Filed Pursuant to Rule 424(b)(5)
Registration No. 333-234025
Prospectus Supplement
(To Prospectus Dated September 30, 2019, as amended)
15,625,000 Shares of Common Stock
We
are offering 15,625,000 shares of our common stock pursuant to
this prospectus supplement and accompanying
prospectus.
Our
common stock is presently traded on the Nasdaq Capital Market under
the symbol “VTGN.” On August 3, 2020, the last reported
sale price of our common stock was $0.805 per share.
Investing in our common stock involves a high degree of risk. See
“Risk
Factors” beginning on
page S-4 of this prospectus supplement and under similar
headings in the documents incorporated by reference into this
prospectus supplement.
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Per Share
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Total
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Public
Offering Price
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$0.800
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$12,500,000
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Underwriting Discounts and
Commissions (1)
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$(0.068)
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$(1,062,500)
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Proceeds
to VistaGen Therapeutics, Inc. before expenses
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$0.732
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$11,437,500
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(1)
See “Underwriting”
for additional information regarding underwriting
compensation.
The
underwriters may also purchase up to an additional 2,343,750 shares
of common stock from us, at the public offering price, less the
underwriting discount, within 45 days from the date of this
prospectus supplement.
As
of July 31, 2020, the aggregate market value of our voting and
non-voting common stock held by non-affiliates pursuant to General
Instruction I.B.6. of Form S-3 was $51,947,217 which was calculated
based on 55,857,223 outstanding shares of our common stock held by
non-affiliates and at a price of $0.93 per share, the closing sale
price of our common stock reported on the Nasdaq Capital Market on
July 31, 2020. As a result, we are eligible to offer and sell up to
an aggregate of $17,314,008 of shares of our common stock pursuant
to General Instruction I.B.6. of Form S-3. Following this offering,
we will have sold securities with an aggregate market value of
$15,250,000, including this offering, pursuant to General
Instruction I.B.6. of Form S-3 during the prior 12 calendar month
period that ends on, and includes, the date of this prospectus
supplement.
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.
Delivery of the
shares of common stock will be made on or about August
5, 2020, subject to the
satisfaction of certain closing conditions.
Sole Book-running Manager
Maxim Group LLC
____________________
The date of this prospectus supplement is August 2,
2020
VISTAGEN THERAPEUTICS, INC.
TABLE OF CONTENTS
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Prospectus Supplement
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Page
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About This Prospectus Supplement
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S-1
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Prospectus
Supplement Summary
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S-2
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Risk Factors
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S-4
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Cautionary Notes Regarding Forward-Looking Statements
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S-7
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Use of Proceeds
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S-8
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Dividend Policy
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S-9
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Capitalization
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S-10
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Dilution
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S-11
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Material
U.S. Federal Income Tax Consequences to Non-U.S. Holder
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S-12
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Underwriting
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S-16
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Legal Matters
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S-20
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Experts
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S-20
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Where You Can Find More Information
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S-21
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Incorporation of Certain Information by Reference
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S-21
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Prospectus
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Page
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About This Prospectus
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1
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Company Overview
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2
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Risk Factors
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6
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Cautionary Notes Regarding Forward-Looking Statements
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7
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Use of Proceeds
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8
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Description of our Capital Stock
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9
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Description of our Warrants
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15
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Description of our Units
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18
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Description of Certain Provisions of Nevada Law and our Articles of
Incorporation and Bylaws
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19
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Plan of Distribution
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20
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Legal Matters
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21
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Experts
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21
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Where You Can Find More Information
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21
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Incorporation of Certain Information by Reference
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22
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This
prospectus supplement and the accompanying prospectus form a part
of a registration statement on Form S-3 that we filed with the
Securities and Exchange Commission (the SEC) utilizing a “shelf”
registration process. This document is in two parts. The first part
is the prospectus supplement, which describes the specific terms of
this offering. The second part, the accompanying prospectus,
provides more general information about the securities we may offer
from time to time, some of which may not apply to the securities
offered by this prospectus supplement. Generally, when we refer to
this prospectus, we are referring to both parts of this document
combined. Before you invest, you should carefully read this
prospectus supplement, the accompanying prospectus, all information
incorporated by reference herein and therein, and the additional
information described under “Where You Can Find More
Information” on page S-21 of this prospectus
supplement. These documents contain information you should consider
when making your investment decision. This prospectus supplement
may add, update or change information contained in the accompanying
prospectus. To the extent that any statement that we make in this
prospectus supplement is inconsistent with statements made in the
accompanying prospectus or any documents incorporated by reference
therein, the statements made in this prospectus supplement will be
deemed to modify or supersede those made in the accompanying
prospectus and such documents incorporated by reference
therein.
We have
not authorized any other person to provide you with any information
that is different. We are offering to sell, and seeking offers to
buy, our securities only in jurisdictions where offers and sales
are permitted. The distribution of this prospectus supplement and
the accompanying prospectus and the offering of the securities in
certain jurisdictions may be restricted by law. Persons outside the
United States who come into possession of this prospectus
supplement and/or the accompanying prospectus must inform
themselves about, and observe any restrictions relating to, the
offering of the securities and the distribution of this prospectus
supplement and/or the accompanying prospectus outside the United
States. This prospectus supplement and the accompanying prospectus
do not constitute, and may not be used in connection with, an offer
to sell, or a solicitation of an offer to buy, any securities
offered by this prospectus supplement and the accompanying
prospectus by any person in any jurisdiction in which it is
unlawful for such person to make such an offer or
solicitation.
We
further note that the representations, warranties and covenants
made by us in any agreement that is filed as an exhibit to any
document that is incorporated by reference in the accompanying
prospectus were made solely for the benefit of the parties to such
agreement, including, in some cases, for the purpose of allocating
risk among the parties to such agreements, and should not be deemed
to be a representation, warranty or covenant to you. Moreover, such
representations, warranties or covenants were accurate only as of
the date when made. Accordingly, such representations, warranties
and covenants should not be relied on as accurately representing
the current state of our affairs.
Unless
the context otherwise requires, references in this prospectus
supplement to “we”, “us” and “our” refer to VistaGen
Therapeutics, Inc.
S-1
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This summary highlights selected information about our company,
this offering and information appearing elsewhere in this
prospectus supplement, in the accompanying prospectus, in the
documents we incorporate by reference and in any free writing
prospectus that we have authorized for use in connection with this
offering. This summary is not complete and does not contain all the
information that you should consider before investing in our
securities. You should read this entire prospectus supplement and
the accompanying prospectus carefully, including the “Risk
Factors” contained in this prospectus supplement, the
accompanying prospectus and the financial statements and the notes
thereto incorporated by reference in this prospectus supplement and
the accompanying prospectus and the other information that we
incorporated by reference herein, including our Annual Report on
Form 10-K and Quarterly Reports on Form 10-Q we
file from time to time.
Business Overview
We are a clinical-stage biopharmaceutical
company committed to developing new generation therapies for
anxiety, depression and certain additional central nervous system
(CNS) disorders for which
we believe current treatment options are inadequate, resulting in
high unmet need in large and growing markets worldwide. Our
pipeline includes three CNS product candidates, PH94B, PH10 and
AV-101, each with a differentiated mechanism of action, an
exceptional safety profile in all clinical studies to date, and
therapeutic potential in multiple CNS indications. We are currently
preparing PH94B for Phase 3 clinical development for the acute
treatment of adult patients with social anxiety disorder
(SAD). We are also
preparing PH94B for an exploratory Phase 2A open-label study in
adult patients experiencing adjustment disorder with anxiety
(AjDA). PH10 has completed
successful exploratory Phase 2A development as a novel treatment
for major depressive disorder (MDD). We are currently preparing PH10
for Phase 2B development as a potential stand-alone treatment for
MDD. In several clinical studies, we have established that AV-101
is orally available and has an excellent safety profile. Based on
successful preclinical studies involving AV-101 alone and in
combination with probenecid, we are currently assessing potential
Phase 1B and subsequent Phase 2A development of AV-101, in
combination with probenecid, for treatment of depression and
several other CNS indications involving the NMDAR (N-methyl-D-aspartate receptor).
Additionally, our subsidiary, VistaStem Therapeutics (VistaStem), has pluripotent stem cell
technology focused on assessing and developing small molecule new
chemical entities (NCEs)
for our CNS pipeline, or for out-licensing, by utilizing CardioSafe
3D, VistaStem’s customized human heart cell-based cardiac
bioassay system. Our goal is to become a fully integrated
biopharmaceutical company that develops and commercializes
innovative medicine for large and growing neuropsychiatry and
neurology markets worldwide where current treatments are inadequate
to meet the needs of millions of
patients.
Our Product Candidates
We
believe that PH94B is a novel, first-in-class neuroactive nasal
spray with therapeutic potential in a wide range of indications
involving anxiety or phobia. Self-administered in microgram doses,
PH94B does not require systemic uptake and distribution to produce
its rapid-onset anti-anxiety effects. We are initially developing
PH94B as a potential fast-acting, non-sedating, non-addictive new
generation acute treatment of SAD, as well as AjDA. With its
rapid-onset pharmacology, lack of systemic exposure and excellent
safety profile, we believe that PH94B also has potential as a novel
treatment for postpartum anxiety (PPA), post-traumatic stress disorder
(PTSD), preoperative
anxiety (POA), panic
disorder and other anxiety-related disorders.
PH10 is
an odorless, fast-acting synthetic neurosteroid delivered
intranasally that has therapeutic potential in a wide range of
neuropsychiatric indications involving depression.
Self-administered in microgram doses, PH10 does not require
systemic uptake and distribution to produce its rapid-onset
antidepressant effects. We are initially developing PH10 as a
potential fast-acting, non-sedating, non-addictive new generation
treatment of MDD. With its rapid-onset pharmacology, lack of
systemic exposure an exceptional safety profile, we believe that
PH10 also has potential as a novel treatment for postpartum
depression (PPD),
treatment-resistant depression (TRD) and suicidal ideation
(SI).
We
believe that AV-101 (4-Cl-KYN) is a novel, oral prodrug that
targets the NMDAR, an ionotropic glutamate receptor in the brain.
Abnormal NMDAR function is associated with numerous CNS diseases
and disorders. AV-101’s active metabolite, 7-chloro-kynurenic
acid (7-Cl-KYNA), is a
potent and selective full antagonist of the glycine coagonist site
of the NMDAR that inhibits the function of the NMDAR, but does not
block the NMDAR receptor like ketamine and other NMDAR antagonists.
We have demonstrated in clinical trials that AV-101 is
orally-available, well-tolerated and does not cause dissociative or
hallucinogenic psychological side effects or safety concerns
similar to those that may be caused by other NMDAR antagonists.
With just a few side effects and excellent safety profile, we
believe that AV-101 has potential to be an oral, new generation
treatment for multiple large market CNS indications involving
abnormal NDAR function and where current treatments are inadequate
to meet high unmet patient needs. The Food and Drug Administration
(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 (NP). We
are currently assessing AV-101’s potential in combination
with probenecid, to treat both MDD and NP, as well as dyskinesia
associated with levodopa therapy for Parkinson’s disease,
epilepsy and suicidal ideation.
VistaStem is
applying pluripotent stem cell (hPSC) technology and CardioSafe 3D, our
customized cardiac bioassay system, to discover and develop, novel
small molecule NCEs for our CNS pipeline or for
out-licensing.
Our
product candidates are protected through a combination of patents,
trade secrets, and proprietary know-how. If approved, they may also
be eligible for periods of regulatory exclusivity. Our intellectual
property portfolio includes issued U.S. and foreign patents, as
well as U.S. and foreign patent applications.
VistaStem, a California corporation, is our
wholly-owned subsidiary. Our condensed consolidated financial
statements incorporated by reference in this prospectus supplement
also include the accounts of VistaStem and VistaStem’s two
wholly-owned inactive subsidiaries, Artemis Neuroscience, Inc., a
Maryland corporation, and VistaStem Canada, Inc., a corporation
organized under the laws of Ontario,
Canada.
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S-2
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Recent Developments
Spring 2020 Private Placement
During April 2020, in a self-placed private
placement and pursuant to a subscription agreement between us and
an accredited investor, we sold to such investor units, at a
purchase price of $0.40 per unit, consisting of 125,000
unregistered shares of our common stock and warrants to purchase up
to 125,000 unregistered shares of our common stock at an exercise
price of $0.50 per share and a term through April 30, 2024
(the Spring 2020 Private
Placement).
Common Stock Purchase Agreement with Lincoln Park
On March 24, 2020, we entered into a purchase
agreement and a registration rights agreement with Lincoln Park
Capital Fund (LPC) pursuant to which LPC committed to purchase up
to $10,250,000 of our common stock at market-based prices over a
period of 24 months (the LPC Agreement). On March 24, 2020, we sold 500,000
unregistered shares of our common stock (the Initial Purchase
Shares) to LPC under the
purchase agreement at a price of $0.50 per share for gross cash
proceeds of $250,000 (the Initial
Purchase) and we also issued
750,000 unregistered shares of our common stock to LPC under the
terms of the LPC Agreement (the Commitment
Shares). To satisfy our
obligations under the registration rights agreement, we filed a
Registration Statement on Form S-1 (File No. 333-237514)
(the LPC
Registration Statement) with
the SEC on March 31, 2020, which the SEC declared effective on
April 14, 2020 (the Commencement
Date). The LPC Registration
Statement included registration of the Initial Purchase Shares and
the Commitment Shares. Subsequent to the Commencement Date and
through August 3, 2020 we sold an additional 6,301,995 registered
shares of our common stock to LPC and received aggregate gross cash
proceeds of $2,891,200 (the Lincoln Park Agreement
Shares). At August 3, 2020,
there were approximately 2.0 million registered shares of common
stock remaining available for sale under the LPC
Agreement.
PH94B Sublicense Agreement with EverInsight
Therapeutics
On June 24, 2020, we entered into a
strategic licensing and collaboration agreement for the clinical
development and commercialization of PH94B with EverInsight
Therapeutics Inc., a biopharmaceutical company focused on
developing and commercializing transformative pharmaceutical
products for patients in Greater China and other parts of Asia
(the EverInsight
Agreement). Under
the terms of the EverInsight Agreement, EverInsight will be
responsible for clinical development, regulatory submissions and
commercialization of PH94B for treatment of SAD, and potentially
other anxiety-related indications, in markets in Greater China,
South Korea and Southeast Asia.
Under the terms of the EverInsight
Agreement, on August 3, 2020, EverInsight made a non-dilutive
upfront payment of $5.0 million (the EverInsight Cash
Payment) to us, of
which we recognized net cash proceeds of $4.655 million, after
sublicense and consulting payments which we were obligated to make
pursuant to our PH94B license from Pherin Pharmaceuticals and a
business development consulting agreement. We are also eligible to
receive additional development and commercial milestone payments in
the future, upon successful attainment of specific milestones. On
June 24, 2020, we issued 233,645 unregistered shares of our common
stock, valued at $125,000, as partial compensation to a consultant
for business development services related to the EverInsight
Agreement (the EverInsight
Services Shares).
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 are
available for purchase by eligible employees who participate in the
plan. Eligible employees are 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. The initial option period under the 2019 ESPP was
completed on June 30, 2020 and participating employees purchased an
aggregate of 28,125 shares of our registered common stock (the
ESPP Shares) at a price of
$0.448 per share in accordance with the provisions of the 2019
ESPP.
Warrant Exercises
During July 2020, certain holders of outstanding
warrants to purchase shares of our common stock at an exercise
price of $0.50 per share exercised such warrants to purchase
228,000 registered shares of our common stock (the
Warrant Exercise
Shares). We received aggregate
cash proceeds of $114,000 from such exercise.
Nasdaq Compliance
On March 30, 2020, we received a letter from the
Listing Qualifications Staff of The Nasdaq Stock Market, LLC
(Nasdaq) notifying us that the listing of our shares of
common stock was not in compliance with Nasdaq Listing Rule
5550(b)(2) (the MVLS Rule) for continued listing on the Nasdaq Capital
Market, as the market value of our listed securities was less than
$35 million for the previous 30 consecutive business
days.
To regain compliance with the MVLS Rule,
the market value of our listed securities must be $35
million or more for a minimum of 10 consecutive business days.
Between July 20, 2020 and August 2, 2020, the market value of our
listed securities was above $35 million. As a result, on August 3,
2020 we received a letter from Nasdaq’s Listing
Qualifications Staff advising that we had regained compliance with
the MVLS Rule. Please see “Risk
Factors” below for
additional disclosure regarding our compliance with Nasdaq Listing
Rule 5550(a)(2).
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.
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S-3
The Offering
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Issuer
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VistaGen Therapeutics, Inc.
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Common Stock Offered by Us
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15,625,000 shares (or 17,968,750 shares if the underwriters
exercise in full their option to purchase additional
shares).
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Option to Purchase Additional Shares
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We have granted the underwriters a 45-day option to purchase up to
2,343,750 additional shares of common stock at the public offering
price, less underwriting discounts and commissions.
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Common Stock to be Outstanding Immediately After this
Offering
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71,754,507 shares (or 74,098,557 shares if the underwriters
exercise in full their option to purchase additional
shares).
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Use of Proceeds
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We
intend to use the net proceeds from this offering primarily for
research and development expenses associated with continuing
development of PH94B, PH10, AV-101, potential drug rescue
candidates, and for other working capital and capital expenditures.
See “Use of
Proceeds” on page S-8.
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Risk Factors
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Investing in our common stock involves a high degree of risk. For a
discussion of factors that you should consider before buying our
securities, see the information under “Risk
Factors” in this
prospectus supplement and under similar headings in the documents
incorporated by reference into this prospectus
supplement.
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Listing
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Our common stock is listed on the Nasdaq Capital Market under the
symbol “VTGN.”
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The number of
shares of our common stock that are and will be outstanding
immediately before and after this offering as shown above is based
on 56,129,807 shares
outstanding as of August 3, 2020. The number of shares outstanding
as of August 3, 2020, as used throughout this prospectus
supplement, unless otherwise indicated, excludes:
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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;
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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,
and shares of our common stock which may be issued in payment of
accrued dividends upon conversion of the Series B 10% Convertible
Preferred Stock;
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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;
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26,361,834 shares of common stock that have
been reserved for issuance upon exercise of outstanding warrants,
with a weighted average exercise price of $1.65 per share;
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11,948,088 shares of common stock reserved
for issuance upon exercise of outstanding stock options under our
2019 Omnibus Equity Incentive Plan and our 2016 Equity Incentive
Plan, with a weighted average exercise price of $1.21 per
share;
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4,785,162 shares of common stock reserved
for future issuance in connection with future grants under our 2019
Omnibus Equity Incentive Plan; and
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971,875 shares of
common stock reserved for future issuance in connection with the
2019 ESPP.
Unless otherwise indicated, this prospectus supplement reflects and
assumes no exercise by the underwriters of their option to purchase
additional shares of common stock and no exercise and/or conversion
of any outstanding derivative securities as of August 3,
2020.
S-4
Our Annual Report on Form 10-K for the fiscal year ended March 31,
2020, which is incorporated by reference into this prospectus
supplement, 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.
Risk Related to this Offering
The COVID-19 pandemic has, and may continue to adversely impact our
business.
In recent months, a new strain of coronavirus
(COVID-19) has spread to many countries in the world and
the outbreak has been declared a pandemic by the World Health
Organization. The U.S. Secretary of Health and Human Services has
also declared a public health emergency in the U.S. in response to
the outbreak. Considerable uncertainty still surrounds
the COVID-19 virus and its potential effects, and the extent
of and effectiveness of responses taken on international, national
and local levels. Measures taken to limit the impact
of COVID-19, including shelter-in-place orders, social
distancing measures, travel bans and restrictions, and business and
government shutdowns have already resulted in significant negative
economic impacts on a global basis.
As the
coronavirus pandemic continues to rapidly evolve, we cannot at
this time accurately predict the effects of these conditions on our
operations. Uncertainties remain as to the ultimate geographic
spread of the virus, the severity of the disease, the duration of
the outbreak, and the length and scope of the travel restrictions
and business closures imposed by the governments of impacted
countries. The continued outbreak of COVID-19, or another
infectious disease with similar characteristics, may lead to the
implementation of further responses, including additional travel
restrictions, government-imposed quarantines or stay-at-home
orders, and other public health safety measures, which may result
in further disruptions to our business and operations.
The COVID-19 outbreak has had an impact on our business, and a
continuing outbreak or future outbreaks may have several adverse
effects on our business, results of operations and financial
condition.
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Delayed product development: We have, and may continue
to face delays and other disruptions to our ongoing clinical
development programs for PH94B, PH10 and AV-101 due to the ongoing
COVID-19 pandemic. In addition, regulatory oversight and actions
regarding our products may be disrupted or delayed in regions
impacted by COVID-19, including the U.S. and
elsewhere, which may impact review and approval timelines for
products in development. Although we remain invested in
continuing our clinical development programs for our current
product candidates, our research and development efforts may be
impacted if our employees, our contract research organizations
(CROs) and our third-party
contract manufacturer(s) (CMOs) are advised to continue to work
remotely as part of social distancing measures.
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Negative impacts on our suppliers and
employees: COVID-19 or similar infectious diseases may
impact the health of our employees, contractors or suppliers,
reduce the availability of our workforce or those of companies with
which we do business, divert our attention toward succession
planning, or create disruptions in our supply or distribution
networks. Since the beginning of the COVID-19 pandemic, we have
experienced delays of the delivery of supplies of active
pharmaceutical product (API) required to continue development
of PH94B and PH10. Although our supply of raw materials and API
remains sufficiently operational, we may experience adverse effects
of such events, which may result in a significant, material
disruption to clinical development programs, and our operations.
Additionally, having shifted to remote working arrangements, we
also face a heightened risk of cybersecurity attacks or data
security incidents and are more dependent on internet and
telecommunications access and capabilities.
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COVID-19
has also created significant disruption to and volatility in
national, regional and local economies and markets. Uncertainties
related to, and perceived or experienced negative effects
from, COVID-19 may cause significant volatility or decline in
the trading price of our securities, capital market conditions and
general economic environment. Our future results of operations and
liquidity could be adversely impacted by supply
chain disruptions and operational challenges faced by our
CROs, CMOs and other contractors. Continued outbreaks
of COVID-19 or a significant outbreak of contagious diseases
in the human population could result in a widespread health crisis
that could adversely affect the economies and financial markets of
many countries, resulting in a further economic downturn or a
global recession. Such events may limit or restrict our ability to
access capital on favorable terms, or at all, lead to consolidation
that negatively impacts our business, weaken demand, increase
competition, cause us to reduce our capital spend further, or
otherwise disrupt our business or make it more difficult to
implement our strategic plans.
We may be required to raise additional financing by issuing new
securities with terms or rights superior to those of our existing
securityholders, which could adversely affect the market price of
shares of our common stock and our business.
We
will require additional financing to fund future operations,
including our research and development activities for our product
candidates. We may not be able to obtain financing on favorable
terms, if at all. If we raise additional funds by issuing equity
securities, the percentage ownership of our current stockholders
will be reduced, and the holders of the new equity securities may
have rights superior to those of our existing security holders,
which could adversely affect the market price of our common stock
and the voting power of shares of our common stock. If we raise
additional funds by issuing debt securities, the holders of these
debt securities would similarly have some rights senior to those of
our existing securityholders, and the terms of these debt
securities could impose restrictions on operations and create a
significant interest expense for us, which could have a materially
adverse effect on our business.
If you purchase shares of our common stock sold in this offering,
you will experience immediate and substantial dilution in your
investment. In addition, we may issue additional equity or
equity-linked securities in the future, which may result in
additional dilution to you.
The price per share of our common stock being
offered may be higher than the net tangible book value per share of
our outstanding common stock prior to this offering. Based on the
public offering price of $0.80 per share and our net tangible book
value as of March 31, 2020 of approximately $(0.12) per share, if
you purchase shares of common stock in this offering, you will
suffer immediate and substantial dilution of approximately $0.69
per share, representing the difference between the public offering
price per share and the net tangible book value per share of our
common stock as of March 31, 2020 after giving effect to this
offering. See the section entitled “Dilution” below for a more detailed discussion of
the dilution you will incur if you purchase common stock in this
offering.
In
addition, we expect that significant additional capital will be
needed in the future to continue our planned operations. To the
extent that we raise additional capital by issuing equity
securities, our existing shareholders’ ownership may
experience substantial dilution, and the terms of these securities
may include liquidation or other preferences that adversely affect
your rights as a common shareholder.
Sales of a
substantial number of shares of our common stock, or the perception
that such sales may occur, may adversely impact the price of our
common stock.
Sales of a substantial number of shares of our
common stock in the public market could occur at any time. These
sales, or the perception that such sales may occur, may adversely
impact the price of our common stock, even if there is no
relationship between such sales and the performance of our
business. As of August 3, 2020, we have 56,129,807 shares of common
stock outstanding, as well as outstanding options to purchase an
aggregate of 11,948,088 shares of our common stock at a weighted
average exercise price of $1.21 per share, up to 4,228,252 shares
of common stock issuable upon conversion of outstanding shares of
our preferred stock, up to 3,936,498 shares of common stock reserved for issuance as
payment of accrued dividends on outstanding shares of our Series B
10% Convertible Preferred Stock, and outstanding warrants to
purchase up to an aggregate of 26,361,834 shares of our common
stock at a weighted average exercise price of $1.65 per share. The
exercise and/or conversion of such outstanding derivative
securities may result in further dilution of your
investment.
S-5
Our management will have broad discretion in the use of the net
proceeds from this offering and may allocate the net proceeds from
this offering in ways that you and other stockholders may not
approve.
Our management will have broad discretion in the
use of the net proceeds, including for any of the purposes
described in the section entitled “Use of
Proceeds,” and you will
not have the opportunity as part of your investment decision to
assess whether the net proceeds are being used appropriately.
Because of the number and variability of factors that will
determine our use of the net proceeds from this offering, their
ultimate use may vary substantially from their currently intended
use. The failure of our management to use these funds effectively
could harm our business. Pending their use, we may invest the net
proceeds from this offering in short- and intermediate-term,
interest-bearing obligations, investment-grade instruments,
certificates of deposit or direct or guaranteed obligations of the
U.S. government. These investments may not yield a favorable return
to our stockholders.
Because
we have no current plans to pay cash dividends on our common stock
for the foreseeable future, you may not receive any return on
investment unless you sell your common stock for a price greater
than that which you paid for it.
We
intend to retain future earnings, if any, for future operations and
expansion of our business and have no current plans to pay any cash
dividends for the foreseeable future. The declaration, amount and
payment of any future dividends on shares of common stock will be
at the sole discretion of our Board of Directors. Our Board of
Directors may take into account general and economic conditions,
our financial condition and results of operations, our available
cash and current and anticipated cash needs, capital requirements,
contractual, legal, tax and regulatory restrictions, implications
on the payment of dividends by us to our stockholders or by our
subsidiaries to us and such other factors as our Board of Directors
may deem relevant. In addition, our ability to pay dividends may be
limited by covenants in connection with any indebtedness we or our
subsidiaries may incur. As a result, you may not receive any return
on an investment in our common stock unless you sell our common
stock for a price greater than that which you paid for
it.
This offering could result in a significant limitation on our
ability to utilize our net operating loss carryforwards to offset
future taxable income.
As of March 31, 2020, we had federal and state net
operating loss carryforwards (NOLs) of approximately $125.1 million and $64.1
million, respectively, which begin to expire in our fiscal year
ending March 31, 2021. Under Section 382 of the Internal Revenue
Code of 1986, as amended (the Code) changes in our ownership may limit the amount of
our net operating loss carryforwards that could be utilized
annually to offset our future taxable income, if any. This
limitation would generally apply in the event of a cumulative
change in ownership of our stock (for Code Section 382 purposes) of
more than 50% within a three-year period. Any such limitation may
significantly reduce our ability to utilize our net operating loss
carryforwards and tax credit carryforwards before they expire and
could have a material adverse effect on our results of operations
in future years. We have not assessed whether such an ownership
change has previously occurred and it is possible that this
offering could result in an ownership change.
If securities or industry analysts do not publish research or
publish inaccurate or unfavorable research about our business, our
stock price and trading volume could decline.
The
trading market for our common stock depends in part on the research
and reports that securities or industry analysts publish about us
or our business. We currently have research coverage by two
securities and industry analysts. If one or more of the analysts
who covers us downgrades our stock or publishes inaccurate or
unfavorable research about our business, our stock price would
likely decline. If one or more of these analysts ceases coverage of
us or fails to publish reports on us regularly, demand for our
stock could decrease, which could cause our stock price and trading
volume to decline.
The market price of our common stock may be adversely affected by
market conditions affecting the stock markets in general, including
price and trading fluctuations on Nasdaq.
Market
conditions may result in volatility in the level of, and
fluctuations in, market prices of stocks generally and, in turn,
our common stock and sales of substantial amounts of our common
stock in the market, in each case being unrelated or
disproportionate to changes in our operating performance. A weak
global economy or other circumstances, such as changes in tariffs
and trade, could also contribute to extreme volatility of the
markets, which may have an effect on the market price of our common
stock.
If we fail to comply with the continued listing requirements of the
Nasdaq Capital Market, our common stock may be delisted and the
price of our common stock and our ability to access the capital
markets could be negatively impacted.
On January 31, 2020, we were notified by
Nasdaq that we were not in
compliance with the minimum bid price requirements set forth
in Nasdaq Listing Rule 5550(a)(2) for continued listing on the
Nasdaq Capital Market. Nasdaq Listing Rule 5550(a)(2) requires
listed securities to maintain a minimum bid price of $1.00 per
share, and Nasdaq Listing Rule 5810(c)(3)(A) provides that a
failure to meet the minimum bid price requirement exists if the
deficiency continues for a period of 30 consecutive business days.
The notification provided that we had 180 calendar days, or until
July 29, 2020, to regain compliance with Nasdaq Listing Rule
5550(a)(2) (the Bid Price
Rule). To regain compliance,
the bid price of our common stock must have a closing bid price of
at least $1.00 per share for a minimum of 10 consecutive business
days.
On
April 17, 2020, in response to the extraordinary market conditions
caused by the COVID-19 pandemic, Nasdaq instituted a longer period
of time for companies such as ours to regain compliance with
certain continued listing requirements, including the Bid Price
Rule. As a result, we now have until October 12, 2020 to regain
compliance with the Bid Price Rule. If we do not regain compliance
with the Bid Price Rule by October 12, 2020, an additional 180
days may be granted to regain compliance, so long as we meet
the Nasdaq Capital Market continued listing requirements
and notify Nasdaq in writing of our intention to cure the
deficiency during the second compliance period. If we do not
qualify for the second compliance period or fail to regain
compliance during the second 180-day period,
then Nasdaq will notify us of its determination to delist
our common stock, at which point we will have an opportunity to
appeal the delisting determination to a hearings
panel.
No
assurance can be given that we will meet applicable Nasdaq
continued listing standards. Failure to meet applicable Nasdaq
continued listing standards could result in a delisting of our
common stock, which could materially reduce the liquidity of our
common stock and result in a corresponding material reduction in
the price of our common stock. In addition, delisting could harm
our ability to raise capital through alternative financing sources
on terms acceptable to us, or at all, and may result in the
inability to advance our drug development programs, potential loss
of confidence by investors and employees, and fewer business
development opportunities.
S-6
This
prospectus supplement contains forward-looking statements that
involve substantial risks and uncertainties. All statements
contained in this prospectus supplement and the accompanying
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 impact of COVID-19 pandemic, efforts to contain the pandemic and
resulting economic downturn on our operations and financial
condition;
●
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, 2020, 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 supplement, as
well as certain information incorporated by reference into this
prospectus supplement and the accompanying 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 supplement and the accompanying
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.
S-7
We
estimate that our net proceeds from this offering will be
approximately $11.26 million (or approximately $12.97
million if the underwriters exercise their option to purchase
additional shares in full), in each case, after deducting the
underwriting discounts and commissions and estimated offering
expenses payable by us.
We
currently intend to use the net proceeds from the sale of the
shares of common stock offered by this prospectus supplement to
fund continued development of our CNS pipeline programs, and
for general research and development, working capital and
general corporate purposes.
Pending
other uses, we intend to invest our 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.
S-8
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. At July 31, 2020, accrued
dividends on our Series B 10% Convertible Preferred Stock total
approximately $5.46 million.
S-9
The
following table sets forth our cash and cash equivalents and
capitalization as of March 31, 2020:
●
on an actual basis;
●
on a pro forma basis giving effect to the issuance of shares of
common stock and warrants and the receipt of proceeds, each as
applicable, in connection with the Spring 2020 Private Placement,
the Lincoln Park Agreement Shares, the EverInsight Cash Payment,
net of related expenses, the EverInsight Services Shares, the ESPP
Shares and the Warrant Exercise Shares; and
●
on a pro forma, as adjusted basis giving effect to the sale and
issuance by us of shares of common stock in this offering, at a
public offering price of $0.80 per share, after deducting the
underwriting discount and commissions, and estimated offering
expenses payable by us.
|
As
of March 31, 2020
(amounts in dollars and in thousands, except
share and per share amounts)
|
Actual
|
Pro forma
|
Pro
forma, as adjusted
|
|
Cash and cash
equivalents
|
$1,355
|
$9,361
|
$20,622
|
|
|
|
|
|
|
Stockholders’
equity (deficit):
|
|
|
|
|
Preferred stock,
$0.001 par value, 10,000,000 shares authorized:
|
|
|
|
|
Series A Preferred,
500,000 shares authorized and outstanding, actual, pro forma and
pro forma, as adjusted
|
$1
|
$1
|
$1
|
|
Series B Preferred,
4,000,000 shares authorized and 1,160,240 shares outstanding,
actual, pro forma and pro forma, as adjusted
|
1
|
1
|
1
|
|
Series C Preferred,
3,000,000 shares authorized and 2,318,012 shares outstanding,
actual, pro forma and pro forma, as adjusted
|
2
|
2
|
2
|
|
Common stock,
$0.001 par value, 175,000,000 shares authorized; 49,348,707 shares
issued, actual; 56,265,472 shares issued, pro forma;71,890,472
shares issued, pro forma, as adjusted
|
49
|
56
|
72
|
|
Additional paid-in
capital
|
200,093
|
203,184
|
214,430
|
|
Treasury stock, at
cost, 135,665 shares, actual, pro forma and pro forma, as adjusted
|
(3,968)
|
(3,968)
|
(3,968)
|
|
Accumulated deficit
|
(201,907)
|
(202,377)
|
(202,377)
|
|
Total
stockholders’ equity (deficit)
|
$(5,729)
|
$(3,101)
|
8,160
|
|
Total
capitalization
|
$(5,729)
|
$(3,101)
|
8,160
|
The
above discussion and table are based on 49,213,042 shares of common
stock outstanding as of March 31, 2020 and excludes the following
securities:
●
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 B10% Convertible 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 Convertible 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;
●
10,003,088 shares of common stock reserved for issuance upon
exercise of outstanding stock options under our 2019 Omnibus Equity
Incentive Plan and our 2016 Equity Incentive Plan, with a weighted
average exercise price of $1.36 per share;
●
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 the
2019 ESPP; and
●
the
underwriters’ option to purchase additional shares of common
stock.
S-10
If
you purchase shares of our common stock in this offering, you will
experience dilution to the extent of the difference between the
offering price per share in this offering and our as adjusted net
tangible book value per share immediately after this offering. Net
tangible book value is total assets minus the sum of liabilities
and intangible assets. Net tangible book value per share is net
tangible book value divided by the total number of shares of common
stock outstanding. As of March 31, 2020, our net tangible book
value was approximately $(5,729,400), or approximately $(0.12) per
share.
Pro
forma net tangible book value per share represents our total
tangible assets less our total liabilities, divided by the number
of shares of common stock outstanding as of March 31, 2020, after
giving effect to the receipt of net proceeds and issuance of shares
of common stock, as applicable, in connection with the Spring 2020
Private Placement, the Lincoln Park Agreement Shares, the
EverInsight Cash Payment, the EverInsight Services Shares, the ESPP
Shares and the Warrant Exercise Shares.
After further giving effect to (i) the pro forma
adjustment described above, and (ii) the sale by us of 15,625,000
shares of common stock in this offering at a public offering price
of $0.80 per share, after deducting the underwriting
discount and commissions, and estimated offering expenses payable
by us, our pro forma, as adjusted net
tangible book value as of March 31, 2020 would have been
approximately $8,160,100 or approximately $0.11 per share. This
amount represents an immediate increase in net tangible book value
of approximately $0.17 per share to existing stockholders and an
immediate dilution in net tangible book value of approximately
$0.69 per share to purchasers of our common stock in this
offering.
The
following table illustrates the dilution in net tangible book value
per share to new investors:
|
Public
offering price per share:
|
|
$0.80
|
|
Net
tangible book value per share as of March 31, 2020
|
$(0.12)
|
|
|
Pro
forma increase in net tangible book value per share attributable to
the (i) Spring 2020 Private Placement, (ii) the Lincoln Park
Agreement Shares;(iii) the EverInsight Cash Payment; (iv) the
EverInsight Services Shares;(v) the ESPP Shares; and (vi) the
Warrant Exercise Shares
|
0.06
|
|
|
Pro
forma net tangible book value per share as of March 31,
2020
|
$(0.06)
|
|
|
Increase
in pro forma, as adjusted, net tangible book value per share after
this offering
|
0.17
|
|
|
|
|
|
|
Pro
forma, as adjusted net tangible book value per share after this
offering
|
|
0.11
|
|
|
|
|
|
Dilution
in pro forma, as adjusted net tangible book value per share to new
investors in this offering
|
|
$0.69
|
If
the underwriters exercise their option to purchase additional
shares in full, the pro forma net tangible book value would
increase to approximately $0.13 per share, representing an increase
to existing stockholders of approximately $0.19 per share, and
there would be an immediate dilution of approximately $0.67 per
share to new investors.
The
foregoing discussion and table do not take into account further
dilution to new investors that could occur upon the exercise of
outstanding options or warrants having a per share exercise price
less than the public offering price in this offering. To the extent
that we raise additional capital through the sale of equity or
convertible debt securities after this offering, the issuance of
those securities could result in further dilution to our
stockholders.
The
above discussion and table are based on 49,213,042 shares of common
stock outstanding as of March 31, 2020 and excludes the following
securities:
●
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 B10% Convertible 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 Convertible 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;
●
10,003,088 shares of common stock reserved for issuance upon
exercise of outstanding stock options under our 2019 Omnibus Equity
Incentive Plan and our 2016 Equity incentive Plan, with a weighted
average exercise price of $1.36 per share;
●
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 the
2019 ESPP; and
●
the
underwriters’ option to purchase additional shares of common
stock.
S-11
MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES
TO NON-U.S. HOLDERS
The
following is a general discussion of the material U.S. federal
income tax consequences applicable to non-U.S. holders
(as defined herein) with respect to their purchase, ownership and
disposition of shares of our common stock issued pursuant to this
offering. All prospective non-U.S. holders of our common
stock should consult their own tax advisors with respect to the
U.S. federal, state, local and non-U.S. tax consequences
of the purchase, ownership and disposition of our common
stock.
In
general, a non-U.S. holder means a beneficial owner of
our common stock (other than a partnership or an entity or
arrangement treated as a partnership for U.S. federal income tax
purposes) that is not, for U.S. federal income tax
purposes:
● an
individual who is a citizen or resident of the United
States;
●
a
corporation, or an entity treated as a corporation for U.S. federal
income tax purposes, created or organized in the United States or
under the laws of the United States or of any state thereof or the
District of Columbia;
● an
estate, the income of which is subject to U.S. federal income tax
regardless of its source; or
●
a
trust if (i) a U.S. court can exercise primary supervision over the
trust’s administration and one or more U.S. persons have the
authority to control all of the trust’s substantial decisions
or (ii) the trust has a valid election in effect under applicable
U.S. Treasury Regulations to be treated as a U.S.
person.
This discussion is based on current provisions of
the U.S. Internal Revenue Code of 1986, as amended
(the Code), existing U.S. Treasury Regulations promulgated
thereunder, published administrative pronouncements and rulings of
the U.S. Internal Revenue Service, which we refer to as the IRS,
and judicial decisions, all as in effect as of the date of this
prospectus supplement. These authorities are subject to change and
to differing interpretation, possibly with retroactive effect. Any
change or differing interpretation could alter the tax consequences
to non-U.S. holders described in this
discussion.
We
assume in this discussion that a non-U.S. holder holds
shares of our common stock as a capital asset within the meaning of
Section 1221 of the Code (generally, property held for
investment). This discussion does not address all aspects of U.S.
federal income taxation that may be relevant to a
particular non-U.S. holder in light of
that non-U.S. holder’s individual circumstances,
nor does it address any estate or gift tax consequences, or any
aspects of U.S. state, local or non-U.S. taxes. This
discussion also does not address consequences relevant to non-U.S.
holders subject to special tax rules, such as holders that own, or
are deemed to own, more than 5% of our capital stock (except to the
extent specifically set forth below), corporations that accumulate
earnings to avoid U.S. federal income tax, tax-exempt or
governmental organizations, banks, financial institutions,
insurance companies, brokers, dealers or traders in securities,
commodities or currencies, tax-qualified retirement
plans, holders subject to the alternative minimum tax or the
Medicare contribution tax, holders holding our common stock as part
of a hedge, straddle or other risk reduction strategy, conversion
transaction, synthetic security or other integrated investment,
holders deemed to sell our common stock under the constructive sale
provisions of the Code, controlled foreign corporations, passive
foreign investment companies, accrual method taxpayers subject to
special tax accounting rules under Section 451(b) of the Code,
and U.S. expatriates and certain former U.S. citizens or long-term
residents.
In
addition, this discussion does not address the tax treatment of
partnerships (or entities or arrangements that are treated as
partnerships for U.S. federal income tax purposes) or persons that
hold their common stock through such partnerships. If a
partnership, including any entity or arrangement treated as a
partnership for U.S. federal income tax purposes, holds shares of
our common stock, the U.S. federal income tax treatment of a
partner in such partnership will generally depend upon the status
of the partner, the activities of the partnership and certain
determinations made at the partner level. Such partners and
partnerships should consult their own tax advisors regarding the
tax consequences of the purchase, ownership and disposition of our
common stock.
S-12
There
can be no assurance that a court or the IRS will not challenge one
or more of the tax consequences described herein, and we have not
obtained, nor do we intend to obtain, a ruling with respect to the
U.S. federal income tax consequences to a non-U.S. holder
of the purchase, ownership or disposition of our common
stock.
All
prospective non-U.S. holders of our common stock are urged to
consult their own tax advisors with respect to the U.S. federal
income tax laws to their particular situation as well as any tax
consequences of the purchase, ownership and disposition of our
common stock arising under the U.S. federal estate or gift tax laws
or under the laws of any state, local or non-U.S. taxing
jurisdiction or under any applicable income tax
treaty.
Distributions on Our Common Stock
As described in the section entitled
“Dividend
Policy,” we do not expect
to pay any cash dividends in the foreseeable future, but may issue
shares of our common stock to pay accrued, but unpaid dividends
upon conversion of outstanding shares of our Series B 10%
Convertible Preferred Stock. However, if we do make distributions
of cash or property on our common stock, such distributions
generally will constitute dividends for U.S. federal income tax
purposes to the extent paid from our current or accumulated
earnings and profits, as determined under U.S. federal income tax
principles. If a distribution exceeds our current and accumulated
earnings and profits, the excess will be treated as a return
of capital and first be applied against and reduce a
non-U.S. holder’s adjusted tax basis in its common
stock, but not below zero. Any remaining excess will be treated as
capital gain from the sale or exchange of our common stock subject
to the tax treatment described below in “Gain on Sale,
Exchange or Other Disposition of Our Common Stock.” Any such
distribution will also be subject to the discussion below under the
headings “Foreign Accounts” and “Backup
Withholding and Information Reporting.”
Subject
to the discussions below on effectively connected income, dividends
paid to a non-U.S. holder of our common stock will be
subject to U.S. federal withholding at a 30% rate of the gross
amount of the dividend (or such lower rate as may be specified by
an applicable income tax treaty between the United States and a
non-U.S. holder’s country of residence).
If
dividends paid to a non-U.S. holder are effectively connected with
a trade or business conducted by a non-U.S. holder within
the United States (and, if an applicable income tax treaty so
provides, that are attributable to a permanent establishment or a
fixed base maintained by the non-U.S. holder within the
United States), the non-U.S. holder will be exempt from the 30%
U.S. federal withholding tax if the non-U.S. holder
satisfies applicable certification and disclosure requirements.
However, such U.S. effectively connected income, net of specified
deductions and credits, will be taxed at the same graduated U.S.
federal income tax rates applicable to “United States
persons” (as defined in the Code). Any U.S. effectively
connected income received by a non-U.S. holder that is a
corporation may also, under certain circumstances, be subject to an
additional “branch profits tax” at a 30% rate (or such
lower rate as may be specified by an applicable income tax treaty
between the United States and a non-U.S. holder’s country of
residence) on a portion of its effectively connected earnings and
profits for the taxable year, as adjusted for certain
items.
To
claim a reduction or exemption from withholding,
a non-U.S. holder of our common stock generally will be
required to provide (a) a properly executed IRS
Form W-8BEN (in the case of individuals)
or W-8BEN-E (in the case of entities), or successor form,
and satisfy applicable certification and other requirements to
claim the benefit of an applicable income tax treaty between the
United States and such holder’s country of residence, or
(b) a properly executed IRS Form W-8ECI stating that
dividends are not subject to withholding because they are
effectively connected with such non-U.S. holder’s
conduct of a trade or business within the United States. The tax
forms referred to above must be provided to us or our paying agent
prior to the payment of dividends and must be updated periodically.
In the case of a non-U.S. holder that is an entity,
Treasury Regulations and any relevant tax treaty provide rules to
determine whether, for purposes of determining the applicability of
an income tax treaty, dividends will be treated as paid to the
entity or to those holding an interest in that entity. If
a non-U.S. Holder holds stock through a financial
institution or other agent acting on the holder’s behalf, the
holder will be required to provide appropriate documentation to
such agent. The holder’s agent will then be required to
provide certification to us or our paying agent, either directly or
through other intermediaries. A non-U.S. holder that is
eligible for a reduced rate of U.S. federal withholding tax under
an income tax treaty may obtain a refund or credit of any excess
amounts withheld by timely filing an appropriate claim for refund
with the IRS. Non-U.S. holders are urged to consult
their tax advisors regarding their entitlement to benefits under a
relevant income tax treaty.
S-13
Gain on Sale, Exchange or Other Disposition of Our Common
Stock
Subject
to the discussion below regarding backup withholding and the
discussion under the heading “Foreign Accounts,” in
general, a non-U.S. holder will not be subject to any
U.S. federal income tax on any gain realized upon such non-U.S.
holder’s sale, exchange or other taxable disposition of
shares of our common stock unless:
●
the
gain
is effectively connected with a U.S. trade or business of the
non-U.S. holder (and, if an applicable income tax treaty so
provides, is attributable to a permanent establishment or a fixed
base maintained in the United States by
such non-U.S. holder), in which case the
non-U.S. holder generally will be taxed on a net income basis
at the graduated U.S. federal income tax rates applicable to
“United States persons” (as defined in the Code) and,
if the non-U.S. holder is a foreign corporation, the
branch profits tax at a rate of 30% (or such lower rate specified
by an applicable income tax treaty) on such effectively connected
gain, as adjusted for certain items, may also apply;
●
the
non-U.S. holder is a nonresident alien individual who is present in
the United States for 183 days or more in the taxable year of the
disposition and certain other conditions are met, in which case
the non-U.S. holder will be subject to a 30% U.S. federal
income tax (or such lower rate as may be specified by an applicable
income tax treaty) on the net gain derived from the disposition,
which may be offset by U.S. source capital losses of
the non-U.S. holder, if any (even though the individual
is not considered a resident of the United States), provided
the non-U.S. holder has timely filed U.S. federal income tax
returns with respect to such losses; or
●
our
common stock constitutes U.S. real property interest because we
are, or have been, at any time during the five-year period
preceding such disposition (or the non-U.S. holder’s holding
period, if shorter) a U.S. real property holding corporation for
U.S. federal income tax purposes. Generally, a corporation is a
U.S. real property holding corporation only if the fair market
value of its U.S. real property interests equals or exceeds 50% of
the sum of the fair market value of its worldwide real property
interests plus the fair market value of its other assets used or
held for use in a trade or business. We do not believe that we are,
or have been, a U.S. real property holding corporation, or that we
are likely to become one in the future. However, because the
determination of whether we are a U.S. real property holding
corporation depends on the fair market value of our U.S. real
property relative to the fair market value of our other business
assets, there can be no assurance that we will not become a U.S.
real property holding corporation in the future. Even if we are or
become a U.S. real property holding corporation, provided that our
common stock is regularly traded, as defined by applicable Treasury
Regulations, on an established securities market, our common stock
will be treated as a U.S. real property interest only with respect
to a non-U.S. holder that holds more than 5% of our
outstanding common stock, actually or constructively, during the
shorter of the 5-year period ending on the date of the
disposition or the period that the non-U.S. holder held our
common stock. In such case, such non-U.S. holder
generally will be taxed on its net gain derived from the
disposition at the graduated U.S. federal income tax rates
applicable to “United States persons” (as defined in
the Code). No assurance can be provided that our common stock will
continue to be regularly traded on an established securities market
for purposes of the rules described above.
Non-U.S.
Holders should consult their tax advisors regarding potentially
applicable income tax treaties that may provide for different
rules.
Backup Withholding and Information Reporting
We
must report annually to the IRS and
to each non-U.S. holder the gross amount of the
dividends on our common stock paid to such holder and the tax
withheld, if any, with respect to
such dividends. Non-U.S. holders will have to
comply with specific certification procedures to establish that the
holder is not a “United States person” (as defined in
the Code) in order to avoid backup withholding at the applicable
rate (currently at a 24% rate) with respect to dividends on our
common stock. A non-U.S. holder generally will
not be subject to U.S. backup withholding with respect to payments
of dividends on our common stock if such non-U.S. holder
certifies its non-U.S. status by providing a
valid IRS Form W-8BEN (in the case of
individuals) or W-8BEN-E (in the case of
entities) or W-8ECI, or successor form, or
otherwise establishes an exemption; provided we do not have actual
knowledge or reason to
know such non-U.S. holder is a “United
States person” (as defined in the Code).
S-14
Information
reporting and backup withholding will generally apply to the
proceeds of a disposition of our common stock
by a non-U.S. holder effected by or through the
U.S. office of any broker, U.S. or foreign, unless the non-U.S.
holder certifies its status as a non-U.S. holder as
described above and satisfies certain other requirements, or
otherwise establishes an exemption. Generally, information
reporting and backup withholding will not apply to a payment of
disposition proceeds to a non-U.S. holder where
the transaction is effected outside the United States
through a non-U.S. office of a non-U.S. broker.
However, for information reporting purposes, dispositions effected
through a non-U.S. office of a broker with
substantial U.S. ownership or operations generally will be treated
in a manner similar to dispositions effected through a U.S. office
of a broker. Non-U.S. holders should consult
their own tax advisors regarding the application of the information
reporting and backup withholding rules to them.
Copies
of information returns may be made available under the provisions
of a specific treaty or agreement to the tax authorities of the
country in which the non-U.S. holder resides or
is established.
Backup
withholding is not an additional tax. Any amounts withheld under
the backup withholding rules from a payment
to a non-U.S. holder may be allowed as a credit
against the non-U.S. holder’s U.S.
federal income tax liability, if any, and may entitle such holder
to a refund, provided that the required information is timely
furnished to the IRS.
Foreign Accounts
Withholding taxes may be imposed under Sections
1471 to 1474 of the Code (such Sections commonly referred to as the
Foreign Account Tax Compliance Act (FATCA)) on certain types of payments made to non-U.S.
financial institutions and certain other non-U.S. entities.
Specifically, a U.S. federal withholding tax of 30% may be imposed
on dividends on, or on the gross proceeds from the sale or other
disposition of, our common stock paid to a “foreign financial
institution” (as defined in the Code), unless such foreign
financial institution enters into an agreement with the U.S.
Department of Treasury requiring, among other things, withhold on
certain payments and to collect and provide to the U.S. tax
authorities substantial information regarding accounts held by
certain “specified United States persons” or
“United States-owned foreign entities” (each as defined
in the Code), or otherwise qualifies for an exemption from these
rules. Additionally, U.S. federal withholding tax of 30% may be
imposed on dividends on, or on the gross proceeds from the sale or
other disposition of, our common stock paid
to a “non-financial foreign entity” (as
defined in the Code), unless such non-financial foreign entity
provides the withholding agent with either a certification that it
does not have any “substantial United States owners”
(as defined in the Code), provides information regarding each
substantial United States owner, or otherwise qualifies for an
exemption from these rules. An intergovernmental agreement between
the United States and an applicable foreign country where a foreign
financial institution is located may modify the requirements
described in this paragraph.
The withholding
under FATCA described above currently applies to dividends paid on
our common stock. While withholding under FATCA would have applied
also to payments of gross proceeds from the sale or other
disposition of our common stock on or after January 1, 2019,
recently proposed Treasury Regulations eliminate FATCA withholding
on payments of gross proceeds entirely. Taxpayers generally may
rely on these proposed Treasury Regulations until final Treasury
Regulations are issued.
Prospective
investors should consult their tax advisors regarding the potential
application of withholding under FATCA to their investment in our
common stock.
S-15
UNDERWRITING
We are
offering the shares of common stock described in this prospectus
supplement and the accompanying prospectus through the underwriters
listed below. Maxim Group LLC is acting as the sole book-running
manager of this offering and representative of each of the
underwriters named below. The underwriters named below have agreed
to buy, subject to the terms of the underwriting agreement, the
number of securities listed opposite its name below. The
underwriters are committed to purchase and pay for all of the
securities if any are purchased, other than those securities
covered by the over-allotment option described below.
|
Underwriters
|
Number of
Shares
|
|
Maxim Group
LLC
|
15,625,000
|
|
Total
|
15,625,000
|
The
underwriters have advised us that they propose to offer the shares
of common stock to the public at a price of $0.80 per share. The
underwriters propose to offer the shares of common stock to certain
dealers at the same price less a concession of not more than $0.032
per share. After the offering, these figures may be changed by the
underwriters.
The
common stock sold in this offering are expected to be ready for
delivery on or about August 5, 2020, against payment in
immediately available funds. The underwriters may reject all or
part of any order.
We have
granted to the underwriters an option to purchase up to an
additional 2,343,750 shares of common stock from us at the same
price to the public, and with the same underwriting discount, as
set forth in the table below. The underwriters may exercise this
option any time during the 45-day period after the date of this
prospectus supplement, but only to cover over-allotments, if any.
To the extent the underwriters exercise the option, the
underwriters will become obligated, subject to certain conditions,
to purchase the shares of common stock for which they exercise the
option.
The
table below summarizes the underwriting discounts that we will pay
to the underwriters. These amounts are shown assuming both no
exercise and full exercise of the over-allotment option. In
addition to the underwriting discount, we have agreed to pay up to
$50,000 of the fees and expenses of the underwriters, which may
include the fees and expenses of counsel to the underwriters. The
fees and expenses of the underwriters that we have agreed to
reimburse are not included in the underwriting discounts set forth
in the table below. The underwriting discount and reimbursable
expenses the underwriters will receive were determined through
arms’ length negotiations between us and the
underwriters.
|
|
Per
Share
|
Total with no
Over-Allotment
|
Total with
Over-Allotment
|
|
Underwriting discount to be paid by
us
|
$0.068
|
$1,062,500
|
$1,221,875
|
We
estimate that the total expenses of this offering, excluding
underwriting discounts, will be $176,390. This includes $50,000 of
the fees and expenses of the underwriters. These expenses are
payable by us.
We also
have agreed to indemnify the underwriters against certain
liabilities, including civil liabilities under the Securities Act
of 1933, as amended, or to contribute to payments that the
underwriters may be required to make in respect of those
liabilities.
No Sales of Similar Securities
Each of
our directors and officers and certain of our stockholders, have
agreed not to offer, sell, agree to sell, directly or indirectly,
or otherwise dispose of any shares of common stock or any
securities convertible into or exchangeable for shares of common
stock without the prior written consent of the underwriters for a
period of four (4) months after the later of (i) the closing of
this offering, and (ii) the last closing with respect to the
underwriters’ exercise of the over-allotment option, if any.
These lock-up agreements provide limited exceptions and their
restrictions may be waived at any time by the
underwriters.
In
addition, we have agreed, subject to certain exceptions, not to
offer, sell agree to sell, directly or indirectly or otherwise
issue shares of our common stock for a period of three (3) months,
or, in the case of certain variable rate transactions, four (4)
months, following the later of (i) the closing of this offering,
and (ii) the last closing with respect to the underwriters'
exercise of the over-allotment option, if any.
S-16
Price Stabilization, Short Positions and Penalty Bids
To
facilitate this offering, the underwriters may engage in
transactions that stabilize, maintain or otherwise affect the price
of our common stock during and after the offering. Specifically,
the underwriters may over-allot or otherwise create a short
position in our common stock for its own account by selling more
shares of common stock than we have sold to the underwriters. The
underwriters may close out any short position by either exercising
its option to purchase additional shares or purchasing shares in
the open market.
In
addition, the underwriters may stabilize or maintain the price of
our common stock by bidding for or purchasing shares in the open
market and may impose penalty bids. If penalty bids are imposed,
selling concessions allowed to broker-dealers participating in this
offering are reclaimed if shares previously distributed in this
offering are repurchased, whether in connection with stabilization
transactions or otherwise. The effect of these transactions may be
to stabilize or maintain the market price of our common stock at a
level above that which might otherwise prevail in the open market.
The imposition of a penalty bid may also affect the price of our
common stock to the extent that it discourages resales of our
common stock. The magnitude or effect of any stabilization or other
transactions is uncertain. These transactions may be effected on
the Nasdaq Capital Market or otherwise and, if commenced, may be
discontinued at any time.
In connection with
this offering, the underwriters and selling group members may also
engage in passive market making transactions in our common stock on
the Nasdaq Capital Market. Passive market making consists of
displaying bids on the Nasdaq Capital Market limited by the prices
of independent market makers and effecting purchases limited by
those prices in response to order flow. Rule 103 of
Regulation M promulgated by the Securities and Exchange
Commission limits the amount of net purchases that each passive
market maker may make and the displayed size of each bid. Passive
market making may stabilize the market price of our common stock at
a level above that which might otherwise prevail in the open market
and, if commenced, may be discontinued at any time.
Neither we nor the
underwriters make any representation or prediction as to the
direction or magnitude of any effect that the transactions
described above may have on the price of our common stock. In
addition, neither we nor the underwriters make any representation
that the underwriters will engage in these transactions or that any
transaction, if commenced, will not be discontinued without
notice.
Affiliations
The
underwriters and their affiliates are full service financial
institutions engaged in various activities, which may include
securities trading, commercial and investment banking, financial
advisory, investment management, investment research, principal
investment, hedging, financing and brokerage activities. The
underwriters may in the future engage in investment banking and
other commercial dealings in the ordinary course of business with
us or our affiliates. The underwriters may in the future receive
customary fees and commissions for these transactions.
In the ordinary
course of its various business activities, the underwriters and
their affiliates may make or hold a broad array of investments and
actively trade debt and equity securities (or related derivative
securities) and financial instruments (including bank loans) for
its own account and for the accounts of its customers, and such
investment and securities activities may involve securities and/or
instruments of the issuer. The underwriters and their affiliates
may also make investment recommendations and/or publish or express
independent research views in respect of such securities or
instruments and may at any time hold, or recommend to clients that
they acquire, long and/or short positions in such securities and
instruments.
Electronic Offer, Sale and Distribution
In connection
with this offering, the underwriters or certain of the securities
dealers may distribute prospectuses by electronic means, such as
e-mail. In addition, the underwriters may facilitate Internet
distribution for this offering to certain of its Internet
subscription customers. The underwriters may allocate a limited
number of securities for sale to its online brokerage customers. An
electronic prospectus is available on the Internet websites
maintained by any such underwriter. Other than the prospectus in
electronic format, the information on the websites of the
underwriters is not part of this prospectus supplement or the
accompanying prospectus.
S-17
Listing
Our
common stock is listed on the Nasdaq Capital Market under the
symbol “VTGN.”
Transfer Agent and Registrar
The
transfer agent and registrar for our common stock is Computershare
Trust Company, N.A., Jersey City, New Jersey.
Selling Restrictions
Canada. The
securities may be sold in Canada only to purchasers purchasing, or
deemed to be purchasing, as principal that are accredited
investors, as defined in National Instrument 45-106 Prospectus Exemptions or subsection
73.3(1) of the Securities Act (Ontario), and are permitted clients,
as defined in National Instrument 31 103 Registration Requirements, Exemptions and
Ongoing Registrant Obligations. Any resale of the securities
must be made in accordance with an exemption from, or in a
transaction not subject to, the prospectus requirements of
applicable securities laws.
Securities
legislation in certain provinces or territories of Canada may
provide a purchaser with remedies for rescission or damages if this
prospectus supplement (including any amendment thereto) contains a
misrepresentation, provided that the remedies for rescission or
damages are exercised by the purchaser within the time limit
prescribed by the securities legislation of the purchaser’s
province or territory. The purchaser should refer to any applicable
provisions of the securities legislation of the purchaser’s
province or territory for particulars of these rights or consult
with a legal advisor.
Pursuant to section
3A.3 of National Instrument 33 105 Underwriting Conflicts (NI 33 105), the
underwriters are not required to comply with the disclosure
requirements of NI 33-105 regarding underwriters conflicts of
interest in connection with this offering.
European Economic
Area. In relation to each Member State of the
European Economic Area which has implemented the Prospectus
Directive (each, a “Relevant Member State”) an offer to
the public of any securities may not be made in that Relevant
Member State, except that an offer to the public in that Relevant
Member State of any securities may be made at any time under the
following exemptions under the Prospectus Directive, if they have
been implemented in that Relevant Member State:
|
|
●
|
to any
legal entity which is a qualified investor as defined in the
Prospectus Directive;
|
|
|
●
|
to
fewer than 100 or, if the Relevant Member State has implemented the
relevant provision of the 2010 PD Amending Directive, 150, natural
or legal persons (other than qualified investors as defined in the
Prospectus Directive), as permitted under the Prospectus Directive,
subject to obtaining the prior consent of the representatives for
any such offer; or
|
|
|
●
|
in any
other circumstances falling within Article 3(2) of the Prospectus
Directive, provided that no such offer of securities shall result
in a requirement for the publication by us or any underwriters of a
prospectus pursuant to Article 3 of the Prospectus
Directive.
|
For the
purposes of this provision, the expression an “offer to the
public” in relation to any securities in any Relevant Member
State means the communication in any form and by any means of
sufficient information on the terms of the offer and any securities
to be offered so as to enable an investor to decide to purchase any
securities, as the same may be varied in that Member State by any
measure implementing the Prospectus Directive in that Member State,
the expression “Prospectus Directive” means Directive
2003/71/EC (and amendments thereto, including the 2010 PD Amending
Directive, to the extent implemented in the Relevant Member State),
and includes any relevant implementing measure in the Relevant
Member State, and the expression “2010 PD Amending
Directive” means Directive 2010/73/EU.
S-18
United Kingdom. Each
underwriter has represented and agreed that:
|
|
●
|
it has
only communicated or caused to be communicated and will only
communicate or cause to be communicated an invitation or inducement
to engage in investment activity (within the meaning of Section 21
of the Financial Services and Markets Act 2000 (the FSMA) received by it in connection with
the issue or sale of the securities in circumstances in which
Section 21(1) of the FSMA does not apply to us; and
|
|
|
●
|
it has
complied and will comply with all applicable provisions of the FSMA
with respect to anything done by it in relation to the securities
in, from or otherwise involving the United Kingdom.
|
Switzerland. The
securities may not be publicly offered in Switzerland and will not
be listed on the SIX Swiss Exchange (the SIX) or on any other stock exchange or
regulated trading facility in Switzerland. This document has been
prepared without regard to the disclosure standards for issuance
prospectuses under art. 652a or art. 1156 of the Swiss Code of
Obligations or the disclosure standards for listing prospectuses
under art. 27 ff. of the SIX Listing Rules or the listing rules of
any other stock exchange or regulated trading facility in
Switzerland. Neither this document nor any other offering or
marketing material relating to the securities or the offering may
be publicly distributed or otherwise made publicly available in
Switzerland.
Neither this
document nor any other offering or marketing material relating to
the offering, or the securities have been or will be filed with or
approved by any Swiss regulatory authority. In particular, this
document will not be filed with, and the offer of securities will
not be supervised by, the Swiss Financial Market Supervisory
Authority FINMA, and the offer of securities has not been and will
not be authorized under the Swiss Federal Act on Collective
Investment Schemes (CISA).
Accordingly, no public distribution, offering or advertising, as
defined in CISA, its implementing ordinances and notices, and no
distribution to any non-qualified investor, as defined in CISA, its
implementing ordinances and notices, shall be undertaken in or from
Switzerland, and the investor protection afforded to acquirers of
interests in collective investment schemes under CISA does not
extend to acquirers of securities.
Australia. No
placement document, prospectus, product disclosure statement or
other disclosure document has been lodged with the Australian
Securities and Investments Commission (ASIC), in relation to the
offering.
This prospectus does not constitute a prospectus, product
disclosure statement or other disclosure document under the
Corporations Act 2001 (the Corporations Act) and does not purport
to include the information required for a prospectus, product
disclosure statement or other disclosure document under the
Corporations Act.
Any offer in Australia of the securities may only be made to
persons (the Exempt
Investors) who are “sophisticated investors”
(within the meaning of section 708(8) of the Corporations Act),
“professional investors” (within the meaning of section
708(11) of the Corporations Act) or otherwise pursuant to one or
more exemptions contained in section 708 of the Corporations Act so
that it is lawful to offer the securities without disclosure to
investors under Chapter 6D of the Corporations Act.
The securities applied for by Exempt Investors in Australia must
not be offered for sale in Australia in the period of 12 months
after the date of allotment under the offering, except in
circumstances where disclosure to investors under Chapter 6D of the
Corporations Act would not be required pursuant to an exemption
under section 708 of the Corporations Act or otherwise or where the
offer is pursuant to a disclosure document which complies with
Chapter 6D of the Corporations Act. Any person acquiring securities
must observe such Australian on-sale restrictions.
This prospectus contains general information only and does not take
account of the investment objectives, financial situation or
particular needs of any particular person. It does not contain any
securities recommendations or financial product advice. Before
making an investment decision, investors need to consider whether
the information in this prospectus is appropriate to their needs,
objectives and circumstances, and, if necessary, seek expert advice
on those matters.
S-19
LEGAL MATTERS
Certain legal matters in connection with this
offering will be passed upon for us by Disclosure Law Group, a
Professional Corporation, of San Diego, California (DLG). Partners of DLG beneficially own
an aggregate of 74,487 registered and/or restricted shares of
our common stock. Maxim Group LLC is being represented in
connection with this offering by Ellenoff Grossman & Schole
LLP.
EXPERTS
OUM
& Co. LLP, our independent registered public accounting firm,
has audited our consolidated financial statements included in our
Annual Report on Form 10-K for the year ended March 31, 2020, as
set forth in their report, which is incorporated by reference in
this prospectus. The report for VistaGen Therapeutics, Inc.
includes an explanatory paragraph about the existence of
substantial doubt concerning its ability to continue as a going
concern. Our financial statements are incorporated by reference in
reliance on OUM & Co. LLP’s report, given on their
authority as experts in accounting and auditing.
S-20
WHERE YOU CAN FIND MORE INFORMATION
We have
filed with the SEC a registration statement on Form S-3 under the
Securities Act with respect to the securities covered by this
prospectus supplement. This prospectus supplement, which is a part
of the registration statement, does not contain all of the
information set forth in the registration statement or the exhibits
and schedules filed therewith. For further information with respect
to us and the securities covered by this prospectus, please see the
registration statement and the exhibits filed with the registration
statement. The SEC maintains an Internet website that contains
reports, proxy and information statements and other information
regarding registrants that file electronically with the SEC. The
address of the website is http://www.sec.gov.
We are
subject to the information and periodic reporting requirements of
the Exchange Act and, in accordance therewith, we file periodic
reports, proxy statements and other information with the SEC. Such
periodic reports, proxy statements and other information are
available free of charge at our website, www.vistagen.com,
as soon as reasonably practicable after such material is
electronically filed with, or furnished to, the SEC. Our website
and the information contained on that site, or connected to that
site, are not incorporated into and are not a part of this
prospectus supplement.
The following documents filed by us with the SEC are incorporated
by reference in this prospectus:
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our Annual Report on Form 10-K for the year ended March 31, 2020,
filed with the SEC on June 29, 2020;
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our Current Reports on Form 8-K, filed with the SEC on April 3,
2020, April 27, 2020, April 28, 2020, May 18, 2020, June 1, 2020,
June 26, 2020, June 30, 2020, and July 24, 2020; and
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The description of our common stock contained in the Registration
Statement on Form 8-A filed with the SEC pursuant to Section 12(b)
of the Exchange Act on May 3, 2016, including any amendment or
report filed with the SEC for the purpose of updating this
description.
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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 supplement and the accompanying 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
supplement and the accompanying prospectus. We have not authorized
anyone to provide information other than that provided in this
prospectus supplement and the accompanying 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 supplement and the accompanying prospectus is accurate
as of any date other than the date on the front of the
document.
S-21
PROSPECTUS
$150,000,000
COMMON STOCK
PREFERRED STOCK
WARRANTS
UNITS
From
time to time, we may offer and sell, in one or more offerings, up
to approximately $147.1 million of any combination of the
securities described in this prospectus. We may also offer
securities as may be issuable upon conversion, repurchase, exchange
or exercise of any securities registered hereunder, including
applicable anti-dilution provisions, if any. Any warrants sold
hereunder may be exercisable for shares of our common stock, shares
of our preferred stock and/or units. Any units sold hereunder will
represent an interest in two or more other securities, which may or
may not be separable from one another. The shares of our
common stock that may become issuable from time to time upon the
exercise of our Series A1 Warrants (as defined herein) are also
being offered pursuant to this prospectus.
This prospectus provides a general description of the securities we
may offer from time to time. Each time we offer securities, we will
provide specific terms of the securities offered in a supplement to
this prospectus. We may also authorize one or more free writing
prospectuses to be provided to you in connection with an offering.
The prospectus supplement and any related free writing prospectus
may also add, update or change information contained in this
prospectus. You should carefully read this prospectus, the
applicable prospectus supplement and any related free writing
prospectus, as well as any documents incorporated by reference,
before you invest in any of the securities being
offered.
Our common stock is
listed on the Nasdaq Capital Market under the symbol
“VTGN.” On September 27, 2019, the closing price of our common
stock on the Nasdaq Capital Market was $1.14 per share.
We may offer and sell our securities to or through
one or more agents, underwriters, dealers or other third parties or
directly to one or more purchasers on a continuous or delayed
basis. If agents, underwriters or dealers are used to sell our
securities, we will name them and describe their compensation in a
prospectus supplement. The price to the public of our securities
and the net proceeds we expect to receive from the sale of such
securities will also be set forth in a prospectus supplement. For
additional information on the methods of sale, you should refer to
the section entitled “Plan of
Distribution” in this
prospectus.
As
of September 30, 2019, the aggregate market value of our
outstanding common stock held by non-affiliates was approximately
$54,677,141, which was calculated in accordance with General
Instruction I.B.6 of Form S-3, based on 42,385,381 shares of
outstanding common stock held by non-affiliates, at a price per
share of $1.29, the closing sale price of our common stock reported
on the Nasdaq Capital Market on September 20, 2019.
Pursuant
to General Instruction I.B.6 of Form S-3, in no event will we sell
the securities described in this prospectus in a public primary
offering with a value exceeding more than one-third (1/3) of the
aggregate market value of our common stock held by non-affiliates
in any twelve (12)-month period, so long as the aggregate market
value of our outstanding common stock held by non-affiliates
remains below $75.0 million. During the twelve (12) calendar months
prior to and including the date of this prospectus, we have offered
and sold $11.5 million of securities pursuant to General
Instruction I.B.6 of Form S-3. As a result, we are currently
eligible to offer and sell up to an aggregate of approximately $6.7
million of our securities pursuant to General Instruction I.B.6. of
Form S-3.
Our business and investing in our securities involve significant
risks. You should review carefully the risks and uncertainties
referenced under the heading “Risk
Factors” on page 6 of
this prospectus, as well as those contained in the applicable
prospectus supplement and any related free writing prospectus, and
in the other documents that are incorporated by reference into this
prospectus or the applicable prospectus
supplement.
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 September 30, 2019
VISTAGEN THERAPEUTICS, INC.
TABLE OF CONTENTS
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PAGE
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About This
Prospectus
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1
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Company
Overview
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2
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Risk
Factors
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6
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Cautionary Notes
Regarding Forward-Looking Statements
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7
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Use of
Proceeds
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8
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Description of our
Capital Stock
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9
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Description of our
Warrants
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15
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Description of our
Units
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18
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Description of
Certain Provisions of Nevada Law and our Articles of Incorporation
and Bylaws
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Plan of
Distribution
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Legal
Matters
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Experts
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Where You Can Find
More Information
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Incorporation of
Certain Information by Reference
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-i-
Table of Contents
ABOUT THIS PROSPECTUS
This prospectus is part of a registration
statement filed with the Securities and Exchange Commission
(the SEC), using a “shelf” registration
process. Under this shelf registration process, we may sell
the securities described in this prospectus in one or more
offerings. This prospectus provides you with a general
description of the securities which may be offered from
time-to-time. Each time we offer securities for sale, we will
provide a prospectus supplement that contains information about the
specific terms of that offering. Any prospectus supplement may also
add or update information contained in this prospectus. You
should read both this prospectus and any prospectus supplement
together with additional information described below under
“Where You Can Find More
Information” and
“Incorporation of Certain
Information by Reference.”
THIS PROSPECTUS MAY NOT BE USED TO CONSUMMATE A SALE OF SECURITIES UNLESS IT IS ACCOMPANIED BY A PROSPECTUS SUPPLEMENT.
You
should rely only on the information contained or incorporated by
reference in this prospectus, and in any prospectus
supplement. We have not authorized any other person to provide
you with different information. If anyone provides you with
different or inconsistent information, you should not rely on
it. We are not making offers to sell or solicitations to buy
the securities described in this prospectus in any jurisdiction in
which an offer or solicitation is not authorized, or in which the
person making that offer or solicitation is not qualified to do so
or to anyone to whom it is unlawful to make an offer or
solicitation. You should not assume that the information in
this prospectus or any prospectus supplement, as well as the
information we file or previously filed with the SEC that we
incorporate by reference in this prospectus or any prospectus
supplement, is accurate as of any date other than its respective
date. Our business, financial condition, results of operations
and prospects may have changed since those dates.
This prospectus contains summaries of certain
provisions contained in some of the documents described herein, but
reference is made to the actual documents for complete information.
All of the summaries are qualified in their entirety by the actual
documents. Copies of some of the documents referred to herein have
been filed, will be filed or will be incorporated by reference as
exhibits to the registration statement of which this prospectus is
a part, and you may obtain copies of those documents as described
below under the heading “Where You Can Find More
Information.”
-1-
Table of Contents
COMPANY OVERVIEW
This summary highlights information contained elsewhere in this
prospectus. This summary does not contain all the information you
should consider before buying our securities. You should read the
following summary together with the more detailed information
appearing in this prospectus, including the section titled
“Risk Factors” on page 6, before deciding whether to
purchase our securities.
In this prospectus, unless otherwise stated or the context
otherwise requires, references to “VistaGen,”
“Company,” “we,” “us,”
“our,” refer to VistaGen Therapeutics,
Inc.
Overview
We are a clinical-stage biopharmaceutical company
committed to developing differentiated new generation medications
for central nervous system (CNS) diseases and disorders with high unmet need. Our
product candidate portfolio includes three differentiated
clinical-stage candidates, AV-101, PH10 and PH94B, which we are
developing for multiple CNS indications. 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.
AV-101 (4-Cl-KYN) belongs to a new generation of
investigational medicines in neuropsychiatry and neurology known as
NMDA (N-methyl-D-aspartate) glutamate receptor modulators. The NMDA
receptor is a pivotal receptor in the brain and abnormal NMDA
function is associated with multiple CNS diseases and disorders,
including major depressive disorder (MDD), chronic neuropathic pain, epilepsy,
levodopa-induced dyskinesia and many others. AV-101 is an oral
prodrug of 7-Cl-KYNA which binds uniquely at the glycine site of
the NMDA receptor. We are developing AV-101 initially for the
treatment of MDD, a serious neurobiologically-based mood disorder
the leading cause of disability globally, affecting approximately
16 million adults in the United States and nearly 300 million
people worldwide according to the U.S. National Institutes of
Health (NIH). AV-101 is currently in Phase 2 development in
the U.S. as an add-on treatment (together with current FDA-approved
antidepressants (SSRIs and SNRIs)) for adult patients with MDD who
have an inadequate response to their current antideperssant. The
FDA has granted Fast Track designation for development of AV-101 as
an add-on, or adjunctive, treatment for MDD. We believe AV-101 has
potential as a novel treatment for multile additional CNS
indivcations, including as a non-opioid treatment for chronic
neuropathic pain, for which the FDA has granted a second AV-101
Fast Track designation, as well as a novel oral therapy for
levodopa-induced dyskinesia associated with Parkinson’s
disease therapy and suicidal ideation.
Our second product candidate, PH10, is a novel,
rapid-acting CNS neuroactive nasal spray administered in microgram
doses. PH10 activates nasal chemosensory receptors that, in turn,
engage neural circuits that lead to rapid antidepressant effects
without psychological side effects, systemic exposure or safety
concerns often associated with current antidepressants and
ketamine-based therapy (intravenous ketamine or esketamine
nasal spray). In an exploratory 30-patient Phase 2a clinical study,
PH10 was well-tolerated and, at microgram doses, demonstrated
rapid-onset antidepressant effects, as measured by the Hamilton
Depression Rating Scale (HAM-D), without psychological side effects or safety
concerns. Based on positive results from this exploratory Phase 2a
study, we are planning Phase 2b clinical development of PH10 in
2020, initially as a new stand-alone treatment for MDD. With its
exceptional safety profile during clinical development to date,
PH10 also has potential to change the current paradigm for
treatment of treatment-resistant depression (TRD) with ketamine-based therapy (intravenous
ketamine or esketamine nasal spray, both of which must be
administered in a clinical setting), by enabling those who respond
to such therapy to transition to more convenient at-home
administration of PH10 to maintain the therapeutic benefits of
ketamine or esketamine.
Our third product candidate, PH94B, is also a
novel, rapid-acting CNS neuroactive nasal spray administered in
microgram doses. We are developing PH94B initially for treatment of
social anxiety disorder (SAD), which affects over 19 million Americans and is
the third most common psychiatric condition after depression and
substance abuse according to the NIH. SAD is characterized by a
persistent and unreasonable fear of one or more social or
performance situations, where the individual fears that he or she
will act in a way or show symptoms that will be embarrassing or
humiliating, leading to avoidance of the situations when possible
and anxiety or distress when they occur. These fears have a
significant impact on the person's employment, social activities
and overall quality of life. Only three drugs, all antidepressants,
are approved by the U.S Food and Drug Administration
(FDA) specifically for treatment of SAD. However, for
treatment of both MDD and SAD, current oral antidepressants
(ADs) have slow onset of effect (often several weeks
to months) and significant side effects that may make them
inadequate treatment alternatives for many individuals affected by
MDD and SAD.
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Table of Contents
PH94B is fundamentally differentiated from all
current treatments for SAD. PH94B activates nasal chemosensory
receptors that, in turn, engage neural circuits that lead to rapid
suppression of fear and anxiety, but without psychological side
effects, systemic exposure, sedation or other safety concerns often
associated with current antidepressants approved by the FDA for
treatment of SAD, as well as benzodiazepines and beta blockers,
which are not approved by the FDA to treat SAD but are often
prescribed for treatment of SAD off-label. 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 public-speaking and social interaction anxiety
on laboratory challenges of individuals with SAD within 10 to 15
minutes of self-administration. Based on its novel mechanism of pharmacological
action, rapid-onset of therapeutic effects and exceptional safety
and tolerability profile in Phase 2 clinical trials to date, we are
preparing to begin pivotal Phase 3 development of PH94B neuroactive
nasal spray to become the first FDA-approved on-demand treatment
for SAD. Additional potential CNS indications for PH94B include,
general anxiety disorder (GAD), peripartum anxiety, preoperative anxiety, panic
disorder and post-tramautic stress disorder (PTSD).
In addition to our current CNS product candidates,
we have pipeline-enabling programs through our wholly-owned
subsidiary, VistaStem Therapeutics (VistaStem). VistaStem is focused on applying pluripotent
stem cell (hPSC) technology to discover, rescue, develop and
commercialize proprietary new chemical entities
(NCEs)
for CNS and other diseases and regenerative medicine
(RM) involving hPSC-derived blood, cartilage, heart
and liver cells. Our internal drug rescue programs are designed to
utilize CardioSafe
3D, our customized cardiac
bioassay system, to discover and develop small molecule NCEs for
our CNS pipeline or for out-licensing. To advance potential RM
applications of our cardiac stem cell technology, we have
sublicensed to BlueRock Therapeutics LP, a next generation cell
therapy and RM company recently acquired by Bayer AG
(BlueRock
Therapeutics), rights to
certain proprietary technologies relating to the production of
cardiac stem cells for the treatment of heart disease
(the BlueRock
Agreement). In a manner
similar to the BlueRock Agreement, we may pursue additional
collaborations or licensing transactions involving blood,
cartilage, and/or liver cells derived from hPSCs for cell-based
therapy, cell repair therapy, RM and/or tissue
engineering.
Securities Offerings under Prior Registration
Statement
On August 31, 2017, we entered into an
underwriting agreement with Oppenheimer & Co. Inc., relating to
the issuance and sale (the “September 2017
Public Offering”) of 1,371,430 shares of our common stock
and warrants to purchase an aggregate total of 1,892,572 shares of
our common stock, consisting of Series A1 Warrants to purchase up
to 1,388,931 shares of common stock and Series A2 Warrant to
purchase up to 503,641 shares of common stock (the Series A1
Warrants and Series A2 Warrants are collectively referred herein as
the “Warrants”). Each share of common stock was sold
together with 1.0128 Series A1 Warrants, each whole Series A1
Warrant to purchase one share of common stock, and 0.3672 of a
Series A2 Warrant, each whole Series A2 Warrant to purchase one
share of common stock, at a public offering price of $1.75 per
share and related Warrants.
Each
Series A1 Warrant became exercisable six months from the date of
issuance, while the Series A2 Warrants were immediately
exercisable. Both Warrants have an exercise price of $1.82 per
whole share, and expire five years from the date first exercisable.
In December 2017 and January 2018, all of the Series A2 Warrants
were exercised at the reset exercise price resulting from a
subsequent public offering of shares of our common stock and
warrants completed in December 2017, from which we received nominal
cash proceeds. As of the date of this prospectus, all Series A1
Warrants offered and sold in the September 2017 Public Offering
remain outstanding.
Risk Factors
Our business is subject to substantial risk.
Please carefully consider the section titled
“Risk
Factors” on page 6 of
this prospectus for a discussion of the factors you should
carefully consider before deciding to purchase securities that may
be offered by this prospectus.
Additional risks and
uncertainties not presently known to us or that we currently deem
immaterial may also impair our business operations.
The occurrence of any of
these known or unknown risks might cause you to lose all or part of
your investment in the offered securities.
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Table of Contents
Risks Related to our Common Stock and our Series A1
Warrants
The price of our common stock might fluctuate significantly, which
could reduce the value of our Series A1 Warrants.
Our common stock is listed for trading on the Nasdaq Capital Market
under the symbol “VTGN.” Our stock price has been and
could continue to be subject to wide fluctuations in response to a
variety of factors, including the following:
●
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;
●
general
market conditions and overall fluctuations in U.S. equity
markets;
●
variations
in our quarterly operating results;
●
changes
in our financial guidance or securities analysts’ estimates
of our financial performance;
●
changes
in accounting principles;
●
our
ability to raise additional capital and the terms on which we can
raise it;
●
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 or
warrants;
●
additions
or departures of key personnel;
●
discussion
of us or our stock price by the press and by online investor
communities; and
●
other
risks and uncertainties described in these risk factors, and the
risk factors incorporated by reference into this
prospectus.
These and other factors might cause the market price of our common
stock to fluctuate substantially, which may negatively affect the
liquidity of our common stock. In addition, in recent years, the
stock market has experienced significant price and volume
fluctuations. This volatility has had a significant impact on the
market price of securities issued by many companies across many
industries. The changes frequently appear to occur without regard
to the operating performance of the affected companies.
Accordingly, the price of our common stock could fluctuate based
upon factors that have little or nothing to do with our company,
and these fluctuations could materially reduce the market price of
our common stock and the value of the Series A1
Warrants.
Securities class action litigation has often been instituted
against companies following periods of volatility in the overall
market and in the market price of a company’s securities.
This litigation, if instituted against us, could result in
substantial costs, divert our management’s attention and
resources, and harm our business, operating results and financial
condition.
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Table of Contents
There is no public market
for our Series A1
Warrants and the liquidity of our Series A1 Warrants may be
limited.
There is no established public trading market for our Series A1
Warrants, and we do not expect a market to develop. In addition, we
do not intend to apply for the listing of our Series A1 Warrants on
any national securities exchange or other trading market. Without
an active market, we expect the liquidity of our Series A1 Warrants
will be limited, which may negatively impact the value of our
Series A1 Warrants.
Holders of our Series A1 Warrants will generally not have rights as
a common stockholder until such holders exercise their Series A1
Warrants and acquire our common stock.
Except as set forth in our Series A1 Warrants, holders of our
Series A1 Warrants will generally not have rights with respect to
the Series A1 Warrant Shares underlying the Series A1 Warrants.
Upon exercise of the Series A1 Warrants, the holders thereof will
be entitled to exercise the rights of a common stockholder only as
to matters for which the record date occurs after the exercise
date.
Due to the speculative nature of our Series A1 Warrants, there is
no guarantee that it will ever be profitable for holders of our
Series A1 Warrants to exercise their Series A1
Warrants.
Holders of Series A1 Warrants may exercise their right to acquire
the Series A Warrant Shares by paying an exercise price of $1.82
per share prior to their expiration on or about March 7, 2023,
after which date any unexercised Series A1 Warrants will expire and
have no further value. There can be no assurance that the market
price of our common stock will ever equal or exceed the exercise
price of the Series A1 Warrants, and, consequently, whether it will
ever be profitable for holders to exercise their Series A1
Warrants.
Significant holders or beneficial holders of our common stock may
not be permitted to exercise Series A1 Warrants that they
hold.
The terms of the Series A1 Warrants prohibit holders from
exercising their Series A1 Warrants if doing so would result in
such holders (together with such holders’ affiliates)
beneficially owning more than 4.99% (which threshold may be
decreased or increased, but not above 9.99%, at the election of the
holders upon prior written notice to us) of the number of shares of
common stock outstanding immediately after giving effect to the
exercise, as such percentage ownership is determined in accordance
with the terms of the Series A1 Warrants. As a result, holders of
the Series A1 Warrants may not be able to exercise our Series A1
Warrants for Series A1 Warrant Shares at a time when it would be
financially beneficial for them to do so.
We have broad discretion to determine how any funds received in
connection with any offering will be used, and may use them in ways
that may not enhance our operating results or the price of our
common stock.
Our management will have broad discretion over the use of proceeds
received from any offering pursuant to this registration statement,
including upon the exercise of the Series A1 Warrants, and we could
spend the proceeds in ways in which our investors do not agree or
that do not yield a favorable return. If we do not invest or apply
the proceeds of any offering in ways that improve our operating
results, we may fail to achieve expected financial results, which
could cause the market price of our common stock and the value of
our Series A1 Warrants to decline.
We do not intend to pay cash dividends.
We have never declared or paid cash dividends on our common stock
or other securities. We currently intend to retain all available
funds and any future earnings for use in the operation and
expansion of our business and do not anticipate paying any cash
dividends in the foreseeable future. Accordingly, investors may
have to sell some or all of their shares of our common stock in
order to generate cash flow from their investment. Investors may
not receive a gain on their investment when they sell their shares
of our common stock and may lose the entire amount of their
investment.
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. We have included our website address as a factual
reference and do not intend it to be an active link to our
website.
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Table of Contents
RISK FACTORS
Investing in our securities involves a high degree
of risk. Before deciding whether to purchase any of our securities,
you should carefully consider the risks and uncertainties described
under “Risk
Factors” on page 6 of
this prospectus and in our Annual Report on Form 10-K for the
fiscal year ended March 31, 2019, our Quarterly Report on Form 10-Q
for the period ended June 30, 2019 and our other filings with the
SEC, all of which are incorporated by reference herein. If any of
these risks actually occur, our business, financial condition and
results of operations could be materially and adversely affected
and we may not be able to achieve our goals, the value of our
securities could decline and you could lose some or all of your
investment. Additional risks not presently known to us or that we
currently deem immaterial may also impair our business operations.
If any of these risks occur, the trading price of our common stock
could decline materially and you could lose all or part of your
investment.
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Table of Contents
CAUTIONARY
NOTES REGARDING
FORWARD-LOOKING STATEMENTS
This prospectus and the documents incorporated by
reference herein contain forward-looking statements that involve
substantial risks and uncertainties. All statements, other than
statements of historical facts, contained in this
prospectus and the documents incorporated by reference herein,
including statements regarding our strategy, future operations, future
financial position, future revenue, projected costs, prospects,
plans, objectives of management and expected market growth, are
forward-looking statements. 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 and clinical
and nonclinical development objectives;
●
the accuracy of our
estimates regarding expenses, future revenues and capital
requirements;
●
our
plans to develop and commercialize our product candidates,
including, among other things, AV-101, initially as an add-on
treatment for MDD, and subsequently as a treatment for additional
diseases and disorders involving the CNS, PH94B, initially, as a
treatment for SAD and PH10, initially, as a stand-alone treatment
for MDD;
●
our
ability to initiate and complete necessary preclinical and clinical
trials, to advance our product candidates into additional
preclinical and clinical trials, including pivotal clinical trials,
to successfully complete any such preclinical and clinical trials,
and for those trials to generate positive results;
●
economic,
regulatory and political developments in the U.S. and foreign
countries;
●
the performance of the Department of Veterans
Affairs (VA), Baylor University, our third-party contract
manufacturer(s) (CMOs), contract research organizations
(CROs) and other third-party preclinical and clinical
drug development collaborators and regulatory service
providers;
●
our ability to obtain and maintain intellectual
property (IP) protection for our core assets, including our
product candidates;
●
the
size of the potential markets for our product candidates and our
ability to enter and 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 in the markets we seek to enter on our own or with
collaborators;
●
the
loss of key scientific, clinical or nonclinical development,
regulatory, and/or management personnel, internally or from one or
more of our third-party collaborators; and
●
other risks and
uncertainties, including those listed in the “Risk Factors” section of this
prospectus and the documents incorporated by reference
herein.
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, particularly in the “Risk
Factors” sections in
this prospectus and the documents incorporated by reference herein,
that we believe could cause actual 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, the documents incorporated by
reference herein and the documents that we have filed as exhibits
to the registration statement of which this prospectus is a part
completely and with the understanding that our actual future
results may be materially different from what we expect. We qualify
all of the forward-looking statements in this prospectus and the
documents incorporated by reference herein by these cautionary
statements. Except as required by law, we undertake no obligation
to publicly update any forward-looking statements, whether as a
result of new information, future events or otherwise.
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USE OF
PROCEEDS
Unless otherwise provided in the applicable
prospectus supplement, we intend to use the net proceeds from the
sale of the securities under this prospectus primarily
for research and development expenses associated with continuing
development of AV-101, PH10, PH94B,
potential drug rescue candidates, and for other working
capital and capital expenditures. We may use a portion of the net
proceeds to fund production of, and nonclinical and clinical
studies related to Phase 2 and Phase 3 development of, AV-101, PH10
and PH94B and our other drug candidates. We may also use the net
proceeds from the sale of the securities under this prospectus
to in-license, acquire or invest in complementary businesses,
technologies, products or assets. However, we have no current
commitments or obligations to do so.
Pending
other uses, we intend to invest our 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
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DESCRIPTION
OF OUR CAPITAL
STOCK
General
Our authorized
capital stock consists of 175.0 million shares of common stock,
$0.001 par value per share (“Common Stock”), and 10.0 million
shares of preferred stock, $0.001 par value per share
(“Preferred
Stock”). The following is a description of our common
stock and certain provisions of our Restated Articles of
Incorporation (“Articles”), and our amended and
restated bylaws (“Bylaws”), and certain provisions
of Nevada law.
As of September 30, 2019, there were issued and
outstanding, or reserved for issuance:
●
42,622,965 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;
●
21,242,954 shares of common stock that have
been reserved for issuance upon exercise of outstanding warrants,
with a weighted average exercise price of $2.43 per share;
●
7,844,838 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 $1.76 per share;
●
170,000 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 $1.00 per share,
and
●
8,718,412 shares of common stock reserved
for future issuance in connection with future grants under our 2019
Omnibus Equity Incentive 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.
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 Articles and our
Bylaws, copies of which are filed with the SEC as exhibits to the
registration statement of which this prospectus is a
part.
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.
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.
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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.
September
2017 Public Offering and Series A1 Warrant Shares
On August 31, 2017, we entered into an
underwriting agreement with Oppenheimer & Co. Inc., relating to
the issuance and sale (the “September 2017
Public Offering”) of 1,371,430 shares of our common stock
and warrants to purchase an aggregate total of 1,892,572 shares of
our common stock, consisting of Series A1 Warrants to purchase up
to 1,388,931 shares of common stock and Series A2 Warrant to
purchase up to 503,641 shares of common stock (the Series A1
Warrants and Series A2 Warrants are collectively referred herein as
the “Warrants”). Each share of common stock was sold
together with 1.0128 Series A1 Warrants, each whole Series A1
Warrant to purchase one share of common stock, and 0.3672 of a
Series A2 Warrant, each whole Series A2 Warrant to purchase one
share of common stock, at a public offering price of $1.75 per
share and related Warrants.
Each
Series A1 Warrant became exercisable six months from the date of
issuance, while the Series A2 Warrants were immediately
exercisable. Both Warrants have an exercise price of $1.82 per
whole share, and expire five years from the date first exercisable.
In December 2017 and January 2018, all of the Series A2 Warrants
were exercised at the reset exercise price resulting from a
subsequent public offering of shares of our common stock and
warrants completed in December 2017, from which we received nominal
cash proceeds. As of the date of this prospectus, all Series A1
Warrants offered and sold in the September 2017 Public Offering
remain outstanding.
Preferred
Stock
This section describes the general terms and provisions of our
outstanding shares of preferred stock, as well as preferred stock
that we may offer from time to time. The applicable prospectus
supplement will describe the specific terms of the shares of
preferred stock offered through that prospectus supplement, which
may differ from the terms we describe below. We will file a
copy of the certificate of designation that contains the terms of
each new series of preferred stock with the SEC each time we issue
a new series of preferred stock, and these certificates of
designation will be incorporated by reference into the registration
statement of which this prospectus is a part. Each certificate of
designation will establish the number of shares included in a
designated series and fix the designation, powers, privileges,
preferences and rights of the shares of each series as well as any
applicable qualifications, limitations or restrictions. A holder of
our preferred stock should refer to the applicable certificate of
designation, our Articles and the applicable prospectus supplement
(and any related free writing prospectus that we may authorize to
be provided to you) for more specific information.
We are authorized,
subject to limitations prescribed by Nevada law, to issue up to
10.0 million shares of preferred stock in one or more series, to
establish from time to time the number of shares to be included in
each series and to fix the designation, powers, preferences and
rights of the shares of each series and any of its qualifications,
limitations or restrictions. Our board of directors can increase or
decrease the number of shares of any series, but not below the
number of shares of that series then outstanding, without any
further vote or action by our stockholders. Our board of directors
may authorize the issuance of preferred stock with voting or
conversion rights that could adversely affect the voting power or
other rights of the holders of the common stock. The issuance of
preferred stock, while providing flexibility in connection with
possible acquisitions and other corporate purposes, could, among
other things, have the effect of delaying, deferring or preventing
a change in control of the Company and may adversely affect the
market price of our common stock and the voting and other rights of
the holders of our common stock.
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Outstanding
Series of Preferred Stock
Currently, there
are three series of our preferred stock outstanding- Series A
Convertible Preferred Stock, Series B 10% Convertible Preferred
Stock, and Series C Convertible Preferred Stock. The rights and
preferences associated with each series are summarized
below.
Series A Preferred
General
In December 2011, our Board authorized the
creation of a series of up to 500,000 shares of Series A Preferred,
par value $0.001 (Series A
Preferred). Each
restricted share of Series A Preferred is currently convertible at
the option of the holder into one and one-half restricted shares of
our common stock. The Series A Preferred ranks prior to
the common stock for purposes of liquidation
preference.
Conversion and Rank
At September
30, 2019, there were 500,000
shares of Series A Preferred outstanding, which shares are
currently subject to beneficial ownership blockers and are
exchangeable at the option of the holders into an aggregate of
750,000 shares of our common stock. The Series A Preferred ranks
prior to our common stock for purposes of liquidation
preference.
Conversion Restriction
At no time may a
holder of shares of Series A Preferred convert shares of the Series
A Preferred if the number of shares of common stock to be issued
pursuant to such conversion would result in such holder
beneficially owning (as determined in accordance with Section 13(d)
of the Exchange Act and the rules thereunder) more than 9.99% of
all of the common stock outstanding at such time; provided, however, that this limitation may be
waived upon sixty-one (61) days’ notice to us.
Dividend Rights
The Series A
Preferred has no separate dividend rights. However, whenever the
board of directors declares a dividend on the common stock, each
holder of record of a share of Series A Preferred, or any fraction
of a share of Series A Preferred, on the date set by the board of
directors to determine the owners of the common stock of record
entitled to receive such dividend (Record Date) shall be entitled to
receive out of any assets at the time legally available therefor,
an amount equal to such dividend declared on one share of common
stock multiplied by the number of shares of common stock into which
such share, or such fraction of a share, of Series A Preferred
could be exchanged on the Record Date.
Voting Rights
The Series A
Preferred has no voting rights, except with respect to transactions
upon which the Series A Preferred shall be entitled to vote
separately as a class. The common stock into which the Series A
Preferred is exchangeable shall, upon issuance, have all of the
same voting rights as other issued and outstanding shares of our
common stock.
Liquidation Rights
In the event of the
liquidation, dissolution or winding up of our affairs, after
payment or provision for payment of our debts and other
liabilities, the holders of Series A Preferred then outstanding
shall be entitled to receive, out of our assets, if any, an amount
per share of Series A Preferred calculated by taking the total
amount available for distribution to holders of all of our
outstanding common stock before deduction of any preference
payments for the Series A Preferred, divided by the total of (x),
all of the then outstanding shares of our common stock, plus (y)
all of the shares of our common stock into which all of the
outstanding shares of the Series A Preferred can be exchanged
before any payment shall be made or any assets distributed to the
holders of the common stock or any other junior stock.
Series B Preferred
General
In July 2014, our Board authorized the creation
of a class of Series B Preferred Stock, par value $0.001
(Series B
Preferred). In May 2015, we
filed a Certificate of Designation of the Relative Rights and
Preferences of the Series B 10% Preferred Stock of VistaGen
Therapeutics, Inc. (Certificate of
Designation) with the Nevada
Secretary of State to designate 4.0 million shares of our
authorized preferred stock as Series B
Preferred.
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Conversion
Each share of
Series B Preferred is convertible, at the option of the holder
(Voluntary Conversion),
into one (1) share of the Company’s common stock. All
outstanding shares of Series B Preferred are also automatically
convertible into common stock (Automatic Conversion) upon the closing
or effective date of any of the following transactions or events:
(i) a strategic transaction involving AV-101 with an initial up
front cash payment to the Company of at least $10.0 million; (ii) a
registered public offering of Common Stock with aggregate gross
proceeds to the Company of at least $10.0 million; or (iii) for 20
consecutive trading days the Company’s Common Stock trades at
least 20,000 shares per day with a daily closing price of at least
$12.00 per share; provided, however, that Automatic Conversion and
Voluntary Conversion are subject to certain beneficial ownership
blockers set forth in Section 6 of the Certificate of
Designation.
Following the
completion of our $10.9 million underwritten public offering of our
common stock in May 2016, which public offering occurred
concurrently with and facilitated our listing on the Nasdaq Capital
Market, approximately 2.4 million shares of Series B Preferred were
converted automatically into approximately 2.4 million shares of
our common stock pursuant to the Automatic Conversion provision. At
September 30, 2019, there were
1,160,240 shares of Series B Preferred outstanding, which shares
are currently subject to beneficial ownership blockers and are
exchangeable at the option of the respective holders by Voluntary
Conversion, or pursuant to Automatic Conversion to the extent not
otherwise subject to beneficial ownership blockers, into an
aggregate of 1,160,240 shares of our common stock.
Conversion Restriction
At no time may a
holder of shares of Series B Preferred convert shares of the Series
B Preferred, either by Voluntary Conversion or Automatic
Conversion, if the number of shares of common stock to be issued
pursuant to such conversion would result in such holder
beneficially owning (as determined in accordance with Section 13(d)
of the Exchange Act and the rules thereunder) more than 9.99% of
all of the common stock outstanding at such time; provided, however, that this limitation may be
waived upon sixty-one (61) days’ notice to us.
Rank
The Series B
Preferred ranks prior to our common stock, and pari passu with the Series A
Preferred for purposes of liquidation preference.
Dividend Rights
Prior to either a Voluntary Conversion
or Automatic Conversion, shares of Series B Preferred will accrue
dividends, payable only in unregistered common stock, at a rate of
10% per annum (the Accrued
Dividend). The
Accrued Dividend will be payable on the date of either a Voluntary
Conversion or Automatic Conversion solely in that number of shares
of Common Stock equal to the Accrued Dividend.
Voting Rights
The Series B
Preferred has no voting rights, except with respect to transactions
upon which the Series B Preferred shall be entitled to vote
separately as a class. The common stock into which the Series B
Preferred shall be exchangeable shall, upon issuance, have all of
the same voting rights as other issued and outstanding shares of
our common stock.
Liquidation Rights
Upon any
liquidation, dissolution, or winding-up of the Company, whether
voluntary or involuntary, the holders of Series B Preferred are
entitled to receive out of the Company’s assets, whether
capital or surplus, an amount equal to the stated value of the
Series B Preferred ($7.00 per share), plus any accrued and unpaid
dividends thereon, before any distribution or payment shall be made
to the holders of any junior securities, including holders of our
common stock. If the assets of the Company are insufficient to pay,
in full, such amounts, then the entire assets to be distributed to
the holders of the Series B Preferred shall be ratably distributed
among the holders in accordance with the respective amounts that
would be payable on such shares if all amounts payable thereon were
paid in full.
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Series C
Preferred
General
In January 2016,
our Board authorized the creation of and, accordingly, we filed a Certificate of Designation of the
Relative Rights and Preferences of the Series C Convertible
Preferred Stock of VistaGen Therapeutics, Inc. (the
Series C
Preferred Certificate of
Designation) with the Nevada
Secretary of State to designate 3.0 million shares of our preferred
stock, par value $0.001 per share, as Series C Convertible
Preferred Stock (Series C
Preferred).
Conversion and Rank
At September
30, 2019, there were 2,318,012
shares of Series C Preferred outstanding, which shares of Series C
Preferred are currently subject to beneficial ownership blockers
and are exchangeable at the option of the holder into 2,318,012
shares of our common stock. The Series C Preferred ranks prior to
our common stock for purposes of liquidation preference,
and pari
passu with the Series A Preferred and Series B
Preferred.
Conversion Restriction
At no time may a
holder of shares of Series C Preferred convert shares of the Series
C Preferred if the number of shares of common stock to be issued
pursuant to such conversion would result in such holder
beneficially owning (as determined in accordance with Section 13(d)
of the Exchange Act and the rules thereunder) more than 9.99% of
all of the common stock outstanding at such time; provided, however, that this limitation may be
waived upon sixty-one (61) days’ notice to us.
Dividend Rights
The Series C
Preferred has no separate dividend rights. However, whenever the
board of directors declares a dividend on the common stock, each
holder of record of a share of Series C Preferred, or any fraction
of a share of Series C Preferred, on the date set by the board of
directors to determine the owners of the common stock of record
entitled to receive such dividend (Record Date) shall be entitled to
receive out of any assets at the time legally available therefor,
an amount equal to such dividend declared on one share of common
stock multiplied by the number of shares of common stock into which
such share, or such fraction of a share, of Series C Preferred
could be exchanged on the Record Date.
Voting Rights
The Series C
Preferred has no voting rights, except with respect to transactions
upon which the Series C Preferred shall be entitled to vote
separately as a class. The common stock into which the Series C
Preferred is exchangeable shall, upon issuance, have all of the
same voting rights as other issued and outstanding shares of our
common stock.
Liquidation Rights
In the event of the
liquidation, dissolution or winding up of our affairs, after
payment or provision for payment of our debts and other
liabilities, the holders of Series C Preferred then outstanding
shall be entitled to receive, out of our assets, if any, an amount
per share of Series C Preferred calculated by taking the total
amount available for distribution to holders of all of our
outstanding common stock before deduction of any preference
payments for the Series C Preferred, divided by the total of (x),
all of the then outstanding shares of our common stock, plus (y)
all of the shares of our common stock into which all of the
outstanding shares of the Series C Preferred can be exchanged
before any payment shall be made or any assets distributed to the
holders of the common stock or any other junior stock.
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Shares
of Preferred Stock Issuable Pursuant to this
Prospectus
We will incorporate
by reference as an exhibit to the registration statement, which
includes this prospectus, the form of any certificate of
designation that describes the terms of the series of preferred
stock we are offering. This description and the applicable
prospectus supplement will include:
●
the title and
stated value;
●
the number of
shares authorized;
●
the liquidation
preference per share;
●
the purchase
price;
●
the dividend rate,
period and payment date, and method of calculation for
dividends;
●
whether dividends
will be cumulative or non-cumulative and, if cumulative, the date
from which dividends will accumulate;
●
the procedures for
any auction and remarketing, if any;
●
the provisions for
a sinking fund, if any;
●
the provisions for
redemption or repurchase, if applicable, and any restrictions on
our ability to exercise such redemption and repurchase
rights;
●
any listing of the
preferred stock on any securities exchange or market;
●
whether the
preferred stock will be convertible into our common stock, and, if
applicable, the conversion price, or how it will be calculated, and
the conversion period;
●
voting rights, if
any, of the preferred stock;
●
preemptive rights,
if any;
●
restrictions on
transfer, sale or other assignment, if any;
●
a discussion of any
material United States federal income tax considerations applicable
to the preferred stock;
●
the relative
ranking and preferences of the preferred stock as to dividend
rights and rights if we liquidate, dissolve or wind up our
affairs;
●
any limitations on
issuance of any class or series of preferred stock ranking senior
to or on a parity with the series of preferred stock as to dividend
rights and rights if we liquidate, dissolve or wind up our affairs;
and
●
any other specific
terms, preferences, rights or limitations of, or restrictions on,
the preferred stock.
When we issue
shares of preferred stock under this prospectus, the shares will
fully be paid and nonassessable and will not have, or be subject
to, any preemptive or similar rights.
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DESCRIPTION OF
WARRANTS
The following description, together with the additional information
we include in any applicable prospectus supplements or free writing
prospectus, summarizes the material terms and provisions of the
warrants that we may offer under this prospectus. Warrants may be
offered independently or together with common stock or preferred
stock offered by any prospectus supplement or free writing
prospectus, and may be attached to or separate from those
securities. While the terms we have summarized below will generally
apply to any future warrants we may offer under this prospectus, we
will describe the particular terms of any warrants that we may
offer in more detail in the applicable prospectus supplement or
free writing prospectus. The terms of any warrants we offer under a
prospectus supplement or free writing prospectus may differ from
the terms we describe below.
In
the event that we issue warrants, we may issue the warrants under a
warrant agreement, which, if applicable, we will enter into with a
warrant agent to be selected by us. Forms of these warrant
agreements and forms of the warrant certificates representing the
warrants, and the complete warrant agreements and forms of warrant
certificates containing the terms of the warrants being offered,
will be filed as exhibits to the registration statement of which
this prospectus is a part or will be incorporated by reference from
reports that we file with the SEC. We use the term “warrant
agreement” to refer to any of these warrant agreements. We
use the term “warrant agent” to refer to the warrant
agent under any of these warrant agreements. The warrant agent will
act solely as an agent of ours in connection with the warrants and
will not act as an agent for the holders or beneficial owners of
the warrants.
The
following summaries of material provisions of the warrants and the
warrant agreements are subject to, and qualified in their entirety
by reference to, all the provisions of the warrant agreement
applicable to a particular series of warrants. We urge you to read
the applicable prospectus supplements or free writing prospectus
related to the warrants that we sell under this prospectus, as well
as the complete warrant agreements that contain the terms of the
warrants.
General
We
will describe in the applicable prospectus supplement or free
writing prospectus the terms relating to a series of warrants. If
warrants for the purchase of common stock or preferred stock are
offered, the prospectus supplement or free writing prospectus will
describe the following terms, to the extent
applicable:
●
the
offering price and the aggregate number of warrants
offered;
●
the
total number of shares that can be purchased if a holder of the
warrants exercises them and, in the case of warrants for preferred
stock, the designation, total number and terms of the series of
preferred stock that can be purchased upon exercise;
●
the
designation and terms of any series of preferred stock with which
the warrants are being offered and the number of warrants being
offered with each share of common stock or preferred
stock;
●
the
date on and after which the holder of the warrants can transfer
them separately from the related common stock;
●
the
number of shares of common stock or preferred stock that can be
purchased if a holder exercises the warrant and the price at which
such common stock or preferred stock may be purchased upon
exercise, including, if applicable, any provisions for changes to
or adjustments in the exercise price and in the securities or other
property receivable upon exercise;
●
the
terms of any rights to redeem or call, or accelerate the expiration
of, the warrants;
●
the
date on which the right to exercise the warrants begins and the
date on which that right expires;
●
federal
income tax consequences of holding or exercising the warrants;
and
●
any
other specific terms, preferences, rights or limitations of, or
restrictions on, the warrants.
Exercise of Warrants
Each
holder of a warrant is entitled to purchase the number of shares of
common stock or preferred stock, as the case may be, at the
exercise price described in the applicable prospectus supplement or
free writing prospectus. After the close of business on the day
when the right to exercise terminates (or a later date if we extend
the time for exercise), unexercised warrants will become
void.
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A
holder of warrants may exercise them by following the general
procedure outlined below:
●
delivering
to the warrant agent the payment required by the applicable
prospectus supplement or free writing prospectus to purchase the
underlying security;
●
properly
completing and signing the reverse side of the warrant certificate
representing the warrants; and
●
delivering
the warrant certificate representing the warrants to the warrant
agent within five business days of the warrant agent receiving
payment of the exercise price.
If
you comply with the procedures described above, your warrants will
be considered to have been exercised when the warrant agent
receives payment of the exercise price, subject to the transfer
books for the securities issuable upon exercise of the warrant not
being closed on such date. After you have completed those
procedures and subject to the foregoing, we will, as soon as
practicable, issue and deliver to you the common stock or preferred
stock that you purchased upon exercise. If you exercise fewer than
all of the warrants represented by a warrant certificate, a new
warrant certificate will be issued to you for the unexercised
amount of warrants. Holders of warrants will be required to pay any
tax or governmental charge that may be imposed in connection with
transferring the underlying securities in connection with the
exercise of the warrants.
Amendments and Supplements to the Warrant Agreements
We
may amend or supplement a warrant agreement without the consent of
the holders of the applicable warrants to cure ambiguities in the
warrant agreement, to cure or correct a defective provision in the
warrant agreement, or to provide for other matters under the
warrant agreement that we and the warrant agent deem necessary or
desirable, so long as, in each case, such amendments or supplements
do not materially adversely affect the interests of the holders of
the warrants.
Warrant Adjustments
Unless
the applicable prospectus supplement or free writing prospectus
states otherwise, the exercise price of, and the number of
securities covered by, a common stock or a preferred stock warrant
will be adjusted proportionately if we subdivide or combine our
common stock or preferred stock, as applicable. In addition, unless
the prospectus supplement or free writing prospectus states
otherwise, if we, without receiving payment:
●
issue
capital stock or other securities convertible into or exchangeable
for common stock or preferred stock, or any rights to subscribe
for, purchase or otherwise acquire any of the foregoing, as a
dividend or distribution to holders of our common stock or
preferred stock;
●
pay
any cash to holders of our common stock or preferred stock other
than a cash dividend paid out of our current or retained earnings
or other than in accordance with the terms of the preferred
stock;
●
issue
any evidence of our indebtedness or rights to subscribe for or
purchase our indebtedness to holders of our common stock or
preferred stock; or
●
issue
common stock or preferred stock or additional stock or other
securities or property to holders of our common stock or preferred
stock by way of spinoff, split-up, reclassification, combination of
shares or similar corporate rearrangement,
then
the holders of common stock or preferred stock warrants will be
entitled to receive upon exercise of the warrants, in addition to
the securities otherwise receivable upon exercise of the warrants
and without paying any additional consideration, the amount of
stock and other securities and property such holders would have
been entitled to receive had they held the common stock or
preferred stock, as applicable, issuable under the warrants on the
dates on which holders of those securities received or became
entitled to receive such additional stock and other securities and
property.
Except
as stated above or as otherwise set forth in the applicable
prospectus supplement or free writing prospectus, the exercise
price and number of securities covered by a common stock or
preferred stock warrant, and the amounts of other securities or
property to be received, if any, upon exercise of such warrant,
will not be adjusted or provided for if we issue those securities
or any securities convertible into or exchangeable for those
securities, or securities carrying the right to purchase those
securities or securities convertible into or exchangeable for those
securities.
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Holders
of common stock and preferred stock warrants may have additional
rights under the following circumstances:
●
certain
reclassifications, capital reorganizations or changes of the common
stock or preferred stock, as applicable;
●
certain
share exchanges, mergers, or similar transactions involving us and
which result in changes of the common stock or preferred stock, as
applicable; or
●
certain
sales or dispositions to another entity of all or substantially all
of our property and assets.
If
one of the above transactions occurs and holders of our common
stock or preferred stock are entitled to receive stock, securities
or other property with respect to or in exchange for their
securities, the holders of the common stock warrants and preferred
stock warrants then outstanding, as applicable, will be entitled to
receive, upon exercise of their warrants, the kind and amount of
shares of stock and other securities or property that they would
have received upon the applicable transaction if they had exercised
their warrants immediately before the transaction.
Series
A1 Warrants
As described above,
we have issued Series A1 Warrants to purchase up to 1,388,931 shares of our common stock at an
exercise price of $1.82 per share, which warrants expire on or
about March 7, 2023. The Series A1 Warrants Shares that may become
issuable from time to time upon the exercise of the Series A1
Warrants are being offered pursuant to this prospectus. Form more
information, see “Decription of Warrants –
Registration of Series A1 Warrants and Series A1 Warrant
Shares”
below.
Duration and Exercise
Price: The Series A1
Warrants are exercisable for a five-year period commencing on or
about March 7, 2018, and have an exercise price of $1.82 per
share.
Exercisability: Each
of Series A1 Warrant may be exercised, in whole or in part, by
delivering to the Company a written notice of election to exercise
the applicable Series A1 Warrant and delivering to the Company cash
payment of the exercise price, if applicable. The exercise price
and the number of shares of our common stock issuable upon exercise
of the Series A1 Warrants is subject to adjustment in the event of
certain subdivisions and combinations, including by any stock split
or reverse stock split, stock dividend, recapitalization or
otherwise.
Cashless
Exercise: If, at any time
during the term of the Series A1 Warrants, the issuance or resale
of shares of our common stock upon exercise of the Series A1
Warrants is not covered by an effective registration statement, the
holder is permitted to effect a cashless exercise of the Series A1
Warrants (in whole or in part) in which case the holder would
receive upon such exercise the net number of shares of common stock
determined according to the formula set forth in the Series A1
Warrants. Shares issued pursuant to a cashless exercise would be
deemed to have been issued pursuant to the exemption from
registration provided by Section 3(a)(9) of the Securities Act, and
the shares of common stock issued upon such cashless exercise would
take on the characteristics of the Series A1 Warrants being
exercised, including, for purposes of Rule 144(d) promulgated under
the Securities Act, a holding period beginning from the original
issuance date of the Series A1 Warrants.
Adjustment
Provisions: The exercise
price and the number and type of securities purchasable upon
exercise of the Series A1 Warrants are subject to adjustment upon
certain corporate events, including certain subdivisions,
combinations and similar events If we declare any dividend or
distribution of assets (including cash, stock or other securities,
evidence of indebtedness, purchase rights or other property), each
holder of a Series A1 Warrant will be entitled to participate in
such distribution to the same extent that the holder would have
participated had the applicable Series A1 Warrant been exercised
immediately before the record date for the
distribution.
Transferability: Subject
to applicable laws, the Series A1 Warrants may be offered for sale,
sold, transferred or assigned without our consent. However, as of
the date of this prospectus there is no established trading market
for the Series A1 Warrants and it is not expected that a trading
market for the Series A1 Warrants will develop in the future.
Without an active trading market, the liquidity of the Series A1
Warrants will be limited.
Listing: We have not and will not apply to list the
Series A1 Warrants on Nasdaq Capital Market. We do not intend to
list the Series A1 Warrants on any securities exchange or other
quotation system. Without an active market, the liquidity of
the Series A1 Warrants will be limited.
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Rights as a
stockholder: Except as set
forth in the Series A1 Warrants or by virtue of such holders’
ownership of shares of our common stock, the holders of the Series
A1 Warrants do not have the rights or privileges of holders of our
common stock, including any voting rights, until they exercise the
Series A1 Warrants.
Limitations on
Exercise: The exercise of
the Series A1 Warrants may be limited in certain circumstances if,
after giving effect to such exercise, the holder or any of its
affiliates would beneficially own (as determined in accordance with
the terms of the Series A1 Warrants) more than 4.99% (or, at the
election of the holder, 9.99%) of our outstanding common stock
immediately after giving effect to the
exercise.
Fundamental
Transactions: In the event
of certain fundamental transactions, as described in the Series A1
Warrants and generally including any merger or consolidation with
or into another entity, the holders of the Series A1 Warrants shall
thereafter have the right to exercise the applicable Series A1
Warrant for the same amount and kind of securities, cash or
property as it would have been entitled to receive upon the
occurrence of such fundamental transaction if it had been,
immediately prior to such fundamental transaction, the holder of
shares of common stock issuable upon exercise in full of the Series
A1 Warrant. In the event of a Change of Control (as defined in the
Series A1 Warrants) (other than a Change of Control which was not
approved by the Board of Directors, as to which this right shall
not apply), at the request of the holder delivered before the 30th
day after such Change of Control, a holder of a Series A1 Warrant
will have the right to require us or any successor entity to
purchase the holder’s Series A1 Warrant for the Black-Scholes
Value of the remaining unexercised portion of the Series A1 Warrant
on the effective date of such Change of Control (determined in
accordance with a formula specified in the Series A1 Warrants),
payable in cash; provided, that if the applicable Change of Control
was not approved by our Board of Directors, such amount shall be
payable, at our option in either (x) shares of our common stock or
the consideration receivable by holders of common stock in the
Change of Control transaction, as applicable, valued at the value
of the consideration received by the shareholders in such Change of
Control, or (y) cash.
Dividends and Other
Distributions: If we
declare or make any dividend or other distribution of our assets to
holders of shares of our common stock (including any distribution
of cash, stock or other securities, property, options, evidence of
indebtedness or any other assets), then, subject to certain
limitation on exercise described in the Series A1 Warrants, each
holder of a Series A1 Warrant shall receive the distributed assets
that such holder would have been entitled to receive in the
distribution had the holder exercised the Series A1 Warrant
immediately prior to the record date for the
distribution.
Registration
of Series A1 Warrants and Series A1 Warrant
Shares. The Series A1
Warrants and the Series A1 Warrant Shares were previously
registered pursuant to the Prior Registration Statement and a
prospectus supplement filed with the SEC on August 31, 2017
pursuant to Rule 424(b)(5) under the Securities Act. Pursuant to
Rule 415(a)(6) and Rule 429 under the Securities Act, the offering
of the Series A1 Warrant Shares will be registered pursuant to this
registration statement.
DESCRIPTION OF UNITS
This section outlines some of the provisions of the units and the
unit agreements. This information may not be complete in all
respects and is qualified entirely by reference to the unit
agreement with respect to the units of any particular series. The
specific terms of any series of units will be described in the
applicable prospectus supplement or free writing prospectus. If so
described in a particular prospectus supplement or free writing
prospectus, the specific terms of any series of units may differ
from the general description of terms presented below.
As
specified in the applicable prospectus supplement, we may issue
units consisting of one or more shares of common stock, shares of
our preferred stock, warrants or any combination of such
securities.
The
applicable prospectus supplement will specify the following terms
of any units in respect of which this prospectus is being
delivered:
●
the
terms of the units and of any of the shares of common stock, shares
of preferred stock, or warrants comprising the units, including
whether and under what circumstances the securities comprising the
units may be traded separately;
●
a
description of the terms of any unit agreement governing the
units;
●
if
appropriate, a discussion of material U.S. federal income tax
considerations; and
●
a
description of the provisions for the payment, settlement, transfer
or exchange of the units.
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DESCRIPTION OF CERTAIN PROVISIONS OF NEVADA
LAW AND
OUR
ARTICLES OF INCORPORATION AND BYLAWS
Transactions
with Interested Persons
Under the Nevada
Revised Statutes (the NRS)
a transaction with the Company (i) in which a Company director or
officer has a direct or indirect interest, or (ii) involving
another corporation, firm or association in which one or more of
the Company’s directors or officers are directors or officers
of the corporation, firm or association or have a financial
interest in the corporation firm or association, is not void or
voidable solely because of the director’s or officer’s
interest or common role in the transaction if any one of the
following circumstances exists:
●
the fact of the
common directorship, office or financial interest is known to the
board of directors or a committee of the board of directors and a
majority of disinterested directors on the board of directors (or
on the committee) authorized, approved or ratified the
transaction;
●
the fact of the
common directorship, office or financial interest is known to the
stockholders and disinterested stockholders holding a majority of
the shares held by disinterested stockholders authorized, approved
or ratified the transaction;
●
the fact of the
common directorship, office or financial interest is not known to
the director or officer at the time the transaction is brought to
the board of directors for action; or
●
the transaction was
fair to the Company at the time it is authorized or
approved.
Control
Share Acquisition Provisions
Nevada law
precludes an acquirer of the shares of a Nevada corporation who
crosses one of three ownership thresholds (20%, 33 1/3% or 50%)
from obtaining voting rights with respect to those shares unless
the disinterested holders of a majority of the shares of the
Company held by disinterested stockholders vote to accord voting
power to those shares.
Combinations
with Interested Stockholders
Under the NRS,
except under certain circumstances, a corporation is not permitted
to engage in a business combination with any “interested
stockholder” for a period of two years following the date
such stockholder became an interested stockholder. An
“interested stockholder” is a person or entity who owns
10% or more of the outstanding shares of voting
stock. Nevada permits a corporation to opt out of the
application of these business combination provisions by so
providing in the articles of incorporation or
bylaws. The Company’s Bylaws contain a provision
opting out of the application of these business combination
provisions.
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PLAN OF DISTRIBUTION
We
may sell the securities described in this prospectus to or through
underwriters or dealers, through agents, or directly to one or more
purchasers. A prospectus supplement or supplements (and any related
free writing prospectus that we may authorize to be provided to
you) will describe the terms of the offering of the securities,
including, to the extent applicable:
●
the
name or names of any underwriters or agents, if
applicable;
●
the
purchase price of the securities and the proceeds we will receive
from the sale;
●
any
over-allotment options under which underwriters may purchase
additional securities from us;
●
any
agency fees or underwriting discounts and other items constituting
agents’ or underwriters’ compensation;
●
any
public offering price;
●
any
discounts or concessions allowed or reallowed or paid to dealers;
and
●
any
securities exchange or market on which the securities may be
listed.
We
may also sell equity securities covered by this registration
statement in an “at the market offering” as defined in
Rule 415 under the Securities Act. Such offering may be made into
an existing trading market for such securities in transactions at
other than a fixed price, either:
●
on
or through the facilities of the Nasdaq Capital Market or any other
securities exchange or quotation or trading service on which such
securities may be listed, quoted or traded at the time of sale;
and/or
●
to
or through a market maker otherwise than on the Nasdaq Capital
Market or such other securities exchanges or quotation or trading
services.
Such
at-the-market offerings, if any, may be conducted by underwriters
acting as principal or agent.
Only
underwriters named in a prospectus supplement are underwriters of
the securities offered by the prospectus supplement.
If
underwriters are used in the sale, they will acquire the securities
for their own account and may resell the securities from time to
time in one or more transactions at a fixed public offering price
or at varying prices determined at the time of sale. The
obligations of the underwriters to purchase the securities will be
subject to the conditions set forth in the applicable underwriting
agreement. We may offer the securities to the public through
underwriting syndicates represented by managing underwriters or by
underwriters without a syndicate. Subject to certain conditions,
the underwriters will be obligated to purchase all of the
securities offered by the prospectus supplement. Any public
offering price and any discounts or concessions allowed or
reallowed or paid to dealers may change from time to time. We may
use underwriters with whom we have a material relationship. We will
describe in the prospectus supplement that names the underwriter,
the nature of any such relationship.
We
may sell securities directly or through agents we designate from
time to time. We will name any agent involved in the offering and
sale of securities, and we will describe any commissions we will
pay the agent in the prospectus supplement. Unless the prospectus
supplement states otherwise, our agent will act on a best-efforts
basis for the period of its appointment.
We
may authorize agents or underwriters to solicit offers by certain
types of institutional investors to purchase securities from us at
the public offering price set forth in the prospectus supplement
pursuant to delayed delivery contracts providing for payment and
delivery on a specified date in the future. We will describe the
conditions to these contracts and the commissions we must pay for
solicitation of these contracts in the prospectus
supplement.
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We
may provide agents and underwriters with indemnification against
civil liabilities related to this offering, including liabilities
under the Securities Act, or contribution with respect to payments
that the agents or underwriters may make with respect to these
liabilities. Agents and underwriters may engage in transactions
with, or perform services for, us in the ordinary course of
business.
Any underwriter may engage in overallotment,
stabilizing transactions, short covering transactions and penalty
bids in accordance with Regulation M under the Securities Exchange
Act of 1934, as amended (the “Exchange
Act”). Overallotment
involves sales in excess of the offering size, which create a short
position. Stabilizing transactions permit bids to purchase the
underlying security so long as the stabilizing bids do not exceed a
specified maximum. Short covering transactions involve purchases of
the securities in the open market after the distribution is
completed to cover short positions. Penalty bids permit the
underwriters to reclaim a selling concession from a dealer when the
securities originally sold by the dealer are purchased in a
covering transaction to cover short positions. Those activities may
cause the price of the securities to be higher than it would
otherwise be. If commenced, the underwriters may discontinue any of
the activities at any time.
Any
underwriters who are qualified market makers on the Nasdaq Capital
Market may engage in passive market making transactions in
accordance with Rule 103 of Regulation M during the business day
prior to the pricing of the offering, before the commencement of
offers or sales of the securities. Passive market makers must
comply with applicable volume and price limitations and must be
identified as passive market makers. In general, a passive market
maker must display its bid at a price not in excess of the highest
independent bid for such security; if all independent bids are
lowered below the passive market maker’s bid, however, the
passive market maker’s bid must then be lowered when certain
purchase limits are exceeded.
LEGAL MATTERS
Certain
legal matters in connection with this offering will be passed upon
for us by Disclosure Law Group, a Professional Corporation, of San
Diego, California.
EXPERTS
OUM
& Co. LLP, our independent registered public accounting firm,
has audited our consolidated financial statements included in our
Annual Report on Form 10-K for the year ended March 31, 2019, as
set forth in their report, which is incorporated by reference in
this prospectus. The report for VistaGen Therapeutics, Inc.
includes an explanatory paragraph about the existence of
substantial doubt concerning its ability to continue as a going
concern. Our financial statements are incorporated by reference in
reliance on OUM & Co. LLP’s report, given on their
authority as experts in accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
We are a public company and file annual, quarterly
and special reports, proxy statements and other information with
the SEC. Our SEC filings are available, at no charge, to the public
at the SEC’s website at
http://www.sec.gov.
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INCORPORATION
OF CERTAIN INFORMATION 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 year ended June 30, 2019,
filed on August 13, 2019;
●
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;
and
●
The
description of our common stock contained in the Registration
Statement on Form 8-A filed pursuant to Section 12(b) of the
Exchange 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 and any accompanying
prospectus supplement. 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.
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15,625,000 Shares of Common Stock
_______________________________
Prospectus Supplement
_______________________________
Sole Book-running
Manager
Maxim Group LLC
The date of this prospectus supplement is August 2,
2020