Table of Contents
PROSPECTUS
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Filed Pursuant to Rule 424(b)(2)
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Registration Statement No. 333-252588
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8,323,694 Shares of Common Stock
Pursuant to this prospectus, the selling
stockholders identified herein (the “Selling Stockholders”) are offering on a resale basis an aggregate of 8,323,694
shares of common stock, par value $0.0001 per share (the “Common Stock), of Phio Pharmaceuticals Corp. (“Phio,”
“we,” “our” or the “Company”), a Delaware corporation. 7,981,624 shares
of Common Stock offered for resale hereby were deemed acquired by certain Selling Stockholders pursuant to a securities purchase
agreement by and among the Company and the Selling Stockholders, dated January 21, 2021 (the “Purchase Agreement”),
of which 4,420,863 shares are outstanding and held by the Selling Stockholders and 3,560,761 shares are issuable upon the exercise
of warrants (the “Warrants”) held by the Selling Stockholders and issued pursuant to the Purchase Agreement.
342,070 shares of Common Stock are issuable upon the exercise of Warrants issued to the Company’s placement agent in connection
with the Purchase Agreement. The shares of Common Stock issued and the Common Stock issuable upon the exercise of the Warrants
were issued pursuant to an exemption from the registration requirements of the Securities Act of 1933, as amended (the “Securities
Act”) provided in Section 4(a)(2) thereof and/or Rule 506 of Regulations D promulgated thereunder. We are registering
the resale of the shares of Common Stock covered by this prospectus as required by the Purchase Agreement and registration rights
agreement entered into by and among the Company and the Selling Stockholders.
We will not receive any of the proceeds
from the sale by the Selling Stockholders of the Common Stock. Upon any exercise of the Warrants by payment of cash, however, we
will receive the exercise price of the Warrants. We intend to use those proceeds, if any, for general corporate purposes.
The Selling Stockholders may sell or otherwise
dispose of the Common Stock covered by this prospectus in a number of different ways and at varying prices. We provide more information
about how the Selling Stockholders may sell or otherwise dispose of the Common Stock covered by this prospectus in the section
entitled “Plan of Distribution” on page 12. Discounts, concessions, commissions and similar
selling expenses attributable to the sale of Common Stock covered by this prospectus will be borne by the Selling Stockholders.
We will pay all expenses (other than discounts, concessions, commissions and similar selling expenses) relating to the registration
of the Common Stock with the Securities and Exchange Commission.
Our common stock is listed on The Nasdaq
Capital Market under the symbol “PHIO.” On February 5, 2021, the last reported sale price of our common stock on
The Nasdaq Capital Market was $3.31 per share.
Investing in our securities involves
a high degree of risk. Before making any investment in these securities, you should consider carefully the risks and uncertainties
described in the section entitled “Risk Factors” beginning on page 7 of this prospectus.
Neither the Securities and Exchange
Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus
is truthful or complete. Any representation to the contrary is a criminal offense. The securities are not being offered in any
jurisdiction where the offer is not permitted.
The date of this prospectus is February
8, 2021
TABLE OF CONTENTS
ABOUT THIS PROSPECTUS
This prospectus is part of a registration
statement that we filed with the Securities and Exchange Commission (the “SEC”) utilizing a shelf registration
process. Under the shelf registration process, the Selling Stockholders may, from time to time, offer and sell the shares described
in this prospectus in one or more offerings. Information about the Selling Stockholders may change over time.
This prospectus provides you with a
general description of the shares the Selling Stockholders may offer. Each time the Selling Stockholders sell our shares using
this prospectus, to the extent necessary and required by law, we will provide a prospectus supplement that will contain specific
information about the terms of that offering, including the number of shares being offered, the manner of distribution, the identity
of any underwriters or other counterparties and other specific terms related to the offering. The prospectus supplement may also
add, update or change information contained in this prospectus. To the extent that any statement made in a prospectus supplement
is inconsistent with statements made in this prospectus, the statements made in this prospectus will be deemed modified or superseded
by those made in the prospectus supplement. You should read this prospectus, any applicable prospectus supplement and the
information incorporated by reference in this prospectus before making an investment in shares of our common stock. See “Where You Can Find More Information” for more information.
Neither we nor the Selling Stockholders
have authorized anyone to provide any information other than that contained in this prospectus or in any free writing prospectus
prepared by or on behalf of us or to which we may have referred you. Neither we nor the Selling Stockholders take any responsibility
for, nor can provide assurance as to the reliability of, any other information that others may give you. Neither we nor the Selling
Stockholders have authorized any other person to provide you with different or additional information, and neither of us are making
an offer to sell the shares in any jurisdiction where the offer or sale is not permitted. You should assume that the information
appearing in this prospectus is accurate only as of the date on the front cover of this prospectus, regardless of the time of delivery
of the prospectus or any sale of the ordinary shares. Our business, financial condition, results of operations and prospects may
have changed since the date on the front cover of this prospectus.
For investors outside of the United
States, neither we nor the Selling Stockholders have done anything that would permit the offering or possession or distribution
of this prospectus in any jurisdiction where action for that purpose is required, other than in the United States. You are required
to inform yourselves about and to observe any restrictions relating to the offering and the distribution of this prospectus outside
of the United States.
Cautionary
Note Regarding Forward-Looking Statements
This prospectus contains
forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements
can be identified by words such as “intends,” “believes,” “anticipates,” “indicates,”
“plans,” “expects,” “suggests,” “may,” “would,” “should,”
“potential,” “designed to,” “will,” “ongoing,” “estimate,” “forecast,”
“predict,” “could,” and similar references, although not all forward-looking statements contain these words.
Forward-looking statements are neither historical facts nor assurances of future performance. These statements are based only on
our current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, projections,
anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future,
they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which
are outside of our control. Risks that could cause actual results to vary from expected results expressed in our forward-looking
statements include, but are not limited to:
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our business and operations may be materially and adversely affected by the recent coronavirus outbreak;
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our product candidates are in an early stage of development and may fail or experience significant delays or may never advance to the clinic, which may materially and adversely impact our business;
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we are dependent on collaboration partners for the successful development of our adoptive cell therapy product candidates;
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the approach we are taking to discover and develop novel therapeutics using RNAi may never lead to marketable products;
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a number of different factors could prevent us from advancing into clinical development, obtaining regulatory approval, and ultimately commercializing our product candidates on a timely basis, or at all;
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the FDA could impose a unique regulatory regime for our therapeutics;
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we may be unable to protect our intellectual property rights licensed from other parties; our intellectual property rights may be inadequate to prevent third parties from using our technologies or developing competing products; and we may need to license additional intellectual property from others;
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we are subject to significant competition and may not be able to compete successfully;
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if we fail to attract, hire and retain qualified personnel, we may not be able to design, develop, market or sell our products or successfully manage our business;
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future financing may be obtained through, and future development efforts may be paid for by, the issuance of debt or equity, which may have an adverse effect on our stockholders or may otherwise adversely affect our business; and
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the price of our common stock has been and may continue to be volatile.
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Our actual results
and financial condition may differ materially from those indicated in the forward-looking statements as a result of the foregoing
factors, as well as those identified in this prospectus under the heading “Risk Factors” and in other filings the Company
periodically makes with the SEC. Therefore, you should not rely unduly on any of these forward-looking statements. Forward-looking
statements contained in this prospectus speak as of the date hereof and the Company does not undertake to update any of these forward-looking
statements to reflect a change in its views or events or circumstances that occur after the date of this report.
Prospectus
Summary
The following
summary highlights certain information contained elsewhere in this prospectus and the documents incorporated by reference
herein. This summary provides an overview of selected information and does not contain all of the information you should
consider in making your investment decision. Therefore, you should read the entire prospectus and the documents incorporated
by reference herein carefully before investing in our securities. Investors should carefully consider the information set
forth under “Risk Factors” beginning on page 7 of this prospectus and the financial
statements and other information incorporated by reference in this prospectus. In this prospectus, unless otherwise noted,
(1) the term “Phio” refers to Phio Pharmaceuticals Corp. and our subsidiary, MirImmune, LLC and (2) the terms
“Company,” “we,” “us,” and “our” refer to the ongoing business operations of
Phio and MirImmune, LLC, whether conducted through Phio or MirImmune, LLC.
Overview
Phio
Pharmaceuticals Corp. is a biotechnology company developing the next generation of immuno-oncology therapeutics based on our self-delivering
RNAi (“INTASYL™”) therapeutic platform. Our efforts are focused on silencing tumor-induced suppression
of the immune system through our proprietary INTASYL platform with utility in immune cells and the tumor micro-environment. Our
goal is to develop powerful INTASYL therapeutic compounds that can weaponize immune effector cells to overcome tumor immune escape,
thereby providing patients a potentially powerful new treatment option that goes beyond current treatment modalities.
Our development efforts
are based on our broadly patented INTASYL technology platform. Our INTASYL compounds do not require a delivery vehicle to penetrate
into tissues and cells and are designed to “silence” or down-regulate, the expression of a specific gene which is over-expressed
in cancer. We believe that our INTASYL platform has the potential to uniquely position the Company in the field of immuno-oncology
because of this and the following reasons:
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Efficient uptake of INTASYL to immune cells obviating the need for facilitated delivery (mechanical or formulation);
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Does not require permanent genetic modification;
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Can target multiple genes (i.e. multiple immunosuppression pathways) in a single therapeutic entity;
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Gene silencing by INTASYL has been shown to have a sustained, or long-term, effect in vivo;
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Favorable clinical safety profile of INTASYL with local administration; and
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Can be readily manufactured under current good manufacturing practices.
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The
self-delivering nature of our compounds makes INTASYL ideally suited for use with adoptive cell transfer (“ACT”)
treatments and direct therapeutic use. ACT consists of the infusion of immune cells with antitumor properties, after growing them
in a lab to large numbers. These cells can be derived from unmodified (i.e. naturally occurring) immune cells, immune cells isolated
from resected tumors, or genetically engineered immune cells recognizing tumor cells.
Regardless
of the source of immune cells (ACT or naturally occurring immune cells), in patients with solid tumors, these cells face several
hurdles. Multiple inhibitory mechanisms restrain immune cells from effectively eradicating tumors, including immune checkpoints,
reduced cell fitness and cell persistence. Furthermore, the immunosuppressive tumor micro-environment (the “TME”)
can pose a formidable barrier to immune cell infiltration and function.
We
have developed a product platform based on our INTASYL technology that allows easy, precise, rapid, and selective non-genetically
modified programming of ACT cells (ex vivo, during manufacturing) and of the TME (in vivo, by local application),
resulting in reduced immune inhibition and in improved immunotherapy.
Adoptive Cell
Transfer
ACT
includes a number of different types of immunotherapy treatments. These treatments use immune cells, isolated from patients, donors
or retrieved from allogeneic immune cell banks. They are grown in a lab to large numbers, followed by administering them to the
body to fight the cancer cells. Sometimes, immune cells that naturally recognize a tumor are used, while other times immune cells
are modified or “genetically engineered” to make them recognize and kill the cancer cells. There are several types
of ACT, including: a.) non-engineered cell therapy in which immune cells are grown from the patient’s tumor or blood, such
as tumor infiltrating lymphocytes (“TILs”), or from donor blood or tissue such as natural killer (“NK”)
cells, dendritic cells (“DC”) and macrophages, and b.) genetically engineered immune cells that are genetically
modified to recognize specific tumor proteins and to remain in an activated state (such as T cell receptor technology (“TCRs”),
chimeric antigen receptor (“CAR”) T cells, or CAR-NK cells).
In
ACT, immune cells are then expanded and modified before being returned and used to treat the patient. Multiple
inhibitory mechanisms restrain immune cells used in ACT from effectively eradicating tumors, including immune checkpoints, reduced
cell fitness and cell persistence, and other barriers to immune cell infiltration and function mainly in solid tumors. We
believe our INTASYL compounds are ideally suited to be used in combination with ACT, in order to make these immune cells more effective
without the need for additional complicated manufacturing steps and/or genetic engineering.
Our
approach builds on well-established methodologies of ACT and involves the treatment of immune cells with our INTASYL compounds
ex vivo while they are grown in the lab and before administering them to the patient. Because our INTASYL compounds do not
require a delivery vehicle to penetrate into the cells, we are able to enhance the function of these cells by merely adding our
INTASYL compounds during the expansion process and without the need for genetic engineering and without additional needed complex
manufacturing steps. By adding INTASYL to the cell culture media used during the cell expansion, we can reduce or eliminate the
expression of genes that make the immune cells less effective. For example, with our INTASYL compounds, we can reduce the expression
of immunosuppressive proteins by the therapeutic immune cells, potentially enabling them to overcome tumor resistance mechanisms
and thus improving their ability to destroy the tumor cells. In various types of immune cells tested to date, INTASYL treatment
results in potent silencing with close to 100% transfection efficiency and while maintaining nearly full cell viability. After
expanding these cells and enhancing them with INTASYL ex vivo, they are returned to the patient for treatment.
Our
lead product candidate and most advanced program being developed in ACT is PH-762, an INTASYL compound that targets the checkpoint
protein PD-1. Checkpoint proteins, such as PD-1, normally act as a type of “off switch” that prevents T cells from
attacking certain cells, such as cancer cells, in the body. Our T cells are immune cells that protect the body from cancer cells
and infections.
Data
developed by Phio and with collaborators has shown that PH-762 silences PD-1 checkpoint expression, thereby removing the “off
switch” and resulting in enhanced T cell activation and tumor cytotoxicity. Experimental
data shows that PH-762 can silence the expression of PD-1 in target human T cells in a potent and durable manner, and can increase
function of patient derived TILs for use in ACT, showing that PH-762 is suitable for use both in ACT and as a standalone therapeutic
through intra-tumoral injection. This supports the application of INTASYL technology in immunotherapy of cancer.
Our
second ACT product candidate PH-894, an INTASYL compound that targets BRD4, is a regulator of gene expression impacting cell differentiation.
In previous studies, PH-894 has been shown to improve T cell function and persistence by differentiating T cells into a more active
state (stem-cell like memory phenotype). Data, completed in partnership with the Karolinska Institutet, demonstrated that the application
of PH-894, was shown to silence BRD4 in human T cells during expansion for ACT, which has the potential to confer superior anti-tumor
activity, for example by improving T cell persistence. With this data we expanded our collaboration with the Karolinska Institutet
to build upon these findings and develop INTASYL compounds for additional targets and cell types toward clinical application in
areas of the Karolinska Institutet’s ongoing clinical research.
We
are also developing our INTASYL compound PH-804 for use in ACT. PH-804 targets the suppressive immune receptor TIGIT, which is
a checkpoint protein present on T cells and NK cells. To date, we have shown that PH-804 can silence the expression of TIGIT in
NK cells and T cells, overcoming their “off switch” and the cells becoming “weaponized” to kill cancer
cells.
In
March 2020, we entered into a collaboration and option agreement with Medigene AG and the Helmholtz Zentrum München (“HMGU”).
This three-way collaboration expands upon our outstanding research agreement with HMGU to design and develop novel candidates for
the use of INTASYL compounds in ACT to enhance immune cell function. Under the agreement, Medigene AG will contribute expertise
regarding clinical development, as well as proprietary research material and has the option to an exclusive license for the clinical
and/or commercial development of the potential immune cell enhancers.
Tumor Micro-Environment
The
TME is the environment that surrounds and feeds a tumor, including normal cells, blood vessels, immune cells, and the extracellular
matrix. The TME is an immunosuppressive microenvironment that inhibits the immune system’s natural ability to recognize and
destroy tumor cells by negatively impacting how immunosuppressive cells are being attracted and activated. Reprogramming different
components of the TME may overcome resistance to immunotherapy. Such reprogramming of the TME by INTASYL compounds through direct
local administration into the tumor, could potentially become an important form of therapy. The Company has previously shown in
a clinical setting that our INTASYL compounds are safe and well-tolerated following local administration, therefore we believe
that our INTASYL technology can not only be used with ACT, but can also be used as an independent therapeutic platform.
We
have pipeline programs in place for the development of INTASYL compounds for direct administration into the tumor, including the
use of PH-762, PH-804 and PH-894 for in situ transfection and activation of immune cells in the TME.
Data
presented in January 2020 from in vivo studies performed by the Company showed that intra-tumoral injection of a mouse version
of PH-804 reduced the tumor growth in colorectal carcinoma tumor bearing mice, which was shown to inhibit tumor growth and was
correlated with the silencing of TIGIT mRNA expression and in increase in cytotoxic effector T cells in the TME.
Building
on the animal data with PH-804, the Company conducted several animal studies with a mouse version of PH-762 and with PH-894 in
a validated mouse model of hepatocellular carcinoma. These studies showed that local administration of the mouse version of PH-762
or PH-894 through intra-tumoral injection resulted in potent anti-tumoral effects. The treated animals showed a complete and statistically
significant inhibition of tumor growth, whereas placebo treated animals displayed exponential tumor growth. The combined PH-804,
PH-762, and PH-894 data further shows that INTASYL compounds can trigger associated changes in the TME such as an increase of TILs,
including CD8+ T cells responsible for tumor cell killing, and an increase of activation markers on these cells. These preclinical
findings demonstrate that direct injection of INTASYL compounds can successfully infiltrate solid tumors and impact the TME by
activating the immune response in animal models of solid tumors resulting in reduced tumor growth. This is one of the key challenges
for many other immunotherapy platforms to be able to achieve an adequate therapeutic effect in solid tumors.
We
are also investigating other relevant compounds for TME targets, such as PH-790, an INTASYL compound targeting PD-L1. PD-L1 is
a protein formed by cancer cells that activate the PD-1 “off switch” on immune cells. Our approach with PH-790 is to
block the formation of the PD-L1 protein, which may prevent cancer cells from inactivating T cells and attack the cancer, and will
be evaluated alongside PH-762. Previously, a series of preclinical in vivo studies
in tumor models showed dose-dependent attenuated tumor growth for the INTASYL compounds compared to control groups. Recent
data presented at the 35th Annual Meeting of Society for Immunotherapy of Cancer in November 2020 demonstrated
that the antitumoral efficacy of our individual pipeline products, PH-762, PH-790 and PH-804, can be further improved by combining
them in a single drug treatment. This data showed that the combination of our INTASYL compounds inhibited tumor growth without
having a negative impact on the tolerability of the treatment.
Corporate Information
We were incorporated
in the state of Delaware in 2011 as RXi Pharmaceuticals Corporation. On November 19, 2018, the Company changed its name to Phio
Pharmaceuticals Corp., to reflect its transition from a platform company to one that is fully committed to developing groundbreaking
immuno-oncology therapeutics. Our executive offices are located at 257 Simarano Drive, Suite 101, Marlborough, MA 01752, and our
telephone number is (508) 767-3861. The Company’s website address is http://www.phiopharma.com. Our website and the
information contained on that site, or connected to that site, is not part of or incorporated by reference into this prospectus.
Our certificate of
incorporation provides that the Court of Chancery of the State of Delaware is the exclusive forum for the following types of actions
or proceedings: any derivative action or proceeding brought on behalf of the Company, any action asserting a claim of breach of
a fiduciary duty owed by any director, officer or other employee of the Company to the Company or the Company’s stockholders,
any action asserting a claim against the Company arising pursuant to any provision of the Delaware General Corporation Law or the
Company’s certificate of incorporation or bylaws, or any action asserting a claim against the Company governed by the internal
affairs doctrine. Despite the fact that our certificate of incorporation provides for this exclusive forum provision to be applicable
to the fullest extent permitted by applicable law, Section 27 of the Securities Act and Exchange Act of 1934, as amended (the “Exchange
Act”), creates exclusive federal jurisdiction over all suits brought to enforce any duty or liability created by the
Exchange Act or the rules and regulations thereunder and Section 22 of the Securities Act, creates concurrent jurisdiction for
federal and state courts over all suits brought to enforce any duty or liability created by the Securities Act or the rules and
regulations thereunder. As a result, this provision of our certificate of incorporation would not apply to claims brought to enforce
a duty or liability created by the Securities Act, Exchange Act, or any other claim for which the federal courts have exclusive
jurisdiction.
THE OFFERING
Pursuant to this prospectus, the Selling Stockholders are offering on a resale basis an aggregate of 8,323,694 shares of Common Stock. 7,981,624 shares of Common Stock offered for resale hereby were acquired by certain Selling Stockholders pursuant to the Purchase Agreement by and among the Company and the Selling Stockholders, dated January 21, 2021, of which 4,420,863 shares are outstanding and held by the Selling Stockholders and 3,560,761 shares are issuable upon the exercise of the Warrants held by the Selling Stockholders and issued pursuant to the Purchase Agreement. 342,070 shares of Common Stock are issuable upon the exercise of Warrants issued to the Company’s placement agent in connection with the Purchase Agreement
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Common Stock to be offered by the Selling Stockholders
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4,420,863 shares of Common Stock and 3,902,831 shares of Common Stock issuable upon the exercise of Warrants.
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Common Stock outstanding prior to this offering
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10,201,836 shares.
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Common Stock to be outstanding after this offering
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14,104,667 shares (assuming the exercise of all Warrants).
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Use of proceeds:
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We will not receive any of the proceeds from
the sale by the Selling Stockholders of the Common Stock. Upon any exercise of the Warrants by payment of cash, however, we will
receive the exercise price of the Warrants. See “Use of Proceeds” on page 8 of this prospectus.
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Risk factors:
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You should read the “Risk
Factors” section beginning on page 7 of this prospectus for a discussion of factors to consider carefully before deciding
to invest in shares of our securities.
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Nasdaq Capital Market symbol:
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Our common stock is listed on The Nasdaq Capital Market under the symbol “PHIO.” We do not intend to apply for listing of the Warrants on any securities exchange or nationally recognized trading system.
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RISK FACTORS
Investing
in our securities involves a high degree of risk. Before investing in our securities, you should carefully consider the risks,
uncertainties and assumptions contained in this prospectus and discussed under the heading “Risk Factors” included
in our Annual Report on Form 10-K for the year ended December 31, 2019 and subsequent Quarterly Reports on Form 10-Q, which are
on file with the SEC and are incorporated herein by reference, and which may be amended, supplemented or superseded from time to
time by other reports we file with the SEC in the future, including any accompanying prospectus supplement and the documents incorporated
by reference therein. Our business, financial condition, results of operations and future growth prospects could be materially
and adversely affected by any of these risks. In these circumstances, the market price of our Common Stock could decline, and you
may lose all or part of your investment.
USE OF PROCEEDS
We will not receive any of the proceeds
from the sale of the Common Stock by the Selling Stockholders. Some of the shares offered hereby are issuable upon the exercise
of the Warrants. Upon exercise of such Warrants for cash, we will receive the applicable cash exercise price paid by the holders
of the Warrants. We intend to use those proceeds, if any, for general corporate purposes.
SELLING STOCKHOLDERS
The Common Stock being offered by the Selling
Stockholders are those previously issued to the Selling Stockholders, and those issuable to the Selling Stockholders, upon exercise
of the Warrants. The Selling Stockholders acquired the Common Stock and the Warrants pursuant to the Purchase Agreement. We are
registering the shares of Common Stock in order to permit the Selling Stockholders to offer the shares for resale from time to
time. The Selling Stockholders may sell some, all or none of their shares of Common Stock. We do not know how long the Selling
Stockholders will hold the Warrants, whether any will exercise the Warrants, and upon such exercise, how long such Selling Stockholders
will hold the shares of Common Stock before selling them, and we currently have no agreements, arrangements or understandings with
the Selling Stockholders regarding the sale of any of the shares. Except for the ownership of the shares of Common stock and the
Warrants, the Selling Stockholders have not had any material relationship with us within the past three years.
The table below lists
the Selling Stockholders and other information regarding the beneficial ownership of the shares of Common Stock by each of the
Selling Stockholder based on information supplied to us by the Selling Stockholders. The second column lists the number of shares
of Common Stock beneficially owned by each Selling Stockholder, based on its ownership of the shares of Common Stock and warrants,
as of the date such information was provided to us, assuming exercise of the warrants held by the selling shareholders on that
date, without regard to any limitations on exercises. The third column lists the number shares of Common Stock being offered by
this prospectus by the Selling Stockholders.
In accordance with the terms of a registration
rights agreement with the Selling Stockholders, this prospectus generally covers the resale of the sum of (i) the number of shares
of Common Stock issued to the Selling Stockholders pursuant to the Purchase Agreement and (ii) the maximum number of shares of
Common Stock issuable upon exercise of the Warrants, 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, each as of the trading
day immediately preceding the applicable date of determination and all subject to adjustment as provided in the registration right
agreement, without regard to any limitations on the exercise of the Warrants. The fourth and fifth columns assume the sale of all
of the shares of Common Stock offered by the Selling Stockholders pursuant to this prospectus. Except as noted below, beneficial
ownership is determined in accordance with Section 13(d) of the Exchange Act and Rule 13d-3 thereunder. The percentage of shares
beneficially owned prior to the offering is based on 10,201,836 shares of our Common Stock actually outstanding as of January 25,
2021.
Under the terms of the Warrants and other
warrants held by the Selling Stockholders, a Selling Stockholder may not exercise such securities to the extent such exercise would
cause such Selling Stockholder, together with its affiliates and attribution parties, to beneficially own a number of shares of
Common Stock which would exceed 4.99% of our then outstanding Common Stock following such exercise, excluding for purposes of such
determination shares of common stock issuable upon exercise of the warrants which have not been exercised. The number of shares
in the second and fourth columns do not reflect this limitation. The Selling Stockholders may sell all, some or none of their shares
in this offering. See “Plan of Distribution.”
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Shares Beneficially Owned
After this Offering
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Selling Stockholder
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Number of Shares Beneficially
Owned Before this
Offering(1)
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Number of Shares to be Sold in
this Offering
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Number of Shares
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Percentage of Total Outstanding Common Stock
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Alpha Capital Anstalt(2)
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427,525
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427,525
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–
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Altium Growth Fund, LP(3)
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1,140,066
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1,140,066
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–
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Anson Investments Master Fund LP(4)
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353,949
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262,500
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91,499
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*
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Anson East Master Fund LP(5)
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87,500
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87,500
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–
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Armistice Capital Master Fund, Ltd.(6)
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2,612,213
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1,995,113
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617,100
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4.19%
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Bigger Capital Fund, LP(7)
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379,563
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288,750
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90,813
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Brio Capital Master Fund LTD.(8)
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175,000
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175,000
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–
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Empery Asset Master, LTD(9)
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1,024,090
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878,930
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145,160
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1.02%
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Empery Tax Efficient, LP(10)
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284,889
|
|
|
|
259,947
|
|
|
|
24,942
|
|
|
|
*
|
|
Empery Tax Efficient III, LP(11)
|
|
|
286,206
|
|
|
|
286,206
|
|
|
|
–
|
|
|
|
*
|
|
Intracoastal Capital, LLC(12)
|
|
|
1,360,204
|
|
|
|
855,048
|
|
|
|
505,156
|
|
|
|
3.46%
|
|
Iroquois Master Fund, Ltd.(13)
|
|
|
668,176
|
|
|
|
478,826
|
|
|
|
189,350
|
|
|
|
1.32%
|
|
Iroquois Capital Investment Group LLC(14)
|
|
|
315,996
|
|
|
|
233,713
|
|
|
|
82,283
|
|
|
|
*
|
|
MMCAP International Inc. SPC(15)
|
|
|
612,500
|
|
|
|
612,500
|
|
|
|
–
|
|
|
|
*
|
|
Noam Rubinstein(16)
|
|
|
214,061
|
|
|
|
107,752
|
|
|
|
106,309
|
|
|
|
*
|
|
Craig Schwabe(16)
|
|
|
20,944
|
|
|
|
11,545
|
|
|
|
9,399
|
|
|
|
*
|
|
Michael Vasinkevich(16)
|
|
|
435,974
|
|
|
|
219,352
|
|
|
|
216,622
|
|
|
|
1.51%
|
|
Charles Worthman(16)
|
|
|
6,796
|
|
|
|
3,421
|
|
|
|
3,375
|
|
|
|
*
|
|
*Represents beneficial ownership of less
than one percent.
(1) The ability to exercise warrants held
by the Selling Stockholders is subject to a beneficial ownership limitation that, at the time of initial issuance of the warrants,
was capped at either 4.99% or 9.99% beneficial ownership of the Company’s issued and outstanding common stock (post-exercise).
These beneficial ownership limitations may be adjusted up or down, subject to providing advanced notice to the Company, provided
that any increases in beneficial ownership limitations only take effect upon 61 days advance notice. Beneficial ownership as reflected
in the selling stockholder table reflects the total number of shares potentially issuable underlying warrants and does not give
effect to these beneficial ownership limitations. Accordingly, actual beneficial ownership, as calculated in accordance with Section
13(d) and Rule 13d-3 thereunder may be lower than as reflected in the table.
(2) Nicola Feuerstein
has sole voting and dispositive power over the securities held for the account of this Selling Stockholder. The Selling Stockholder’s
address is Lettstrasse 32, 9490 Vaduz, Principality of Liechtenstein.
(3)
Jacob Gottlieb has sole voting and dispositive power over the securities held by Altium Growth Fund, LP. The principal business
address of Altium Growth Fund, LP is 152 West 57th Street, Floor 20, New York, New York 10019.
(4) Anson Advisors Inc and Anson Funds
Management LP, the Co-Investment Advisers of Anson Investments Master Fund LP (“Anson”), hold voting and dispositive
power over the Common Shares held by Anson. 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 is Walkers Corporate Limited, Cayman Corporate Centre, 27 Hospital Road, George Town, Grand
Cayman KY1-9008, Cayman Islands.
(5) Anson Advisors Inc and Anson Funds
Management LP, the Co-Investment Advisers of Anson East Master Fund LP (“Anson”), hold voting and dispositive
power over the Common Shares held by Anson. 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 is Walkers Corporate Limited, Cayman Corporate Centre, 27 Hospital Road, George Town, Grand
Cayman KY1-9008, Cayman Islands.
(6) The
shares are directly held by Armistice Capital Master Fund Ltd., a Cayman Islands exempted company (the "Master Fund"),
and may be deemed to be indirectly beneficially owned by: (i) Armistice Capital, LLC ("Armistice Capital"), as the investment
manager of the Master Fund; and (ii) Steven Boyd, as the Managing Member of Armistice Capital. The number of shares includes
1,612,213 shares of common stock issuable upon exercise of the pre-funded warrants and the warrants, both of which are subject
to certain beneficial ownership limitations. Armistice Capital and Steven Boyd disclaim
beneficial ownership of the securities except to the extent of their respective pecuniary interests therein.
(7)
Michael Bigger is a managing member of Bigger Capital Fund, LP and has sole voting and dispositive power over the securities held
by Bigger Capital Fund, LP. The principal business address of Bigger Capital Fund, LP is 11434 Glowing Sunset, Las Vegas, NV 89135.
(8)
Shaye Hirsch has sole voting and dispositive power over the securities held by Brio Capital Master Fund Ltd. The principal business
address of Brio Capital Master Fund Ltd. is c/o Brio Capital Management LLC, 100 Merrick Road, Suite 401W, Rockville Centre, New
York 11570.
(9) Empery Asset Management LP, the authorized
agent of Empery Asset Master, Ltd (“EAM”), has discretionary authority to vote and dispose of the securities
listed in the table above held by EAM and may be deemed to be the beneficial owner of such securities. Martin Hoe and Ryan Lane,
in their capacity as investment managers of Empery Asset Management LP, may also be deemed to have investment discretion and voting
power over such securities held by EAM. EAM, Mr. Hoe and Mr. Lane each disclaim any beneficial ownership of such securities.
(10) Empery Asset Management LP, the authorized
agent of Empery Tax Efficient, LP (“ETE”), has discretionary authority to vote and dispose of the securities
listed in the table above held by ETE and may be deemed to be the beneficial owner of such securities. Martin Hoe and Ryan Lane,
in their capacity as investment managers of Empery Asset Management LP, may also be deemed to have investment discretion and voting
power over such securities held by ETE. ETE, Mr. Hoe and Mr. Lane each disclaim any beneficia1 ownership of such securities.
(11) Empery Asset Management LP, the authorized
agent of Empery Tax Efficient III, LP (“ETE III”), has discretionary authority to vote and dispose of the securities
listed in the table listed above held by ETE III and may be deemed to be the beneficial owner of such securities. Martin Hoe and
Ryan Lane, in their capacity as investment managers of Empery Asset Management LP, may also be deemed to have investment discretion
and voting power over such securities held by ETE III. ETE III, Mr. Hoe and Mr. Lane each disclaim any beneficial ownership of
such securities.
(12) Mitchell P. Kopin (“Mr. Kopin”)
and Daniel B. Asher (“Mr. 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 Exchange Act)
of the securities reported herein that are held by Intracoastal.
(13) Iroquois Capital Management L.L.C.
is the investment manager of Iroquois Master Fund, Ltd. Iroquois Capital Management, LLC has voting control and investment discretion
over securities held by Iroquois Master Fund. As Managing Members of Iroquois Capital Management, LLC, Richard Abbe and Kimberly
Page make voting and investment decisions on behalf of Iroquois Capital Management, LLC in its capacity as investment manager to
Iroquois Master Fund Ltd. As a result of the foregoing, Mr. Abbe and Mrs. Page may be deemed to have beneficial ownership (as determined
under Section 13(d) of the Exchange Act) of the shares held by Iroquois Capital Management and Iroquois Master Fund. The Selling
Stockholder’s address is 125 Park Avenue, 25th Floor, New York, New York
10017.
(14) Richard Abbe is the managing member
of Iroquois Capital Investment Group LLC. Mr. Abbe has voting control and investment discretion over securities held by Iroquois
Capital Investment Group LLC. As such, Mr. Abbe may be deemed to be the beneficial owner (as determined under Section 13(d) of
the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) of the shares held by Iroquois Capital Investment
Group LLC. The Selling Stockholder’s address is 125 Park Avenue, 25th Floor,
New York, New York 10017.
(15)
Matthew MacIssac is the Secretary of MM Asset Management Inc. and an investment advisor to MMCAP International Inc. SPC and has
shared voting and dispositive power over the securities held by MMCAP International Inc. SPC. The principal business address of
MMCAP International Inc. SPC is Mount Governance Services (Cayman), 94 Solaris Avenue, Camana Bay, P.O. Box 1348, Grand Cayman,
Cayman Islands KY1-1108.
(16)
The Selling Stockholder was issued Warrants as a representative of H.C. Wainwright, the Company’s placement agent, in connection
with the Purchase Agreement and each representative has sole voting and dispositive power over the securities held. The business
address is c/o H.C. Wainwright, 430 Park Avenue, 3rd Floor, New York, New York 10128.
PLAN OF DISTRIBUTION
Each Selling Stockholder
of the securities and any of their pledgees, assignees and successors-in-interest may, from time to time, sell any or all of their
securities covered hereby on the principal Trading Market or any other stock exchange, market or trading facility on which the
securities are traded or in private transactions. These sales may be at fixed or negotiated prices. A Selling Stockholder may use
any one or more of the following methods when selling securities:
|
·
|
ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers;
|
|
·
|
block trades in which the broker-dealer will attempt to sell the securities as agent but may position and resell a portion
of the block as principal to facilitate the transaction;
|
|
·
|
purchases by a broker-dealer as principal and resale by the broker-dealer for its account;
|
|
·
|
an exchange distribution in accordance with the rules of the applicable exchange;
|
|
·
|
privately negotiated transactions;
|
|
·
|
settlement of short sales;
|
|
·
|
in transactions through broker-dealers that agree with the Selling Stockholders to sell a specified number of such securities
at a stipulated price per security;
|
|
·
|
through the writing or settlement of options or other hedging transactions, whether through an options exchange or otherwise;
|
|
·
|
a combination of any such methods of sale; or
|
|
·
|
any other method permitted pursuant to applicable law.
|
The Selling Stockholders
may also sell securities under Rule 144 or any other exemption from registration under the Securities Act, if available, rather
than under this prospectus.
Broker-dealers engaged
by the Selling Stockholders may arrange for other brokers-dealers to participate in sales. Broker-dealers may receive commissions
or discounts from the Selling Stockholders (or, if any broker-dealer acts as agent for the purchaser of securities, from the purchaser)
in amounts to be negotiated, but, except as set forth in a supplement to this Prospectus, in the case of an agency transaction
not in excess of a customary brokerage commission in compliance with FINRA Rule 2440; and in the case of a principal transaction
a markup or markdown in compliance with FINRA IM-2440.
In connection with
the sale of the securities or interests therein, the Selling Stockholders may enter into hedging transactions with broker-dealers
or other financial institutions, which may in turn engage in short sales of the securities in the course of hedging the positions
they assume. The Selling Stockholders may also sell securities short and deliver these securities to close out their short positions,
or loan or pledge the securities to broker-dealers that in turn may sell these securities. The Selling Stockholders may also enter
into option or other transactions with broker-dealers or other financial institutions or create one or more derivative securities
which require the delivery to such broker-dealer or other financial institution of securities offered by this prospectus, which
securities such broker-dealer or other financial institution may resell pursuant to this prospectus (as supplemented or amended
to reflect such transaction).
The Selling Stockholders
and any broker-dealers or agents that are involved in selling the securities may be deemed to be “underwriters” within
the meaning of the Securities Act in connection with such sales. In such event, any commissions received by such broker-dealers
or agents and any profit on the resale of the securities purchased by them may be deemed to be underwriting commissions or discounts
under the Securities Act. Each Selling Stockholder has informed the Company that it does not have any written or oral agreement
or understanding, directly or indirectly, with any person to distribute the securities.
The Company is required
to pay certain fees and expenses incurred by the Company incident to the registration of the securities. The Company has agreed
to indemnify the Selling Stockholders against certain losses, claims, damages and liabilities, including liabilities under the
Securities Act.
We agreed to keep this
prospectus effective until the earlier of (i) the date on which the securities may be resold by the Selling Stockholders without
registration and without regard to any volume or manner-of-sale limitations by reason of Rule 144, without the requirement for
the Company to be in compliance with the current public information under Rule 144 under the Securities Act or any other rule of
similar effect or (ii) all of the securities have been sold pursuant to this prospectus or Rule 144 under the Securities Act or
any other rule of similar effect. The resale securities will be sold only through registered or licensed brokers or dealers if
required under applicable state securities laws. In addition, in certain states, the resale securities covered hereby may not be
sold unless they have been registered or qualified for sale in the applicable state or an exemption from the registration or qualification
requirement is available and is complied with.
Under applicable rules
and regulations under the Exchange Act, any person engaged in the distribution of the resale securities may not simultaneously
engage in market making activities with respect to the common stock for the applicable restricted period, as defined in Regulation
M, prior to the commencement of the distribution. In addition, the Selling Stockholders will be subject to applicable provisions
of the Exchange Act and the rules and regulations thereunder, including Regulation M, which may limit the timing of purchases and
sales of the common stock by the Selling Stockholders or any other person. We will make copies of this prospectus available to
the Selling Stockholders and have informed them of the need to deliver a copy of this prospectus to each purchaser at or prior
to the time of the sale (including by compliance with Rule 172 under the Securities Act).
Our common stock is quoted on The NASDAQ
Capital Market under the symbol “PHIO.”
Legal
Matters
Certain legal matters
relating to the issuance of the securities offered by this prospectus will be passed upon for us by Gibson, Dunn & Crutcher
LLP, San Francisco, California.
Experts
The
consolidated financial statements as of December 31, 2019 and 2018 and for each of the two years in the period ended December 31,
2019 incorporated by reference in this prospectus have been so incorporated in reliance on the report of BDO USA, LLP, an independent
registered public accounting firm, incorporated herein by reference, given on the authority of said firm as experts in auditing
and accounting.
Where
You Can Find More Information
We
are required to file annual, quarterly and current reports, proxy statements and other information with the SEC. The SEC maintains
an Internet site that contains all reports and other information that we file electronically with the SEC. The address of that
website is www.sec.gov. Copies of certain information filed by us with the SEC are also available on our website at www.phiopharma.com.
Our website is not a part of this prospectus and is not incorporated by reference in this prospectus, and you should not consider
the contents of our website in making an investment decision with respect to our common stock.
We have filed a registration
statement, of which this prospectus is a part, covering the securities offered hereby. As allowed by SEC rules, this prospectus
does not include all of the information contained in the Registration Statement and the included exhibits, financial statements
and schedules. You are referred to the Registration Statement, the included exhibits, financial statements and schedules for further
information. Statements contained in this prospectus as to the contents of any contract or other document are not necessarily complete,
and in each instance we refer you to the copy of the contract or document filed as an exhibit to the registration statement, each
such statement being qualified in all respects by such reference. This prospectus is qualified in its entirety by such other information.
incorporation
of certain information by reference
The
SEC allows us to “incorporate by reference” the information we have filed with them, which means that we can disclose
important information to you by referring you to those documents. The information we incorporate by reference is an important part
of this prospectus, and information that we file later with the SEC will automatically update and supersede this information. The
documents we are incorporating by reference are:
|
·
|
Our Annual Report on Form 10-K for the year ended December 31, 2019, filed with the SEC on March 26, 2020;
|
|
·
|
Our Current Reports on Form 8-K, filed with the SEC on January 10, 2020, January 14, 2020, February 6, 2020, February 10, 2020, February 13, 2020, March 12, 2020, April 2, 2020, October 13, 2020, and January 25, 2021; and
|
|
·
|
The description of our common stock contained in our registration statement on Form 8-A12B filed with the SEC on February 7, 2014, including any amendment or report filed for the purpose of updating such description.
|
All
documents we file with the SEC pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act, except as to any portion of
any report or document that is not deemed filed under such provisions, (1) on or after the date of filing of the registration statement
containing this prospectus and prior to the effectiveness of the registration statement and (2) on or after the date of this prospectus
until the earlier of the date on which all of the securities registered hereunder have been sold or the registration statement
of which this prospectus is a part has been withdrawn, shall be deemed incorporated by reference in this prospectus and to be a
part of this prospectus from the date of filing of those documents and will be automatically updated and, to the extent described
above, supersede information contained or incorporated by reference in this prospectus and previously filed documents that are
incorporated by reference in this prospectus.
Nothing in this prospectus
shall be deemed to incorporate information furnished but not filed with the SEC pursuant to Item 2.02, 7.01 or 9.01 of Form 8-K.
Upon written or oral
request, we will provide without charge to each person, including any beneficial owner, to whom a copy of the prospectus is delivered
a copy of any or all of the reports or documents incorporated by reference herein (other than exhibits to such documents, unless
such exhibits are specifically incorporated by reference herein). You may request a copy of these filings, at no cost, by writing
or telephoning us at the following address: Phio Pharmaceuticals Corp., 257 Simarano Drive, Suite 101, Marlborough, Massachusetts
01752 Attention: Investor Relations, telephone: (508) 767-3861. We maintain a website at www.phiopharma.com. You may access
our definitive proxy statements on Schedule 14A, annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on
Form 8-K and periodic amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act with
the SEC free of charge at our website as soon as reasonably practicable after such material is electronically filed with, or furnished
to, the SEC. The information contained in, or that can be accessed through, our website is not incorporated by reference in, and
is not part of, this prospectus. We have not authorized any one to provide you with any information that differs from that contained
in this prospectus. Accordingly, you should not rely on any information that is not contained in this prospectus. You should not
assume that the information in this prospectus is accurate as of any date other than the date of the front cover of this prospectus.
Phio Pharmaceuticals Corp.
Up to 8,323,694 Shares of Common Stock
PROSPECTUS
February 8,
2021
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