Filed Pursuant to Rule 424(b)(5)
Registration Nos. 333-255044 and 333-258921
PROSPECTUS SUPPLEMENT
(To Prospectus dated April 14, 2021)

8,430,000 Shares of Common
Stock
Pre-funded Warrants to Purchase up
to 5,570,000 Shares of Common Stock
We are offering 8,430,000 shares (“Shares”) of our common stock,
par value $0.0001 per share and Pre-funded Warrants (“Pre-funded
Warrants”) to purchase up to 5,570,000 shares of common stock to
certain institutional investors pursuant to this prospectus
supplement and the accompanying prospectus.
A holder of Pre-funded Warrants will not have the right to exercise
any portion of its Pre-funded Warrants if the holder, together with
its affiliates and certain related parties, would beneficially own
in excess of 4.99% (or, at the election of the holder, 9.99%) of
the number of shares of common stock outstanding immediately after
giving effect to such exercise. Each Pre-funded Warrant will be
exercisable for one share of common stock at an exercise price of
$0.001 per share of common stock. The offering price is $4.999 per
Pre-funded Warrant, which is equal to the offering price per share
of common stock less $0.001. Each Pre-funded Warrant will be
exercisable upon issuance and will expire when exercised in full.
There is no established public trading market for the Pre-funded
Warrants, and we do not expect a market to develop. We do not
intend to apply for listing of the Pre-funded Warrants on The
Nasdaq Stock Market (“Nasdaq”) or any other securities exchange or
nationally recognized trading system. Without an active trading
market, the liquidity of the Pre-funded Warrants will be limited.
This offering also relates to the shares of common stock issuable
upon exercise of the Pre-funded Warrants being offered by this
prospectus supplement and the accompanying prospectus.
In a concurrent private placement (the “Private Placement”), we are
also selling to such investors unregistered warrants (the “Series A
Warrants”) to purchase up to 7,000,000 shares of common stock, at
an exercise price of $5.00 per share. The Series A Warrants are
exercisable immediately and will expire five years following the
date of issuance. The Series A Warrants and the shares of our
common stock issuable upon the exercise of the Series A Warrants
(the “Series A Warrant Shares”) are being offered pursuant to the
exemptions provided in Section 4(a)(2) under the Securities Act of
1933, as amended (the “Securities Act”) and Regulation D
promulgated thereunder, and are not being offered pursuant to this
prospectus supplement and the accompanying prospectus. There is no
established public trading market for the Series A Warrants and we
do not expect a market to develop. In addition, we do not intend to
list the Series A Warrants on Nasdaq, any other national securities
exchange or any other nationally recognized trading system.
Our common stock is listed on Nasdaq under the symbol “PMCB.” The
last reported sale price of our common stock on Nasdaq on August
18, 2021 was $9.85 per share.
Except as otherwise indicated, all share and per share information
in this prospectus supplement gives effect to the reverse stock
split of the Company’s outstanding common stock, which was effected
at a ratio of 1-for-1,500 shares as of 12:01am Eastern Time on
Monday, July 12, 2021. However, share and per share amounts in the
accompanying prospectus and certain of the documents incorporated
by reference herein have not been adjusted to give effect to the
reverse stock split.
Investing in our securities involves significant risks. Please
read the information contained in or incorporated by reference
under the heading “Risk
Factors” beginning on page S-15 of this prospectus
supplement and under similar headings in other documents filed
after the date hereof and incorporated by reference into this
prospectus supplement and the accompanying prospectus.
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these
securities or determined if this prospectus supplement or the
accompanying prospectus is truthful or complete. Any representation
to the contrary is a criminal offense.
|
|
Per
Share |
|
|
Per
Pre-funded Warrant |
|
|
Total |
|
Offering
price |
|
$ |
5.000 |
|
|
$ |
4.999 |
|
|
$ |
69,994,430 |
|
Placement
agent fees(1) |
|
$ |
0.375 |
|
|
$ |
0.375 |
|
|
$ |
5,250,000 |
|
Proceeds,
before expenses, to us |
|
$ |
4.625 |
|
|
$ |
4.624 |
|
|
$ |
64,744,430 |
|
(1) |
In
addition, we will pay the placement agent a management fee equal to
1% of the gross proceeds to us from the sales of shares and
Pre-funded Warrants in this offering. In addition, we have agreed
to issue to the placement agent or its designees warrants to
purchase shares of common stock equal to 7.5% of the shares issued
in this offering (including the shares of common stock issuable
upon the exercise of the Pre-funded Warrants) and to reimburse
certain expenses of the placement agent in connection with this
offering. See “Plan of
Distribution” for additional disclosure regarding placement
agent compensation. |
We have retained H.C. Wainwright & Co., LLC (“Wainwright” or
the “placement agent”) to act as our exclusive placement agent in
connection with this offering. The placement agent is not
purchasing the shares of common stock or Pre-funded Warrants
offered by us in this offering and is not required to sell any
specific number or dollar amount of securities but will assist us
in this offering on a reasonable best-efforts basis.
Delivery of the Shares and Pre-Funded Warrants offered hereby is
expected to take place on or about August 23, 2021, subject to
certain customary closing conditions.
H.C. WAINWRIGHT &
CO.
The date of this prospectus supplement is August 19,
2021.
TABLE OF CONTENTS
Prospectus Supplement
Prospectus
ABOUT THIS PROSPECTUS
SUPPLEMENT
This prospectus supplement and the accompanying prospectus are part
of a shelf registration statement on Form S-3 (File No. 333-255044)
that we filed with the Securities and Exchange Commission, or SEC,
on April 5, 2021 and that was declared effective by the SEC on
April 14, 2021, pursuant to which we may from time to time offer
various securities in one or more offerings, and a related
registration statement (File No. 333-258921) filed on August 19,
2021 in accordance with Rule 462(b) under the Securities Act of
1933, as amended (the “Securities Act”).
This document is in two parts. The first part is this prospectus
supplement, which describes the terms of this offering and also
adds to and updates information contained in the accompanying
prospectus and the documents incorporated by reference herein or
therein. The second part, the accompanying prospectus, including
the documents incorporated by reference into the accompanying
prospectus, provides more general information. When we refer to
this prospectus, we are referring to both parts of this document
combined. To the extent there is a conflict between the information
contained in this prospectus supplement and the information
contained in the accompanying prospectus or any document
incorporated by reference herein or therein filed prior to the date
of this prospectus supplement, you should rely on the information
in this prospectus supplement; provided that if any statement in
one of these documents is inconsistent with a statement in another
document having a later date - for example, a document incorporated
by reference in the accompanying prospectus - the statement in the
document having the later date modifies or supersedes the earlier
statement.
We have not and the placement agent has not authorized anyone to
provide information different from that contained in this
prospectus supplement and the accompanying prospectus that we have
authorized for use in this offering. If anyone provides you with
different or inconsistent information, you should not rely on it.
We do not and the placement agent does not take any responsibility
for, and neither we nor the placement agent can provide assurance
as to the reliability of, any other information that others may
give you. Neither the delivery of this prospectus supplement and
the accompanying prospectus, nor the sale of our common stock and
Pre-funded Warrants means that information contained in this
prospectus supplement and the accompanying prospectus, is correct
after their respective dates. It is important for you to read and
consider all information contained in this prospectus supplement
and the accompanying prospectus, including the information
incorporated by reference into this prospectus supplement and the
accompanying prospectus in making your investment decision.
This prospectus supplement does not contain all of the
information that is important to you. You should also read and
consider the information in the documents to which we have referred
you in the sections entitled “Where You Can Find More
Information” and “Incorporation of Certain Information
by Reference” in this prospectus supplement. You should rely
only on the information contained or incorporated by reference in
this document. You should assume that the information in this
prospectus supplement and the accompanying prospectus, as well as
the information we have filed with the SEC and incorporated by
reference in this document, is accurate only as of its date or the
date which is specified in those documents.
We are offering to sell, and seeking offers to buy, these
securities only in jurisdictions where offers and sales are
permitted. The distribution of this prospectus supplement and the
accompanying prospectus and the offering of the securities in
certain jurisdictions may be restricted by law. Persons outside the
United States who come into possession of this prospectus
supplement and the accompanying prospectus must inform themselves
about, and observe any restrictions relating to, the offering of
the securities and the distribution of this prospectus supplement
and the accompanying prospectus outside the United States. This
prospectus supplement and the accompanying prospectus do not
constitute, and may not be used in connection with, an offer to
sell, or a solicitation of an offer to buy, any securities offered
by this prospectus supplement and the accompanying prospectus by
any person in any jurisdiction in which it is unlawful for such
person to make such an offer or solicitation.
This prospectus supplement and the information incorporated herein
by reference include trademarks, service marks and trade names
owned by us or other companies. All trademarks, service marks and
trade names included or incorporated by reference herein are the
property of their respective owners.
Unless the context otherwise requires, in this prospectus
supplement the “Company,” “we,” “us,” “our” and similar names refer
to PharmaCyte Biotech, Inc. and its subsidiaries.
PROSPECTUS SUPPLEMENT SUMMARY
This summary highlights certain information about us, this offering
and selected information contained elsewhere in or incorporated by
reference into this prospectus supplement and the accompanying
prospectus. This summary is not complete and does not contain all
of the information that you should consider before deciding whether
to invest in our common stock and Pre-funded Warrants. For a more
complete understanding of the Company and this offering, we
encourage you to read and consider carefully the more detailed
information in this prospectus supplement and the accompanying
prospectus, including the information incorporated by reference in
this prospectus supplement and the accompanying prospectus,
including the information referred to under the heading “Risk Factors” in this prospectus
supplement beginning on page S-15.
Overview
We are a biotechnology company focused on developing cellular
therapies for cancer and diabetes based upon a proprietary
cellulose-based live cell encapsulation technology known as
“Cell-in-a-Box®..” The Cell-in-a-Box®
technology is intended to be used as a platform upon which
therapies for several types of cancer, including locally advanced,
inoperable, non-metastatic pancreatic cancer (“LAPC”) will be
developed. The current generation of our product candidate is
referred to as “CypCaps™.” On September 1, 2020, we submitted an
Investigational New Drug Application (“IND”) to the U.S. Food and
Drug Administration (“FDA”) for a planned Phase 2b clinical trial
in LAPC. On October 1, 2020, the Company received notice from the
FDA that it had placed the IND on clinical hold. On October 30,
2020, the FDA sent a letter to us setting forth the reasons for the
clinical hold and specific guidance on what we must do to have the
clinical hold lifted. To lift the clinical hold, the FDA has
informed us that we need to conduct several additional preclinical
studies and assays. The FDA also requested additional information
regarding several topics, including DNA sequencing data,
manufacturing information and product release specifications. We
are in the process of conducting these studies and assays and
gathering additional information to submit to the FDA. See “Our
Investigational New Drug Application and the Clinical Hold”
below.
The Cell-in-a-Box® encapsulation technology potentially
enables genetically engineered live human cells to be used as a
means to produce various biologically active molecules. The
technology is intended to result in the formation of pinhead sized
cellulose-based porous capsules in which genetically modified live
human cells can be encapsulated and maintained. In a laboratory
setting, this proprietary live cell encapsulation technology has
been shown to create a micro-environment in which encapsulated
cells survive and flourish. They are protected from environmental
challenges, such as the sheer forces associated with bioreactors
and passage through catheters and needles, which we believe enables
greater growth and production. The capsules are largely composed of
cellulose (cotton) and are bio inert.
We are developing therapies for pancreatic and other solid
cancerous tumors by using genetically engineered live human cells
that we believe are capable of converting a cancer prodrug into its
cancer-killing form. We encapsulate those cells using the
Cell-in-a-Box® technology and place those capsules in
the body as close as possible to the tumor. In this way, we believe
that when a cancer prodrug is administered to a patient with a
particular type of cancer that may be affected by the prodrug, the
killing of the patient’s cancerous tumor may be optimized.
We have also been considering ways to exploit the benefits of the
Cell-in-a-Box® technology to develop therapies for
cancer that involve prodrugs based upon certain constituents of
the Cannabis plant; these constituents are of the
class of compounds known as “cannabinoids”.
Until: (i) the FDA allows us to commence a clinical trial in LAPC
described in our IND for which the FDA has placed a clinical hold;
and (ii) we validate our Cell-in-a-Box® encapsulation
technology in our planned Phase 2b clinical trial in LAPC, we are
not spending any further resources developing this cannabinoid
program.
In addition, we have been exploring ways to delay the production
and accumulation of malignant ascites fluid that results from many
types of abdominal cancerous tumors. Malignant ascites fluid is
secreted by abdominal cancerous tumors into the abdomen after the
tumors have reached a certain stage of growth. This fluid contains
cancer cells that can seed and form new tumors throughout the
abdomen. This fluid accumulates in the abdominal cavity, causing
swelling of the abdomen, severe breathing difficulties and extreme
pain.
In our pancreatic cancer development program, our plan is to
determine whether our product candidate can prevent or delay the
production and accumulation of malignant ascites fluid. Until the
completion of this offering, we are not spending further resources
developing this malignant ascites fluid program.
We have also been developing a potential therapy for Type 1
diabetes and insulin-dependent Type 2 diabetes. Our product
candidate for the treatment of diabetes consists of encapsulated
genetically modified insulin-producing cells. The encapsulation
will be done using the Cell-in-a-Box® technology.
Implanting these cells in the body is designed to function as a
bio-artificial pancreas for purposes of insulin production.
Until the completion of this offering, we are not spending any
further resources developing the diabetes program.
Cancer Therapy
Targeted Chemotherapy
Our live-cell encapsulation technology-based potential therapies
consist of encapsulated genetically modified living cells, with the
type of encapsulated cell dependent on the disease being treated.
For our lead product candidate, a therapy for pancreatic cancer, we
propose that approximately 15,000-20,000 genetically modified live
cells that produce an enzyme (an isoform of cytochrome P450), which
we believe will convert the chemotherapy prodrug ifosfamide into
its cancer-killing form, will be encapsulated using the
Cell-in-a-Box® technology. In the clinical trial, if the
FDA allows us to proceed, approximately 300 of these capsules will
be placed in the patients’ blood supply and guided into place using
interventional radiography so that they finally reside as close to
the tumor in the pancreas as possible. Low doses (one gram per
square meter of body surface area of the patient) of the
chemotherapy prodrug ifosfamide will then be given to the patient
intravenously.
The prodrug ifosfamide is normally activated in the patient’s
liver. By activating the prodrug near the tumor using the
Cell-in-a-Box® capsules, we believe our cellular therapy
will act as a type of “bio-artificial liver.” Using this type of
“targeted chemotherapy,” we are seeking to create an environment
that enables optimal concentrations of the “cancer-killing” form of
ifosfamide at the site of the tumor. Because the cancer-killing
form of ifosfamide has a short biological half-life, we believe
that this approach will result in little to no collateral damage to
other organs in the body. We also believe this treatment will
significantly reduce tumor size with no treatment-related side
effects.
Figure 1: Proposed treatment for pancreatic cancer by targeted
deployment and activation of chemotherapy using
Cell-in-a-Box® encapsulated cells.
Note: Charts A and B are generalized graphic depictions of
the principal hypothesized mechanisms of our proposed treatment for
pancreatic cancer using our product candidate, the combination of
Cell-in-a-Box® encapsulated cells plus low-doses of
ifosfamide, under expected conditions. This combination therapy
will be the subject of a clinical trial we plan to conduct, subject
to FDA approval allowing us to move forward with our clinical
trial. No regulatory authority has granted marketing approval for
the Cell-in-a-Box® technology, the related encapsulated
cells, or Cell-in-a-Box® and encapsulated cells plus
low-dose ifosfamide combination.
|
|
 |
Chart (A)
Cell-in-a-Box® capsules containing live
ifosfamide-activating cells (shown in white) will be implanted in
the blood vessels leading to the tumor in the pancreas. Then low
dose ifosfamide will be given intravenously.
|
|
Chart (B)
Chart B shows the human pancreas and generalized depictions of two
pancreatic cancer tumors (shown in pink) as examples. In this
chart, ifosfamide is converted to its cancer-killing form by the
encapsulated live cells implanted near the tumors (shown in
maroon).
Legend
Blue Arrows: Ifosfamide enters capsules
Red Arrows: Conversion to active form
White Arrows: Activated ifosfamide targets tumors
|
Figure 2: Hypothesized mechanism of action of treatment for
pancreatic cancer by targeted deployment of the encapsulated live
cells and activation of the chemotherapy prodrug drug ifosfamide.
The immune system cells are too large to enter the capsule.
Pancreatic Cancer Therapy
We believe an unmet medical need exists for patients with LAPC
whose pancreas tumor no longer responds after 4-6 months of
treatment with either Abraxane® plus gemcitabine or the
4-drug combination known as FOLFIRINOX (folinic acid, fluorouracil,
irinotecan and oxaliplatin). Both combinations are the current
standards of care for pancreatic cancer. We believe that these
refractory patients have no effective treatment alternative once
their tumors no longer respond to these therapies. Two of the most
commonly used treatments for these patients are 5-fluorouiracil
(“5-FU”) or capecitabine (a prodrug of 5-FU) plus radiation
(chemoradiation therapy). We believe that both treatments are only
marginally effective in treating the tumor and both result in
serious side effects. More recently, radiation treatment alone is
being used at some cancer centers in the United States
(“U.S.”).
Other treatments are being tried at various cancer centers in the
U.S. in an attempt to address this lack of an effective treatment
for many LAPC patients, but their success is far from certain. We
are developing a therapy comprised of Cell-in-a-Box®
encapsulated live cells implanted near the pancreas tumor followed
by the infusion of low doses of the cancer prodrug ifosfamide. We
believe that our therapy, if approved, can serve as a
“consolidation therapy” that can be used with the current standards
of care for LAPC and thus address this critical unmet medical need.
Two previous human clinical trials of an encapsulated live cell and
ifosfamide combination for LAPC were conducted in Germany by
Bavarian Nordic during 1998 – 2000, and such trials were referenced
in our IND for LAPC, submitted on September 1, 2020.
Subject to the FDA allowing us to move forward, we plan to commence
a clinical trial involving patients with LAPC whose tumors have
ceased to respond to either Abraxane® plus gemcitabine
or FOLFIRINOX after 4-6 months of either therapy. The trial would
initially take place in the U.S. with possible study sites in
Europe at a later date.
Our Investigational New Drug Application and the Clinical Hold
On September
1, 2020, we submitted an IND to the FDA for a planned Phase 2b
clinical trial in LAPC. Shortly thereafter, we received Information
Requests from the FDA related to the IND. We timely responded to
all Information Requests.
On October 1,
2020, we received notice that the FDA had placed our IND on
clinical hold.
On October
30, 2020, the FDA sent a letter to us setting forth the reasons for
the clinical hold and providing specific guidance on what we must
do to have the clinical hold lifted.
In order to
address the clinical hold, the FDA has requested that
we:
|
· |
Provide
additional sequencing data and genetic stability
studies; |
|
· |
Conduct a
stability study on the final formulated drug product candidate as
well as the cells from our Master Cell Bank; |
|
· |
Evaluate
the compatibility of the delivery devices (the prefilled syringe
and the microcatheter used to implant the CypCaps™) with
our drug product candidate; |
|
· |
Provide
additional detailed description of the manufacturing
process; |
|
· |
Provide
additional product release specifications for our encapsulated
cells; |
|
· |
Demonstrate comparability
between the 1st and 2nd generation products
and ensure adequate and consistent product performance and safety
between the two generations of product; |
|
· |
Conduct a
biocompatibility assessment using the final finished capsules after
the entire drug product candidate manufacturing process (but
without cells); |
|
· |
Address
insufficiencies in Chemistry, Manufacturing and Controls
information in the cross-referenced Drug Master File; |
|
· |
Conduct
an additional nonclinical study in a large animal (such as a pig)
to assess the safety, activity and distribution of the drug product
candidate; and |
|
· |
Revise
the Investigators Brochure to include any additional preclinical
studies conducted in response to the clinical hold and remove any
statements not supported by the data. |
The FDA also
requested that we address the following issues as an amendment to
the IND:
|
· |
Provide a
Certificate of Analysis for pc3/2B1 plasmid that includes tests for
assessing purity, safety, and potency; |
|
· |
Perform
qualification studies for the drug substance filling step to ensure
that the product candidate remains sterile and stable during the
filling process; |
|
· |
Submit an
updated batch analysis for the drug product candidate for the
specific lot that will be used for manufacturing all future drug
product candidate; |
|
· |
Provide
additional details for the methodology for the Resorufin (CYP2B1)
potency and the PrestoBlue cell metabolic assays; |
|
· |
Provide a
few examples of common microcatheters that fit the specifications
in our Angiography Procedure Manual; |
|
· |
Clarify
the language in the Pharmacy Manual regarding proper use of the
syringe fill with the drug product candidate; and |
|
· |
Provide a
discussion with data for trial of the potential for cellular and
humoral immune reactivity against the heterologous rat CYP2B1
protein and potential for induction of autoimmune-mediated
toxicities in our study population in the LAPC. |
We have
assembled a scientific and regulatory team of experts to address
the FDA requests. That team is working to complete the items
requested by the FDA. We are in varying stages of addressing the
studies and acquiring the information requested by the
FDA.
The following
provides a summary of the activities in which we are engaged to
have the clinical hold lifted:
|
· |
We have completed a 3, 6, 9, and
12-month product stability study of our clinical trial product
(CypCaps™), including container closure integrity
testing for certain timepoints; the next time point in this ongoing
study will be at 18 months of product stability. |
|
· |
We have
designed and commenced various additional studies required by the
FDA. These include (i) a
stability study on the cells from our Master Cell Bank (“MCB”) used
to make the CypCaps™, which are already at the 3-year
stability timepoint; (ii) further sequence analysis of the DNA
encoding of the Cyp2B1 gene in the cells in the
CypCaps™; and (iii) collated existing information on the
reproducibility and quality of the filling of the MCB cells into
vials ready for CypCaps™ manufacturing. |
|
· |
We have designed and commenced a
Subchronic and Chronic Toxicity study. We have also designed and
are awaiting initiation of biocompatibility studies, including: (i)
a Skin Sensitization study; (ii) an Acute Systematic Toxicity
study; (iii) an Ames test (Genotoxicity Bacteria and Reverse
Mutation tests); (iv) an Intracutaneous test; (v) a Complement
Activation test; (vi) a Hemolysis test; (vii) an In Vitro
Cytotoxicity test; and (viii) an In Vivo Micronucleus assay. Some
of the data being generated by these studies will also be used to
demonstrate comparability with the CypCaps™ that were
used in the two earlier German clinical trials over twenty years
ago conducted by Bavarian Nordic. |
|
· |
To enable the biocompatibility studies
to be performed, we had Austrianova manufacture and deliver an
additional 400 syringes of empty capsules. |
|
· |
We designed and will initiate studies
to show that CypCaps™ are not in any way adversely
affected by the catheters used by interventional radiologists to
deliver them, nor by the contract media used to visualize the blood
vessels during implantation of the CypCaps™. |
|
· |
We designed and will initiate studies
to demonstrate how robust the CypCaps™ are during
delivery and use as well as to document that the syringes used to
deliver the CypCaps™ will allow delivery consistently,
smoothly and safely. |
|
· |
With our support, Austrianova is
providing additional detailed confidential information to the FDA
on the manufacturing process, including information on the
improvements made to the live cell encapsulated product since the
last clinical trials with respect to reproducibility and safety of
the CypCaps™. |
|
· |
We plan to update our IND submission
documents to include: (i) more pre-clinical data as discussed
above, (ii) some additional parameters for release of the
CypCaps™, (iii) a recommendation of the catheters and
contrast medium to be used to deliver the CypCaps™; and
(iv) an extensive discussion of the potential for cellular and
humoral immune reactivity against the heterologous rat CYP2B1
protein and potential for induction of autoimmune-mediated
toxicities in our study population in the LAPC. |
|
· |
We have designed an abbreviated study
in pigs to address biocompatibility and long-term implantation of
the capsules. This animal study will complement the positive data
already available from the previous human clinical trials conducted
by Bavarian Nordic showing the safety of CypCaps™
implantation for up to two years in humans. |
Cannabinoids
to Treat Cancer
Numerous studies have demonstrated the therapeutic potential of
certain cannabinoids (constituents of Cannabis) in patients with
cancer. Two of the most widely studied cannabinoids in this regard
are tetrahydrocannabinol (“THC”) and cannabidiol (“CBD”).
Cannabinoids are potentially: (i) anti-proliferative (slow tumor
growth); (ii) anti-metastatic (slow tumor spread); (iii)
anti-angiogenic (slowing blood vessel development); and (iv)
pro-apoptotic (initiate programmed cell death). In in vitro and in
vivo models, the therapeutic potential of cannabinoids is broad.
Results support the therapeutic potential in lung, brain, thyroid,
lymphoma, liver, skin, pancreas, uterus breast and prostate
cancers. In a review of 51 scientific studies, among other
properties, it was observed that cannabinoids can regulate cellular
signaling pathways critical for cell growth and survival. These
properties indicate that cannabinoids could be useful in the
treatment of cancer.
We have many
competitors that are developing Cannabis-based treatments for
cancer. Jazz Pharmaceuticals has acquired GW Pharmaceuticals, PLC
who had an approved cannabinoid product for the treatment of
multiple sclerosis spasticity and was developing a product
portfolio to treat a variety of illnesses, including glioblastoma
(brain cancer). Cannabis Science, Inc. has been developing topical
cannabinoid treatments for basal and squamous cell skin cancers and
Kaposi’s sarcoma, and is exploring pre-clinical development of
cannabinoid-based anti-cancer drugs in a collaborative agreement
with other entities. OWC Pharmaceutical Research Corp. is
developing Cannabis-based products targeting a variety of
indications and has a collaborative agreement with an academic
medical center in Israel to study the effects of cannabinoids on
multiple myeloma (a cancer of plasma cells). Cannabis
Pharmaceuticals, Inc. is developing personalized anti-cancer and
palliative Cannabis-based treatments aimed mainly at improving the
cachexia, anorexia syndrome and quality-of-life issues that are
often characteristic of patients with devastating diseases like
cancer.
In contrast
to the work being done by these companies, we plan to focus on
developing specific therapies based on chosen molecules rather than
using complex Cannabis extracts. We intend to use the
Cell-in-a-Box® technology in combination with
genetically modified cell lines designed to activate cannabinoid
molecules for the treatment of diseases and their related symptoms.
Our initial target will be glioblastoma, a very difficult-to treat
form of brain cancer.
In May 2014,
we entered into a research agreement with the University of
Northern Colorado (“UNC”). The goal of the original research was to
develop methods for the identification, separation and
quantification of constituents of Cannabis, some of which are
prodrugs, which could potentially be used in combination with the
Cell-in-a-Box® technology to treat cancer.
In January
2017, we entered into a second research agreement with UNC. The
goal of this research is to assess the synthesis of the patG gene
and its incorporation into a vector, transfection of human
embryonic kidney cells using this vector and assessment of
cannabinoic acid decarboxylase activity.
During 2017,
UNC identified an organism whose genome contains the genetic code
for production of an enzyme capable of activating a cannabinoid
prodrug into its active cancer-killing form. Our Cannabis program
now has two primary areas of focus. The first is evaluating the
therapeutic potential of cannabinoids, such as THC and CBD,
particularly in our main “target” tumor – glioblastoma. UNC’s
laboratory research has confirmed that a purified cannabinoid
showed a potent dose-dependent decrease in cell viability for
various cancers, suggesting that this cannabinoid exhibits
significant anti-proliferative effects (stops the growth and
multiplication of cancer cells). This activity has been
demonstrated in brain (glioblastoma), pancreas, breast, lung, colon
and melanoma cancer cells. The second area of focus is in finding
an enzyme capable of converting an inactive, side-effect-free,
cannabinoid prodrug into its active cancer-killing form.
Clinically,
targeted cannabinoid-based chemotherapy would be accomplished by
implanting the encapsulated bio-engineered cells near the site of a
tumor, along with administration of a cannabinoid prodrug which
would become activated at the site of the tumor by an enzyme
produced by the encapsulated cells. We believe this could lead to
better efficacy than existing therapies with minimal treatment
related adverse events.
Until: (i) the FDA allows us to commence a clinical trial in LAPC
described in our IND for which the FDA has placed a clinical hold;
and (ii) we validate our Cell-in-a-Box® encapsulation
technology in our planned Phase 2b clinical trial in LAPC, we are
not spending any further resources developing this program.
Malignant Ascites Fluid Therapy
We have been exploring ways to
delay the production and accumulation of malignant ascites fluid
that results from many types of abdominal tumors. Malignant ascites
fluid is secreted by an abdominal tumor into the abdomen after the
tumor reaches a certain stage of growth. This fluid contains cancer
cells that can seed and form new tumors throughout the abdomen. As
this ascites fluid accumulates in the abdominal cavity, it can
cause gross swelling of the abdomen, severe breathing difficulties
and extreme pain.
Once an abdominal tumor reaches a
certain stage of development, the tumor secretes malignant ascites
fluid into the abdominal cavity. When that occurs, malignant
ascites fluid must be removed by paracentesis on a periodic basis.
This procedure is painful and costly. We know of no available
therapy that prevents or delays the production and accumulation of
malignant ascites fluid. Preclinical studies were conducted by
Translational Drug Development (“TD2”), an early-stage Clinical
Research Organization (“CRO”) specializing in oncology, to examine
whether the combination of
Cell-in-a-Box® encapsulated cells plus low doses of
ifosfamide can delay the production and accumulation of malignant
ascites fluid. We believe the data from these studies support our
plans to further explore whether the treatment might play a role in
malignant ascites fluid production and accumulation. However, the
conclusions were difficult to interpret with certainty. As a
result, we plan to conduct another preclinical study in Germany to
determine if our conclusions from the TD2 studies are valid. If
this study is successful, and subject to discussions with the FDA,
we plan to submit an IND to seek approval from the FDA to conduct a
Phase 1 clinical trial in the U.S. to determine if our drug product
candidate can delay the production and accumulation of malignant
ascites fluid.
Until the completion of this offering, we are not spending any
further resources developing this program.
Diabetes Therapy
A Bio-Artificial Pancreas to Treat Diabetes
We are
developing a therapy for Type 1 diabetes and insulin-dependent Type
2 diabetes based upon the encapsulation of a human liver cell line
genetically engineered to produce, store and secrete insulin at
levels in proportion to the levels of blood sugar in the human
body. We are also considering an alternative route to bringing a
biological treatment for diabetes into the clinic. We are exploring
the possibility of encapsulating human insulin-producing stem cells
and then transplanting them into a diabetic patient. Our plans are
subject to discussions with the FDA.
The cell line
we select will be encapsulated using the Cell-in-a-Box®
encapsulation technology. If appropriate animal testing is
completed successfully, and subject to discussions with the FDA, we
intend to submit an IND to seek the FDA’s approval to transplant
encapsulated insulin-producing cells into diabetic patients. The
goal for these approaches is to develop a bio-artificial pancreas
for purposes of insulin production for diabetics who are
insulin-dependent.
Our diabetes
program began with two of the most critical components of a
biological diabetes therapy - a line of human cells which release
insulin in response to the blood glucose level in their environment
and a technology to protect the cells from an attack by the immune
system once they are transplanted into a patient’s body to replace
his or her own destroyed insulin-producing cells. This technology
is the Cell-in-a-Box® encapsulation technology. The
cells used are called Melligen cells. They are patent-protected and
have been licensed to us by University of Technology Sydney
(“UTS”).
Regulations
for the use of living cells as a medical product require that the
potential of the cells to grow and form a tumor in a patient be
assessed. This so-called “tumorigenicity study” has been completed
by the University of Veterinary Medicine Vienna (“VetMed”).
Melligen cells showed very low tumorigenicity at a level we believe
would expect to pass regulatory scrutiny, although this is subject
to discussions with the FDA.
Putting
Melligen cells and the Cell-in-a-Box® technology
together, we conducted the first functional study in diabetic mice.
The results did not meet our expectations. We discovered that,
contrary to what we had expected and what we had read in published
scientific papers on the Melligen cells published by UTS, the cells
are not stable. With extensive testing and experiments, we
discovered that the Melligen cells lose some of their specific
beneficial properties over time.
We entered
into a new research agreement with UTS to create an advanced
version of the Melligen cells for the treatment of diabetes. Under
the new research agreement, improvements will be made to the
Melligen cells that we believe will increase their stability,
increase their insulin production and increase the bioactivity of
the produced insulin.
Prof. Ann
Simpson, who created the Melligen cells, and her team of research
scientists at UTS have been conducting this research project. The
work is being funded by the Company and UTS. Our portion of the
funding was previously paid to UTS. The research to date has not
produced the results we had anticipated and is taking longer than
we anticipated. It remains to be seen whether the Melligen cells
are capable of producing the required insulin to be a viable cell
line for the treatment of diabetes.
Until the completion of this offering, we are not spending any
further resources developing this program.
Impact of the COVID-19 Pandemic on the Company’s Operations
The coronavirus SARS-Cov2
pandemic (“COVID-19”) is causing significant, industry-wide delays
in clinical trials. Although we are not yet in a clinical trial, we
have filed an IND with the FDA to commence a clinical trial in
LAPC. While the IND has been placed on clinical hold by the FDA, we
have assessed the impact of COVID-19 on our operations. As of the
date of this prospectus supplement, we believe the COVID-19
pandemic has had an impact upon our operations, primarily relating
to delays in tasks associated with the preparation of the Company’s
responses to the FDA’s clinical hold, including all requested
preclinical studies and assays. There may be further delays in
generating responses to the requests from the FDA related to the
clinical hold. Many of these delays are due to the impact of the
COVID-19 pandemic in foreign countries where we are conducting
these preclinical studies and assays, including India, Europe,
Singapore and Thailand. There have also been supply chain
interruptions due to the COVID-19 pandemic.
Further, many clinical trials
have been delayed due to COVID-19. There are numerous reasons for
these delays. For example, patients have shown a reluctance to
enroll or continue in a clinical trial due to fear of exposure to
COVID-19 when they are in a hospital or doctor’s office. There are
local, regional and state-wide orders and regulations restricting
usual normal activity by people. These discourage and interfere
with patient visits to a doctor’s office if the visit is not
COVID-19 related. Healthcare providers and health systems have
shifted their resources away from clinical trials toward the care
of COVID-19 patients. The FDA and other healthcare providers are
making product candidates for the treatment of COVID-19 a priority
over product candidates unrelated to COVID-19.
As a result of COVID-19 and the
mitigation efforts to address it, we may experience additional
disruptions that could adversely impact our business and clinical
trial, including: (i) delays or difficulties in enrolling patients
in our Phase 2b clinical trial if the FDA allows us to go forward
with the trial; (ii) delays or difficulties in clinical site
activation, including difficulties in recruiting clinical site
investigators and clinical site personnel; (iii) delays in clinical
sites receiving the supplies and materials needed to conduct our
clinical trial, including interruption in global shipping that may
affect the transport of our clinical trial product; (iv) changes in
local regulations as part of a response to the COVID-19 pandemic
which may require us to change the ways in which our clinical trial
is to be conducted, which may result in unexpected costs, or to
discontinue the clinical trial altogether; (v) diversion of
healthcare resources away from the conduct of clinical trials,
including the diversion of hospitals serving as our clinical trial
sites and hospital staff supporting the conduct of our clinical
trial; (vi) interruption of key clinical trial activities, such as
clinical trial site monitoring, due to limitations on travel
imposed or recommended by federal or state governments, employers
and others, or interruption of clinical trial subject visits and
study procedures, the occurrence of which could affect the
integrity of clinical trial data; (vii) risk that participants
enrolled in our clinical trials will acquire COVID-19 while the
clinical trial is ongoing, which could impact the results of the
clinical trial, including by increasing the number of observed
adverse events; (viii) delays in necessary interactions with local
regulators, ethics committees, and other important agencies and
contractors due to limitations in employee resources or forced
furlough of government employees; (ix) limitations in employee
resources that would otherwise be focused on the conduct of our
clinical trial because of sickness of employees or their families
or the desire of employees to avoid contact with large groups of
people; (x) refusal of the FDA to accept data from clinical trials
in affected geographies; and (xi) interruption or delays to our
clinical trial activities.
As a result of the COVID-19
pandemic, commencement of our planned clinical trial to treat LAPC
may be delayed beyond the lifting of the clinical hold by the FDA
should that occur. Also, enrollment may be difficult for the
reasons discussed above. In addition, after enrollment in the
trial, if patients contract COVID-19 during their participation in
the trial or are subject to isolation or shelter in place
restrictions, this may cause them to drop out of our clinical
trial, miss scheduled therapy appointments or follow-up visits or
otherwise fail to follow the clinical trial protocol. If patients
are unable to follow the clinical trial protocol or if the trial
results are otherwise affected by the consequences of the COVID-19
pandemic on patient participation or actions taken to mitigate
COVID-19 spread, the integrity of data from the clinical trial may
be compromised or not be accepted by the FDA. This could further
adversely impact or delay our clinical development program if the
FDA allows it to proceed.
It is highly speculative in
projecting the effects of COVID-19 on our proposed clinical
development program and the Company generally. Moreover, the
various precautionary measures taken by many governmental
authorities around the world in order to limit the spread of
COVID-19 has had and may continue to have an adverse effect on the
global markets and global economy, including on the availability
and pricing of employees, resources, materials, manufacturing and
delivery efforts and other aspects of the global economy. The
continuation of the COVID-19 pandemic could materially disrupt our
business and operations, hamper our ability to raise additional
funds or sell or securities, continue to slow down the overall
economy, curtail consumer spending, interrupt our sources of
supply, and make it hard to adequately staff our operations. The
effects of COVID-19 quickly and dramatically change over time. Its
evolution is difficult to predict, and no one is able to say with
certainty when the pandemic will cease to have an impact on our
operations.
Recent Developments
Nasdaq Listing
Our common stock began trading on Nasdaq on August 10, 2021, under
the symbol “PMCB.” Prior to that, our common stock was quoted on
the OTCQB Market under the symbol “PMCB,” and following the reverse
stock split of our common stock effective as of July 12, 2021, and
until August 6, 2021, the OTCQB Market Symbol for our common stock
had temporarily been PMCBD.
August 2021 Underwritten Offering
On August 9, 2021, we entered into an underwriting agreement with
Wainwright as underwriter in connection with a public offering of
an aggregate of (i) 2,630,385 shares of common stock, par value
$0.0001, and 899,027 pre-funded warrants (the “August Pre-funded
Warrants”) to purchase common stock, and (ii) common stock warrants
(the “August Common Warrants”) to purchase 3,529,412 shares of
common stock. Each share of common stock (or pre-funded warrant in
lieu thereof) was sold together with an August Common Warrant to
purchase one share of common stock at an effective combined public
offering price of $4.25 per share of common stock and accompanying
August Common Warrant, less underwriting discounts and commissions.
The August Common Warrants have an exercise price of $4.25 per
share, are exercisable immediately, and will expire five years
following the date of issuance. The August Pre-funded Warrants have
an exercise price of $0.001 per share, are exercisable immediately,
and do not have an expiration date. In addition, the Company
granted Wainwright a 30-day option (the “Option”) to purchase up to
529,411 shares and/or August Common Warrants at the public offering
price, less the underwriting discounts and commissions. The
offering of such securities pursuant to the underwriting agreement
(the “August 2021 Offering”) closed on August 12, 2021, and at
closing, Wainwright partially exercised its Option for warrants to
purchase an aggregate of up to 499,116 shares of common stock. At
closing, we received net proceeds from the offering of
approximately $13.6 million, after deducting underwriting discounts
and commissions and estimated offering expenses.
August 2021 Warrant Exercises
As of August 18, 2021, all of the August Pre-funded Warrants have
been cashlessly exercised.
As of August 18, 2021, 2,491,787 of the August Common Warrants have
been exercised, for aggregate gross proceeds to the Company of
$10,590,095.
Summary of Risks Associated with Our Business
Our business is subject to numerous risks and uncertainties that
you should consider before investing in our company. These risks
are described more fully in the section titled “Risk Factors” in
this prospectus supplement. These risks include, but are not
limited to, the following:
|
· |
We are a biotechnology company with limited resources, a
limited operating history and have no products approved for
clinical trials or commercial sale, which may make it difficult to
evaluate our current business and predict our future success and
viability. |
|
· |
As a result of the clinical hold that has been placed on our
IND by the FDA, it has taken and may continue to take considerable
time and expense to respond to the FDA and no assurance can be
given that the FDA will remove the clinical hold in which case our
business and prospects will likely suffer material adverse
consequences. |
|
· |
The recent and ongoing COVID-19 pandemic has affected and could
continue to affect our operations, as well as the business or
operations of third parties with whom we conduct business. Our
business could be adversely affected by the effects of other future
health pandemics in regions where we or third parties on which we
rely have significant business operations. |
|
· |
If we are unable to successfully raise additional capital, our
future clinical trials and product development could be limited and
our long-term viability may be threatened. |
|
· |
Due to the significant resources required for the development
of our programs, and depending on our ability to access capital, we
must prioritize development of certain product candidates. We may
expend our limited resources on programs that do not yield a
successful product candidate and fail to capitalize on product
candidates or indications that may be more profitable or for which
there is a greater likelihood of success. |
|
· |
We currently have no commercial revenue and may never become
profitable. |
|
· |
Our ability to continue as a going concern. |
|
· |
If we are unable to obtain, or if there are delays in
obtaining, required approval from the applicable regulatory
agencies, we will not be able to commercialize our product
candidates and our ability to generate revenue will be materially
impaired. |
|
· |
If allowed to proceed with our clinical development program, we
intend to conduct clinical trials for certain of our product
candidates at sites outside of the U.S., and the U.S. regulatory
agencies may not accept data from trials conducted in such
locations. |
|
· |
Promising results in previous clinical trials of our
encapsulated live cell and ifosfamide combination for LAPC may not
be replicated in future clinical trials which could result in
development delays or a failure to obtain marketing approval. |
|
· |
We may not be able to protect our intellectual property rights
throughout the world. |
|
· |
We rely and expect to continue to rely heavily on third parties
to conduct our preclinical studies and clinical trials, and those
third parties may not perform satisfactorily, including failing to
meet deadlines for the completion of such studies and trials. |
|
· |
There are risks related to this offering, including risks that
you will experience immediate and substantial dilution in the net
tangible book value per share of the common stock you purchase in
this offering and the risk that substantial future sales or other
issuances of our common stock could depress the market for our
common stock. |
|
· |
We have broad discretion in the use of the net proceeds of this
offering and, despite our efforts, we may use the net proceeds in a
manner that does not increase the value of your investment. |
|
· |
There was no consistent active trading market for our common
stock prior to August 10, 2021, and public trading of our common
stock may continue to fluctuate substantially. |
|
· |
A large number of shares may be issued and subsequently sold
upon the exercise of existing options and warrants. |
|
· |
As a result of our Nasdaq listing, we will incur materially
increased costs and become subject to additional regulations and
requirements. |
|
· |
We may not be able to meet the continued listing requirements for
Nasdaq or another nationally recognized stock exchange, which could
limit investors’ ability to make transactions in our securities and
subject us to additional trading restrictions.
|
|
· |
We are a “smaller reporting company” under the SEC’s disclosure
rules and have elected to comply with the reduced disclosure
requirements applicable to smaller reporting companies. |
|
|
|
|
· |
As a non-accelerated filer, we are not required to comply with
the auditor attestation requirements of the Sarbanes-Oxley
Act. |
|
|
|
|
· |
Following the reverse stock split, the resulting market price
of our common stock may not attract new investors, including
institutional investors, and may not satisfy the investing
requirements of those investors. Consequently, the trading
liquidity of our common stock may not improve. |
Our Corporate Information
We are a Nevada corporation incorporated in 1996. In 2013, we
restructured our operations to focus on biotechnology. The
restructuring resulted in the Company focusing all of its efforts
upon the development of a novel, effective and safe way to treat
cancer and diabetes. In January 2015, the Company changed its name
from Nuvilex, Inc. to PharmaCyte Biotech, Inc. to reflect the
nature of its current business.
Our corporate headquarters is located at 23046 Avenida de la
Carlota, Suite 600, Laguna Hills, California 92653, and our
telephone number is (917) 595-2850. We maintain a website at
www.pharmacyte.com, to which we regularly post copies of our
press releases as well as additional information about us. Our
filings with the SEC will be available free of charge through the
website as soon as reasonably practicable after being
electronically filed with or furnished to the SEC. Information
contained in our website is not a part of, nor incorporated by
reference into, this prospectus or our other filings with the SEC,
and should not be relied upon.
THE OFFERING
Common
stock offered by us |
8,430,000
shares of common stock. |
|
|
Pre-funded
Warrants offered
by us
|
Pre-funded
Warrants to purchase up to 5,570,000 shares of common stock. Each
Pre-funded Warrant will be exercisable for one share of our common
stock. The purchase price of each Pre-funded Warrant will equal the
price per share at which the shares of common stock are being sold
to the public in this offering, minus $0.001, and the exercise
price of each Pre-funded Warrant will be $0.001 per share. This
offering also relates to the shares of common stock issuable upon
exercise of any Pre-funded Warrants sold in this offering. The
exercise price and number of shares of common stock issuable upon
exercise will be subject to certain further adjustments as
described herein. See “Description of Securities
Offered” on page S-41
of this prospectus supplement. |
|
|
Concurrent
Private Placement of Series A Warrants |
In a
concurrent private placement, we are selling to investors in this
offering Series A Warrants to purchase up to an aggregate of
7,000,000 shares of our common stock, representing 50% of the
shares of our common stock and shares underlying Pre-funded
Warrants that may be purchased in this offering. Each Series A
Warrant has an exercise price of $5.00 per share, is
immediately exercisable and will expire on the
fifth anniversary of the original issuance date. The Series A
Warrants are being offered pursuant to the exemptions provided in
Section 4(a)(2) under the Securities Act and Regulation D
promulgated thereunder and, along with the Series A Warrant Shares,
have not been registered under the Act, or applicable state
securities laws. Accordingly, the Series A Warrants and the Series
A Warrant Shares may not be offered or sold in the U.S. except
pursuant to an effective registration statement or an applicable
exemption from the registration requirements of the Securities Act
and such applicable state securities laws. See “Private Placement of
Warrants.” |
|
|
Common
stock to be outstanding after this offering |
21,634,465
shares assuming all of the Pre-funded Warrants issued in this
offering are exercised and no exercise of any Series A Warrant
issued in this offering. |
|
|
Use
of proceeds |
We
currently intend to use the net proceeds from this offering,
together with our existing cash and cash equivalents, as
follows: |
|
· |
$5 million to complete activities requested by the FDA to
address the FDA’s clinical hold on our IND with respect to our
planned Phase 2b clinical trial in LAPC, including conducting
several additional preclinical studies and assays and providing the
FDA with the additional information it requested; |
|
· |
$20 million to fully fund and conduct the Phase 2b clinical
trial in LAPC, if and when the clinical hold on the IND is
lifted; |
|
· |
$20 million to continue clinical development of the Company’s
cancer program; |
|
· |
$10 million to continue development of the Company’s diabetes
program; |
|
· |
$5 million to continue development of the Company’s malignant
ascites program; and |
|
· |
the remainder for general corporate purposes. |
|
See “Use of
Proceeds.” |
Risk
factors |
An
investment in our common stock involves a high degree of risk. See
“Risk
Factors” beginning on page S-15 of this
prospectus supplement, and under similar headings in other
documents filed after the date hereof and incorporated by reference
into this prospectus supplement and the accompanying
prospectus. |
|
|
Nasdaq
Symbol |
PMCB |
|
|
Reverse
Stock Split |
On
June 30, 2021, our Board approved a reverse stock split of 1:1,500
of our authorized and our issued and outstanding shares of common
stock effective on July 12, 2021. Unless otherwise stated, all
share and per share information in this prospectus supplement
reflects the reverse stock split of the authorized and outstanding
common stock of the Company at a ratio of 1:1,500. However, share
and per share amounts in the accompanying prospectus and certain of
the documents incorporated by reference herein have not been
adjusted to give effect to the reverse stock split. |
Outstanding Shares
The number of shares of our common stock to be outstanding after
this offering is based on 7,634,465 shares of our common stock
outstanding as of August 18, 2021, and excludes:
|
· |
42,333
shares reserved for issuance upon the exercise of outstanding stock
options at a weighted average exercise price of $78.63 per
share; |
|
· |
1,800,320 shares reserved for
issuance upon the exercise of outstanding warrants at a weighted
average exercise price of $4.50 per share; |
|
· |
166,667 shares of common stock
reserved for future issuance under our 2021 Equity Incentive
Plan; |
|
· |
7,000,000 shares of common stock
issuable upon exercise of the Series A Warrants issued in this
offering; and |
|
· |
up to 1,050,000 shares of common
stock issuable upon exercise of warrants with an exercise price of
$6.25 per share to be issued to the placement agent or its
designees as compensation in connection with this
offering. |
Except as otherwise indicated, all information in this prospectus
supplement assumes (i) no exercise or conversion of the outstanding
options or warrants described above; (ii) no exercise of the Series
A Warrants or the warrants to be issued to the placement agent in
connection with this offering, and (iii) no exercise of the
Pre-funded Warrants.
RISK FACTORS
Investing in our common stock involves a high degree of risk.
Before investing in our common stock, you should carefully consider
the risks described below, together with all of the other
information contained in this prospectus supplement and the
accompanying prospectus and incorporated by reference herein and
therein, including from our Annual Report on Form 10-K for the
fiscal year ended April 30, 2021, as well as any amendment or
update to our risk factors reflected in subsequent filings with the
SEC. Some of these factors relate principally to our business and
the industry in which we operate. Other factors relate principally
to your investment in our securities. The risks and uncertainties
described therein and below are not the only risks facing us.
Additional risks and uncertainties not presently known to us or
that we currently deem immaterial may also materially and adversely
affect our business and operations.
If any of the matters included in the following risks were to
occur, our business, financial condition, results of operations,
cash flows or prospects could be materially and adversely affected.
In such case, you may lose all or part of your investment.
Risks Related to Our Financial Position, FDA Clinical Hold, Need
for Additional Capital and Overall Business
We are a biotechnology company with limited resources, a
limited operating history and have no products approved for
clinical trials or commercial sale, which may make it difficult to
evaluate our current business and predict our future success and
viability.
We are a biotechnology company focused on developing cellular
therapies for cancer based upon a proprietary cellulose-based live
cell encapsulation technology known as “Cell-in-a-Box®.”
In recent years, we have devoted substantially all our resources to
the development of our product candidate for LAPC. We have limited
resources, a limited operating history, no products approved for
clinical trials or commercial sale and therefore have not produced
any revenues. We have generated significant operating losses since
our inception. Our net losses for the years ended April 30, 2021
and 2020 were approximately $3.6 million and $3.8 million,
respectively. As of April 30, 2021, we had an accumulated deficit
of approximately $107 million. Substantially all our losses have
resulted from expenses incurred relating to our research and
development programs and from general and administrative expenses
and operating losses associated with our business.
We expect to continue to incur significant expenses and operating
losses for the foreseeable future. We anticipate these losses will
increase as we continue our research and development of, and, if
approved by the FDA, commence clinical trials for, our product
candidates. In addition to budgeted expenses, we may encounter
unforeseen expenses, difficulties, complications, delays and other
unknown factors that may adversely affect our business.
We have no facilities to conduct fundamental research and we have
performed our research and development activities by collaboration
with contract service providers and contract manufacturers, and by
designing and developing research programs in collaboration with
university-based experts who work with us to evaluate mechanism(s)
of disease for which we have designed and developed product
candidates. We have not maintained a principal laboratory or
primary research facility for the development of our product
candidates.
Biotechnology product development is a highly uncertain undertaking
and involves a substantial degree of risk. We have not commenced or
completed clinical trials for any of our product candidates,
obtained marketing approval for any product candidates,
manufactured a commercial scale product, or arranged for a third
party to do so on our behalf, or conducted sales and marketing
activities necessary for successful product commercialization.
Given the highly uncertain nature of biotechnology product
development, we may never commence or complete clinical trials for
any of our product candidates, obtain marketing approval for any
product candidates, manufacture a commercial scale product or
arrange for a third party to do so on our behalf, or conduct sales
and marketing activities necessary for successful product
commercialization.
Our limited operating history as a company makes any assessment of
our future success and viability subject to significant
uncertainty. We will encounter risks and difficulties frequently
experienced by early-stage biotechnology companies in rapidly
evolving fields, and we have not yet demonstrated an ability to
successfully overcome such risks and difficulties. If we do not
address these risks and difficulties successfully, our business,
operating results and financial condition will suffer.
As a result of the clinical hold that has been placed on our IND by
the FDA, it has taken and may continue to take considerable time
and expense to respond to the FDA and no assurance can be given
that the FDA will remove the clinical hold in which case our
business and prospects will likely suffer material adverse
consequences.
On October 1, 2020, we received notice from the FDA that it had
placed our IND for a planned Phase 2b clinical trial in LAPC on
clinical hold. As part of the clinical hold process, the FDA has
asked for additional information, tasks to be performed by us and
new preclinical studies and assays. It has taken and may continue
to take a considerable period of time, the length of which is not
certain at this time, for us to conduct such tasks and preclinical
studies and to generate and prepare the requested information. In
addition, the significant expense of such work is likely to require
us to raise additional capital. It is possible that the service
providers that we will utilize for such work may have considerable
backlogs and/or are suffering from slowdowns as a result of
COVID-19 and may not be able to perform such work for an extended
period of time. Even if we are able to fully respond to the FDA’s
requests, they may subsequently make additional requests that we
would need to fulfill prior to the lifting of the clinical hold and
we may never be able to begin our clinical trial in LAPC, obtain
regulatory approval or successfully commercialize our product
candidates. An inability to conduct our clinical trial in LAPC as a
result of the clinical hold or otherwise, would likely force us to
terminate our clinical development plans. It is possible that we
will be unable to fully respond to the FDA in a satisfactory
manner, and as a result the clinical hold may never be lifted. If
the clinical hold is not lifted or if the lifting takes an extended
period of time, our business and prospects will likely suffer
material adverse consequences.
The recent and ongoing COVID-19 pandemic could materially
affect our operations, as well as the business or operations of
third parties with whom we conduct business. Our business could be
adversely affected by the effects of other future health pandemics
in regions where we or third parties on which we rely have
significant business operations.
Our business and its operations, including, but not limited to, our
proposed clinical development program, supply chain operations,
research and development activities and fundraising activities, has
been and could continue to be adversely affected by the COVID-19
pandemic in areas where we have business operations, including the
U.S., India, Europe, Singapore and Thailand. Also, this pandemic
could cause significant disruption in the operations of third
parties upon whom we rely on to conduct the Company’s business. In
March 2020, the World Health Organization declared the COVID-19
outbreak a pandemic. Shortly thereafter, the U.S.
government-imposed restrictions on travel between the U.S., Europe,
and certain other countries. The President of the U.S. declared the
COVID-19 pandemic a national emergency. Since March 2020, numerous
state, regional and local jurisdictions, including the
jurisdictions where our headquarters are located, as well as
foreign jurisdictions, have imposed, and others in the future may
impose, quarantines, shelter-in-place orders, executive, and
similar government orders for their residents to control the spread
of COVID-19. The COVID-19 pandemic has had an impact
upon our operations.
The effects of the executive orders, the shelter-in-place orders
and our work-from-home policies has and may continue to negatively
impact productivity, disrupt our business, and delay our proposed
clinical development program and timeline, the magnitude of which
will depend, in part, on the length and severity of the
restrictions and other limitations on our ability to conduct our
business in the ordinary course. These and similar, and perhaps
more severe, disruptions in our operations could negatively impact
our business, operating results and financial condition.
Quarantines, shelter-in-place, executive, and similar government
orders, or the perception that such orders, shutdowns or other
restrictions on the conduct of business operations could occur,
related to COVID-19, could impact personnel at our third-party
manufacturing facilities in Thailand, or the availability or cost
of materials we use or require to conduct our business, including
product development, which would disrupt our supply chain. Some of
our suppliers and vendors of certain materials used in our
operations and research and development activities are located in
areas that are subject to executive orders and shelter-in-place
orders. While many of these materials may be obtained from more
than one supplier, port closures and other restrictions resulting
from the COVID-19 pandemic may disrupt our supply chain or limit
our ability to obtain sufficient materials to operate our business.
To date, we are aware of certain suppliers for our research and
development activities that have experienced operational delays
directly related to the COVID-19 pandemic.
Depending upon the length of the COVID-19 pandemic and whether the
FDA lifts the clinical hold on our IND, we anticipate our planned
clinical trial in LAPC may be affected by the COVID-19 pandemic. If
COVID-19 continues to spread in the U.S. and elsewhere, we may
experience additional disruptions that could adversely impact our
business and proposed clinical trial, including: (i) delays or
difficulties in enrolling patients in our Phase 2b clinical trial
if the FDA allows us to go forward with such trial; (ii) delays or
difficulties in clinical site activation, including difficulties in
recruiting clinical site investigators and clinical site personnel;
(iii) delays in clinical sites receiving the supplies and materials
needed to conduct our clinical trial, including interruption in
global shipping that may affect the transport of our clinical trial
product; (iv) changes in local regulations as part of a response to
the COVID-19 pandemic which may require us to change the ways in
which our clinical trial is to be conducted, which may result in
unexpected costs, or to discontinue the clinical trial altogether,
if allowed to proceed; (v) diversion of healthcare resources away
from the conduct of clinical trials, including the diversion of
hospitals serving as our clinical trial sites and hospital staff
supporting the conduct of our clinical trial; (vi) interruption of
key clinical trial activities, such as clinical trial site
monitoring, due to limitations on travel imposed or recommended by
federal or state governments, employers and others, or interruption
of clinical trial subject visits and study procedures, the
occurrence of which could affect the integrity of clinical trial
data; (vii) risk that participants enrolled in our proposed
clinical trials will acquire COVID-19 while the clinical trial is
ongoing, which could impact the results of the clinical trial,
including by increasing the number of observed adverse events;
(viii) delays in necessary interactions with local regulators,
ethics committees, and other important agencies and contractors due
to limitations in employee resources or forced furlough of
government employees; (ix) limitations in employee resources that
would otherwise be focused on the conduct of our clinical trial
because of sickness of employees or their families or the desire of
employees to avoid contact with large groups of people; (x) refusal
of the FDA to accept data from clinical trials in affected
geographies; and (xi) interruption or delays to our clinical trial
activities.
The spread of COVID-19, which has caused a widespread impact
throughout the world, may materially affect us economically. The
potential economic impact brought about by the COVID-19 pandemic,
and the duration of such impact, is difficult to assess or predict.
The pandemic has resulted in significant disruption of global
financial markets, which could reduce our ability to access capital
and negatively affect our future liquidity. Also, a recession or
market correction resulting from the spread of COVID-19 and related
government orders and restrictions could materially affect our
business and the value of our common stock. The COVID-19 pandemic
continues to evolve. The ultimate impact of the COVID-19 pandemic
and the mitigation efforts to address it is highly uncertain and
subject to change. We do not yet know the full extent of potential
delays or impacts on our business, our proposed clinical trial,
healthcare systems or the global economy.
If we are unable to successfully raise additional capital, our
future clinical trials and product development could be limited and
our long-term viability may be threatened.
We have experienced negative operating cash flows since our
inception and have funded our operations primarily through sales of
our equity securities. We will need to seek additional funds in the
future through equity or debt financings, or strategic alliances
with third parties, either alone or in combination with equity
financings to complete our product development initiatives. These
financings could result in substantial dilution to the holders of
our common stock, or require contractual or other restrictions on
our operations or on alternatives that may be available to us. If
we raise additional funds by issuing debt securities, these debt
securities could impose significant restrictions on our operations.
Any such required financing may not be available in amounts or on
terms acceptable to us, and the failure to procure such required
financing could have a material and adverse effect on our business,
financial condition and results of operations, or threaten our
ability to continue as a going concern.
Our operating and capital requirements during this fiscal year and
thereafter will vary based on several factors, including whether
the FDA allows us to commence our planned clinical trial for LAPC,
how quickly enrollment of patients in our such trial can be
commenced, the duration of the clinical trial and any change in the
clinical development plans for our product candidates and the
outcome, timing and cost of meeting regulatory requirements
established by the FDA and the EMA or other comparable foreign
regulatory authorities.
Our present and future capital requirements will be significant and
will depend on many factors, including:
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whether the FDA lifts the clinical hold on our IND filing for
LAPC; |
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the progress and results of our development efforts for our
product candidates; |
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the costs, timing and outcome of regulatory review of our
product candidates; |
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the costs and timing of preparing, filing and prosecuting
patent applications, maintaining and enforcing our intellectual
property rights and defending any intellectual property-related
claims; |
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the effect of competing technological and market
developments; |
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market acceptance of our product candidates; |
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the rate of progress in establishing coverage and reimbursement
arrangements with domestic and international commercial third-party
payors and government payors; |
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the extent to which we acquire or in-license other products and
technologies; and |
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legal, accounting, insurance and other professional and
business-related costs. |
We may not be able to acquire additional funds on acceptable terms,
or at all. If we are unable to raise adequate funds, we may have to
liquidate some or all of our assets, or delay or reduce the scope
of or eliminate some or all of our development programs. Further,
if we do not have, or are not able to obtain, sufficient funds, in
addition to those being raised in this offering, we may be required
to delay development or commercialization of our product
candidates. We also may have to reduce the resources devoted to our
product candidates or cease operations. Any of these factors could
harm our operating results.
Due to the significant resources required for the development of
our programs, and depending on our ability to access capital, we
must prioritize development of certain product candidates. We may
expend our limited resources on programs that do not yield a
successful product candidate and fail to capitalize on product
candidates or indications that may be more profitable or for which
there is a greater likelihood of success.
We seek to maintain a process of prioritization and resource
allocation to maintain an optimal balance between aggressively
advancing lead programs and ensuring replenishment of our
portfolio. Until such time, if ever, as the FDA lifts its clinical
hold on our IND related to our planned Phase 2b clinical trial in
LAPC and our Cell-in-a-Box® encapsulation technology is
validated in our planned Phase 2b clinical trial, we have halted
spending on behalf of our development program with respect to
cannabinoids. Further, until we have completed this offering, we
have halted spending on behalf of our other development programs
with respect to diabetes and malignant ascites fluid.
Due to the significant resources required for the development of
our programs, we must focus our programs on specific diseases and
decide which product candidates to pursue and advance and the
amount of resources to allocate to each. Our decisions concerning
the allocation of research, development, collaboration, management
and financial resources toward particular product candidates or
therapeutic areas may not lead to the development of any viable
commercial product and may divert resources away from better
opportunities. Similarly, our potential decisions to delay,
terminate or collaborate with third parties in respect of certain
programs may subsequently also prove to be suboptimal and could
cause us to miss valuable opportunities. We may fail to capitalize
on viable commercial products or profitable market opportunities,
be required to forego or delay pursuit of opportunities with other
product candidates or other diseases that may later prove to have
greater commercial potential than those we choose to pursue, or
relinquish valuable rights to such product candidates through
collaboration, licensing or other royalty arrangements in cases in
which it would have been advantageous for us to invest additional
resources to retain sole development and commercialization rights.
If we make incorrect determinations regarding the viability or
market potential of any or all of our programs or product
candidates or misread trends in the biotechnology industry, our
business, prospects, financial condition and results of operations
could be materially adversely affected.
We currently have no commercial revenue and may never become
profitable.
Even if we can successfully achieve regulatory approval for our
product candidates, we do not know what the reimbursement status of
our product candidates will be or when any of these products will
generate revenue for us, if at all. We have not generated, and do
not expect to generate, any product revenue for the foreseeable
future. We expect to continue to incur significant operating losses
for the foreseeable future due to the cost of our research and
development, preclinical studies and clinical trials and the
regulatory approval process for our product candidates. The amount
of future losses is uncertain and will depend, in part, on the rate
of growth of our expenses.
Our ability to generate revenue from our product candidates also
depends on numerous additional factors, including our ability
to:
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successfully complete development activities, including the
remaining preclinical studies and planned clinical trials for our
product candidates; |
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complete and submit NDAs or BLAs to the FDA and MAAs to the
EMA, and obtain regulatory approval for indications for which there
is a commercial market; |
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complete and submit applications to, and obtain regulatory
approval from, other foreign regulatory authorities; |
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manufacture any approved products in commercial quantities and
on commercially reasonable terms; |
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develop a commercial organization, or find suitable partners,
to market, sell and distribute approved products in the markets in
which we have retained commercialization rights; |
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achieve acceptance among patients, clinicians and advocacy
groups for any products we develop; |
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obtain coverage and adequate reimbursement from third parties,
including government payors; and |
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set a commercially viable price for any products for which we
may receive approval. |
We are unable to predict the timing or amount of increased
expenses, or when or if we will be able to achieve or maintain
profitability. Even if we can complete the processes described
above, we anticipate incurring significant costs associated with
commercializing our product candidates.
We face substantial competition, which may result in others
discovering, developing or commercializing competing products
before or more successfully than we do.
The development and commercialization of new drug products is
highly competitive. We face competition with respect to our current
product candidates. We will face competition with respect to any
product candidates that we may seek to develop or commercialize in
the future. Such competition may arise from major pharmaceutical
companies, specialty pharmaceutical companies and biotechnology
companies worldwide. There are several large pharmaceutical and
biotechnology companies that currently market products or are
pursuing the development of products for the treatment of the
disease indications for which we are developing our product
candidates. Some of these competitive products and therapies are
based on scientific approaches that are entirely different from our
approach. Potential competitors also include academic institutions,
government agencies and other public and private research
organizations that conduct research, seek patent protection and
establish collaborative arrangements for research, development,
manufacturing and commercialization.
Specifically, there are numerous companies developing or marketing
therapies for cancer and diabetes, including many major
pharmaceutical and biotechnology companies. Our commercial
opportunity could be reduced or eliminated if our competitors
develop and commercialize products that are safer, more effective,
have fewer or less severe side effects, are more convenient or are
less expensive than any products that we may develop. Our
competitors also may obtain regulatory approval for their products
more rapidly than we may obtain approval for ours, which could
result in our competitors establishing a strong market position
before we can enter the market.
Many of the companies against which we are competing or against
which we may compete in the future have significantly greater
financial resources and expertise in research and development,
manufacturing, preclinical testing, conducting clinical trials,
obtaining regulatory approvals and marketing approved products than
we do. Mergers and acquisitions in the pharmaceutical and
biotechnology sectors may result in even more resources being
concentrated among a smaller number of our competitors. Smaller and
other early-stage companies may also prove to be significant
competitors, particularly through collaborative arrangements with
large and established companies. These third parties compete with
us in recruiting and retaining qualified scientific and management
personnel, establishing clinical trial sites and patient
registration for clinical trials, as well as in acquiring
technologies complementary to, or necessary for, our programs.
Additional Risks Related to Regulatory Matters
If we are unable to obtain, or if there are delays in obtaining,
required approval from the applicable regulatory agencies, we will
not be able to commercialize our product candidates and our ability
to generate revenue will be materially impaired.
Our product candidates must obtain marketing approval from the FDA
for commercialization in the U.S. and from foreign regulatory
agencies for commercialization in countries outside the U.S. The
process of obtaining marketing approvals in the countries in which
we intend to sell and distribute our product candidates is
expensive and can take many years, if approval is obtained at all.
This process can vary substantially based upon a variety of
factors, including the type, complexity and novelty of the product
candidates involved. Failure to obtain marketing approval for a
product candidate will prevent us from commercializing that product
candidate. To date, we have not received approval to market any of
our product candidates from regulatory agencies in any
jurisdiction. We have no experience in filing and supporting the
applications necessary to gain marketing approvals and expect to
rely on third-party contract research organizations to assist us in
this process. Securing marketing approval requires the submission
of extensive preclinical and clinical data and supporting
information to the regulatory agencies for each product candidate
to establish the product candidate’s safety and efficacy. Securing
marketing approval also requires the submission of information
about the product manufacturing process to, and inspection of
manufacturing facilities by, the regulatory agencies.
Our product candidates may not be effective, may be only moderately
effective or may prove to have undesirable or unintended side
effects, toxicities or other characteristics that may preclude our
obtaining marketing approval or prevent or limit commercial use.
Regulatory agencies have substantial discretion in the approval
process and may refuse to accept any application or may decide that
our data are insufficient for approval and require additional
preclinical, clinical or other studies. In addition, varying
interpretations of the data obtained from preclinical and clinical
testing could delay, limit or prevent marketing approval of a
product candidate. Changes in marketing approval policies during
the development period, changes in or the enactment of additional
statutes or regulations, or changes in regulatory review for each
submitted product application, may also cause delays in or prevent
the approval of an application. New cancer drugs frequently are
indicated only for patient populations that have not responded to
an existing therapy or have relapsed after such therapies. If we
experience delays in obtaining approval or if we fail to obtain
approval of our product candidates, the commercial prospects for
our product candidates may be harmed and our ability to generate
revenues will be materially impaired.
If allowed to proceed with our clinical development programs, we
intend to conduct clinical trials for certain of our product
candidates at sites outside of the U.S., and the U.S. regulatory
agencies may not accept data from trials conducted in such
locations.
Although the FDA may accept data from clinical trials conducted
outside the U.S., acceptance of this data is subject to certain
conditions imposed by the regulatory agencies outside of the U.S.
For example, the clinical trial must be well designed and conducted
and performed by qualified investigators in accordance with ethical
principles. The trial population must also adequately represent the
population in the country in which the clinical trial is being
conducted. The data must be applicable to the U.S. population and
medical practice in the U.S. in ways that the FDA deems clinically
meaningful. Generally, the patient population for any clinical
trial conducted outside of the U.S. must be representative of the
population for whom we intend to seek approval in the U.S.
In addition, while these clinical trials are subject to the
applicable local laws, the FDA acceptance of the data will be
dependent upon its determination that the trials also complied with
all applicable U.S. laws and regulations. There can be no assurance
that the FDA will accept data from trials conducted outside of the
U.S. If the FDA does not accept the data from any of our clinical
trials that we determine to conduct outside the U.S., it would
likely result in the need for additional trials that would be
costly and time-consuming and delay or permanently halt the
development of our product candidate.
In addition, the conduct of clinical trials outside the U.S. could
have a significant impact on us. Risks inherent in conducting
international clinical trials include:
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Foreign regulatory requirements that could restrict or limit
our ability to conduct our clinical trials; |
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Administrative burdens of conducting clinical trials under
multiple foreign regulatory schemes; |
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Foreign exchange fluctuations; and |
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Diminished protection of intellectual property in some
countries. |
Promising results in previous clinical trials of our encapsulated
live cell and ifosfamide combination for LAPC may not be replicated
in future clinical trials which could result in development delays
or a failure to obtain marketing approval.
Positive results in the previous Phase 1/2 and Phase 2 clinical
trials of the encapsulated live cell and ifosfamide combination
product may not be predictive of similar results in future clinical
trials such as our planned Phase 2b clinical trial in LAPC for
which the FDA has placed a clinical hold. The previous Phase 1/2
and Phase 2 clinical trials were done over twenty years ago in
Germany by Bavarian Nordic and had a relatively limited number of
patients in each trial. These trials resulted in outcomes that were
not statistically significant and may not be representative of
future results. In addition, interim results obtained after a
clinical trial has commenced do not necessarily predict results in
future clinical trials. Numerous companies in the pharmaceutical
and biotechnology industries have suffered significant setbacks in
late-stage clinical trials even after achieving promising results
in early-stage clinical development. Our clinical trials may
produce negative or inconclusive results and we may decide, or
regulatory agencies may require us, to conduct additional clinical
trials. Moreover, clinical data are often susceptible to varying
interpretations and analyses, and many companies that believed
their product candidates performed satisfactorily in preclinical
studies and clinical trials have nonetheless failed to obtain the
approval for their products by the regulatory agencies.
Risks related to our Intellectual Property
We may not be able to protect our intellectual property rights
throughout the world.
Filing, prosecuting and
defending patents or establishing other intellectual property
rights to our product candidates in all
countries throughout the world would be prohibitively
expensive, and our intellectual property rights in some countries
outside the United States can be less extensive than those in the
United States or non-existent. For example, the Melligen cells are
protected by patents only in the U.S. and Europe and we are only
pursuing patent protection for our pancreatic cancer product
candidate in the U.S., Australia and Canada.
Many companies have encountered significant problems in protecting
and defending intellectual property rights in foreign
jurisdictions. The legal systems of some countries do not favor the
enforcement of patents and other intellectual property protection,
which could make it difficult for us to stop the infringement of
our patents or misappropriation of our intellectual property rights
generally. Proceedings to enforce our patent and other intellectual
property rights in foreign jurisdictions could result in
substantial costs and divert our efforts and attention from other
aspects of our business, could put our patents or intellectual
property rights at risk of being invalidated or interpreted
narrowly and our patent applications at risk of not issuing and
could provoke third parties to assert claims against us. We may not
prevail in any lawsuits that we initiate, and the damages or other
remedies awarded, if any, may not be commercially meaningful.
Many countries, including
European Union countries, India, Japan and China, have compulsory
licensing laws under which a patent owner may be compelled under
specified circumstances to grant licenses to third parties. In
those countries, we may have limited remedies if patents are infringed or if
we are compelled to grant a license to a third party, which could
materially diminish the value of those patents. This could limit
our ability to pursue strategic alternatives, including
identifying and consummating transactions with potential third-party
partners, to further develop, obtain marketing approval for and/or
commercialize our product candidates, and consequently our
potential revenue opportunities.
Our intellectual property and data and market exclusivity may
not be sufficient to block others from commercializing identical or
competing products.
Our success depends in large
part on our ability to obtain and maintain both intellectual
property rights and data and market exclusivity for our product
candidates in order to block others from commercializing identical
or competing products. Establishing intellectual property
rights includes filing, prosecuting, maintaining, and enforcing
patents that cover our product candidates and variations of our
product candidates and protecting our trade secrets and other
proprietary information related to our product candidates from
unauthorized use.
The foundational patents
relating to the Cell-in-the-Box® technology that were formerly
licensed from Bavarian Nordic/GSF covering capsules encapsulating
cells expressing cytochrome P450 and treatment methods using the
same expired on March 27, 2017. Currently, we do not have any
issued patents in any countries covering our product candidate for
the treatment of pancreatic cancer. We exclusively license from UTS
patented Melligen cells, which cover our product candidate for the
treatment of diabetes, which are issued in the U.S. and Europe and
expire in August 2028. Currently, we do not have any issued patents
or pending applications covering our product candidate for the
treatment of cancer using cannabinoids or our product candidate for
the treatment of malignant ascites fluid therapy. We may not be
able to obtain protection for our product candidates or variations
of our product candidates. Even if our owned and licensed
patent applications issue as patents, they may not issue in a form
that will provide us with any meaningful protection, prevent
competitors from competing with us or otherwise provide us with any
competitive advantage or our patents may expire before or shortly
after our product candidate is approved. Our competitors may be
able to circumvent our owned or licensed patents by developing
similar or alternative technologies or products in a non-infringing
manner.
Confidential know-how and
trade secrets are only protectable to the extent a third party
utilizes the confidential know-how or trade secret in an
unauthorized manner; however, if a third party is able to
independently duplicate the technology, such as through reverse
engineering, without access to or use of our confidential know-how
or trade secret, we would have no recourse.
In addition, data exclusivity
that is provided through the BPCIA in the U.S. and equivalents in
foreign countries is limited in both time and scope. The BPCIA bars
the FDA from approving biosimilar applications for 12 years after
an innovator biological product receives initial marketing
approval, however it does not bar the FDA from approving an
identical or similar product that is the subject of its own BLA.
Finally, upon the approval of the first BLA for a biologic
designated as an Orphan Drug for a specified indication, the
sponsor of that BLA is entitled to 7 years of exclusive marketing
rights in the U.S. for biologic for the particular indication
unless the sponsor cannot assure the availability of sufficient
quantities to meet the needs of persons with the disease. In
Europe, this exclusivity is 10 years. However, Orphan Drug status
for an approved indication does not prevent another company from
seeking approval of a biologic that has other labeled indications
that are not under orphan or other exclusivities. In addition, in
the U.S., the FDA is not prevented from approving another biologic
for the same labeled Orphan indication if the company can
demonstrate that the other biologic is clinically superior to first
approved product.
Even if we are able to obtain
patents and maintain confidential information and trade secrets and
obtain data and market exclusivity for our product candidates, our
competitors may be able to develop and obtain approval of identical
or competing products.
If we do not obtain patent and/or data exclusivity for our
product candidates, our business may be materially
harmed.
Our commercial success will largely depend on our ability to obtain
and maintain patent and other intellectual property protection
and/or data exclusivity under the BPCIA in the U.S. and other
countries with respect to our proprietary technology, product
candidates and our target indications. If we are unable to obtain
patents covering our product candidates or obtain data and/or
marketing exclusivity for our product candidates, our competitors
may be able to take advantage of our investment in development and
clinical trials by referencing our clinical and preclinical data to
obtain approval of competing products, such as a biosimilar,
earlier than might otherwise be the case.
If we are unable to protect the confidentiality of our trade
secrets, our business and competitive position would be
harmed.
In addition to seeking patents for some of our technology and
product candidates, we also rely on trade secrets, including
unpatented know-how, technology and other proprietary information,
to maintain our competitive position. We seek to protect these
trade secrets, in part, by entering non-disclosure and
confidentiality agreements with parties who have access to them,
such as our employees, corporate collaborators, outside scientific
collaborators, contract manufacturers, consultants, advisors and
other third parties. We seek to protect our confidential
proprietary information, in part, by entering confidentiality and
invention or patent assignment agreements with our employees and
consultants; however, we cannot be certain that such agreements
have been entered with all relevant parties.
Moreover, to the extent we enter such agreements, any of these
parties may breach the agreements and disclose our proprietary
information, including our trade secrets to unaffiliated third
parties. We may not be able to obtain adequate remedies for such
breaches. Enforcing a claim that a party illegally disclosed or
misappropriated a trade secret is difficult, expensive and
time-consuming and the outcome is unpredictable. In addition, some
courts inside and outside the U.S. are less willing or unwilling to
protect trade secrets. If any of our trade secrets were to be
lawfully obtained or independently developed by a competitor, we
would have no right to prevent them, or those to whom they
communicate them, from using that technology or information to
compete with us. If any of our trade secrets were to be disclosed
to or independently developed by a competitor, our competitive
position would be harmed.
The majority of the technology that we license and use for our
product candidates is not protected by patents, but rather is based
upon confidential know-how and trade secrets. Confidential know-how
and trade secrets are only protectable to the extent a third party
utilizes the confidential know-how or trade secret in an
unauthorized manner; however, if a third party is able to
independently duplicate the technology, such as through reverse
engineering, without access to or use of our confidential know-how
or trade secret, we would have no recourse.
Risks Related to Our Dependence on Third Parties
We rely heavily on third parties to conduct our preclinical studies
and plan to rely on third parties to conduct our clinical trials,
assuming they are allowed to proceed, and those third parties may
not perform satisfactorily, including failing to meet deadlines for
the completion of such studies and trials.
We currently rely heavily on third parties to conduct our
preclinical studies and plan to rely on third parties to conduct
our clinical trials, assuming they are allowed to proceed,
including Austrianova in which we own an equity interest. We expect
to continue to rely heavily on third parties, such as a CRO, a
clinical data management organization, a medical institution, a
clinical investigator and others to plan for and conduct our
clinical trials. Our agreements with these third parties generally
allow the third party to terminate our agreement with them at any
time. If we are required to enter alternative arrangements because
of any such termination, the introduction of our product candidates
to market could be delayed.
Our reliance on these third parties for research and development
(“R&D”) activities will reduce our control over these
activities but will not relieve us of our responsibilities. For
example, we design our clinical trials and will remain responsible
for ensuring that each is conducted in accordance with the general
investigational plan and protocol for the trial. Moreover,
regulatory agencies require us to comply with current good
manufacturing practices (“cGMP”) for conducting, recording and
reporting the results of clinical trials to assure that data and
reported results are credible and accurate and that the rights,
integrity and confidentiality of trial participants are protected.
Our reliance on third parties that we do not control does not
relieve us of these responsibilities and requirements. We also are
required to register ongoing clinical trials and post the results
of completed clinical trials on a government-sponsored database of
regulatory agencies within specified timeframes. Failure to do so
can result in fines, adverse publicity and civil and criminal
sanctions.
Furthermore, these third parties may also have relationships with
other entities, some of which may be our competitors. If these
third parties do not successfully carry out their contractual
duties, meet expected deadlines or conduct our clinical trials in
accordance with the requirements of a regulatory agency or our
protocols, we will not be able to obtain, or may be delayed in
obtaining, marketing approvals for our product candidates and will
not be able to, or may be delayed in our efforts to, successfully
commercialize our product candidates.
We expect to rely on third parties to store and distribute
our product candidates for our clinical trials. Any performance
failure on the part of such third parties could delay clinical
development or marketing approval of our product candidates or
commercialization of our products, producing additional losses and
depriving us of potential product candidate revenue. Our existing
collaboration with universities and institutions is important to
our business. If we are unable to maintain these collaborations, or
if these collaborations are not successful, our business could be
adversely affected.
We rely on numerous consultants for a substantial portion of our
R&D related to our product candidates. If there are delays or
failures to perform their obligations, our product candidates would
be adversely affected. If our collaboration with these consultants
is unsuccessful or is terminated, we would need to identify new
research and collaboration partners for our preclinical and
clinical development. If we are unsuccessful or significantly
delayed in identifying new collaboration and research partners, or
unable to reach an agreement with such a partner on commercially
reasonable terms, development of our product candidates will
suffer, and our business would be materially harmed.
Furthermore, if any of these consultants change their strategic
focus, or if external factors cause any one of them to divert
resources from our collaboration, or if any one of them
independently develops products that compete directly or indirectly
with our product candidates using resources or information it
acquires from our collaboration, our business and results of
operations could suffer.
We rely on Prof. Günzburg, Dr. Salmons and Dr. Löhr for the
development of our product candidates. If they decide to terminate
their relationship with us, we may not be successful in the
development of our product candidates.
We rely on Prof. Walter H. Günzburg and Dr. Brian Salmons, officers
of Austrianova, and Dr. Löhr, currently with the Karolinska
Institute in Stockholm, Sweden, for the development of our product
candidates. If they decide to terminate their relationship with us,
we may not be successful in the development of our product
candidates.
Prof. Günzburg, Dr. Salmons and Dr. Löhr are involved in almost all
our scientific endeavors underway and being planned by us. These
endeavors include preclinical and clinical studies involving our
cancer therapy for LAPC to be conducted in the U.S. and elsewhere
on our behalf. They also provide professional consulting services
to us through the respective consulting agreements we have entered
with the consulting companies through which they provide services.
The consulting agreements may be terminated for any reason at any
time upon one party giving the other a written notice prior to the
effective date of the termination. If that occurs, we may not be
successful in the development of our product candidates which could
have a material adverse effect on us.
Risks Related to this Offering
You will experience immediate and substantial dilution in the
net tangible book value per share of the common stock you purchase
in this offering.
Because the effective offering price per share in this offering
exceeds the net tangible book value per share of our common stock
outstanding prior to this offering, you will incur an immediate and
substantial dilution in the net tangible book value of the shares
of common stock you purchase in this offering or the shares of
common stock underlying the Pre-funded Warrants you purchase in
this offering. After giving effect to the sale by us of (i)
8,430,000 shares of our common stock at the offering price of $5.00
per share of common stock and (ii) Pre-funded Warrants to purchase
5,570,000 shares of common stock at the offering price of $4.999
per Pre-funded Warrant, and after deducting placement agent fees
and estimated offering expenses payable by us and assuming full
exercise of the Pre-funded Warrants, you will experience immediate
dilution of $0.90 per share, representing the difference between
the effective offering price per share and our pro forma as
adjusted net tangible book value per share as of April 30, 2021
after giving effect to the August 2021 Offering and warrant
exercises subsequent to April 30, 2021 through August 18, 2021, and
this offering. The exercise of warrants, exercise of outstanding
stock options and vesting of other stock awards may result in
further dilution of your investment. See “Dilution” on page S-32 of this
prospectus supplement for a more detailed discussion of the
dilution you will incur if you participate in this offering.
In addition, as of August 18, 2021, we had outstanding options to
acquire 42,333 shares of our common stock and outstanding warrants
to acquire 1,800,320 shares of our common stock, and pursuant to
this offering, we will issue placement agent warrants to purchase
up to 1,050,000 shares of our common stock. The issuance of
shares of our common stock upon exercise of the stock options or
warrants could result in dilution to the interests of other holders
of our common stock and could adversely affect our stock price.
Substantial future sales or other issuances of our common
stock could depress the market for our common stock.
Sales of a substantial number of shares of our common stock, or the
perception by the market that those sales could occur, could cause
the market price of our common stock to decline or could make it
more difficult for us to raise funds through the sale of equity in
the future.
In connection with our August 2021 Offering, our directors and
executive officers entered into lock-up agreements for a period of
90 days following such offering. Our directors and executive
officers may be released from such lock-up agreements prior to the
expiration of the lock-up period at the sole discretion of
Wainwright. Upon expiration or earlier release of the lock-up, our
directors and executive officers may sell shares into the market,
which could adversely affect the market price of shares of our
common stock.
Future issuances of our common stock or our other equity securities
could further depress the market for our common stock. We expect to
continue costs associated with our R&D programs, such as
preclinical studies, clinical trials, and the regulatory approval
process for therapeutic candidates, and general and administrative
costs associated with our operations, and to satisfy our funding
requirements, we may need to sell additional equity securities. The
sale or the proposed sale of substantial amounts of our common
stock or our other equity securities may adversely affect the
market price of our common stock and our stock price may decline
substantially. Our stockholders may experience substantial dilution
and a reduction in the price that they are able to obtain upon sale
of their shares. New equity securities issued may have greater
rights, preferences or privileges than our existing common
stock.
There is no public market for the Pre-funded Warrants being
offered in this offering.
There is no established public trading market for the Pre-funded
Warrants being offered in this offering, and we do not expect a
market to develop. In addition, we do not intend to apply to list
the Pre-funded Warrants on any securities exchange or nationally
recognized trading system, including Nasdaq. Without an active
market, the liquidity of the Pre-funded Warrants will be
limited.
Holders of Pre-funded Warrants purchased in this offering
will have no rights as common stockholders until such holders
exercise their Pre-funded Warrants and acquire our common
stock.
Until holders of Pre-funded Warrants acquire shares of our common
stock upon exercise of such warrants, holders of Pre-funded
Warrants will have no rights with respect to the shares of our
common stock underlying such Pre-funded Warrants. Upon exercise of
the Pre-funded Warrants, the holders will be entitled to exercise
the rights of a common stockholder only as to matters for which the
record date occurs after the exercise date.
We have broad discretion in the use of the net proceeds of
this offering and, despite our efforts, we may use the net proceeds
in a manner that does not increase the value of your
investment.
Our management will have broad discretion in the application of our
existing cash and the net proceeds from this offering, including
for any of the purposes described in the section titled "Use of
Proceeds," and you will not have the opportunity as part of your
investment decision to assess whether such proceeds are being used
appropriately. Because of the number and variability of factors
that will determine our use of our existing cash and the net
proceeds from this offering, their ultimate use may vary
substantially from their currently intended use. Our management
might not apply our existing cash and the net proceeds from this
offering in ways that ultimately increase the value of your
investment. The failure by our management to apply these funds
effectively could harm our business. Pending their use, we may
invest the net proceeds from this offering in short-term,
investment-grade, interest-bearing securities. These investments
may not yield a favorable return to our stockholders. If we do not
invest or apply the net proceeds from this offering in ways that
enhance stockholder value, we may fail to achieve expected
financial results, which could cause our stock price to
decline.
There was no consistent active trading market for our common
stock prior to August 10, 2021, and public trading of our common
stock may continue to fluctuate
substantially.
Our common stock only began trading on Nasdaq on August 10, 2021.
There was no consistent active trading market for our common stock
prior to August 10, 2021 and there is no assurance that the trading
market for our common stock will become more active or liquid.
Furthermore, there can be no assurance any market maker will be
interested in trading our stock. Therefore, it may be difficult to
sell your shares of common stock if you desire or need to sell
them. As a result, no assurances can be given that you will be able
to readily sell your common stock at a price equal to or above the
price you paid. Our placement agent is not obligated to make a
market in our securities, and even if they make a market, they can
discontinue market making at any time without notice. Neither we
nor the placement agent can provide any assurance that an active
and liquid trading market in our securities will develop or, if
developed, that such market will continue.
Moreover, the trading price of our common stock has fluctuated
substantially over the past few years, and there remains a
significant risk that our common stock price may continue to
fluctuate substantially in the future in response to various
factors, including any material developments in the FDA approval
process for our proposed Phase 2b clinical trial, material
variations in our periodic operating results, departures or
additions of management or other key personnel, announcements of
acquisitions, mergers, share consolidations, or new technology or
patents, new product developments, significant litigation matters,
gain or loss of significant licensees, significant capital
transactions, substantial sales of our common stock in our trading
market, and general and specific market and economic
conditions.
We may not be able to meet the continued listing requirements
for the Nasdaq Capital Market or another nationally recognized
stock exchange, which could limit investors’ ability to make
transactions in our securities and subject us to additional trading
restrictions.
In order to remain listed on the Nasdaq Capital Market, we will be
required to meet the continued listing requirements of the Nasdaq
Capital Market or any other U.S. or nationally recognized stock
exchange to which we may apply and be approved for listing. We may
be unable to satisfy these continued listing requirements, and
there is no guarantee that our common stock will remain listed on
the Nasdaq Capital Market or any other U.S. or nationally
recognized stock exchange. If, after listing, our common stock is
delisted from the Nasdaq Capital Market or any other U.S. or
nationally recognized stock exchange, we could face significant
material adverse consequences, including:
|
· |
a
limited availability of market quotations for our common
stock; |
|
· |
reduced
liquidity with respect to the market for our common
stock; |
|
· |
a
determination that our common stock is a “penny stock,” which will
require brokers trading in our common stock to adhere to different
rules, possibly resulting in a reduced level of trading activity in
the secondary trading market for our common stock; |
|
· |
a
limited amount of news and analyst coverage; and |
|
· |
decreased
ability to issue additional shares of our common stock or obtain
additional financing in the future. |
A large number of shares may be issued and subsequently sold
upon the exercise of existing options and warrants.
As of August 18, 2021, there were 42,333 shares of common stock
issuable under outstanding options and 1,800,320 shares issuable
upon exercise of outstanding warrants at various exercise prices.
In addition, we will be issuing concurrently with this offering in
a private placement Series A Warrants to purchase 7,000,000 shares
of common stock, which are immediately exercisable. To the extent
that holders of existing options or warrants sell the shares of
common stock issued upon the exercise of warrants, the market price
of our common stock may decrease due to the additional selling
pressure in the market. The risk of dilution from issuances of
shares of common stock underlying existing options and warrants may
cause shareholders to sell their common stock, which could further
decline in the market price.
You may experience future dilution as a result of future
equity offerings.
In order to raise additional capital, we may in the future offer
additional common stock or other securities convertible into or
exchangeable for our common stock at prices that may not be the
same as the price per share in this offering. We may sell shares or
other securities in any other offering at a price per share that is
less than the price per share paid by investors in this offering,
and investors purchasing shares or other securities in the future
could have rights superior to existing shareholders. The price per
share at which we sell additional shares of our common stock, or
securities convertible or exchangeable into common stock, in future
transactions may be higher or lower than the price per share paid
by investors in this offering.
As a newly listed company on Nasdaq, we will incur materially
increased costs and be subject to additional regulations and
requirements.
As a newly exchange-listed public company on Nasdaq, we will incur
material additional legal, accounting and other expenses, including
payment of annual exchange fees, to satisfy the continued listing
standards for Nasdaq. If our common stock is listed on Nasdaq, we
must meet certain financial and liquidity criteria to maintain our
listing. If we fail to meet any of Nasdaq’s listing standards, our
common stock may be delisted. In addition, our Board may determine
that the cost of maintaining our listing on a national securities
exchange outweighs the benefits of such listing. A delisting of our
common stock from Nasdaq may materially impair our stockholders’
ability to buy and sell our common stock and could have an adverse
effect on the market price of, and the efficiency of the trading
market for, our common stock. The delisting of our common stock
could significantly impair our ability to raise capital and the
value of your investment.
We may experience volatility in our stock price, which may
adversely affect the trading price of our common stock.
We have experienced significant volatility from time to time in the
market price of our shares of common stock. Over the past twelve
months, shares of our common stock were quoted and traded at a high
of $55.22 per share and a low of $2.25 per share. In the future,
the market price of our common stock may continue to be
volatile.
Risks Related to our Reverse Stock Split
We cannot assure you that we will be able to continue to
comply with the minimum bid price requirement of
Nasdaq.
There can be no assurance that the market price of our common stock
will remain at the level required for continuing compliance with
Nasdaq’s minimum bid requirement. It is not uncommon for the market
price of a company’s common stock to decline in the period
following a reverse stock split. In any event, other factors
unrelated to the number of shares of our common stock outstanding,
such as negative financial or operational results, could adversely
affect the market price of our common stock and jeopardize our
ability to maintain compliance with Nasdaq’s minimum bid price
requirement.
There can be no assurance that we will be able to comply with
the continued listing standards of Nasdaq, a failure of which could
result in a de-listing of our common stock.
Nasdaq requires that the trading price of its listed stocks remain
above one dollar in order for the stock to remain listed. If a
listed stock trades below one dollar for more than 30 consecutive
trading days, then it is subject to delisting from Nasdaq. In
addition, to maintain a listing on Nasdaq, we must satisfy minimum
financial and other continued listing requirements and standards,
including those regarding director independence and independent
committee requirements, minimum stockholders’ equity and certain
corporate governance requirements. If we are unable to satisfy
these requirements or standards, we could be subject to delisting.
This would have a negative effect on the price of our common stock
and would impair your ability to sell or purchase our common stock
when you wish to do so. In the event of a delisting, we can provide
no assurance that any action we may take to restore our compliance
with the listing requirements would allow our common stock to
become listed again, stabilize the market price or improve the
liquidity of our common stock, prevent our common stock from
dropping below the minimum bid price requirement, or prevent future
non-compliance with the listing requirements.
Risks Related to our Tax Matters
Our ability to use our net operating loss carryforwards and
certain other tax attributes may be limited.
As of April 30, 2021, we had federal net operating loss
carryforwards of approximately $47.9 million, which began to expire
in varying amounts beginning in 2020. Under Sections 382 and 383 of
the United States Internal Revenue Code of 1986, as amended, or the
Code, and corresponding provisions of state law, if a corporation
undergoes an “ownership change” (generally defined as a greater
than 50-percentage-point cumulative change (by value) in the equity
ownership of certain stockholders over a rolling three-year
period), the corporation’s ability to use its pre-change net
operating loss carryforwards and other pre-change tax attributes to
offset its post-change taxable income or taxes may be limited. We
may have experienced ownership changes in the past and could
experience one or more ownership changes in the future, including
in connection with this offering, some of which are outside our
control. Our net operating loss carryforwards may also be subject
to limitation under state laws. Further, our ability to utilize net
operating loss carryforwards of companies that we may acquire in
the future may also be subject to limitations. There is also a risk
that due to tax law changes, such as suspensions on the use of net
operating loss carryforwards, or other unforeseen reasons, our
ability to use our pre-change net operating loss carryforwards and
other pre-change tax attributes to offset post-change taxable
income or taxes may be subject to limitation or expire.
Changes in U.S. tax law could adversely affect our business
and financial condition.
The laws, rules and regulations dealing with U.S. federal, state,
and local income taxation are constantly under review by persons
involved in the legislative process and by the Internal Revenue
Service and the U.S. Treasury Department. Changes to tax laws
(which changes may have retroactive application) could adversely
affect us or holders of our common stock. In recent years, many
changes have been made to applicable tax laws and changes are
likely to continue to occur in the future.
For example, the Tax Cuts and Jobs Act, or the TCJA, was enacted in
2017 and made significant changes to corporate taxation, including
the reduction of the corporate tax rate from a top marginal rate of
35% to a flat rate of 21%, the limitation of the tax deduction for
net interest expense to 30% of adjusted taxable income (except for
certain small businesses), the limitation of the deduction for net
operating losses from taxable years beginning after December 31,
2017 to 80% of current year taxable income and the elimination of
net operating loss carrybacks generated in taxable years ending
after December 31, 2017 (though any such net operating losses may
be carried forward indefinitely), and the modification or repeal of
many business deductions and credits. In addition, on March 27,
2020, then President Trump signed into law the “Coronavirus Aid,
Relief, and Economic Security Act” or the CARES Act, which, among
other things, suspends the 80% limitation on the deduction for net
operating losses arising in taxable years beginning before January
1, 2021, permits a five-year carryback of net operating losses
arising in taxable years beginning after December 31, 2017 and
before January 1, 2021, and generally modifies the limitation on
the deduction for net interest expense to 50% of adjusted taxable
income for taxable years beginning in 2019 and 2020.
It cannot be predicted whether, when, in what form, or with what
effective dates, new tax laws may be enacted, or regulations and
rulings may be enacted, promulgated or issued under existing or new
tax laws, which could result in an increase in our or our
shareholders’ tax liability or require changes in the manner in
which we operate in order to minimize or mitigate any adverse
effects of changes in tax law or in the interpretation thereof.
NOTE REGARDING FORWARD-LOOKING
STATEMENTS
This prospectus supplement contains forward-looking statements.
Forward-looking statements give our current expectations or
forecasts of future events. You can identify these statements by
the fact that they do not relate strictly to historical or current
facts. Forward-looking statements involve risks and uncertainties
and include statements regarding, among other things, our projected
revenue growth and profitability, our growth strategies and
opportunity, anticipated trends in our market and our anticipated
needs for working capital. They are generally identifiable by use
of the words “may,” “will,” “should,” “anticipate,” “estimate,”
“plans,” “potential,” “projects,” “continuing,” “ongoing,”
“expects,” “management believes,” “we believe,” “we intend” or the
negative of these words or other variations on these words or
comparable terminology. In particular, these include statements
relating to future actions, prospective products, market
acceptance, future performance or results of current and
anticipated products, sales efforts, expenses, and the outcome of
contingencies such as legal proceedings and financial results.
Examples of forward-looking statements in this prospectus
supplement include, but are not limited to, our expectations
regarding our business strategy, business prospects, operating
results, operating expenses, working capital, liquidity and capital
expenditure requirements. Important assumptions relating to the
forward-looking statements include, among others, assumptions
regarding demand for our products, the cost, terms and availability
of materials related to biopharma products, pricing levels, the
timing and cost of capital expenditures, status of regulatory
approvals, competitive conditions and general economic conditions.
These statements are based on our management’s expectations,
beliefs and assumptions concerning future events affecting us,
which in turn are based on currently available information. These
assumptions could prove inaccurate. Although we believe that the
estimates and projections reflected in the forward-looking
statements are reasonable, our expectations may prove to be
incorrect.
Important factors that could cause actual results to differ
materially from the results and events anticipated or implied by
such forward-looking statements include, but are not limited
to:
|
· |
our ability to conduct the preclinical studies and assays and
provide the additional information requested by the FDA in order to
lift the clinical hold on our IND for LAPC; |
|
· |
our ability to advance any product candidates into, and
successfully complete, clinical studies and obtain regulatory
approval for them; |
|
· |
the timing or likelihood of regulatory filings and
approvals; |
|
· |
the commercialization, marketing and manufacturing of our
product candidates, if approved; |
|
· |
our ability to continue as a going concern; |
|
· |
the pricing and reimbursement of our product candidates, if
approved; |
|
· |
the rate and degree of market acceptance and clinical utility
of any products for which we receive marketing approval; |
|
· |
the implementation of our strategic plans for our business,
product candidates and technology; |
|
· |
the scope of protection we have and are able to establish and
maintain for intellectual property rights covering our product
candidates and technology; |
|
· |
our expectations related to the use of proceeds from this
offering and our existing cash resources, and estimates of our
expenses, future revenues, capital requirements and our needs for
additional financing; |
|
· |
our ability to maintain and establish collaborations; |
|
· |
our financial performance; |
|
· |
our ability to maintain compliance with the Nasdaq Capital
Market’s listing standards; |
|
· |
developments relating to our competitors and our industry,
including the impact of government regulation; |
|
· |
our ability to retain and attract senior management and
consultants; and |
|
· |
other risks and uncertainties, including those listed under the
caption “Risk Factors” in this prospectus supplement and the
accompanying prospectus or any other documents incorporated by
reference in this prospectus supplement and the accompanying
prospectus. |
We operate in a very competitive and rapidly changing environment.
New risks emerge from time to time. It is not possible for us to
predict all of those risks, nor can we assess the impact of all of
those risks on our business or the extent to which any factor may
cause actual results to differ materially from those contained in
any forward-looking statement. The forward-looking statements in
this prospectus supplement are based on assumptions management
believes are reasonable. However, due to the uncertainties
associated with forward-looking statements, you should not place
undue reliance on any forward-looking statements. Further,
forward-looking statements speak only as of the date they are made,
and unless required by law, we expressly disclaim any obligation or
undertaking to publicly update any of them in light of new
information, future events, or otherwise.
USE OF PROCEEDS
We estimate that the net proceeds from our issuance and sale of
shares of our common stock and Pre-funded Warrants in this offering
will be approximately $64 million, after deducting the
estimated placement agent fees and the estimated offering expenses
payable by us. These estimates exclude the proceeds, if any, from
the exercise of the Pre-funded Warrants sold in this offering and
the Series A Warrants sold in a private placement concurrently with
this offering.
We currently intend to use the net proceeds from this offering,
together with our existing cash and cash equivalents, as
follows:
|
· |
$5 million to complete activities requested by the FDA to
address the FDA’s clinical hold on our IND with respect to our
planned Phase 2b clinical trial in LAPC, including conducting
several additional preclinical studies and assays and providing the
FDA with the additional information it requested; |
|
· |
$20 million to fully fund and conduct the Phase 2b
clinical trial in LAPC, if and when the clinical hold on the IND is
lifted; |
|
· |
$20 million to continue clinical development of the Company’s
cancer program; |
|
· |
$10 million to continue development of the Company’s
diabetes program; |
|
· |
$5 million to continue development of the Company’s
malignant ascites program; and |
|
· |
the remainder for general corporate purposes. |
The amounts and timing of our use of the net proceeds from this
offering will depend on a number of factors, such as the timing and
progress of our efforts to lift the FDA’s clinical hold on our IND
for a clinical trial for LAPC, our ability to conduct the clinical
trial for LAPC if and when the FDA’s clinical hold is lifted, our
R&D efforts, the timing and progress of any collaborative or
strategic partnering efforts, technological advances and the
competitive environment for our planned products. As of the date of
this prospectus supplement, we cannot specify with certainty all of
the particular uses for the net proceeds to us from the sale of the
shares of our common stock offered by us hereunder. Accordingly,
our management will have broad discretion in the timing and
application of these proceeds. Pending application of the net
proceeds as described above, we intend to temporarily invest the
proceeds in short-term, interest-bearing instruments.
DILUTION
Purchasers of our common stock and Pre-funded Warrants in this
offering will experience immediate dilution to the extent of the
difference between the effective offering price per share of our
common stock and/or Pre-funded Warrants and the as adjusted net
tangible book value per share of our common stock immediately after
this offering.
Our net tangible book value as of April 30, 2021 was approximately
$1.5 million, or $0.97 per share of our common stock. Net tangible
book value per share of our common stock is determined by dividing
total tangible assets less total liabilities, excluding items such
as intangibles, by the aggregate number of shares of our common
stock outstanding as of April 30, 2021.
Our pro forma net tangible book value as of April 30, 2021, was
approximately $25.1 million, or $3.29 per share, after giving
effect to (i) the sale in the August 2021 Offering, that closed on
August 12, 2021, of 2,630,385 shares of common stock, August
Pre-funded Warrants and August Common Warrants and additional
common stock warrants pursuant to the partial exercise of the
Option, for net proceeds of approximately $23.6 million, after
deducting underwriting discounts and offering expenses paid by us,
(ii) the cashless exercise of the August Pre-funded Warrants and
issuance of 899,027 shares of common stock upon such exercise, and
(iii) exercise of August Common Warrants to purchase an aggregate
of 2,491,787 shares of common stock from August 12, 2021 through
August 18, 2021, for an aggregate exercise price of approximately
$10.6 million.
After giving effect to the foregoing pro forma transactions and
giving further effect to the sale in this offering and the
concurrent private placement of (i) 8,430,000 shares of our common
stock at an offering price of $5.00 per share and accompanying
warrant, and (ii) Pre-funded Warrants to purchase 5,570,000 shares
of common stock at an offering price of $4.999 per Pre-funded
Warrant and accompanying warrant, and after deducting placement
agent fees and estimated offering expenses payable by us, our pro
forma as adjusted net tangible book value as of April 30, 2021
would have been approximately $88.6 million, or approximately $4.10
per share of our common stock. This represents an immediate
increase in net tangible book value of $0.81 per share of our
common stock to our existing stockholders and an immediate dilution
in net tangible book value of $0.90 per share of our common stock
to purchasers in this offering.
The following table illustrates this calculation on a per share
basis:
Offering
price per share in this offering |
|
|
|
|
|
$ |
5.00 |
|
Net
tangible book value per share as of April 30, 2021 |
|
$ |
0.97 |
|
|
|
|
|
Pro
forma increase in net tangible book value per share attributable to
pro forma adjustments for the August 2021 Offering |
|
$ |
2.32 |
|
|
|
|
|
Pro forma net tangible book value per share at April 30, 2021,
before giving effect to this offering |
|
$ |
3.29 |
|
|
|
|
|
Increase per share attributable to investors purchasing our
common stock or Pre-funded Warrant in this offering |
|
$ |
0.81 |
|
|
|
|
|
Pro
Forma as adjusted net tangible book value per share as of April 30,
2021, immediately after this offering |
|
|
|
|
|
$ |
4.10 |
|
Dilution
per share to purchasers in this offering |
|
|
|
|
|
$ |
0.90 |
|
The discussion and table above assume no exercise of the Series A
Warrants sold in a private placement concurrently with this
offering and full exercise of the Pre-funded Warrants sold in this
offering.
The above table is based on 1,590,084 shares of our common stock
outstanding as of April 30, 2021 (subject to adjustment based on
issuances of additional shares as applicable due to the rounding up
of fractional shares resulting from the 1:1,500 reverse stock
split), and excludes:
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41,333
shares of our common stock issuable upon the exercise of stock
options outstanding as of April 30, 2021, at a weighted-average
exercise price of $79.97 per share; |
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2,981 shares of our common stock
issuable upon the exercise of outstanding warrants as of April 30,
2021, at a weighted average exercise price of $59.00 per
share; |
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7,000,000
shares of common stock issuable upon exercise of the Series A
Warrants issued in this offering; and |
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up to
1,050,000 shares of common stock issuable upon exercise of warrants
with an exercise price of $6.25 per share to be issued to the
placement agent or its designees as compensation in connection with
this offering. |
To the extent that options or warrants are exercised, other equity
awards vest, new equity awards are issued under the 2021 Equity
Incentive Plan or pursuant to inducement awards, or we issue
additional shares of common stock in the future, there may be
further dilution to investors participating in this offering. In
addition, we may choose to raise additional capital because of
market conditions or strategic considerations, even if we believe
that we have sufficient funds for our current or future operating
plans. If we raise additional capital through the sale of equity or
convertible debt securities, the issuance of these securities could
result in further dilution to our stockholders.
PRIVATE PLACEMENT OF
WARRANTS
In a concurrent Private Placement, we are selling to the investors
in this offering Series A Warrants to purchase up to an aggregate
of 7,000,000 shares of common stock, representing 50% of the shares
of our common stock and Pre-funded Warrants that may be purchased
in this offering. The Series A Warrants are exercisable at an
exercise price of $5.00 per share, subject to certain adjustments,
are exercisable immediately upon issuance and have a term of
exercise equal to five years from the date of issuance. A holder of
Series A Warrants will have the right to exercise the Series A
Warrants on a “cashless” basis if there is no effective
registration statement registering the resale of the Series A
Warrant Shares. Subject to limited exceptions, a holder of Series A
Warrants will not have the right to exercise any portion of its
Series A Warrants if the holder, together with its affiliates,
would beneficially own in excess of 4.99% (or 9.99% at the election
of the holder prior to the date of issuance) of the number of
shares of our common stock outstanding immediately after giving
effect to such exercise, provided that the holder may increase or
decrease the beneficial ownership limitation up to 9.99%. Any
increase in the beneficial ownership limitation shall not be
effective until 61 days following notice of such change to us.
Except as otherwise provided in the Series A Warrants or by virtue
of such holder’s ownership of shares of our common stock, the
holders of the Series A Warrants do not have the rights or
privileges of holders of our common stock, including any voting
rights, until they exercise their Series A Warrants.
The Series A Warrants and the Series A Warrant Shares are being
offered pursuant to the exemptions provided in Section 4(a)(2)
under the Securities Act and Regulation D promulgated thereunder,
and are not being offered pursuant to this prospectus supplement
and the accompanying prospectus.
In the event of any fundamental transaction, as described in the
Series A Warrants and generally including any merger with or into
another entity, sale of all or substantially all of our assets,
tender offer or exchange offer, or reclassification of our shares
of common stock, then upon any subsequent exercise of a Series A
Warrant, the holder will have the right to receive as alternative
consideration, for each share of common stock that would have been
issuable upon such exercise immediately prior to the occurrence of
such fundamental transaction, the number of shares of common stock
of the successor or acquiring corporation of our company, if it is
the surviving corporation, and any additional consideration
receivable upon or as a result of such transaction by a holder of
the number of shares of common stock for which the Series A Warrant
is exercisable immediately prior to such event. Notwithstanding the
foregoing, in the event of a fundamental transaction, the holders
of the Series A Warrants have the right to require us or a
successor entity to redeem the Series A Warrants for cash in the
amount of the Black Scholes Value (as defined in each Series A
Warrant) of the unexercised portion of the Series A Warrants
concurrently with or within 30 days following the consummation of a
fundamental transaction. However, in the event of a fundamental
transaction which is not in our control, including a fundamental
transaction not approved by our board of directors, the holders of
the Series A Warrants will only be entitled to receive from us or
our successor entity, as of the date of consummation of such
fundamental transaction the same type or form of consideration (and
in the same proportion), at the Black Scholes Value of the
unexercised portion of the Series A Warrant, that is being offered
and paid to the holders of our common stock in connection with the
fundamental transaction, whether that consideration is in the form
of cash, stock or any combination of cash and stock, or whether the
holders of our common stock are given the choice to receive
alternative forms of consideration in connection with the
fundamental transaction.
There is no established public trading market for the Series A
Warrants and we do not expect a market to develop. In addition, we
do not intend to list the Series A Warrants on the Nasdaq Capital
Market, any other national securities exchange or any other
nationally recognized trading system.
MATERIAL U.S. FEDERAL INCOME TAX
CONSIDERATIONS FOR NON-U.S. HOLDERS
The following discussion is a summary of certain material U.S.
federal income tax considerations for non-U.S. holders (as defined
below) with respect to their ownership and disposition of shares of
our common stock issued pursuant to this offering. For purposes of
this discussion, a “non-U.S. holder is a beneficial owner of our
common stock that, for U.S. federal income tax purposes is neither
a “U.S. person” nor an entity (or arrangement) treated as a
partnership. A “U.S. person” is any person that, for U.S. federal
income tax purposes, is or is treated as any of the following:
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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 created
or organized in the United States or under the laws of the United
States or any political subdivision thereof, or otherwise treated
as such for U.S. federal income tax purposes; |
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an estate whose income is subject to U.S. federal income tax
regardless of its source; or |
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a trust (x) whose administration is subject to the primary
supervision of a U.S. court and that has one or more U.S. persons
who have the authority to control all substantial decisions of the
trust or (y) that has made a valid election under applicable
Treasury Regulations to be treated as a U.S. person. |
This discussion does not address the tax treatment of partnerships
or other entities that are pass-through entities for U.S. federal
income tax purposes or persons that hold their common stock through
partnerships or other pass-through entities. A partner in a
partnership or other pass-through entity that will hold our common
stock should consult his, her or its tax advisor regarding the tax
consequences of acquiring, holding and disposing of our common
stock through a partnership or other pass-through entity, as
applicable.
This discussion is based on current provisions of the U.S. Internal
Revenue Code of 1986, as amended, which we refer to as the Code,
existing and proposed U.S. Treasury Regulations promulgated
thereunder, current administrative rulings and judicial decisions,
all as in effect as of the date of this prospectus and all of which
are subject to change or to differing interpretation, possibly with
retroactive effect. Any such change or differing interpretation
could alter the tax consequences to non-U.S. holders described in
this prospectus supplement. There can be no assurance that the
Internal Revenue Service, which we refer to as the IRS, will not
challenge one or more of the tax consequences described herein. We
assume in this discussion that a non-U.S. holder holds shares of
our common stock as a capital asset within the meaning of Section
1221 of the Code, generally property held for investment.
This discussion does not address all aspects of U.S. federal income
taxation that may be relevant to a particular non-U.S. holder in
light of that non-U.S. holder’s individual circumstances nor does
it address U.S. state, local or non-U.S. taxes, the alternative
minimum tax, the rules regarding qualified small business stock
within the meaning of Section 1202 of the Code, the Medicare tax on
net investment income or any other aspect of any U.S. federal tax
other than the income tax. This discussion also does not consider
any specific facts or circumstances that may apply to a non-U.S.
holder and does not address the special tax rules applicable to
particular non-U.S. holders, such as:
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tax-exempt or governmental organizations; |
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financial institutions; |
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brokers or dealers in securities; |
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regulated investment companies; |
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“controlled foreign corporations,” “passive foreign investment
companies,” and corporations that accumulate earnings to avoid U.S.
federal income tax; |
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“qualified foreign pension funds” as defined in Section
897(I)(2) of the Code and entities all of the interests of which
are held by qualified foreign pension funds; |
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persons deemed to sell our common stock under the constructive
sale provisions of the Code; |
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persons that hold our common stock as part of a straddle,
hedge, conversion transaction, synthetic security or other
integrated investment; |
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persons who hold or receive our common stock pursuant to the
exercise of any employee stock option or otherwise as compensation;
and |
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certain U.S. expatriates. |
This discussion is for general information only and is not tax
advice. Accordingly, all prospective non-U.S. holders of our common
stock should consult their tax advisors with respect to the U.S.
federal, state, local and non-U.S. tax consequences of the
ownership and disposition of our common stock.
Distributions on Our Common Stock
As described in the “Risk Factors” section above, we do not
anticipate paying any cash dividends on our capital stock in the
foreseeable future. Distributions, if any, on our common stock will
constitute dividends for U.S. federal income tax purposes to the
extent paid from our current or accumulated earnings and profits,
as determined under U.S. federal income tax principles. If a
distribution exceeds our current and accumulated earnings and
profits, the excess will be treated as a tax-free return of the
non-U.S. holder’s investment, up to such holder’s tax basis in the
common stock. Any remaining excess will be treated as capital gain,
subject to the tax treatment described below in “Gain on Sale or
Other Taxable Disposition of Our Common Stock.” Any such
distributions will also be subject to the discussions below under
the sections titled “Backup Withholding and Information Reporting”
and “FATCA.”
Subject to the discussion in the following two paragraphs in this
section, dividends paid to a non-U.S. holder generally will be
subject to withholding of U.S. federal income tax at a 30% rate or
such lower rate as may be specified by an applicable income tax
treaty between the U.S. and such holder’s country of residence.
Dividends that are treated as effectively connected with a trade or
business conducted by a non-U.S. holder within the U.S. are
generally exempt from the 30% withholding tax if the non-U.S.
holder satisfies applicable certification and disclosure
requirements. However, such U.S. effectively connected income, net
of specified deductions and credits, is taxed at the same graduated
U.S. federal income tax rates applicable to U.S. persons (as
defined in the Code), subject to an applicable income tax treaty
providing otherwise. Any U.S. effectively connected income received
by a non-U.S. holder that is a corporation may also, under certain
circumstances, be subject to an additional “branch profits tax” at
a 30% rate, or such lower rate as may be specified by an applicable
income tax treaty between the U.S. and such holder’s country of
residence, on its effectively connected earnings and profits that
are not reinvested in the United States.
A non-U.S. holder of our common stock who claims the benefit of an
applicable income tax treaty between the U.S. and such holder’s
country of residence generally will be required to provide a
properly executed IRS Form W-8BEN or W-8BEN-E (or successor form)
to the applicable withholding agent and satisfy applicable
certification and other requirements. Non-U.S. holders are urged to
consult their tax advisors regarding their entitlement to benefits
under a relevant income tax treaty. A non-U.S. holder that is
eligible for a reduced rate of U.S. withholding tax under an income
tax treaty may obtain a refund or credit of any excess amounts
withheld by timely filing a U.S. tax return with the IRS.
Gain on Sale or Other Taxable Disposition of Our Common Stock
Subject to the discussions below under “Backup Withholding and
Information Reporting” and “FATCA,” a non-U.S. holder generally
will not be subject to any U.S. federal income or withholding tax
on any gain realized upon such holder’s sale or other taxable
disposition of shares of our common stock unless:
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the gain is effectively connected with the non-U.S. holder’s
conduct of a U.S. trade or business and, if an applicable income
tax treaty so provides, is attributable to a permanent
establishment or a fixed base maintained by such non-U.S. holder in
the U.S., in which case the non-U.S. holder generally will be taxed
on a net income basis at the graduated U.S. federal income tax
rates applicable to U.S. persons (as defined in the Code) and, if
the non-U.S. holder is a foreign corporation, the branch profits
tax described above in “Distributions on Our Common Stock” also may
apply; |
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the non-U.S. holder is a nonresident alien individual who is
present in the U.S. for 183 days or more in the taxable year of the
disposition and certain other conditions are met, in which case the
non-U.S. holder will be subject to a 30% tax (or such lower rate as
may be specified by an applicable income tax treaty between the
U.S. and such holder’s country of residence) on the net gain
derived from the disposition, which may be offset by certain U.S.
source capital losses of the non-U.S. holder; or |
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we are, or have been, at any time during the five-year period
preceding such sale or other taxable disposition (or the non-U.S.
holder’s holding period, if shorter) a U.S. real property holding
corporation, unless our common stock is regularly traded on an
established securities market and the non-U.S. holder holds no more
than 5% of our outstanding common stock, directly or indirectly,
actually or constructively, during the shorter of the 5-year period
ending on the date of the disposition or the period that the
non-U.S. holder held our common stock. Generally, a corporation is
a U.S. real property holding corporation only if the fair market
value of its U.S. real property interests equals or exceeds 50% of
the sum of the fair market value of its worldwide real property
interests plus its other assets used or held for use in a trade or
business. Although there can be no assurance, we do not believe
that we are, or have been, a U.S. real property holding
corporation, or that we are likely to become one in the future. No
assurance can be provided that our common stock will be regularly
traded on an established securities market for purposes of the
rules described above. |
Backup Withholding and Information Reporting
We must report annually to the IRS and to each non-U.S. holder the
gross amount of the distributions on our common stock paid to such
holder and the tax withheld, if any, with respect to such
distributions. Non-U.S. holders may have to comply with specific
certification procedures to establish that the holder is not a
United States person (as defined in the Code) in order to avoid
backup withholding at the applicable rate with respect to dividends
on our common stock. Dividends paid to non-U.S. holders subject to
withholding of U.S. federal income tax, as described above in
“Distributions on Our Common Stock,” generally will be exempt from
U.S. backup withholding.
Information reporting and backup withholding will generally apply
to the proceeds of a disposition of our common stock by a non-U.S.
holder effected by or through the U.S. office of any broker, U.S.
or foreign, unless the holder certifies its status as a non-U.S.
holder and satisfies certain other requirements, or otherwise
establishes an exemption. Generally, information reporting and
backup withholding will not apply to a payment of disposition
proceeds to a non-U.S. holder where the transaction is effected
outside the U.S. through a non-U.S. office of a broker. However,
for information reporting purposes, dispositions effected through a
non-U.S. office of a broker with substantial U.S. ownership or
operations generally will be treated in a manner similar to
dispositions effected through a U.S. office of a broker.
Non-U.S. holders should consult their tax advisors regarding the
application of the information reporting and backup withholding
rules to them. Copies of information returns may be made available
to the tax authorities of the country in which the non-U.S. holder
resides or is incorporated under the provisions of a specific
treaty or agreement. Backup withholding is not an additional tax.
Any amounts withheld under the backup withholding rules from a
payment to a non-U.S. holder can be refunded or credited against
the non-U.S. holder’s U.S. federal income tax liability, if any,
provided that an appropriate claim is filed with the IRS in a
timely manner.
FATCA
Provisions of the Code commonly referred to as the Foreign Account
Tax Compliance Act, or FATCA, generally impose a U.S. federal
withholding tax at a rate of 30% on payments of dividends on our
common stock paid to a foreign entity unless (i) if the foreign
entity is a “foreign financial institution,” such foreign entity
undertakes certain due diligence, reporting, withholding, and
certification obligations, (ii) if the foreign entity is not a
“foreign financial institution,” such foreign entity identifies
certain of its U.S. investors, if any, or (iii) the foreign entity
is otherwise exempt under FATCA. Such withholding may also apply to
gross proceeds from the sale or other disposition of our common
stock, although under recently proposed U.S. Treasury Regulations,
no withholding would apply to such gross proceeds. The preamble to
the proposed regulations specifies that taxpayers (including
withholding agents) are permitted to rely on the proposed
regulations pending finalization. Under certain circumstances, a
non-U.S. holder may be eligible for refunds or credits of this
withholding tax. An intergovernmental agreement between the U.A.
and an applicable foreign country may modify the requirements
described in this paragraph. Non-U.S. holders should consult their
tax advisors regarding the possible implications of this
legislation on their investment in our common stock and the
entities through which they hold our common stock, including,
without limitation, the process and deadlines for meeting the
applicable requirements to prevent the imposition of the 30%
withholding tax under FATCA.
The preceding discussion of U.S. federal income tax
considerations is for general information only. It is not tax
advice. Each prospective investor should consult its own tax
advisor regarding the particular U.S. federal, state and local and
non-U.S. tax consequences of purchasing, holding and disposing of
our common stock, including the consequences of any proposed change
in applicable laws.
PLAN OF DISTRIBUTION
Pursuant to an engagement letter agreement dated April 26,
2021, we engaged Wainwright to act as our placement agent in
connection with this offering of the shares of common stock and
pre-funded warrants pursuant to this prospectus supplement and
accompanying prospectus. Wainwright is not purchasing or selling
any of the shares of common stock and pre-funded warrants offered
by us in this offering, nor is it required to arrange for the
purchase and sale of any specific number or dollar amount of such
securities, other than to use its “reasonable best efforts” to
arrange for the sale of such securities by us. Therefore, we may
not sell all of the shares of our common stock or pre-funded
warrants being offered. The terms of this offering were subject to
market conditions and negotiations between us, Wainwright and
prospective investors. Wainwright will have no authority to bind us
by virtue of the engagement letter. We have entered into securities
purchase agreements directly with certain institutional investors
who have agreed to purchase shares of our common stock and/or
pre-funded warrants in this offering. We will only sell to
investors who have entered into securities purchase agreements.
We expect to deliver the shares of common stock and pre-funded
warrants being offered pursuant to this prospectus supplement on or
about August 23, 2021, subject to satisfaction of certain
closing conditions.
We have agreed to pay the placement agent a total cash fee equal to
7.5% of the gross proceeds of this offering. We will also pay the
placement agent a management fee equal to 1.0% of the gross
proceeds of this offering, $75,000 for non-accountable and legal
expenses, and $15,950 for clearing fees. We estimate the total
expenses payable by us for this offering will be approximately $6.5
million, which amount includes the placement agent’s fees and
reimbursable expenses and legal and other miscellaneous
expenses.
We have also agreed to issue to the placement agent or its
designees, at the closing of this offering, warrants to purchase a
number of our shares equal to an aggregate of 7.5% of the shares
and pre-funded warrants sold in this offering (or warrants to
purchase up to 1,050,000 shares of our common stock). Such warrants
will have substantially the same terms as the Series A Warrants
being sold and issued in the concurrent private placement, except
that the placement agent’s warrant will have an exercise price
equal to $6.25 per share, which is 125% of the offering price of
the shares set forth on the cover of this prospectus supplement)
and that the placement agent’s warrants will be exercisable for a
term of five years from the commencement of the sales in connection
with this offering. Neither the placement agent’s warrants nor the
shares of our common stock issuable upon exercise thereof are being
registered hereby.
We have granted the placement agent, subject to certain exceptions,
a right of first refusal for a period of eighteen months following
the closing of this offering to act as our exclusive underwriter or
placement agent for any further capital raising transactions
undertaken by us or any of our subsidiaries. If the placement agent
or an affiliate of the placement agent accepts any such engagement,
the agreement governing such engagement will contain, among other
things, provisions for customary fees and terms for transactions of
similar size and nature, including indemnification, which are
appropriate to such a transaction.
In the event that any investors that were contacted or were
introduced to us by the placement agent during the term of its
engagement provide any capital to us in a public or private
offering or capital-raising transaction during the twelve-month
period following the expiration or termination of the engagement of
the placement agent, we shall pay the underwriter the cash and
warrant compensation provided above on the gross proceeds from such
investors. We have agreed to indemnify the placement agent and
specified other persons against certain liabilities relating to or
arising out of the placement agent’s activities and to contribute
to payments that the placement agent may be required to make in
respect of such liabilities.
The placement agent may be deemed to be an underwriter within the
meaning of Section 2(a)(11) of the Securities Act, and any
commissions received by it and any profit realized on the resale of
the securities sold by it while acting as principal might be deemed
to be underwriting discounts or commissions under the Securities
Act. As an underwriter, the placement agent would be required to
comply with the requirements of the Securities Act and the Exchange
Act, including, without limitation, Rule 10b-5 and
Regulation M under the Exchange Act. These rules and
regulations may limit the timing of purchases and sales of shares
of our securities by the placement agent acting as principal. Under
these rules and regulations, the placement agent:
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may not engage in any stabilization activity in connection with
our securities; and |
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may not bid for or purchase any of our securities or attempt to
induce any person to purchase any of our securities, other than as
permitted under the Exchange Act, until it has completed its
participation in the distribution. |
From time to time, the placement agent may provide in the future
various advisory, investment and commercial banking and other
services to us in the ordinary course of business, for which they
have received and may continue to receive customary fees and
commissions. Wainwright acted as our underwriter for the August
2021 Offering, for which it received compensation. However, except
as disclosed in this prospectus, we have no present arrangements
with the placement agent for any further services.
Transfer Agent
The transfer agent and registrar for our common stock is American
Stock Transfer & Trust Company, LLC.
Listing
Our shares of Common Stock are listed on The Nasdaq Capital Market
under the symbol “PMCB.”
DESCRIPTION OF SECURITIES WE ARE
OFFERING
Common Stock
We are offering shares of our common stock in this offering. As of
August 18, 2021, there were 7,634,465 shares of common stock issued
and outstanding, held of record by approximately 35,000
stockholders. See “Description of Securities we may Offer” in our
prospectus for more information regarding our shares of common
stock.
Pre-funded Warrants
The following summary of certain terms and provisions of the
Pre-funded Warrants that are being offered hereby is not complete
and is subject to, and qualified in its entirety by, the provisions
of the Pre-funded Warrant, the form of which will be filed as an
exhibit to a Current Report on Form 8-K in connection with this
offering and incorporated by reference into the registration
statement of which this prospectus supplement forms a part.
Prospective investors should carefully review the terms and
provisions of the form of Pre-funded Warrant for a complete
description of the terms and conditions of the Pre-funded
Warrants.
Pre-funded warrants will be issued in certificated form only.
Duration and Exercise Price
Each Pre-funded offered hereby has an initial exercise price per
share equal to $0.001. The Pre-funded Warrants are immediately
exercisable and will expire on the fifth anniversary of the
original issuance date. The exercise price and number of shares of
common stock issuable upon exercise is subject to appropriate
adjustment in the event of stock dividends, stock splits,
reorganizations or similar events affecting our common stock and
the exercise price.
Exercisability
The Pre-funded Warrants will be exercisable, at the option of each
holder, in whole or in part, by delivering to us a duly executed
exercise notice accompanied by payment in full for the number of
shares of our common stock purchased upon such exercise (except in
the case of a cashless exercise as discussed below). A holder
(together with its affiliates) may not exercise any portion of such
holder’s Pre-funded Warrant to the extent that the holder would own
more than 4.99% (or at the election of the holder, 9.99%) of the
outstanding shares of common stock immediately after exercise,
except that upon at least 61 days’ prior notice from the holder to
us, the holder may increase the amount of ownership of outstanding
shares of common stock after exercising the holder’s Pre-funded
Warrants up to 9.99% of the number of shares of common stock
outstanding immediately after giving effect to the exercise, as
such percentage ownership is determined in accordance with the
terms of the Pre-funded Warrants. No fractional shares of common
stock will be issued in connection with the exercise of a
Pre-funded Warrant. In lieu of fractional shares, we will either
pay the holder an amount in cash equal to the fractional amount
multiplied by the exercise price or round up to the next whole
share.
Cashless Exercise
In lieu of making the cash payment otherwise contemplated to be
made to us upon such exercise in payment of the aggregate exercise
price, the holder may elect instead to receive upon such exercise
(either in whole or in part) the net number of shares of common
stock determined according to a formula set forth in the Pre-funded
Warrants.
Fundamental Transactions
In the event of any fundamental transaction, as described in the
Pre-funded Warrants and generally including any merger with or into
another entity, sale of all or substantially all of our assets,
tender offer or exchange offer, or reclassification of our shares
of common stock, then upon any subsequent exercise of a Pre-funded
Warrant, the holder will have the right to receive as alternative
consideration, for each share of common stock that would have been
issuable upon such exercise immediately prior to the occurrence of
such fundamental transaction, the number of shares of common stock
of the successor or acquiring corporation or of our company, if it
is the surviving corporation, and any additional consideration
receivable upon or as a result of such transaction by a holder of
the number of shares of common stock for which the Pre-funded
Warrant is exercisable immediately prior to such event.
Transferability
Subject to applicable laws, a Pre-funded Warrant may be transferred
at the option of the holder upon surrender of the Pre-funded
Warrant to us together with the appropriate instruments of transfer
and payment of funds sufficient to pay any transfer taxes (if
applicable).
Exchange Listing
There is no established trading market for the Pre-funded Warrants.
We do not intend to list the Pre-funded Warrants on any securities
exchange or nationally recognized trading system.
Right as a Shareholder
Except as otherwise provided in the Pre-funded Warrants or by
virtue of such holder’s ownership of shares of our common stock,
the holders of the Pre-funded Warrants do not have the rights or
privileges of holders of our common stock, including any voting
rights, until such Pre-funded Warrant holders exercise their
Pre-funded Warrants.
LEGAL MATTERS
Certain legal matters in connection with this offering will be
passed upon for us by Troutman Pepper Hamilton Sanders LLP, New
York, New York. Certain legal matters governed by Nevada law with
respect to the validity of the offered securities will be passed
upon for us by Ballard Spahr LLP, Las Vegas, Nevada. Haynes and
Boone, LLP, New York, New York, is acting as counsel for the
placement agent in connection with certain legal matters related to
this offering.
EXPERTS
The consolidated financial statements of PharmaCyte Biotech, Inc.
as of April 30, 2021 and 2020, and for each of the years in the
two-year period ended April 30, 2021, have been incorporated by
reference herein in reliance upon the report of Armanino LLP, the
Company’s independent registered public accounting firm,
incorporated by reference herein and upon the authority of Armanino
LLP as experts in accounting and auditing.
WHERE YOU CAN FIND MORE
INFORMATION
We have filed with the SEC a registration statement on Form S-3
under the Securities Act, of which this prospectus supplement forms
a part. The rules and regulations of the SEC allow us to omit from
this prospectus supplement certain information included in the
registration statement. For further information about us and the
securities we are offering under this prospectus supplement, you
should refer to the registration statement and the exhibits and
schedules filed with the registration statement. With respect to
the statements contained in this prospectus supplement regarding
the contents of any agreement or any other document, in each
instance, the statement is qualified in all respects by the
complete text of the agreement or document, a copy of which has
been filed as an exhibit to the registration statement.
Because we are subject to the information and reporting
requirements of the Exchange Act, we file annual, quarterly and
current reports and other information with the SEC. Our SEC filings
are available to the public over the Internet at the SEC’s website
at http://www.sec.gov.
We make available free of charge on our website our annual,
quarterly and current reports, including amendments to such
reports, as soon as reasonably practicable after we electronically
file such material with, or furnish such material to, the SEC.
Please note, however, that we have not incorporated any other
information by reference from our website, other than the documents
listed under the heading “Incorporation of Certain Information
by Reference” on page S-46 of this prospectus
supplement. In addition, you may request copies of these filings at
no cost by writing or telephoning us at the following address or
telephone number:
PharmaCyte Biotech, Inc.,
23046 Avenida de la Carlota, Suite 600,
Laguna Hills, California 92653
(917) 595-2850
INCORPORATION OF CERTAIN
INFORMATION BY REFERENCE
SEC rules permit us to incorporate information by reference in this
prospectus supplement. 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 part of this prospectus supplement, except for
information superseded by information contained in this prospectus
supplement itself or in any subsequently filed incorporated
document. This prospectus supplement incorporates by reference the
documents set forth below that we have previously filed with the
SEC, other than information in such documents that is deemed to be
furnished and not filed. These documents contain important
information about us and our business and financial condition.
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our Current Report on Form 8-K filed with the SEC on August 12, 2021; and |
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The description of our common stock set for in the registration
statement on Form 8-A registering our common stock under Section 12
of the Exchange Act, which was filed with the SEC on August 2,
2021, including any amendments or reports filed for purposes of
updating such description. |
All documents that we file (but not those that we furnish) pursuant
to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act, after the
date of the initial registration statement of which this prospectus
supplement is a part shall be deemed to be incorporated by
reference into this prospectus and will automatically update and
supersede the information in this prospectus supplement, and any
previously filed documents. All documents that we file (but not
those that we furnish) pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act on or after the date of this prospectus
supplement and prior to the termination of the offering of any of
the securities covered under the prospectus shall be deemed to be
incorporated by reference into this prospectus supplement and will
automatically update and supersede the information in this
prospectus supplement and any previously filed documents.
Any statement contained herein or in a document incorporated or
deemed to be incorporated by reference in this prospectus
supplement shall be deemed to be modified or superseded for
purposes of this prospectus supplement to the extent that a
statement contained in the prospectus or this prospectus
supplement, or in any other subsequently filed document which also
is or is deemed to be incorporated by reference in the prospectus
and this prospectus supplement, modifies or supersedes such earlier
statement. Any statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part
of the prospectus or this prospectus supplement.
To obtain copies of these filings, see “Where You Can Find More
Information” on page S-45 of this prospectus
supplement.
PROSPECTUS
$100,000,000.00
PHARMACYTE BIOTECH, INC.
Common Stock
Preferred Stock
Debt Securities
Warrants
Rights
Units
We may offer and sell, from time to time in one or more offerings,
up to $100,000,000.00 of our common stock, preferred stock, debt
securities, warrants and rights, or any combination of these
securities, and/or units consisting of one or more of these
securities. We may also offer common stock or preferred stock upon
conversion of debt securities or exercise of warrants and common
stock upon conversion of preferred stock. All of the securities
listed above may be sold separately or as units with other
securities.
This prospectus describes some of the general terms that may apply
to these securities. When we decide to sell a particular class or
series of securities, we will provide specific terms of the offered
securities in one or more prospectus supplements. We may also
authorize one or more free writing prospectuses to be provided to
you in connection with these offerings.
The prospectus supplement, and any documents incorporated by
reference, may also add, update or change information contained in
or incorporated by reference into this prospectus. However, no
prospectus supplement shall offer a security that is not registered
and described in this prospectus at the time of its effectiveness.
You should read carefully this prospectus and any prospectus
supplement, as well as the documents incorporated by reference or
deemed to be incorporated by reference into this prospectus, and
any free writing prospectus carefully before you invest. This
prospectus may not be used to offer or sell our securities unless
accompanied by a prospectus supplement relating to the offered
securities.
Our common stock is quoted on the OTCQB under the symbol “PMCB.”
Each prospectus supplement will contain information, where
applicable, as to our listing on any securities exchange of the
securities covered by the prospectus supplement. The aggregate
market value of our outstanding common stock held by non-affiliates
was $76,316,030 based on 2,341,410,405 shares of outstanding common
stock, of which 70,100,000 shares are held by affiliates, and a
price of $.03360 per share, which was the last reported sale price
of our common stock as quoted on the OTCQB on February 22,
2021.
These securities may be sold by us directly to purchasers, through
dealers or agents, or to or through underwriters, or through a
combination of these methods. See “Plan of Distribution” in this
prospectus. We may also describe the plan of distribution for any
particular offering of our securities in a prospectus supplement.
If any agents, underwriters or dealers are involved in the sale of
any securities in respect of which this prospectus is being
delivered, we will disclose their names and the nature of our
arrangements with them in a prospectus supplement. The net proceeds
we expect to receive from any such sale will also be included in a
prospectus supplement.
An investment in our securities involves a high degree of risk.
See the sections entitled “Risk Factors” in our most recent Annual
Report on Form 10-K, in any Quarterly Report on Form 10-Q and in
any Periodic Report on Form 8-K, as well as in any prospectus
supplement or free writing prospectus related to these specific
offerings.
We may amend or supplement this prospectus from time to time by
filing amendments or supplements as required or related free
writing prospectuses. You should read the entire prospectus and any
amendments or supplements carefully before you make your investment
decision.
Neither the Securities and Exchange Commission (“SEC”) nor any
state securities commission has approved or disapproved of these
securities or determined if this prospectus is truthful or
complete. Any representation to the contrary is a criminal
offense.
The date of this prospectus is April 14, 2021
TABLE OF CONTENTS
ABOUT THIS PROSPECTUS
This prospectus is part of a Registration Statement that we filed
with the Securities and Exchange Commission using a “shelf”
registration process. Under this shelf registration process, we may
offer from time to time securities described in this prospectus
having a maximum aggregate offering price of $100,000,000.00 in one
or more offerings. Each time we offer securities, we will prepare
and file with the SEC a prospectus supplement or information that
is incorporated by reference into this prospectus that describes
the specific amounts, prices and terms of the securities we offer.
We may also authorize one or more free writing prospectuses to be
provided to you that may contain material information relating to
these offerings and securities. The prospectus supplement also may
add, update or change information contained in this prospectus or
the documents incorporated herein by reference. You should read
carefully this prospectus, any applicable prospectus supplement and
any related free writing prospectus together with additional
information described below under the caption “Where You Can Find
More Information.”
This prospectus does not contain all the information provided in
the Registration Statement we filed with the SEC. For further
information about us or our securities offered hereby, you should
refer to that Registration Statement, which you can obtain from the
SEC as described below under “Where You Can Find More
Information.”
You should rely only on the information contained or incorporated
by reference in this prospectus, any prospectus supplement and any
related free writing prospectus. We have not authorized any other
person to provide you with different information. If anyone
provides you with different or inconsistent information, you should
not rely on it. This prospectus is not an offer to sell securities,
and it is not soliciting an offer to buy securities, in any
jurisdiction where the offer or sale is not permitted. You should
assume that the information appearing in this prospectus, any
prospectus supplement, any related free writing prospectus as well
as information we have previously filed with the SEC and
incorporated by reference, is accurate as of the date of those
documents only. Our business, financial condition, results of
operations and prospects may have changed since those dates. This
prospectus incorporates by reference, and any prospectus supplement
or free writing prospectus may contain and incorporate by
reference, market data and industry statistics and forecasts that
are based on independent industry publications and other publicly
available information. Although we believe these sources are
reliable, we do not guarantee the accuracy or completeness of this
information and we have not independently verified this
information. Although we are not aware of any misstatements
regarding the market and industry data presented in this prospectus
and the documents incorporated herein by reference, these estimates
involve risks and uncertainties and are subject to change based on
various factors, including those discussed under the heading “Risk
Factors” contained in this prospectus, the applicable prospectus
supplement and any applicable free writing prospectus, and under
similar headings in other documents that are incorporated by
reference into this prospectus. Accordingly, investors should not
place undue reliance on this information.
We may sell securities through underwriters or dealers, through
agents, directly to purchasers or through any combination of these
methods. We and our agents reserve the sole right to accept or
reject in whole or in part any proposed purchase of securities. The
prospectus supplement, which we will prepare and file with the SEC
each time we offer securities, will set forth the names of any
underwriters, agents or others involved in the sale of securities,
and any applicable fee, commission or discount arrangements with
them. See “Plan of Distribution.”
In this prospectus, unless otherwise indicated, the
“Registrant,” “our company,” “we,” “us”
or “our” refer to PharmaCyte Biotech, Inc., a Nevada
corporation and its consolidated subsidiaries.
We license the copyright for Cell-in-a-Box® in the
United States from Austrianova Singapore Pte. Ltd. This prospectus
contains references to our copyright. Solely for convenience,
copyrights and trade names referred to in this prospectus,
including logos, artwork and other visual displays, may appear
without the ® or TM symbols, but such references are not intended
to indicate, in any way, that we will not assert, to the fullest
extent under applicable law, our rights or the rights of the
applicable licensor to these trademarks and trade names. We do not
intend our use or display of other companies’ trade names or
trademarks to imply a relationship with, or endorsement or
sponsorship of us by, any other company.
PROSPECTUS SUMMARY
This prospectus summary highlights certain information about our
company and other information contained elsewhere in this
prospectus or in documents incorporated by reference. This summary
does not contain all of the information that you should consider
before making an investment decision. You should carefully read the
entire prospectus, any prospectus supplement, including the section
entitled “Risk Factors”, and the documents incorporated by
reference into this prospectus, before making an investment
decision.
THE OFFERING
This prospectus is part of a Registration Statement that we filed
with the SEC utilizing a shelf registration process. Under this
shelf registration process, we may sell any combination of:
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debt securities, in one or more series; |
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warrants to purchase any of the securities listed
above; |
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rights to purchase common stock, preferred stock or warrants;
and/or |
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units consisting of one or more of the foregoing |
in one or more offerings up to a total dollar amount of
$100,000,000.00. This prospectus provides you with a general
description of the securities we may offer. Each time we sell
securities, we will provide a prospectus supplement that will
contain specific information about the terms of that specific
offering and include a discussion of any risk factors or other
special considerations that apply to those securities. The
prospectus supplement may also add, update or change information
contained in this prospectus. You should read both this prospectus
and any prospectus supplement together with the additional
information described under the heading “Where You Can Find
More Information.”
OUR COMPANY
We are a biotechnology company focused on developing cellular
therapies for cancer and diabetes based upon a proprietary
cellulose-based live cell encapsulation technology known as
“Cell-in-a-Box®.” The
Cell-in-a-Box® technology is intended to be used as
a platform upon which therapies for several types of cancer,
including locally advanced, inoperable, pancreatic cancer (“LAPC”),
and Type 1 and insulin dependent Type 2 diabetes will be developed.
The current generation of our product candidate is referred
to as “CypCaps™”. On September 1, 2020, we submitted an
Investigational New Drug Application (“IND” to the U.S. Food and
Drug Administration (“FDA”) for a planned Phase 2b clinical trial
in LAPC, and on October 1, 2020, the Company received notice that
the FDA had placed the IND on clinical hold. See “Clinical
Hold.”
We are developing therapies for pancreatic and other solid
cancerous tumors by using genetically engineered live human cells
that we believe are capable of converting a cancer prodrug into its
cancer-killing form, encapsulating those cells using the
Cell-in-a-Box® technology and placing those
capsules in the body as close as possible to the tumor. We believe
that when the cancer prodrug is administered to a patient with a
particular type of cancer that may be affected by the prodrug, the
killing of the patient’s tumor may be optimized.
We are also examining ways to exploit the benefits of the
Cell-in-a-Box® technology to develop therapies for
cancer that involve prodrugs based upon certain constituents of
the Cannabis plant; these constituents are of the
class of compounds known as “cannabinoids.” Until the FDA allows us
to commence the clinical trial involving LAPC described in our IND
for which the FDA has placed a clinical hold, we are not spending
any further resources developing this program.
In addition, we are developing a therapy to delay the production
and accumulation of malignant ascites fluid that results from many
types of abdominal cancerous tumors. Malignant ascites fluid is
secreted by abdominal cancerous tumors into the abdomen after the
tumors have reached a certain stage of growth. This fluid contains
cancer cells that can seed and form new tumors throughout the
abdomen. This fluid accumulates in the abdominal cavity, causing
swelling of the abdomen, severe breathing difficulties and extreme
pain.
We are using our therapy for pancreatic cancer to determine if it
can prevent or delay the production and accumulation of malignant
ascites fluid. As with our Cannabis program, until
the FDA allows us to commence the clinical trial involving LAPC
described in its IND for which the FDA has placed a clinical hold,
we are not spending any further resources developing this
program.
We are also developing a therapy for Type 1 diabetes and
insulin-dependent Type 2 diabetes. Our diabetes therapy consists of
encapsulated genetically modified insulin-producing cells. The
encapsulation will be done using the
Cell-in-a-Box® technology. Implanting these cells
in the body is designed to function as a bio-artificial pancreas
for purposes of insulin production. As with the two previous
programs, we not spending any further resources developing this
program until the FDA allows us to commence the clinical trial
involving LAPC described in its IND for which the FDA has placed a
clinical hold.
Clinical Hold
On September 1, 2020, the Company submitted an IND to the FDA for a
planned Phase 2b clinical trial in LAPC. Shortly thereafter, the
Company received Information Requests from the FDA related to the
IND. The Company timely responded to all information requests.
On October 1, 2020, the Company received notice that the FDA had
placed the IND on clinical hold.
On October 30, 2020, the FDA sent a letter to the Company setting
forth the reasons for the clinical hold and specific guidance on
what the Company must do to have the clinical hold lifted.
In order to address the clinical hold, the FDA has requested that
we:
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Provide additional sequencing data and genetic stability
studies; |
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Conduct a stability study on the final formulated drug product
as well as the cells from the Master Cell Bank; |
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Evaluate the compatibility of the delivery devices (i.e., the
prefilled syringe and microcatheter) with our drug product; |
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Provide additional detailed description of the manufacturing
process; |
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Provide additional product release specifications for the
encapsulated cells; |
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Demonstrate comparability between the 1st and 2nd generation
products and ensure adequate and consistent product performance and
safety between the two generations of product; |
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Conduct a biocompatibility assessment using the final finished
capsules after the entire drug product manufacturing process (but
without cells); |
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Address insufficiencies in Chemistry, Manufacturing and
Controls information in the cross-referenced Drug Master File; |
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Conduct an additional nonclinical study to assess the safety,
activity and distribution of the drug product; |
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Revise the Investigators Brochure to include any additional
preclinical studies conducted in response to the clinical hold and
remove any statements not supported by the data; and |
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Provide data from a new and extensive pig study. |
The FDA also requested that we address several issues not related
to the clinical hold in an amendment to the IND, including:
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Providing a Certificate of Analysis for pc3/2B1 plasmid that
includes tests for assessing purity, safety, and potency; |
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Performing qualification studies for the drug substance filling
step to ensure that the product remains sterile and stable during
the filling process; |
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Submitting an updated batch analysis for the drug product for
the specific lot that will be used for manufacturing all future
drug product; |
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Providing additional details for the methodology for the
Resorufin (CYP2B1) potency and the PrestoBlue cell metabolic
assays; |
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Providing a few examples of common microcatheters that fit the
specifications in the Angiography Procedure Manual; |
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Clarifying the language in the Pharmacy Manual regarding proper
use of the syringe fill with the drug product; and |
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Providing a discussion with data for the potential for cellular
and humoral immune reactivity against the heterologous rat CYP2B1
protein and potential for induction of autoimmune-mediated
toxicities in the Company’s study population. |
Since October 30, 2020, there has been no further communication
with the FDA regarding the clinical hold.
We have assembled a scientific team to address the FDA requests
related to the clinical hold. That team is working to complete the
items requested by the FDA. We have not yet determined the
estimated cost or the time necessary to complete these items. The
cost and time associated with completing these items will be
significant.
Among other things, we completed a 12-month product stability
study, commenced physical parameter testing for CypCaps™ and
commenced additional studies for the sequence of DNA encoding of
its encapsulated cells. We also designed the biocompatibility tests
for cytotoxicity, sensitization, irritation, acute systemic
toxicity, material-mediated pyrogenicity, subacute/subchronic
toxicity, genotoxicity and implantation. In addition, we have begun
a compression and swelling study of CypCaps™, designed a study to
determine if CypCaps™ are adversely affected by contrast medium and
designed a study to show the catheters used to implant CypCaps™ do
not adversely impact the encapsulated cells.
Impact of the COVID-19 Pandemic on our Operations
The coronavirus SARS-Cov2 pandemic (“COVID-19”) is causing
significant, industry-wide delays in clinical trials. Although we
are not yet in a clinical trial, we have filed an IND with the FDA
to commence a clinical trial in LAPC. While the IND has been placed
on clinical hold by the FDA, we have assessed the impact of
COVID-19 on our operations. Currently, many clinical trials are
being delayed due to COVID-19. There are numerous reasons for these
delays. For example, patients have shown a reluctance to enroll or
continue in a clinical trial due to fear of exposure to COVID-19
when they are in a hospital or doctor’s office. There are local,
regional and state-wide orders and regulations restricting usual
normal activity by people. These discourage and interfere with
patient visits to a doctor’s office if the visit is not COVID-19
related. Healthcare providers and health systems are shifting their
resources away from clinical trials toward the care of COVID-19
patients. The FDA and other healthcare providers are making product
candidates for the treatment of COVID-19 a priority over product
candidates unrelated to COVID-19. As of the date of this
prospectus, the COVID-19 pandemic has had an impact upon our
operations, although we believe that impact is not material. The
impact primarily relates to delays in tasks associated with the
preparation of our responses to the clinical hold, including all
requested preclinical studies. There may be further delays in
generating responses to the requests from the FDA related to the
clinical hold.
As a result of the COVID-19 pandemic, commencement of our planned
clinical trial to treat LAPC may be delayed beyond the lifting of
the clinical hold should that occur. Also, enrollment may be
difficult for the reasons discussed above. In addition, after
enrollment in the trial, if patients contract COVID-19 during their
participation in the trial or are subject to isolation or shelter
in place restrictions, this may cause them to drop out of our
clinical trial, miss scheduled therapy appointments or follow-up
visits or otherwise fail to follow the clinical trial protocol. If
patients are unable to follow the clinical trial protocol or if the
trial results are otherwise affected by the consequences of the
COVID-19 pandemic on patient participation or actions taken to
mitigate COVID-19 spread, the integrity of data from the clinical
trial may be compromised or not be accepted by the FDA. This could
further adversely impact or delay our clinical development
program.
It is highly speculative in projecting the effects of COVID-19 on
our clinical development program and us generally. The effects of
COVID-19 quickly and dramatically change over time. Its evolution
is difficult to predict, and no one is able to say with certainty
when the pandemic will subside.
COVID-19 could materially affect our operations, as well as the
business or operations of third parties with whom we conduct
business. Our business could be adversely affected by the effects
of other future health pandemics in regions where we or third
parties on which we rely have significant business operations.
Corporate History
We were incorporated in 1996. In 2013, we restructured our
operations to focus on biotechnology, having been a nutraceutical
products company before then. The restructuring occurred so we
could develop a unique, effective and safe way to treat cancer and
diabetes. On January 6, 2015, we changed our name from “Nuvilex,
Inc.” to “PharmaCyte Biotech, Inc.” to reflect the nature of our
business.
The address of our corporate headquarters is 23046 Avenida de la
Carlota, Suite 600, Laguna Hills, CA 92653 and our telephone number
is (917) 595-2850. We maintain a website at www.pharmacyte.com
where general information about us is available. The information
on, or that may be accessed through, our website is not
incorporated by reference into and should not be considered a part
of this registration statement.
To date, we have had a limited operating history with our current
business model and have not produced any revenues.
RISK FACTORS
Investing in our securities involves a high degree of risk. Prior
to making a decision about investing in our securities, you should
carefully consider and evaluate the specific factors discussed
under the heading “Risk Factors” in our Annual Report on Form 10-K
for the fiscal year ended April 30, 2020 filed on August 13, 2020,
with the SEC, as amended, and any updates described in subsequent
Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and
Periodic Reports on Form 8-K, all of which are incorporated herein
by reference, and may be amended, supplemented or superseded from
time to time by other reports we file with the SEC in the future.
The risks and uncertainties we have described are not the only
risks that we face. Additional risks and uncertainties not
presently known to us or that we currently deem immaterial may also
affect our operations. The occurrence of these known or unknown
risks might cause you to lose all or part of your investment.
See also the statements contained under the heading
“Forward-Looking Statements.”
FORWARD-LOOKING STATEMENTS
This prospectus and the documents incorporated by reference herein
contain “forward-looking statements” within the meaning of Section
27A of the Securities Act and Section 21E of the Securities
Exchange Act of 1934, as amended ( “Exchange Act”), that are
intended to qualify for the “safe harbor” created by those
sections. In addition, we may make forward-looking statements in
other documents filed with or furnished to the SEC, and our
management and other representatives may make forward-looking
statements orally or in writing to analysts, investors,
representatives of the media and others. Forward-looking statements
can generally be identified by the fact that they do not relate
strictly to historical or current facts and include, but are not
limited to, statements using terminology such as “can”, “may”,
“could”, “should”, “assume”, “forecasts”, “believe”, “designated
to”, “will”, “expect”, “plan”, “anticipate”, “estimate”,
“potential”, “position”, “predicts”, “strategy”, “guidance”,
“intend”, “budget”, “seek”, “project” or “continue”, or the
negative thereof or other comparable terminology regarding beliefs,
plans, expectations or intentions regarding the future, including
risks relating to the recent outbreak of the coronavirus
(COVID-19). You should read statements that contain these words
carefully because they:
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discuss our future expectations; |
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contain projections of our future results of operations or of
our financial condition; and |
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state other “forward-looking” information. |
We believe it is important to communicate our expectations.
However, forward-looking statements are based on our current
expectations, assumptions, estimates and projections about our
business and our industry and are subject to known and unknown
risks, uncertainties and other factors. Accordingly, our actual
results and the timing of certain events may differ materially from
those expressed or implied in such forward-looking statements due
to a variety of factors and risks, including, but not limited to,
those set forth under “Risk Factors” and “Our Company” set forth in
this prospectus and the documents incorporated herein by
reference, including among
others, our estimates regarding expenses, future revenues, capital
requirements and needs for additional financing; whether the FDA
approves our IND and lifts its clinical hold so that we can
commence our planned clinical trial involving LPAC; there is
substantial doubt about our ability to continue as a going concern;
the success and timing of our preclinical studies and clinical
trials; the potential that results of preclinical studies and
clinical trials may indicate that any of our technologies and
product candidates are unsafe or ineffective; our dependence on
third parties in the conduct of our preclinical studies and
clinical trials; the difficulties and expenses associated with
obtaining and maintaining regulatory approval of our product
candidates; the material adverse impact that the coronavirus
pandemic may have on our business, including our planned clinical
trial involving LAPC, which could materially affect our operations
as well as the business or operations of third parties with whom we
conduct business; and whether the FDA will approve our product
candidates after our clinical trials are completed, assuming the
FDA allows our clinical trial to proceed for LAPC.
All forward-looking statements and risk factors included in this
prospectus are made as of the date hereof, and all forward-looking
statements and risk factors included in documents incorporated
herein by reference are made as of their original date, in each
case based on information available to us as of the date hereof, or
in the case of documents incorporated by reference, the original
date of any such document, and we assume no obligations to update
any forward-looking statement or risk factor, unless we are
required to do so by law. If we do update one or more
forward-looking statements, no inference should be drawn that we
will make updates with respect to other forward-looking statements
or that we will make any further updates to those forward-looking
statements at any future time.
Forward-looking statements may include our plans and objectives for
future operations, including plans and objectives relating to our
products and our future economic performance, projections, business
strategy and timing and likelihood of success. Assumptions relating
to the foregoing involve judgments with respect to, among other
things, future economic, competitive and market conditions, future
business decisions, and the time and money required to successfully
complete development and commercialization of our technologies, all
of which are difficult or impossible to predict accurately and many
of which are beyond our control.
Any of the assumptions underlying the forward-looking statements
contained in this prospectus could prove inaccurate and, therefore,
we cannot assure you that any of the results or events contemplated
in any of such forward-looking statements will be realized. Based
on the significant uncertainties inherent in these forward-looking
statements, the inclusion of any such statement should not be
regarded as a representation or as a guarantee by us that our
objectives or plans will be achieved, and we caution you against
relying on any of the forward looking-statements contained
herein.
USE OF PROCEEDS
Except as otherwise provided in the applicable prospectus
supplement, we intend to use the net proceeds from the sale of the
securities covered by this prospectus for general corporate
purposes, which may include, but are not limited to, working
capital, capital expenditures, clinical trials, business
development and research and development expenditures and
acquisitions of new technologies or businesses. The precise amount,
use and timing of the application of such proceeds will depend upon
our funding requirements and the availability and cost of other
capital. Additional information on the use of net proceeds from an
offering of securities covered by this prospectus may be set forth
in the prospectus supplement relating to the specific offering.
DIVIDEND POLICY
We have never declared or paid any cash dividends on our common
stock. We do not anticipate paying any cash dividends to
stockholders in the foreseeable future. In addition, any future
determination to pay cash dividends will be at the discretion of
our Board of Directors (“Board”) and will be dependent upon our
financial condition, results of operations, capital requirements,
and such other factors as our Board deems relevant.
DESCRIPTIONS OF THE SECURITIES WE MAY
OFFER
The descriptions of the securities contained in this prospectus,
together with any applicable prospectus supplement, summarize all
the material terms and provisions of the various types of
securities that we may offer. We will describe in the applicable
prospectus supplement relating to a particular offering the
specific terms of the securities offered by that prospectus
supplement. We will indicate in the applicable prospectus
supplement if the terms of the securities differ from the terms we
have summarized below. We will also include in the prospectus
supplement information, where applicable, regarding material United
States federal income tax considerations relating to the
securities.
We may sell from time to time, in one or more offerings:
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shares of our common stock; |
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· |
shares of our preferred stock; |
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· |
warrants to purchase any of the securities listed
above; |
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· |
rights to purchase common stock, preferred stock or warrants;
and/or |
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units consisting of one or more of the foregoing. |
This prospectus may not be used to consummate a sale of securities
unless it is accompanied by a prospectus supplement.
Capital Stock
General
The following description of common stock and preferred stock,
together with the additional information we include in any
applicable prospectus supplement, summarizes the material terms and
provisions of the common stock and preferred stock that we may
offer under this prospectus but is not complete. For the complete
terms of our common stock and preferred stock, please refer to our
articles of incorporation, as may be amended from time to time
(“Articles of Incorporation”), any certificates of
designation for our preferred stock, that may be authorized from
time to time, and our bylaws, as amended from time to time. Nevada
Law may also affect the terms of these securities. While the terms
we have summarized below will apply generally to any future common
stock or preferred stock that we may offer, we will describe the
specific terms of any series of these securities in more detail in
the applicable prospectus supplement. If we so indicate in a
prospectus supplement, the terms of any common stock or preferred
stock we offer under that prospectus supplement may differ from the
terms we describe below.
As of April 1, 2021, our authorized capital stock consists of
2,490,000,000 shares of common stock, par value $0.0001 per share,
of which 2,341,410,405 shares were issued and outstanding, and
10,000,000 shares of preferred stock, par value $0.0001 per share,
of which no shares were issued and outstanding. The actual number
of stockholders is greater than the number of stockholders of
record and includes stockholders who are beneficial owners but
whose shares are held in street name by brokers and other nominees.
This number of holders of record also does not include stockholders
whose shares may be held in trust by other entities. In addition,
as of April 1, 2021, there were issued and outstanding options to
purchase 62,600,000 shares of our common stock and warrants to
purchase 4,472,129 shares of our common stock. The authorized and
unissued shares of common stock and preferred stock are available
for issuance without further action by our stockholders, unless
such action is required by applicable law or the rules of any stock
exchange on which our securities may be listed. Unless approval of
our stockholders is so required, our Board will not seek
stockholder approval for the issuance and sale of our common
stock.
Common Stock
Holders of our common stock are entitled to one vote for each share
issued and outstanding held on all matters to be voted upon by the
stockholders. Our shares of common stock have no preemptive,
conversion, or redemption rights. The rights, preferences, and
privileges of the holders of common stock are subject to, and may
be adversely affected by, the rights of the holders of shares of
any series of preferred stock we may issue in the future. Upon the
sale of substantially all of our stock or assets or dissolution,
liquidation or winding up, and after all liquidation preferences
payable to any series of preferred stock entitled thereto have been
satisfied, our remaining assets shall be distributed to all holders
of common stock and any similarly situated stockholders who are not
entitled to any liquidation preference or, if there be an
insufficient amount to pay all such stockholders, then ratably
among such holders. All of our issued and outstanding shares of
common stock are fully paid and non-assessable. The holders of
shares of our common stock will be entitled to such dividends and
other distributions in cash, stock or property from our assets or
funds legally available for such purposes as may be declared from
time to time by our Board.
Our common stock is quoted on OTCQB under the symbol “PMCB.”
American Stock Transfer & Trust Company is the transfer agent
and registrar for our common stock.
Preferred Stock
Our Articles of Incorporation provides that our Board may, by
resolution, designate classes of preferred stock in the future. The
designated series of preferred stock will have such powers,
designations, preferences and relative participation or optional or
other special rights and qualifications, limitations or
restrictions as expressed in the related resolution adopted by the
Board. Once designated by our Board, each series of preferred stock
will have specific financial and other terms that will be described
in a prospectus supplement. The description of the preferred stock
that is set forth in any prospectus supplement is not complete
without reference to the documents that govern the preferred stock.
These include our Articles of Incorporation and any certificates of
designation that our Board may adopt. Before the issuance of shares
of each series of preferred stock, the Board is required by the
Nevada Revised Statutes and our Articles of Incorporation to adopt
resolutions and file a certificate of designations with the
Secretary of State of the State of Nevada. The related certificate
of designation fixes for each class or series the designations,
powers, preferences, rights, qualifications, limitations and
restrictions, including, but not limited to, some or all of the
following:
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the number of shares constituting that series and the
distinctive designation of that series, which number may be
increased or decreased (but not below the number of shares then
outstanding) from time to time by action of the Board; |
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· |
the dividend rate and the manner and frequency of payment of
dividends on the shares of that series, whether dividends will be
cumulative, and, if so, from which date; |
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· |
whether that series will have voting rights, in addition to any
voting rights provided by law, and, if so, the terms of such voting
rights; |
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whether that series will have conversion privileges, and, if
so, the terms and conditions of such conversion, including
provision for adjustment of the conversion rate in such events as
the Board may determine; |
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· |
whether or not the shares of that series will be redeemable,
and, if so, the terms and conditions of such redemption; |
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whether that series will have a sinking fund for the redemption
or purchase of shares of that series, and, if so, the terms and
amount of such sinking fund; |
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· |
whether or not the shares of the series will have priority over
or be on a parity with or be junior to the shares of any other
series or class in any respect; |
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· |
the rights of the shares of that series in the event of
voluntary or involuntary liquidation, dissolution or winding up of
the corporation, and the relative rights or priority, if any, of
payment of shares of that series; and |
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any other relative rights, preferences and limitations of that
series. |
Although our Board has no intention at the present time of doing
so, it could authorize the issuance of a series of preferred stock
that could, depending on the terms of such series, impede the
completion of a merger, tender offer or other takeover attempt. All
shares of preferred stock offered hereby will, when issued, be
fully paid and non-assessable, including shares of preferred stock
issued upon the exercise of preferred stock warrants or
subscription rights, if any.
We have authorized 10,000,000 shares of preferred stock, with a par
value of $0.0001, of which one share has been designated as "Series
A Preferred Stock" and 13,500 shares have been designated as
“Series E Preferred Stock.” The one share of Series A Preferred
Stock was issued on October 30, 2019 and repurchased by the Company
on December 3, 2019. As of April 30, 2020, there are no shares of
preferred stock issued and outstanding.
The descriptions of the Series A Preferred Stock and the Series E
Preferred Stock below is qualified in its entirety by reference to
the Company’s Articles of Incorporation, as amended.
Series A Convertible Preferred Stock
The Series A Preferred Stock has the following features:
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There is one share of preferred stock designated as Series A
Preferred Stock; |
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· |
The Series A Preferred Stock has a number of votes at any time
equal to the number of votes then held by all other shareholders of
the Company having a right to vote on any matter plus
one. The Certificate of Designations that designated the
terms of the Series A Preferred Stock cannot be amended without the
consent of the holder of the Series A Preferred Stock; |
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· |
We may redeem the Series A Preferred Stock at any time for a
redemption price of $1.00 paid to the holder of the share of Series
A Preferred Stock; and |
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· |
The Series A Preferred Stock has no rights of transfer,
conversion, dividends, preferences upon liquidation or
participation in any distributions to shareholders. |
Series E Convertible Preferred Stock
The Series E Convertible Preferred Stock have the following
features:
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· |
The holders of Series E Convertible Preferred Stock are
entitled to receive cash out of our assets before any amount is
paid to the holders of any capital stock of any class junior in
rank to the shares of Series E Convertible Preferred Stock; |
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· |
Each share of Series E Convertible Preferred Stock is
convertible, at the holder's option, into shares of common stock at
the average closing bid price of the common stock for five trading
days prior to the conversion date; |
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We have the right, in our sole discretion, at any time 110 days
after issuance of shares of Series E Convertible Preferred Stock,
to redeem all of the shares of Series E Convertible Preferred Stock
upon thirty days advance written notice at a redemption price equal
to the par value of the shares of the Series E Convertible
Preferred Stock; and |
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At every meeting of stockholders every holder of shares of
Series E Convertible Preferred Stock is entitled to 50,000 votes
for each share of Series E Convertible Preferred Stock with the
same and identical voting rights as a holder of a share of common
stock. |
Anti-Takeover Effects of Nevada Law
The “business combination” provisions of Sections 78.411 to 78.444,
inclusive, of the NRS, generally prohibit a Nevada corporation with
at least 200 stockholders of record from engaging in various
“combination” transactions with any interested stockholder for a
period of two years after the date of the transaction in which the
person became an interested stockholder, unless the transaction is
approved by the Board prior to the date the interested stockholder
obtained such status or the combination is approved by the Board
and thereafter is approved at a meeting of the stockholders by the
affirmative vote of stockholders representing at least 60% of the
outstanding voting power held by disinterested stockholders, and
extends beyond the expiration of the two-year period, unless:
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the combination was approved by the
Board prior to the person becoming an interested stockholder or the
transaction by which the person first became an interested
stockholder was approved by the Board before the person became an
interested stockholder or the combination is later approved by a
majority of the voting power held by disinterested stockholders;
or |
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if the consideration to be paid by the
interested stockholder is at least equal to the highest of: (a) the
highest price per share paid by the interested stockholder within
the two years immediately preceding the date of the announcement of
the combination or in the transaction in which it became an
interested stockholder, whichever is higher, (b) the market value
per share of common stock on the date of announcement of the
combination and the date the interested stockholder acquired the
shares, whichever is higher, or (c) for holders of preferred stock,
the highest liquidation value of the preferred stock, if it is
higher. |
A “combination” is generally defined to include mergers or
consolidations or any sale, lease exchange, mortgage, pledge,
transfer, or other disposition, in one transaction or a series of
transactions, with an “interested stockholder” having: (a) an
aggregate market value equal to 5% or more of the aggregate market
value of the assets of the corporation, (b) an aggregate market
value equal to 5% or more of the aggregate market value of all
outstanding shares of the corporation, (c) 10% or more of the
earning power or net income of the corporation, and (d) certain
other transactions with an interested stockholder or an affiliate
or associate of an interested stockholder.
In general, an “interested stockholder” is a person who, together
with affiliates and associates, owns (or within two years, did own)
10% or more of a corporation’s voting stock. The statute could
prohibit or delay mergers or other takeover or change in control
attempts and, accordingly, may discourage attempts to acquire us
even though such a transaction may offer our stockholders the
opportunity to sell their stock at a price above the prevailing
market price.
The provisions of Nevada law could have the effect of discouraging
others from attempting hostile takeovers and, as a consequence,
they may also inhibit temporary fluctuations in the market price of
our common stock that often result from actual or rumored hostile
takeover attempts. These provisions may also have the effect of
preventing changes in the composition of our Board and management.
It is possible that these provisions could make it more difficult
to accomplish transactions that stockholders may otherwise deem to
be in their best interests.
In addition, the NRS provides for statutes, Sections 78.378 to
78.3793, inclusive, of the NRS, that limit the voting rights of the
acquisition of a “controlling interest” defined to occur at three
ownership thresholds of one-fifth, one-third and a majority of the
corporation’s voting power. Although our Articles of Incorporation
have not opted out of these statutes, the limitations on voting
rights apply only to a corporation with 200 or more stockholders of
record, at least 100 of whom have addresses in the State of Nevada
appearing on the corporation’s stock ledger during the 90 days
immediately preceding the date of the acquisition.
Warrants
The following description, together with the additional information
we may include in any applicable prospectus supplement or free
writing prospectus, summarizes the material terms and provisions of
the warrants that we may offer under this prospectus and any
related warrant agreement and warrant certificate. While the terms
summarized below will apply generally to any warrants that we may
offer, we will describe the specific terms of any series of
warrants in more detail in the applicable prospectus supplement. If
we indicate in the prospectus supplement, the terms of any warrants
offered under that prospectus supplement may differ from the terms
described below. Specific warrant agreements will contain
additional important terms and provisions and will be incorporated
by reference as an exhibit to the Registration Statement which
includes this prospectus.
General
We may issue warrants for the purchase of common stock, preferred
stock and/or debt securities in one or more series. We may issue
warrants independently or together with common stock, preferred
stock and/or debt securities, and the warrants may be attached to
or separate from these securities.
We will evidence each series of warrants by warrant certificates
that we may issue under a separate agreement. We may enter into a
warrant agreement with a warrant agent. Each warrant agent may be a
bank or trust company that we select which has its principal office
in the United States. We may also choose to act as our own warrant
agent. We will indicate the name and address of any such warrant
agent in the applicable prospectus supplement relating to a
particular series of warrants.
We will describe in the applicable prospectus supplement the terms
of the series of warrants, including:
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the offering price and aggregate number of warrants
offered; |
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if applicable, the designation and terms of the securities with
which the warrants are issued and the number of warrants issued
with each such security or each principal amount of such
security; |
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if applicable, the date on and after which the warrants and the
related securities will be separately transferable; |
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in the case of warrants to purchase debt securities, the
principal amount of debt securities purchasable upon exercise of
one warrant and the price at, and currency in which, this principal
amount of debt securities may be purchased upon such exercise; |
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in the case of warrants to purchase common stock or preferred
stock, the number or amount of shares of common stock or preferred
stock, as the case may be, purchasable upon the exercise of one
warrant and the price at which and currency in which these shares
may be purchased upon such exercise; |
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the manner of exercise of the warrants, including any cashless
exercise rights; |
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the warrant agreement under which the warrants will be
issued; |
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the effect of any merger, consolidation, sale or other
disposition of our business on the warrant agreement and the
warrants; |
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anti-dilution provisions of the warrants, if any; |
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the terms of any rights to redeem or call the warrants; |
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any provisions for changes to or adjustments in the exercise
price or number of securities issuable upon exercise of the
warrants; |
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the dates on which the right to exercise the warrants will
commence and expire or, if the warrants are not continuously
exercisable during that period, the specific date or dates on which
the warrants will be exercisable; |
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the manner in which the warrant agreement and warrants may be
modified; |
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the identities of the warrant agent and any calculation or
other agent for the warrants; |
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federal income tax consequences of holding or exercising the
warrants; |
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the terms of the securities issuable upon exercise of the
warrants; |
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any securities exchange or quotation system on which the
warrants or any securities deliverable upon exercise of the
warrants may be listed or quoted; and |
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any other specific terms, preferences, rights or limitations of
or restrictions on the warrants. |
Before exercising their warrants, holders of warrants will not have
any of the rights of holders of the securities purchasable upon
such exercise, including:
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in the case of warrants to purchase debt securities, the right
to receive payments of principal of, or premium, if any, or
interest on, the debt securities purchasable upon exercise or to
enforce covenants in the applicable indenture; or |
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in the case of warrants to purchase common stock or preferred
stock, the right to receive dividends, if any, or, payments upon
our liquidation, dissolution or winding up or to exercise voting
rights, if any. |
Exercise of Warrants
Each warrant will entitle the holder to purchase the securities
that we specify in the applicable prospectus supplement at the
exercise price that we describe in the applicable prospectus
supplement. Unless we otherwise specify in the applicable
prospectus supplement, holders of the warrants may exercise the
warrants at any time up to 5:00 P.M. eastern time on the expiration
date that we set forth in the applicable prospectus supplement.
After the close of business on the expiration date, unexercised
warrants will become void.
Holders of the warrants may exercise the warrants by delivering the
warrant certificate representing the warrants to be exercised
together with specified information and paying the required
exercise price by the methods provided in the applicable prospectus
supplement. We will set forth on the reverse side of the warrant
certificate, and in the applicable prospectus supplement, the
information that the holder of the warrant will be required to
deliver to the warrant agent.
Upon receipt of the required payment and the warrant certificate
properly completed and duly executed at the corporate trust office
of the warrant agent or any other office indicated in the
applicable prospectus supplement, we will issue and deliver the
securities purchasable upon such exercise. If fewer than all of the
warrants represented by the warrant certificate are exercised, then
we will issue a new warrant certificate for the remaining amount of
warrants.
Enforceability of Rights by Holders of Warrants
Any warrant agent will act solely as our agent under the applicable
warrant agreement and will not assume any obligation or
relationship of agency or trust with any holder of any warrant. A
single bank or trust company may act as warrant agent for more than
one issue of warrants. A warrant agent will have no duty or
responsibility in case of any default by us under the applicable
warrant agreement or warrant, including any duty or responsibility
to initiate any proceedings at law or otherwise, or to make any
demand upon us. Any holder of a warrant may, without the consent of
the related warrant agent or the holder of any other warrant,
enforce by appropriate legal action the holder’s right to exercise,
and receive the securities purchasable upon exercise of, its
warrants in accordance with their terms.
Warrant Agreement Will Not Be Qualified Under Trust Indenture
Act
No warrant agreement will be qualified as an indenture, and no
warrant agent will be required to qualify as a trustee, under the
Trust Indenture Act of 1939, as amended (“Trust Indenture Act”).
Therefore, holders of warrants issued under a warrant agreement
will not have the protection of the Trust Indenture Act with
respect to their warrants.
Governing Law
Each warrant agreement and any warrants issued under the warrant
agreements will be governed by New York law.
Calculation Agent
Any calculations relating to warrants may be made by a calculation
agent, an institution that we appoint as our agent for this
purpose. The prospectus supplement for a particular warrant will
name the institution that we have appointed to act as the
calculation agent for that warrant as of the original issue date
for that warrant, if any. We may appoint a different institution to
serve as calculation agent from time to time after the original
issue date without the consent or notification of the holders. The
calculation agent’s determination of any amount of money payable or
securities deliverable with respect to a warrant will be final and
binding in the absence of manifest error.
Outstanding Warrants
As of April 1, 2021, we had outstanding four warrants to purchase
4,472,129 shares of our common stock at a weighted average exercise
price of $0.039.
Debt Securities
The following description, together with the additional information
we include in any applicable prospectus supplement or free writing
prospectus, summarizes certain general terms and provisions of the
debt securities that we may offer under this prospectus. When we
offer to sell a particular series of debt securities, we will
describe the specific terms of the series in a supplement to this
prospectus. We will also indicate in the supplement to what extent
the general terms and provisions described in this prospectus apply
to a particular series of debt securities. To the extent the
information contained in the prospectus supplement differs from
this summary description, you should rely on the information in the
prospectus supplement.
We may issue debt securities either separately, or together with,
or upon the conversion or exercise of or in exchange for, other
securities described in this prospectus. Debt securities may be our
senior, senior subordinated or subordinated obligations and, unless
otherwise specified in a supplement to this prospectus, the debt
securities will be our direct, unsecured obligations and may be
issued in one or more series.
The debt securities will be issued under an indenture between us
and a trustee named in the prospectus supplement. We have
summarized select portions of the indenture below. The summary is
not complete. The form of the indenture has been filed as an
exhibit to the registration statement and you should read the
indenture for provisions that may be important to you. In the
summary below, we have included references to the section numbers
of the indenture so that you can easily locate these provisions.
Capitalized terms used in the summary and not defined herein have
the meanings specified in the indenture.
General
The terms of each series of debt securities will be established by
or pursuant to a resolution of our Board and set forth or
determined in the manner provided in a resolution of our Board, in
an officer’s certificate or by a supplemental indenture. (Section
2.2) The particular terms of each series of debt securities will be
described in a prospectus supplement relating to such series
(including any pricing supplement or term sheet).
We can issue an unlimited amount of debt securities under the
indenture that may be in one or more series with the same or
various maturities, at par, at a premium, or at a discount.
(Section 2.1) We will set forth in a prospectus supplement
(including any pricing supplement or term sheet) relating to any
series of debt securities being offered, the aggregate principal
amount and the following terms of the debt securities, if
applicable:
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the title and ranking of the debt securities (including the
terms of any subordination provisions); |
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the price or prices (expressed as a percentage of the principal
amount) at which we will sell the debt securities; |
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any limit on the aggregate principal amount of the debt
securities; |
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the date or dates on which the principal of a particular series
of debt securities is payable; |
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the rate or rates (which may be fixed or variable) per annum or
the method used to determine the rate or rates (including any
commodity, commodity index, stock exchange index or financial
index) at which the debt securities will bear interest, the date or
dates from which interest will accrue, the date or dates on which
interest will commence and be payable and any regular record date
for the interest payable on any interest payment date; |
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the place or places where principal of, and interest, if any,
on the debt securities will be payable (and the method of such
payment), where the debt securities of such series may be
surrendered for registration of transfer or exchange, and where
notices and demands to us in respect of the debt securities may be
delivered; |
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the period or periods within which, the price or prices at
which and the terms and conditions upon which we may redeem the
debt securities; |
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· |
any obligation we have to redeem or purchase the debt
securities pursuant to any sinking fund or analogous provisions or
at the option of a holder of debt securities and the period or
periods within which, the price or prices at which and the terms
and conditions upon which the debt securities of a particular
series shall be redeemed or purchased, in whole or in part,
pursuant to such obligation; |
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· |
the dates on which and the price or prices at which we will
repurchase debt securities at the option of the holders of debt
securities and other detailed terms and provisions of these
repurchase obligations; |
|
· |
the denominations in which the debt securities will be issued,
if other than denominations of $1,000 and any integral multiple
thereof; |
|
· |
whether the debt securities will be issued in the form of
certificated debt securities or global debt securities; |
|
· |
the portion of principal amount of the debt securities payable
upon declaration of acceleration of the maturity date, if other
than the principal amount; |
|
· |
the currency of denomination of the debt securities, which may
be U.S. dollars or any foreign currency, and if such currency of
denomination is a composite currency, the agency or organization,
if any, responsible for overseeing such composite currency; |
|
· |
the designation of the currency, currencies or currency units
in which payment of principal of, and premium and interest on, the
debt securities will be made; |
|
· |
if payments of principal of, or premium or interest on, the
debt securities will be made in one or more currencies or currency
units other than that or those in which the debt securities are
denominated, the manner in which the exchange rate with respect to
these payments will be determined; |
|
· |
the manner in which the amounts of payment of principal of, and
premium, if any, and interest on, the debt securities will be
determined, if these amounts may be determined by reference to an
index based on a currency or currencies or by reference to a
commodity, commodity index, stock exchange index or financial
index; |
|
· |
any provisions relating to any security provided for the debt
securities; |
|
· |
any addition to, deletion of or change in the Events of Default
described in this prospectus or in the indenture with respect to
the debt securities and any change in the acceleration provisions
described in this prospectus or in the indenture with respect to
the debt securities; |
|
· |
any addition to, deletion of or change in the covenants
described in this prospectus or in the indenture with respect to
the debt securities; |
|
· |
any depositaries, interest rate calculation agents, exchange
rate calculation agents or other agents with respect to the debt
securities; |
|
· |
the provisions, if any, relating to conversion or exchange of
any debt securities of such series, including if applicable, the
conversion or exchange price and period, provisions as to whether
conversion or exchange will be mandatory, the events requiring an
adjustment of the conversion or exchange price and provisions
affecting conversion or exchange; |
|
· |
any other terms of the debt securities, which may supplement,
modify or delete any provision of the indenture as it applies to
that series, including any terms that may be required under
applicable law or regulations or advisable in connection with the
marketing of the securities; and |
|
· |
whether any of our direct or indirect subsidiaries will
guarantee the debt securities of that series, including the terms
of subordination, if any, of such guarantees. (Section 2.2) |
We may issue debt securities that provide for an amount less than
their stated principal amount to be due and payable upon
declaration of acceleration of their maturity pursuant to the terms
of the indenture. We will provide you with information on the
federal income tax considerations and other special considerations
applicable to any of these debt securities in the applicable
prospectus supplement.
If we denominate the purchase price of any of the debt securities
in a foreign currency or currencies or a foreign currency unit or
units, or if the principal of, and premium, if any, and interest
on, any series of debt securities is payable in a foreign currency
or currencies or a foreign currency unit or units, we will provide
you with information on the restrictions, elections, general tax
considerations, specific terms and other information with respect
to that issue of debt securities and such foreign currency or
currencies or foreign currency unit or units in the applicable
prospectus supplement.
Transfer and Exchange
Each debt security will be represented by either one or more global
securities registered in the name of The Depository Trust Company
(“DTC” or the “Depositary”) or a nominee of the
Depositary (we will refer to any debt security represented by a
global debt security as a “book-entry debt security”), or a
certificate issued in definitive registered form (we will refer to
any debt security represented by a certificated security as a
“certificated debt security”) as set forth in the applicable
prospectus supplement. Except as set forth under the heading
“Global Debt Securities and Book-Entry System” below, book-entry
debt securities will not be issuable in certificated form.
Certificated Debt Securities. You may transfer or exchange
certificated debt securities at any office we maintain for this
purpose in accordance with the terms of the indenture. (Section
2.4) No service charge will be made for any transfer or exchange of
certificated debt securities, but we may require payment of a sum
sufficient to cover any tax or other governmental charge payable in
connection with a transfer or exchange. (Section 2.7)
You may effect the transfer of certificated debt securities and the
right to receive the principal of, premium and interest on
certificated debt securities only by surrendering the certificate
representing those certificated debt securities and either
reissuance by us or the trustee of the certificate to the new
holder or the issuance by us or the trustee of a new certificate to
the new holder.
Global Debt Securities and Book-Entry System. Each global
debt security representing book-entry debt securities will be
deposited with, or on behalf of, the Depositary, and registered in
the name of the Depositary or a nominee of the Depositary. Please
see the section entitled “Global Securities” for more
information.
Covenants
We will set forth in the applicable prospectus supplement any
restrictive covenants applicable to any issue of debt securities.
(Article IV)
No Protection in the Event of a Change of Control
Unless we state otherwise in the applicable prospectus supplement,
the debt securities will not contain any provisions that may afford
holders of the debt securities protection in the event we have a
change in control or in the event of a highly leveraged transaction
(whether or not such transaction results in a change in control)
which could adversely affect holders of debt securities.
Consolidation, Merger and Sale of Assets
We may not consolidate with or merge with or into, or convey,
transfer or lease all or substantially all of our properties and
assets to, any person (a “successor person”) unless:
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we are the surviving corporation or the successor person (if
other than our company) is a corporation organized and validly
existing under the laws of any U.S. domestic jurisdiction and
expressly assumes our obligations on the debt securities and under
the indenture; |
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immediately after giving effect to the transaction, no Default
or Event of Default, shall have occurred and be continuing;
and |
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certain other conditions are met. |
Notwithstanding the above, any of our subsidiaries may consolidate
with, merge into or transfer all or part of its properties to us.
(Section 5.1)
Events of Default
“Event of Default” means with respect to any series of debt
securities, any of the following:
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default in the payment of any interest upon any debt security
of that series when it becomes due and payable, and continuance of
such default for a period of 30 days (unless the entire amount of
the payment is deposited by us with the trustee or with a paying
agent prior to the expiration of the 30-day period); |
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default in the payment of principal of any debt security of
that series at its maturity; |
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default in the performance or breach of any other covenant or
warranty by us in the indenture or any debt security (other than a
covenant or warranty that has been included in the indenture solely
for the benefit of a series of debt securities other than that
series), which default continues uncured for a period of 60 days
after we receive written notice from the trustee or our company and
the trustee receive written notice from the holders of not less
than 25% in principal amount of the outstanding debt securities of
that series as provided in the indenture; |
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certain voluntary or involuntary events of bankruptcy,
insolvency or reorganization of our company; or |
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any other Event of Default provided with respect to debt
securities of that series that is described in the applicable
prospectus supplement. (Section 6.1) |
No Event of Default with respect to a particular series of debt
securities (except as to certain events of bankruptcy, insolvency
or reorganization) necessarily constitutes an Event of Default with
respect to any other series of debt securities. (Section 6.1) The
occurrence of certain Events of Default or an acceleration under
the indenture may constitute an event of default under certain
indebtedness of ours or our subsidiaries outstanding from time to
time.
We will provide the trustee written notice of any Default or Event
of Default within 30 days of becoming aware of the occurrence of
such Default or Event of Default, which notice will describe in
reasonable detail the status of such Default or Event of Default
and what action we are taking or propose to take in respect
thereof. (Section 6.1)
If an Event of Default with respect to debt securities of any
series at the time outstanding occurs and is continuing, then the
trustee or the holders of not less than 25% in principal amount of
the outstanding debt securities of that series may, by a notice in
writing to us (and to the trustee if given by the holders), declare
to be due and payable immediately the principal of (or, if the debt
securities of that series are discount securities, that portion of
the principal amount as may be specified in the terms of that
series) and accrued and unpaid interest, if any, on all debt
securities of that series. In the case of an Event of Default
resulting from certain events of bankruptcy, insolvency or
reorganization, the principal (or such specified amount) of and
accrued and unpaid interest, if any, on all outstanding debt
securities will become and be immediately due and payable without
any declaration or other act on the part of the trustee or any
holder of outstanding debt securities. At any time after a
declaration of acceleration with respect to debt securities of any
series has been made, but before a judgment or decree for payment
of the money due has been obtained by the trustee, the holders of a
majority in principal amount of the outstanding debt securities of
that series may rescind and annul the acceleration if all Events of
Default, other than the non-payment of accelerated principal and
interest, if any, with respect to debt securities of that series,
have been cured or waived as provided in the indenture. (Section
6.2) We refer you to the prospectus supplement relating to any
series of debt securities that are discount securities for the
particular provisions relating to acceleration of a portion of the
principal amount of such discount securities upon the occurrence of
an Event of Default.
The indenture provides that the trustee may refuse to perform any
duty or exercise any of its rights or powers under the indenture,
unless the trustee receives indemnity satisfactory to it against
any cost, liability or expense that might be incurred by it in
performing such duty or exercising such right or power. (Section
7.1(e)) Subject to certain rights of the trustee, the holders of a
majority in principal amount of the outstanding debt securities of
any series will have the right to direct the time, method and place
of conducting any proceeding for any remedy available to the
trustee or exercising any trust or power conferred on the trustee
with respect to the debt securities of that series. (Section
6.12)
No holder of any debt security of any series will have any right to
institute any proceeding, judicial or otherwise, with respect to
the indenture or for the appointment of a receiver or trustee, or
for any remedy under the indenture, unless:
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that holder has previously given to the trustee written notice
of a continuing Event of Default with respect to debt securities of
that series; and |
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· |
the holders of not less than 25% in principal amount of the
outstanding debt securities of that series have made written
request, and offered indemnity or security satisfactory to the
trustee, to the trustee to institute the proceeding as trustee, and
the trustee has not received from the holders of not less than a
majority in principal amount of the outstanding debt securities of
that series a direction inconsistent with that request and has
failed to institute the proceeding within 60 days. (Section
6.7) |
Notwithstanding any other provision in the indenture, the holder of
any debt security will have an absolute and unconditional right to
receive payment of the principal of, and premium and any interest
on, that debt security on or after the due dates expressed in that
debt security and to institute suit for the enforcement of payment.
(Section 6.8).
The indenture requires us, within 120 days after the end of our
fiscal year, to furnish to the trustee a statement as to compliance
with the indenture. (Section 4.3) If a Default or Event of Default
occurs and is continuing with respect to the securities of any
series and if it is known to a responsible officer of the trustee,
the trustee shall mail to each holder of the securities of that
series notice of a Default or Event of Default within 90 days after
it occurs or, if later, after a responsible officer of the trustee
has knowledge of such Default or Event of Default. The indenture
provides that the trustee may withhold notice to the holders of
debt securities of any series of any Default or Event of Default
(except in payment on any debt securities of that series) with
respect to debt securities of that series if the trustee determines
in good faith that withholding notice is in the interest of the
holders of those debt securities. (Section 7.5)
Modification and Waiver
We and the trustee may modify, amend or supplement the indenture or
the debt securities of any series without the consent of any holder
of any debt security:
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to cure any ambiguity, defect or inconsistency; |
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to comply with covenants in the indenture described above under
the heading “Consolidation, Merger and Sale of Assets”; |
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to provide for uncertificated securities in addition to or in
place of certificated securities; |
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to add guarantees with respect to debt securities of any series
or secure debt securities of any series; |
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to surrender any of our rights or powers under the
indenture; |
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to add covenants or Events of Default for the benefit of the
holders of debt securities of any series; |
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to comply with the applicable procedures of the applicable
depositary; |
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to make any change that does not adversely affect the rights of
any holder of debt securities; |
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to provide for the issuance of and establish the form and terms
and conditions of debt securities of any series as permitted by the
indenture; |
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to effect the appointment of a successor trustee with respect
to the debt securities of any series and to add to or change any of
the provisions of the indenture to provide for or facilitate
administration by more than one trustee; or |
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to comply with requirements of the SEC in order to effect or
maintain the qualification of the indenture under the Trust
Indenture Act. (Section 9.1) |
We may also modify and amend the indenture with the consent of the
holders of at least a majority in principal amount of the
outstanding debt securities of each series affected by the
modifications or amendments. We may not make any modification or
amendment without the consent of the holders of each affected debt
security then outstanding if that amendment will:
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reduce the amount of debt securities whose holders must consent
to an amendment, supplement or waiver; |
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reduce the rate of or extend the time for payment of interest
(including default interest) on any debt security; |
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reduce the principal of or premium on or change the fixed
maturity of any debt security or reduce the amount of, or postpone
the date fixed for, the payment of any sinking fund or analogous
obligation with respect to any series of debt securities; |
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reduce the principal amount of discount securities payable upon
acceleration of maturity; |
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waive a Default or Event of Default in the payment of the
principal of, or premium or interest on, any debt security (except
a rescission of acceleration of the debt securities of any series
by the holders of at least a majority in aggregate principal amount
of the then outstanding debt securities of that series and a waiver
of the payment default that resulted from such acceleration); |
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make the principal of, or premium or interest on, any debt
security payable in currency other than that stated in the debt
security; |
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make any change to certain provisions of the indenture relating
to, among other things, the right of holders of debt securities to
receive payment of the principal of, and premium and interest on,
those debt securities and to institute suit for the enforcement of
any such payment and to waivers or amendments; or |
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waive a redemption payment with respect to any debt security.
(Section 9.3) |
Except for certain specified provisions, the holders of at least a
majority in principal amount of the outstanding debt securities of
any series may on behalf of the holders of all debt securities of
that series waive our compliance with provisions of the indenture.
(Section 9.2) The holders of a majority in principal amount of the
outstanding debt securities of any series may on behalf of the
holders of all the debt securities of such series waive any past
default under the indenture with respect to that series and its
consequences, except a default in the payment of the principal of,
or any interest on, any debt security of that series; provided,
however, that the holders of a majority in principal amount of the
outstanding debt securities of any series may rescind an
acceleration and its consequences, including any related payment
default that resulted from the acceleration. (Section 6.13)
Defeasance of Debt Securities and Certain Covenants in Certain
Circumstances
Legal Defeasance. The indenture provides that, unless
otherwise provided by the terms of the applicable series of debt
securities, we may be discharged from any and all obligations in
respect of the debt securities of any series (subject to certain
exceptions). We will be so discharged upon the deposit with the
trustee, in trust, of money and/or U.S. government obligations or,
in the case of debt securities denominated in a single currency
other than U.S. dollars, government obligations of the government
that issued or caused to be issued such currency, that, through the
payment of interest and principal in accordance with their terms,
will provide money or U.S. government obligations in an amount
sufficient in the opinion of a nationally recognized firm of
independent public accountants or investment bank to pay and
discharge each installment of principal of, premium and interest
on, and any mandatory sinking fund payments in respect of, the debt
securities of that series on the stated maturity of those payments
in accordance with the terms of the indenture and those debt
securities.
This discharge may occur only if, among other things, we have
delivered to the trustee an opinion of counsel stating that we have
received from, or there has been published by, the U.S. Internal
Revenue Service a ruling or, since the date of execution of the
indenture, there has been a change in the applicable U.S. federal
income tax law, in either case to the effect that, and based
thereon such opinion shall confirm that, the holders of the debt
securities of that series will not recognize income, gain or loss
for U.S. federal income tax purposes as a result of the deposit,
defeasance and discharge and will be subject to U.S. federal income
tax on the same amounts and in the same manner and at the same
times as would have been the case if the deposit, defeasance and
discharge had not occurred. (Section 8.3)
Defeasance of Certain Covenants. The indenture provides
that, unless otherwise provided by the terms of the applicable
series of debt securities, upon compliance with certain
conditions:
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we may omit to comply with the covenant described under the
heading “Consolidation, Merger and Sale of Assets” and certain
other covenants set forth in the indenture, as well as any
additional covenants that may be set forth in the applicable
prospectus supplement; and |
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any omission to comply with those covenants will not constitute
a Default or an Event of Default with respect to the debt
securities of that series (“covenant defeasance”). |
The conditions include:
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depositing with the trustee money and/or U.S. government
obligations or, in the case of debt securities denominated in a
single currency other than U.S. dollars, government obligations of
the government that issued or caused to be issued such currency,
that, through the payment of interest and principal in accordance
with their terms, will provide money in an amount sufficient in the
opinion of a nationally recognized firm of independent public
accountants or investment bank to pay and discharge each
installment of principal of, premium and interest on, and any
mandatory sinking fund payments in respect of, the debt securities
of that series on the stated maturity of those payments in
accordance with the terms of the indenture and those debt
securities; and |
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delivering to the trustee an opinion of counsel to the effect
that the holders of the debt securities of that series will not
recognize income, gain or loss for U.S. federal income tax purposes
as a result of the deposit and related covenant defeasance and will
be subject to U.S. federal income tax on the same amounts and in
the same manner and at the same times as would have been the case
if the deposit and related covenant defeasance had not occurred.
(Section 8.4) |
No Personal Liability of Directors, Officers, Employees or
Securityholders
None of our past, present or future directors, officers, employees
or securityholders, as such, will have any liability for any of our
obligations under the debt securities or the indenture or for any
claim based on, or in respect or by reason of, such obligations or
their creation. By accepting a debt security, each holder waives
and releases all such liability. This waiver and release is part of
the consideration for the issue of the debt securities. However,
this waiver and release may not be effective to waive liabilities
under U.S. federal securities laws, and it is the view of the SEC
that such a waiver is against public policy.
Governing Law
The indenture and the debt securities, including any claim or
controversy arising out of or relating to the indenture or the debt
securities, will be governed by the laws of the State of New
York.
The indenture will provide that we, the trustee and the holders of
the debt securities (by their acceptance of the debt securities)
irrevocably waive, to the fullest extent permitted by applicable
law, any and all right to trial by jury in any legal proceeding
arising out of or relating to the indenture, the debt securities or
the transactions contemplated thereby.
The indenture will provide that any legal lawsuit, action or
proceeding arising out of or based upon the indenture or the
transactions contemplated thereby may be instituted in the federal
courts of the United States of America located in the City of New
York or the courts of the State of New York in each case located in
the City of New York, and we, the trustee and the holder of the
debt securities (by their acceptance of the debt securities)
irrevocably submit to the non-exclusive jurisdiction of such courts
in any such suit, action or proceeding. The indenture will further
provide that service of any process, summons, notice or document by
mail (to the extent allowed under any applicable statute or rule of
court) to such party’s address set forth in the indenture will be
effective service of process for any suit, action or other
proceeding brought in any such court. The indenture will further
provide that we, the trustee and the holders of the debt securities
(by their acceptance of the debt securities) irrevocably and
unconditionally waive any objection to the laying of venue of any
suit, action or other proceeding in the courts specified above and
irrevocably and unconditionally waive and agree not to plead or
claim any such suit, action or other proceeding has been brought in
an inconvenient forum. (Section 10.10)
Rights
We may issue rights to purchase common stock, preferred stock or
warrants that we may offer to our security holders in one or more
series. The rights may or may not be transferable by the persons
purchasing or receiving the rights. In connection with any rights
offering, we may enter into a standby underwriting or other
arrangement with one or more underwriters or other persons pursuant
to which such underwriters or other persons would purchase any
offered securities remaining unsubscribed for after such rights
offering. Each series of rights will be issued under a separate
rights agent agreement to be entered into between us and a bank or
trust company, as rights agent, that we will name in the applicable
prospectus supplement. The rights agent will act solely as our
agent in connection with the rights and will not assume any
obligation or relationship of agency or trust for or with any
holders of rights certificates or beneficial owners of rights. A
copy of the form of rights agent or subscription agent agreement,
including the form of rights certificate representing a series of
rights, will be filed with the SEC in connection with the offering
of a particular series of rights.
The prospectus supplement relating to any rights that we offer will
include specific terms relating to the offering, including, among
other matters:
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the title of the rights; |
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the securities for which the rights are exercisable; |
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the date of determining the security holders entitled to the
rights distribution; |
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the aggregate number of rights issued and the aggregate number
of shares of common stock or preferred stock or warrants
purchasable upon exercise of the rights; |
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the extent to which the rights are transferable; |
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any provisions for changes to or adjustments in the exercise
price or number of securities issuable upon exercise of the
rights; |
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the conditions to completion of the rights offering; |
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any applicable federal income tax considerations; |
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if applicable, the material terms of any standby underwriting
or other purchase arrangement that we may enter into in connection
with the rights offering; |
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the date on which the right to exercise the rights will
commence and the date on which the rights will expire; and |
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any other terms of the rights, including terms, procedures and
limitations relating to the exchange and exercise of the
rights. |
Each right would entitle the holder of the rights to purchase for
cash the amount of shares of common stock or preferred stock or
warrants at the exercise price set forth in the applicable
prospectus supplement. Rights may be exercised at any time up to
the close of business on the expiration date for the rights
provided in the applicable prospectus supplement. After the close
of business on the expiration date, all unexercised rights will
become void.
We may determine to offer any unsubscribed securities directly to
persons other than our security holders, to or through agents,
underwriters or dealers or through a combination of such methods,
including pursuant to standby arrangements, as described in the
applicable prospectus supplement.
Until a holder exercises the rights to purchase shares of our
common stock or preferred stock or warrants, the holder will not
have any rights as a holder of shares of our common stock or
preferred stock or warrants, as the case may be, by virtue of
ownership of the rights.
Units
We may issue units consisting of one or more of the other
securities described in this prospectus, in any prospectus
supplement or a free writing prospectus in any combination. Each
unit will be issued so that the holder of the unit is also the
holder, with the rights and obligations of a holder, of each
security included in the unit. The unit agreement under which a
unit is issued may provide that the securities included in the unit
may not be held or transferred separately, at any time or at any
time before a specified date or upon the occurrence of a specified
event or occurrence.
The applicable prospectus supplement or free writing prospectus
will describe:
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the designation and terms of the units and of the securities
comprising the units, including whether and under what
circumstances those securities may be held or transferred
separately; |
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any unit agreement under which the units will be issued; |
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any provisions for the issuance, payment, settlement, transfer
or exchange of the units or of the securities comprising the units;
and |
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whether the units will be issued in fully registered or global
form. |
Global Securities
Book-Entry, Delivery and Form
Unless we indicate differently in any applicable prospectus
supplement or free writing prospectus, the securities initially
will be issued in book-entry form and represented by one or more
global notes or global securities (collectively, “global
securities”). The global securities will be deposited with, or
on behalf of, DTC and registered in the name of Cede & Co., the
nominee of DTC. Unless and until it is exchanged for individual
certificates evidencing securities under the limited circumstances
described below, a global security may not be transferred except as
a whole by the depositary to its nominee or by the nominee to the
depositary, or by the depositary or its nominee to a successor
depositary or to a nominee of the successor depositary.
DTC has advised us that it is:
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a limited-purpose trust company organized under the New York
Banking Law; |
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a “banking organization” within the meaning of the New York
Banking Law; |
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a member of the Federal Reserve System; |
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a “clearing corporation” within the meaning of the New York
Uniform Commercial Code; and |
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a “clearing agency” registered pursuant to the provisions of
Section 17A of the Exchange Act. |
DTC holds securities that its participants deposit with DTC. DTC
also facilitates the settlement among its participants of
securities transactions, such as transfers and pledges, in
deposited securities through electronic computerized book-entry
changes in participants’ accounts, thereby eliminating the need for
physical movement of securities certificates. “Direct participants”
in DTC include securities brokers and dealers, including
underwriters, banks, trust companies, clearing corporations and
other organizations. DTC is a wholly-owned subsidiary of The
Depository Trust & Clearing Corporation (“DTCC”). DTCC
is the holding company for DTC, National Securities Clearing
Corporation and Fixed Income Clearing Corporation, all of which are
registered clearing agencies. DTCC is owned by the users of its
regulated subsidiaries. Access to the DTC system is also available
to others, which we sometimes refer to as indirect participants,
that clear through or maintain a custodial relationship with a
direct participant, either directly or indirectly. The rules
applicable to DTC and its participants are on file with the
SEC.
Purchases of securities under the DTC system must be made by or
through direct participants, which will receive a credit for the
securities on DTC’s records. The ownership interest of the actual
purchaser of a security, which we sometimes refer to as a
beneficial owner, is in turn recorded on the direct and indirect
participants’ records. Beneficial owners of securities will not
receive written confirmation from DTC of their purchases. However,
beneficial owners are expected to receive written confirmations
providing details of their transactions, as well as periodic
statements of their holdings, from the direct or indirect
participants through which they purchased securities. Transfers of
ownership interests in global securities are to be accomplished by
entries made on the books of participants acting on behalf of
beneficial owners. Beneficial owners will not receive certificates
representing their ownership interests in the global securities,
except under the limited circumstances described below.
To facilitate subsequent transfers, all global securities deposited
by direct participants with DTC will be registered in the name of
DTC’s partnership nominee, Cede & Co., or such other name as
may be requested by an authorized representative of DTC. The
deposit of securities with DTC and their registration in the name
of Cede & Co. or such other nominee will not change the
beneficial ownership of the securities. DTC has no knowledge of the
actual beneficial owners of the securities. DTC’s records reflect
only the identity of the direct participants to whose accounts the
securities are credited, which may or may not be the beneficial
owners. The participants are responsible for keeping account of
their holdings on behalf of their customers.
So long as the securities are in book-entry form, you will receive
payments and may transfer securities only through the facilities of
the depositary and its direct and indirect participants. We will
maintain an office or agency in the location specified in the
prospectus supplement for the applicable securities, where notices
and demands in respect of the securities and the indenture may be
delivered to us and where certificated securities may be
surrendered for payment, registration of transfer or exchange.
Conveyance of notices and other communications by DTC to direct
participants, by direct participants to indirect participants and
by direct participants and indirect participants to beneficial
owners will be governed by arrangements among them, subject to any
legal requirements in effect from time to time.
Redemption notices will be sent to DTC. If less than all of the
securities of a particular series are being redeemed, DTC’s
practice is to determine by lot the amount of the interest of each
direct participant in the securities of such series to be
redeemed.
Neither DTC nor Cede & Co. (or such other DTC nominee) will
consent or vote with respect to the securities. Under its usual
procedures, DTC will mail an omnibus proxy to us as soon as
possible after the record date. The omnibus proxy assigns the
consenting or voting rights of Cede & Co. to those direct
participants to whose accounts the securities of such series are
credited on the record date, identified in a listing attached to
the omnibus proxy.
So long as securities are in book-entry form, we will make payments
on those securities to the depositary or its nominee, as the
registered owner of such securities, by wire transfer of
immediately available funds. If securities are issued in definitive
certificated form under the limited circumstances described below
and unless if otherwise provided in the description of the
applicable securities herein or in the applicable prospectus
supplement, we will have the option of making payments by check
mailed to the addresses of the persons entitled to payment or by
wire transfer to bank accounts in the United States designated in
writing to the applicable trustee or other designated party at
least 15 days before the applicable payment date by the persons
entitled to payment, unless a shorter period is satisfactory to the
applicable trustee or other designated party.
Redemption proceeds, distributions and dividend payments on the
securities will be made to Cede & Co., or such other nominee as
may be requested by an authorized representative of DTC. DTC’s
practice is to credit direct participants’ accounts upon DTC’s
receipt of funds and corresponding detail information from us on
the payment date in accordance with their respective holdings shown
on DTC records. Payments by participants to beneficial owners will
be governed by standing instructions and customary practices, as is
the case with securities held for the account of customers in
bearer form or registered in “street name.” Those payments will be
the responsibility of participants and not of DTC or us, subject to
any statutory or regulatory requirements in effect from time to
time. Payment of redemption proceeds, distributions and dividend
payments to Cede & Co., or such other nominee as may be
requested by an authorized representative of DTC, is our
responsibility; disbursement of payments to direct participants is
the responsibility of DTC; and disbursement of payments to the
beneficial owners is the responsibility of direct and indirect
participants.
Except under the limited circumstances described below, purchasers
of securities will not be entitled to have securities registered in
their names and will not receive physical delivery of securities.
Accordingly, each beneficial owner must rely on the procedures of
DTC and its participants to exercise any rights under the
securities and the indenture.
The laws of some jurisdictions may require that some purchasers of
securities take physical delivery of securities in definitive form.
Those laws may impair the ability to transfer or pledge beneficial
interests in securities.
DTC may discontinue providing its services as securities depositary
with respect to the securities at any time by giving reasonable
notice to us. Under such circumstances, in the event that a
successor depositary is not obtained, securities certificates are
required to be printed and delivered.
As noted above, beneficial owners of a particular series of
securities generally will not receive certificates representing
their ownership interests in those securities. However, if:
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DTC notifies us that it is unwilling or unable to continue as a
depositary for the global security or securities representing such
series of securities or if DTC ceases to be a clearing agency
registered under the Exchange Act at a time when it is required to
be registered and a successor depositary is not appointed within 90
days of the notification to us or of our becoming aware of DTC’s
ceasing to be so registered, as the case may be; |
|
· |
we determine, in our sole discretion, not to have such
securities represented by one or more global securities; or |
|
· |
an Event of Default has occurred and is continuing with respect
to such series of securities, |
we will prepare and deliver certificates for such securities in
exchange for beneficial interests in the global securities. Any
beneficial interest in a global security that is exchangeable under
the circumstances described in the preceding sentence will be
exchangeable for securities in definitive certificated form
registered in the names that the depositary directs. It is expected
that these directions will be based upon directions received by the
depositary from its participants with respect to ownership of
beneficial interests in the global securities.
PLAN OF DISTRIBUTION
We may sell the securities offered pursuant to this prospectus from
time to time in one or more transactions, including, without
limitation:
|
· |
to or through underwriters; |
|
· |
through broker-dealers (acting as agent or principal); |
|
· |
directly by us to one or more purchasers (including our
affiliates and stockholders), through a specific bidding or auction
process, a rights offering or otherwise; |
|
· |
through a combination of any such methods of sale; or |
|
· |
through any other methods described in a prospectus
supplement. |
The distribution of securities may be effected, from time to time,
in one or more transactions, including:
|
· |
block transactions (which may involve crosses) and transactions
on any national exchange or any other organized market where the
securities may be traded; |
|
· |
purchases by a broker-dealer as principal and resale by the
broker-dealer for its own account pursuant to a prospectus
supplement; |
|
· |
ordinary brokerage transactions and transactions in which a
broker-dealer solicits purchasers; |
|
· |
sales “at the market” to or through a market maker or into an
existing trading market, on an exchange or otherwise; and |
|
· |
sales in other ways not involving market makers or established
trading markets, including direct sales to purchasers. |
The applicable prospectus supplement will describe the terms of the
offering of the securities, including:
|
· |
the name or names of any underwriters, if, and if required, any
dealers or agents; |
|
· |
the purchase price of the securities and the proceeds we will
receive from the sale; |
|
· |
any underwriting discounts and other items constituting
underwriters’ compensation; |
|
· |
any discounts or concessions allowed or re-allowed or paid to
dealers; and |
|
· |
any securities exchange or market on which the securities may
be listed or traded. |
We may distribute the securities from time to time in one or more
transactions at:
|
· |
a fixed price or prices, which may be changed; |
|
· |
market prices prevailing at the time of sale; |
|
· |
prices related to such prevailing market prices; or |
Only underwriters named in the prospectus supplement are
underwriters of the securities offered by the prospectus
supplement.
If underwriters are used in an offering, we will execute an
underwriting agreement with such underwriters and will specify the
name of each underwriter and the terms of the transaction
(including any underwriting discounts and other terms constituting
compensation of the underwriters and any dealers) in a prospectus
supplement. The securities may be offered to the public either
through underwriting syndicates represented by managing
underwriters or directly by one or more investment banking firms or
others, as designated. If an underwriting syndicate is used, the
managing underwriter(s) will be specified on the cover of the
prospectus supplement. If underwriters are used in the sale, the
offered securities will be acquired by the underwriters for their
own accounts and may be resold from time to time in one or more
transactions, including negotiated transactions, at a fixed public
offering price or at varying prices determined at the time of sale.
Any public offering price and any discounts or concessions allowed
or re-allowed or paid to dealers may be changed from time to time.
Unless otherwise set forth in the prospectus supplement, the
obligations of the underwriters to purchase the offered securities
will be subject to conditions precedent, and the underwriters will
be obligated to purchase all of the offered securities, if any are
purchased.
We may grant to the underwriters options to purchase additional
securities to cover over-allotments, if any, at the public offering
price, with additional underwriting commissions or discounts, as
may be set forth in a related prospectus supplement. The terms of
any over-allotment option will be set forth in the prospectus
supplement for those securities.
If a dealer is used in the sale of the securities, we, or an
underwriter, will sell the securities to the dealer, as principal.
The dealer may then resell the securities to the public at varying
prices to be determined by the dealer at the time of resale. To the
extent required, we will set forth in the prospectus supplement,
document incorporated by reference or free writing prospectus, as
applicable, the name of the dealer and the terms of the
transactions.
We may sell the securities directly or through agents we designate
from time to time. We will name any agent involved in the offering
and sale of securities and we will describe any commissions we will
pay the agent in the prospectus supplement.
We may authorize agents or underwriters to solicit offers by
institutional investors to purchase securities from us at the
public offering price set forth in the prospectus supplement
pursuant to delayed delivery contracts providing for payment and
delivery on a specified date in the future. We will describe the
conditions to these contracts and the commissions we must pay for
solicitation of these contracts in the prospectus supplement.
In connection with the sale of the securities, underwriters,
dealers or agents may receive compensation from us or from
purchasers of the securities for whom they act as agents, in the
form of discounts, concessions or commissions. Underwriters may
sell the securities to or through dealers, and those dealers may
receive compensation in the form of discounts, concessions or
commissions from the underwriters or commissions from the
purchasers for whom they may act as agents. Underwriters, dealers
and agents that participate in the distribution of the securities,
and any institutional investors or others that purchase securities
directly for the purpose of resale or distribution, may be deemed
to be underwriters, and any discounts or commissions received by
them from us and any profit on the resale of the common stock by
them may be deemed to be underwriting discounts and commissions
under the Securities Act. No FINRA member firm may receive
compensation in excess of that allowable under FINRA rules,
including Rule 5110, in connection with the offering of the
securities.
We may provide agents, underwriters and other purchasers with
indemnification against particular civil liabilities, including
liabilities under the Securities Act, or contribution with respect
to payments that the agents, underwriters or other purchasers may
make with respect to such liabilities. Agents and underwriters may
engage in transactions with, or perform services for, us in the
ordinary course of business.
To facilitate the public offering of a series of securities,
persons participating in the offering may engage in transactions
that stabilize, maintain, or otherwise affect the market price of
the securities. This may include over-allotments or short sales of
the securities, which involves the sale by persons participating in
the offering of more securities than have been sold to them by us.
In addition, those persons may stabilize or maintain the price of
the securities by bidding for or purchasing securities in the open
market or by imposing penalty bids, whereby selling concessions
allowed to underwriters or dealers participating in any such
offering may be reclaimed if securities sold by them are
repurchased in connection with stabilization transactions. The
effect of these transactions may be to stabilize or maintain the
market price of the securities at a level above that which might
otherwise prevail in the open market. Such transactions, if
commenced, may be discontinued at any time. We make no
representation or prediction as to the direction or magnitude of
any effect that the transactions described above, if implemented,
may have on the price of our securities.
Unless otherwise specified in the applicable prospectus supplement,
any common stock sold pursuant to a prospectus supplement will be
eligible for trading as quoted on the OTCQB. Any underwriters to
whom securities are sold by us for public offering and sale may
make a market in the securities, but such underwriters will not be
obligated to do so and may discontinue any market making at any
time without notice.
In order to comply with the securities laws of some states, if
applicable, the securities offered pursuant to this prospectus will
be sold in those states only through registered or licensed brokers
or dealers. In addition, in some states securities may not be sold
unless they have been registered or qualified for sale in the
applicable state or an exemption from the registration or
qualification requirement is available and complied with.
To the extent required, this prospectus may be amended or
supplemented from time to time to describe a specific plan of
distribution.
LEGAL MATTERS
Certain legal matters governed by New York law with respect to the
validity of certain of the offered securities will be passed upon
for us by Troutman Pepper Hamilton Sanders LLP, New York, New York.
Certain legal matters governed by Nevada law with respect to the
validity of certain of the offered securities will be passed upon
for us by Ballard Spahr LLP, Las Vegas, Nevada.
EXPERTS
Armanino LLP,
independent registered public accounting firm, has audited our
consolidated financial statements included in our Annual Report on
Form 10-K for the year ended April 30, 2020, as set forth in their
report, which is incorporated by reference in the prospectus and
elsewhere in this registration statement. Our consolidated
financial statements are incorporated by reference in reliance on
Armanino LLP’s report,
given on their authority as experts in accounting and auditing.
WHERE YOU CAN FIND MORE
INFORMATION
This prospectus and any subsequent prospectus supplements do not
contain all of the information in the Registration Statement. We
have omitted from this prospectus some parts of the Registration
Statement as permitted by the rules and regulations of the SEC.
Statements in this prospectus concerning any document we have filed
as an exhibit to the Registration Statement or that we otherwise
filed with the SEC are not intended to be comprehensive and are
qualified in their entirety by reference to these filings. In
addition, we file annual, quarterly and current reports and other
information with the SEC. The SEC maintains a website that contains
reports and information statements and other information that
registrants file electronically with the SEC, including us. The
SEC’s website can be found at http://www.sec.gov. In
addition, we make available on or through our website copies of
these reports as soon as reasonably practicable after we
electronically file or furnished them to the SEC. Our website can
be found at http:www.pharmacyte.com. Our website is not a
part of this prospectus.
INFORMATION INCORPORATED BY
REFERENCE
We have elected to incorporate certain information by reference
into this prospectus. By incorporating by reference, we can
disclose important information to you by referring you to other
documents we have filed or will file with the SEC. The information
incorporated by reference is deemed to be part of this prospectus,
except for information incorporated by reference that is superseded
by information contained in this prospectus. This means that you
must look at all of the SEC filings that we incorporate by
reference to determine if any statements in the prospectus or any
document previously incorporated by reference have been modified or
superseded. This prospectus incorporates by reference the documents
set forth below that we have previously filed with the SEC, except
in each case the information contained in such document to the
extent “furnished” and not “filed”:
|
· |
Our Annual Report on Form 10-K for the fiscal year
ended April 30, 2020, filed with the SEC on August 13, 2020. |
|
· |
Our Quarterly Report on Form 10-Q for the quarterly period
ended July 31, 2020, filed with the SEC
on September 11, 2020. |
|
· |
Our Quarterly Report on Form 10-Q for the quarterly period
ended October 31, 2020, filed with the
SEC on December 11, 2020. |
|
· |
Our Quarterly Report on Form 10-Q for the quarterly period
ended January 31, 2021, filed with the
SEC on March 12, 2021. |
|
· |
Our Current Report on Form 8-K filed with the SEC on
October 16, 2020. |
We also incorporate by reference all documents we file in the
future pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act after the date of this prospectus and prior to the
sale of all the securities covered by this prospectus (including
all such documents filed with the SEC after the date of the initial
filing of the Registration Statement that contains this prospectus
and prior to effectiveness of the Registration Statement or after
such effectiveness), except in each case the information contained
in such document to the extent “furnished” and not “filed.”
You may obtain copies of these documents on the website
maintained by the SEC at http://www.sec.gov, or from us
without charge (other than exhibits to such documents, unless such
exhibits are specifically incorporated by reference into such
documents) by writing us at Corporate Secretary, PharmaCyte
Biotech, Inc., 23046 Avenida de la Carlota, Suite 600, Laguna
Hills, California 92653 or visiting our website at
http://www.pharmacyte.com.
Any statement contained in a document incorporated or deemed to be
incorporated by reference in this prospectus shall be deemed to be
modified or superseded for the purposes of this prospectus to the
extent that a statement contained herein, any prospectus supplement
or in any other subsequently filed document which also is or deemed
to be incorporated by reference herein modifies or supersedes that
statement. Any statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part
of this prospectus.

8,430,000 Shares of Common
Stock
Pre-funded Warrants to Purchase up
to 5,570,000 Shares of Common Stock
PROSPECTUS SUPPLEMENT
H.C. WAINWRIGHT & CO.
August 19, 2021
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