This prospectus relates to the sale or other disposition from
time to time of up to 15,455,960 shares of our common stock, $0.001 par value per share, and up to 8,809,897 shares of common stock
issuable upon the exercise of warrants held by the selling stockholders named in this prospectus, including their transferees,
pledgees, donees or successors. We are not selling any shares of common stock under this prospectus and will not receive any of
the proceeds from the sale of shares of common stock by the selling stockholders.
The selling stockholders may sell or otherwise dispose of the
shares of common stock covered by this prospectus in a number of different ways and at varying prices. We provide more information
about how the selling stockholders may sell or otherwise dispose of their shares of common stock in the section entitled “Plan
of Distribution” beginning on page 16. The selling stockholders will pay all brokerage fees and commissions and similar
expenses. We will pay all expenses (except brokerage fees and commissions and similar expenses) relating to the registration of
the shares with the Securities and Exchange Commission. No underwriter or other person has been engaged to facilitate the sale
of shares of our common stock in this offering.
Our common stock is listed on the Nasdaq Capital Market under
the symbol “CTXR”. The last reported sale price of our common stock on February 3, 2021 was $1.44 per share. We recommend
that you obtain current market quotations for our common stock prior to making an investment decision.
SPECIAL
NOTE REGARDING FORWARD-LOOKING STATEMENTS AND INDUSTRY DATA
This prospectus contains forward-looking statements that
are based on our management’s belief and assumptions and on information currently available to our management. Although we
believe that the expectations reflected in these forward-looking statements are reasonable, these statements relate to future events
or our future financial performance, and involve known and unknown risks, uncertainties and other factors that may cause our actual
results, levels of activity, performance or achievements to be materially different from any future results, levels of activity,
performance or achievements expressed or implied by these forward-looking statements. Forward-looking statements in this prospectus
include, but are not limited to, statements about:
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our need for, and ability to raise, additional capital;
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the number, designs, timing and results of our pre-clinical and clinical trials;
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the regulatory review process and any regulatory approvals that may be issued or denied by the
FDA or other regulatory agencies;
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the commercial success and market acceptance of any of our product candidates that are approved
for marketing in the United States or other countries;
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the accuracy of our estimates and of third-party estimates of the size and characteristics of
the markets that may be addressed by our product candidates;
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our ability to recruit and retain qualified management and scientific and technical personnel
to carry out our operations;
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our ability to manufacture sufficient amounts of our product candidates for clinical trials and,
if approved, our products for commercialization activities;
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our need to secure collaborators to license, manufacture, market and sell any products for which
we receive regulatory approval;
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our ability to protect our intellectual property and operate our business without infringing upon
the intellectual property rights of others;
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the medical benefits, effectiveness and safety of our product candidates;
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the safety and efficacy of medicines or treatments introduced by competitors that are targeted
to indications for which our product candidates are being developed;
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our current or prospective collaborators’ compliance or non-compliance with their obligations
under our agreements with them;
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the impact of the COVID-19 pandemic on our clinical trials, business and operations; and
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other factors discussed elsewhere in this prospectus or incorporated by reference herein.
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In some cases, you can identify
forward-looking statements by terminology such as “may”, “will”, “should”,
“expects”, “intends”, “plans”, “anticipates”, “believes”,
“estimates”, “predicts”, “potential”, “continue” or the negative of these
terms or other comparable terminology. These statements are only predictions. You should not place undue reliance on
forward-looking statements because they involve known and unknown risks, uncertainties and other factors, which are, in some
cases, beyond our control and which could materially affect results. Factors that may cause actual results to differ
materially from current expectations include, among other things, those listed under “Risk Factors” and elsewhere
in this prospectus. Actual events or results may vary significantly from those implied or projected by the forward-looking
statements. No forward-looking statement is a guarantee of future performance. You should read this prospectus and the
documents that we reference in this prospectus and have filed with the SEC as exhibits to this prospectus completely and with
the understanding that our actual future results may be materially different from any future results expressed or implied by
these forward-looking statements. The forward-looking statements in this prospectus represent our views as of the date of
this prospectus or the document incorporated by reference herein. We anticipate that subsequent events and developments will
cause our views to change. However, while we may elect to update these forward-looking statements at some point in the
future, we have no current intention of doing so except to the extent required by applicable law. You should therefore not
rely on these forward-looking statements as representing our views as of any date subsequent to the date of this
prospectus or the document incorporated by reference herein.
This prospectus and the documents incorporated by reference
into this prospectus contain “forward-looking statements” that involve risks and uncertainties, as well as assumptions
that, if they never materialize or prove incorrect, could cause our results to differ materially from those expressed or implied
by such forward-looking statements. The statements contained in this prospectus and the documents incorporated by reference into
this prospectus that are not purely historical are forward-looking statements within the meaning of Section 27A of the Securities
Act of 1933, as amended, or Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or Exchange Act.
This prospectus, the documents incorporated by reference
into this prospectus and the documents that we have filed as exhibits to the Registration Statement, of which this prospectus is
a part, include statistical and other industry and market data that we obtained from industry publications and research, surveys
and studies conducted by third parties. Industry publications and third-party research, surveys and studies generally indicate
that their information has been obtained from sources believed to be reliable, although they do not guarantee the accuracy or completeness
of such information. We believe that the data obtained from these industry publications and third-party research, surveys and studies
are reliable. We are ultimately responsible for all disclosure included in this prospectus.
You should rely only on the information contained in this
prospectus, as supplemented and amended. We have not authorized anyone to provide you with information that is different. This
prospectus may only be used where it is legal to sell these securities. The information in this prospectus may only be accurate
on the date of this prospectus.
In addition, projections, assumptions, and estimates of
our future performance and the future performance of the industry in which we operate are necessarily subject to a high degree
of uncertainty and risk due to a variety of factors, including those described in “Risk Factors”. These and other factors
could cause results to differ materially from those expressed in the estimates made by the independent parties and by us.
THE COMPANY
Overview
Citius Pharmaceuticals, Inc., headquartered in Cranford, New
Jersey, is a specialty pharmaceutical company dedicated to the development and commercialization of critical care products targeting
important medical needs with a focus on anti-infective products in adjunct cancer care, unique prescription products and, recently,
mesenchymal stem cell therapy. Our goal generally is to achieve leading market positions by providing therapeutic products that
address unmet medical needs yet have a lower development risk than usually is associated with new chemical entities. New formulations
of previously approved drugs with substantial existing safety and efficacy data are a core focus. We seek to reduce development
and clinical risks associated with drug development, yet still focus on innovative applications. Our strategy centers on products
that have intellectual property and regulatory exclusivity protection, while providing competitive advantages over other existing
therapeutic approaches.
The Company was founded as Citius Pharmaceuticals, LLC, a Massachusetts
limited liability company, on January 23, 2007. On September 12, 2014, Citius Pharmaceuticals, LLC entered into a Share Exchange
and Reorganization Agreement, with Citius Pharmaceuticals, Inc. (formerly Trail One, Inc.), a publicly traded company incorporated
under the laws of the State of Nevada. Citius Pharmaceuticals, LLC became a wholly-owned subsidiary of Citius Pharmaceuticals,
Inc. (“Citius”). On March 30, 2016, Citius acquired Leonard-Meron Biosciences, Inc. (“LMB”) as a wholly-owned
subsidiary. LMB was a pharmaceutical company focused on the development and commercialization of critical care products with a
concentration on anti-infectives. On September 11, 2020, we formed NoveCite, Inc. (“NoveCite”), a Delaware corporation,
of which we own 75% of the issued and outstanding capital stock. NoveCite is focused on the development and commercialization of
its proprietary mesenchymal stem cells for the treatment of acute respiratory disease syndrome (“ARDS”).
Mino-Lok
Mino-Lok is a patented solution containing minocycline, disodium
ethylenediaminetetraacetic acid (edetate), and ethyl alcohol, all of which act synergistically to treat and salvage infected central
venous catheters (“CVCs”) in patients with catheter related bloodstream infections (“CRBSIs”). Mino-Lok
breaks down biofilm barriers formed by bacterial colonies, eradicates the bacteria, and provides anti-clotting properties to maintain
patency in CVCs.
The administration of Mino-Lok consists of filling the lumen
of the catheter with 0.8 ml to 2.0 ml of Mino-Lok solution. The catheter is then “locked”, meaning that the solution
remains in the catheter without flowing into the vein. The lock is maintained for a dwell-time of two hours while the catheter
is not in use. If the catheter has multiple lumens, all lumens may be locked with the Mino-Lok solution either simultaneously or
sequentially. If patients are receiving continuous infusion therapy, the catheters alternate between being locked with the Mino-Lok
solution and delivering therapy. The Mino-Lok therapy is two hours per day for at least five days, usually with two additional
locks in the subsequent two weeks. After locking the catheter for two hours, the Mino-Lok solution is aspirated, and the catheter
is flushed with normal saline. At that time, either the infusion will be continued, or will be locked with the standard-of-care
lock solution until further use of the catheter is required. In a clinical study conducted by MD Anderson Cancer Center (“MDACC”),
there were no serum levels of either minocycline or edetate detected in the sera of several patients who underwent daily catheter
lock solution with minocycline and edetate (“M-EDTA”) at the concentration level proposed in Mino-Lok treatment. Thus,
it has been demonstrated that the amount of either minocycline or edetate that leaks into the serum is very low or none at all.
Phase 2b Results
From April 2013 to July 2014, 30 patients with CVC-related bloodstream
infection were enrolled at MDACC in a prospective Phase 2b study. Patients received Mino-Lok therapy for two hours once daily for
a minimum of five days within the first week, followed by two additional locks within the next two weeks. Patients were followed
for one month post-lock therapy. Demographic information, clinical characteristics, laboratory data, therapy, as well as adverse
events and outcome were collected for each patient. Median age at diagnosis was 56 years (range: 21-73 years). In all patients,
prior to the use of lock therapy, systemic treatment with a culture-directed, first-line intravenous antibiotic was started. Microbiological
eradication was achieved at the end of therapy in all cases. None of the patients experienced any serious adverse event related
to the lock therapy.
The active arm, which is the Mino-Lok treated group of patients,
was then compared to 60 patients in a matched cohort that experienced removal and replacement of their CVCs within the same contemporaneous
timeframe. The patients were matched for cancer type, infecting organism, and level of neutropenia. All patients were cancer patients
and treated at MDACC. The efficacy of Mino-Lok therapy was 100% in salvaging CVCs, demonstrating equal effectiveness to removing
the infected CVC and replacing it with a new catheter.
The main purpose of the study was to show that Mino-Lok therapy
was at least as effective as the removal and replacement of CVCs when CRBSIs are present, and that the safety was better, that
is, the complications of removing an infected catheter and replacing with a new one could be avoided. In addition to having a 100%
efficacy rate with all CVCs being salvaged, Mino-Lok therapy had no significant adverse events (“SAEs”), compared to
an 18% SAE rate in the matched cohort where patients had the infected CVCs removed and replaced with a fresh catheter. There were
no overall complication rates in the Mino-Lok arm group compared to 11 patients with events (18)% in the control group. These events
included bacterial relapse (5)% at four weeks post-intervention, and a number of complications associated with mechanical manipulation
in the removal or replacement procedure for the catheter (10)% or development of deep-seated infections such as septic thrombophlebitis
and osteomyelitis (8)%. As footnoted, six patients had more than one complication in the control arm group.
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Mino-Lok Arm
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Control Arm
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Parameter
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N
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(%)
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N
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(%)
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Patients
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30
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(100
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)%
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60
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(100
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)%
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Cancer type
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- Hematologic
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20
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(67
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)
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48
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(80
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- Solid tumor
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10
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(33
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)
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12
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(20
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ICU Admission
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4
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(13
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)
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4
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(7
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Mech. Ventilator
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3
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(10
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0
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(0
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)
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Bacteremia
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- Gram+
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17
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(57
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)*
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32
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(53
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)
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- Gram-
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14
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(47
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)*
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28
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(47
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)
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Neutropenia (<500)
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19
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(63
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)
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36
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(60
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Microbiologic Eradication
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30
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(100
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)
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60
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(100
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- Relapse
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0
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(0
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)
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3
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(5
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Complications
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0
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(0
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)
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8
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(13
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SAEs related to R&R
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0
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(0
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)
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6
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(10
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Overall Complication Rate
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0
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(0
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)%
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11
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**
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(18
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)%
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*
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1 polymicrobial patient had a Gram+ and a Gram- organism cultured
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**
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6 patients had > 1 complication
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Source: Dr. Issam Raad, Antimicrobial Agents and Chemotherapy,
June 2016, Vol. 60 No. 6, Page 3429
Phase 3 Trial
In November 2016, the Company initiated site recruitment for
Phase 3 clinical trials. From initiation through the first quarter of 2017, the Company received input from several sites related
to the control arm as being less than standard-of-care for some of the respective institutions. The Company worked closely with
the U.S. Food and Drug Administration (“FDA”) with respect to the design of the Phase 3 trial and received feedback
on August 17, 2017. The FDA stated that they recognized that there is an unmet medical need in salvaging infected catheters and
agreed that an open label, superiority design would address the Company’s concerns and would be acceptable to meet the requirements
of a new drug application. The Company amended the Phase 3 study design to remove the saline and heparin placebo control arm and
to use an active control arm that conforms with today’s current standard-of-care. Patient enrollment commenced in February
2018.
The Mino-Lok Phase 3 trial was originally planned to enroll
700 patients in 50 participating institutions, all located in the U.S. There will be interim analyses at both the 50% and 75% points
of the trial as measured by the number of patients treated. As of November 15, 2020, there are 29 active sites currently enrolling
patients including such academic centers as MDACC, Henry Ford Health Center, Georgetown University Medical Center, and others.
There are two additional medical centers in startup mode. There are no other remaining sites in feasibility.
In September 2019, the Company announced that the FDA agreed
to a new primary efficacy endpoint of “time to catheter failure” in comparing Mino-Lok to the antibiotic lock control
arm. This change in the trial design reduced the required patient sample size of the trial from 700 subjects to approximately 144
available subjects to achieve the pre-specified 92 catheter failure events needed to conclude the trial. Additionally, the Company
submitted a response to the FDA that it will implement this change in the primary endpoint and expected it to result in less than
150 subjects needed in its Phase 3 trial. The new primary endpoints require that the time to catheter failure be at least 38 days
for Mino-Lok versus 21 days for the standard of care antibiotic locks.
In October 2019, the FDA agreed that the patient sample size
of approximately 144 patients was acceptable.
In October 2019, the Company announced that the Phase 3 trial
had reached the 40% completion triggering an interim futility analysis by the data monitoring committee (the “DMC”).
The DMC is an independent panel of experts that review progress regarding the safety and efficacy of drugs in clinical trials,
and to determine if the trial may be futile in achieving its endpoints or if the trial should be modified in any way.
In December 2019, the DMC convened and recommended that the
trial continue with no changes because the analysis showed a positive outcome, as it met the prespecified interim futility analysis
criteria.
In May 2020, we announced that we are providing free access
to Mino-Lok for healthcare providers under an Expanded Access protocol to ease the burden associated with the COVID-19 pandemic.
Through the Expanded Access protocol, an infected central venous catheter can now be treated with Mino-Lok, potentially avoiding
the need for the removal and replacement procedure.
In June 2020, we announced that we had received positive feedback
from the FDA on our proposed catheter compatibility studies for Mino-Lok. The studies, if and when successfully completed, should
allow Mino-Lok to be labeled for use with all commercially available CVCs and peripherally inserted central catheters (PICCs) on
the U.S. market. It is further assumed that these studies will meet European and world standards. The ability to be labeled without
restrictions with respect to catheter type would allow Mino-Lok unrestricted access to the full U.S. and world markets for an effective
antibiotic lock therapy for central line associated blood stream infections (“CLABSIs”).
In September 2020, we announced that another DMC meeting was
held to review the data being generated and analyzed in the Mino-Lok Phase 3 trial based on progress to date, and to make recommendations
to us as to any action that may be necessary regarding the study. After reviewing these data, the DMC members stated that they
did not find any safety signals; and they also recommended continuing the trial without any modifications. The DMC further conducted
an ad hoc meeting and agreed with the Company that a 75% interim analysis be conducted as planned in which superior
efficacy is evaluated. Due to the COVID-19 pandemic, the interim analysis will be performed at the 65% threshold and is expected
to be completed by March 2021 with the DMC convening in April 2021.
In September 2020 the Company announced that the three registration
batches for all components of Mino Lok were manufactured and that clinical sites were resupplied with registration product.
In November 2020, the Company announced that the three components
of Mino-Lok, minocycline, disodium edetate (“EDTA”), and ethanol, were superior to EDTA and ethanol in their ability
to eradicate resistant staphylococcal biofilms.
Fast Track Designation
In October 2017, the Company received official notice from FDA
that the investigational program for Mino-Lok was granted “Fast Track” status. Fast Track is a designation that expedites
FDA review to facilitate development of drugs which treat a serious or life-threatening condition and fill an unmet medical need.
A drug that receives Fast Track designation is eligible for the following:
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More frequent meetings with FDA to discuss the drug’s development plan and ensure collection of appropriate data needed
to support drug approval;
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More frequent written correspondence from FDA about the design of the clinical trials;
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Priority review to shorten the FDA review process for a new drug from ten months to six months; and
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Rolling review, which means Citius can submit completed sections of its New Drug Application (“NDA”) for review
by FDA, rather than waiting until every section of the application is completed before the entire application can be reviewed.
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Mino-Lok International Study
In October 2017, data from an international study on Mino-Lok
was presented at the Infectious Disease Conference (“ID Week”), in San Diego, California. The 44-patient study was
conducted in Brazil, Lebanon, and Japan and showed Mino-Lok therapy was an effective intervention to salvage long-term, infected
CVCs in CRBSIs in patients who had cancer with limited vascular access. This study showed 95% effectiveness for Mino-Lok therapy
in achieving microbiological eradication of the CVCs as compared to 83% for the control. The single failure in the Mino-Lok arm
was due to a patient with Burkholderia cepacia that was resistant to all antibiotics tested.
Stability Patent Application for Mino-Lok
In October 2018, the U.S. Patent and Trademark Office (“USPTO”)
issued U.S. Patent No. 10,086,114, entitled “Antimicrobial Solutions with Enhanced Stability.” This invention overcomes
limitations in mixing antimicrobial solutions in which components have precipitated because of physical and/or chemical factors,
thus limiting the stability of the post-mix solutions. The scientists and technologists at MDACC have been able to improve the
stability of the post-mixed solutions through adjustments of the post-mixed pH of the solution. This may allow for longer storage
time of the ready-to-use solution. Citius holds the exclusive worldwide license which provides access to this patented technology
for development and commercialization of Mino-Lok.
On October 9, 2019, the European Patent Office (“EPO”)
granted European Patent No. 3370794, entitled “Antimicrobial Solutions with Enhanced Stability.” The grant of this
European patent strengthens the intellectual property protection for Mino-Lok through November of 2036. This invention overcomes
limitations in mixing antimicrobial solutions, in which components have precipitated because of physical and/or chemical factors,
thus limiting the stability of the post-mix solutions. The scientists and technologists at MDACC have been able to improve the
stability of the post-mixed solutions through adjustments of the post-mixed pH of the solution. This may allow for longer storage
time of the ready-to-use solution.
Mino-Wrap
On January 2, 2019, we entered into a patent and technology
license agreement with the Board of Regents of the University of Texas System on behalf of MDACC, whereby we in-licensed exclusive
worldwide rights to the patented technology for any and all uses relating to breast implants, specifically the Mino-Wrap technology.
This includes rights to U.S. Patent No. 9,849,217, which was issued on December 16, 2017. We intend to develop Mino-Wrap as a liquefying,
gel-based wrap containing minocycline and rifampin for the reduction of infections associated with breast implants following breast
reconstructive surgeries. We are required to use commercially reasonable efforts to commercialize Mino-Wrap under several regulatory
scenarios and achieve milestones associated with these regulatory options leading to an approval from the FDA. Mino-Wrap will require
pre-clinical development prior to any regulatory pathway. In July 2019, we announced that we intend to pursue the FDA’s Investigational
New Drug (“IND”) regulatory pathway for the development of Mino-Wrap. On August 4, 2020, we announced that we had submitted
a briefing package to the FDA for a pre-IND consultation on Mino-Wrap. In December 2020, we reported the FDA response to the briefing
package and commented that the FDA was in general agreement with our planned pre-clinical program and gave further guidance on
our clinical plans.
Halo-Lido
Overview
Halo-Lido is a topical formulation of halobetasol propionate,
a corticosteroid and lidocaine that is intended for the treatment of hemorrhoids. To our knowledge, there are currently no FDA-approved
prescription drug products for the treatment of hemorrhoids. Some physicians are known to prescribe topical steroids for the treatment
of hemorrhoids. In addition, there are various topical combination prescription products containing halobetasol propionate along
with lidocaine or pramoxine, each a topical anesthetic, that are prescribed by physicians for the treatment of hemorrhoids. These
products contain drugs that were in use prior to the start of the Drug Efficacy Study Implementation (“DESI”) program
and are commonly referred to as DESI drugs. However, none of these single-agent or combination prescription products have been
clinically evaluated for safety and efficacy and approved by the FDA for the treatment of hemorrhoids. Further, many hemorrhoid
patients use over the counter (“OTC”) products as their first line therapy. OTC products contain any one of several
active ingredients including glycerin, phenylephrine, pramoxine, white petrolatum, shark liver oil and/or witch hazel, for symptomatic
relief.
Development of Hemorrhoids Drugs
Hemorrhoids are a common gastrointestinal disorder, characterized
by anal itching, pain, swelling, tenderness, bleeding and difficulty defecating. In the U.S., hemorrhoids affect nearly 5% of the
population, with approximately 10 million persons annually admitting to having symptoms of hemorrhoidal disease. Of these persons,
approximately one third visit a physician for evaluation and treatment of their hemorrhoids. The data also indicate that for both
sexes a peak of prevalence occurs from age 45 to 65 years with a subsequent decrease after age 65 years. Caucasian populations
are affected significantly more frequently than African Americans, and increased prevalence rates are associated with higher socioeconomic
status in men but not women. Development of hemorrhoids before age 20 is unusual. In addition, between 50% and 90% of the general
U.S., Canadian and European population will experience hemorrhoidal disease at least once in life. Although hemorrhoids and other
anorectal diseases are not life-threatening, individual patients can suffer from agonizing symptoms which can limit social activities
and have a negative impact on the quality of life.
Hemorrhoids are defined as internal or external according to
their position relative to the dentate line. Classification is important for selecting the optimal treatment for an individual
patient. Accordingly, physicians use the following grading system referred to as the Goligher’s classification of internal
hemorrhoids:
Grade I
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Hemorrhoids not prolapsed but bleeding.
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Grade II
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Hemorrhoids prolapse and reduce spontaneously with or without bleeding.
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Grade III
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Prolapsed hemorrhoids that require reduction manually.
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Grade IV
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Prolapsed and cannot be reduced including both internal and external hemorrhoids that are confluent from skin tag to inner anal canal.
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Development Activities to Date
In the fall of 2015, we completed dosing patients in a double-blind
dose ranging placebo controlled Phase 2a study where six different formulations containing hydrocortisone and lidocaine in various
strengths were tested against the vehicle control. The objectives of this study were to: (1) demonstrate the safety and efficacy
of the formulations when applied twice daily for two weeks in subjects with Grade I or II hemorrhoids, and (2) assess the potential
contribution of lidocaine hydrochloride and hydrocortisone acetate, alone or in combination for the treatment of symptoms of Goligher’s
Classification Grade I or II hemorrhoids.
Symptom improvement was observed based on a global score of
disease severity (“GSDS”) and based on some of the individual signs and symptoms of hemorrhoids, specifically itching
and overall pain and discomfort. Within the first few days of treatment, the combination products (containing both hydrocortisone
and lidocaine) were directionally favorable versus the placebo and their respective individual active treatment groups (e.g., hydrocortisone
or lidocaine alone) in achieving ‘almost symptom free’ or ‘symptom free’ status according to the GSDS scale.
These differences suggest the possibility of a benefit for the combination product formulation.
Overall, results from adverse event reporting support the safety
profile of all test articles evaluated in this study and demonstrate similar safety profiles as compared to the vehicle. The safety
findings were unremarkable. There was a low occurrence of adverse events and a similar rate of treatment related adverse events
across all treatment groups. The majority of adverse events were mild and only one was severe. None of the adverse events were
an SAE and the majority of adverse events were recovered/resolved at the end of the study. There were only two subjects who were
discontinued from the study due to adverse events.
In addition to the safety and dose-ranging information, information
was obtained relating to the use of the GSDS as an assessment tool for measuring the effectiveness of the test articles. Individual
signs and symptoms were also assessed but can vary from patient to patient. Therefore, the goal of the GSDS was to provide an assessment
tool that could be used for all patients regardless of which signs and symptoms they are experiencing. The GSDS proved to be a
more effective tool for assessing the severity of the disease and the effectiveness of the drug when compared to the assessment
of the individual signs and symptoms. Citius believes that we can continue to develop this assessment tool as well as other patient
reported outcome endpoints for use in the next trials and in the pivotal trial.
Information was also obtained about the formulation of the drug and the vehicle. As a result of this study, we believed that the performance
of the active arms of the study relative to the vehicle could be improved by re-formulating our topical preparation. Therefore, we initiated
work on vehicle formulation and evaluation of higher potency steroids.
In June and July 2016, we engaged the Dominion Group, a leading provider of healthcare and pharmaceutical marketing research services.
The primary market research was conducted to understand the symptoms that are most bothersome to patients better in order to develop meaningful
endpoints for the clinical trials. We also learned about the factors that drive patients to seek medical attention for hemorrhoids in
an effort to understand the disease impact on quality of life. The results of this survey are able to help us develop patient reported
outcome evaluation tools. These tools can be used in clinical trials to evaluate the patients’ conditions and to assess the performance
of the test articles.
In March 2018, we announced that we had selected a higher potency
corticosteroid in our steroid/anesthetic topical formulation program for the treatment of hemorrhoids. The original topical preparation,
which we referred to as Hydro-Lido or CITI-001, which was used in the Phase 2a study, was a combination of hydrocortisone acetate
and lidocaine hydrochloride. The new formulation, CITI-002, which we refer to as Halo-Lido, combine slidocaine with the higher
potency corticosteroid halobetasol propionate for symptomatic relief of the pain and discomfort of hemorrhoids.
We held a Type C meeting with the FDA in December 2017 to discuss
the results of the Phase 2a study and to obtain the FDA’s view on development plans to support the potential formulation
change for the planned Phase 2b study. We also requested the FDA’s feedback on our Phase 2b study design, including target
patient population, inclusion/exclusion criteria, and efficacy endpoints. The pre-clinical and clinical development programs for
CITI-002 are planned to be similar to those conducted for the development of CITI-001 to support the design for a planned Phase
3 clinical trial. We anticipate beginning a Phase 2b clinical study by late second quarter or early third quarter 2021.
NoveCite
Overview
In October 2020, we, through our recently formed subsidiary,
NoveCite, signed an exclusive agreement with Novellus Therapeutics Limited (“Novellus”) to license iPSC-derived mesenchymal
stem cells (iMSCs). Under this worldwide exclusive license, we will be focused on developing cellular therapies. Specifically,
we will seek to develop and commercialize the NoveCite mesenchymal stem cells (“NC-iMSCs”) to treat acute respiratory
conditions with a near term focus on ARDS associated with COVID-19.
NC-iMSCs are the next generation mesenchymal stem cell
therapy. They are believed to be differentiated and superior to donor-derived MSCs. Human donor-derived MSCs are sourced from
human bone marrow, adipose tissue, placenta, umbilical tissue, etc. and have significant challenges (e.g., variable donor and
tissue sources, limited supply, low potency, inefficient and expensive manufacturing). NC-iMSCs overcome these challenges
because they:
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Are more potent and secrete exponentially higher levels of immunomodulatory proteins;
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Have practically unlimited supply for high doses and repeat doses;
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Are from a single donor and clonal so they are economically produced at scale with consistent quality and potency, as well
as being footprint free (compared to viral reprogramming methods); and
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Have a significantly higher expansion capability.
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Several cell therapy companies using donor-derived MSC therapies
in treating ARDS have demonstrated that MSCs reduce inflammation, enhance clearance of pathogens and stimulate tissue repair in
the lungs. Almost all these positive results are from early clinical trials or under the emergency authorization program.
In December 2020, the Company announced interim data from a
proof-of-concept large animal study of its NC-iMSC therapy for acute inflammatory respiratory conditions including COVID-19
related ARDS. The available results of NC-iMSC therapy in the study show improvement in critical parameters, such as improved
oxygenation, less systemic shock, and reduced lung injury, compared to the control group. The study was conducted in a widely
accepted large animal model.
The Company will complete additional pre-clinical studies throughout
2021 and anticipates filing an IND by the end of the first quarter 2022.
Corporate History and Information
We were founded as Citius Pharmaceuticals, LLC, a Massachusetts
limited liability company, on January 23, 2007. On September 12, 2014, Citius Pharmaceuticals, LLC entered into a Share Exchange
and Reorganization Agreement, with Citius Pharmaceuticals, Inc. (formerly Trail One, Inc.), a publicly traded company incorporated
under the laws of the State of Nevada. Citius Pharmaceuticals, LLC became a wholly-owned subsidiary of Citius. On March 30, 2016,
Citius acquired Leonard-Meron Biosciences, Inc. (“LMB”) as a wholly-owned subsidiary. LMB was a pharmaceutical company
focused on the development and commercialization of critical care products with a concentration on anti-infectives. On September
11, 2020, we formed NoveCite, Inc. (“NoveCite”), a Delaware corporation, of which we own 75% of the issued and outstanding
capital stock.
Our principal executive offices are located at 11 Commerce Drive,
First Floor, Cranford, New Jersey 07016 and our telephone number is (908) 967-6677.
PRIVATE PLACEMENT OF SHARES
OF COMMON STOCK AND WARRANTS
On January 24, 2021, we entered into a securities purchase agreement
with certain institutional investors and accredited investors for the sale by us of an aggregate of 15,455,960 shares of our common
stock and warrants to purchase up to an aggregate of 7,727,980 shares of our common stock at a purchase price of $1.294 per share.
The aggregate gross proceeds for the sale of the shares and warrants were approximately $20.0 million. Subject to certain ownership
limitations, the warrants are exercisable immediately upon issuance at an exercise price equal to $1.231 per share of common stock,
subject to adjustments as provided under the terms of the warrants. The warrants are exercisable for five and one-half years from
the issuance date. We closed the sales of these securities on January 27, 2021.
H.C. Wainwright & Co., LLC acted as the exclusive placement
agent for the offering. We paid Wainwright an aggregate fee of $1,400,001, which is equal to 7% of the gross proceeds received
by us from the sale of the securities in the transactions. We also granted to Wainwright and its designees warrants to purchase
up to an aggregate of 1,081,917 shares of common stock, which represents 7% of the aggregate number of shares sold in the transactions.
The placement agent warrants have substantially the same terms as the investor warrants, except that the exercise price of the
placement agent warrants is $1.6175 per share. The placement agent warrants and the shares issuable upon exercise of the placement agent warrants were issued
in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act as transactions not involving
a public offering and in reliance on similar exemptions under applicable state laws.
The shares of common stock and the warrants (including the
shares issuable upon exercise of the warrants) were sold and issued without registration under the Securities Act of 1933 (the
“Securities Act”) in reliance on the exemptions provided by Section 4(a)(2) of the Securities Act as transactions not
involving a public offering and Rule 506 promulgated under the Securities Act as sales to accredited investors, and in reliance
on similar exemptions under applicable state laws.
In connection with the sale of the common stock and warrants,
on January 24, 2021, we also entered into a registration rights agreement with each investor whereby we agreed to file a registration
statement within five days to register for resale under the Securities Act the shares of common stock and the shares of common
stock issuable upon exercise of the warrants.
Certain Relationships and Transactions with the Selling Stockholders
In the last three fiscal years, we had the following material
relationship with the following selling stockholder:
Armistice Capital Master Fund, Ltd.
In August 2018, we sold to institutional and accredited investors
in an underwritten at-the-market offering, (i) units, with each unit being comprised of one share of the Company’s common
stock and one warrant to purchase one share and (ii) pre-funded units, with each pre-funded unit being comprised of one pre-funded
warrant to purchase one share and one warrant. Armistice purchased 1,600,000 shares of common stock, pre-funded warrants to purchase
up to 2,321,569 shares of common stock, and warrants to purchase up to 3,921,569 shares of our common stock on the same terms as
the other investors in the offering.
In April 2019, we sold to institutional and accredited investors
shares of our common stock in an at-the-market offering public offering and warrants to purchase shares of our common stock in
a concurrent private placement. Armistice purchased 2,135,923 shares of common stock and warrants to purchase up to 2,135,923 shares
of our common stock on the same terms as the other investors in the offering.
In February 2020, we entered
into a warrant exercise agreement with several existing accredited investors to exercise certain warrants to purchase
up to an aggregate of 3,712,218 shares of common stock having an existing exercise price of $0.77 and 2,586,455 shares of common
stock at a reduced exercise price of $1.02. In consideration for the immediate exercise of the warrants for cash, the exercising
holders received new unregistered warrants to purchase up to an aggregate of 6,298,673 shares of common stock at an exercise price
of $1.02 per share, exercisable commencing six months following the issuance and which have a term of exercise equal to five years.
Armistice was one of the investors and exercised warrants to purchase 3,000,000 shares at $0.77 per share and exercised warrants
to purchase 2,135,923 shares at $1.02 per share, which purchase price was reduced from $1.42 per share. We issued to Armistice
warrants to purchase up to an aggregate of 5,135,923 shares of common stock at an exercise price of $1.02. Armistice participated
in this financing on the same terms as the other investors.
In January 2021, we sold to institutional and accredited investors
shares of our common stock in a private placement. Armistice purchased 3,019,192 shares of common stock and warrants to purchase
up to 1,545,596 shares of our common stock on the same terms as the other investors in the offering.
PLAN OF DISTRIBUTION
Each Selling Stockholder (the “Selling
Stockholders”) of the securities and any of their pledgees, assignees and successors-in-interest may, from time to time,
sell any or all of their securities covered hereby on the principal Trading Market or any other stock exchange, market or trading
facility on which the securities are traded or in private transactions. These sales may be at fixed or negotiated prices. A Selling
Stockholder may use any one or more of the following methods when selling securities:
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ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers;
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block trades in which the broker-dealer will attempt to sell the securities as agent but may position and resell a portion
of the block as principal to facilitate the transaction;
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purchases by a broker-dealer as principal and resale by the broker-dealer for its account;
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an exchange distribution in accordance with the rules of the applicable exchange;
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privately negotiated transactions;
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settlement of short sales;
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in transactions through broker-dealers that agree with the Selling Stockholders to sell a specified number of such securities
at a stipulated price per security;
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through the writing or settlement of options or other hedging transactions, whether through an options exchange or otherwise;
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a combination of any such methods of sale; or
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any other method permitted pursuant to applicable law.
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The Selling Stockholders may also sell securities
under Rule 144 or any other exemption from registration under the Securities Act of 1933, as amended (the “Securities Act”),
if available, rather than under this prospectus.
Broker-dealers engaged by the Selling Stockholders
may arrange for other brokers-dealers to participate in sales. Broker-dealers may receive commissions or discounts from the Selling
Stockholders (or, if any broker-dealer acts as agent for the purchaser of securities, from the purchaser) in amounts to be negotiated,
but, except as set forth in a supplement to this Prospectus, in the case of an agency transaction not in excess of a customary
brokerage commission in compliance with FINRA Rule 2440; and in the case of a principal transaction a markup or markdown in compliance
with FINRA IM-2440.
In connection with the sale of the securities
or interests therein, the Selling Stockholders may enter into hedging transactions with broker-dealers or other financial institutions,
which may in turn engage in short sales of the securities in the course of hedging the positions they assume. The Selling Stockholders
may also sell securities short and deliver these securities to close out their short positions, or loan or pledge the securities
to broker-dealers that in turn may sell these securities. The Selling Stockholders may also enter into option or other transactions
with broker-dealers or other financial institutions or create one or more derivative securities which require the delivery to such
broker-dealer or other financial institution of securities offered by this prospectus, which securities such broker-dealer or other
financial institution may resell pursuant to this prospectus (as supplemented or amended to reflect such transaction).
The Selling Stockholders and any broker-dealers
or agents that are involved in selling the securities may be deemed to be “underwriters” within the meaning of the
Securities Act in connection with such sales. In such event, any commissions received by such broker-dealers or agents and any
profit on the resale of the securities purchased by them may be deemed to be underwriting commissions or discounts under the Securities
Act. Each Selling Stockholder has informed the Company that it does not have any written or oral agreement or understanding, directly
or indirectly, with any person to distribute the securities.
The Company is required to pay certain fees
and expenses incurred by the Company incident to the registration of the securities. The Company has agreed to indemnify the Selling
Stockholders against certain losses, claims, damages and liabilities, including liabilities under the Securities Act.
We agreed to keep this prospectus effective
until the earlier of (i) the date on which the securities may be resold by the Selling Stockholders without registration and without
regard to any volume or manner-of-sale limitations by reason of Rule 144, without the requirement for the Company to be in compliance
with the current public information under Rule 144 under the Securities Act or any other rule of similar effect or (ii) all of
the securities have been sold pursuant to this prospectus or Rule 144 under the Securities Act or any other rule of similar effect.
The resale securities will be sold only through registered or licensed brokers or dealers if required under applicable state securities
laws. In addition, in certain states, the resale securities covered hereby may not be sold unless they have been registered or
qualified for sale in the applicable state or an exemption from the registration or qualification requirement is available and
is complied with.
Under applicable rules and regulations under
the Exchange Act, any person engaged in the distribution of the resale securities may not simultaneously engage in market making
activities with respect to the common stock for the applicable restricted period, as defined in Regulation M, prior to the commencement
of the distribution. In addition, the Selling Stockholders will be subject to applicable provisions of the Exchange Act and the
rules and regulations thereunder, including Regulation M, which may limit the timing of purchases and sales of the common stock
by the Selling Stockholders or any other person. We will make copies of this prospectus available to the Selling Stockholders and
have informed them of the need to deliver a copy of this prospectus to each purchaser at or prior to the time of the sale (including
by compliance with Rule 172 under the Securities Act).