As filed with the Securities and Exchange
Commission on November 5, 2021
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Registration No. 333- |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
PHARMACYTE BIOTECH,
INC.
(Exact name of registrant as specified in its charter)
Nevada |
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3960 Howard Hughes Parkway
Suite 500,
Las Vegas, NV 89169
(917) 595-2850 |
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62-1772151 |
(State
or other jurisdiction of
incorporation or organization) |
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(Address, including zip code, and telephone
number, including area code, of registrant’s principal executive
offices) |
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(I.R.S. Employer Identification
Number) |
Kenneth L. Waggoner
Chief Executive Officer
PharmaCyte Biotech, Inc.
3960 Howard Hughes Parkway, Suite 500
Las Vegas, NV 89169
(917) 595-2850
(Name, address, including zip code,
and telephone number,
including area code, of agent for service) |
Copies to:
Merrill M. Kraines, Esq.
Troutman Pepper Hamilton Sanders LLP
875 Third Avenue
New York, New York 10022
Telephone: (212) 808-2711
Facsimile: (212) 658-9982
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Approximate date of commencement of proposed sale to the public:
From time to time after this Registration Statement becomes
effective.
If the only securities being registered on this form are being
offered pursuant to dividend or interest reinvestment plans, please
check the following box. ☐
If any of the securities being registered on this form are to be
offered on a delayed or continuous basis pursuant to Rule 415
under the Securities Act of 1933, as amended (“Securities
Act”), other than securities offered only in connection with
dividend or interest reinvestment plans, check the following
box. ☒
If this Form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act,
please check the following box and list the Securities Act
Registration Statement number of the earlier effective Registration
Statement for the same offering. ☐
If this Form is a post-effective amendment filed pursuant to
Rule 462(c) under the Securities Act, check the following box
and list the Securities Act Registration Statement number of the
earlier effective Registration Statement for the same
offering. ☐
If this Form is a Registration Statement pursuant to General
Instruction I.D. or a post-effective amendment thereto that shall
become effective upon filing with the Commission pursuant to Rule
462(e) under the Securities Act, check the following
box. ☐
If this Form is a post-effective amendment to a registration
statement filed pursuant to General Instruction I.D. filed to
register additional securities or additional classes of securities
pursuant to Rule 413(b) under the Securities Act, check the
following box. ☐
Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated filer, a
smaller reporting company, or an emerging growth company. See the
definitions of “large accelerated filer,” “accelerated filer,”
“smaller reporting company,” and “emerging growth company” in rule
12b-2 of the Exchange Act.
Large
Accelerated Filer |
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☐ |
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Accelerated
Filer |
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☐ |
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Non-Accelerated Filer |
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☒ |
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Smaller Reporting
Company |
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☒ |
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Emerging Growth
Company |
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☐ |
If an emerging growth company, indicate by check mark if the
registrant has elected not to use the extended transition period
for complying with any new or revised financial accounting
standards provided pursuant to Section 7(a)(2)(B) of the Securities
Act. ☐
CALCULATION OF REGISTRATION FEE
Title of each class of
securities to be
registered |
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Amount to be
Registered(1)
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Proposed
maximum
offering price
per share |
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Proposed
maximum
aggregate
offering price (2) |
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Amount of
registration fee(3) |
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Series A Warrants |
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7,000,000 |
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$ |
5.00 |
|
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$ |
35,000,000 |
|
|
$ |
3,245 |
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Placement Agent
Warrants |
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1,050,000 |
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$ |
6.25 |
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$ |
6,562,500 |
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$ |
608 |
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Total |
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$ |
41,562,500 |
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$ |
3,853 |
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(1) Pursuant to Rule 416 under the Securities Act of 1933, as
amended (the “Securities Act”), the securities being registered
hereunder also include such indeterminate number of additional
shares of Common Stock as may from time to time be issued after the
date hereof as a result of stock splits, stock dividends,
recapitalizations or similar transactions.
(2) Represents shares of our Common Stock offered by the Selling
Stockholders issuable upon the exercise of warrants to purchase
Common Stock issued to the Selling Stockholders in a private
placement.
(3) The registration fee has been calculated in accordance with
Rule 457(o) under the Securities Act.
The registrant hereby amends this registration statement on such
date or dates as may be necessary to delay its effective date until
we shall file a further amendment which specifically states that
this registration statement shall thereafter become effective in
accordance with Section 8(a) of the Securities Act or until the
registration statement becomes effective on such date as the
Securities and Exchange Commission, acting pursuant to said Section
8(a), may determine.
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE
CHANGED. THE SELLING SECURITY HOLDERS NAMED IN THIS PROSPECTUS MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS
PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND IS NOT
SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION
WHERE THE OFFER OR SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION, DATED NOVEMBER 5, 2021
PROSPECTUS

PHARMACYTE BIOTECH, INC.
8,050,000 SHARES OF COMMON STOCK ISSUED
PURSUANT TO THE EXERCISE OF WARRANTS
This prospectus relates to the resale by the selling stockholders
(“Selling Stockholders”) named herein, including their transferees,
pledgees or donees, or their respective successors, of up to
8,050,000 shares (“Shares”) of PharmaCyte Biotech, Inc.’s
(“Company”) common stock, $.0001 par value (“Common Stock”). For
information about the Selling Stockholders, see “Selling Stockholders” on page 34.
Our Common Stock offered by the Selling Stockholders will be issued
pursuant to the exercise of warrants in accordance with their
terms. The Selling Stockholders may sell shares of Common Stock
from time to time in the principal market on which the Company’s
Common Stock is quoted at the prevailing market price or in
negotiated transactions. We are not selling any Common Stock under
this prospectus and will not receive any of the proceeds from the
sale of Common Stock by the Selling Stockholders. We will pay the
expenses of registering these Shares, including legal and
accounting fees. All selling and other expenses incurred by the
Selling Stockholders will be borne by the Selling Stockholders.
See “Plan of
Distribution.”
The Shares offered by the Selling Stockholders are issuable
pursuant to the exercise of 7,000,000 unregistered warrants
(“Series A Warrants”) sold in a private placement and issued under
that certain Securities Purchase Agreement dated as of August 19,
2021(“Purchase Agreement”) with each of the Selling Stockholders.
Each Series A Warrant has an exercise price of $5.00 per share, is
exercisable immediately, and will expire five years following the
date of issuance. In addition, the offered Shares include 1,050,00
shares of Common Stock issuable through the exercise of 1,050,000
warrants (“Placement Agent Warrants,” and, together with the Series
A Warrants, the “Warrants”) issued to H.C. Wainwright & Co.,
LLC (“Wainwright”) or its designees as the Company’s exclusive
placement agent for the Purchase Agreement and a concurrent
Registered Direct Offering (together, “Offerings”). The Placement
Agent Warrants have an exercise price of $6.25 per share and will
expire five years after the date of commencement of sales in the
Offerings. See “Private
Placement of Warrants” on page 32.
The timing and amount of any sale of Common Stock is within the
sole discretion of each Selling Stockholder.
Our Common Stock is traded on the Nasdaq Stock Market (“Nasdaq”)
under the symbol “PMCB”. On November 4, 2021, the closing sales
price for our Common Stock on Nasdaq was $3.02 per share.
The purchase of the Common Stock offered through this prospectus
involves a high degree of risk. You should consider carefully the
risk factors beginning on page 17 of this prospectus before
purchasing any of the securities offered by this
prospectus.
We may amend or supplement this prospectus from time to time by
filing amendments or supplements as required. 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 passed upon the adequacy or accuracy of this
prospectus. Any representation to the contrary is a criminal
offense.
The date of this prospectus is November 5, 2021.
TABLE OF CONTENTS
ABOUT THIS PROSPECTUS
The information contained in this prospectus is not complete and
may be changed. You should rely only on the information provided in
or incorporated by reference in this prospectus, in any prospectus
supplement or in a related free writing prospectus, or documents to
which we otherwise refer you. We have not authorized anyone else to
provide you with different information.
We have not authorized any dealer, agent or other person to give
any information or make any representation other than those
contained or incorporated by reference in this prospectus and any
accompanying prospectus supplement or any related free writing
prospectus. You must not rely upon any information or
representation not contained or incorporated by reference in this
prospectus or an accompanying prospectus supplement or any related
free writing prospectus. This prospectus and the accompanying
prospectus supplement and any related free writing prospectus, if
any, do not constitute an offer to sell or the solicitation of an
offer to buy any securities other than the registered securities to
which they relate, nor does this prospectus and the accompanying
prospectus supplement and any related free writing prospectus, if
any, constitute an offer to sell or the solicitation of an offer to
buy securities in any jurisdiction to any person to whom it is
unlawful to make such offer or solicitation in such jurisdiction.
You should not assume that the information contained in this
prospectus and the accompanying prospectus supplement and any
related free writing prospectus, if any, is accurate on any date
subsequent to the date set forth on the front of such document or
that any information we have incorporated by reference is correct
on any date subsequent to the date of the document incorporated by
reference, even though this prospectus and any accompanying
prospectus supplement and any related free writing prospectus is
delivered or securities are sold on a later date.
We further note that the representations, warranties and covenants
made by us in any agreement that is filed as an exhibit to any
document that is incorporated by reference in this prospectus were
made solely for the benefit of the parties to such agreement,
including, in some cases, for the purpose of allocating risk among
the parties to such agreements, and should not be deemed to be a
representation, warranty or covenant to you. Moreover, such
representations, warranties or covenants were accurate only as of
the date when made. Accordingly, such representations, warranties
and covenants should not be relied on as accurately representing
the current state of our affairs.
Unless otherwise indicated, information contained or incorporated
by reference in this prospectus concerning our industry, including
our general expectations and market opportunity, is based on
information from our own management estimates and research, as well
as from industry and general publications and research, surveys and
studies conducted by third parties. Management estimates are
derived from publicly available information, our knowledge of our
industry and assumptions based on such information and knowledge,
which we believe to be reasonable. In addition, assumptions and
estimates of our and our industry’s future performance are
necessarily uncertain due to a variety of factors, including those
described in “Risk Factors”
beginning on page 17 of this prospectus. These and other factors
could cause our future performance to differ materially from our
assumptions and estimates.
In this prospectus the “Company,” “Registrant,” “PharmaCyte,” “we,”
“us” and “our” refer to PharmaCyte Biotech, Inc., a Nevada
corporation, and, where appropriate, to its 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 copyrights. 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.
FORWARD-LOOKING STATEMENTS
This prospectus 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 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 whether the
United States Food and Drug Administration (“FDA”) approves our
Investigational New Drug Application (“IND”) after we submit a
response to the FDA’s clinical hold, so that we can commence our
planned clinical trial involving locally advanced, inoperable,
pancreatic cancer (“LAPC”); 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 trials to proceed
after submission and review of our response to the FDA’s clinical
hold. Additional assumptions relate to the 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:
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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; |
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our ability to advance any product candidates into, and
successfully complete, clinical studies and obtain regulatory
approval for them; |
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the timing or likelihood of regulatory filings and
approvals; |
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the commercialization, marketing and manufacturing of our
product candidates, if approved; |
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the pricing and reimbursement of our product candidates, if
approved; |
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the rate and degree of market acceptance and clinical utility
of any products for which we receive marketing approval; |
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the implementation of our strategic plans for our business,
product candidates and technology; |
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the scope of protection we have and are able to establish and
maintain for intellectual property rights covering our product
candidates and technology; |
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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; |
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our ability to maintain and establish collaborations; |
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our financial performance; |
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our ability to maintain compliance with Nasdaq listing
standards; |
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developments relating to our competitors and our industry,
including the impact of government regulation; |
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our ability to retain and attract senior management and
consultants; and |
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other risks and uncertainties, including those listed under the
caption “Risk Factors” in this prospectus or any other documents
incorporated by reference in this 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 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.
Any of the assumptions underlying the forward-looking statements
contained in this prospectus and the documents incorporated herein
by reference could prove inaccurate and, therefore, we cannot
assure you that the results 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.
PROSPECTUS SUMMARY
This summary highlights certain information about us, this
offering and information appearing elsewhere in this prospectus and
in the documents we incorporate by reference in this prospectus.
This summary is not complete and does not contain all of the
information that you should consider before investing in our
securities. After you carefully read this summary, to fully
understand our Company and this offering and its consequences to
you, you should read this entire prospectus and any related free
writing prospectus authorized by us, including the information
referred to under the heading “Risk Factors” in this prospectus
beginning on page 17, and any related free writing prospectus, as
well as the other documents that we incorporate by reference into
this prospectus, including our financial statements and the notes
to those financial statements, which are incorporated herein by
reference from our Annual Report on Form 10-K for the year ended
April 30, 2021, filed on August 10, 2021. Please read “Where You Can Find More Information”
on page 40 of this prospectus.
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, 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 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.
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.
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.
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.
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.
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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.
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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
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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
October 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:
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· |
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, 12 and
18-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 24 months of product stability. |
|
· |
We are involved in 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 are also involved in a (i)
Subchronic and Chronic Toxicity study (ii) a Skin Sensitization
study; (iii) an Acute Systematic Toxicity study; (iv) an Ames test
(Genotoxicity Bacteria and Reverse Mutation tests); (v) an
Intracutaneous test; (vi) a Complement Activation test; (vii) a
Hemolysis test; (viii) an In Vitro Cytotoxicity test; and (ix) 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 have commenced 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 have commenced 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. |
|
· |
We have completed the complement activation study. The study
results demonstrated that the capsule material we use does not
activate a major line of the human body’s innate defense – the
complement system. |
|
· |
Another positive result from a completed biocompatibility
showed that the empty capsule material is “non-hemolytic.” |
|
· |
Another completed biocompatibility study showed that the empty
capsule material is not “mutagenic.” |
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.
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 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 the patient’s 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.
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.
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 the Company’s 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 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. 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.
Recent Developments
Certificate of Amendment to Articles of
Incorporation
On June 30, 2021, at our Annual Meeting of Stockholders, our
stockholders approved a Certificate of Amendment to our Articles of
Incorporation to increase the number of authorized shares of Common
Stock from 2,500,000,000 shares to 50,000,000,000 shares. Upon
effectiveness of the 1:1,500 reverse stock split on July 12, 2021,
the number of authorized shares of our Common Stock was reduced
proportionately to 33,333,334 shares by operation of Nevada law and
the number of outstanding shares of our Common Stock was reduced to
1,591,420 shares. As of the date of this prospectus, and giving
effect to the offerings discussed below, the Company had 20,715,470
shares of Common Stock outstanding.
Reverse Stock Split
On June 30, 2021, our Board of Directors (“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
pursuant to a Certificate of Change filed in Nevada. Except as
otherwise indicated, all share and per share information in this
prospectus 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 12:01 a.m. Eastern Time on Monday, July
12, 2021.
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 and 899,027
pre-funded warrants (“August 9 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 (“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 (“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 the
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 Registered Direct Offering
Pursuant to the August 19, 2021 Purchase Agreement, the Company
agreed to sell in a registered direct offering (“Registered Direct
Offering”) 8,430,000 shares (“Shares”) of the Company’s Common
Stock and pre-funded warrants (“August 19 Pre-Funded Warrants”) to
purchase up to 5,570,000 shares of Common Stock. The Pre-Funded
Warrants have an exercise price of $0.001 per share and are
immediately exercisable and can be exercised at any time after
their original issuance until such August 19 Pre-Funded Warrants
are exercised in full. The Registered Direct Offering of the Shares
and the August 19 Pre-Funded Warrants was made pursuant to the
Company’s shelf registration statement on Form S-3 (File No.
333-255044), declared effective by the Securities and Exchange
Commission on April 14, 2021, 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
(“Securities Act”), and a prospectus supplement that the Company
has filed with the Securities and Exchange Commission relating to
such securities. At closing, we received net proceeds of
approximately $64 million after deducting placement fees and
estimated offering expenses.
August 2021 Warrant Exercises
As of August 18, 2021, all 899,027 of the August 9 Pre-funded
Warrants have been exercised.
As of August 31, 2021, 2,522,387 of the August Common Warrants have
been exercised, for aggregate gross proceeds to the Company of
$10,720,145.
As of August 31, 2021, 4,620,000 of the August 19 Pre-funded
Warrants have been exercised for aggregate gross proceeds to the
Company of $4,620.
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.
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 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. |
|
· |
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, if we are allowed to proceed with our planned
clinical trial, and those third parties may not perform
satisfactorily, including failing to meet deadlines for the
completion of such studies and trials. |
|
· |
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 of Common
Stock 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 are located at 3960 Howard Hughes
Parkway, Suite 500, Las Vegas, Nevada 89169, 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.
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 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 and incorporated by
reference herein, 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.
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 July 31, 2021, we had an accumulated deficit of
approximately $108.4 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. 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 may 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; |
|
· |
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; |
|
· |
the effect of competing technological and market
developments; |
|
· |
market acceptance of our product candidates; |
|
· |
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 |
|
· |
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, 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 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.
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; |
|
· |
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; |
|
· |
Administrative burdens of conducting clinical trials under
multiple foreign regulatory schemes; |
|
· |
Foreign exchange fluctuations; and |
|
· |
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, if
allowed to proceed, 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, if they are allowed
to proceed. 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, if
approved, 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. Matthias 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., if allowed to
proceed, 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
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 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 our market makers will
continue to make a market in our Common Stock. 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. We
cannot 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 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.
In order to remain listed on Nasdaq, we will be required to meet
the continued listing requirements of Nasdaq 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 Nasdaq or any other U.S. or nationally
recognized stock exchange. If, after listing, our Common Stock is
delisted from Nasdaq 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 November 4, 2021, there were 42,667 shares of Common Stock
issuable under outstanding options and 10,773,829 shares issuable
upon exercise of outstanding warrants at various exercise prices.
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 $48 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.
USE OF PROCEEDS
We will not receive any proceeds from the sale of the shares of
Common Stock by the Selling Stockholders. However, we will receive
proceeds from the exercise of the Warrants by the Selling
Stockholders to the extent they are exercised for cash. We estimate
that the maximum proceeds that we may receive from the exercise of
the Warrants, assuming all the Series A Warrants are exercised at
their exercise price of $5.00 and all the Placement Agent Warrants
are exercised at their exercise price of $6.25 will be $41,562,500.
We do not know, however, whether any of the Warrants will be
exercised or, if any of the Warrants are exercised, when they will
be exercised. It is possible that the Warrants will expire and
never be exercised. Further, in the event the registration
statement in which this prospectus forms a part does not stay
effective, the Warrants may be exercised on a cashless basis. In
these circumstances, even if the Warrants are exercised, we may not
receive any proceeds, or the proceeds that we do receive may be
less than what we might expect.
We intend to use the aggregate net proceeds from the exercise of
the Warrants by the Selling Stockholders to the extent they are
exercised for cash (in addition to the existing cash of the
Company) (i) to fully fund the Phase 2b clinical trial in LAPC, if
and when the clinical hold on the IND is lifted; (ii) to continue
development of the Company’s Cancer Program; (iii) to continue
development of the Company’s Diabetes Program; (iv) to continue
development of the Company’s Malignant Ascites Program; (v) and to
fund 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, we cannot specify with certainty the amount or
timing of the proceeds the Company will receive from the exercise
of the Warrants. 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.
The Selling Stockholders will pay any expenses incurred by the
Selling Stockholders for brokerage, accounting, tax or legal
services or any other expenses incurred by the Selling Stockholders
in disposing of their shares of Common Stock. We will bear all
other costs, fees and expenses incurred in effecting the
registration of the shares covered by this prospectus, including,
without limitation, all registration fees and fees and expenses of
our counsel and our accountants.
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 and will be dependent upon our financial condition,
results of operations, capital requirements, and such other factors
as our Board deems relevant.
PRIVATE PLACEMENT OF WARRANTS
On August 19, 2021, the Company entered into a securities purchase
agreement (“Purchase Agreement”) with certain institutional
investors (“Purchasers”). Under the Purchase Agreement, and
pursuant to an exemption from the registration requirements of
Section 5 of the Securities Act contained in Section 4(a)(2)
thereof and/or Regulation D thereunder, the Company sold Series A
Warrants to purchase 7,000,000 shares of Common Stock. The Selling
Stockholders were the Purchasers of the Series A Warrants under the
Purchase Agreement. Additionally, pursuant to its engagement letter
with Wainwright, the Company also issued 1,050,000 Placement Agent
Warrants to Wainwright or its designees.
The quantity, issue date, exercise price and expiration date of the
Series A Warrants and Placement Agent Warrants, respectively, are
listed in the table below:
Quantity |
|
|
Issuance Date |
|
Exercise Price |
|
|
Expiration Date |
7,000,0000 |
|
|
August 23,
2021 |
|
$ |
5.00 |
|
|
August 23,
2026 |
1,050,000 |
|
|
August 23, 2021 |
|
$ |
6.25 |
|
|
August 23, 2026 |
Each Series A Warrant is exercisable for one share of Common Stock
beginning on the date of issuance thereof and ending on the
five-year anniversary of such date. The Series A Warrants have an
exercise price of $5.00 per share. The exercise price and number of
shares of Common Stock issuable upon exercise of the Series A
Warrants are subject to adjustment in the event of any stock
dividend, split, recapitalization, reorganization or similar
transaction, as described in the Series A Warrants. Subject to
limited exceptions, a holder of a Series A Warrant will not have
the right to exercise any portion of its Series A Warrant if the
holder, together with its affiliates, 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 (“Beneficial Ownership Limitation”);
provided that upon 61 days’ prior notice to the Company, the holder
may elect to increase or decrease the Beneficial Ownership
Limitation, although in no event may the Beneficial Ownership
Limitation exceed 9.99%.
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.
Each Placement Agent Warrant is exercisable for one share of Common
Stock beginning on the date of commencement of sales in the
Registered Direct Offering and ending on the five-year anniversary
of such date. The Placement Agent Warrants have an exercise price
of $6.25 per share (which represents 125% of the offering price per
Share in the Registered Direct Offering). The Placement Agent
Warrants will terminate five years after the date of commencement
of sales in the Offerings. The exercise price and number of shares
of Common Stock issuable upon exercise of the Placement Agent
Warrants are subject to adjustment in the event of any stock
dividend, split, recapitalization, reorganization or similar
transaction, as described in the Placement Agent Warrants. Subject
to limited exceptions, a holder of a Placement Agent Warrant will
not have the right to exercise any portion of its Placement Agent
Warrant if the holder, together with its affiliates, 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 (the “Beneficial
Ownership Limitation”); provided that upon 61 days’ prior notice to
the Company, the holder may elect to increase or decrease the
Beneficial Ownership Limitation, although in no event may the
Beneficial Ownership Limitation exceed 9.99%.
In the event of any fundamental transaction, as described in the
Placement Agent 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
Placement Agent 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
Placement Agent Warrant is exercisable immediately prior to such
event. Notwithstanding the foregoing, in the event of a fundamental
transaction, the holders of the Placement Agent Warrants have the
right to require us or a successor entity to redeem the Placement
Agent Warrants for cash in the amount of the Black Scholes Value
(as defined in each Placement Agent Warrant) of the unexercised
portion of the Placement Agent 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 Placement Agent 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 Placement
Agent 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.
The Warrants will not be registered nor listed on any exchange. If
at the time of exercise of the Warrants there is no effective
registration statement registering, or the prospectus contained
therein is not available for the issuance of the Common Stock
underlying the Warrants to the applicable Selling Stockholder, then
such Warrant may also be exercised, in whole or in part, at such
time by means of a “cashless exercise” in which the Selling
Stockholder will be entitled to receive a number of shares of
Common Stock as determined by the terms of the Warrant.
There is no established trading market for the Warrants. We do not
intend to list the Warrants on any securities exchange or
nationally recognized trading system.
The foregoing description of the Warrants is qualified in its
entirety by reference to the Form of Series A Common Warrant
Purchase Warrant and the Form of Placement Agent Warrant, which are
included as Exhibits 4.2 and 4.3, respectively, to this
registration statement and are incorporated by reference to the
Company’s Form 8-K, filed with the SEC on August 23, 2021.
SELLING STOCKHOLDERS
We have prepared this prospectus to allow the Selling Stockholders
we have identified herein, including their transferees, pledgees,
donees and successors in interest, to offer for resale up to
8,050,000 shares of our Common Stock (assuming exercise of all
Warrants).
The Common Stock being offered by the Selling Stockholders is that
issuable to the Selling Stockholders upon exercise of the Warrants.
For additional information regarding the issuances of those shares
of Common Stock and Warrants, see “Private Placement of Warrants”
above. We are registering the Shares of Common Stock in order to
permit the Selling Stockholders to offer the Common Stock for
resale from time to time.
The registration of the sale of shares of Common Stock held by the
Selling Stockholders does not mean that they will sell or otherwise
dispose of all or any of those securities. The Selling Stockholders
may sell or otherwise dispose of all, a portion or none of such
shares from time to time. See “Plan of Distribution.” We do not
know the number of shares, if any, that will be offered for sale or
other disposition by any of the Selling Stockholders under this
prospectus. Furthermore, the Selling Stockholders may have sold,
transferred or disposed of the shares of Common Stock covered
hereby in transactions exempt from the registration requirements of
the Securities Act since the date on which we filed this
prospectus. As a result, we cannot estimate the number of shares of
Common Stock each of the Selling Stockholders will beneficially own
after termination of sales under this prospectus. In addition, each
of the Selling Stockholders may have sold, transferred or otherwise
disposed of all or a portion of its shares of Common Stock since
the date on which it provided information for the table below.
This prospectus generally covers the resale of the maximum number
of shares of Common Stock issuable upon exercise of the Warrants
issued pursuant to the Purchase Agreement, determined as if the
outstanding Warrants were exercised in full as of the trading day
immediately preceding the date this registration statement was
initially filed with the SEC, without regard to any limitations on
the exercise of the Warrants.
Except as otherwise described in this prospectus, none of the
Selling Stockholders has, or within the past three years has had,
any position, office or other material relationship with us or any
of our affiliates. Except for Wainwright or its designees, none of
the Selling Stockholders is a broker-dealer or an affiliate of a
broker-dealer.
Wainwright served as our exclusive placement agent in connection
with the Offerings. Pursuant to that engagement letter, dated as of
April 26, 2021, between the Company and Wainwright, we agreed to
pay Wainwright a placement agent fee of 7.5% of the aggregate gross
proceeds raised in the Offerings. In addition, the company agreed
to issue to Wainwright or its designees upon closing of the
Offerings, the Placement Agent Warrants. Each of Michael
Vasinkevich, Noam Rubinstein, Craig Schwabe and Charles Worthman
are associated persons of Wainwright and received Placement Agent
Warrants as Wainwright’s designee.
The table below sets forth certain information with respect to each
Selling Stockholder, including: (i) the name of each Selling
Stockholder; (ii) the number of shares of our Common Stock
beneficially owned by each Selling Stockholder before this
offering; (iii) the maximum number of shares being offered by each
Selling Stockholder pursuant to this prospectus; and (iv) each
Selling Stockholder’s beneficial ownership after completion of this
offering, assuming that all of the shares covered hereby (but no
other shares, if any, held by the Selling Stockholders) are
sold.
The table is based on information supplied to us by the Selling
Stockholders or in Schedules 13G or 13D and other public documents
filed with the SEC, with beneficial ownership and percentage
ownership determined in accordance with the rules and regulations
of the SEC, and includes information with respect to voting or
investment power with respect to shares of stock. This information
does not necessarily indicate beneficial ownership for any other
purpose.
The percentage of each Selling Stockholder’s ownership before and
after this offering is based on 20,715,470 shares of Common Stock
outstanding as of November 4, 2021 are as follows:
Name and Address of Selling
Stockholders |
No. of Shares of Common Stock
Beneficially Owned Prior to this Offering1,
2 |
No. of Shares of Common Stock
Offered by Selling Stockholders1 |
No. and Percentage of Outstanding
Shares of Common Stock Beneficially Owned Subsequent to this
Offering21 |
Alpha Capital
Anstalt3 |
545,716 |
250,00019 |
295,716, 2.6% |
Alto Opportunity Master Fund, SPC -
Segregated Master Portfolio B4 |
1,903,130 |
800,00019 |
1,103,130, 5.33% |
Anson East Master Fund
LP5 |
125,000 |
125,00019 |
0 |
Anson Investments Master Fund
LP5 |
492,647 |
375,00019 |
117,64722 |
Armistice Capital Master Fund
Ltd.6 |
1,500,000 |
1,500,00019 |
0 |
Bigger Capital Fund,
LP7 |
125,000 |
125,00019 |
0 |
Boothbay Absolute Return Strategies,
LP8 |
132,480 |
132,48019 |
0 |
Boothbay Diversified Alpha Master
Fund LP8 |
67,520 |
67,52019 |
0 |
Charles
Worthman9 |
13,147 |
10,50020 |
2,64722 |
Craig Schwabe9 |
44,372 |
35,43820 |
8,93422 |
District 2 Capital Fund
LP7 |
125,000 |
125,00019 |
0 |
Hudson Bay Master Fund
Ltd.10 |
250,000 |
250,00019 |
0 |
Intracoastal Capital
LLC11 |
623,647 |
500,00019 |
123,64722 |
Ionic Ventures,
LLC12 |
1,200,000 |
400,00019 |
800,000, 5.68% |
Iroquois Capital Investment Group
LLC13 |
75,000 |
75,00019 |
0 |
Iroquois Master Fund
Ltd13 |
175,000 |
175,00019 |
0 |
KBB Asset
Management14 |
431,353 |
250,00019 |
181,35322 |
Kingsbrook Opportunities Master Fund
LP15 |
50,000 |
50,00019 |
0 |
Michael
Vasinkevich9 |
843,055 |
673,31220 |
169,74322 |
Noam
Rubinstein9 |
414,132 |
330,75020 |
83,38222 |
S.H.N Financial Investments
LTD16 |
400,000 |
300,00019 |
100,00022 |
Sabby Volatility Warrant Master Fund,
Ltd.17 |
1,836,504 |
1,250,00019 |
586,504, 8.36% |
The Eleven Fund
LLC18 |
750,000 |
250,00019 |
500,000, 3.58% |
1 Includes the Common Stock issued under the applicable
Warrant agreement.
2 We have assumed that the Selling Stockholders will not
acquire beneficial ownership of any additional Common Stock issued
by us during the Offering.
3 Konrad Ackermann has sole voting and dispositive power
over the securities held for the account of this selling
stockholder. The selling stockholder’s address c/o LH Financial
Services Corp., 510 Madison Ave., Suite 1400, New York, NY
10022.
4 Ayrton Capital LLC, the investment manager to Alto
Opportunity Master Fund, SPC - Segregated Master Portfolio B, has
discretionary authority to vote and dispose of the shares held by
Alto Opportunity Master Fund, SPC - Segregated Master Portfolio B
and may be deemed to be the beneficial owner of these shares. Waqas
Khatri, in his capacity as Managing Member of Ayrton Capital LLC,
may also be deemed to have investment discretion and voting power
over the shares held by Alto Opportunity Master Fund, SPC -
Segregated Master Portfolio B. Ayrton Capital LLC and Mr. Khatri
each disclaim any beneficial ownership of these shares. The address
of Ayrton Capital LLC is 55 Post Rd West, 2nd Floor, Westport, CT
06880.
5 Anson Advisors Inc and Anson Funds Management LP, the
Co-Investment Advisers of Anson East Master Fund LP (“Anson East”)
and Anson Investments Master Fund LP (“Anson Investments”), hold
voting and dispositive power over the Common Shares held by Anson
East and Anson Investments. Bruce Winson is the managing member of
Anson Management GP LLC, which is the general partner of Anson
Funds Management LP. Moez Kassam and Amin Nathoo are directors of
Anson Advisors Inc. Mr. Winson, Mr. Kassam and Mr. Nathoo each
disclaim beneficial ownership of these Common Shares except to the
extent of their pecuniary interest therein. The principal business
address of Anson East and Anson Investments is Walkers Corporate
Limited, Cayman Corporate Centre, 27 Hospital Road, George Town,
Grand Cayman KY1-9008, Cayman Islands.
6 Armistice Capital LLC (“Armistice Capital”) is the
investment manager of Armistice Capital Master Fund Ltd. (“Master
Fund”), which holds voting and dispositive power over the Common
Shares held by this selling stockholder. The Master Fund’s Series A
Warrants are subject to a beneficial ownership limitation that
prevents the Master Fund from exercising any portion of the
warrants if such exercise would result in the Master Fund owning
more than 9.99% of our outstanding common stock. Steven Boyd is the
Managing Member of Armistice Capital. Armistice Capital and Mr.
Boyd disclaim beneficial ownership of the securities except to the
extent of their respective pecuniary interests therein. The
principal business address of Armistice Capital Master Fund Ltd. is
510 Madison Avenue, 7th Floor, New York, NY 10022.
7 Bigger Capital Fund GP, LLC (“Bigger GP”) is a general
partner of Bigger Capital Fund, LP (“Bigger Capital”) and District
2 Capital LP (“District 2”) is the investment manager of District 2
Capital Fund LP (“District 2 CF”). Michael Bigger is the managing
member of Bigger GP and District 2 and District 2 Holdings LLC
(“District 2 Holdings”), which is the managing member of District 2
GP LLC (“District 2 GP”), the general partner of District 2 CF.
Therefore, Mr. Bigger, District 2, District 2 Holdings and District
2 CF may be deemed to be the beneficial owner, and have the shared
power to dispose of or direct the disposition, of the shares
reported as beneficially owned by District 2 CF and Mr. Bigger and
Bigger GP may be deemed to be the beneficial owner, and have the
shared power to dispose of or direct the disposition, of the shares
reported as beneficially owned by Bigger Capital and District 2 CF.
The business address for Bigger Capital and District 2 CF is 11434
Glowing Sunset LN, Las Vegas, NV 89135.
8 Boothbay Diversified Alpha Master Fund LP, a Cayman
Islands limited partnership (“BBDAMF”) and Boothbay Diversified
Alpha Master Fund LP, a Cayman Islands limited partnership
(“BBDAMF”), are managed by Boothbay Fund Management, LLC, a
Delaware limited liability company (“Boothbay”). Boothbay, in its
capacity as the investment manager of BBARS and BBDAMF, has the
power to vote and the power to direct the disposition of all
securities held by BBARS and BBDAMF. Ari Glass is the Managing
Member of Boothbay. Each of BBARS, BBDAMF, Boothbay and Mr. Glass
disclaim beneficial ownership of these securities, except to the
extent of any pecuniary interest therein. The mailing address is
c/o Kingsbrook Partners LP, 689 Fifth Avenue, 12th
Floor, New York, NY 10022
9 The selling stockholder was issued Placement Agent
Warrants as a designee of Wainwright in connection with the
Offerings. Each selling stockholder has sole voting and dispositive
power over the securities held. The business address is c/o H.C.
Wainwright & Co., LLC, 430 Park Avenue, 3rd Floor, New York,
New York 10022.
10 Hudson Bay Capital Management LP, the investment
manager of Hudson Bay Master Fund Ltd. has voting and investment
power over these securities. Sander Gerber is the managing member
of Hudson Bay Capital GP LLC, which is the general partner of
Hudson Bay Capital Management LP. Each of Hudson Bay Master Fund
Ltd. and Sander Gerber disclaims beneficial ownership over these
securities. The address of Hudson Bay Master Fund Ltd. is 777 Third
Avenue, 30th Floor, New York, N.Y. 10017
11 Mitchell P. Kopin and Daniel B. Asher, each of whom
are managers of Intracoastal Capital LLC (“Intracoastal”), have
shared voting control and investment discretion over the securities
reported herein that are held by Intracoastal. As a result, each of
Mr. Kopin and Mr. Asher may be deemed to have beneficial ownership
(as determined under Section 13(d) of the Securities Exchange Act
of 1934, as amended (the “Exchange Act”)) of the securities
reported herein that are held by Intracoastal. Intracoastal’s
business address is 245 Palm Trail, Delray Beach, FL 33483.
12 Ionic Ventures, LLC (“Ionic”) is the record and
beneficial owner of the securities set forth in the table. Brendan
O’Neil and Keith Coulston are the managers of Ionic and in such
capacity have joint voting and dispositive power over shares held
by Ionic. Mr. O’Neil and Mr. Coulston each disclaim beneficial
ownership of the reported securities except to the extent of their
pecuniary interest therein. Ionic Ventures, LLC is not a licensed
broker dealer or an affiliate of a licensed broker dealer. The
address of Ionic Ventures, LLC is 3053 Fillmore Street, Ste. 256,
San Francisco, CA 94123.
13 Richard Abbe has the sole authority and
responsibility for the investments made on behalf of Iroquois
Capital Investment Group LLC (“ICIG”) as its managing member and
shares authority and responsibility for the investments made on
behalf of Iroquois Master Fund Ltd. (the “Iroquois Master Fund”)
with Kimberly Page, each of whom is a director of the Iroquois
Master Fund. As such, Mr. Abbe may be deemed to be the beneficial
owner of all shares of common stock held by and underlying the
securities reported herein held by Iroquois Master Fund and ICIG.
The selling stockholder’s address is 125 Park Ave., 25th Floor, New
York, NY 10017.
14 Steve Segal is the managing member of KBB Asset
Management, LLC (“KBB”) and has voting and dispositive power over
the shares held by KBB. The mailing address of KBB is 47 Calle Del
Sur, Palm Coast, Florida 32137.
15 Kingsbrook Partners LP (“Kingsbrook Partners”) is the
investment manager of Kingsbrook Opportunities Master Fund LP
(“Kingsbrook Opportunities”) and consequently has voting control
and investment discretion over securities held by Kingsbrook
Opportunities. Kingsbrook Opportunities GP LLC (“Opportunities GP”)
is the general partner of Kingsbrook Opportunities and may be
considered the beneficial owner of any securities deemed to be
beneficially owned by Kingsbrook Opportunities. KB GP LLC (“GP
LLC”) is the general partner of Kingsbrook Partners and may be
considered the beneficial owner of any securities deemed to be
beneficially owned by Kingsbrook Partners. Ari J. Storch, Adam J.
Chill and Scott M. Wallace are the sole managing members of
Opportunities GP and GP LLC and as a result may be considered
beneficial owners of any securities deemed beneficially owned by
Opportunities GP and GP LLC. Each of Kingsbrook Partners,
Opportunities GP, GP LLC and Messrs. Storch, Chill and Wallace
disclaim beneficial ownership of these securities. The business
address for Kingsbrook Opportunities is 689 Fifth Avenue,
12th Floor, New York, NY 10022.
16 Nir Shamir and Hadar
Shamir have the voting and investment control over the securities
held by S.H.N Financial Investments Ltd. The address of S.H.N
Financial Investments Ltd. is 3 Arik Einstein St., Herzheliya
Israel.
17 Sabby Management, LLC is the investment manager of
Sabby Volatility Warrant Master Fund, Ltd. (“Sabby”) and shares
voting and investment power with respect to these shares in this
capacity. As manager of Sabby Management, LLC, Hal Mintz also
shares voting and investment power on behalf of Sabby. Each of
Sabby Management, LLC and Mr. Mintz disclaims beneficial ownership
over the securities listed except to the extent of their pecuniary
interest therein. The principal business address of Sabby
Volatility Warrant Master Fund, Ltd. and Sabby Management, LLC is
10 Mountainview Road, Suite 205, Upper Saddle River, New Jersey
07458.
18 Hart Wasko is the natural person exercising control
over the securities held by the Eleven Fund LLC. The business
address for the Eleven Fund LLC is 463 Adams Street, Denver, CO
80206.
19 Represents Series A Warrants.
20 Represents Placement Agent Warrants
21 Assumes all Warrants are exercised. Ownership
percentage calculated based on the 20,715,470 shares of Common
Stock outstanding as of November 4, 2021.
22 Percentage of share ownership is less than one
percent.
PLAN OF DISTRIBUTION
We are registering the shares of Common Stock issuable to the
Selling Stockholders upon the exercise of the Warrants to permit
the resale of these shares of Common Stock by the holders of the
shares of Common Stock from time to time after the date of this
prospectus. We will not receive any of the proceeds from the sale
by the Selling Stockholders of the shares of Common Stock. However,
we will receive proceeds from the exercise of the Warrants by the
Selling Stockholders to the extent they are exercised for cash. We
will bear all fees and expenses incident to our obligation to
register the shares of Common Stock. The Selling Stockholders,
which may include donees, pledgees, transferees or other
successors-in-interest selling shares of Common Stock or interests
in shares of Common Stock received after the date of this
prospectus from a Selling Stockholder as a gift, pledge,
partnership distribution or other transfer, may sell all or a
portion of the shares of Common Stock beneficially owned by them
and offered hereby from time to time on any stock exchange, market
or trading facility on which the shares are traded or in private
transactions.
A Selling Stockholder may use any one or more of the following
methods when disposing of shares or interests therein:
|
· |
ordinary brokerage transactions and transactions in which the
broker-dealer solicits purchasers; |
|
· |
block trades in which the broker-dealer will attempt to sell
the shares as agent, but may position and resell a portion of the
block as principal to facilitate the transaction; |
|
· |
purchases by a broker-dealer as principal and resale by the
broker-dealer for its own account; |
|
· |
an exchange distribution in accordance with the rules of the
applicable exchange; |
|
· |
privately negotiated transactions; |
|
· |
through the writing or settlement of options or other hedging
transactions, whether through an options exchange or
otherwise; |
|
· |
through agreements between broker-dealers and the Selling
Stockholders to sell a specified number of such shares at a
stipulated price per share; |
|
· |
a combination of any such methods of sale; and |
|
· |
any other method permitted by applicable law. |
The Selling Stockholders may, from time to time, pledge or grant a
security interest in some or all of the shares of Common Stock
owned by them and, if they default in the performance of their
secured obligations, the pledgees or secured parties may offer and
sell the shares of Common Stock, from time to time, under this
prospectus, or under an amendment to this prospectus under Rule
424(b) or other applicable provision of the Securities Act amending
the list of selling stockholders to include the pledgee, transferee
or other successors in interest as selling stockholders under this
prospectus. The Selling Stockholders also may transfer the shares
of Common Stock in other circumstances, in which case the pledgees,
transferees or other successors in interest will be the selling
beneficial owners for purposes of this prospectus.
The Selling Stockholders also may resell all or a portion of the
shares in open market transactions in reliance upon Rule 144 under
the Securities Act, as permitted by that rule, or Section 4(a)(1)
under the Securities Act, if available, rather than under this
prospectus; provided that they meet the criteria and conform to the
requirements of those provisions.
In connection with the sale of our Common Stock or interests
therein, the Selling Stockholders may enter into hedging
transactions with broker-dealers or other financial institutions,
which may in turn engage in short sales of the Common Stock in the
course of hedging the positions they assume. The Selling
Stockholders may also sell shares of our Common Stock short and
deliver these securities to close out their short positions, or
loan or pledge the Common Stock to broker-dealers that in turn may
sell these securities. The Selling Stockholders may also enter into
options or other transactions with broker-dealers or other
financial institutions or the creation of one or more derivative
securities which require the delivery to each such broker-dealer or
other financial institution of shares offered by this prospectus,
which shares such broker-dealer or other financial institution may
resell pursuant to this prospectus (as supplemented or amended to
reflect such transaction). To the extent required, this prospectus
may be amended or supplemented from time to time to describe a
specific plan of distribution.
The aggregate proceeds to the Selling Stockholders from the sale of
the Common Stock offered by them will be the purchase price of the
Common Stock less discounts or commissions, if any. Each of the
Selling Stockholders reserves the right to accept and, together
with its agents from time to time, to reject, in whole or in part,
any proposed purchase of Common Stock to be made directly or
through agents. We will not receive any of the proceeds from this
offering except that we will receive proceeds from the exercise of
the Warrants by the Selling Stockholders to the extent they are
exercised for cash.
The Selling Stockholders and any underwriters, broker-dealers or
agents that participate in the sale of the Common Stock or
interests therein may be “underwriters” within the meaning of
Section 2(a)(11) of the Securities Act. Any discounts,
commissions, concessions or profit they earn on any resale of the
shares may be underwriting discounts and commissions under the
Securities Act. Selling Stockholders who are “underwriters” within
the meaning of Section 2(11) of the Securities Act will be
subject to the prospectus delivery requirements of the Securities
Act.
To the extent required, the shares of our Common Stock to be sold,
the names of the selling stockholders, the respective purchase
prices and public offering prices, the names of any agents, dealer
or underwriter, and any applicable commissions or discounts with
respect to a particular offer will be set forth in an accompanying
prospectus supplement or, if appropriate, a post-effective
amendment to the registration statement that includes this
prospectus.
If underwriters are used in the sale, the shares of Common Stock
will be acquired by the underwriters for their own account 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. In connection with
any such underwritten sale of shares of Common Stock, underwriters
may receive compensation from the Selling Stockholders, for whom
they may act as agents, in the form of discounts, concessions or
commissions. If the Selling Stockholders use an underwriter or
underwriters to effectuate the sale of shares of Common Stock, we
and/or they will execute an underwriting agreement with those
underwriters at the time of sale of those shares of Common
Stock.
To the extent required by law, the names of the underwriters will
be set forth in a prospectus supplement or, if appropriate, a
post-effective amendment to the registration statement that
includes the prospectus supplement and the accompanying prospectus
used by the underwriters to sell those securities. The obligations
of the underwriters to purchase those shares of Common Stock will
be subject to certain conditions precedent, and unless otherwise
specified in a prospectus supplement, the underwriters will be
obligated to purchase all the shares of Common Stock offered by
such prospectus supplement if any of such shares of Common Stock
are purchased. Any public offering price and any discounts or
concessions allowed or re-allowed or paid to dealers may be changed
from time to time.
We have advised the Selling Stockholders that the anti-manipulation
rules of Regulation M under the Exchange Act may apply to sales of
shares in the market and to the activities of the Selling
Stockholders and their affiliates. The Selling Stockholders may
indemnify any broker-dealer that participates in transactions
involving the sale of the shares against certain liabilities,
including liabilities arising under the Securities Act.
Listing
Our Common Stock is listed on Nasdaq under the symbol “PMCB.”
LEGAL MATTERS
Certain legal matters with respect to the validity of the Shares
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, 2021, as set forth in their
report, dated August 9, 2021, 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
We have filed with the SEC a registration statement on Form S-3
(File No. 333-), of which this prospectus is a part, under the
Securities Act, to register the shares of Common Stock offered by
this prospectus. However, this prospectus does not contain all of
the information contained 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 other reports, proxy
statements and other information with the SEC. Our SEC filings are
available to the public over the Internet at the SEC’s website at
www.sec.gov. Our Annual Report on Form 10-K, Quarterly Reports on
Form 10-Q, and Current Reports on Form 8-K, including any
amendments to those reports, and other information that we file
with or furnish to the SEC pursuant to Section 13(a) or 15(d) of
the Exchange Act can also be accessed free of charge through the
Internet. These filings will be available as soon as reasonably
practicable after we electronically file such material with, or
furnish it to, the SEC. The SEC’s website can be found at
http://www.sec.gov. In addition, we make available, for free, 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”:
|
· |
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. |
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., 3960
Howard Hughes Parkway, Suite 500, Las Vegas, Nevada 89169 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.

PHARMACYTE BIOTECH, INC.
8,050,000 Shares
Common Stock
Offered by the Selling Stockholders
November 5, 2021
PART II
INFORMATION NOT REQUIRED IN THE
PROSPECTUS
Item 13. Disclosure of Commission Position on Indemnification
for Securities Act Liabilities.
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers or persons
controlling the registrant pursuant to the foregoing provisions,
the registrant has been informed that in the opinion of the
Securities and Exchange Commission such indemnification is against
public policy as expressed in the Act and is therefore
unenforceable.
Item 14. Other Expenses of Issuance and Distribution.
Set forth below is an estimate (except in the case of the
registration fee) of the amount of fees and expenses to be incurred
in connection with the issuance and distribution of the offered
Securities registered hereby, other than underwriting discounts and
commissions, if any, incurred in connection with the sale of the
offered Securities. All such amounts will be borne by us.
|
|
AMOUNT |
SEC Registration Fee |
$ |
3,853 |
Printing Expenses |
$ |
5,000 |
Legal Fees and Expenses |
$ |
50,000 |
Accounting Fees and
Expenses |
$ |
12,500 |
Miscellaneous Fees and
Expenses |
$ |
1,500 |
Total |
$ |
72,853 |
Item 15. Indemnification of Directors and Officers.
Our directors and officers are indemnified as permitted by our
Articles of Incorporation, Bylaws and the Nevada Revised Statutes
(“NRS”). We believe that the indemnity and limitation of liability
provisions contained in the indemnification agreements that we have
with our officers and directors are necessary to attract and retain
qualified persons for those positions. No pending material
litigation or proceeding involving our directors, executive
officers, employees or other agents as to which indemnification is
being sought exists, and we are not aware of any pending or
threatened material litigation that may result in claims for
indemnification by any of our directors or executive officers.
The following is a summary of the relevant provisions in our
Articles of Incorporation, Bylaws, and Nevada law with regard to
limitation of liability and indemnification of our directors and
officers. The full provisions are contained in the NRS and such
documents.
Limitation of Liability
The NRS provide that an officer or director of a Nevada corporation
will not be liable for acts or omissions unless:
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The presumption that the officer or
director acted in good faith, on an informed basis and with a view
to the interests of the corporation is rebutted; |
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It is proven that the officer's or
director's acts or omissions constituted a breach of fiduciary
duties; and |
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It is proven that such breach
involved intentional misconduct, fraud, or a knowing violation of
law. |
Indemnification
The indemnification agreements that we have with our officers and
directors provide for their indemnification to the fullest extent
permitted by Nevada law. Our Bylaws and the NRS provide that we may
indemnify our directors and officers who were or are a party or are
threatened to be made a party to any threatened, pending, or
completed action, lawsuit, or proceeding, whether civil, criminal,
administrative, or investigative, including an action by or in the
right of the corporation, by reason of the fact that such person is
or was a director or officer of the corporation, or is or was
serving at the request of the corporation as a director, officer,
employee, or agent of another corporation, partnership, joint
venture, trust, or other enterprise, against expenses, including
attorneys’ fees, judgments, fines, and amounts paid in settlement
actually and reasonably incurred by such person in connection with
the action, lawsuit, or proceeding as long as such person:
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Is not liable under Section 78.138
of the NRS, i.e., exercised his or her powers as a director or
officer of the corporation in good faith and with a view to the
interests of the corporation; and |
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Acted in good faith and in a manner
that such person reasonably believed to be in or not opposed to the
best interest of the corporation, or, with respect to any criminal
action or proceeding, had reasonable cause to believe his conduct
was unlawful. |
We are required to indemnify any director or officer against
expenses, including attorneys’ fees, incurred by such person who
has been successful on the merits or otherwise in defense of any
action, suit, or proceeding.
We will advance expenses of any director or officer incurred in
defending any civil or criminal action, lawsuit, or proceeding and
such director or officer must repay the amount advanced if it is
ultimately determined by a court of competent jurisdiction that the
director or officer is not entitled to be indemnified by the
corporation.
We have been advised that, in the opinion of the SEC,
indemnification for liabilities arising under federal securities
laws is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for
indemnification against these types of liabilities, other than the
payment by us of expenses incurred or paid by a director, officer
or controlling person in the successful defense of any action,
lawsuit or proceeding, is asserted by a director, officer or
controlling person in connection with the securities being
registered, we will (unless in the opinion of our counsel, the
matter has been settled by controlling precedent) submit to a court
of appropriate jurisdiction, the question whether indemnification
by us is against public policy as expressed in the Securities Act
and will be governed by the final adjudication of such issue. The
legal process relating to this matter if it were to occur is likely
to be very costly and may result in us receiving negative
publicity, both of which are likely to materially reduce the market
and price for our shares.
We maintain a director and officer insurance policy that covers
certain liabilities of our directors and officers arising out of
claims based on acts or omissions in their capacities as directors
or officers.
Item 16. Exhibits.
See the Index of Exhibits immediately following the signature page
of this registration statement and which is incorporated herein by
reference.
Item 17. Undertakings.
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a. |
The undersigned
Registrant hereby undertakes: |
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To file, during any
period in which offers or sales are being made, a post-effective
amendment to this registration statement: |
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i. |
To include any prospectus
required by Section 10(a)(3) of the Securities Act; |
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ii. |
To reflect in the prospectus any
facts or events arising after the effective date of the
registration statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in the registration
statement. Notwithstanding the foregoing, any increase or decrease
in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and
any deviation from the low or high end of the estimated maximum
offering range may be reflected in the form of prospectus filed
with the SEC pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than 20% change in
the maximum aggregate offering price set forth in the “Calculation
of Registration Fee” table in the effective registration
statement. |
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iii. |
To include any material
information with respect to the plan of distribution not previously
disclosed in the Registration Statement or any material change to
such information in the registration statement; |
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Provided however, that paragraphs (a)(1)(i), (a)(1)(ii) and
(a)(1)(iii) of this section do not apply if the information
required to be included in a post-effective amendment by those
paragraphs is contained in reports filed with or furnished to the
SEC by the Registrant pursuant to Section 13 or Section 15(d) of
the Exchange Act that are incorporated by reference in the
registration statement, or is contained in a form of prospectus
filed pursuant to Rule 424(b) that is part of the registration
statement.
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2. |
That, for the purpose
of determining any liability under the Securities Act, each such
post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof. |
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3. |
To remove from
registration by means of a post-effective amendment any of the
securities being registered which remain unsold at the termination
of the offering. |
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4. |
That, for the purpose
of determining liability under the Securities Act to any
purchaser: |
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i. |
Each prospectus filed by the
Registrant pursuant to Rule 424(b)(3) shall be deemed to be part of
the registration statement as of the date the filed prospectus was
deemed part of and included in the registration statement;
and |
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ii. |
Each prospectus required to be
filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as part of a
registration statement in reliance on Rule 430B relating to an
offering made pursuant to Rule 415(a)(1)(i), (vii), or (x) for the
purpose of providing the information required by section 10(a) of
the Securities Act shall be deemed to be part of and included in
the registration statement as of the earlier of the date such form
of prospectus is first used after effectiveness or the date of the
first contract of sale of securities in the offering described in
the prospectus. As provided in Rule 430B, for liability purposes of
the issuer and any person that is at that date an underwriter, such
date shall be deemed to be a new effective date of the registration
statement relating to the securities in the registration statement
to which that prospectus relates, and the offering of such
securities at that time shall be deemed to be the initial bona fide
offering thereof; provided, however, that no statement made in a
registration statement or prospectus that is part of the
Registration Statement or made in a document incorporated or deemed
incorporated by reference into the registration statement or
prospectus that is part of the Registration Statement will, as to a
purchaser with a time of contract of sale prior to such effective
date, supersede or modify any statement that was made in the
registration statement or prospectus that was part of the
registration statement or made in any such document immediately
prior to such effective date. |
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b. |
The undersigned
Registrant hereby undertakes that, for purposes of determining any
liability under the Securities Act, each filing of the registrant’s
annual report pursuant to section 13(a) or section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee
benefit plan’s annual report pursuant to section 15(d) of the
Exchange Act) that is incorporated by reference in the Registration
Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial
bona fide offering thereof. |
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c. |
Insofar as
indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the SEC such
indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that
a claim for indemnification against such liabilities (other than
the payment by the Registrant of expenses incurred or paid by a
director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted
by such director, officer or controlling person in connection with
the securities being registered, the Registrant will, unless in the
opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by
the final adjudication of such issue. |
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SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant
certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused
this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of Las Vegas,
State of Nevada on November 5, 2021.
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PHARMACYTE BIOTECH,
INC.,
a Nevada corporation |
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By: |
/s/ Kenneth L.
Waggoner |
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Kenneth L. Waggoner |
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Chief Executive
Officer |
POWERS OF ATTORNEY
AND
SIGNATURES
Each person whose signature appears below constitutes and appoints
Kenneth L. Waggoner and Carlos A. Trujillo, or either of them, as
his or her true and lawful attorneys-in-fact and agents, each of
whom may act alone, with full powers of substitution and
resubstitution, for him or her and in his or her name, place and
stead, in any and all capacities, to sign any or all amendments to
this registration statement, including post-effective amendments to
this registration statement, registration statements filed pursuant
to Rule 429 under the Securities Act, and any related registration
statements necessary to register additional securities, and to file
the same, with all exhibits thereto, and other documents and in
connection therewith, with the Commission, granting unto said
attorneys-in-fact and agents, and each of them full power and
authority to do and perform each and every act and thing requisite
and necessary to be done in and about the premises, as fully to all
intents and purposes as he or she might or could do in person, and
hereby ratifies and confirms all his or her said attorneys-in-fact
and agents or any of them or his or her substitute or substitutes
may lawfully do or cause to be done by virtue hereof.
This Power of Attorney may be executed in multiple counterparts,
each of which shall be deemed an original, but which taken together
shall constitute one instrument.
Pursuant to the requirements of the Securities Act this
registration statement has been signed by the following persons in
the capacities and on the dates indicated.
Signature |
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Title |
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Date |
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/s/ Kenneth L.
Waggoner |
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Kenneth L. Waggoner |
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Chief Executive Officer
(Principal Executive Officer), Chairman of the Board and
Director |
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November 5, 2021 |
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/s/ Carlos A.
Trujillo |
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Carlos A. Trujillo |
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Chief Financial Officer and
Director (Principal Financial Officer and Principal Accounting
Officer) |
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November 5, 2021 |
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/s/ Gerald W.
Crabtree |
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Gerald W. Crabtree |
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Director |
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November 5, 2021 |
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/s/ Thomas Liquard |
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Thomas Liquard |
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Director |
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November 5, 2021 |
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/s/ Thomas C.K.
Yuen |
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Thomas C.K. Yuen |
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Director |
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November 5, 2021 |
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/s/ Michael M.
Abecassis |
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Michael M. Abecassis |
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Director |
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November 5, 2021 |
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/s/ Raymond C. F.
Tong |
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Raymond C. F. Tong |
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Director |
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November 5, 2021 |
INDEX OF EXHIBITS
The following documents are filed as exhibits to this registration
statement, including those exhibits incorporated herein by
reference to a prior filing under the Securities Act or the
Exchange Act:
PharmaCyte Biotech (NASDAQ:PMCB)
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PharmaCyte Biotech (NASDAQ:PMCB)
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