Filed Pursuant to Rule 424(b)(3)
Registration No.
333-237514
9,592,607 Shares of Common Stock
This prospectus
relates to the offer and sale of up to 9,592,607 shares of common
stock, par value $0.001, of VistaGen Therapeutics, Inc., a Nevada
corporation, by Lincoln Park Capital Fund, LLC (Lincoln Park) or the selling
stockholder.
The shares of
common stock being offered by the selling stockholder have been or
may be issued pursuant to a purchase agreement that we entered into
with Lincoln Park on March 24, 2020. See The Lincoln Park Transaction for a
description of that agreement and Selling Stockholder for additional
information regarding Lincoln Park. The prices at which Lincoln
Park may sell the shares will be determined by the prevailing
market price for the shares or in negotiated
transactions.
We are not selling
any securities under this prospectus and will not receive any of
the proceeds from the sale of shares by the selling
stockholder.
The selling
stockholder may sell the shares of common stock described in this
prospectus in a number of different ways and at varying prices. See
Plan of Distribution for
more information about how the selling stockholder may sell the
shares of common stock being registered pursuant to this
prospectus. The selling stockholder is an “underwriter”
within the meaning of Section 2(a)(11) of the Securities Act of
1933, as amended (the Securities
Act) .
The selling
stockholder will pay all brokerage fees and commissions and similar
expenses. We will pay the expenses (except brokerage fees and
commissions and similar expenses) incurred in registering the
shares, including legal and accounting fees. See Plan of Distribution.
Our common stock is
currently listed on The Nasdaq Capital Market under the symbol
“VTGN”. On April 9, 2020, the last reported sale price
of our common stock on The Nasdaq Capital Market was $0.4501
per share.
Investing in our common stock involves a high degree of risk. You
should review carefully the risks and uncertainties described under
“Risk Factors” beginning on page 6 of this prospectus,
and under similar headings in any amendments or supplements to this
prospectus.
Neither
the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or
passed upon the adequacy or accuracy of this prospectus. Any
representation to the contrary is a criminal offense.
The date of this
prospectus is April 15, 2020.
TABLE
OF CONTENTS
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This summary highlights information contained elsewhere in this
prospectus and does not contain all of the information you should
consider in making your investment decision. Before deciding to
invest in our common stock, you should read this entire prospectus
carefully, including the sections of this prospectus entitled
“Risk Factors” and “Management’s Discussion
and Analysis of Financial Condition and Results of
Operations” and our consolidated financial statements and
related notes contained elsewhere in this prospectus. Unless the
context otherwise requires, the words “VistaGen Therapeutics,
Inc.” “VistaGen,” “we,” “the
Company,” “us” and “our” refer to
VistaGen Therapeutics, Inc., a Nevada corporation. “VistaStem
Therapeutics, Inc.” and “VistaGen California”
refer to our wholly owned subsidiary, VistaGen Therapeutics, Inc.,
a California corporation doing business as VistaStem Therapeutics,
Inc.
Business
Overview
We are a multi-asset, clinical-stage
biopharmaceutical company committed to developing differentiated
new generation medications for anxiety, depression and other
central nervous system (CNS) diseases and disorders with high unmet need. Our
pipeline includes three clinical-stage CNS drug candidates, each
with a differentiated mechanism of action, an exceptional safety
profile in all clinical studies to date, and therapeutic potential
in multiple CNS markets. We aim to become a fully-integrated
biopharmaceutical company that develops and commercializes
innovative CNS therapies for large and growing mental health and
neurology markets where current treatments are inadequate to meet
the needs of millions of patients and caregivers
worldwide.
PH94B Neuroactive Nasal Spray for Anxiety-related
Disorders
PH94B neuroactive nasal spray is an odorless,
first-in-class, fast-acting synthetic neurosteroid with therapeutic
potential in a wide range of neuropsychiatric indications involving
anxiety or phobia. Conveniently self-administered in microgram
doses without systemic exposure, we are initially developing PH94B
as a potential fast-acting, non-sedating, non-addictive new
generation treatment of social anxiety disorder
(SAD).
SAD affects over 20 million Americans and, according to the
National Institutes of Health (NIH), is the third most common psychiatric condition
after depression and substance abuse. A person with SAD feels
symptoms of anxiety or fear in certain social situations, such as
meeting new people, dating, being on a job interview, answering a
question in class, or having to talk to a cashier in a store. Doing
everyday things in front of people - such as eating or drinking in
front of others or using a public restroom - also causes anxiety or
fear. A person with SAD is afraid that he or she will be
humiliated, judged, and rejected. The fear that people with
SAD have in social situations is so strong that they feel it is
beyond their ability to control. As a result, SAD gets in the way
of going to work, attending school, or doing everyday things in
situations with potential for interpersonal interaction. People
with SAD may worry about these and other things for weeks before
they happen. Sometimes, they end up staying away from places or
events where they think they might have to do something that will
embarrass or humiliate them. Some people with SAD have
performance anxiety. They feel physical symptoms of fear and
anxiety in performance situations, such as giving a lecture, a
speech or a presentation at school or work, as well as playing a
sports game, or dancing or playing a musical instrument on
stage. Without treatment, SAD can last for many years or a
lifetime and prevent a person from reaching his or her full
potential.
Only three drugs, all oral antidepressants
(ADs), are approved by the U.S Food and Drug
Administration (FDA) specifically for treatment of SAD. These
FDA-approved chronic ADs have slow onset of therapeutic effect
(often taking many weeks to months) and significant side effects
(often beginning soon after administration). Slow onset of effect,
chronic administration and significant side effects may make the
FDA-approved ADs inadequate or inappropriate treatment alternatives
for many individuals affected by SAD episodically. VistaGen’s
PH94B is fundamentally differentiated from all current anxiolytics,
including all ADs approved by the FDA for treatment of SAD.
Intranasal self-administration of only approximately 3.2 micrograms
of PH94B binds to nasal chemosensory receptors that, in turn,
activate key neural circuits in the brain that lead to rapid
suppression of fear and anxiety. In Phase 2 and pilot Phase 3
clinical studies to date, PH94B has not shown psychological side
effects (such as dissociation or hallucinations), systemic
exposure, sedation or other side effects and safety concerns that
may be caused by the current ADs approved by the FDA for treatment
of SAD, as well as by benzodiazepines and beta blockers, which are
not approved by the FDA to treat SAD but which may be prescribed by
psychiatrists and physicians for treatment of SAD on an off-label
basis.
In a peer-reviewed, published double-blind,
placebo-controlled Phase 2 clinical trial, PH94B neuroactive nasal
spray was significantly more effective than placebo in reducing
both public-speaking (performance) anxiety (p=0.002) and social
interaction anxiety (p=0.009) in laboratory challenges of
individuals with SAD within 15 minutes of self-administration of a
non-systemic 1.6 microgram dose of PH94B. Based on its novel
mechanism of pharmacological action, rapid-onset of therapeutic
effects and exceptional safety and tolerability profile in Phase 2
and pilot Phase 3 clinical trials to date, we are preparing for
Phase 3 clinical development of PH94B for treatment of SAD in
adults. Our goal is to develop and commercialize PH94B as the first
FDA-approved, fast-acting, on-demand, at-home treatment for SAD.
Additional potential anxiety-related neuropsychiatric indications
for PH94B include general anxiety disorder, peripartum anxiety
(pre- and post-partum anxiety), preoperative or pre-testing (e.g.,
pre-MRI) anxiety, panic disorder, post-traumatic stress disorder
and specific social phobias. The FDA has granted
Fast Track designation for development of our PH94B neuroactive
nasal spray for on-demand treatment of SAD, the FDA’s first
such designation for a drug candidate for SAD.
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PH10 Neuroactive Nasal Spray for Depression and Suicidal
Ideation
PH10 neuroactive nasal spray is an odorless,
first-in-class, fast-acting synthetic neurosteroid with therapeutic
potential in a wide range of neuropsychiatric indications involving
depression and suicidal ideation. Conveniently self-administered in
microgram doses without systemic exposure, we are initially
developing PH94B as a potential fast-acting, non-sedating,
non-addictive new generation treatment of major depressive disorder
(MDD).
Depression
is a serious medical illness and a global public health concern
that can occur at any time over a person's life. While most people
will experience depressed mood at some point during their lifetime,
MDD is different. MDD is the chronic, pervasive feeling of utter
unhappiness and suffering, which impairs daily functioning.
Symptoms of MDD include diminished pleasure or loss of interest in
activities, changes in appetite that result in weight changes,
insomnia or oversleeping, psychomotor agitation, loss of energy or
increased fatigue, feelings of worthlessness or inappropriate
guilt, difficulty thinking, concentrating or making decisions, and
thoughts of death or suicide and attempts at suicide. Current
FDA-approved medications available in the multi-billion-dollar
global AD market often fall far short of satisfying the unmet
medical needs of millions suffering from the debilitating effects
of depression.
While
current FDA-approved ADs are widely used, about two-thirds of
patients with MDD do not respond to their initial AD treatment.
Inadequate response to current ADs is among the key reasons MDD is
one of the leading public health concerns in the United States,
creating a significant unmet medical need for new agents with
fundamentally different mechanisms of action and side effect and
safety profiles.
PH10 is a new generation antidepressant with a
mechanism of action that is fundamentally different from all
current ADs. After self-administration, a non-systemic
microgram-level dose of PH10 binds to nasal chemosensory receptors
that, in turn, activate key neural circuits in the brain that can
lead to rapid-onset antidepressant effects, but without the
psychological side effects (such as dissociation and
hallucinations) or safety concerns that maybe be caused by
ketamine-based therapy (KBT), including intravenous ketamine or esketamine
nasal spray, or the significant side effects of current ADs. In an
exploratory 30-patient Phase 2a clinical trial, PH10,
self-administered at a dose of 6.4 micrograms, was well-tolerated
and demonstrated significant (p=0.022) rapid-onset antidepressant
effects, which were sustained over an 8-week period, as measured by
the Hamilton Depression Rating Scale (HAM-D), without side effects
or safety concerns that may be caused by KBT. Based on positive
results from this exploratory Phase 2a study, we are preparing for
Phase 2b clinical development of PH10 in MDD. With its exceptional
safety profile during clinical development to date, we believe
PH10, as a convenient at-home therapy, has potential for multiple
applications in global depression markets, including as a
stand-alone front-line therapy for MDD, as an add-on therapy to
augment current FDA-approved ADs for patients with MDD who have an
inadequate response to standard ADs, and to prevent relapse
following successful treatment with KBT.
AV-101, an Oral NMDA Receptor Antagonist
AV-101
(4-Cl-KYN) targets the NMDAR (N-methyl-D-aspartate receptor), an
ionotropic glutamate receptor in the brain. Abnormal NMDAR function
is associated with numerous CNS diseases and disorders. AV-101 is
an oral prodrug of 7-chloro-kynurenic acid (7-Cl-KYNA), which is a
potent and selective full antagonist of the glycine co-agonist site
of the NMDAR that inhibits the function of the NMDAR. Unlike
ketamine and many other NMDAR antagonists, 7-Cl-KYNA is not an ion
channel blocker. In all studies to date, AV-101 has exhibited no
dissociative or hallucinogenic psychological side effects or safety
concerns similar to those that may be caused by amantadine and KBT.
With its exceptionally few side effects and excellent safety
profile, AV-101 has potential to be a differentiated oral, new
generation treatment for multiple large-market CNS indications
where current treatments are inadequate to meet high unmet patient
needs. The FDA has granted Fast Track designation for development
of AV-101 as both a potential adjunctive treatment for MDD and as a
non-opioid treatment for neuropathic pain.
We recently completed a double-blind,
placebo-controlled, multi-center Phase 2 clinical trial of AV-101
as a potential adjunctive treatment, together with a standard
FDA-approved oral AD (either a selective serotonin reuptake
inhibitor (SSRI) or a
serotonin norepinephrine reuptake inhibitor (SNRI)), in
MDD patients who had an inadequate response to a stable dose
of a standard AD (the Elevate
Study). Topline results of the
Elevate Study (n=199) indicated that the AV-101 treatment arm (1440
mg) did not differentiate from placebo on the primary endpoint
(change in the Montgomery-Åsberg Depression Rating Scale
(MADRS-10) total score compared to baseline), potentially due to
sub-therapeutic levels of 7-Cl-KYNA in the brain. As in prior
clinical studies, AV-101 was well tolerated, with no
psychotomimetic side effects or drug-related serious adverse
events.
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Recent discoveries from successful AV-101
preclinical studies suggest that there is a substantially increased
brain concentration of AV-101 and its active metabolite, 7-Cl-KYNA,
when AV-101 is given together with probenecid, a safe and
well-known oral anion transport inhibitor used to treat gout. These
surprising effects were first revealed in our recent preclinical
studies, although they are consistent with well-documented clinical
studies of probenecid increasing the therapeutic benefits of
several unrelated classes of approved drugs, including
certain antibacterial, anticancer and antiviral drugs. When probenecid was administered adjunctively
with AV-101 in an animal model, substantially increased brain
concentrations of both AV-101 (7-fold) and of 7-Cl-KYNA (35-fold)
were discovered. We
also recently identified that some of the same kidney transporters
that reduce drug concentrations in the blood, by excretion in the
urine, are also found in the blood brain barrier and function to
reduce 7-Cl-KYNA levels in the brain by pumping it out of the brain
and back into the blood. In the recent preclinical studies with
AV-101 and probenecid, we discovered that blocking those
transporters in the blood brain barrier with probenecid resulted,
as noted above, in a substantially increased brain concentration of
7-Cl-KYNA. This 7-Cl-KYNA efflux-blocking effect of probenecid,
with the resulting increased brain levels and duration of
7-Cl-KYNA, suggests the potential impact of AV-101 with probenecid
could result in far more profound therapeutic benefits for patients
with MDD and other NMDAR-focused CNS diseases and disorders than
demonstrated in the Elevate Study.
Some of the new discoveries from our
recent AV-101 preclinical studies with adjunctive probenecid were
presented by a collaborator of VistaGen at the British
Pharmacological Society’s Pharmacology 2019 annual conference
in Edinburgh, UK in December 2019.
In addition, a Phase 1b target engagement study
completed after the Elevate Study by the Baylor College of Medicine
(Baylor) with financial support from the U.S. Department
of Veterans Affairs (VA), involved 10 healthy volunteer U.S. military
Veterans who received single doses of AV-101 (720 mg or 1440 mg) or
placebo, in a double-blind, randomized, cross-over controlled
trial. The primary goal of the study was to identify and define a
dose-response relationship between AV-101 and multiple
electrophysiological (EEG) biomarkers related to NMDAR function, as well as
blood biomarkers associated with suicidality (the
Baylor
Study). The findings from the
Baylor Study suggest that, in healthy Veterans, the higher dose of
AV-101 (1440 mg) was associated with dose-related increase in the
40 Hz Auditory Steady State Response (ASSR), a robust measure of the integrity of inhibitory
interneuron synchronization that is associated with NMDAR
inhibition. Findings from the successful Baylor Study were
presented at the 58th Annual Meeting of the American College of
Neuropsychopharmacology (ACNP) in Orlando, Florida in December
2019.
The
successful Baylor Study and the recent discoveries in our
preclinical studies involving AV-101 and adjunctive probenecid
suggest that it may be possible to increase therapeutic
concentrations and duration of 7-Cl-KYNA in the brain, and thus
increase NMDAR antagonism in MDD patients with an inadequate
response to standard ADs when AV-101 and probenecid are combined.
During 2020, we plan to conduct additional AV-101 preclinical
studies with adjunctive probenecid to evaluate its potential
applicability to MDD, suicidal ideation and other NMDAR-focused CNS
indications for which we have existing preclinical data with AV-101
as a monotherapy, including epilepsy, levodopa-induced dyskinesia,
and neuropathic pain, to determine the most appropriate path
forward for potential future clinical development and
commercialization of AV-101.
VistaStem Therapeutics – Stem Cell Technology for Drug Rescue
and Regenerative Medicine
In addition to our current CNS drug candidates, we
have stem cell technology-based, pipeline-enabling programs through
our wholly-owned subsidiary, VistaStem Therapeutics
(VistaStem). VistaStem is focused on applying human
pluripotent stem cell (hPSC) technologies, including our customized cardiac
bioassay system, CardioSafe
3D, to discover and develop
small molecule New Chemical Entities (NCEs) for our CNS pipeline or out-licensing. In
addition, VistaStem’s stem cell technologies involving
hPSC-derived blood, cartilage, heart and liver cells have multiple
potential applications in the cell therapy (CT) and regenerative medicine (RM)
fields.
To advance potential CT and RM applications of
VistaStem’s hPSC technologies related to heart cells, we
licensed to BlueRock Therapeutics LP, a next generation CT/RM
company formed jointly by Bayer AG and Versant Ventures, rights to
develop and commercialize certain proprietary technologies relating
to the production of cardiac stem cells for the treatment of heart
disease. As a result of its acquisition of BlueRock Therapeutics in
2019, Bayer AG now holds rights to develop and commercialize
VistaStem’s hPSC technologies relating to the production of
heart cells for the treatment of heart disease
(the Bayer
Agreement). In a manner
similar to the Bayer Agreement, we may pursue additional
collaborations involving rights to develop and commercialize
VistaStem’s hPSC technologies for production of blood,
cartilage, and/or liver cells for CT and RM applications,
including, among other indications, treatment of arthritis, cancer
and liver disease.
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Recent Developments
January 2020 Registered Direct Offering and Concurrent Offering of
Warrants
On January 24, 2020, we entered into a
securities purchase agreement with certain accredited investors
pursuant to which we received gross cash proceeds of $2.75 million
upon the sale of an aggregate of 3,870,077 shares of our common
stock at a purchase price of $0.71058 per share (the
January 2020
Offering). Concurrently with
the January 2020 Offering, we also commenced a private placement in
which we issued and sold warrants exercisable for an aggregate of
3,870,077 unregistered shares of our common stock (the
Warrant
Shares), having an exercise
price of $0.73 per Warrant Share.
Corporate
Information
VistaGen Therapeutics, Inc., a Nevada
corporation, is the parent of VistaGen Therapeutics, Inc. (dba
VistaStem Therapeutics, Inc.), a wholly owned California
corporation founded in 1998. Our principal executive offices are
located at 343 Allerton Avenue, South San Francisco, California
94080, and our telephone number is (650) 577-3600. Our website
address is www.vistagen.com.
The information contained on our website is not part of this
prospectus supplement or the accompanying prospectus. We have
included our website address as a factual reference and do not
intend it to be an active link to our website.
Lincoln
Park Purchase Agreement
On March 24, 2020, we entered into a purchase
agreement (the Purchase
Agreement) and a registration
rights agreement (the Registration Rights
Agreement) with Lincoln Park
pursuant to which Lincoln Park committed to purchase up to
$10,250,000 of our common stock.
Under the terms and subject to the conditions of
the Purchase Agreement, we have the right, but not the obligation,
to sell to Lincoln Park, and Lincoln Park is obligated to purchase
up to $10,250,000 of shares of our common stock. On March 24, 2020,
we sold 500,000 shares of common stock to Lincoln Park under the
Purchase Agreement at a price of $0.50 per share for proceeds of
$250,000. Future sales of common stock under the Purchase
Agreement, if any, will be subject to certain limitations, and may
occur from time to time, at our sole discretion, over the 24-month
period commencing on the date that a registration statement of
which this prospectus forms a part, which we agreed to file with
the Securities and Exchange Commission (the SEC) pursuant to the Registration Rights Agreement,
is declared effective by the SEC and a final prospectus in
connection therewith is filed and the other conditions set forth in
the Purchase Agreement are satisfied (such date on which all of
such conditions are satisfied, the Commencement
Date).
After the Commencement Date, on any business day
over the term of the Purchase Agreement, we have the right, in our
sole discretion, to direct Lincoln Park to purchase up to 100,000
shares on such business day (the Regular
Purchase), subject to increases
under certain circumstances as provided in the Purchase Agreement.
The purchase price per share for each such Regular Purchase will be
based on prevailing market prices of the Company’s common
stock immediately preceding the time of sale as computed under the
Purchase Agreement. In each case, Lincoln Park’s maximum
commitment in any single Regular Purchase may not exceed
$1,000,000. In addition to Regular Purchases, provided that we
present Lincoln Park with a purchase notice for the full amount
allowed for a Regular Purchase, we may also direct Lincoln Park to
make accelerated purchases
and additional accelerated purchases as described in the Purchase
Agreement.
Under applicable rules of the Nasdaq Capital
Market, the aggregate number of shares that we can sell to Lincoln
Park under the Purchase Agreement may in no case exceed 19.99%
of our common stock outstanding immediately prior to the execution
of the Purchase Agreement (which is 9,592,607 shares of common
stock) (the Exchange
Cap), unless (i) stockholder
approval is obtained to issue more, in which case the Exchange Cap
will not apply, or (ii) the average price of all applicable sales
of our common stock to Lincoln Park under the Purchase Agreement
equals or exceeds the closing price of our common stock on the
Nasdaq Capital Market immediately preceding the signing of the
Purchase Agreement, plus an incremental amount such that
issuances and sales of our common stock to Lincoln Park under the
Purchase Agreement would be exempt from the Exchange Cap limitation
under applicable rules of the Nasdaq Capital
Market.
Lincoln
Park has no right to require us to sell any shares of common stock
to Lincoln Park, but Lincoln Park is obligated to make purchases as
we direct, subject to certain conditions. In all instances, we may
not sell shares of our common stock to Lincoln Park under the
Purchase Agreement if it would result in Lincoln Park beneficially
owning more than 9.99% of our common stock. There are no upper
limits on the price per share that Lincoln Park must pay for shares
of our common stock pursuant to the Purchase
Agreement.
The
Purchase Agreement and the Registration Rights Agreement contain
customary representations, warranties, agreements and conditions
and indemnification obligations of the parties. We have the right
to terminate the Purchase Agreement at any time, at no cost or
penalty. We issued to Lincoln Park 750,000 shares of common
stock, or approximately 2.7% of the value of the shares of common
stock issuable under the Purchase Agreement, in consideration for
entering into the Purchase Agreement.
Issuances of our
common stock in this offering will not affect the rights or
privileges of our existing stockholders, except that the economic
and voting interests of each of our existing stockholders will be
diluted as a result of any such issuance. Although the number of
shares of common stock that our existing stockholders own will not
decrease, the shares owned by our existing stockholders will
represent a smaller percentage of our total outstanding shares
after any such issuance to Lincoln Park.
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The
Offering
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Shares
of common stock offered by the selling stockholders
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9,592,607 shares consisting
of:
●
500,000 shares sold to Lincoln Park
at $0.50 per share on the Execution Date (the Initial Purchase Shares);
●
8,342,607 shares we may sell to Lincoln
Park under the Purchase Agreement from time to time after the date
of this prospectus; and
●
750,000 commitment
shares issued to Lincoln Park on the Execution Date (the
Commitment
Shares).
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Shares
of common stock outstanding before this offering
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47,963,042 shares of common
stock.
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Shares
of common stock to be outstanding after giving effect to the
issuance of 9,592,607 shares under the Purchase Agreement
registered hereunder
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57,555,649 shares of common
stock.
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Use
of proceeds
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We will receive no
proceeds from the sale of shares of common stock by Lincoln Park in
this offering. We may receive up to $10,000,000 aggregate gross
proceeds under the Purchase Agreement from any sales we make to
Lincoln Park pursuant to the Purchase Agreement after the date of
this prospectus.
Any proceeds that
we receive from sales to Lincoln Park under the Purchase Agreement
will be used for working capital and general corporate purposes.
See Use of
Proceeds.
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Terms
of this offering
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The selling
stockholder, including its transferees, donees, pledgees, assignees
and successors-in-interest, may sell, transfer or otherwise dispose
of any or all of the shares of common stock offered by this
prospectus from time to time on The Nasdaq Capital Market or any
other stock exchange, market or trading facility on which the
shares are traded or in private transactions. The shares of common
stock may be sold at fixed prices, at market prices prevailing at
the time of sale, at prices related to prevailing market price or
at negotiated prices.
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Nasdaq
symbol
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Our common stock is
listed on The Nasdaq Capital Market under the symbol
“VTGN”.
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Risk
Factors
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Investing in our
common stock involves a high degree of risk. You should review
carefully the risks and uncertainties described in or incorporated
by reference under the heading “Risk Factors” in this prospectus,
the documents we have incorporated by reference herein, and under
similar headings in other documents filed after the date hereof and
incorporated by reference into this prospectus. See Incorporation of Certain Information by
Reference and Where You Can
Find More Information.
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Unless otherwise
noted, the number of shares of our common stock prior to and after
this offering is based on 49,213,042 shares outstanding as of
March 30, 2020 and excludes:
●
750,000 shares
of common stock reserved for issuance upon conversion
of 500,000 shares our Series A Preferred Stock held by
one institutional investor and one accredited individual investor
;
●
1,160,240 shares
of common stock reserved for issuance upon conversion
of 1,160,240 shares of our Series B 10% Convertible
Preferred Stock held by two institutional investors;
●
2,318,012 shares
of common stock reserved for issuance upon conversion
of 2,318,012 shares of our Series C Convertible Preferred
Stock held by one institutional investor;
●
22,555,281 shares
of common stock that have been reserved for issuance upon exercise
of outstanding warrants, with a weighted average exercise price of
$1.64 per share;
●
7,768,088 shares
of common stock reserved for issuance upon exercise of outstanding
stock options under our 2019 Omnibus Equity Incentive Plan, with a
weighted average exercise price of $1.41 per share;
and
●
6,730,162 shares
of common stock reserved for future issuance in connection with
future grants under our 2019 Omnibus Equity Incentive
Plan.
●
1,000,000 shares of
common stock reserved for future issuance in connection with future
sales under our 2019 Employee Stock Purchase Plan.
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RISK
FACTORS
Our Annual Report on Form 10-K for the fiscal year ended March 31,
2019 and our Quarterly Report on Form 10-Q for the quarters ended
June 30, 2019, September 30, 2019 and December 31, 2019, which are
incorporated by reference into this prospectus, as well as our
other filings with the SEC, include material risk factors relating
to our business. Those risks and uncertainties and the risks and
uncertainties described below are not the only risks and
uncertainties that we face. Additional risks and uncertainties that
are not presently known to us or that we currently deem immaterial
or that are not specific to us, such as general economic
conditions, may also materially and adversely affect our business
and operations. If any of those risks and uncertainties or the
risks and uncertainties described below actually occurs, our
business, financial condition or results of operations could be
harmed substantially. In such a case, you may lose all or part of
your investment. You should carefully consider the risks and
uncertainties described below and those risks and uncertainties
incorporated by reference into this prospectus supplement, as well
as the other information included in this prospectus supplement,
before making an investment decision with respect to our common
stock.
Risks
Related to this Offering
The sale or issuance of our common stock to Lincoln Park may cause
dilution and the sale of the shares of common stock acquired by
Lincoln Park, or the perception that such sales may occur, could
cause the price of our common stock to fall.
On March 24, 2020,
we entered into the Purchase Agreement with Lincoln Park, pursuant
to which Lincoln Park has committed to purchase up to $10,250,000
of our common stock, including the Initial Purchase Shares. Upon
the execution of the Purchase Agreement, we issued 750,000
Commitment Shares to Lincoln Park as a fee for its commitment to
enter into the Purchase Agreement and purchase shares of our common
stock thereunder. The remaining shares of our common stock that may
be issued under the Purchase Agreement may be sold by us to Lincoln
Park, at our sole discretion, from time to time over a 24-month
period commencing after the satisfaction of certain conditions set
forth in the Purchase Agreement, including that the SEC has
declared effective the registration statement that includes this
prospectus. The purchase price for the shares that we may sell to
Lincoln Park under the Purchase Agreement will fluctuate based on
the prevailing price of our common stock on the date(s) of
purchase. Depending on market liquidity at the time, sales of such
shares may cause the trading price of our common stock to
fall.
We generally have
the right to control the timing and amount of any future sales of
our shares to Lincoln Park. Additional sales of our common stock,
if any, to Lincoln Park will depend upon market conditions and
other factors to be determined solely by us. We may ultimately
decide to sell to Lincoln Park all, some or none of the
8,342,607 additional shares of
our common stock that may be available for us to sell pursuant to
the Purchase Agreement. If and when we do sell any additional
shares to Lincoln Park, after Lincoln Park has acquired the shares,
Lincoln Park may resell all, some or none of those shares at any
time or from time to time in its discretion. Therefore, sales to
Lincoln Park by us could result in substantial dilution to the
interests of other holders of our common stock. Additionally, the
sale of a substantial number of shares of our common stock to
Lincoln Park, or the anticipation of such sales, could make it more
difficult for us to sell equity or equity-related securities in the
future at a time and at a price that we might otherwise wish to
effect sales.
Our stock price may be volatile, and you may not be able to resell
shares of our common stock at or above the price you
paid.
The public trading
price for our common stock can be affected by a number of factors,
including:
●
plans
for, progress of or results from nonclinical and clinical
development activities related to our product
candidates;
●
the
failure of the FDA or other regulatory authority to approve our
product candidates;
●
announcements
of new products, technologies, commercial relationships,
acquisitions or other events by us or our competitors;
●
the
success or failure of other CNS therapies;
●
regulatory
or legal developments in the U.S. and other countries;
●
announcements
regarding our intellectual property portfolio;
●
failure
of our product candidates, if approved, to achieve commercial
success;
●
fluctuations
in stock market prices and trading volumes of similar
companies;
●
variations
in our quarterly operating results;
●
changes
in our financial guidance or securities analysts’ estimates
of our financial performance;
●
sales
or purchases of large blocks of our common stock, including sales
or purchases by our executive officers, directors and significant
stockholders;
●
establishment of
short positions by holders or non-holders of our
stock;
●
additions
or departures of key personnel;
●
discussion
of us or our stock price by the press and by online investor
communities; and
●
general market conditions and overall fluctuations
in U.S. equity markets, including fluctuations attributable to the
recent outbreak of the novel coronavirus (COVID-19);
●
conditions
that are outside of our control, such as the impact of health and
safety concerns from the current outbreak of COVID-19 or other
unforeseeable circumstances; and
●
other
risks and uncertainties described in these risk factors and the
risk factors incorporated into this prospectus by
reference.
In recent years,
the stock markets generally and the stock prices of many companies
in the pharmaceutical industry have experienced extreme price and
volume fluctuations that have often been unrelated or
disproportionate to the operating performance of those companies.
Broad market and industry factors may significantly affect the
market price of our common stock, regardless of our actual
operating performance. These fluctuations may be even more
pronounced in the trading market for our common stock shortly
following this offering. If the market price of shares of our
common stock does not ever exceed the price at which shares are
acquired under the Purchase Agreement, you may not be able to
resell shares of our common stock at or above the price you
paid.
We may require additional financing to sustain our operations and
without it we may not be able to continue operations.
We may direct
Lincoln Park to purchase up to $10,250,000 worth of shares of our
common stock under our agreement over a 24-month period generally
in amounts up to 100,000 shares of our common stock, which share
amount may be increased to include additional shares of our common
stock depending on the market price of our common stock at the time
of sale, and subject to a maximum limit of $1,000,000 per purchase,
on any such business day. In addition to the 750,000 Commitment
Shares and 500,000 Initial Purchase Shares, an additional 8,342,607
shares of our common stock are being offered under this prospectus
that may be sold by us to Lincoln Park, at our discretion, from
time to time over a 24-month period commencing after the date of
the Commencement. Depending on the price per share at which we sell
our common stock to Lincoln Park pursuant to the Purchase
Agreement, we may need to sell to Lincoln Park more shares of our
common stock than are offered under this prospectus in order to
receive aggregate gross proceeds equal to $10,250,000. The number
of shares ultimately offered for resale by Lincoln Park is
dependent upon the number of shares we sell to Lincoln Park under
the Purchase Agreement.
The extent we rely
on Lincoln Park as a source of funding will depend on a number of
factors including the prevailing market price of our common stock
and the extent to which we are able to secure working capital from
other sources. If obtaining sufficient funding from Lincoln Park
were to prove unavailable or prohibitively dilutive, we will need
to secure another source of funding in order to satisfy our working
capital needs. Even if we sell all $10,250,000 under the Purchase
Agreement to Lincoln Park, we may still need additional capital to
fully implement our business, operating and development plans.
Should the financing we require to sustain our working capital
needs be unavailable or prohibitively expensive when we require it,
the consequences could be a material adverse effect on our
business, operating results, financial condition and
prospects.
Future sales and issuances of our common stock or other securities
may result in significant dilution and could cause the price of our
common stock to decline.
To raise capital,
we may sell common stock, convertible securities or other equity
securities in one or more transactions at prices and in a manner we
determine from time to time, including pursuant to the Purchase
Agreement with Lincoln Park. These sales, or the perception in the
market that the holders of a large number of shares intend to sell
shares, could reduce the market price of our common stock. These
sales may also result in material dilution to our existing
stockholders, and new investors could gain rights superior to our
existing stockholders.
In addition, sales
of a substantial number of shares of our outstanding common stock
in the public market could occur at any time. Certain of our
stockholders, including Lincoln Park, hold a substantial number of
our common stock that many of them are now able to sell in the
public market. Sales of stock by these stockholders could have a
material adverse effect on the trading price of our common
stock.
We cannot predict
what effect, if any, sales of our shares in the public market or
the availability of shares for sale will have on the market price
of our common stock. However, future sales of substantial amounts
of our common stock in the public market, including shares issued
upon exercise of outstanding warrants or options, or the perception
that such sales may occur, could adversely affect the market price
of our common stock.
Our management will have broad discretion over the use of the net
proceeds from our sale of shares of common stock to Lincoln Park,
you may not agree with how we use the proceeds and the proceeds may
not be invested successfully.
Our management will
have broad discretion as to the use of the net proceeds from our
sale of shares of common stock to Lincoln Park, and we could use
them for purposes other than those contemplated at the time of
commencement of this offering. Accordingly, you will be relying on
the judgment of our management with regard to the use of those net
proceeds, and you will not have the opportunity, as part of your
investment decision, to assess whether the proceeds are being used
appropriately. It is possible that, pending their use, we may
invest those net proceeds in a way that does not yield a favorable,
or any, return for us. The failure of our management to use such
funds effectively could have a material adverse effect on our
business, financial condition, operating results and cash
flows.
INCORPORATION BY REFERENCE
The following
documents filed by us with the SEC are incorporated by reference in
this prospectus:
●
our
Annual Report on Form 10-K for the year ended March 31, 2019, filed
on June 25, 2019;
●
our
Quarterly Report on Form 10-Q for the period ended June 30, 2019,
filed on August 13, 2019;
●
our
Quarterly Report on Form 10-Q for the period ended September 30,
2019, filed on November 7, 2019;
●
our
Quarterly Report on Form 10-Q for the period ended December 31,
2019, filed on February 13, 2020;
●
our
Current Report on Form 8-K, filed on April 4, 2019;
●
our
Current Report on Form 8-K, filed on May 2, 2019;
●
our
Current Report on Form 8-K, filed on June 21, 2019;
●
our
Current Report on Form 8-K, filed on July 23, 2019;
●
our
Current Report on Form 8-K, filed on August 16, 2019;
●
our
Current Report on Form 8-K, filed on August 23, 2019;
●
our
Current Report on Form 8-K, filed on September 6,
2019;
●
our
Current Report on Form 8-K, filed on September 25,
2019;
●
our Current Report
on Form 8-K, filed on October 9, 2019;
●
our Current Report on Form 8-K, filed on October
30, 2019;
●
our Current Report
on Form 8-K, filed on November 8, 2019;
●
our Current Report
on Form 8-K, filed on December 12, 2019;
●
our Current Report
on Form 8-K, filed on December 27, 2019;
●
our Current Report
on Form 8-K, filed on January 27, 2020;
●
our Current Report
on Form 8-K, filed on January 31, 2020;
●
our Current Report
on Form 8-K, filed on February 13, 2020;
●
our Current Report
on Form 8-K, filed on February 21, 2020;
●
our Current Report
on Form 8-K, filed on March 26, 2020;
●
our Current Report
on Form 8-K, filed on April 3, 2020; and
●
The
description of our common stock contained in the Registration
Statement on Form 8-A filed pursuant to Section 12(b) of the
Securities Exchange Act of 1934, as amended (the Securities Act) on May 3, 2016,
including any amendment or report filed with the SEC for the
purpose of updating this description.
We also incorporate by reference all documents we
file pursuant to Section 13(a), 13(c), 14 or 15 of the Exchange Act
(other than any portions of filings that are furnished rather than
filed pursuant to Items 2.02 and 7.01 of a Current Report on Form
8-K) after the date of the initial registration statement of which
this prospectus is a part and prior to effectiveness of such
registration statement. 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 termination of
the offering are also incorporated by reference and are an
important part of this prospectus.
Any
statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or
superseded for the purposes of this registration statement to the
extent that a statement contained herein or in any other
subsequently filed document which also is or deemed to be
incorporated by reference herein modifies or supersedes such
statement. Any statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part
of this registration statement.
We
will provide to each person, including any beneficial owner, to
whom a prospectus is delivered, a copy of any or all of the
information that has been incorporated by reference in the
prospectus but not delivered with the prospectus. You may request a
copy of these filings, excluding the exhibits to such filings which
we have not specifically incorporated by reference in such filings,
at no cost, by writing to or calling us at:
VistaGen
Therapeutics, Inc.
343
Allerton Avenue
South
San Francisco, California 94080
(650)
577-3600
This
prospectus is part of a registration statement we filed with the
SEC. You should only rely on the information or representations
contained in this prospectus and any accompanying prospectus
supplement. We have not authorized anyone to provide information
other than that provided in this prospectus. We are not making an
offer of the securities in any state where the offer is not
permitted. You should not assume that the information in this
prospectus or any accompanying prospectus supplement is accurate as
of any date other than the date on the front of the
document.
CAUTIONARY NOTES REGARDING FORWARD-LOOKING
STATEMENTS
This
prospectus contains forward-looking statements that involve
substantial risks and uncertainties. All statements contained in
this prospectus, other than statements of historical facts, are
forward-looking statements including statements regarding our
strategy, future operations, future financial position, future
revenue, projected costs, prospects, plans, objectives of
management and expected market growth. These statements involve
known and unknown risks, uncertainties and other important factors
that may cause our actual results, performance or achievements to
be materially different from any future results, performance or
achievements expressed or implied by the forward-looking
statements.
The
words “anticipate,” “believe,”
“estimate,” “expect,” “intend,”
“may,” “plan,” “predict,”
“project,” “target,”
“potential,” “will,” “would,”
“could,” “should,” “continue,”
and similar expressions are intended to identify forward-looking
statements, although not all forward-looking statements contain
these identifying words. These forward-looking statements include,
among other things, statements about:
●
the
availability of capital to satisfy our working capital
requirements;
●
the
accuracy of our estimates regarding expenses, future revenues and
capital requirements;
●
our
plans to develop and commercialize our any of our current product
candidates;
●
our
ability to initiate and complete our clinical trials and to advance
our product candidates into additional clinical trials, including
pivotal clinical trials, and successfully complete such clinical
trials;
●
regulatory
developments in the U.S. and foreign countries;
●
the
performance of our third-party contractors involved with the
manufacturer and production of our drug candidates for nonclinical
and clinical development activities, contract research
organizations and other third-party nonclinical and clinical
development collaborators and regulatory service
providers;
●
our
ability to obtain and maintain intellectual property protection for
our core assets;
●
the
size of the potential markets for our product candidates and our
ability to serve those markets;
●
the
rate and degree of market acceptance of our product candidates for
any indication once approved;
●
the
success of competing products and product candidates in development
by others that are or become available for the indications that we
are pursuing;
●
the
loss of key scientific, clinical and nonclinical development,
and/or management personnel, internally or from one of our
third-party collaborators; and
●
other risks and uncertainties, including
those described under Item 1A, “Risk
Factors,” in our Annual
Report on Form 10-K for the fiscal year ended March 31, 2019 and
subsequent Quarterly Reports on Form 10-Q, which risk factors are
incorporated herein by reference.
These
forward-looking statements are only predictions and we may not
actually achieve the plans, intentions or expectations disclosed in
our forward-looking statements, so you should not place undue
reliance on our forward-looking statements. Actual results or
events could differ materially from the plans, intentions and
expectations disclosed in the forward-looking statements we make.
We have based these forward-looking statements largely on our
current expectations and projections about future events and trends
that we believe may affect our business, financial condition and
operating results. We have included important factors in the
cautionary statements included in this prospectus, as well as
certain information incorporated by reference into this prospectus,
that could cause actual future results or events to differ
materially from the forward-looking statements that we make. Our
forward-looking statements do not reflect the potential impact of
any future acquisitions, mergers, dispositions, joint ventures or
investments we may make.
You
should read this prospectus with the understanding that our actual
future results may be materially different from what we expect. We
do not assume any obligation to update any forward-looking
statements whether as a result of new information, future events or
otherwise, except as required by applicable law.
-10-
USE OF PROCEEDS
This prospectus
relates to shares of our common stock that may be offered and sold
from time to time by Lincoln Park. We may receive up to $10,000,000
aggregate gross proceeds under the Purchase Agreement from any
sales we make to Lincoln Park pursuant to the Purchase Agreement
after the date of this prospectus. However, we may not be
registering for sale or offering for resale under the registration
statement of which this prospectus is a part all of the shares
issuable pursuant to the Purchase Agreement. In any evert, we will
receive no proceeds from the sale of any shares of common stock by
Lincoln Park pursuant to this prospectus. As we are unable to
predict the timing or amount of potential issuances of all of the
shares offered hereby (other than the Commitment Shares or the
Initial Purchase Shares), we have not allocated any proceeds of
such issuances to any particular purpose. Accordingly, all such
proceeds are expected to be used for working capital and
general corporate purposes.
Pending
other uses, we intend to invest any proceeds from the offering in
short-term investments or hold them as cash. We cannot predict
whether the proceeds invested will yield a favorable return. Our
management will have broad discretion in the use of the net
proceeds from this offering, and investors will be relying on the
judgment of our management regarding the application of the net
proceeds.
-11-
DIVIDEND POLICY
We
have never paid or declared any cash dividends on our common stock,
and we do not anticipate paying any cash dividends on our
common stock in the foreseeable future. Shares of our
Series B 10% Convertible Preferred Stock accrue dividends at a rate
of 10% per annum, which dividends are payable solely in
unregistered shares of our common stock at the time the Series B
10% Convertible Preferred Stock is converted into common
stock.
-12-
SELLING STOCKHOLDER
This prospectus
relates to only the resale by the selling stockholder, Lincoln
Park, of shares of common stock that have been or may be issued and
sold to Lincoln Park pursuant to the Purchase Agreement. We are
filing the registration statement of which this prospectus forms a
part pursuant to the provisions of the Registration Rights
Agreement, which we entered into with Lincoln Park on March 24,
2020 concurrently with our execution of the Purchase Agreement, in
which we agreed to provide certain registration rights with respect
to sales by Lincoln Park of the shares of our common stock that
have been and may be issued to Lincoln Park under the Purchase
Agreement.
Lincoln Park, as
the selling stockholder, may, from time to time, offer and sell
pursuant to this prospectus any or all of the shares that we have
sold and may sell to Lincoln Park under the Purchase Agreement. The
selling stockholder may sell some, all or none of its shares. We do
not know how long the selling stockholder will hold the shares
before selling them, and we currently have no agreements,
arrangements or understandings with the selling stockholder
regarding the sale of any of the shares.
The following table
presents information regarding the selling stockholder and the
shares that it may offer and sell from time to time under this
prospectus. The table is prepared based on information supplied to
us by the selling stockholder, and reflects its holdings as of
March 24, 2020. Neither Lincoln Park nor any of its affiliates has
held a position or office, or had any other material relationship,
with us or any of our predecessors or affiliates. Beneficial
ownership is determined in accordance with Section 13(d) of the
Exchange Act and Rule 13d-3 thereunder.
|
Selling
Stockholder
|
Shares
Beneficially
Owned
Before this
Offering
|
Percentage
of
Outstanding
Shares
Beneficially
Owned
Before
this Offering
|
Shares
to be Sold in this Offering Assuming The
Company issues the Maximum Number of Shares
Under the Purchase Agreement
|
Percentage
of
Outstanding
Shares
Beneficially
Owned
After
this Offering
|
|
Lincoln Park
Capital Fund, LLC (1)
|
3,904,966(2)
|
7.78%(3)
|
9,592,607(4)
|
6.78%
|
|
(1)
|
Josh Scheinfeld and
Jonathan Cope, the Managing Members of Lincoln Park Capital, LLC,
are deemed to be beneficial owners of all of the shares of common
stock owned by Lincoln Park Capital Fund, LLC. Messrs. Cope and
Scheinfeld have shared voting and investment power over the shares
being offered under the prospectus filed with the SEC in connection
with the transactions contemplated under the Purchase Agreement.
Lincoln Park Capital, LLC is not a licensed broker dealer or an
affiliate of a licensed broker dealer.
|
|
|
|
|
(2)
|
Includes (i) the
500,000 shares sold to Lincoln Park as Initial Purchase Shares
under the Purchase Agreement and the 750,000 shares issued to
Lincoln Park as Commitment Shares which are being registered under
the registration statement of which this prospectus is a part.
Includes a currently exercisable warrant to purchase 1,000,000
shares of our common stock. Excludes a warrant to purchase
2,814,602 shares of our common stock not exercisable within 60
days. See the description under the heading The Lincoln Park Transaction below for
more information about the Purchase Agreement.
|
|
|
|
|
(3)
|
Based on 49,213,042
outstanding shares of our common stock as of March 30,
2020.
|
|
|
|
|
(4)
|
Although the
Purchase Agreement provides that we may sell up to $10,250,000 of
our common stock to Lincoln Park, in addition to the 750,000
Commitment Shares and 500,000 Initial Purchase Shares, an
additional 8,342,607 shares of our common stock are being offered
under this prospectus that may be sold by us to Lincoln Park, at
our discretion, from time to time over a 24-month period commencing
after the Commencement Date. Depending on the price per share at
which we sell our common stock to Lincoln Park pursuant to the
Purchase Agreement, we may need to sell to Lincoln Park under the
Purchase Agreement more shares of our common stock than are offered
under this prospectus in order to receive aggregate gross proceeds
equal to the $10,250,000 total commitment available to us under the
Purchase Agreement. If we choose to do so, we must first register
for resale under the Securities Act such additional shares. The
number of shares ultimately offered for resale by Lincoln Park is
dependent upon the number of shares we sell to Lincoln Park under
the Purchase Agreement. See “The Lincoln Park
Transaction.”
|
-13-
LINCOLN
PARK TRANSACTION
General
On March 24, 2020
(the Execution Date), we
entered into a Purchase Agreement and a Registration Rights
Agreement with Lincoln Park. Pursuant to the terms of the Purchase
Agreement, Lincoln Park has agreed to purchase from us up to
$10,250,000 of our common stock from time to time during the term
of the Purchase Agreement, subject to certain
limitations.
Other than the
Initial Purchase Shares, which we sold to Lincoln Park on the
Execution Date, we do not have the right to commence any sales to
Lincoln Park under the Purchase Agreement until the Commencement
Date (defined below) has occurred. Thereafter, we may, from time to
time, and at our sole discretion, on any single business day,
direct Lincoln Park to purchase shares of our common stock in
amounts up to 100,000 shares, which amounts may be increased
depending on the market price of our common stock at the time of
sale and subject to a maximum commitment by Lincoln Park of
$1,000,000 per single purchase (Regular Purchases). In addition, at our
discretion, Lincoln Park has committed to purchase other amounts
under an Accelerated Purchase (as defined below) under certain
circumstances. The purchase price per share sold will be based on
the market price of our common stock immediately preceding the time
of sale as computed under the Purchase Agreement. Lincoln Park may
not assign or transfer its rights and obligations under the
Purchase Agreement.
Under applicable
rules of The Nasdaq Capital Market, in no event may we issue or
sell to Lincoln Park under the Purchase Agreement shares of our
common stock in excess of the Exchange Cap (which is 9,592,607
shares, or 19.99% of the shares of our common stock outstanding
immediately prior to the execution of the Purchase Agreement),
unless (i) we obtain stockholder approval to issue shares of common
stock in excess of the Exchange Cap or (ii) the average price of
all applicable sales of our common stock to Lincoln Park under the
Purchase Agreement equals or exceeds the closing price of our
common stock on The Nasdaq Capital Market on the business day
immediately preceding March 24,
2020 plus an incremental amount, such that issuances and sales of
our common stock to Lincoln Park under the Purchase Agreement would
be exempt from the Exchange Cap limitation under applicable Nasdaq
rules. In any event, the Purchase Agreement specifically provides
that we may not issue or sell any shares of our common stock under
the Purchase Agreement if such issuance or sale would breach any
applicable Nasdaq rules.
The Purchase
Agreement also prohibits us from directing Lincoln Park to purchase
any shares of common stock if those shares, when aggregated with
all other shares of our common stock then beneficially owned by
Lincoln Park and its affiliates, would result in Lincoln Park
exceeding the Beneficial Ownership Cap.
Pursuant to the
Registration Rights Agreement, the Company is required to register
the shares of common stock that have been and may be issued to
Lincoln Park under the Purchase Agreement. We have filed the
registration statement with the SEC that includes this prospectus
to register for resale under the Securities Act, up to 9,592,607
shares of common stock, representing 19.99% of our issued and
outstanding shares of common stock on March 24, 2020.
Purchase
of Shares Under the Purchase Agreement
Under the terms and
subject to the conditions of the Purchase Agreement, the Company
has the right, but not the obligation, to sell to Lincoln Park, and
Lincoln Park is obligated to purchase up to $10,250,000 of shares
of common stock, including the Initial Purchase Shares purchased by
Lincoln Park on the Execution Date. Such sales of common stock by
the Company, if any, will be subject to certain limitations, and
may occur from time to time, at the Company’s sole
discretion, over the 24-month period commencing on the date that a
registration statement covering the resale of shares of common
stock that have been and may be issued under the Purchase
Agreement, which the Company agreed to file with the SEC pursuant
to the Registration Rights Agreement, is declared effective by the
SEC and a final prospectus in connection therewith is filed and the
other conditions set forth in the Purchase Agreement are satisfied,
all of which are outside the control of Lincoln Park (such date on
which all of such conditions are satisfied, the Commencement Date).
-14-
Thereafter, under
the Purchase Agreement, on any business day over the term of the
Purchase Agreement, the Company has the right, in its sole
discretion, to present Lincoln Park with a purchase notice (each, a
Purchase Notice) directing
Lincoln Park to purchase up to 100,000 shares per business day (the
Regular Purchase), (subject
to adjustment for any reorganization, recapitalization, non-cash
dividend, stock split, reverse stock split or other similar
transaction as provided in the Purchase Agreement). The Regular
Purchase Amount may be increased up to 150,000 shares if the
closing price is not below $0.80 per share, may be increased up to
200,000 shares if the closing price is not below $1.00 per share,
and may be increased up to 250,000 shares if the closing price is
not below $1.50 per share.
In each case,
Lincoln Park’s maximum commitment in any single Regular
Purchase may not exceed $1,000,000. The Purchase Agreement provides
for a purchase price per Purchase Share (the Purchase Price) equal to the lesser
of:
●
the
lowest sale price of the Company’s common stock on the
purchase date; and
●
the
average of the three lowest closing sale prices for the
Company’s common stock during the ten consecutive business
days ending on the business day immediately preceding the purchase
date of such shares.
In addition, on any
date on which the Company submits a Purchase Notice to Lincoln Park
and on which date the Company has directed a Regular Purchase in
full, the Company also has the right, in its sole discretion, to
present Lincoln with an accelerated purchase notice (each, an
Accelerated Purchase
Notice) directing Lincoln Park to purchase an amount of
stock (the Accelerated
Purchase) equal to up to the lesser of (i) three times the
number of shares purchased pursuant to such Regular Purchase; or
(ii) 30% of the aggregate shares of the Company’s common
stock traded during all or, if certain trading volume or market
price thresholds specified in the Purchase Agreement are crossed on
the applicable Accelerated Purchase date, the portion of the normal
trading hours on the applicable Accelerated Purchase date prior to
such time that any one of such thresholds is crossed (such period
of time on the applicable Accelerated Purchase Date, the
Accelerated Purchase Measurement
Period). The purchase price per share for each such
Accelerated Purchase will be equal to the lesser of:
●
95% of
the volume weighted average price of the Company’s common
stock during the applicable Accelerated Purchase Measurement Period
on the applicable Accelerated Purchase date; and
●
the
closing sale price of the Company’s common stock on the
applicable Accelerated Purchase Date.
In the case of the
regular purchases and accelerated purchases, the purchase price per
share will be equitably adjusted for any reorganization,
recapitalization, non-cash dividend, stock split, reverse stock
split or other similar transaction occurring during the business
days used to compute the purchase price.
Other than as
described above, there are no trading volume requirements or
restrictions under the Purchase Agreement, and we will control the
timing and amount of any sales of our common stock to Lincoln
Park.
-15-
Events
of Default
Events of default
under the Purchase Agreement include the following:
●
the
effectiveness of a registration statement registering the resale of
the Securities lapses for any reason (including, without
limitation, the issuance of a stop order or similar order) or such
registration statement (or the prospectus forming a part thereof)
is unavailable to the Investor for resale of any or all of the
Securities to be issued to the Investor under the Transaction
Documents, and such lapse or unavailability continues for a period
of ten (10) consecutive Business Days or for more than an aggregate
of thirty (30) Business Days in any 365-day period, but excluding a
lapse or unavailability where (i) the Company terminates a
registration statement after the Investor has confirmed in writing
that all of the Securities covered thereby have been resold or (ii)
the Company supersedes one registration statement with another
registration statement, including (without limitation) by
terminating a prior registration statement when it is effectively
replaced with a new registration statement covering Securities
(provided in the case of this clause (ii) that all of the
Securities covered by the superseded (or terminated) registration
statement that have not theretofore been resold are included in the
superseding (or new) registration statement);
●
the
suspension of the common stock from trading on the Principal Market
for a period of one (1) Business Day, provided that the Company may
not direct the Investor to purchase any shares of common stock
during any such suspension;
●
the
delisting of the common stock from The Nasdaq Capital Market,
provided, however, that the common stock is not immediately
thereafter trading on the New York Stock Exchange, The Nasdaq
Global Market, The Nasdaq Global Select Market, the NYSE American,
the NYSE Arca, the OTC Bulletin Board, the OTCQX operated by the
OTC Markets Group, Inc. or the OTCQB operated by the OTC Markets
Group, Inc. (or nationally recognized successor to any of the
foregoing);
●
If at
any time after the Commencement Date, the Exchange Cap is exceeded
unless and until stockholder approval is obtained pursuant to the
Purchase Agreement. The Exchange Cap shall be deemed to be exceeded
at such time if, upon submission of a Regular Purchase Notice or
Accelerated Purchase Notice under this Agreement, the issuance of
such shares of common stock would exceed that number of shares of
common stock which the Company may issue under this Agreement
without breaching the Company’s obligations under the rules
or regulations of the Principal Market;
●
the
failure for any reason by the Transfer Agent to issue Purchase
Shares to the Investor within three (3) Business Days after the
applicable Purchase Date, Accelerated Purchase Date or Additional
Accelerated Purchase Date (as applicable) on which the Investor is
entitled to receive such Purchase Shares;
●
the
Company breaches any representation, warranty, covenant or other
term or condition under any Transaction Document if such breach has
or could have a Material Adverse Effect and except, in the case of
a breach of a covenant which is reasonably curable, only if such
breach continues for a period of at least five (5) Business
Days;
●
if any
Person commences a proceeding against the Company pursuant to or
within the meaning of any Bankruptcy Law;
●
if the
Company is at any time insolvent, or, pursuant to or within the
meaning of any Bankruptcy Law, (i) commences a voluntary case, (ii)
consents to the entry of an order for relief against it in an
involuntary case, (iii) consents to the appointment of a Custodian
of it or for all or substantially all of its property, or (iv)
makes a general assignment for the benefit of its creditors or is
generally unable to pay its debts as the same become
due;
●
a court
of competent jurisdiction enters an order or decree under any
Bankruptcy Law that (i) is for relief against the Company in an
involuntary case, (ii) appoints a Custodian of the Company or for
all or substantially all of its property, or (iii) orders the
liquidation of the Company or any Subsidiary; or
●
if at
any time the Company is not eligible to transfer its common stock
electronically as DWAC Shares.
Lincoln Park does
not have the right to terminate the Purchase Agreement upon any of
the events of default set forth above. During an event of default,
all of which are outside of Lincoln Park’s control, we may
not direct Lincoln Park to purchase any shares of our common stock
under the Purchase Agreement.
Termination
Rights of the Company
We have the
unconditional right, at any time, for any reason and without any
payment or liability to Lincoln Park, to give notice to Lincoln
Park to terminate the Purchase Agreement.
No
Short-Selling or Hedging by Lincoln Park
Lincoln Park has
agreed that neither it nor any of its affiliates shall engage in
any direct or indirect short-selling or hedging of our common stock
during any time prior to the termination of the Purchase
Agreement.
-16-
Prohibitions
on Variable Rate Transactions
There are no
restrictions on future financings, rights of first refusal,
participation rights, penalties or liquidated damages in the
Purchase Agreement or Registration Rights Agreement, other than a
prohibition on entering into a “Variable Rate
Transaction,” as defined in the Purchase
Agreement.
Effect
of Performance of the Purchase Agreement on Our
Stockholders
All 9,592,607
shares registered in this offering which have been and may be
issued or sold by us to Lincoln Park under the Purchase Agreement
are expected to be freely tradable. It is anticipated that shares
registered in this offering may be sold over a period of up to
24-months commencing on the date that the registration statement
including this prospectus becomes effective. The sale by Lincoln
Park of a significant number of shares registered in this offering
at any given time could cause the market price of our common stock
to decline and to be highly volatile. Sales of our common stock to
Lincoln Park, if any, will depend upon market conditions and other
factors to be determined by us. We may ultimately decide to sell to
Lincoln Park all, some or none of the additional shares of our
common stock that may be available for us to sell pursuant to the
Purchase Agreement. If and when we do sell shares to Lincoln Park,
after Lincoln Park has acquired the shares, Lincoln Park may resell
all, some or none of those shares at any time or from time to time
in its discretion. Therefore, sales to Lincoln Park by us under the
Purchase Agreement may result in substantial dilution to the
interests of other holders of our common stock. In addition, if we
sell a substantial number of shares to Lincoln Park under the
Purchase Agreement, or if investors expect that we will do so, the
actual sales of shares or the mere existence of our arrangement
with Lincoln Park may make it more difficult for us to sell equity
or equity-related securities in the future at a time and at a price
that we might otherwise wish to effect such sales. However, we have
the right to control the timing and amount of any additional sales
of our shares to Lincoln Park and the Purchase Agreement may be
terminated by us at any time at our discretion without any cost to
us.
The Purchase
Agreement prohibits us from issuing or selling to Lincoln Park
under the Purchase Agreement (i) shares of our common stock in
excess of the Exchange Cap, unless we obtain stockholder approval
to issue shares in excess of the Exchange Cap or the average price
of all applicable sales of our common stock to Lincoln Park under
the Purchase Agreement equals or exceeds the closing price of our
common stock on The Nasdaq Capital Market on the business day
immediately preceding March 24, 2020 plus an incremental amount,
such that the transactions contemplated by the Purchase Agreement
are exempt from the Exchange Cap limitation under applicable Nasdaq
rules, and (ii) any shares of our common stock if those shares,
when aggregated with all other shares of our common stock then
beneficially owned by Lincoln Park and its affiliates, would exceed
the Beneficial Ownership Cap.
The following table
sets forth the amount of gross proceeds we would receive from
Lincoln Park from our sale of shares to Lincoln Park under the
Purchase Agreement at varying purchase prices:
|
Assumed
Average Purchase Price Per Share
|
Number
of Registered Shares to be Issued if Full Purchase (1)
|
Percentage
of Outstanding Shares After Giving Effect to the Issuance to
Lincoln Park (2)
|
Proceeds
from the Sale of Shares to Lincoln Park Under the $10.25M Purchase
Agreement (4)
|
|
$0.3557(3)
|
8,342,607
|
14.49%
|
$3,217,465
|
|
$0.50
|
8,342,607
|
14.49%
|
$4,421,304
|
|
$1.00
|
8,342,607
|
14.49%
|
$8,592,607
|
|
$1.50
|
6,666,607
|
11.93%
|
$10,250,000
|
|
$2.00
|
5,000,000
|
9.22%
|
$10,250,000
|
(1)
Includes the total
number of purchase shares which we would have sold under the
Purchase Agreement at the corresponding assumed purchase price per
share set forth in the adjacent column, which does not include the
750,000 Commitment Shares previously issued to Lincoln Park, nor
the 500,000 Initial Purchase Shares previously sold to Lincoln
Park. Although the Purchase Agreement provides that we may sell up
to $10,250,000 of our common stock to Lincoln Park (including the
Initial Purchase Shares), we are only registering 9,592,607 shares
(including the 750,000 Commitment Shares and the 500,000 Initial
Purchase Shares previously issued to Lincoln Park) under this
prospectus, which may or may not cover all the shares we ultimately
sell to Lincoln Park under the Purchase Agreement, depending on the
purchase price per share. As a result, we have included in this
column only those shares that we are registering in this offering.
If we seek to issue shares of our common stock, including shares
from other transactions that may be aggregated with the
transactions contemplated by the Purchase Agreement under the
applicable rules of The Nasdaq Capital Market, in excess of
9,592,607 shares, or 19.99% of the total common stock outstanding
immediately prior to the execution of the Purchase Agreement unless
the average price per share exceeds the closing price of our common
stock on The Nasdaq Capital Market on the business day immediately
preceeding March 24, 2020, plus an incremental amount, such that
issuances and sales of our common stock to Lincoln Park under the
Purchase Agreement would be exempt from the Exchange Cap limitation
under applicable Nasdaq rules, we may be required to seek
stockholder approval to maintain compliance with the rules of The
Nasdaq Capital Market.
(2)
The
denominator is based on 49,213,042 shares outstanding as of March
30, 2020, which includes (i) 750,000 Commitment Shares and 500,000
Initial Purchase Shares issued to Lincoln Park upon the execution
of the Purchase Agreement, and (ii) the number of shares set forth
in the adjacent column which we would have sold to Lincoln Park,
assuming the purchase price in the adjacent column. The numerator
is based on the number of shares issuable under the Purchase
Agreement at the corresponding assumed purchase price set forth in
the adjacent column.
(3)
The
Minimum Price as calculated in accordance with rules of the Nasdaq
Capital Market.
(4)
Includes $250,000
proceeds from sale of 500,000 Initial Purchase Shares.
-17-
PLAN OF DISTRIBUTION
The common stock
offered by this prospectus is being offered by the selling
stockholder, Lincoln Park. The common stock may be sold or
distributed from time to time by the selling stockholder directly
to one or more purchasers or through brokers, dealers, or
underwriters who may act solely as agents at market prices
prevailing at the time of sale, at prices related to the prevailing
market prices, at negotiated prices, or at fixed prices, which may
be changed. The sale of the common stock offered by this prospectus
could be affected in one or more of the following
methods:
●
ordinary
brokers’ transactions;
●
transactions
involving cross or block trades;
●
through
brokers, dealers, or underwriters who may act solely as
agents;
●
“at the
market” into an existing market for the common
stock;
●
in
other ways not involving market makers or established business
markets, including direct sales to purchasers or sales effected
through agents;
●
in
privately negotiated transactions; or
●
any
combination of the foregoing.
In order to comply
with the securities laws of certain states, if applicable, the
shares may be sold only through registered or licensed brokers or
dealers. In addition, in certain states, the shares may not be sold
unless they have been registered or qualified for sale in the state
or an exemption from the state’s registration or
qualification requirement is available and complied
with.
Lincoln Park is an
“underwriter” within the meaning of Section 2(a)(11) of
the Securities Act.
Lincoln Park has
informed us that it intends to use an unaffiliated broker-dealer to
effectuate all sales, if any, of the common stock that it may
purchase from us pursuant to the Purchase Agreement. Such sales
will be made at prices and at terms then prevailing or at prices
related to the then current market price. Each such unaffiliated
broker-dealer will be an underwriter within the meaning of Section
2(a)(11) of the Securities Act. Lincoln Park has informed us that
each such broker-dealer will receive commissions from Lincoln Park
that will not exceed customary brokerage commissions.
Brokers, dealers,
underwriters or agents participating in the distribution of the
shares as agents may receive compensation in the form of
commissions, discounts, or concessions from the selling stockholder
and/or purchasers of the common stock for whom the broker-dealers
may act as agent. The compensation paid to a particular
broker-dealer may be less than or in excess of customary
commissions. Neither we nor Lincoln Park can presently estimate the
amount of compensation that any agent will receive.
We know of no
existing arrangements between Lincoln Park or any other
stockholder, broker, dealer, underwriter or agent relating to the
sale or distribution of the shares offered by this prospectus. At
the time a particular offer of shares is made, a prospectus
supplement, if required, will be distributed that will set forth
the names of any agents, underwriters or dealers and any
compensation from the selling stockholder, and any other required
information.
We will pay the
expenses (except brokerage fees and commissions and similar
expenses) incurred in registering the shares, including legal and
accounting fees. We have agreed to indemnify Lincoln Park and
certain other persons against certain liabilities in connection
with the offering of shares of common stock offered hereby,
including liabilities arising under the Securities Act or, if such
indemnity is unavailable, to contribute amounts required to be paid
in respect of such liabilities. Lincoln Park has agreed to
indemnify us against liabilities under the Securities Act that may
arise from certain written information furnished to us by Lincoln
Park specifically for use in this prospectus or, if such indemnity
is unavailable, to contribute amounts required to be paid in
respect of such liabilities.
Lincoln Park has
represented to us that at no time prior to the Purchase Agreement
has Lincoln Park or its agents, representatives or affiliates
engaged in or effected, in any manner whatsoever, directly or
indirectly, any short sale (as such term is defined in Rule 200 of
Regulation SHO of the Exchange Act) of our common stock or any
hedging transaction, which establishes a net short position with
respect to our common stock. Lincoln Park agreed that during the
term of the Purchase Agreement, it, its agents, representatives or
affiliates will not enter into or effect, directly or indirectly,
any of the foregoing transactions.
We have advised
Lincoln Park that it is required to comply with Regulation M
promulgated under the Exchange Act. With certain exceptions,
Regulation M precludes the selling stockholder, any affiliated
purchasers, and any broker-dealer or other person who participates
in the distribution from bidding for or purchasing, or attempting
to induce any person to bid for or purchase any security which is
the subject of the distribution until the entire distribution is
complete. Regulation M also prohibits any bids or purchases made in
order to stabilize the price of a security in connection with the
distribution of that security. All of the foregoing may affect the
marketability of the securities offered by this
prospectus.
This offering will
terminate on the earlier of (i) termination of the Purchase
Agreement or (ii) the date that all shares offered by this
prospectus have been sold by Lincoln Park.
Our common stock is
quoted on The Nasdaq Capital Market under the symbol
“VTGN”.
-18-
DESCRIPTION OF CAPITAL STOCK
The following summary of the rights of our capital stock is not
complete and is subject to and qualified in its entirety by
reference to our certificate of incorporation and bylaws, copies of
which are filed as exhibits to our Annual Report on Form 10-K for
the year ended March 31, 2019, filed with the SEC on June 25, 2019,
which is incorporated by reference
herein.
General
Our authorized
capital stock consists of 175.0 million shares of common stock,
$0.001 par value per share, and 10.0 million shares of preferred
stock, $0.001 par value per share.
Common Stock
This section describes the general terms of our common stock that
we may offer from time to time. For more detailed information, a
holder of our common stock should refer to our Restated and Amended
Article of Incorporation, as amended (our Articles) and our Amended
and Restated Bylaws (our Bylaws), copies of which are filed with
the SEC as exhibits to the registration statement of which this
prospectus is a part.
As of March 30, 2020, there were issued and
outstanding, or reserved for issuance:
●
49,213,042 shares of common stock held by
approximately 6,000
stockholders of record;
●
750,000 shares of common stock reserved for
issuance upon conversion of 500,000 shares our Series A Preferred held
by one institutional investor and one accredited individual
investor;
●
1,160,240 shares of common stock reserved
for issuance upon conversion of 1,160,240 shares of our Series B Preferred
held by two institutional investors;
●
2,318,012 shares of common stock reserved
for issuance upon conversion of 2,318,012 shares of our Series C Preferred
held by one institutional investor;
●
26,555,281 shares of common stock that have
been reserved for issuance upon exercise of outstanding warrants,
with a weighted average exercise price of $1.64 per share;
●
7,768,088 registered shares of common stock
reserved for issuance upon exercise of outstanding stock options
under our Amended and Restated 2016 Stock Incentive Plan, with a
weighted average exercise price of $1.41 per share;
●
2,235,000
registered shares of common stock reserved for issuance upon
exercise of outstanding stock options under our 2019 Omnibus Equity
Incentive Plan, with a weighted average exercise price of $1.22 per
share, and
●
6,730,162 registered shares of common stock
reserved for future issuance in connection with future grants under
our 2019 Omnibus Equity Incentive Plan.
●
1,000,000 shares of
common stock reserved for future issuance in connection with future
sales under our 2019 Employee Stock Purchase Plan.
We may elect or be
required to amend our Articles to increase the number of shares of
common stock authorized for issuance prior to completing sales of
shares of our common stock, or securities convertible and/or
exchangeable into shares of our common stock described in this
prospectus.
Except as otherwise
expressly provided in our Articles, or as required by applicable
law, all shares of our common stock have the same rights and
privileges and rank equally, share ratably and are identical in all
respects as to all matters, including, without limitation, those
described below. All outstanding shares of common stock are fully
paid and nonassessable.
-19-
Voting Rights
Each holder of our
common stock is entitled to cast one vote for each share of common
stock held on all matters submitted to a vote of stockholders.
Cumulative voting for election of directors is not allowed under
our Articles, which means that a plurality of the shares voted can
elect all of the directors then outstanding for election. Except as
otherwise provided under Nevada law or our Articles, and Bylaws, on
matters other than election of directors, action on a matter is
approved if the votes cast favoring the action exceed the votes
cast opposing the action.
Dividend Rights
The holders of
outstanding shares of our common stock are entitled to receive
dividends out of funds legally available, if our board of
directors, in its discretion, determines to issue dividend, and
only at the times and in the amounts that our board of directors
may determine. Our board of directors is not obligated to declare a
dividend. We have not paid any dividends in the past and we do not
intend to pay dividends in the foreseeable future.
Liquidation Rights
Upon our
liquidation, dissolution or winding-up, the holders of our common
stock will be entitled to share equally, identically and ratably in
all assets remaining, subject to the prior satisfaction of all
outstanding debt and liabilities and the preferential rights and
payment of liquidation preferences, if any, on any outstanding
shares of preferred stock.
No Preemptive or Similar Rights
Our common stock is
not subject to conversion, redemption, sinking fund or similar
provisions.
Transfer Agent and Registrar
The transfer agent
and registrar for our common stock is Computershare Trust Company,
N.A., Jersey City, New Jersey.
Listing
Our common stock is
listed on The Nasdaq Capital Market under the symbol
“VTGN”.
-20-
EXECUTIVE
COMPENSATION
Executive Officers
The
Company’s executive officers are appointed by the Board and
serve at the discretion of the Board, subject to the terms of any
employment agreements they may have with the Company. The following
is a brief description of the present and past business experience
of each of the Company’s current executive
officers.
|
Name
|
|
Age
|
|
Position
|
|
Shawn
K. Singh, JD
|
|
57
|
|
Chief
Executive Officer and Director
|
|
H.
Ralph Snodgrass, Ph.D.
|
|
70
|
|
Founder,
President, Chief Scientific Officer and Director
|
|
Mark
A. Smith, M.D., Ph.D.
|
|
64
|
|
Chief
Medical Officer
|
|
Jerrold
D. Dotson, CPA
|
|
66
|
|
Vice
President, Chief Financial Officer and Secretary
|
|
Mark
A. McPartland
|
|
54
|
|
Vice
President, Corporate Development
|
Shawn K. Singh has
served as our Chief Executive Officer since August 2009, first as
the Chief Executive Officer of VistaGen Therapeutics, Inc., a
California corporation (VistaGen
California), then as Chief Executive Officer of the Company
after the merger by and between VistaGen California and the Company
on May 11, 2011 (the Merger), at which time VistaGen
California became a wholly-owned subsidiary of the Company. Mr.
Singh first joined the Board of Directors of VistaGen California in
2000 and served on the VistaGen California management team
(part-time) from late-2003, following VistaGen California’s
acquisition of Artemis Neuroscience, of which he was President, to
August 2009. In connection with the Merger, Mr. Singh was appointed
as a member of our Board in 2011. Mr. Singh has nearly 30 years of
experience working with biotechnology, medical device and
pharmaceutical companies, both private and public. From 2001 to
August 2009, Mr. Singh served as Managing Principal of Cato
BioVentures, a life science venture capital firm, and as Chief
Business Officer and General Counsel of Cato Research Ltd, a
contract research organization (CRO) affiliated with Cato BioVentures.
Mr. Singh served as President (part-time) of Echo Therapeutics, a
medical device company, from 2007 to 2009, and as a member of its
Board of Directors from 2007 to 2011. He also served as Chief
Executive Officer (part- time) of Hemodynamic Therapeutics, a
private biopharmaceutical company affiliated with Cato BioVentures,
from 2004 to 2009. From 2000 to 2001, Mr. Singh served as Managing
Director of Start-Up Law, a management consulting firm serving
biotechnology companies. Mr. Singh also served as Chief Business
Officer of SciClone Pharmaceuticals (formerly NASDAQ: SCLN), a
specialty pharmaceutical company with a substantial commercial
business in China, from 1993 to 2000, and as a corporate finance
associate of Morrison & Foerster LLP, an international law
firm, from 1991 to 1993. Mr. Singh earned a B.A. degree, with
honors, from the University of California, Berkeley, and a Juris
Doctor degree from the University of Maryland School of Law. Mr.
Singh is a member of the State Bar of
California.
H. Ralph
Snodgrass, Ph.D. co-founded VistaGen California with Dr.
Gordon Keller in 1998 and served as the Chief Executive Officer of
VistaGen California until August 2009. Dr. Snodgrass has served as
the President and Chief Scientific Officer of VistaGen California
from inception to the present, and in the same positions with the
Company following the completion of the Merger. He served as a
member of the Board of Directors of VistaGen California from 1998
to 2011, and was appointed to serve on our Board after the
completion of the Merger. Prior to founding VistaGen California,
Dr. Snodgrass served as a key member of the executive management
team that led Progenitor, Inc., a biotechnology company focused on
developmental biology, through its initial public offering, and was
its Chief Scientific Officer from June 1994 to May 1998, and its
Executive Director from July 1993 to May 1994. He received his
Ph.D. in immunology from the University of Pennsylvania, and has 25
years of experience in senior biotechnology management and over 10
year’s research experience as an assistant professor at the
Lineberger Comprehensive Cancer Center, University of North
Carolina Chapel Hill School of Medicine, and as a member of the
Institute for Immunology, Basel, Switzerland. Dr. Snodgrass is a
past Board Member of the Emerging Company Section of the
Biotechnology Industry Organization (BIO), and past member of the
International Society of Stem Cell Research (ISSCR) Industry Committee. Dr.
Snodgrass has published more than 95 scientific papers, is the
inventor on more than 21 patents and a number of patent
applications, has been, the Principal Investigator on U.S. federal
and private foundation sponsored research grants with budgets
totaling more than $14.5 million and is recognized as an expert in
stem cell biology with more than 32 years’ experience in the
uses of stem cells as biological tools for research, drug discovery
and development.
-21-
Mark A.
Smith, M.D., Ph.D. has served as our Chief Medical Officer since June
2016. Dr. Smith served as the Clinical Lead for
Neuropsychiatry at Teva Pharmaceuticals from November 2013 through
June 2016. He served as Senior Director of Experimental
Medicine, Global Clinical Development and Innovation at Shire
Pharmaceuticals from September 2012 to October 2013 and at
AstraZeneca Pharmaceutical Company as Executive Director of
Clinical Development and in other senior positions from
June 2000 through September 2012. He served as a Senior
Investigator and Principal Research Scientist in CNS Diseases
Research at DuPont Pharmaceutical Company from 1996 to 2000 and in
the Biological Psychiatry and Clinical Neuroendocrinology Branches
of the National Institute of Mental Health from 1987 through
1996. Dr. Smith has significant expertise in drug
discovery and development and clinical trial design and execution,
having directed approximately fifty clinical trials from Phase 0
through Phase II B and served as project leader in both
the discovery and development of approximately twenty
investigational new drugs aimed at depression, anxiety,
schizophrenia and other disorders. Dr. Smith received
his Bachelor of Science and Master of Science degrees in Molecular
Biophysics and Biochemistry from Yale University; his M.D and Ph.D.
in Physiology and Pharmacology from the University of California,
San Diego and completed his residency at Duke University Medical
Center.
Jerrold D.
Dotson, CPA has served as our Chief Financial Officer since
September 2011, as our Corporate Secretary since October 2013 and
as a Vice President since February 2014. Mr. Dotson served as
Corporate Controller for Discovery Foods Company, a privately held
Asian frozen foods company from January 2009 to September
2011. From February 2007 through September 2008, Mr.
Dotson served as Vice President, Finance and Administration
(principal financial and accounting officer) for Calypte Biomedical
Corporation (OTCBB: CBMC), a publicly held biotechnology
company. Mr. Dotson served as Calypte’s Corporate
Secretary from 2001 through September 2008. He also
served as Calypte’s Director of Finance from January 2000
through July 2005 and was a financial consultant to Calypte from
August 2005 through January 2007. Prior to joining
Calypte, from 1988 through 1999, Mr. Dotson worked in various
financial management positions, including Chief Financial Officer,
for California & Hawaiian Sugar Company, a privately held
company. Mr. Dotson is licensed as a CPA in California
and received his B.S. degree in Business Administration with a
concentration in accounting from Abilene Christian
College.
Mark A.
McPartland has served as
our Vice-President, Corporate
Development since October 2016. Mr. McPartland previously served as
the Vice President of Corporate Development and Communications at
Stellar Biotechnologies, Inc. (now Edesa Biotech, Inc. (NASDAQ:
EDSA)), from November 2013 to September 2016. While at Stellar, Mr.
McPartland was responsible for transforming and expanding its
capital markets and corporate communications strategy, while also
supporting its global business development activities. From
September 2011 to November 2013, Mr. McPartland served as Senior
Vice President at MZ North America, a subsidiary of MZ Group, a
global leader in investor relations and corporate communications,
and from January 2005 to January 2011, he served as Vice President
and Partner at Alliance Advisors, LLC where he specialized in the
implementation of capital markets strategy, market positioning and
financial communications, and Regional Vice President of Hayden
Communications, Inc. where he led investor relations and corporate
communications programs for micro and small cap companies. Mr.
McPartland received his Bachelors in Business Administration and
Marketing from Coastal Carolina University.
Our Compensation Objectives
Our
compensation practices are designed to attract key employees and to
retain, motivate and reward our executive officers for their
performance and contribution to our long-term success. Our Board,
through the Compensation Committee, seeks to compensate our
executive officers by combining short and long-term cash and equity
incentives. It also seeks to reward the achievement of corporate
and individual performance objectives, and to align executive
officers’ incentives with stockholder value creation. When
possible, the Compensation Committee seeks to tie individual goals
to the area of the executive officer’s primary
responsibility. These goals may include the achievement of specific
financial or business development goals. Also, when possible and
appropriate taking into account the Company’s financial
condition and other related facts and circumstances, the
compensation committee seeks to set performance goals that reach
across all business areas and include achievements in
finance/business development and corporate
development.
The
Compensation Committee makes decisions regarding salaries, annual
bonuses, if any, and equity incentive compensation for our
executive officers, approves corporate goals and objectives
relevant to the compensation of the Chief Executive Officer and our
other executive officers. The Compensation Committee solicits input
from our Chief Executive Officer regarding the performance of our
other executive officers. Finally, the Compensation Committee also
administers our incentive compensation and benefit
plans.
Although
we have no formal policy for a specific allocation between current
and long-term compensation, or cash and non-cash compensation, when
possible and appropriate taking into account the Company’s
financial condition and other related facts and circumstances, we
seek to implement a pay mix for our officers with a relatively
equal balance of both, providing a competitive salary with a
significant portion of compensation awarded on both corporate and
personal performance.
-22-
Compensation Components
As
a general rule, and when possible and appropriate taking into
account the Company’s financial condition and other related
facts and circumstances, our compensation consists primarily of
three elements: base salary, annual bonus and long-term equity
incentives. We describe each element of compensation in more detail
below.
Base Salary
Base
salaries for our executive officers are established based on the
scope of their responsibilities and their prior relevant
experience, taking into account competitive market compensation
paid by other companies in our industry for similar positions and
the overall market demand for such executives, both initially at
the time of hire and thereafter, to ensure that we retain our
executive management team. An executive officer’s base salary
is also determined by reviewing the executive officer’s other
compensation to ensure that the executive officer’s total
compensation is in line with our overall compensation
philosophy.
Base
salaries are reviewed periodically as deemed necessary by the
Compensation Committee and increased for merit reasons, based on
the executive officers’ success in meeting or exceeding
individual objectives. Additionally, we may adjust base salaries as
warranted throughout the year for promotions or other changes in
the scope or breadth of an executive officer’s role or
responsibilities.
Annual Bonus
The Compensation Committee assesses the level of
the executive officer’s achievement of meeting individual
goals, as well as that executive officer’s contribution
towards our corporate-wide goals. The amount of the cash bonus
depends on the level of achievement of the individual performance
goals, with a target bonus generally set as a percentage of base
salary and based on the achievement of pre-determined
milestones. For the year ended March 31, 2019, each
Named Executive Officer (NEO) serving during that period was awarded a bonus
by the Compensation Committee in the amount set forth in the
Summary Compensation Table below. The Compensation Committee has
not yet determined or awarded a bonus to any NEO for our fiscal
year ended March 31, 2020. Payment of a bonus to an NEO for our
fiscal year ended March 31, 2020, if any, is at the discretion of
the Compensation Committee which may consider factors other than
attainment of individual or corporate goals in its determination of
bonus amounts to be granted.
Long-Term
Equity Incentives
The Compensation
Committee believes that to attract and retain management, employees
and independent directors, the compensation paid to these persons
should include non-cash equity-based compensation, in addition to
base salary and potential annual cash incentives, that is
competitive with peer companies. The Compensation Committee
determines the amount and terms of non-cash equity-based
compensation granted under our stock option plans or pursuant to
other awards made to our executives, employees and independent
directors. Any long-term equity compensation granted to our
management, employees and independent directors does not represent
cash payments made to such individuals, and there is no guarantee
that any recipients of awards granted as long-term equity
compensation will realize any cash value as a result of the
awards.
During the year
ended March 31, 2020, the Compensation Committee granted stock
options to management, employees and independent directors as a
part of each individual's long-term compensation. The options have
a term of ten years, and an exercise price that was at or above the
market price of our common stock on the grant date, which the
Compensation Committee believes align the long-term interests of
our management, employees and independent directors with those of
our stockholders. In addition, the exercise price of the options
granted during our 2020 fiscal year remains above the market price
of our common stock as of March 31, 2020.
-23-
2020 Summary Compensation Table
The
following table shows information regarding the compensation of our
NEOs for services performed in the fiscal years ended March 31,
2020 and 2019.
|
|
|
|
|
|
|
All
|
|
|
|
|
|
|
Option
|
|
Other
|
|
|
|
Fiscal
|
Salary
|
Bonus (9)
|
Awards (6)
|
|
Compensation
|
Total
|
|
Name and Principal Position
|
Year
|
($)
|
($)
|
($)
|
|
($)
|
($)
|
|
|
|
|
|
|
|
|
|
|
Shawn K. Singh (1)
|
2020
|
498,000
|
-
|
435,667
|
(7)
|
-
|
933,667
|
|
Chief Executive Officer
|
2019
|
466,365
|
110,305
|
374,445
|
(8)
|
-
|
951,115
|
|
|
|
|
|
|
|
|
|
|
H. Ralph Snodgrass, Ph.D. (2)
|
2020
|
416,850
|
-
|
254,405
|
(7)
|
-
|
671,255
|
|
President, Chief Scientific Officer
|
2019
|
393,991
|
73,444
|
174,823
|
(8)
|
-
|
642,258
|
|
|
|
|
|
|
|
|
|
|
Mark A. Smith, M.D., Ph.D. (3)
|
2020
|
416,850
|
-
|
179,988
|
(7)
|
-
|
596,838
|
|
Chief Medical Officer
|
2019
|
393,991
|
73,444
|
154,922
|
(8)
|
-
|
622,357
|
|
|
|
|
|
|
|
|
|
|
Jerrold D. Dotson (4)
|
2020
|
367,500
|
-
|
229,571
|
(7)
|
-
|
597,071
|
|
Vice President, Chief Financial
|
2019
|
344,992
|
64,749
|
131,326
|
(8)
|
-
|
541,067
|
|
Officer and Secretary
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mark A. McPartland (5)
|
2020
|
300,000
|
-
|
179,988
|
(7)
|
-
|
479,988
|
|
Vice President, Corporate Development
|
2019
|
268,750
|
50,874
|
187,017
|
(8)
|
-
|
506,641
|
-24-
|
(1)
|
Mr. Singh became Chief Executive Officer of
VistaGen Therapeutics, Inc. (a California corporation)
(VistaGen
California) on August 20, 2009
and our Chief Executive Officer in May 2011, in connection with the
Merger. Pursuant to his January 2010 employment
agreement, as amended in June 2016, Mr. Singh’s annual base
cash salary, was contractually set at $395,000. The Compensation
Committee has since adjusted Mr. Singh’s base annual salary
to $477,000 effective in July 2018 and to $498,000 effective in
April 2019. Pursuant to his employment agreement, Mr. Singh is
eligible to receive an annual cash incentive bonus of up to fifty
percent (50%) of his base cash salary.
|
|
|
|
|
(2)
|
Through
August 20, 2009, Dr. Snodgrass served as VistaGen
California’s President and Chief Executive Officer, at which
time he became its President and Chief Scientific
Officer. He became our President and Chief Scientific
Officer in May 2011, in connection with the
Merger. Pursuant to his January 2010 employment
agreement, as amended in June 2016, Dr. Snodgrass’ annual
base cash salary, was contractually set at $350,000. The
Compensation Committee has since adjusted Dr. Snodgrass’ base
annual salary to $397,000 effective in July 2018 and to $416,850
effective in April 2019. Pursuant to his employment agreement,
Dr. Snodgrass is eligible to receive an annual cash incentive bonus
of up to fifty percent (50%) of his base cash salary.
|
|
|
|
|
(3)
|
Dr.
Smith became our Chief Medical Officer upon his employment
effective June 18, 2016. During our fiscal year ended March 31,
2019, Dr. Smith’s annual base cash salary was $397,000. The
Compensation Committee adjusted Dr. Smith’s base annual
salary to $416,850 effective in April 2019.
|
|
|
|
|
(4)
|
Mr.
Dotson served as Chief Financial Officer on a contract basis from
September 19, 2011 through August 2012, at which time he became our
full-time employee. During our fiscal year ended March
31, 2019, Mr. Dotson’s annual base cash salary was $350,000.
The Compensation Committee adjusted Mr. Dotson’s base annual
salary to $367,500 effective in April 2019.
|
|
|
|
|
(5)
|
Mr. McPartland has served as our Vice-President, Corporate Development since
October 2016 and was designated a NEO in September 2017. During our
fiscal year ended March 31, 2019, Mr. McPartland’s annual
base cash salary was $275,000. The Compensation Committee adjusted
Mr. McPartland’s base annual salary to $300,000 effective in
April 2019.
|
|
|
|
|
(6)
|
The amounts in the Option Awards column do not
represent any cash payments actually received by the NEOs with
respect to any of such options to purchase shares of our common
stock awarded to them or modified during the periods presented.
Rather, the amounts in this column represent (i) the aggregate
grant date fair value of options to purchase shares of our common
stock awarded to Mr. Singh, Dr. Snodgrass, Dr. Smith, Mr. Dotson
and Mr. McPartland during the fiscal year presented, and (ii) in
Fiscal 2019, the modification date incremental fair value resulting
from the reduction of exercise prices in excess of $1.56 per share
to $1.50 per share for options previously granted to Mr. Singh, Dr.
Snodgrass, Dr. Smith, Mr. Dotson and Mr. McPartland, both computed
in accordance with the Financial Accounting Standards Board’s
Accounting Standards Codification Topic 718, Compensation –
Stock Compensation (ASC 718). Other than the exercise of such modified
options to purchase 25,375 and 2,500 shares of our common stock at
$1.50 per share by Mr. Singh and Dr. Snodgrass, respectively,
during our fiscal year ended March 31, 2019, to date, none of the
NEOs have exercised any of such options to purchase common stock,
and there can be no assurance that any of them will ever realize
any of the ASC 718 grant date fair value amounts presented in the
Option Awards column.
|
|
(7)
|
The
table below provides information regarding the option awards we
granted to the NEO’s during Fiscal 2020 and the assumptions
used in the Black Scholes Option Pricing Model to determine the
grant date fair values of the respective awards.
|
-25-
|
|
Option
Grant
|
Option
Grant
|
Option
Grant
|
|
|
Option Award
Compensation – Fiscal Year Ended March 31, 2020
|
5/23/2019
|
9/5/2019
|
10/21/2019
|
Total
|
|
|
|
|
|
|
|
Singh
|
$42,142
|
$95,803
|
$297,682
|
$435,667
|
|
Snodgrass
|
80,747
|
-
|
173,658
|
254,405
|
|
Smith
|
80,747
|
-
|
99,241
|
179,988
|
|
Dotson
|
80,747
|
-
|
148,824
|
229,571
|
|
McPartland
|
80,747
|
-
|
99,241
|
179,988
|
|
|
$365,130
|
$95,803
|
$818,646
|
$1,279,619
|
|
|
Option
Grant
|
Option
Grant
|
Option
Grant
|
|
|
Option Shares
Granted - Fiscal Year Ended March 31, 2020
|
5/23/2019
|
9/5/2019
|
10/21/2019
|
Total
|
|
|
|
|
|
|
|
Singh
|
80,000
|
170,000
|
300,000
|
600,000
|
|
Snodgrass
|
150,000
|
-
|
175,000
|
400,000
|
|
Smith
|
150,000
|
-
|
100,000
|
425,000
|
|
Dotson
|
150,000
|
-
|
150,000
|
400,000
|
|
McPartland
|
150,000
|
-
|
100,000
|
300,000
|
|
|
680,000
|
170,000
|
825,000
|
2,125,000
|
|
|
Option
Grant
|
Option
Grant
|
Option
Grant
|
|
Option Award
Assumptions – Fiscal Year Ended March 31, 2020
|
5/23/2019
|
9/5/2019
|
10/21/2019
|
|
|
|
|
|
|
Market
price per share
|
$0.80
|
0.84
|
$1.41
|
|
Exercise
price per share
|
$1.00
|
1.00
|
$1.41
|
|
Risk-free
interest rate
|
2.13%
|
1.45%
|
1.62%
|
|
Volatility
|
85.9%
|
86.0%
|
87.5%
|
|
Expected
term (years)
|
5.58
|
5.58
|
5.39
|
|
Dividend
rate
|
0.0%
|
0.0%
|
0.0%
|
|
|
|
|
|
|
Fair
value per share
|
$0.54
|
0.56
|
$0.99
|
|
Aggregate
shares
|
680,000
|
170,000
|
825,000
|
|
(8)
|
The
table below provides information regarding the option awards we
granted to the NEO’s during Fiscal 2019 and the assumptions
used in the Black Scholes Option Pricing Model to determine the
grant date fair values of the respective awards and
modifications
|
|
|
Option
Grant
|
Option
Modifications
|
Option
Grant
|
|
|
Option Award
Compensation – Fiscal Year Ended March 31, 2019
|
8/5/2018
|
8/29/2018
|
1/14/2019
|
Total
|
|
|
|
|
|
|
|
Singh
|
$-
|
$95,436
|
$279,009
|
$374,445
|
|
Snodgrass
|
122,913
|
51,910
|
-
|
174,823
|
|
Smith
|
98,330
|
56,592
|
-
|
154,922
|
|
Dotson
|
98,330
|
32,996
|
-
|
131,326
|
|
McPartland
|
147,495
|
39,522
|
-
|
187,017
|
|
|
$467,068
|
$276,456
|
$279,009
|
$1,022,553
|
|
|
Option
Grant
|
Option
Modifications
|
Option
Grant
|
|
|
Option Shares
Granted - Fiscal Year Ended March 31, 2019
|
8/5/2018
|
8/29/2018
|
1/14/2019
|
Total
|
|
|
|
|
|
|
|
Singh
|
-
|
-
|
220,000
|
600,000
|
|
Snodgrass
|
125,000
|
-
|
-
|
400,000
|
|
Smith
|
100,000
|
-
|
-
|
425,000
|
|
Dotson
|
100,000
|
-
|
-
|
400,000
|
|
McPartland
|
150,000
|
-
|
-
|
300,000
|
|
|
475,000
|
-
|
220,000
|
2,125,000
|
-26-
|
|
Option
Grant
|
Option
Modifications
|
Option
Grant
|
|
Option Award
Assumptions – Fiscal Year Ended March 31, 2019
|
8/5/2018
|
8/29/2018
|
1/14/2019
|
|
|
|
|
|
|
Market
price per share
|
$1.27
|
|
$1.70
|
|
Exercise
price per share
|
$1.27
|
|
$1.70
|
|
Risk-free
interest rate
|
2.84%
|
|
2.55%
|
|
Volatility
|
99.29%
|
|
93.56%
|
|
Expected
term (years)
|
5.50
|
|
5.50
|
|
Dividend
rate
|
0%
|
|
0%
|
|
|
|
|
|
|
Fair
value per share
|
$0.988
|
|
$1.27
|
|
Aggregate
shares
|
475,000
|
|
220,000
|
|
|
Amounts shown for option modification compensation
reflect the modification date incremental fair value resulting from
the reduction of exercise prices in excess of $1.56 per share to
$1.50 per share for options previously granted to the NEOs, as
permitted by the 2016 Plan. Options to purchase 555,375 shares,
346,250 shares and 231,001 shares of our common stock and having
pre-modification exercise prices from $1.96 per share to $10.00 per
share were modified to reduce the exercise price to $1.50 per share
for Mr. Singh, Dr. Snodgrass and Mr. Dotson, respectively. Options
to purchase 385,000 shares of our common stock and having
pre-modification exercise prices from $1.96 per share to $3.80 per
share were modified to reduce the exercise price to $1.50 per share
for Dr. Smith. Options to
purchase 265,000 shares of our common stock and having
pre-modification exercise prices from $1.96 per share to $4.27 per
share were modified to reduce the exercise price to $1.50 per share
for Mr. McPartland.
|
|
(9)
|
Amounts
reported in the Bonus column reflect bonuses earned and accrued
during the year ended March 31, 2019 by each NEO for attainment of
performance-based objectives during that period. Bonus amounts
earned during the year ended March 31, 2019 were paid to each NEO
during the subsequent fiscal year.
The
Compensation Committee has not yet determined or awarded a bonus to
any NEO for our fiscal year ended March 31, 2020, nor have any
bonus amounts been accrued as of the date of this
prospectus.
|
No
NEO is entitled to any perquisites or other personal benefits that,
in the aggregate, are worth over $50,000 or over 10% of their
base salary.
Benefit Plans
401(k) Plan
We
maintain, through a registered agent, a retirement and deferred
savings plan for our officers and employees. This plan is intended
to qualify as a tax-qualified plan under Section 401(k) of the
Internal Revenue Code of 1986, as amended. The retirement and
deferred savings plan provides that each participant may contribute
a portion of his or her pre-tax compensation, subject to statutory
limits. Under the plan, each employee is fully vested in his or her
deferred salary contributions. Employee contributions are held and
invested by the plan’s trustee. The retirement and deferred
savings plan also permits us to make discretionary contributions
subject to established limits and a vesting schedule. To
date, we have not made any discretionary contributions to the
retirement and deferred savings plan on behalf of participating
employees.
2019 Employee Stock Purchase Plan
Following the
approval of our 2019 Employee Stock Purchase Plan (the 2019 ESPP) by our stockholders in
September 2019, the 2019 ESPP became operational effective January
1, 2020. Under our 2019 ESPP, shares
of our common stock will be available for purchase by eligible
employees, including our NEO’s, who participate in the plan.
Eligible employees will be entitled to purchase, by means of
payroll deductions, limited amounts of our common stock at a
discount to the market price during periodic option periods under
the 2019 ESPP. At March 31, 2020, no option period had been
completed under the 2019 ESPP.
-27-
Outstanding Warrants and Options at March 31, 2020
The
following table provides information regarding each unexercised
stock option and warrant to purchase shares of our common stock
held by each of the named executive officers as of March 31,
2020.
|
|
Stock Options and Warrants
|
|
||||
|
Name
|
Number of Securities Underlying Unexercised Options and
Warrants
(#) Exercisable
|
|
Number of Securities
Underlying Unexercised Options and Warrants
(#) Unexercisable
|
|
Exercise
Price
($)
|
Expiration
Date
|
|
|
|
|
|
|
|
|
|
Shawn
K. Singh
|
5,000
|
|
-
|
|
1.50
|
4/26/2021
|
|
|
72,000
|
|
-
|
|
7.00
|
3/3/2023
|
|
|
250,000
|
|
-
|
|
7.00
|
9/2/2020
|
|
|
187,500
|
(1)
|
12,500
|
(1)
|
1.50
|
6/19/2026
|
|
|
100,000
|
(2)
|
-
|
(2
|
1.50
|
11/9/2026
|
|
|
170,138
|
(3)
|
4,862
|
(3)
|
1.50
|
4/26/2027
|
|
|
125,000
|
|
-
|
|
1.56
|
9/19/2027
|
|
|
300,000
|
|
-
|
|
1.16
|
2/2/2028
|
|
|
151,250
|
(4)
|
68,750
|
(4)
|
1.70
|
1/14/2029
|
|
|
58,335
|
(7)
|
21,665
|
(7)
|
1.00
|
5/23/2029
|
|
|
63,750
|
(9)
|
106,250
|
(9)
|
1.00
|
9/5/2029
|
|
|
121,875
|
(10)
|
178,125
|
(10)
|
1.41
|
10/21/2029
|
|
Total:
|
1,604,848
|
|
392,152
|
|
|
|
|
|
|
|
|
|
|
|
|
H.
Ralph Snodgrass, Ph.D.
|
150,000
|
|
-
|
|
7.00
|
9/20/2020
|
|
|
50,000
|
|
-
|
|
7.00
|
3/3/2023
|
|
|
117,187
|
(1)
|
7,813
|
(1)
|
1.50
|
6/19/2026
|
|
|
80,000
|
(2)
|
-
|
(2)
|
1.50
|
11/9/2026
|
|
|
121,527
|
(3)
|
3,473
|
(3)
|
1.50
|
4/26/2027
|
|
|
100,000
|
|
-
|
|
1.56
|
9/19/2027
|
|
|
175,000
|
|
-
|
|
1.16
|
2/2/2028
|
|
|
105,468
|
(5)
|
19,532
|
(4)
|
1.27
|
8/5/2028
|
|
|
68,750
|
(8)
|
81,250
|
(8)
|
1.00
|
5/23/2029
|
|
|
71,094
|
(10)
|
103,906
|
(10)
|
1.41
|
10/21/2029
|
|
Total:
|
1,039,026
|
|
215,974
|
|
|
|
|
|
|
|
|
|
|
|
|
Mark
A. Smith, M.D. Ph.D.
|
168,750
|
(1)
|
11,250
|
(1)
|
1.50
|
6/19/2026
|
|
|
80,000
|
(2)
|
-
|
(2)
|
1.50
|
11/9/2026
|
|
|
121,527
|
(3)
|
3,473
|
(3)
|
1.50
|
4/26/2027
|
|
|
100,000
|
|
-
|
|
1.56
|
9/19/2027
|
|
|
200,000
|
|
-
|
|
1.16
|
2/2/2028
|
|
|
84,375
|
(5)
|
15,625
|
(5)
|
1.27
|
8/5/2028
|
|
|
68,750
|
(8)
|
81,250
|
(8)
|
1.00
|
5/23/2029
|
|
|
40,625
|
(10)
|
59,375
|
(10)
|
1.41
|
10/21/2029
|
|
Total:
|
864,027
|
|
170,973
|
|
|
|
|
|
|
|
|
|
|
|
|
Jerrold
D. Dotson
|
5,001
|
|
-
|
|
1.50
|
10/30/2022
|
|
|
1,000
|
|
-
|
|
1.50
|
10/27/2023
|
|
|
100,000
|
|
-
|
|
7.00
|
9/2/2020
|
|
|
10,000
|
|
-
|
|
7.00
|
3/3/2023
|
|
|
70,312
|
(1)
|
4,688
|
(1)
|
1.50
|
6/19/2026
|
|
|
50,000
|
(2)
|
-
|
(2)
|
1.50
|
11/9/2026
|
|
|
97,222
|
(3)
|
2,778
|
(3)
|
1.50
|
4/26/2027
|
|
|
100,000
|
|
-
|
|
1.56
|
9/19/2027
|
|
|
200,000
|
|
-
|
|
1.16
|
2/2/2028
|
|
|
84,375
|
(5)
|
15,625
|
(5)
|
1.27
|
8/5/2028
|
|
|
68,750
|
(8)
|
81,250
|
(8)
|
1.00
|
5/23/2029
|
|
|
60,938
|
(10)
|
89,062
|
(10)
|
1.41
|
10/21/2029
|
|
Total:
|
847,598
|
|
193,403
|
|
|
|
|
|
|
|
|
|
|
|
|
Mark
A. McPartland
|
109,375
|
(6)
|
15,625
|
|
1.50
|
9/29/2026
|
|
|
40,000
|
(2)
|
-
|
(6)
|
1.50
|
11/9/2026
|
|
|
97,222
|
(3)
|
2,778
|
(3)
|
1.50
|
4/26/2027
|
|
|
50,000
|
|
-
|
|
1.56
|
9/19/2027
|
|
|
150,000
|
|
-
|
|
1.16
|
2/2/2028
|
|
|
126,562
|
(5)
|
23,438
|
(5)
|
1.27
|
8/5/2028
|
|
|
68,750
|
(8)
|
81,250
|
(8)
|
1.00
|
5/23/2029
|
|
|
40,625
|
(10)
|
59,375
|
(10)
|
1.41
|
10/21/2029
|
|
Total:
|
682,534
|
|
182,466
|
|
|
|
|
(1)
|
Represents
an option to purchase shares of our common stock at $3.49 per share
granted on June 19, 2016 when the market price of our common stock
was $3.49 per share. The option became exercisable for
25% of the shares granted on June 19, 2017 with the remaining
shares becoming exercisable ratably monthly through June 19, 2020,
when all shares granted will be fully exercisable. The exercise
price of the option was reduced to $1.50 per share on August 29,
2018.
|
|
(2)
|
Represents
an option to purchase shares of our common stock at $3.80 per share
granted on November 9, 2016 when the market price of our common
stock was $3.80 per share. All shares granted are now
fully exercisable. The exercise price of the option was reduced to
$1.50 per share on August 29, 2018.
|
|
(3)
|
Represents
an option to purchase shares of our common stock at $1.96 per share
granted on April 26, 2017 when the market price of our common stock
was $1.96 per share. All shares granted are now fully
exercisable. The exercise price of the option was reduced to $1.50
per share on August 29, 2018.
|
|
(4)
|
Represents
an option to purchase shares of our common stock at $1.70 per share
granted on January 14, 2019 when the market price of our common
stock was $1.70 per share. The option became exercisable
for 25% of the shares granted immediately upon grant, with the
remaining shares becoming exercisable ratably monthly through
January 14, 2021, when all shares granted will be fully
exercisable.
|
|
(5)
|
Represents
an option to purchase shares of our common stock at $1.27 per share
granted on August 5, 2018 when the market price of our common stock
was $1.27 per share. The option became exercisable for
25% of the shares granted immediately upon grant, with the
remaining shares becoming exercisable ratably monthly through
August 5, 2020, when all shares granted will be fully
exercisable.
|
|
(6)
|
Represents an option to purchase shares of our
common stock at $4.27 per share granted on September 29, 2016 when
the market price of our common stock was $4.27 per
share. The option became exercisable for 25% of the
shares granted on September 29, 2017, with the remaining shares
becoming exercisable ratably monthly through September 29, 2020,
when all shares granted will be fully exercisable. The exercise
price of the option was reduced to $1.50 per share on August 29,
2018.
|
|
(7)
|
Represents
an option to purchase shares of our common stock at $1.00 per share
granted on May 23, 2019 when the market price of our common stock
was $0.80 per share. The option became exercisable for
62.5% of the shares granted immediately upon grant, with the
remaining shares becoming exercisable ratably monthly through May
23, 2022, when all shares granted will be fully
exercisable.
|
|
(8)
|
Represents
an option to purchase shares of our common stock at $1.00 per share
granted on May 23, 2019 when the market price of our common stock
was $0.80 per share. The option became exercisable for
25% of the shares granted immediately upon grant, with the
remaining shares becoming exercisable ratably monthly through My
23, 2022, when all shares granted will be fully
exercisable.
|
|
(9)
|
Represents
an option to purchase shares of our common stock at $1.00 per share
granted on September 5, 2019 when the market price of our common
stock was $0.84 per share. The option became exercisable
for 25% of the shares granted immediately upon grant, with the
remaining shares becoming exercisable ratably monthly through
September 5, 2022, when all shares granted will be fully
exercisable.
|
|
(10)
|
Represents
an option to purchase shares of our common stock at $1.41 per share
granted on October 21, 2019 when the market price of our common
stock was $1.41 per share. The option became exercisable
for 25% of the shares granted immediately upon grant, with the
remaining shares becoming exercisable ratably monthly through
October 21, 2021, when all shares granted will be fully
exercisable.
|
-28-
Employment or Severance Agreements
We
have employment agreements with Mr. Singh and Dr. Snodgrass, the
material terms of which are described below.
Singh Agreement
We entered into an
employment agreement with Mr. Singh on April 28, 2010. Under the
agreement, as amended on June 22, 2016, Mr. Singh’s base
salary was increased from $347,500 per year to $395,000 per year,
effective June 16, 2016. The
Compensation Committee has subsequently adjusted Mr. Singh’s
base annual salary to $477,000 effective in July 2018 and to
$498,000 effective in April 2019. Under his agreement, Mr.
Singh is eligible to receive an annual incentive cash bonus of up
to 50% of his base salary. The Compensation Committee awarded Mr.
Singh a cash bonus of $110,305 for attainment of performance-based
objectives during the year ended March 31, 2019. The Compensation Committee has not yet determined
or awarded a bonus to Mr. Singh for attainment of
performance-based objectives during our fiscal year ended March 31, 2020. The
award of his annual incentive bonus is at the discretion of the
Compensation Committee of our Board of Directors. In the event we
terminate Mr. Singh’s employment without cause, he is
entitled to receive severance in an amount equal to:
●
twelve
months of his then-current base salary payable in the form of
salary continuation;
●
a
pro-rated portion of the incentive cash bonus that the Board of
Directors determines in good faith that Mr. Singh earned prior to
his termination; and
●
such amounts required to reimburse him for
Consolidated Omnibus Budget Reconciliation Act (COBRA) payments for continuation of his medical health
benefits for such twelve-month period.
In addition, in the
event Mr. Singh terminates his employment with “good
reason” following a “change of control” (each as
defined below), he is entitled to twelve months of his then-current
base salary payable in the form of salary
continuation.
Snodgrass Agreement
We entered into an
employment agreement with Dr. Snodgrass on April 28, 2010. Under
the agreement, as amended on June 22, 2016, Dr. Snodgrass’s
base salary was increased from $305,000 per year to $350,000 per
year, effective June 16, 2016. The
Compensation Committee has subsequently adjusted Dr.
Snodgrass’ base annual salary to $397,000 effective in July
2018 and to $416,850 effective in April 2019. Under his
agreement, Dr. Snodgrass is eligible to receive an annual incentive
cash bonus of up to 50% of his base salary. The Compensation
Committee awarded Dr. Snodgrass cash bonuses of $73,444 for
attainment of performance-based objectives during the year ended
March 31, 2019. The Compensation
Committee has not yet determined or awarded a bonus to Dr.
Snodgrass for attainment of performance-based objectives
during our fiscal year ended March 31,
2020. The award of his annual incentive bonus is at the
discretion of the Compensation Committee of the Board of Directors.
In the event we terminate Dr. Snodgrass’s employment without
cause, he is entitled to receive severance in an amount equal
to:
●
twelve
months of his then-current base salary payable in the form of
salary continuation;
●
a
pro-rated portion of the incentive bonus that the Board of
Directors determines in good faith that Dr. Snodgrass earned prior
to his termination; and
●
such
amounts required to reimburse him for COBRA payments for
continuation of his medical health benefits for such twelve-month
period.
In
addition, in the event Dr. Snodgrass terminates his employment
with "good reason" (as defined below), he is entitled to twelve
months of his then-current base salary payable in the form of
salary continuation.
-29-
Change of Control Provisions
Pursuant
to each of their respective employment agreements,
Dr. Snodgrass is entitled to severance if he terminates his
employment at any time for “good reason” (as defined
below), while Mr. Singh is entitled to severance if he
terminates his employment for good reason after a change of
control. Under their respective agreements, “good
reason” means any of the following events, if we affect the
event without the executive’s consent (subject to our right
to cure):
●
a
material reduction in the executive’s responsibility;
or
●
a
material reduction in the executive’s base salary except for
reductions that are comparable to reductions generally applicable
to similarly situated executives of VistaGen.
Furthermore,
pursuant to their respective employment agreements and their stock
option award agreements, as amended, in the event we terminate the
executive without cause within twelve months of a change of
control, the executive’s remaining unvested option shares
become fully vested and exercisable. Upon a change of control in
which the successor corporation does not assume the
executive’s stock options, the stock options granted to the
executive become fully vested and exercisable.
Pursuant
to their respective employment agreements, a change of control
occurs when: (i) any “person” as such term is used
in Sections 13(d) and 14(d) of the Exchange Act (other than
VistaGen, a subsidiary, an affiliate, or a VistaGen employee
benefit plan, including any trustee of such plan acting as trustee)
becoming the “beneficial owner” (as defined in
Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of VistaGen representing 50% or more of the combined
voting power of VistaGen’s then outstanding securities;
(ii) a sale of substantially all of VistaGen’s assets;
or (iii) any merger or reorganization of VistaGen whether or
not another entity is the survivor, pursuant to which the holders
of all the shares of capital stock of VistaGen outstanding prior to
the transaction hold, as a group, fewer than 50% of the shares of
capital stock of VistaGen outstanding after the
transaction.
In
the event that, following termination of employment, amounts are
payable to an executive pursuant to his employment agreement, the
executive’s eligibility for severance is conditioned on
executive having first signed a release agreement.
Pursuant
to their respective employment agreements, the estimated amount
that could be paid by us assuming that a change of control occurred
on the last business day of our current fiscal year, is $498,000
for Mr. Singh and $416,850 for Dr. Snodgrass, excluding
the imputed value of accelerated vesting of incentive stock
options, if any.
-30-
BOARD OF
DIRECTORS
|
Name
|
|
Age
|
|
Position
|
|
Jon S. Saxe (1)
|
|
83
|
|
Director
|
|
Ann M. Cunningham, MBA (2)
|
|
52
|
|
Director
|
|
Jerry B. Gin, Ph.D., MBA (3)
|
|
76
|
|
Director
|
|
Shawn
K. Singh
|
|
57
|
|
Chief
Executive Officer and Director
|
|
H.
Ralph Snodgrass, Ph.D.
|
|
70
|
|
President,
Chief Scientific Officer and Director
|
|
Brian J. Underdown, Ph.D. (4)
|
|
79
|
|
Director
|
|
(1)
|
Chairman
of the Board; Chairman of the Audit Committee and member of the
Compensation Committee and Corporate Governance and Nominating
Committee.
|
|
(2)
|
Member
of the Corporate Governance and Nominating Committee.
|
|
(3)
|
Chairman
of the Corporate Governance and Nominating Committee and member of
the Audit Committee and Compensation Committee.
|
|
(4)
|
Chairman
of the Compensation Committee and member of the Audit Committee and
Corporate Governance and Nominating Committee.
|
Jon S.
Saxe, J.D., LL.M. has served as Chairman of our Board since
2000, first as Chairman of the Board of Directors of VistaGen
California, then as Chairman of our Board after completion of the
Merger. He also serves as the Chairman of our Audit
Committee. Mr. Saxe is the retired President and was a
director of PDL BioPharma from 1989 to 2008. From 1989 to 1993, he
was President, Chief Executive Officer and a director of Synergen,
Inc. (acquired by Amgen). Mr. Saxe served as Vice President,
Licensing & Corporate Development for Hoffmann-Roche from
1984 through 1989, and Head of Patent Law for Hoffmann-Roche from
1978 through 1989. Mr. Saxe currently is a director of Durect
Corporation (NASDAQ: DRRX), and seven private life science
companies, Achelios, Arbor Vita Corporation, Aether, Inc., Arcuo
Medical, LLC, Cancer Prevention Pharmaceuticals, Inc., Lumos
Pharma, Inc., Trellis Bioscience, Inc. and Epalex Corporation.
Mr. Saxe has also served as a director of other biotechnology
and pharmaceutical companies, including ID Biomedical (acquired by
GlaxoSmithKline), Sciele Pharmaceuticals, Inc. (acquired by
Shionogi), Amalyte (acquired by Kemin Industries), Cell Pathways
(acquired by OSI Pharmaceuticals), Lumos Pharma, Inc. (merged with
New Link Genetics) and other companies, both public and private.
Mr. Saxe has a B.S.Ch.E. from Carnegie-Mellon University, a
J.D. degree from George Washington University and an LL.M. degree
from New York University.
We selected Mr.
Saxe to serve as Chairman of our Board of Directors due to his
numerous years of experience as a senior executive with major
pharmaceutical and biotechnology companies, including Protein
Design Labs, Inc., Synergen, Inc. and Hoffmann-Roche, Inc., as well
as his extensive experience serving as a director of numerous
private and public biotechnology and pharmaceutical companies,
serving as Chairman, and Chair and member of audit, compensation
and governance committees of both private and public
companies. Mr. Saxe provides us and our Board of
Directors with highly valuable insight and perspective into the
biotechnology and pharmaceutical industries, as well as the
strategic opportunities and challenges that we face.
Ann M. Cunningham,
MBA, was appointed to serve on our Board on January 10,
2019. Ms. Cunningham is the Founder and Managing Partner of i3
Strategy Partners, a consulting firm founded in 2018 that
specializes in assisting companies in the pharmaceutical space.
Prior to founding i3 Strategy Partners, Ms. Cunningham served as
Vice President, Neurodegenerative Diseases and Psychiatry for Teva
Pharmaceuticals Industries, Ltd. from 2015 to 2018, as Senior
Marketing Director for Otsuka Pharmaceutical Companies from 2013 to
2015 and in several marketing-focused positions for Eli Lily and
Company from 1999 to 2013, including serving as Global Marketing
Senior Director from 2009 to 2013. Ms. Cunningham holds a B.A.
degree in Psychology from Yale University and an MBA, with a focus
on marketing management, from the University of
Michigan.
We selected Ms.
Cunningham to serve on our Board due to her substantial experience
in healthcare marketing, particularly in the successful
development, positioning and commercial launch of products to treat
diseases of the central nervous system. Ms. Cunningham brings an
insightful commercial perspective to us and to our Board that is
critical as our pipeline products move from clinical development to
commercialization.
Jerry B.
Gin, Ph.D., MBA was appointed to serve on our Board of
Directors on March 29, 2016. Dr. Gin is currently the co-founder
and CEO of Nuvora, Inc., a private company founded in 2006 with a
drug delivery platform for the sustained release of
ingredients through the mouth for such indications as dry mouth,
biofilm reduction and sore throat/cough relief. Dr. Gin is also
co-founder and Chairman of Livionex, a private platform technology
company founded in 2009 and focused on oral care, ophthalmology and
wound care. Previously, Dr. Gin co-founded Oculex Pharmaceuticals
in 1993, which developed technology for controlled release delivery
of drugs to the interior of the eye, specifically to treat macular
edema, and served as President and CEO until it was acquired by
Allergan in 2003. Prior to forming Oculex, Dr. Gin co-founded and
took public ChemTrak, which developed a home cholesterol test
commonly available in drug stores today. Prior to ChemTrak, Dr. Gin
was Director of New Business Development and Strategic Planning for
Syva, the diagnostic arm of Syntex Pharmaceuticals, Director for
Pharmaceutical and Diagnostic businesses for Dow Chemical, and
Director of BioScience Labs (now Quest Laboratories), the clinical
laboratories of Dow Chemical. Dr. Gin received his
Bachelor’s degree in Chemistry from the University of
Arizona, his Ph.D. in Biochemistry from the University of
California, Berkeley, his MBA from Loyola College, and conducted
his post-doctoral research at the National Institutes of
Health.
-31-
We selected Dr. Gin
to serve on our Board of Directors due to his extensive experience
in the healthcare industry, focusing his substantial business and
scientific expertise on founding and developing numerous
biopharmaceutical, diagnostic and biotechnology companies and
propelling them to their next platforms of growth and
value.
Shawn K. Singh
Please see Mr. Singh’s biography on page 21 of this
prospectus, under the section titled Executive Officers.
We
selected Mr. Singh to serve on our Board of Directors due to his
substantial practical experience and expertise in senior leadership
roles with multiple private and public biotechnology,
pharmaceutical and medical device companies, and his extensive
experience in corporate finance, venture capital, corporate
governance, drug development, intellectual property, regulatory
affairs and strategic collaborations.
H. Ralph
Snodgrass, Ph.D. Please see Dr. Snodgrass’s biography
on page 21 of this prospectus, under the section titled
Executive
Officers.
We selected Dr.
Snodgrass to serve on our Board of Directors due to his expertise
in biotechnology focused on developmental biology, including stem
cell biology, his extensive senior management experience leading
biotechnology companies at all stages of development, as well as
his reputation and standing in the fields of biotechnology and stem
cell research, which allow him to bring to us and the Board of
Directors a unique understanding of the challenges and
opportunities associated with pluripotent stem cell biology, as
well as credibility in the markets in which we
operate.
Brian J.
Underdown, Ph.D. has served as a member of our Board of
Directors since November 2009, first as a director of VistaGen
California, then as a member of our Board after the completion of
the Merger. Dr. Underdown retired as a Venture Partner with
Lumira Capital Corp.in December 2016, after having served as a
Managing Director with Lumira from September 1997 through December
2015. His investment focus has been on therapeutics in both new and
established companies in both Canada and the United States. Prior
to joining Lumira and its antecedent company MDS Capital Corp.,
Dr. Underdown held a number of senior management positions in
the biopharmaceutical industry and at universities.
Dr. Underdown’s current board positions include the
following private companies: Kisoji Biotechnology Inc., Naegis
Pharmaceuticals, Inc. and Osteo QC. Some of Dr. Underdown’s
previous board roles include: Argos Therapeutics (NASDAQ: ARGS), ID
Biomedical (acquired by GlaxoSmithKline), enGene Inc. and Ception
Therapeutics (acquired by Cephalon). He has served on a
number of Boards and advisory bodies of government-sponsored
research organizations including CANVAC, the Canadian National
Centre of Excellence in Vaccines, Ontario Genomics Institute
(Chair), Allergen Plc., the Canadian National Centre of Excellence
in Allergy and Asthma. Dr. Underdown obtained his Ph.D. in
immunology from McGill University and undertook post-doctoral
studies at Washington University School of Medicine.
We selected Dr.
Underdown to serve on our Board of Directors due to his extensive
background working in the biotechnology and pharmaceutical
industries, as a director of numerous private and public companies,
as well as his substantial corporate finance and venture capital
experience funding and advising startup and established
biopharmaceutical companies focused on development and
commercialization of novel therapeutics.
Director Compensation
We adopted a
director compensation policy for the independent directors of our
Board, as “independent” is defined by the rules of the
Nasdaq Stock Market rules, which policy became effective for our
fiscal year beginning April 1, 2014. Under our independent director
compensation policy, our independent directors are entitled to
receive a $25,000 annual retainer, payable in cash or shares of our
common stock. For service on a committee of the Board, an
independent director is entitled to receive an additional annual
cash retainer of $7,500 for service on our Audit Committee and
Compensation Committee, and $5,000 for service on our Corporate
Governance and Nominating Committee. In lieu of the annual cash
retainer for committee participation, each independent director
serving as a chair of a Board committee shall receive an annual
cash retainer of $15,000 for the Audit Committee and Compensation
Committee chairs and $10,000 for the Corporate Governance and
Nominating Committee chair. In addition, each independent director
will also receive an annual grant of an option or warrant to
purchase a minimum of 12,000 shares of our common stock, which will
vest monthly over a one-year period from the date of grant.
Prorated grants are made for partial years of service.
We
paid our independent directors cash compensation consistent with
the policy noted above during our fiscal year ended March 31,
2020.
-32-
In May 2019, we granted to each of our four
independent directors options to purchase 50,000 shares of our
common stock at an exercise price of $1.00 per share under the
terms of our Amended and Restated 2016 Stock Incentive Plan
(the 2016
Plan). In October 2019,
following the approval by our stockholders of our 2019 Omnibus
Equity Incentive Plan (the 2019 Plan), we granted to each of our four independent
directors options to purchase 125,000 shares of our common stock at
an exercise price of $1.41 per share under the terms of our 2019
Plan. Each grant awarded to our independent directors during the
year ended March 31, 2020 expires ten years after the date of
grant.
The
following table sets forth a summary of the compensation earned by
our independent, non-employee directors in our fiscal year ended
March 31, 2020.
|
|
Fees
Paid in Cash (1)
|
Option
Awards (2)(7)
|
Other
Compensation
|
Total
|
|
Name
|
($)
|
($)
|
($)
|
($)
|
|
|
|
|
|
|
|
Jon S. Saxe (3)
|
$52,500
|
$101,347
|
$-
|
$153,847
|
|
Brian J. Underdown, Ph.D. (4)
|
$52,500
|
$101,347
|
$-
|
$153,847
|
|
Jerry B. Gin, Ph.D., M.B.A (5)
|
$50,000
|
$101,347
|
$-
|
$151,347
|
|
Ann M. Cunningham (6)
|
$30,000
|
$101,347
|
$-
|
$131,347
|
|
(1)
|
|
The
amounts shown represent fees earned for service on our Board, and
Audit Committee, Compensation Committee and Corporate Governance
and Nominating Committee during the fiscal year ended March 31,
2020, which amounts were paid in full during the fiscal year then
ended.
|
|
|
|
|
|
(2)
|
|
The amounts in the “Option Awards”
column do not represent any cash payments actually received by Mr.
Saxe, Dr. Underdown, Dr. Gin or Ms. Cunningham with respect to any
of such stock options awarded to them during the fiscal year ended
March 31, 2020 Rather, the amounts represent (i) the
aggregate grant date fair value of options to purchase shares of
our common stock awarded to Mr. Saxe, Dr. Underdown, Dr. Gin and
Ms. Cunningham during our fiscal year ended March 31, 2020,
computed in accordance with the Financial Accounting Standards
Board’s Accounting Standards Codification Topic 718,
Compensation – Stock Compensation (ASC 718). To date, Mr. Saxe, Dr. Underdown, Dr. Gin
and Ms. Cunningham have not exercised any of the options granted
during our fiscal year ended March 31, 2020, and there can be no
assurance that any of them will ever realize any of the ASC 718
grant date fair value amounts presented in the “Option
Awards” column.
|
|
(3)
|
|
Mr.
Saxe has served as the Chairman of our Board, the Chairman of our
Audit Committee and a member of our Compensation Committee and
Corporate Governance and Nominating Committee throughout our fiscal
year ended March 31, 2020. At March 31, 2020, Mr. Saxe
held: (i) 23,251 shares of our common stock; (ii) options to
purchase 437,500 registered shares of our common stock, of which
options to purchase 351,631 shares were exercisable; and (iii)
warrants to purchase 57,500 restricted shares of our common stock,
all of which are exercisable.
|
|
(4)
|
|
Dr.
Underdown has served as a member of our Board, as the Chairman of
our Compensation Committee and as a member of our Audit Committee
and Corporate Governance and Nominating Committee throughout the
fiscal year ended March 31, 2020. At March 31, 2020, Dr.
Underdown held: (i) options to purchase 437,500 registered shares
of our common stock, of which options to purchase 351,631 shares
were exercisable; and (ii) warrants to purchase 57,500 restricted
shares of our common stock, all of which are
exercisable.
|
|
(5)
|
|
Dr.
Gin has served as a member of our Board, as the Chairman of our
Corporate Governance and Nominating Committee and as a member of
our Audit Committee and Compensation Committee throughout the
fiscal year ended March 31, 2020. At March 31, 2020, Dr. Gin held:
(i) 50,000 shares of our unregistered common stock, (ii) options to
purchase 460,000 registered shares of our common stock of which
374,131 were exercisable; and (ii) warrants to purchase 50,000
restricted shares of our common stock, all of which are
exercisable.
|
|
(6)
|
|
Ms.
Cunningham has served as a member of our Board and as a member of
Corporate Governance and Nominating Committee since her appointment
to both on January 10, 2019. At March 31, 2020, Ms. Cunningham held
options to purchase 150,000 registered shares of our common stock,
of which 78,386 were exercisable.
|
|
(7)
|
|
The
table below provides information regarding the option awards we
granted to Mr. Saxe, Dr. Underdown, Dr. Gin and Ms. Cunningham
during fiscal 2020 and the assumptions used in the Black Scholes
Option Pricing Model to determine the grant date fair values of the
respective awards.
|
-33-
|
|
Option
|
Option
|
|
|
|
Grant
|
Grant
|
|
|
|
5/23/2019
|
10/21/2019
|
Total
|
|
|
|
|
|
|
Saxe
|
$26,916
|
$74,431
|
$101,347
|
|
Underdown
|
26,916
|
74,431
|
101,347
|
|
Gin
|
26,916
|
74,431
|
101,347
|
|
Cunningham
|
26,916
|
74,431
|
101,347
|
|
|
$107,662
|
$297,725
|
$405,388
|
|
|
|
|
|
|
Exercise
Price
|
$1.00
|
$1.41
|
|
|
Grant
Date stock price
|
$0.80
|
$1.41
|
|
|
Risk
free interest rate
|
2.13%
|
1.62%
|
|
|
Expected
Term (years)
|
5.58
|
$5.39
|
|
|
Volatility
|
85.85%
|
87.53%
|
|
|
Dividend
rate
|
0.00%
|
0.00%
|
|
|
|
|
|
|
|
Fair
value per share
|
$0.54
|
$0.99
|
|
|
Aggregate
option shares
|
200,000
|
300,000
|
|
|
|
|
Mr.
Saxe, Dr. Underdown, Dr. Gin and Ms. Cunningham were each granted
an option to purchase 50,000 shares of our common stock on May 23,
2019. Each was also granted an option to purchase 75,000 shares of
our common stock on October 21, 2019.
|
-34-
Board Attendance at Board of Directors, Committee and Stockholder
Meetings
Our Board met five
times and acted by unanimous written consent five times during our
fiscal year ended March 31, 2020. Our Audit Committee met four
times. Our Compensation Committee met once, acted by unanimous
written consent three times with respect to executive compensation
matters and grants of equity securities, and requested action by
the entire Board with respect to the adoption of our 2019 Omnibus
Equity Incentive Plan and 2019 Employee Stock Purchase Plan and the
modification of certain outstanding warrants. Our Corporate
Governance and Nominating Committee requested action by the entire
Board with respect to re-election of members of our Board and other
resolutions presented to our stockholders at our September 2019
annual meeting of stockholders and Board committee assignments.
With the exception of Dr. Snodgrass, who was unable to attend one
Board meeting due to international travel, each director serving
during Fiscal 2020 attended all of the meetings of the Board and
the committees of the Board upon which such director served that
were held during the fiscal year.
We do not have a
formal policy regarding attendance by members of the Board at our
annual meetings of stockholders, but directors are encouraged to
attend. With the exception of Dr. Underdown and Ms. Cunningham,
each of whom was unavailable, each of our directors attended our
September 2019 Annual Meeting of Stockholders in
person.
Independent
Directors
Our securities are
currently listed on the Nasdaq Capital Market, which requires that
a majority of our directors be independent. Accordingly, we
evaluate director independence under the standards established by
the SEC and the rules of the Nasdaq Stock Market.
Subject
to some exceptions, these standards generally provide that a
director will not be independent if (a) the director is, or in the
past three years has been, an employee of ours; (b) a member of the
director’s immediate family is, or in the past three years
has been, an executive officer of ours; (c) the director or a
member of the director’s immediate family has received more
than $200,000 per year in direct compensation from us other than
for service as a director (or for a family member, as a
non-executive employee); (d) the director or a member of the
director’s immediate family is, or in the past three years
has been, employed in a professional capacity by our independent
public accountants, or has worked for such firm in any capacity on
our audit; (e) the director or a member of the director’s
immediate family is, or in the past three years has been, employed
as an executive officer of a company where one of our executive
officers serves on the compensation committee; or (f) the director
or a member of the director’s immediate family is an
executive officer of a company that makes payments to, or receives
payments from, us in an amount which, in any twelve-month period
during the past three years, exceeds the greater of $1,000,000 or
two percent of that other company’s consolidated gross
revenues.
Our Board has
undertaken a review of its composition, the composition of its
committees and the independence of each director. Based upon
information requested from and provided by each director concerning
his or her background, employment and affiliations, including
family relationships, our Board has determined that Mr. Saxe, Dr.
Underdown, Dr. Gin and Ms. Cunningham are each
“independent” as that term is defined by the rules of
the Nasdaq Stock Market. Our Board has also determined that Mr.
Saxe, Dr. Underdown and Dr. Gin, who together comprise our Audit
Committee and Compensation Committee, and, together with Ms.
Cunningham comprise our Corporate Governance and Nominating
Committee, satisfy the independence standards set forth in the
Nasdaq Stock Market rules. In making these determinations, our
Board considered the current and prior relationships that each
nonemployee director has with the Company and all other facts and
circumstances that our Board deemed relevant.
Board
Committees and Charters
Our Board has
established an Audit Committee, a Compensation Committee and a
Corporate Governance and Nominating Committee. The composition and
responsibilities of each committee are described below. Members
serve on these committees until their resignation or until
otherwise determined by our Board. Since April 1, 2017, only our
independent directors, Mr. Saxe, Dr. Underdown and Dr. Gin, and,
since January 10, 2019, Ms. Cunningham, serve as members of these
committees.
-35-
The Audit Committee
of our Board is comprised of Mr. Saxe, who serves as the committee
chairman, Dr. Underdown and Dr. Gin. Mr. Saxe is also our Audit
Committee financial expert, as that term is defined under SEC rules
implementing Section 407 of the Sarbanes Oxley Act of 2002, and
possesses the requisite financial sophistication, as defined under
applicable rules. The Audit Committee operates under a written
charter. Our Audit Committee charter is available on our website
at www.vistagen.com.
Under its charter, our Audit Committee is primarily responsible
for, among other things, the following:
●
overseeing our accounting and financial reporting
process;
●
selecting,
retaining and replacing our independent auditors and evaluating
their qualifications, independence and performance;
●
reviewing
and approving scope of the annual audit and audit
fees;
●
monitoring
rotation of partners of independent auditors on engagement team as
required by law;
●
discussing
with management and independent auditors the results of annual
audit and review of quarterly financial statements;
●
reviewing
adequacy and effectiveness of internal control policies and
procedures;
●
approving
retention of independent auditors to perform any proposed
permissible non-audit services;
●
overseeing
internal audit functions and annually reviewing audit committee
charter and committee performance; and
●
preparing
the audit committee report that the SEC requires in our annual
proxy statement.
Compensation Committee
The Compensation
Committee of our Board is comprised of Dr. Underdown, who serves as
the committee chairman, Mr. Saxe, and Dr. Gin. Our Compensation
Committee charter is available on our website at www.vistagen.com.
Under its charter, the Compensation Committee is primarily
responsible for, among other things, the following:
●
reviewing and approving our compensation programs
and arrangements applicable to our executive officers (as defined
in Rule I 6a-I (f) of the Securities Exchange Act of 1934, as
amended (the Exchange
Act)), including all
employment-related agreements or arrangements under which
compensatory benefits are awarded or paid to, or earned or received
by, our executive officers, including, without limitation,
employment, severance, change of control and similar agreements or
arrangements;
●
determining
the objectives of our executive officer compensation
programs;
●
ensuring
corporate performance measures and goals regarding executive
officer compensation are set and determining the extent to which
they are achieved and any related compensation earned;
●
establishing goals and objectives
relevant to Chief Executive Officer compensation, evaluating
Chief Executive
Officer performance in light of such goals and objectives, and
determining Chief Executive Officer
compensation based on the evaluation;
●
endeavoring
to ensure that our executive compensation programs are effective in
attracting and retaining key employees and reinforcing business
strategies and objectives for enhancing stockholder value,
monitoring the administration of incentive-compensation plans and
equity-based incentive plans as in effect and as adopted from time
to time by the Board;
●
reviewing
and approving any new equity compensation plan or any material
change to an existing plan; and
●
reviewing
and approving any stock option award or any other type of award as
may be required for complying with any tax, securities, or other
regulatory requirement, or otherwise determined to be appropriate
or desirable by the committee or Board.
-36-
Corporate Governance and Nominating Committee
The Corporate
Governance and Nominating Committee of our Board is comprised of
Dr. Gin, who serves as the committee chairman, Mr. Saxe, Dr.
Underdown and Ms. Cunningham. Our Corporate Governance and
Nominating Committee charter is available on our website
at www.vistagen.com.
Under its charter, the Corporate Governance and Nominating
Committee is primarily responsible for, among other things, the
following:
●
monitoring
the size and composition of the Board;
●
making
recommendations to the Board with respect to the nominations or
elections of our directors;
●
reviewing
the adequacy of our corporate governance policies and procedures
and our Code of Business Conduct and Ethics, and recommending any
proposed changes to the Board for approval; and
●
considering
any requests for waivers from our Code of Business Conduct and
Ethics and ensure that we disclose such waivers as may be required
by the exchange on which we are listed, if any, and rules and
regulations of the SEC.
Compensation Committee Interlocks and Insider
Participation
The Compensation
Committee of our Board consists of Dr. Underdown, Mr. Saxe and Dr.
Gin, each of whom is an independent, nonemployee director. None of
the members of the Compensation Committee has a relationship that
would constitute an interlocking relationship with executive
officers or directors of another entity.
Board Leadership Structure
The
Board currently separates the roles of Chief Executive Officer and
Chairman of the Board in recognition of the differences between the
two roles. Our Chief Executive Officer, who is also a member of our
Board, is responsible for setting the strategic direction of the
Company and the day-to-day leadership and performance of the
Company, while the Chairman of the Board provides guidance to the
Chief Executive Officer and sets the agenda for the Board meetings
and presides over meetings of the Board. Although these roles are
currently separate, the Board believes it should be able to freely
select the Chairman of the Board based on criteria that it deems to
be in the best interest of the Company and its stockholders, and
therefore one person may, in the future, serve as both the Chief
Executive Officer and Chairman of the Board.
Board Role in Risk Assessment
Management,
in consultation with outside professionals, as applicable,
identifies risks associated with the Company’s operations,
strategies and financial statements. Risk assessment is also
performed through periodic reports received by the Audit Committee
from management, counsel and the Company’s independent
registered public accountants relating to risk assessment and
management. Audit Committee members meet privately in executive
sessions with representatives of the Company’s independent
registered public accountants. The Board also provides risk
oversight through its periodic reviews of the financial and
operational performance of the Company.
Code of Ethics
We have adopted a Code of Business Conduct and
Ethics applicable to our employees, officers and
directors. Our Code of Business Conduct and Ethics is
available on our website at www.vistagen.com. We
intend to disclose any future amendments to certain provisions of
our Code of Business Conduct and Ethics, or waivers of these
provisions, on our website or in filings with the SEC under the
Exchange Act.
Stockholder Communications
If
you wish to communicate with the Board, you may send your
communication in writing to:
VistaGen
Therapeutics, Inc.
343
Allerton Avenue
South
San Francisco, California 94080
Attn:
Corporate Secretary
You
must include your name and address in the written communication and
indicate whether you are a stockholder of the Company. The
Corporate Secretary will review any communication received from a
stockholder, and all material and appropriate communications from
stockholders will be forwarded to the appropriate director or
directors or committee of the Board based on the subject
matter.
-37-
LEGAL MATTERS
The validity of the
securities offered hereby will be passed upon for us by Disclosure
Law Group, a Professional Corporation, San Diego, California
(DLG). Partners of DLG
beneficially own an aggregate of 74,487 registered and/or
restricted shares of our common stock.
EXPERTS
The audited
financial statements incorporated by reference in this prospectus
and elsewhere in the registration statement have been incorporated
by reference in reliance upon the report of OUM & Co. LLP, independent registered
public accounting firm, upon the authority of said firm as experts
in accounting and auditing. The 2019 and 2018 audited annual
consolidated financial statements of VistaGen Therapeutics, Inc.,
as of and for the years ended March 31, 2019 and 2018, have been
audited by OUM & Co. LLP,
independent registered public accounting firm. The audit report
dated June 25, 2019 for the 2019 audited annual consolidated
financial statements includes an explanatory paragraph which states
that certain circumstances raise substantial doubt about our
ability to continue as a going concern.
WHERE
YOU CAN FIND MORE INFORMATION
We are subject to
the informational requirements of the Exchange Act and in
accordance therewith we file annual, quarterly, and other reports,
proxy statements and other information with the Commission under
the Exchange Act. Such reports, proxy statements and other
information, including the Registration Statement, and exhibits and
schedules thereto, are available to the public through the
Commission’s website at www.sec.gov.
We make available
free of charge on or through our website our Annual Reports on Form
10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K
and amendments to those reports filed or furnished pursuant to
Section 13(a) or 15(d) of the Exchange Act as soon as reasonably
practicable after we electronically file such material with or
otherwise furnish it to the Commission.
We have filed with
the Commission a registration statement under the Securities Act of
1933, as amended, relating to the offering of these securities. The
registration statement, including the attached exhibits, contains
additional relevant information about us and the securities. This
prospectus does not contain all of the information set forth in the
registration statement. You can obtain a copy of the registration
statement, at prescribed rates, from the Commission at the address
listed above, or for free at www.sec.gov. The registration
statement and the documents referred to below under
“Incorporation of Certain
Information by Reference” are also available on our
website, www.vistagen.com/sec-filings.
We have not
incorporated by reference into this prospectus the information on
our website, and you should not consider it to be a part of this
prospectus.
-38-
9,592,607 Shares
Common
Stock
PROSPECTUS
We have not
authorized any dealer, salesperson or other person to give any
information or to make any representations not contained in this
prospectus. You must not rely on any unauthorized information. This
prospectus is not an offer to sell these securities in any
jurisdiction where an offer or sale is not permitted.
April 15,
2020