares to which the offer relates, the
offeror may, at any time within two months beginning with the date on which the approval was obtained, require by notice any nontendering
shareholder to transfer its shares on the same terms as the original offer. In those circumstances, nontendering shareholders will
be compelled to sell their shares unless the Supreme Court of Bermuda (on application made within a one-month period from the date
of the offeror’s notice of its intention to acquire such shares) orders otherwise.
(3) Where one or more parties holds not less than 95% of the
shares or a class of shares of a company, such holder(s) may, pursuant to a notice given to the remaining shareholders or class
of shareholders, acquire the shares of such remaining shareholders or class of shareholders. When this notice is given, the acquiring
party is entitled and bound to acquire the shares of the remaining shareholders on the terms set out in the notice, unless a remaining
shareholder, within one month of receiving such notice, applies to the Supreme Court of Bermuda for an appraisal of the value of
their shares. This provision only applies where the acquiring party offers the same terms to all holders of shares whose shares
are being acquired.
Anti-Takeover Provisions
Two-thirds supermajority shareholder voting requirement
:
The Bye-laws provide that, except to the extent that a proposal has received the prior approval of the board, the approval of an
amalgamation, merger or consolidation with or into any other person shall require the affirmative vote of not less than 66 2∕3%
of all votes attaching to all shares then in issue entitling the holder to attend and vote on the resolution.
Amendments to the Bye-laws
: The Bye-laws provide that
no bye-law may be rescinded, altered or amended and no new bye-law may be made until the same has been approved by a resolution
of the board and by a resolution of the shareholders. In the case of certain bye-laws, such as the Bye-laws relating to election
and removal of directors, approval of business combinations and amendment of bye-law provisions, the required resolutions must
include the affirmative vote of at least 66 2∕3% of our directors then in office and of at least 66 2∕3% percent of
the votes attaching to all shares in issue.
Limitations on the election of directors
: The Bye-laws
provide that a person may be proposed for election or appointment as a director at a general meeting either by the board or by
one or more shareholders holding our shares which in the aggregate carry not less than 5% of the voting rights in respect of the
election of directors. In addition, unless a person is proposed for election or appointment as a director by the board, when a
person is proposed for appointment or election as a director, written notice of the proposal must be given to us as follows. Where
a director is to be appointed or elected: (1) at an annual general meeting, such notice must be given not less than 90 days nor
more than 120 days before the anniversary of the last annual general meeting prior to the giving of the notice or, in the event
the annual general meeting is called for a date that is not 30 days before or after such anniversary the notice must be given not
later than 10 days following the earlier of the date on which notice of the annual general meeting was posted to shareholders or
the date on which public disclosure of the date of the annual general meeting was made; and (2) at a special general meeting, such
notice must be given not later than 10 days following the earlier of the date on which notice of the special general meeting was
posted to shareholders or the date on which public disclosure of the date of the special general meeting was made.
Shareholder Suits
Class actions and derivative actions are generally not available
to shareholders under Bermuda law. The Bermuda courts, however, would ordinarily be expected to permit a shareholder to commence
an action in the name of a company to remedy a wrong to the company where the act complained of is alleged to be beyond the corporate
power of the company or illegal, or would result in the violation of the company’s memorandum of association (or memorandum
of continuance) or bye-laws. Furthermore, consideration would be given by a Bermuda court to acts that are alleged to constitute
a fraud against the minority shareholders or, for instance, where an act requires the approval of a greater percentage of the company’s
shareholders than that which actually approved it.
When the affairs of a company are being conducted in a manner
which is oppressive or prejudicial to the interests of some part of the shareholders, one or more shareholders may apply to the
Supreme Court of Bermuda, which may make such order as it sees fit, including an order regulating the conduct of the company’s
affairs in the future or ordering the purchase of the shares of any shareholders by other shareholders or by the company.
The Bye-laws contain a provision by virtue of which our shareholders
waive any claim or right of action that they have, both individually and on our behalf, against any director or officer in relation
to any action or failure to take action by such director or officer, except in respect of any fraud or dishonesty of such director
or officer. The SEC has advised that the operation of this provision as a waiver of the right to sue for violations of federal
securities laws would likely be unenforceable in U.S. courts.
Capitalization of Profits and Reserves
Pursuant to the Bye-laws, our board of directors may (i) capitalize
any part of the amount of our share premium or other reserve accounts or any amount credited to our profit and loss account or
otherwise available for distribution by applying such sum in paying up unissued shares to be allotted as fully paid bonus shares
pro-rata (except in connection with the conversion of shares) to the shareholders; or (ii) capitalize any sum standing to the credit
of a reserve account or sums otherwise available for dividend or distribution by paying up in full, partly paid or nil paid shares
of those shareholders who would have been entitled to such sums if they were distributed by way of dividend or distribution.
Exchange controls
We have received consent under the Exchange Control Act 1972
from the Bermuda Monetary Authority for the issue and transfer of the common shares to and between non-residents of Bermuda for
exchange control purposes provided our shares remain listed on an appointed stock exchange, which includes the Nasdaq Capital Market.
In granting such consent the Bermuda Monetary Authority accepts no responsibility for our financial soundness or the correctness
of any of the statements made or opinions expressed in this prospectus.
Registrar or Transfer Agent
A register of holders of the common shares will be maintained
by Conyers Corporate Services (Bermuda) Limited in Bermuda, and a branch register will be maintained in the United States by American
Stock Transfer & Trust Company, LLC, who will serve as branch registrar and transfer agent.
Untraced Shareholders
The Bye-laws provide that our board of directors may forfeit
any dividend or other monies payable in respect of any shares which remain unclaimed for six years from the date when such monies
became due for payment. In addition, we are entitled to cease sending dividend warrants and checks by post or otherwise to a shareholder
if such instruments have been returned undelivered to, or left uncashed by, such shareholder on at least two consecutive occasions
or, following one such occasion, reasonable enquires have failed to establish the shareholder’s new address. This entitlement
ceases if the shareholder claims a dividend or cashes a dividend check or a warrant.
Certain Provisions of Bermuda Law
We have been designated by the Bermuda Monetary Authority as
a non-resident for Bermuda exchange control purposes. This designation allows us to engage in transactions in currencies other
than the Bermuda dollar, and there are no restrictions on our ability to transfer funds (other than funds denominated in Bermuda
dollars) in and out of Bermuda or to pay dividends to United States residents who are holders of our common shares.
We have received consent from the Bermuda Monetary Authority
for the issue and free transferability of all of our common shares to and between non-residents of Bermuda for exchange control
purposes, provided our shares remain listed on an appointed stock exchange, which includes the Nasdaq. Approvals or permissions
given by the Bermuda Monetary Authority do not constitute a guarantee by the Bermuda Monetary Authority as to our performance or
creditworthiness. Accordingly, in giving such consent or permissions, the Bermuda Monetary Authority shall not be liable for the
financial soundness, performance or default of our business or for the correctness of any opinions or statements expressed in this
prospectus. Certain issues and transfers of common shares involving persons deemed resident in Bermuda for exchange control purposes
require the specific consent of the Bermuda Monetary Authority.
In accordance with Bermuda law, share certificates are only
issued in the names of companies, partnerships or individuals. In the case of a shareholder acting in a special capacity (for example
as a trustee), certificates may, at the request of the shareholder, record the capacity in which the shareholder is acting. Notwithstanding
such recording of any special capacity, we will not be bound to investigate or see to the execution of any such trust. We will
take no notice of any trust applicable to any of our shares, whether or not we have been notified of such trust.
Stock Exchange Listing
Our common shares are listed on the Nasdaq Capital Market under
the symbol “EARS.”
The Depository Trust Company
Initial settlement of any common shares to be issued pursuant
to this prospectus will take place through The Depository Trust Company, or DTC, in accordance with its customary settlement procedures
for equity securities. Each person owning common shares held through DTC must rely on the procedures thereof and on institutions
that have accounts therewith to exercise any rights of a holder of the shares.
Description
of Series A Warrants
The Series A warrants were issued on July
17, 2018, pursuant to a prospectus dated July 12, 2018. The Series A warrants were issued as individual warrant agreements to the
investors. The material terms and provisions of the Series A warrants are summarized below. The Series A warrants represent the
rights to purchase an aggregate of up to 3,377,533 common shares at an initial exercise price per share of CHF 0.39.
Exercisability
The Series A warrants were exercisable beginning
on the date of issuance, , and at any time on or prior to the close of business on July 17, 2025; provided that any single exercise
shall be for common shares with an aggregate exercise price of no less than CHF 25,000 (or if a holder’s purchase rights
shall be for common shares with an aggregate exercise price of less than CHF 25,000, such exercise may be for all of the common
shares subject to purchase under the Series A warrant). The Series A warrants are exercisable, at the option of each holder, in
whole or in part by delivering to us the original of a duly executed and irrevocable exercise notice accompanied by payment in
full of the exercise price for the number of common shares purchased upon such exercise to a bank account designated by us. Common
shares issuable upon exercise of the Series A warrants will not be issued until both the executed notice of exercise and the relevant
exercise price is received by the Company. A holder may pre-deliver the original of the signed exercise notices to the Company
to hold in escrow pending further emailed irrevocable instruction from the holder to the Company regarding how to complete the
exercise notice. The common shares will be issued out of the Company’s authorized but unissued share capital. No fractional
common shares will be issued in connection with the exercise of a Series A warrant. In lieu of fractional shares, we will, at our
option, either (i) pay the holder an amount in cash equal to the fractional amount multiplied by the market value of a common share
or (ii) round up to the next whole share. The Series A warrants do not provide holders with the option of cashless, or net, exercises
of the Series A warrants.
We have agreed to maintain an effective registration
statement under the Securities Act permitting the issuance of common shares upon exercise of the Series A warrants from the date
of issuance until the termination date for the Series A warrants. However, if at any time there is no effective registration statement
under the Securities Act permitting the issuance of common shares upon exercise of the Series A warrants, a holder may not exercise
the purchase rights represented by the Series A warrants unless such holder, at the time of such exercise, is an “accredited
investor” as defined in Regulation D under the Securities Act, and such holder, at the Company’s request, represents
the same to the Company in writing. If a holder delivers to the Company an executed exercise notice at a time when there is no
effective registration statement under the Securities Act permitting the issuance of common shares upon exercise of the Series
A warrants, then the Company will pay to such holder, in cash, an amount equal to the product of (a) the volume weighted
average price per share over the last full day immediately preceding the delivery of the executed exercise notice (determined in
accordance with the provisions of the Series A warrant) minus the exercise price per share and (b) the number of common shares
that would be issuable upon exercise pursuant to such executed exercise notice. The number of common shares available for purchase
under the Series A warrant held by such holder will be decreased by the number of common shares that would be issuable upon exercise
pursuant to such executed exercise notice.
Exercise Limitations
Under the Series A warrants, a holder does
not have the right to exercise any portion of the Series A warrant if such holder (together with its affiliates) would beneficially
own in excess of 4.99% of the number of our common shares outstanding immediately after giving effect to the exercise, as such
percentage ownership is determined in accordance with the terms of the Series A warrants. A holder may give not less than 61 days’
prior notice to the Company to increase such beneficial ownership limit, up to 9.99%. The foregoing beneficial ownership restrictions
will not apply to the extent a holder (together with its affiliates) beneficially owned in excess of the foregoing beneficial ownership
thresholds prior to the date of issuance.
Failure to Timely Deliver Shares
If we fail to deliver to the investor the
common shares specified in a duly executed notice of exercise by the second trading day after the receipt by the Company of such
executed notice of exercise and the corresponding exercise price, as required by the Series A warrant, and if the investor purchases
the common shares after that second trading day to deliver in satisfaction of a sale by the investor of the underlying Series A
warrant shares that the investor anticipated receiving from us, then, upon the investor’s request, we, at the investor’s
option, will (A) pay in cash to the investor the amount, if any, by which (x) the investor’s total purchase price (including
brokerage commissions, if any) for the common shares so purchased exceeds (y) the amount obtained by multiplying (1) the number
of Series A warrant shares that the Company was required to deliver to the investor in connection with the exercise at issue times
(2) the price at which the sell order giving rise to such purchase obligation was executed (without deducting brokerage commissions,
if any), and (B) at the option of the investor, either reinstate the portion of the Series A warrant and equivalent number of Series
A warrant shares for which such exercise was not honored (in which case such exercise shall be deemed rescinded) or deliver to
the investor the number of common shares that would have been issued had the Company timely complied with its exercise and delivery
obligations under the Series A warrant.
Exercise Price
Each Series A warrant represents the right
to purchase 0.35 of a common share at an initial exercise price per share of CHF 0.39. The exercise price of the Series A warrants
is subject to appropriate adjustment in the event of certain common share dividends and distributions, share splits, stock combinations,
reclassifications or similar events affecting our common shares, and also upon any cash dividends to our shareholders; provided
that in no event will the exercise price per share be lower than the nominal value of a common share (which is CHF 0.02 as of the
date of issuance) as of the time the relevant Series A warrant is exercised.
Fundamental Transactions
If we consummate any merger, consolidation,
sale or other reorganization event in which our common shares are converted into or exchanged for securities, cash or other property,
or if we consummate certain sales or other business combinations, then following such event, the holders of the Series A warrants
will be entitled to receive upon exercise of the Series A warrants the kind and amount of securities, cash or other property that
the holders would have received had they exercised the Series A warrants immediately prior to such event. At the holder’s
election, exercisable at any time concurrently with, or within 30 days after, the consummation of certain Fundamental Transactions,
(as defined in the Series A warrant), we or any successor entity shall purchase the Series A warrant from the holder by paying
the holder an amount of cash equal to the Black-Scholes value (determined in accordance with the provisions of the Series A warrant).
Transferability
Subject to applicable laws, the Series A
warrants may be offered for sale, sold, transferred or assigned without our consent.
No Exchange Listing
There is no public trading market for the
Series A warrants, and we do not expect a market to develop. In addition, we do not intend to apply for listing of the Series A
warrants on any securities exchange or other trading system.
No Rights as a Shareholder
Except as otherwise provided in the Series
A warrants or by virtue of such holder’s ownership of shares of our common shares, the holder of a Series A warrant does
not have the rights or privileges of a holder of our common shares, including any voting rights, until the holder exercises the
Series A warrant and delivers the corresponding executed exercise notice and exercise price.
Governing Law
The Series A warrants will be governed by,
and construed and enforced in accordance with, the laws of the State of New York.
Description
of Series B Warrants
The Series B warrants were issued on July
17, 2018, pursuant to a prospectus dated July 12, 2018. The Series B warrants were issued as individual warrant agreements to the
investors. The material terms and provisions of the Series B warrants are summarized below. The Series B warrants represent the
rights to purchase an aggregate of up to 1,622,756 common shares at an initial exercise price per share of CHF 0.39. The exercise
price of the Series B warrants is subject to adjustment in the event that we issue certain securities at any time while the Series
B warrants are outstanding. See “- Exercise Price.”
Exercisability
The Series B warrants were exercisable beginning
on the date of issuance, and at any time on or prior to the close of business on June 18, 2020; provided that any single exercise
shall be for common shares with an aggregate exercise price of no less than CHF 25,000 (or if a holder’s purchase rights
shall be for common shares with an aggregate exercise price of less than CHF 25,000, such exercise may be for all of the common
shares subject to purchase under the Series B warrant). The Series B warrant shares shall be issued from the Company’s authorized
but unissued share capital. The Series B warrants are exercisable, at the option of each holder, in whole or in part by delivering
to us the original of a duly executed and irrevocable exercise notice accompanied by payment in full of the exercise price for
the number of common shares purchased upon such exercise to a bank account designated by us. A holder may pre-deliver the original
of the signed exercise notices to the Company to hold in escrow pending further emailed irrevocable instruction from the holder
to the Company regarding how to complete the exercise notice. At least one trading day prior to the submission of any signed exercise
notice by the holder of Series B warrants (or prior to emailed irrevocable instructions in case of escrowed notices, as applicable),
the holder shall inform the Company about its intention to submit an exercise notice (or about the intention to send irrevocable
instructions to complete the exercise notice, as applicable). The respective common shares issuable upon exercise of the Series
B warrants will not be issued until the executed notice of exercise and the relevant exercise price is received by the Company.
No fractional common shares will be issued in connection with the exercise of a Series B warrant. In lieu of fractional shares,
we will, at our option, either (i) pay the holder an amount in cash equal to the fractional amount multiplied by the market value
of a common share or (ii) round up to the next whole share. The Series B warrants do not provide holders with the option of cashless,
or net, exercises of the Series B warrants.
We have agreed to maintain an effective registration
statement under the Securities Act permitting the issuance of common shares upon exercise of the Series B warrants from the date
of issuance until the termination date for the Series B warrants. However, if at any time there is no effective registration statement
under the Securities Act permitting the issuance of common shares upon exercise of the Series B warrants, a holder may not exercise
the purchase rights represented by the Series B warrants unless such holder, at the time of such exercise, is an “accredited
investor" as defined in Regulation D under the Securities Act, and such holder, at the Company’s request, represents
the same to the Company in writing. If a holder delivers to the Company an executed exercise notice at a time when there is no
effective registration statement under the Securities Act permitting the issuance of common shares upon exercise of the Series
B warrants, then the Company will pay to such holder, in cash, an amount equal to the product of (a) the volume weighted average
price per share over the last full day immediately preceding the delivery of the executed exercise notice (determined in accordance
with the provisions of the Series B warrant) minus the exercise price per share and (b) the number of common shares that would
be issuable upon exercise pursuant to such executed exercise notice. The number of common shares available for purchase under the
Series B warrant held by such holder will be decreased by the number of common shares that would be issuable upon exercise pursuant
to such executed exercise notice.
Exercise Limitations
Under the Series B warrants, a holder does
not have the right to exercise any portion of the Series B warrant if such holder (together with its affiliates) would beneficially
own in excess of 4.99% of the number of our common shares outstanding immediately after giving effect to the exercise, as such
percentage ownership is determined in accordance with the terms of the Series B warrants. A holder may give not less than 61 days’
prior notice to the Company to increase such beneficial ownership limit, up to 9.99%. The foregoing beneficial ownership restrictions
will not apply to the extent a holder (together with its affiliates) beneficially owned in excess of the foregoing beneficial ownership
thresholds prior to the date of issuance.
Failure to Timely Deliver Shares
If we fail to deliver to the investor the
common shares specified in a duly executed notice of exercise by the seventh trading day after the receipt by the Company of such
executed notice of exercise and the corresponding exercise price, as required by the Series B warrant, and if the investor purchases
the common shares after that seventh trading day to deliver in satisfaction of a sale by the investor of the underlying Series
B warrant shares that the investor anticipated receiving from us, then, upon the investor’s request, we, at the investor’s
option, will (A) pay in cash to the investor the amount, if any, by which (x) the investor’s total purchase price (including
brokerage commissions, if any) for the common shares so purchased exceeds (y) the amount obtained by multiplying (1) the number
of Series B warrant shares that the Company was required to deliver to the investor in connection with the exercise at issue times
(2) the price at which the sell order giving rise to such purchase obligation was executed (without deducting brokerage commissions,
if any), and (B) at the option of the investor, either reinstate the portion of the Series B warrant and equivalent number of Series
B warrant shares for which such exercise was not honored (in which case such exercise shall be deemed rescinded) or deliver to
the investor the number of common shares that would have been issued had the Company timely complied with its exercise and delivery
obligations under the Series B warrant.
Exercise Price
Each Series B warrant represents the right
to purchase 0.25 of a common share at an initial exercise price per share of CHF 0.39. The exercise price of the Series B warrants
is subject to appropriate adjustment in the event of certain common share dividends and distributions, share splits, stock combinations,
reclassifications or similar events affecting our common shares, and also upon any cash dividends to our shareholders; provided
that in no event will the exercise price per share be lower than the nominal value of a common share (which is CHF 0.02 as of the
date of issuance) as of the time the relevant Series B warrant is exercised.
If, at any time while the Series B warrants
are outstanding, we sell or grant any option to purchase or sell or grant any right to reprice, or otherwise dispose of or issue,
any of our common shares or securities convertible into or exercisable for our common shares at an effective price per share that
is lower than the exercise price of the Series B warrants then in effect, then the exercise price of the Series B warrants will
be reduced to equal the higher of (A) such lower price or (B) CHF 0.05, such reduction is subject to an exception for the
following types of issuances (i) issuances to our employees, officers or directors pursuant to any stock or option plan adopted
by a majority of the non-employee members of our Board of Directors or committee thereof, (ii) issuances upon the exercise or exchange
of any securities issued in connection with this offering or issued and outstanding on the date of the issuance of the Series B
warrants, provided that such securities have not been amended since the date of the issuance of the Series B warrants to increase
the number of securities issuable upon exercise or exchange or decrease the exercise, exchange or conversion price, (iii) issuances
to Lincoln Park Capital, LLC (“LPC”) pursuant to the Purchase Agreement between the Company and LPC dated May 2, 2018
or (iv) issuances pursuant to acquisitions or strategic transactions approved by a majority of the disinterested members of our
Board of Directors, provided that for purposes of this clause (iv), such securities are “restricted securities” under
Rule 144 under the Securities Act and carry no registration rights that require or permit the filing of any registration statement
in connection therewith during the 90-day period following the date of the issuance of the Series B warrants, and provided that
any such issuance is to a person or its equityholders that is an operating company or an owner of an asset in a business synergistic
with the business of our company and will provide our company with additional benefits in addition to the investment of funds,
but will not include a transaction in which we issue securities primarily for the purpose of raising capital or to an entity whose
primary business is investing in securities.
Fundamental Transactions
If we consummate any merger, consolidation,
sale or other reorganization event in which our common shares are converted into or exchanged for securities, cash or other property,
or if we consummate certain sales or other business combinations, then following such event, the holders of the Series B warrants
will be entitled to receive upon exercise of the Series B warrants the kind and amount of securities, cash or other property that
the holders would have received had they exercised the Series B warrants immediately prior to such event. At the holder’s
election, exercisable at any time concurrently with, or within 30 days after, the consummation of certain Fundamental Transactions,
(as defined in the Series B warrant), we or any successor entity shall purchase the Series B warrant from the holder by paying
the holder an amount of cash equal to the Black-Scholes value (determined in accordance with the provisions of the Series B warrant).
Transferability
Subject to applicable laws, the Series B
warrants may be offered for sale, sold, transferred or assigned without our consent.
No Exchange Listing
There is no public trading market for the
Series B warrants, and we do not expect a market to develop. In addition, we do not intend to apply for listing of the Series B
warrants on any securities exchange or other trading system.
No Rights as a Shareholder
Except as otherwise provided in the Series
B warrants or by virtue of such holder’s ownership of shares of our common shares, the holder of a Series B warrant does
not have the rights or privileges of a holder of our common shares, including any voting rights, until the holder exercises the
Series B warrant and delivers the corresponding executed exercise notice and exercise price.
Governing Law
The Series B warrants will be governed by,
and construed and enforced in accordance with, the laws of the State of New York.
Comparison
of BERMUDA Law and Delaware Law
The Bermuda laws applicable to Bermuda companies and their shareholders
differ from laws applicable to U.S. corporations and their shareholders. The following table summarizes significant differences
in shareholder rights between the provisions of the Companies Act applicable to our company and the Delaware General Corporation
Law applicable to companies incorporated in Delaware and their shareholders. Please note that this is only a general summary of
certain provisions applicable to companies in Delaware. Certain Delaware companies may be permitted to exclude certain of the provisions
summarized below in their charter documents.
DELAWARE CORPORATE LAW
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BERMUDA CORPORATE LAW
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Under the Delaware General Corporation Law, with certain exceptions, a merger, consolidation, sale, lease or transfer of all or substantially all of the assets of a corporation must be approved by the board of directors and a majority of the outstanding shares entitled to vote thereon. A shareholder of a Delaware corporation participating in certain major corporate transactions may, under certain circumstances, be entitled to appraisal rights pursuant to which such shareholder may receive cash in the amount of the fair value of the shares held by such shareholder (as determined by a court) in lieu of the consideration such shareholder would otherwise receive in the transaction. The Delaware General Corporation Law also provides that a parent corporation, by resolution of its board of directors, may merge with any subsidiary, of which it owns at least 90.0% of each class of capital stock without a vote by the shareholders of such subsidiary. Upon any such merger, dissenting shareholders of the subsidiary would have appraisal rights.
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The amalgamation or merger of a Bermuda company with another company or corporation (other than certain affiliated companies) requires the amalgamation or merger agreement to be approved by the company’s board of directors and by its shareholders. Unless the company’s bye-laws provide otherwise, the approval of 75% of the shareholders voting at a general meeting is required to approve the amalgamation or merger agreement, and the quorum for such meeting must be two persons holding or representing more than one-third of the issued shares of the company. The Bye-laws provide that a merger or an amalgamation (other than with a wholly owned subsidiary or as described below) that has been approved by the board must only be approved by a majority of the votes cast at a general meeting of the shareholders at which the quorum shall be two or more persons present in person and representing in person or by proxy issued and outstanding voting shares.
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DELAWARE CORPORATE LAW
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BERMUDA CORPORATE LAW
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The Bye-laws contain provisions regarding “business combinations” with “interested shareholders”. Pursuant to our Bye-laws, in addition to any other approval that may be required by applicable law, any business combination with an interested shareholder within a period of three years after the date of the transaction in which the person became an interested shareholder must be approved by our board and authorized at an annual or special general meeting by the affirmative vote of at least 66 and 2∕3rds% of our issued and outstanding voting shares that are not owned by the interested shareholder, unless: (i) prior to the time that the shareholder becoming an interested shareholder, our board of directors approved either the business combination or the transaction that resulted in the shareholder becoming an interested shareholder; or (ii) upon consummation of the transaction that resulted in the shareholder becoming an interested shareholder, the interested shareholder owned at least 85% of our issued and outstanding voting shares at the time the transaction commenced. For purposes of these provisions, “business combinations” include mergers, amalgamations, consolidations and certain sales, leases, exchanges, mortgages, pledges, transfers and other dispositions of assets, issuances and transfers of shares and other transactions resulting in a financial benefit to an interested shareholder. An “interested shareholder” is a person that beneficially owns 15% or more of our issued and outstanding voting shares and any person affiliated or associated with us that owned 15% or more of our issued and outstanding voting shares at any time three years prior to the relevant time.
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DELAWARE CORPORATE LAW
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BERMUDA CORPORATE LAW
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Under Bermuda law, in the event of an amalgamation or merger of a Bermuda company with another company or corporation, a shareholder of the Bermuda company who did not vote in favor of the amalgamation or merger and who is not satisfied that fair value has been offered for such shareholder’s shares may, within one month of notice of the shareholders meeting, apply to the Supreme Court of Bermuda to appraise the fair value of those shares. Note that each share of an amalgamating or merging companies carries the right to vote in respect of an amalgamation or merger whether or not is otherwise carries the right to vote.
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Class actions and derivative actions generally are available to shareholders of a Delaware corporation for, among other things, breach of fiduciary duty, corporate waste and actions not taken in accordance with applicable law. In such actions, the court has discretion to permit the winning party to recover attorneys’ fees incurred in connection with such action.
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Class actions and derivative actions are generally not available to shareholders under Bermuda law. The Bermuda courts, however, would ordinarily be expected to permit a shareholder to commence an action in the name of a company to remedy a wrong to the company where the act complained of is alleged to be beyond the corporate power of the company or illegal, or would result in the violation of the company’s memorandum of association or bye-laws. Furthermore, consideration would be given by a Bermuda court to acts that are alleged to constitute a fraud against the minority shareholders or, for instance, where an act requires the approval of a greater percentage of the company’s shareholders than that which actually approved it.
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DELAWARE CORPORATE LAW
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BERMUDA CORPORATE LAW
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When the affairs of a company are being conducted in a manner
which is oppressive or prejudicial to the interests of some part of the shareholders, one or more shareholders may apply to the
Supreme Court of Bermuda, which may make such order as it sees fit, including an order regulating the conduct of the company’s
affairs in the future or ordering the purchase of the shares of any shareholders by other shareholders or by the company.
The Bye-laws contain a provision by virtue of which our shareholders
waive any claim or right of action that they have, both individually and on our behalf, against any director or officer in relation
to any action or failure to take action by such director or officer, except in respect of any fraud or dishonesty of such director
or officer.
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Under the Delaware General Corporation Law, the board of directors has the authority to fix the compensation of directors, unless otherwise restricted by the certificate of incorporation or bylaws.
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The Bye-laws contain a provision that the board of directors has the power to determine the remuneration, if any, of the directors.
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Unless directors are elected by written consent in lieu of an annual meeting, directors are elected in an annual meeting of stockholders on a date and at a time designated by or in the manner provided in the bylaws. Re-election is possible.
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The Bye-laws provide that the directors shall hold office for such term as the shareholders may determine or, in their absence of such determination, until the next annual general meeting, or until their successors are elected or appointed or their office is otherwise vacated. Re-election is possible.
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Classified boards are permitted.
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Provision for staggered boards of directors may be included in a company’s bye-laws.
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DELAWARE CORPORATE LAW
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BERMUDA CORPORATE LAW
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The Delaware General Corporation Law provides that a certificate
of incorporation may contain a provision eliminating or limiting the personal liability of directors (but not other controlling
persons) of the corporation for monetary damages for breach of a fiduciary duty as a director, except no provision in the certificate
of incorporation may eliminate or limit the liability of a director for:
● any breach of a director’s duty of loyalty to
the corporation or its shareholders;
● acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law;
● statutory liability for unlawful payment of dividends
or unlawful stock purchase or redemption; or
● any transaction from which the director derived an improper
personal benefit.
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Section 98 of the Companies Act provides generally that a Bermuda company may indemnify its directors, officers and auditors against any liability which by virtue of any rule of law would otherwise be imposed on them in respect of any negligence, default, breach of duty or breach of trust, except in cases where such liability arises from fraud or dishonesty of which such director, officer or auditor may be guilty in relation to the company. Section 98 further provides that a Bermuda company may indemnify its directors, officers and auditors against any liability incurred by them in defending any proceedings, whether civil or criminal, in which judgment is awarded in their favor or in which they are acquitted or granted relief by the Supreme Court of Bermuda pursuant to section 281 of the Companies Act.
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A Delaware corporation may indemnify any person who was or is a party or is threatened to be made a party to any proceeding, other than an action by or on behalf of the corporation, because the person is or was a director or officer, against liability incurred in connection with the proceeding if the director or officer acted in good faith and in a manner reasonably believed to be in, or not opposed to, the best interests of the corporation; and the director or officer, with respect to any criminal action or proceeding, had no reasonable cause to believe his or her conduct was unlawful.
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The Bye-laws contain provisions that provide that we shall indemnify our officers and directors in respect of their actions and omissions, except in respect of their fraud or dishonesty. The Bye-laws provide that the shareholders waive all claims or rights of action that they might have, individually or in right of the company, against any of the company’s directors or officers for any act or failure to act in the performance of such director’s or officer’s duties, except in respect of any fraud or dishonesty of such director or officer. Section 98A of the Companies Act permits us to purchase and maintain insurance for the benefit of any officer or director in respect of any loss or liability attaching to him in respect of any negligence, default, breach of duty or breach of trust, whether or not we may otherwise indemnify such officer or director. We have purchased and maintain a directors’ and officers’ liability policy for such a purpose.
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DELAWARE CORPORATE LAW
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BERMUDA CORPORATE LAW
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Unless ordered by a court, any foregoing indemnification is
subject to a determination that the director or officer has met the applicable standard of conduct:
● by a majority vote of the directors who are not parties
to the proceeding, even though less than a quorum;
● by a committee of directors designated by a majority
vote of the eligible directors, even though less than a quorum;
● by independent legal counsel in a written opinion if
there are no eligible directors, or if the eligible directors so direct; or
● by the shareholders.
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Moreover, a Delaware corporation may not indemnify a director or officer in connection with any proceeding in which the director or officer has been adjudged to be liable to the corporation unless and only to the extent that the court determines that, despite the adjudication of liability but in view of all the circumstances of the case, the director or officer is fairly and reasonably entitled to indemnity for those expenses which the court deems proper.
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DELAWARE CORPORATE LAW
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BERMUDA CORPORATE LAW
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A director of a Delaware corporation has a fiduciary duty to
the corporation and its shareholders. This duty has two components:
● the duty of care; and
● the duty of loyalty.
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At common law, members of a board of directors owe a fiduciary duty to the company to act in good faith in their dealings with or on behalf of the company and exercise their powers and fulfill the duties of their office honestly. This duty includes the following elements: (i) a duty to act in good faith in the best interests of the company; (ii) a duty not to make a personal profit from opportunities that arise from the office of director; (iii) a duty to avoid conflicts of interest; and (iv) a duty to exercise powers for the purpose for which such powers were intended.
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The duty of care requires that a director act in good faith, with the care that an ordinarily prudent person would exercise under similar circumstances. Under this duty, a director must inform himself of, and disclose to shareholders, all material information reasonably available regarding a significant transaction. The duty of loyalty requires that a director act in a manner he reasonably believes to be in the best interests of the corporation. He must not use his corporate position for personal gain or advantage. This duty prohibits self-dealing by a director and mandates that the best interest of the corporation and its shareholders take precedence over any interest possessed by a director, officer or controlling shareholder and not shared by the shareholders generally. In general, actions of a director are presumed to have been made on an informed basis, in good faith and in the honest belief that the action taken was in the best interests of the corporation. However, this presumption may be rebutted by evidence a breach of one of the fiduciary duties.
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The Companies Act also imposes a duty on directors and officers
of a Bermuda company to: (i) act honestly and in good faith with a view to the best interests of the company; and (ii) exercise
the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances.
In addition, the Companies Act imposes various duties on directors
and officers of a company with respect to certain matters of management and administration of the company.
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DELAWARE CORPORATE LAW
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BERMUDA CORPORATE LAW
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Should such evidence be presented concerning a transaction by a director, a director must prove the procedural fairness of the transaction, and that the transaction was of fair value to the corporation.
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A Delaware corporation may, in its certificate of incorporation, eliminate the right of shareholders to act by written consent.
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The Companies Act provides that shareholders may take action by written consent, expect in respect of the removal of an auditor from office before the expiry of his term or in respect of a resolution passed for the purpose of removing a director before the expiration of his term of office. A resolution in writing is passed when it is signed by the members of the company who at the date of the notice of the resolution represent such majority of votes as would be required if the resolution had been voted on at a meeting or when it is signed by all the members of the company or such other majority of members as may be provided by the bye-laws of the company.
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A shareholder of a Delaware corporation has the right to put any proposal before the annual meeting of shareholders, provided it complies with the notice provisions in the governing documents. A special meeting may be called by the board of directors or any other person authorized to do so in the governing documents, but shareholders may be precluded from calling special meetings.
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Shareholder(s) may, as set forth below and at their own expense (unless the company otherwise resolves), require the company to: (i) give notice to all shareholders entitled to receive notice of the annual general meeting of any resolution that the shareholder(s) may properly move at the next annual general meeting; and/or (ii) circulate to all shareholders entitled to receive notice of any general meeting a statement in respect of any matter referred to in the proposed resolution or any business to be conducted at such general meeting. The number of shareholders necessary for such a requisition is either: (i) any number of shareholders representing not less than 5% of the total voting rights of all shareholders entitled to vote at the meeting to which the requisition relates; or (ii) not less than 100 shareholders.
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DELAWARE CORPORATE LAW
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BERMUDA CORPORATE LAW
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Pursuant to the Bye-laws, any shareholder or shareholders holding or representing not less than 5% of the total voting rights wishing to propose for election as a director someone who is not an existing director or is not proposed by our board must give notice of the intention to propose the person for election in accordance with the Bye-laws.
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Under the Delaware General Corporation Law, cumulative voting for elections of directors is not permitted unless the corporation’s certificate of incorporation provides for it.
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Under Bermuda law, the voting rights of shareholders are regulated by the company’s bye-laws and, in certain circumstances, by the Companies Act. The Bye-laws provide for a plurality of voting for elections of directors, and cumulative voting for elections of directors is not permitted.
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DELAWARE CORPORATE LAW
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BERMUDA CORPORATE LAW
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A Delaware corporation with a classified board may be removed only for cause with the approval of a majority of the outstanding shares entitled to vote, unless the certificate of incorporation provides otherwise.
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Under the Bye-laws, a director may be removed, with cause, by the shareholders, provided notice of the shareholders meeting convened to remove the director is given to the director. The notice must contain a statement of the intention to remove the director and must be served on the director not less than fourteen days before the meeting. The director is entitled to attend the meeting and be heard on the motion for his removal.
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The Delaware General Corporation Law generally prohibits a Delaware corporation from engaging in certain business combinations with an “interested shareholder” for three years following the date that such person becomes an interested shareholder. An interested shareholder generally is a person or group who or which owns or owned 15.0% or more of the corporation’s outstanding voting stock within the past three years.
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There is no similar law in Bermuda.
The Bye-laws contain provisions regarding “business combinations”
with “interested shareholders” which are described above under “mergers and similar arrangements.”
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DELAWARE CORPORATE LAW
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BERMUDA CORPORATE LAW
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Unless the board of directors of a Delaware corporation approves the proposal to dissolve, dissolution must be approved by shareholders holding 100.0% of the total voting power of the corporation. Only if the dissolution is initiated by the board of directors may it be approved by a simple majority of the corporation’s outstanding shares. Delaware law allows a Delaware corporation to include in its certificate of incorporation a supermajority voting requirement in connection with dissolutions initiated by the board.
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A Bermuda company may be wound up by the Bermuda court on application
presented by the company itself, its creditors (including contingent or prospective creditors) or its contributories. The Bermuda
court has authority to order winding up in a number of specified circumstances includingWhere it is, in the opinion of the Bermuda
court, just and equitable to do so.
A Bermuda company limited by shares may be wound up voluntarily
when the shareholders so resolve in general meeting. In the case of a voluntary winding up, the company shall, from the commencement
of the winding up, cease to carry on its business, except so far as may be required for the beneficial winding up thereof.
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A Delaware corporation may vary the rights of a class of shares with the approval of a majority of the outstanding shares of such class, unless the certificate of incorporation provides otherwise.
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Under the Bye-laws, if at any time we have more than one class of shares, the rights attaching to any class, unless otherwise provided for by the terms of issue of the relevant class, may be varied either: (i) with the consent in writing of the holders of 75% of the issued shares of that class; or (ii) with the sanction of a resolution passed by a majority of the votes cast at a general meeting of the relevant class of shareholders at which a quorum consisting of at least two persons holding or representing issued shares of the relevant class is present. The Bye-laws specify that the creation or issue of shares ranking equally with existing shares will not, unless expressly provided by the terms of issue of existing shares, vary the rights attached to existing shares. In addition, the creation or issue of preference shares ranking prior to common shares will not be deemed to vary the rights attached to common shares or, subject to the terms of any other series of preference shares, to vary the rights attached to any other series of preference shares.
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DELAWARE CORPORATE LAW
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BERMUDA CORPORATE LAW
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A Delaware corporation’s governing documents may be amended with the approval of a majority of the outstanding shares entitled to vote, unless the certificate of incorporation provides otherwise.
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A Bermuda company’s memorandum of association and bye-laws may be amended by resolutions of the board of directors and the shareholders, subject to the company’s bye-laws.
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Shareholders of a Delaware corporation, upon written demand under oath stating the purpose thereof, have the right during the usual hours for business to inspect for any proper purpose, and to obtain copies of list(s) of shareholders and other books and records of the corporation and its subsidiaries, if any, to the extent the books and records of such subsidiaries are available to the corporation.
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Members of the general public have a right to inspect the public documents of a company available at the office of the Registrar of Companies in Bermuda. These documents include the company’s memorandum of association/continuance, including its objects and powers, and certain alterations to the memorandum of association/continuance. The shareholders have the additional right to inspect the bye-laws of the company, minutes of general meetings and the company’s audited financial statements, which must be presented to the annual general meeting. The register of members of a company is also open to inspection by shareholders without charge, and by members of the general public on payment of a fee. The register of members is required to be open for inspection for not less than two hours in any business day (subject to the ability of a company to close the register of members for not more than thirty days in a year). A company is required to maintain its share register in Bermuda but may, subject to the provisions of the Companies Act, establish a branch register outside of Bermuda. A company is required to keep at its registered office a register of directors and officers that is open for inspection for not less than two hours in any business day by members of the public without charge. Bermuda law does not, however, provide a general right for shareholders to inspect or obtain copies of any other corporate records.
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DELAWARE CORPORATE LAW
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BERMUDA CORPORATE LAW
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The board of directors may approve a dividend without shareholder
approval. Subject to any restrictions contained in its certificate of incorporation, the board may declare and pay dividends upon
the shares of its capital stock either:
● out of its surplus, or
● in case there is no such surplus, out of its net profits
for the fiscal year in which the dividend is declared and/or the preceding fiscal year.
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Under Bermuda law, the board of directors may declare a dividend without shareholder approval, but a company may not declare or pay dividends if there are reasonable grounds for believing that: (i) the company is, or would after the payment be, unable to pay its liabilities as they become due; or (ii) that the realizable value of its assets would thereby be less than its liabilities. Under the Bye-laws, each common share is entitled to dividends if, as and when dividends are declared by our board of directors, subject to any preferred dividend right of the holders of any preference shares.
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Stockholder approval is required to authorize capital stock in excess of that provided in the charter. Directors may issue authorized shares without stockholder approval.
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All creation of shares require the board of directors to adopt a resolution or resolutions, pursuant to authority expressly vested in the board of directors by the provisions of the company’s certificate of incorporation.
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The authorized share capital of a Bermuda company is determined by the company’s shareholders.
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TAXATION
The following summary contains a description of the material
Bermuda, Swiss and U.S. federal income tax consequences of the acquisition, ownership and disposition of common shares, but it
does not purport to be a comprehensive description of all the tax considerations that may be relevant to a decision to purchase
common shares. The summary is based upon the tax laws of Bermuda and regulations thereunder, of Switzerland and regulations thereunder
and on the tax laws of the United States and regulations thereunder as of the date hereof, which are subject to change.
Bermuda Tax Considerations
At the present time, there is no Bermuda income or profits tax,
withholding tax, capital gains tax, capital transfer tax, estate duty or inheritance tax payable by us or by our shareholders in
respect of our shares. We have received an assurance from the Minister of Finance of Bermuda under the Exempted Undertakings Tax
Protection Act 1966 that, in the event that any legislation is enacted in Bermuda imposing any tax computed on profits or income,
or computed on any capital asset, gain or appreciation or any tax in the nature of estate duty or inheritance tax, such tax shall
not, until March 31, 2035, be applicable to us or to any of our operations or to our shares, debentures or other obligations except
insofar as such tax applies to persons ordinarily resident in Bermuda or is payable by us in respect of real property owned or
leased by us in Bermuda.
Swiss Tax Considerations
This summary of material Swiss tax consequences is based on
Swiss law and regulations and the practice of the Swiss tax administration as in effect on the date hereof, all of which are subject
to change (or subject to changes in interpretation), possibly with retroactive effect. The summary does not purport to take into
account the specific circumstances of any particular shareholder or potential investor and does not relate to persons in the business
of buying and selling common shares or other securities. The summary is not intended to be, and should not be interpreted as, legal
or tax advice to any particular potential shareholder/s, and no representation with respect to the tax consequences to any particular
shareholder/s is made.
On September 28, 2018, the Swiss parliament approved the final
draft of the Federal Act on Tax Reform and AHV Financing (“TRAF”). A public vote on the TRAF is planned to be held
on May 19, 2019. The first measures could take place in 2020. Key measures of the reform are, inter alia, the abolition of the
special tax treatment for cantonal status companies, which are no longer accepted internationally. Additionally, an increase of
the partial taxation (
Teilbesteuerung
) for individual shareholders holding at least 10% shares in a company from 60% to
70% will likely be introduced on federal, cantonal and communal levels. Furthermore, TRAF provides for a repayment rule in the
capital contribution principle according to which repayments of capital contribution reserves are only exempt from withholding
and income tax if the company distributes taxable reserves to the same extent. However, the rule only applies to companies listed
on a Swiss stock exchange. The rule also includes a partial liquidation rule in the event of the repurchase of our own shares.
According to this rule, at least half of the corresponding liquidation surplus must be charged to the capital contribution reserves.
If this rule is not respected, the amount of the capital contribution reserves is adjusted accordingly and the taxable portion
of the liquidation surplus is reduced.
Current and prospective shareholders are advised to consult
their own tax advisers in light of their particular circumstances as to the Swiss tax laws, regulations and regulatory practices
that could be relevant for them in connection with the acquiring, owning and selling or otherwise disposing of common shares and
receiving dividends and similar cash or in-kind distributions on common shares (including dividends on liquidation proceeds and
stock dividends) or distributions on common shares based upon a capital reduction (
Nennwertrückzahlungen
) or reserves
paid out of capital contributions (
Reserven aus Kapitaleinlagen
) and the consequences thereof under the tax laws, regulations
and regulatory practices of Switzerland.
Taxation of Auris Medical Holding Ltd.
Auris Medical Holding Ltd. is a Swiss tax resident company,
taxed as a holding company in the Canton of Zug. The Company is taxed at a current effective income tax rate of 7.83% (including
direct federal as well as cantonal/communal taxes), whereby a participation relief applies to dividend income from qualifying subsidiaries,
and a current annual capital tax rate of 0.003% which is levied on the net equity of the Company.
Assuming TRAF will be implemented, Auris Medical Holding Ltd.
will lose its holding privilege at the cantonal/communal level as of January 1, 2020.
Taxation of Common Shares: Swiss Federal Withholding Tax
on Dividends and Distributions
Dividend payments and similar cash or in-kind distributions
on the common shares (including dividends on liquidation proceeds and stock dividends) that the Company makes to shareholders are
subject to Swiss federal withholding tax (
Verrechnungssteuer
) at a rate of 35% on the gross amount of the dividend. The
Company is required to withhold the Swiss federal withholding tax from the dividend and remit it to the Swiss Federal Tax Administration.
Distributions based upon a capital reduction (
Nennwertrückzahlungen
) and reserves paid out of capital contributions
(
Reserven aus Kapitaleinlagen
) are not subject to Swiss federal withholding tax.
The Swiss federal withholding tax may also apply to gains realized
upon a repurchase of shares by the Company, on the difference between the repurchase price and the nominal value of the shares
(
Nennwertprinzip
); a different basis of taxation may apply under the capital contribution principle (
Kapitaleinlageprinzip
).
The Swiss federal withholding tax is refundable or creditable in full to a Swiss tax resident corporate and individual shareholder
as well as to a non-Swiss tax resident corporate or individual shareholder who holds the common shares as part of a trade or business
carried on in Switzerland through a permanent establishment or fixed place of business situated for tax purposes in Switzerland,
if such person is the beneficial owner of the distribution and, in the case of a Swiss tax resident individual who holds the common
shares as part of his private assets, duly reports the gross distribution received in his individual income tax return or, in the
case of a person who holds the common shares as part of a trade or business carried on in Switzerland through a permanent establishment
or fixed place of business situated for tax purposes in Switzerland, recognizes the gross dividend distribution for tax purposes
as earnings in the income statements and reports the annual profit in the Swiss income tax return.
If a shareholder who is not a Swiss resident for tax purposes
and does not hold the common shares in connection with the conduct of a trade or business in Switzerland through a permanent establishment
or fixed place of business situated, for tax purposes in Switzerland, receives a distribution from the Company, the shareholder
may be entitled to a full or partial refund or credit of Swiss federal withholding tax incurred on a taxable distribution if the
country in which such shareholder is resident for tax purposes has entered into a treaty for the avoidance of double taxation with
Switzerland and the further prerequisites of the treaty for a refund have been met. Shareholders not resident in Switzerland should
be aware that the procedures for claiming treaty benefits (and the time required for obtaining a refund or credit) may differ from
country to country.
Besides bilateral tax treaties, Switzerland has entered into
an agreement with the European Union on the automatic exchange of information in tax matters (the “AEOI Agreement”)
which provides for, inter alia, full withholding tax exemption of cross-border dividends, interest and royalties between related
entities from EU member states to Switzerland and vice versa if the respective requirements of Article 9 AEOI Agreement are met.
Individual and Corporate Income Tax on Dividends
Swiss resident individuals holding the common shares as part
of their private assets who receive dividends and similar distributions (including stock dividends and liquidation proceeds), which
are not repayments of the nominal value (
Nennwertrückzahlungen
) of the common shares or reserves paid out of capital
contributions (
Reserven aus Kapitaleinlagen
) are required to report such payments in their individual income tax returns
and are liable to Swiss federal, cantonal and communal income taxes on any net taxable income for the relevant tax period. Furthermore,
for the purpose of the Direct Federal Tax, dividends, shares in profits, liquidation proceeds and pecuniary benefits from shares
(including bonus shares) are included in the tax base for only 60% of their value (
Teilbesteuerung
), if the investment amounts
to at least 10% of nominal capital of the Company. Most Swiss cantons have introduced similar partial taxation measures at cantonal
and communal levels.
Swiss resident individuals as well as non-Swiss resident individual
taxpayers holding the common shares in connection with the conduct of a trade or business in Switzerland through a permanent establishment
or fixed place of business situated, for tax purposes, in Switzerland, are required to recognize dividends, distributions based
upon a capital reduction (
Nennwertrückzahlungen
) and reserves paid out of capital contributions (
Reserven aus Kapitaleinlagen
)
in their income statements for the relevant tax period and are liable to Swiss federal, cantonal and communal individual or corporate
income taxes, as the case may be, on any net taxable earnings accumulated (including the payment of dividends) for such period.
Furthermore, for the purpose of the Direct Federal Tax, dividends, shares in profits, liquidation proceeds and pecuniary benefits
from shares (including bonus shares) are included in the tax base for only 50% (
Teilbesteuerung
), if the investment is held
in connection with the conduct of a trade or business or qualifies as an opted business asset (
gewillkürtes Geschäftsvermögen
)
according to Swiss tax law and amounts to at least 10% of nominal capital of the Company. All cantons have introduced similar partial
taxation measures at cantonal and communal levels.
Swiss resident corporate taxpayers as well as non-Swiss resident
corporate taxpayers holding the common shares in connection with the conduct of a trade or business through a permanent establishment
or fixed place of business situated, for tax purposes, in Switzerland, are required to recognize dividends, distributions based
upon a capital reduction (
Nennwertrückzahlungen
) and reserves paid out of capital contributions (
Reserven aus Kapitaleinlagen
)
in their income statements for the relevant tax period and are liable to Swiss federal, cantonal and communal corporate income
taxes on any net taxable earnings accumulated for such period. Swiss resident corporate taxpayers as well as non-Swiss resident
corporate taxpayers holding the common shares in connection with the conduct of a trade or business through a permanent establishment
or fixed place of business situated, for tax purposes, in Switzerland may be eligible for participation relief (
Beteiligungsabzug
)
in respect of dividends and distributions based upon a capital reduction (
Nennwertrückzahlungen
) and reserves paid
out of capital contributions (
Reserven aus Kapitaleinlagen
) if the common shares held by them as part of a Swiss business
have an aggregate market value of at least CHF 1 million or represent at least 10% of the nominal capital of the Company or give
entitlement to at least 10% of the profits and reserves of the Company, respectively.
Recipients of dividends and similar distributions on the common
shares (including stock dividends and liquidation proceeds) who neither are residents of Switzerland nor during the current taxation
year have engaged in a trade or business in Switzerland and who are not subject to taxation in Switzerland for any other reason
are not subject to Swiss federal, cantonal or communal individual or corporate income taxes in respect of dividend payments and
similar distributions because of the mere holding of the common shares.
Wealth and Annual Capital Tax on Holding of Common Shares
Swiss resident individuals holding the common shares as private
assets are required to report their common shares as part of their wealth and will be subject to cantonal and communal wealth tax
to the extent the aggregate taxable net wealth is allocable to Switzerland.
Individuals and corporate taxpayers holding the common shares
in connection with the conduct of a trade or business in Switzerland through a permanent establishment or fixed place of business
situated, for tax purposes, in Switzerland, will be subject to cantonal and communal annual capital tax on the taxable capital
to the extent the aggregate taxable capital is allocable to Switzerland.
Individuals and corporate taxpayers not resident in Switzerland
for tax purposes and not holding the common shares in connection with the conduct of a trade or business in Switzerland through
a permanent establishment or fixed place of business situated, for tax purposes, in Switzerland, are not subject to wealth or annual
capital tax in Switzerland because of the mere holding of the common shares.
Capital Gains on Disposal of Common Shares
Swiss resident individuals who sell or otherwise dispose of
the common shares realize a tax-free capital gain, or a non-deductible capital loss, as the case may be, provided that they hold
the common shares as part of their private assets. Under certain circumstances, the sale proceeds may be requalified into taxable
investment income (e.g., professional securities dealer, etc.).
Capital gains realized on the sale of the common shares held
by Swiss resident individuals who do not hold the common shares as part of their private assets and Swiss resident corporate taxpayers,
as well as non-Swiss resident individuals and corporate taxpayers holding the common shares in connection with the conduct of a
trade or business in Switzerland through a permanent establishment or fixed place of business situated, for tax purposes, in Switzerland,
will be subject to Swiss federal, cantonal and communal individual or corporate income tax, as the case may be. This also applies
to Swiss resident individuals who, for individual income tax purposes, are deemed to be professional securities dealers for reasons
of, inter alia, frequent dealing and debt-financed purchases. Capital gains realized by resident individuals who hold the common
shares as business assets might be entitled to reductions or partial taxations similar to those mentioned above for dividends (
Teilbesteuerung
)
if certain conditions are met (e.g. holding period of at least one year and participation of at least 10% of nominal capital of
the Company).
Swiss resident corporate taxpayers as well as non-Swiss resident
corporate taxpayers holding the common shares in connection with the conduct of a trade or business, through a permanent establishment
or fixed place of business situated, for tax purposes, in Switzerland, are required to recognize such capital gain in their income
statements for the relevant tax period. Corporate taxpayers may qualify for participation relief on capital gains (
Beteiligungsabzug
),
if the common shares sold during the tax period represent at least 10% of the Company’s share capital or if the common shares
sold give entitlement to at least 10% of the Company’s profit and reserve and were held for at least one year. The tax relief
applies to the difference between the sale proceeds of common shares by the Company and the initial costs of the participation
(
Gestehungskosten
).
Individuals and corporations not resident in Switzerland for
tax purposes and not holding the common shares in connection with the conduct of a trade or business in Switzerland through a permanent
establishment or fixed place of business situated, for tax purposes, in Switzerland, are not subject to Swiss federal, cantonal
and communal individual income or corporate income tax, as the case may be, on capital gains realized on the sale of the common
shares.
Gift and Inheritance Tax
Transfers of common shares may be subject to cantonal and/or
communal inheritance or gift taxes if the deceased or the donor or the recipient were resident in a Canton levying such taxes and,
in international circumstances where residency requirements are satisfied, if the applicable tax treaty were to allocate the right
to tax to Switzerland.
Swiss Issuance Stamp Duty
The Company is subject to paying to the Swiss Federal Tax Administration
a 1% Swiss federal issuance stamp tax (
Emissionsabgabe
) on any increase of the nominal capital of the Company (with or without
issuance of shares) or any other equity contributions received by the Company (regardless of whether or not any compensation is
paid to the shareholder in connection with the contribution). Certain costs incurred in connection with the issuance of shares
(if any) may be deductible. There are several exemptions from issuance stamp tax that may apply under certain circumstances (e.g.,
certain intercompany reorganizations).
Swiss Securities Transfer Tax
The purchase or sale (or other financial transfer) of the common
shares, whether by Swiss residents or non-Swiss residents, may be subject to Swiss securities transfer tax of up to 0.15%, calculated
on the purchase price or the proceeds if the purchase or sale occurs through or with a Swiss bank or other Swiss securities dealer
as defined in the Swiss Federal Stamp Duty Act as an intermediary or party to the transaction unless an exemption applies.
Material U.S. Federal Income Tax Considerations for U.S.
Holders
The following is a description of the material U.S. federal
income tax consequences to the U.S. Holders (defined below) of owning and disposing of common shares, but it does not purport to
be a comprehensive description of all tax considerations that may be relevant to a particular person’s decision to acquire
the common shares. This discussion applies only to a U.S. Holder that holds common shares as capital assets for U.S. federal income
tax purposes. In addition, it does not describe all of the tax consequences that may be relevant in light of a U.S. Holder’s
particular circumstances, including alternative minimum tax consequences, the potential application of the provisions of the Internal
Revenue Code of 1986, as amended, or the Code, known as the Medicare contribution tax and tax consequences applicable to U.S. Holders
subject to special rules, such as:
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certain
financial institutions;
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dealers
or traders in securities who use a mark-to-market method of tax accounting;
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persons
holding common shares as part of a straddle, wash sale, or conversion transaction or persons entering into a constructive sale
with respect to the common shares;
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persons
whose functional currency for U.S. federal income tax purposes is not the U.S. dollar;
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entities
classified as partnerships for U.S. federal income tax purposes;
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tax-exempt
entities, including an “individual retirement account” or “Roth IRA”;
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persons
that own or are deemed to own ten percent or more of the vote or value of our stock;
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persons
who acquired our common shares pursuant to the exercise of an employee stock option or otherwise as compensation; or
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persons
holding shares in connection with a trade or business conducted outside of the United States.
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If an entity that is classified as a partnership for U.S. federal
income tax purposes holds common shares, the U.S. federal income tax treatment of a partner will generally depend on the status
of the partner and the activities of the partnership. Partnerships holding common shares and partners in such partnerships should
consult their tax advisers as to their particular U.S. federal income tax consequences of holding and disposing of the common shares.
This discussion is based on the Code, administrative pronouncements,
judicial decisions and final, temporary and proposed Treasury regulations, all as of the date hereof, any of which is subject to
change, possibly with retroactive effect.
A “U.S. Holder” is a beneficial owner of common
shares that is, for U.S. federal income tax purposes:
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an individual who is a citizen or resident of the United States;
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a corporation, or other entity taxable as a corporation for U.S. federal income tax purposes, created or organized in or under the laws of the United States, any state therein or the District of Columbia; or
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an estate the income of which is subject to U.S. federal income taxation regardless of its source; or
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a trust with respect to which a U.S. court is able to exercise primary supervision over its administration and one or more U.S. persons have the authority to control all of its substantial decisions, or that has a valid election in effect to be treated as a U.S. person under applicable U.S. Treasury Regulations.
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U.S. Holders should consult their tax advisers concerning the
U.S. federal, state, local and non-U.S. tax consequences of owning and disposing of common shares in their particular circumstances.
Passive Foreign Investment Company Rules
We believe that we were a “passive foreign investment
company,” or PFIC, for U.S. federal income tax purposes for our 2018 taxable year, and we expect to be a PFIC for our current
taxable year and for the foreseeable future. In addition, we may, directly or indirectly, hold equity interests in other PFICs,
or Lower-tier PFICs. In general, a non-U.S. corporation will be considered a PFIC for any taxable year in which (i) 75% or more
of its gross income consists of passive income or (ii) 50% or more of the average quarterly value of its assets consists of assets
that produce, or are held for the production of, passive income. For purposes of the above calculations, a non-U.S. corporation
that directly or indirectly owns at least 25% by value of the shares of another corporation is treated as if it held its proportionate
share of the assets of the other corporation and received directly its proportionate share of the income of the other corporation.
Passive income for this purpose generally includes, among other things, dividends, interest, rents, royalties and capital gains.
Under attribution rules, assuming we are a PFIC, U.S. Holders
will be deemed to own their proportionate shares of Lower-tier PFICs and will be subject to U.S. federal income tax according to
the rules described in the following paragraphs on (i) certain distributions by a Lower-tier PFIC and (ii) a disposition of shares
of a Lower-tier PFIC, in each case as if the U.S. Holder held such shares directly, even if the U.S. Holder has not received the
proceeds of those distributions or dispositions.
If we are a PFIC for any taxable year during which a U.S. Holder
holds our shares, the U.S. Holder may be subject to certain adverse tax consequences. Unless a U.S. Holder makes a timely “mark-to-market”
election or “qualified electing fund” election, each as discussed below, gain recognized on a disposition (including,
under certain circumstances, a pledge) of common shares by the U.S. Holder, or on an indirect disposition of shares of a Lower-tier
PFIC, will be allocated ratably over the U.S. Holder’s holding period for the shares. The amounts allocated to the taxable
year of disposition and to years before we became a PFIC, if any, will be taxed as ordinary income. The amounts allocated to each
other taxable year will be subject to tax at the highest rate in effect for that taxable year for individuals or corporations,
as appropriate, and an interest charge will be imposed on the tax attributable to the allocated amounts. Further, to the extent
that any distribution received by a U.S. Holder on our common shares (or a distribution by a Lower-tier PFIC to its shareholder
that is deemed to be received by a U.S. Holder) exceeds 125% of the average of the annual distributions on the shares received
during the preceding three years or the U.S. Holder’s holding period, whichever is shorter, the distribution will be subject
to taxation in the same manner as gain, described immediately above.
If we are a PFIC for any year during which a U.S. Holder holds
common shares, we generally will continue to be treated as a PFIC with respect to the U.S. Holder for all succeeding years during
which the U.S. Holder holds common shares, even if we cease to meet the threshold requirements for PFIC status. U.S. Holders should
consult their tax advisers regarding the potential availability of a “deemed sale” election that would allow them to
eliminate this continuing PFIC status under certain circumstances.
If our common shares are “regularly traded” on a
“qualified exchange,” a U.S. Holder may make a mark-to-market election with respect to the shares that would result
in tax treatment different from the general tax treatment for PFICs described above. Our common shares will be treated as “regularly
traded” in any calendar year in which more than a de minimis quantity of the common shares is traded on a qualified exchange
on at least 15 days during each calendar quarter. Nasdaq, on which the common shares are currently listed, is a qualified exchange
for this purpose. U.S. Holders should consult their tax advisers regarding the availability and advisability of making a mark-to-market
election in their particular circumstances and the consequences to them if the common shares are delisted from Nasdaq (see “Risk
Factors”). In particular, U.S. Holders should consider carefully the impact of a mark-to-market election with respect to
their common shares given that we may have Lower-tier PFICs for which a mark-to-market election may not be available.
If a U.S. Holder makes the mark-to-market election, the U.S.
Holder generally will recognize as ordinary income any excess of the fair market value of the common shares at the end of each
taxable year over their adjusted tax basis, and will recognize an ordinary loss in respect of any excess of the adjusted tax basis
of the common shares over their fair market value at the end of the taxable year (but only to the extent of the net amount of income
previously included as a result of the mark-to-market election). If a U.S. Holder makes the election, the U.S. Holder’s tax
basis in the common shares will be adjusted to reflect the income or loss amounts recognized. Any gain recognized on a sale or
other disposition of common shares in a year in which we are a PFIC will be treated as ordinary income and any loss will be treated
as an ordinary loss (but only to the extent of the net amount of income previously included as a result of the mark-to-market election).
Distributions paid on common shares will be treated as discussed below under “Taxation of Distributions.” Once made,
the election cannot be revoked without the consent of the Internal Revenue Service unless the common shares cease to be marketable.
Alternatively, a U.S. Holder can make an election, if we provide
the necessary information, to treat us and each Lower-tier PFIC as a qualified electing fund (a “QEF Election”) in
the first taxable year that we (and each Lower-tier PFIC) are treated as a PFIC with respect to the U.S. Holder. A U.S. Holder
must make the QEF Election for each PFIC by attaching a separate properly completed IRS Form 8621 (Information Return by a Shareholder
of a Passive Foreign Investment Company or Qualified Elected Fund) for each PFIC to its timely filed U.S. federal income tax return.
Upon request of a U.S. Holder, we will provide the information necessary for a U.S. Holder to make a QEF Election with respect
to us and will use commercially reasonable efforts to cause each Lower-tier PFIC that we control to provide such information with
respect to such Lower-tier PFIC. However, no assurance can be given that such QEF Election information will be available for any
Lower-tier PFIC and we cannot guarantee that we will continue to provide such determination or information for future years.
If a U.S. Holder makes a QEF Election with respect to a PFIC,
the U.S. Holder will be currently taxable on its pro rata share of the PFIC’s ordinary earnings and net capital gain (at
ordinary income and capital gain rates, respectively) for each taxable year that the entity is classified as a PFIC. If a U.S.
Holder makes a QEF Election with respect to us, any distributions paid by us out of our earnings and profits that were previously
included in the U.S. Holder’s income under the QEF Election will not be taxable to the U.S. Holder. A U.S. Holder will increase
its tax basis in its common shares by an amount equal to any income included under the QEF Election and will decrease its tax basis
by any amount distributed on the common shares that is not included in its income. In addition, a U.S. Holder will recognize capital
gain or loss on the disposition of common shares in an amount equal to the difference between the amount realized and its adjusted
tax basis in the common shares. U.S. Holders should note that if they make QEF Elections with respect to us and Lower-tier PFICs,
they may be required to pay U.S. federal income tax with respect to their common shares for any taxable year significantly in excess
of any cash distributions (which may be zero) received on the shares for such taxable year. U.S. Holders should consult their tax
advisers regarding making QEF Elections in their particular circumstances.
Furthermore, if with respect to a particular U.S. Holder we
are treated as a PFIC for the taxable year in which we paid a dividend or the prior taxable year, the preferential dividend rate
with respect to dividends paid to certain non-corporate U.S. Holders will not apply.
If we are a PFIC for any taxable year during which a U.S. Holder
holds common shares, such U.S. Holder will be required to file an annual information report with respect to the company and any
Lower-tier PFIC, generally with such U.S. Holder’s U.S. Federal income tax return on IRS Form 8621.
U.S. Holders should consult their tax advisers concerning our
PFIC status and the tax considerations relevant to an investment in a PFIC.
Taxation of Distributions
As discussed above under “Dividend Policy,” we do
not currently expect to make distributions on our common shares. In the event that we do make distributions of cash or other property,
subject to the PFIC rules described above, distributions paid on common shares, other than certain pro rata distributions of common
shares, will be treated as dividends to the extent paid out of our current or accumulated earnings and profits (as determined under
U.S. federal income tax principles). Because we may not account for our earnings and profits in accordance with U.S. federal income
tax principles, we expect that distributions generally will be reported to U.S. Holders as dividends. The U.S. dollar amount of
any dividend will be treated as foreign-source dividend income to U.S.
Dividends will not be eligible for the dividends-received deduction
generally available to U.S. corporations under the Code. In light of the discussion in “—
Passive Foreign Investment
Company Rules
” above, non-corporate U.S. Holders should expect that any dividends will not constitute “qualified
dividend income” eligible for preferential tax rates. Dividends will be included in a U.S. Holder’s income on the date
of the U.S. Holder’s receipt of the dividend.
The amount of any dividend income paid in a non-U.S. currency
will be the U.S. dollar amount calculated by reference to the exchange rate in effect on the date of receipt, regardless of whether
the payment is in fact converted into U.S. dollars. If the dividend is converted into U.S. dollars on the date of receipt, a U.S.
Holder should not be required to recognize foreign currency gain or loss in respect of the dividend income. A U.S. Holder may have
foreign currency gain or loss if the dividend is converted into U.S. dollars after the date of receipt.
Sale or Other Disposition of Common Shares
Subject to the PFIC rules described above, for U.S. federal
income tax purposes, gain or loss realized on the sale or other disposition of common shares will be capital gain or loss, and
will be long-term capital gain or loss if the U.S. Holder held the common shares for more than one year. The amount of the gain
or loss will equal the difference between the U.S. Holder’s tax basis in the common shares disposed of and the amount realized
on the disposition, in each case as determined in U.S. dollars. This gain or loss will generally be U.S.-source gain or loss for
foreign tax credit purposes. The deductibility of capital losses is subject to limitations.
Information Reporting and Backup Withholding
Payments of dividends and sales proceeds that are made within
the United States or through certain U.S.-related financial intermediaries generally are subject to information reporting, and
may be subject to backup withholding, unless (i) the U.S. Holder is a corporation or other exempt recipient or (ii) in the case
of backup withholding, the U.S. Holder provides a correct taxpayer identification number and certifies that it is not subject to
backup withholding.
Backup withholding is not an additional tax. The amount
of any backup withholding from a payment to a U.S. Holder will be allowed as a credit against the holder’s U.S. federal income
tax liability and may entitle it to a refund, provided that the required information is timely furnished to the IRS.
Certain U.S. Holders who are individuals and certain entities
may be required to report information relating to an interest in our common shares, or non-U.S. financial accounts through which
they are held. U.S. Holders should consult their tax advisers regarding their reporting obligations with respect to the common
shares.
PLAN OF DISTRIBUTION
We will deliver common shares upon the
exercise of the warrants. Each of the warrants contains instructions for exercise. We will deliver common shares in the manner
described above in the sections titled “Description of Series A Warrants” and “Description of Series B Warrants,”
as applicable. We do not know if or when the warrants will be exercised. We also do not know whether any of the common shares acquired
upon exercise will be sold.
Legal
Matters
The validity of the common shares and certain
other matters of Bermuda law will be passed upon for us by Conyers Dill & Pearman Limited, Bermuda. Certain matters of U.S.
federal and New York State law will be passed upon for us by Lowenstein Sandler LLP, New York, New York.
Experts
The consolidated financial statements incorporated
in this Prospectus by reference from Auris Medical Holding Ltd (formerly Auris Medical Holding AG)’s Annual Report on Form
20-F for the year ended December 31, 2018 have been audited by Deloitte AG, an independent registered public accounting firm, as
stated in their report, which is incorporated herein by reference (which report expresses an unqualified opinion on the financial
statements and includes an explanatory paragraph referring to the retrospective adjustments for the effects of the reverse share
split described in Note 21 to the consolidated financial statements). Such consolidated financial statements have been so incorporated
in reliance upon the report of such firm, given upon their authority as experts in accounting and auditing.
The current address of Deloitte AG is General
Guisan-Quai 38, 8002 Zurich, Switzerland, phone number + (41) 58 279 60 00.
Enforcement
of Judgments
Auris Medical Holding Ltd. is a Bermuda
exempted company. As a result, the rights of holders of its common shares will be governed by Bermuda law and its memorandum of
continuation and bye-laws. The rights of shareholders under Bermuda law may differ from the rights of shareholders of companies
incorporated in other jurisdictions. Many of our directors and some of the named experts referred to in this prospectus are not
residents of the United States, and a substantial portion of our assets are located outside the United States. As a result, it
may be difficult for investors to effect service of process on those persons in the United States or to enforce in the United States
judgments obtained in U.S. courts against us or those persons based on the civil liability provisions of the U.S. securities laws.
It is doubtful whether courts in Bermuda will enforce judgments obtained in other jurisdictions, including the United States, against
us or our directors or officers under the securities laws of those jurisdictions or entertain actions in Bermuda against us or
our directors or officers under the securities laws of other jurisdictions.
Where
You Can Find More Information
We have filed with the U.S. Securities
and Exchange Commission a registration statement (including amendments and exhibits to the registration statement) on Form F-1
under the Securities Act. This prospectus, which is part of the registration statement, does not contain all of the information
set forth in the registration statement and the exhibits and schedules to the registration statement. For further information,
we refer you to the registration statement and the exhibits and schedules filed as part of the registration statement. If a document
has been filed as an exhibit to the registration statement, we refer you to the copy of the document that has been filed. Each
statement in this prospectus relating to a document filed as an exhibit is qualified in all respects by the filed exhibit.
We are subject to the informational requirements
of the Exchange Act. Accordingly, we are required to file reports and other information with the SEC, including annual reports
on Form 20-F and reports on Form 6-K. You may inspect and copy reports and other information filed with the SEC at the Public Reference
Room at 100 F Street, N.E., Washington, D.C. 20549. Information on the operation of the Public Reference Room may be obtained by
calling the SEC at 1-800-SEC-0330. In addition, the SEC maintains an Internet website that contains reports and other information
about issuers, like us, that file electronically with the SEC. The address of that website is www.sec.gov.
As a foreign private issuer, we are exempt
under the Exchange Act from, among other things, the rules prescribing the furnishing and content of proxy statements, and our
directors, executive officers and principal shareholders are exempt from the reporting and short-swing profit recovery provisions
contained in Section 16 of the Exchange Act.
Incorporation
of Certain Information by Reference
The SEC allows us to incorporate by reference
information into this document. This 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 considered to be a part of this document, except for
any information superseded by information that is included directly in this prospectus or incorporated by reference subsequent
to the date of this prospectus.
We incorporate by reference the following
documents or information that we have filed with the SEC:
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our
Annual Report on Form 20-F for the fiscal year ended December 31, 2018;
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our
Reports on Form 6-K furnished on March 18, 2019 and April 5, 2019; and
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the
description of our common shares contained in our Report on Form 6-K furnished on March 18, 2019, including any subsequent amendment
or reports filed for the purpose of updating such description.
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Documents incorporated by reference in
this prospectus are available from us without charge upon written or oral request, excluding any exhibits to those documents that
are not specifically incorporated by reference into those documents. You can obtain documents incorporated by reference in this
document by requesting them from us in writing or at Auris Medical Holding Ltd., Clarendon House, 2 Church Street, Hamilton HM
11, Bermuda or via telephone at (441) 295-5950.
5,000,289 Common Shares
Issuable upon Exercise of Warrants
Auris Medical Holding Ltd.
PROSPECTUS
, 2019
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
Item 6. Indemnification of Directors and Officers
Section 98 of the Companies Act provides
generally that a Bermuda company may indemnify its directors, officers and auditors against any liability which by virtue of any
rule of law would otherwise be imposed on them in respect of any negligence, default, breach of duty or breach of trust, except
in cases where such liability arises from fraud or dishonesty of which such director, officer or auditor may be guilty in relation
to the company. Section 98 further provides that a Bermuda company may indemnify its directors, officers and auditors against any
liability incurred by them in defending any proceedings, whether civil or criminal, in which judgment is awarded in their favour
or in which they are acquitted or granted relief by the Supreme Court of Bermuda pursuant to section 281 of the Companies Act.
We have adopted provisions in our bye-laws
that provide that we shall indemnify our officers and directors in respect of their actions and omissions, except in respect of
their fraud or dishonesty. Our bye-laws provide that the shareholders waive all claims or rights of action that they might have,
individually or in right of the company, against any of the company’s directors or officers for any act or failure to act
in the performance of such director’s or officer’s duties, except in respect of any fraud or dishonesty of such director
or officer. Section 98A of the Companies Act permits us to purchase and maintain insurance for the benefit of any officer or director
in respect of any loss or liability attaching to him in respect of any negligence, default, breach of duty or breach of trust,
whether or not we may otherwise indemnify such officer or director.
We have entered into indemnification agreements
with each of the members of our board of directors and executive officers.
Insofar as indemnification for liabilities
arising under the Securities Act of 1933, as amended, may be permitted to directors, officers and controlling persons of the Company,
the Company has been advised that, in the opinion of the Securities and Exchange Commission, such indemnification is against public
policy as expressed in the Securities Act of 1933, as amended, and is, therefore, unenforceable.
Item 7. Recent Sales of Unregistered Securities
None.
Item 8. Exhibits
(a) Exhibits
See the Exhibit Index attached to this
registration statement, which is incorporated by reference herein.
(b)
Financial Statement Schedules
None.
Item 9. Undertakings
The undersigned hereby undertakes:
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which
offers or sales are being made, a post-effective amendment to this registration statement:
i. To include any prospectus
required by section 10(a)(3) of the Securities Act of 1933;
ii. To reflect in the prospectus
any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration
statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum
offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate,
the changes in volume and price represent no more than 20% change in the maximum aggregate offering price set forth in the “Calculation
of Registration Fee” table in the effective registration statement;
iii. To include any material
information with respect to the plan of distribution not previously disclosed in the registration statement or any material change
to such information in the registration statement.
(2) That, for the purpose of determining
any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by
means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.
(4) To file a post-effective amendment
to the registration statement to include any financial statements required by Item 8.A. of Form 20-F at the start of any delayed
offering or throughout a continuous offering. Financial statements and information otherwise required by Section 10(a)(3) of the
Act need not be furnished, provided that the registrant includes in the prospectus, by means of a post-effective amendment, financial
statements required pursuant to this paragraph (a)(4) and other information necessary to ensure that all other information in the
prospectus is at least as current as the date of those financial statements. Notwithstanding the foregoing, with respect to registration
statements on Form F-3, a post-effective amendment need not be filed to include financial statements and information required by
Section 10(a)(3) of the Act or Rule 3-19 of this chapter if such financial statements and information are contained in periodic
reports filed with or furnished to the Commission by the registrant pursuant to section 13 or section 15(d) of the Securities Exchange
Act of 1934 that are incorporated by reference in the Form F-3.
(5) That, for the purpose of determining
liability under the Securities Act of 1933 to any purchaser:
i. If the registrant is relying
on Rule 430B:
A. Each prospectus filed by
the registrant pursuant to Rule 424(b)(3) shall be deemed to be part of the registration statement as of the date the filed prospectus
was deemed part of and included in the registration statement; and
B. Each prospectus required
to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as part of a registration statement in reliance on Rule 430B relating
to an offering made pursuant to Rule 415(a)(1)(i), (vii), or (x) for the purpose of providing the information required by section
10(a) of the Securities Act of 1933 shall be deemed to be part of and included in the registration statement as of the earlier
of the date such form of prospectus is first used after effectiveness of the date of the first contract or sale of securities in
the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any person that is
at that date an underwriter, such date shall be deemed to be a new effective date of the registration statement relating to the
securities in the registration statement to which that prospectus relates, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof. Provided, however, that no statement made in a registration statement or
prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into
the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract
sale prior to such effective date, supersede or modify any statement that was made in the registration statement or prospectus
that was part of the registration statement or made in any such document immediately prior to such effective date; or
ii. If the registrant is
subject to Rule 430C, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering,
other than registration statements relying on Rule 430B or other prospectuses filed in reliance on Rule 430A, shall be deemed to
be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that
no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated
or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will,
as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the
registration statement or prospectus that was part of the registration statement or made in any such document immediately prior
to such date of first use.
(6) That, for the purpose of determining
liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities, the
undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration
statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or
sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser
and will be considered to offer or sell securities to such purchaser:
i. Any preliminary prospectus or prospectus of
the undersigned registrant relating to the offering required to be filed pursuant to Rule 424;
ii. Any free writing prospectus
relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant;
iii. The portion of any other
free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities
provided by or on behalf of the undersigned registrant; and
iv. Any other communication
that is an offer in the offering made by the undersigned registrant to the purchaser.
(b) Insofar as indemnification for liabilities arising
under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to
the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the U.S. Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid
by a director, officer, or controlling person of the registrant in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will,
unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction
the question of whether such indemnification by it is against public policy as expressed in the Act and will be governed by the
final adjudication of such issue.
(c) The undersigned registrant hereby undertakes that:
(1) For purposes of determining any
liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration
statement in reliance upon Rule 430A and contained in a form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared
effective.
(2) For the purpose of determining
any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed
to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
EXHIBIT INDEX
The following documents are filed as part
of this registration statement:
3.1
|
|
Memorandum of Continuance of the registrant (incorporated herein by reference to exhibit 1.2 of the Auris Medical Holding Ltd. Annual Report on Form 20-F filed with the Commission on March 14, 2019)
|
3.2
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|
Bye-laws of the registrant (incorporated herein by reference to exhibit 1.3 of the Auris Medical Holding Ltd. Annual Report on Form 20-F filed with the Commission on March 14, 2019)
|
4.1
|
|
Form of Registration Rights Agreement between Auris Medical Holding AG and the shareholders listed therein (incorporated by reference to exhibit 4.1 of the Auris Medical Holding Ltd. registration statement on Form F-1 (Registration no. 333-197105) filed with the Commission on July 21, 2014)
|
4.2
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|
Warrant Agreement, dated as of March 13, 2018, between Auris Medical Holding AG and Hercules Capital, Inc. (incorporated by reference to exhibit 2.2 of the Auris Medical Holding Ltd. Annual Report on Form 20-F filed with the Commission on March 22, 2018)
|
4.3
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|
Registration Rights Agreement, dated as of October 10, 2017 between Auris Medical Holding AG and Lincoln Park Capital Fund, LLC (incorporated by reference to exhibit 10.3 of the Auris Medical Holding Ltd. report on Form 6-K filed with the Commission on October 11, 2017)
|
4.4
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|
Purchase Agreement, dated as of May 2, 2018 between Auris Medical Holding AG and Lincoln Park Capital Fund, LLC (incorporated by reference to exhibit 10.1 of the Auris Medical Holding Ltd. report on Form 6-K filed with the Commission on May 2, 2018)
|
4.5
|
|
Registration Rights Agreement, dated as of May 2, 2018 between Auris Medical Holding AG and Lincoln Park Capital Fund, LLC (incorporated by reference to exhibit 10.2 of the Auris Medical Holding Ltd. report on Form 6-K filed with the Commission on May 2, 2018)
|
4.6
|
|
Form of Pre-Funded Warrant (incorporated by reference to exhibit 4.6 of the Auris Medical Holding Ltd. registration statement on Form F-1 (Registration no. 333-225676) filed with the Commission on July 12, 2018)
|
4.7
|
|
Form of Series A Warrant (incorporated by reference to exhibit 4.7 of the Auris Medical Holding Ltd. registration statement on Form F-1 (Registration no. 333-225676) filed with the Commission on July 12, 2018)
|
4.8
|
|
Form of Series B Warrant (incorporated by reference to exhibit 4.8 of the Auris Medical Holding Ltd. registration statement on Form F-1 (Registration no. 333-225676) filed with the Commission on July 12, 2018)
|
5.1
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|
Opinion of Conyers Dill & Pearman Limited, Bermuda counsel to the Company, as to the validity of the common shares of Auris Medical Holding Ltd.
|
10.1#
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|
Collaboration and License Agreement, dated October 21, 2003, between Auris Medical AG and Xigen SA (incorporated by reference to exhibit 10.1 of the Auris Medical Holding Ltd. registration statement on Form F-1 (Registration no. 333-197105) filed with the Commission on June 27, 2014)
|
10.2#
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|
Co-Ownership and Exploitation Agreement, dated September 29, 2003, between Auris Medical AG and INSERM (incorporated by reference to exhibit 10.2 of the Auris Medical Holding Ltd. registration statement on Form F-1 (Registration no. 333-197105) filed with the Commission on June 27, 2014)
|
10.3
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|
Form of Indemnification Agreement (incorporated by reference to exhibit 99.4 of the Auris Medical Holding Ltd. report on Form 6-K filed with the Commission on May 11, 2016)
|
10.4
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|
Stock Option Plan A (incorporated by reference to exhibit 10.11 of the Auris Medical Holding Ltd. registration statement on Form F-1 (Registration no. 333-197105) filed with the Commission on June 27, 2014)
|
10.5
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|
Stock Option Plan C (incorporated by reference to exhibit 10.12 of the Auris Medical Holding Ltd. registration statement on Form F-1 (Registration no. 333-197105) filed with the Commission on June 27, 2014)
|
10.6
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|
Equity Incentive Plan, as amended (incorporated by reference to exhibit 99.1 to the Auris Medical Holding Ltd. registration statement on Form S-8 (Registration no. 333-217306) filed with the Commission on April 14, 2017)
|
10.7
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|
English language translation of Lease Agreement between Auris Medical AG and PSP Management AG (incorporated by reference to exhibit 4.8 of the Auris Medical Holding Ltd. Annual Report on Form 20-F filed with the Commission on March 14, 2017)
|
10.8
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|
Controlled Equity OfferingSM Sales Agreement, dated as of June 1, 2016, between Auris Medical Holding AG and Cantor Fitzgerald & Co. (incorporated by reference to exhibit 1.1 of the Auris Medical Holding Ltd. report on Form 6-K filed with the Commission on June 1, 2016)
|
10.9
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|
Share Lending Agreement, dated as of June 1, 2016, between Thomas Meyer and Cantor Fitzgerald & Co. (incorporated by reference to exhibit 10.1 of the Auris Medical Holding Ltd. report on Form 6-K filed with the Commission on June 1, 2016)
|
10.10
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|
Loan and Security Agreement, dated as of July 19, 2016, between Auris Medical Holding AG, the several banks and other financial institutions or entities from time to time parties to the agreement and Hercules Capital, Inc. (incorporated by reference to exhibit 10.1 of the Auris Medical Holding Ltd. rep ort on Form 6-K filed with the Commission on July 19, 2016)
|
10.11
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|
Consent and Waiver, dated as of March 8, 2018, between Auris Medical Holding AG, the several banks and other financial institutions or entities from time to time parties to the agreement and Hercules Capital, Inc. (incorporated by reference to exhibit 4.12 of the Auris Medical Holding Ltd. Annual Report on Form 20-F filed with the Commission on March 22, 2018)
|
10.12
|
|
Joinder Agreement dated as of March 13, 2018 to the Loan and Security Agreement, dated as of July 19, 2016, between Auris Medical Holding AG, the several banks and other financial institutions or entities from time to time parties to the agreement and Hercules Capital, Inc. (incorporated by reference to exhibit 4.13 of the Auris Medical Holding Ltd. Annual Report on Form 20-F filed with the Commission on March 22, 2018)
|
10.13
|
|
Share Pledge Agreement, dated July 19, 2016, between Auris Medical Holding AG and Hercules Capital, Inc. (incorporated by reference to exhibit 10.3 of the Auris Medical Holding Ltd. report on Form 6-K filed with the Commission on July 19, 2016)
|
10.14
|
|
Claims Security Assignment Agreement, dated July 19, 2016, between Auris Medical Holding AG and Hercules Capital, Inc. (incorporated by reference to exhibit 10.4 of the Auris Medical Holding Ltd. report on Form 6-K filed with the Commission on July 19, 2016)
|
10.15
|
|
Bank Account Claims Security Assignment Agreement, dated July 19, 2016, between Auris Medical Holding AG and Hercules Capital, Inc. (incorporated by reference to exhibit 10.5 of the Auris Medical Holding Ltd. report on Form 6-K filed with the Commission on July 19, 2016)
|
10.16
|
|
Purchase Agreement, dated as of October 10, 2017 between Auris Medical Holding AG and Lincoln Park Capital Fund, LLC (incorporated by reference to exhibit 10.1 of the Auris Medical Holding Ltd. report on Form 6-K filed with the Commission on October 11, 2017)
|
10.17
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|
Purchase Agreement, dated as of October 10, 2017 between Auris Medical Holding AG and Lincoln Park Capital Fund, LLC (incorporated by reference to exhibit 10.2 of the Auris Medical Holding Ltd. report on Form 6-K filed with the Commission on October 11, 2017)
|
10.18
|
|
Placement Agency Agreement, dated as of January 28, 2018, between Auris Medical Holding AG and Ladenburg Thalmann & Co. Inc. (incorporated by reference to exhibit 1.1 of the Auris Medical Holding Ltd. report on Form 6-K filed with the Commission on January 30, 2018)
|
10.19
|
|
Securities Purchase Agreement, dated as of January 26, 2018 by and among Auris Medical Holding AG and the investors named therein (incorporated by reference to exhibit 10.1 of the Auris Medical Holding Ltd. report on Form 6-K filed with the Commission on January 30, 2018)
|
10.20
|
|
Agreement and Plan of Merger, dated as of February 9, 2018, by and among Auris Medical Holding AG and Auris Medical NewCo Holding AG (incorporated by reference to exhibit 99.3 of the Auris Medical Holding Ltd. report on Form 6-K filed with the Commission on February 9, 2018)
|
10.21
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|
Share Transfer Agreement, dated as of February 9, 2018 by and between Thomas Meyer and Auris Medical Holding AG (incorporated by reference to exhibit 4.22 of the Auris Medical Holding Ltd. Annual Report on Form 20-F filed with the Commission on March 22, 2018)
|
10.22
|
|
Sales Agreement, dated as of November 30, 2018, between Auris Medical Holding AG and A.G.P./Alliance Global Partners (incorporated by reference to exhibit 1.1 of the Auris Medical Holding Ltd. report on Form 6-K filed with the Commission on November 30, 2018)
|
10.23
|
|
Form of Indemnification Agreement (incorporated by reference to exhibit 10.23 of the Auris Medical Holding Ltd. registration statement on Form F-1 (Registration no. 333-229465) filed with the Commission on March 20, 2019)
|
10.24
|
|
Amendment No. 1 to Sales Agreement, dated as of April 5, 2019, between Auris Medical Holding Ltd. and A.G.P./Alliance Global Partners (incorporated by reference to exhibit 1.1 of the Auris Medical Holding Ltd. report on Form 6-K filed with the Commission on April 5, 2019)
|
21.1
|
|
List of subsidiaries (incorporated by reference to exhibit 21.1 of the Auris Medical Holding Ltd. registration statement on Form F-1 (Registration no. 333-197105) filed with the Commission on June 27, 2014)
|
23.1
|
|
Consent of Deloitte AG
|
23.2
|
|
Consent of Conyers Dill & Pearman Limited, Bermuda counsel to the Company (included in Exhibit 5.1)
|
24.1*
|
|
Powers
of attorney (included on the signature page of the registration statement (Registration no. 333-225676) filed on June 15,
2018)
|
|
#
|
Confidential
treatment requested as to portions of the exhibit. Confidential materials omitted and filed separately with the Securities and
Exchange Commission.
|
SIGNATURES
Pursuant to the requirements of the Securities
Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing
on Form F-1 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized,
in Hamilton, Bermuda on April 11, 2019.
|
Auris Medical Holding Ltd.
|
|
|
|
By:
|
/s/ Thomas Meyer
|
|
|
Name:
|
Thomas Meyer
|
|
|
Title:
|
Chief Executive Officer
|
Pursuant to the requirements of the Securities
Act of 1933, as amended, this registration statement has been signed by the following persons on April 11, 2019 in the capacities
indicated:
|
By:
|
/s/ Thomas Meyer
|
|
|
Name:
|
Thomas Meyer
|
|
|
Title:
|
Chief Executive Officer and Director
(principal executive officer)
|
|
|
|
|
|
By:
|
*
|
|
|
Name:
|
Hernan Levett
|
|
|
Title:
|
Chief Financial Officer
(principal financial officer and principal accounting officer)
|
|
|
|
|
|
By:
|
*
|
|
|
Name:
|
Armando Anido
|
|
|
Title:
|
Director
|
|
|
|
|
|
By:
|
*
|
|
|
Name:
|
Mats Blom
|
|
|
Title:
|
Director
|
|
|
|
|
|
By:
|
*
|
|
|
Name:
|
Alain Munoz
|
|
|
Title:
|
Director
|
|
|
|
|
|
By:
|
*
|
|
|
Name:
|
Calvin Roberts
|
|
|
Title:
|
Director
|
|
|
|
|
|
By:
|
*
|
|
|
Name:
|
Colleen A. DeVries
|
|
|
Title:
|
SVP of Cogency Global Inc.
Authorized Representative in the United States
|
*By:
|
/s/ Thomas Meyer
|
|
|
Name:
|
Thomas Meyer
|
|
|
Title:
|
Attorney-in-Fact
|
|
II-7
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