Filed Pursuant to Rule 424(b)(4)
Registration No. 333-267423
PROSPECTUS
255,000 Shares of Common Stock
Pre-Funded Warrants to Purchase up to
3,183,396 Shares of Common Stock
Common Warrants to Purchase up to 3,438,396
Shares of Common Stock
Shares of Common Stock underlying the Pre-Funded
Warrants and Common Warrants
We are offering 255,000 shares of common stock,
together with common warrants to purchase 3,438,396 shares of common stock at a combined public offering price of $1.745 per share and
common warrant (and the shares issuable from time to time upon exercise of the common warrants) pursuant to this prospectus. The shares
of common stock and common warrants will be separately issued, but the shares of common stock and common warrants will be issued to purchasers
in the ratio of one-to-one. Each common warrant will have an exercise price of $1.62 per share, will be exercisable upon issuance and
will expire five years from the date of issuance.
We are also offering pre-funded warrants to purchase
3,183,396 shares of common stock (and the shares of common stock that are issuable from time to time upon exercise of the pre-funded warrants)
to those purchasers, whose purchase of shares of common stock in this offering would result in the purchaser, together with its affiliates
and certain related parties, beneficially owning more than 4.99% (or, at the election of the purchaser, 9.99%) of our outstanding common
stock following the consummation of this offering in lieu of the shares of our common stock that would result in ownership in excess of
4.99% (or, at the election of the purchaser, 9.99%). Each pre-funded warrant will be exercisable for one share of common stock at an exercise
price of $0.0001 per share. Each pre-funded warrant is being issued together with the same common warrant described above being issued
with each share common stock. The purchase price of each pre-funded warrant will equal the combined public offering price per share of
common stock and common warrant being sold in this offering, less the $0.0001 per share exercise price of each such pre-funded warrant.
Each pre-funded warrant will be exercisable upon issuance and will expire when exercised in full. The pre-funded warrants and common warrants
are immediately separable and will be issued separately in this offering.
There is no established public trading market
for the pre-funded warrants or common warrants, and we do not expect a market to develop. We do not intend to apply for listing of the
pre-funded warrants or common warrants on any securities exchange or other nationally recognized trading system. Without an active trading
market, the liquidity of the pre-funded warrants and common warrants will be limited.
We have engaged H.C. Wainwright & Co., LLC,
or the placement agent, to act as our exclusive placement agent in connection with this offering. The placement agent has agreed to use
its reasonable best efforts to arrange for the sale of the securities offered by this prospectus. The placement agent is not purchasing
or selling any of the securities we are offering and the placement agent is not required to arrange the purchase or sale of any specific
number or dollar amount of securities. We have agreed to pay to the placement agent the placement agent fees set forth in the table below,
which assumes that we sell all of the securities offered by this prospectus. There is no arrangement for funds to be received in escrow,
trust or similar arrangement. There is no minimum number of shares of common stock or pre-funded warrants or minimum aggregate amount
of proceeds that is a condition for this offering to close. We may sell fewer than all of the shares of common stock and pre-funded warrants
offered hereby, which may significantly reduce the amount of proceeds received by us, and investors in this offering will not receive
a refund if we do not sell all of the securities offered hereby. Because there is no escrow account and no minimum number of securities
or amount of proceeds, investors could be in a position where they have invested in us, but we have not raised sufficient proceeds in
this offering to adequately fund the intended uses of the proceeds as described in this prospectus. We will bear all costs associated
with the offering. See “Plan of Distribution” on page 21 of this prospectus for more information regarding these arrangements.
This offering will end no later than three trading days from the date of this prospectus.
Our common stock is listed on The Nasdaq Capital
Market under the symbol “FWBI.” On October 6, 2022, the last reported sale price of our common stock on The Nasdaq Capital
Market was $1.62 per share. Effective as of 12:01 am Eastern Time on August 26, 2022, we filed an amendment to our Amended and Restated
Certificate of Incorporation to effect a one-for-thirty reverse stock split of our issued and outstanding shares of common stock (the
“Reverse Stock Split”). All share and per share prices in this prospectus have been adjusted to reflect the Reverse Stock
Split. However, common stock share and per share amounts in certain of the documents incorporated by reference herein have not been adjusted
to give effect to the Reverse Stock Split.
You should read this prospectus, together with
additional information described under the headings “Information Incorporated by Reference” and “Where You Can Find
More Information,” carefully before you invest in any of our securities.
Investing in our securities involves a high
degree of risk. See the section entitled “Risk Factors” beginning on page 8 of this prospectus and in the documents
incorporated by reference into this prospectus for a discussion of risks that should be considered in connection with an investment in
our securities.
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Per Share and
Accompanying
Common Warrant | | |
Per Pre-Funded
Warrant and
Accompanying
Common Warrant | | |
Total | |
| Public offering price | |
$ | 1.745 | | |
$ | 1.7449 | | |
$ | 5,999,682 | |
| Placement agent fees(1) | |
$ | 0.12215 | | |
$ | 0.12215 | | |
$ | 420,000 | |
| Proceeds to us, before expenses(2) | |
$ | 1.62285 | | |
$ | 1.622757 | | |
$ | 5,579,682 | |
(1) Includes a cash fee of 7.0% of the gross
proceeds of this offering. We have also agreed to pay the placement agent a reimbursement for non-accountable expenses equal to $25,000,
a reimbursement for legal fees and expenses of the placement agent in the amount of $150,000 and $15,950 for clearing fees. See “Plan
of Distribution” for additional information about the compensation payable to the placement agent.
(2) We estimate the total expenses of this
offering payable by us, excluding the placement agent fee, will be approximately $342,000.
The delivery of the shares of common stock and the pre-funded warrants
and common warrants to purchasers is expected to be made on or about October 11, 2022.
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.
H.C. Wainwright &
Co.
The date of this
prospectus is October 6, 2022.
TABLE OF CONTENTS
ABOUT THIS PROSPECTUS
We incorporate by reference important information
into this prospectus. You may obtain the information incorporated by reference without charge by following the instructions under “Where
You Can Find More Information.” You should carefully read this prospectus as well as additional information described under “Incorporation
of Certain Information by Reference,” before deciding to invest in our securities.
We have not, and the placement agent has not,
authorized anyone to provide any information or to make any representations other than those contained in this prospectus or in any free
writing prospectuses prepared by or on behalf of us or to which we have referred you. We take no responsibility for, and can provide
no assurance as to the reliability of, any other information that others may give you. This prospectus is an offer to sell only the securities
offered hereby, and only under circumstances and in jurisdictions where it is lawful to do so. The information contained in this prospectus
or in any applicable free writing prospectus is current only as of its date, regardless of its time of delivery or any sale of our securities.
Our business, financial condition, results of operations and prospects may have changed since that date.
The information incorporated by reference or
provided in this prospectus contains statistical data and estimates, including those relating to market size and competitive position
of the markets in which we participate, that we obtained from our own internal estimates and research, as well as from industry and general
publications and research, surveys and studies conducted by third parties. Industry publications, studies and surveys generally state
that they have been obtained from sources believed to be reliable. While we believe our internal company research is reliable and the
definitions of our market and industry are appropriate, neither this research nor these definitions have been verified by any independent
source.
For investors outside the United States: We have
not, and the placement agent has not, done anything that would permit this offering or possession or distribution of this prospectus
in any jurisdiction where action for that purpose is required, other than in the United States. Persons outside the United States who
come into possession of this prospectus must inform themselves about, and observe any restrictions relating to, the offering of the securities
and the distribution of this prospectus outside the United States.
This
prospectus and the information incorporated by reference into this prospectus contain references to our trademarks and to trademarks
belonging to other entities. Solely for convenience, trademarks and trade names referred to in this prospectus and the information incorporated
by reference into this prospectus, including logos, artwork, and other visual displays, may appear without the ®
or TM symbols, but such references are not intended to indicate, in any way, that we will
not assert, to the fullest extent under applicable law, our rights or the rights of the applicable licensor to these trademarks and trade
names. We do not intend our use or display of other companies’ trade names or trademarks to imply a relationship with, or endorsement
or sponsorship of us by, any other company.
CAUTIONARY NOTE REGARDING
FORWARD-LOOKING STATEMENTS
This prospectus, and any documents
we incorporate by reference, contain certain forward-looking statements that involve substantial risks and uncertainties. All statements
contained in this prospectus and any documents we incorporate by reference, 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:
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our ability
to comply with the terms of the Exception and to regain compliance with the continued listing requirements of the Nasdaq Capital
Market; |
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our ability to satisfy
our payment obligations in connection with the acquisition of First Wave Bio, Inc.; |
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statements
regarding the impact of the COVID-19 pandemic and other geopolitical events, including the war in Ukraine and their effects on our
operations, access to capital, research and development and clinical trials and potential disruption in the operations and business
of third-party vendors, contract research organizations (“CROs”), contract development and manufacturing organizations
(“CDMOs”), other service providers, and collaborators with whom we conduct business; |
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the availability of capital
to satisfy our working capital requirements; |
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our
current and future capital requirements and our ability to raise additional funds to satisfy our capital needs; |
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the
integration and effects of our acquisitions, including the First Wave Acquisition, and other strategic transactions; |
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the accuracy of our estimates
regarding expense, future revenue and capital requirements; |
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ability to continue operating
as a going concern; |
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our
plans to develop and commercialize our product candidates, including the biologic adrulipase (formerly MS1819) and niclosamide; |
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our ability
to initiate and complete our clinical trials and to advance our principal product candidates into additional clinical trials, including
pivotal clinical trials, and successfully complete such clinical trials; |
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regulatory developments
in the U.S. and foreign countries; |
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the performance
of our third-party vendor(s), CROs, CDMOs and other third-party non-clinical and clinical development collaborators and regulatory
service providers |
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our ability to obtain and
maintain intellectual property protection for our core assets; |
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the size of the potential
markets for our product candidates and our ability to serve those markets; |
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the rate and degree of
market acceptance of our product candidates for any indication once approved; |
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the success
of competing products and product candidates in development by others that are or become available for the indications that we are
pursuing; |
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the loss
of key scientific, clinical and nonclinical development, and/or management personnel, internally or from one of our third-party collaborators;
and |
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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 that could cause actual
future results or events to differ materially from the forward-looking statements that we make. Our forward-looking statements do not
reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or investments we may make.
You should read this prospectus
with the understanding that our actual future results may be materially different from what we expect. We do not assume any obligation
to update any forward-looking statements whether as a result of new information, future events or otherwise, except as required by applicable
law.
PROSPECTUS SUMMARY
This summary highlights
information contained elsewhere in this prospectus. This summary does not contain all of the information that you should consider before
deciding to invest in our securities. You should read this entire prospectus carefully, including the “Risk Factors” section
in this prospectus and under similar captions in the documents incorporated by reference into this prospectus. In this prospectus, unless
otherwise stated or the context otherwise requires, references to “First Wave BioPharma”, “AzurRx”, “Company”,
“we”, “us”, “our” or similar references mean First Wave BioPharma, Inc. and its subsidiaries
on a consolidated basis. References to “First Wave BioPharma” refer to First Wave BioPharma, Inc. on an unconsolidated
basis. References to “AzurRx SAS” refer to AzurRx SAS, First Wave BioPharma’s wholly-owned subsidiary through which
we conduct our European operations. References to “First Wave Bio” refer to First Wave Bio, Inc., First Wave BioPharma’s
wholly-owned subsidiary.
Overview
We are engaged in the research
and development of targeted, non-systemic therapies for the treatment of patients with gastrointestinal (“GI”) diseases.
Non-systemic therapies are non-absorbable drugs that act locally, i.e. the intestinal lumen, skin or mucosa, without reaching an individual’s
systemic circulation.
We are currently focused on
developing our pipeline of gut-restricted GI clinical drug candidates, including the biologic adrulipase (formerly MS1819), a recombinant
lipase enzyme designed to enable the digestion of fats and other nutrients, and niclosamide, an oral small molecule with anti-viral and
anti-inflammatory properties. Our adrulipase programs are focused on the development of an oral, non-systemic, biologic capsule for the
treatment of exocrine pancreatic insufficiency (“EPI”) in patients with cystic fibrosis (“CF”) and chronic pancreatitis
(“CP”). The Company’s niclosamide programs leverage proprietary oral and topical formulations to address multiple GI
conditions, including inflammatory bowel disease (“IBD”) indications and viral diseases.
We are developing our drug
candidates for a host of GI diseases where there are significant unmet clinical needs and limited therapeutic options, resulting in painful,
life threatening and discomforting consequences for patients.
Recent Developments
Nasdaq Listing Extension
On November 26, 2021,
we received a deficiency notice from the Listing Qualifications Staff (the “Staff”) of The Nasdaq Stock Market LLC (“Nasdaq”),
indicating that we were not in compliance with the $2.5 million minimum stockholders’ equity requirement for continued listing
of the Common Stock on Nasdaq as set forth in Nasdaq Listing Rule 5550(b)(1) (the “Minimum Stockholders’ Equity
Rule”). In that regard, we reported a stockholders’ deficit of $(6,969,988) in our Quarterly Report on Form 10-Q for
the period ended September 30, 2021 (we did not then, and do not now, meet the alternative compliance standards relating to the
market value of listed securities of $35 million or net income from continuing operations of $500,000 in the most recently completed
fiscal year or in two of the last three most recently completed fiscal years).
On January 10, 2022, we
submitted a plan to the Staff to regain compliance with the Minimum Stockholders’ Equity Rule and on February 15, 2022,
the Staff notified us that Nasdaq had granted us an extension through May 25, 2022, to regain compliance (this represented the maximum
extension period available to the Staff under the Nasdaq Listing Rules). On May 26, 2022, we received a letter from the Nasdaq Staff
indicating that, based upon our continued non-compliance with the Minimum Stockholders’ Equity Rule, the Staff had determined to
delist our securities from Nasdaq unless we timely requested a hearing before the Nasdaq Hearings Panel (the “Panel”).
Additionally, on May 16,
2022, we received notice from the Staff indicating that, based upon the closing bid price of the Common Stock for the prior 30 consecutive
business days, we were not in compliance with the requirement to maintain a minimum bid price of $1.00 per share for continued listing
on Nasdaq as set forth in Nasdaq Listing Rule 5550(a)(2) (the “Bid Price Rule”). We had 180 days from May 16,
2022, or through November 14, 2022, to regain compliance with the Bid Price Rule.
We timely requested a hearing before the Panel.
Following the hearing, on July 11, 2022 the Panel granted our request for continued listing of the Common Stock (the “Exception”).
The Exception is subject to a number of significant
conditions that must be satisfied on or before specific deadlines set forth in the Exception, including the completion of one or more
significant equity financings. The final term of the Exception expires on November 22, 2022.
Pursuant to the Exception, we are required to
provide the Panel with prompt notification of any significant events that occur including any event that may call into question our ability
to satisfy the terms of the Exception. The Panel has reserved the right to reconsider the terms of the Exception based on any event,
condition or circumstance that exists or develops that would, in the Panel’s opinion, make continued listing of our securities
on Nasdaq inadvisable or unwarranted.
In the event that all of the securities offered
hereby are sold, we will satisfy the equity financing requirement in the Exception. If, however, we do not sell all of the securities
offered hereby, we will be required to complete one or more additional financings prior to the November 22, 2022 compliance deadline.
No assurance can be given that we will be able to satisfy the equity financing requirement of the Exception.
Reverse Stock Split
As contemplated by the Exception, on August 26,
2022, we effected a one-for-thirty reverse stock split of our issued and outstanding common stock. There was no corresponding reduction
in the number of authorized shares of common stock and no change in the par value per share. By letter dated September 13, 2022, Nasdaq
advised us that we had regained compliance with the Bid Price Rule. No assurance can be given that we will be able to remain in compliance
with the Bid Price Rule.
The FWB Action
On May 19, 2022, Fortis Advisors LLC, the hired
representative (in such capacity, the “Representative”) of the former stockholders of First Wave Bio, Inc. (“FWB”)
in connection with the Agreement and Plan of Merger dated as of September 13, 2021, by and among us, Alpha Merger Sub, Inc. and FWB (the
“Merger Agreement”), filed a complaint in the Court of Chancery of the State of Delaware (the “FWB Action”),
for breach of contract and anticipatory repudiation or for unjust enrichment. The FWB Action seeks specific performance of the Company’s
obligations under the Merger Agreement and the settlement agreement by and between us and the Representative, dated November 15, 2021,
including all payments currently owed and to be owed to the Representative, and damages at the maximum amount permitted by law.
On July 29, 2022, we entered into a binding term
sheet (the “Term Sheet”) with the Representative to settle the FWB Action and to restructure our obligations to the former
FWB stockholders (the “FWB Settlement”). We agreed to pay the Representative: (i) $1.5 million in cash on July 29, 2022 (the
“First Payment”); (2) $1.0 million in cash no later than September 29, 2022 (the “Second Payment”); and (iii)
$2.0 million on the earlier of November 30, 2022 and our completion of one or more qualifying equity offerings (the “Third Payment”
and collectively with the First Payment and the Second Payment, the “Payments”). The Representative is also entitled to receive
future cash payments conditioned on the achievement of certain development milestones for adrulipase and to a percentage of any consideration
received by us in the event of a license or sale of adrulipase, subject to a cap. The Representative also is entitled receive a percentage
of the consideration received by us in the event of a license or sale of niclosamide and will retain its existing milestone payment rights
with respect to niclosamide. In the event that the consideration received by us in connection with the sale or license of adrulipase
or niclosamide consists of securities or other non-cash consideration, the Representative will have the right to elect either to receive
its payment in such form of consideration or to cause the licensee or acquirer to assume the obligations described herein. In the event
of a “Company Sale” (as defined in the Term Sheet), the Representative is entitled to receive a pro rata share of the total
consideration received by us or our stockholders up to $4.0 million (plus any unpaid Payments whether or not then due) based on a formula
set forth in the Term Sheet. In certain circumstances, the Representative has the right to treat a “Company Sale” as a sale
of ardulipase or niclosamide, as applicable, and to treat the Company Sale as a sale of the related asset and to receive the consideration
with respect thereto described herein.
In the Term Sheet, the Representative agreed
to stay the FWB Action for a period of 90 days and to eliminate our obligation to pay a portion of any offering proceeds to the Representative.
In addition, our obligation to use commercially reasonable efforts to develop niclosamide will be deferred for a period of 24 months
from the date of the Term Sheet. Effective upon the Second Payment, the Representative agreed to dismiss the FWB Action with prejudice
and to extinguish the approximately $12.5 million of fixed payment obligations currently owed to the former FWB shareholders. On September
9, 2022, we paid the Second Payment. By order dated September 13, 2022, the FWB Action was dismissed with prejudice.
Corporate Information
We were incorporated on January 30,
2014 in the State of Delaware. In June 2014, we acquired 100% of the issued and outstanding capital stock of AzurRx SAS. In September 2021,
we acquired First Wave Bio through a merger transaction, and changed our name to First Wave BioPharma, Inc. Our principal executive
offices are located at 777 Yamato Road, Suite 502, Boca Raton, Florida 33431. Our telephone number is (561) 589-7020. We maintain
a website at www.firstwavebio.com. The information contained on our website is not, and should not be interpreted to be, a part of this
prospectus.
The
Offering
| Common Stock Offered by Us |
255,000 shares. |
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|
| Pre-funded Warrants Offered by Us |
We are also offering pre-funded warrants to purchase 3,183,396 shares
of common stock to certain purchasers whose purchase of shares of common stock in this offering would otherwise result in the purchaser,
together with its affiliates and certain related parties, beneficially owning more than 4.99% (or, at the election of the purchaser, 9.99%)
of our outstanding common stock immediately following the consummation of this offering in lieu of the shares of common stock that would
result in such excess ownership. Each pre-funded warrant will be exercisable for one share of our common stock. The purchase price of
each pre-funded warrant and accompanying common warrant will equal the price at which the share of common stock and accompanying common
warrant are being sold to the public in this offering, minus $0.0001, and the exercise price of each pre-funded warrant will be $0.0001
per share. The pre-funded warrants will be exercisable immediately and may be exercised at any time until all of the pre-funded warrants
are exercised in full. This offering also relates to the shares of common stock issuable upon exercise of the pre-funded warrants sold
in this offering. |
| Common Warrants
Offered by Us |
Common warrants to purchase an aggregate
of 3,438,396 shares of our common stock. Each share of our common stock and each pre-funded warrant to purchase one share of our
common stock is being sold together with a common warrant to purchase one share of our common stock. Each common warrant will have
an exercise price of $1.62 per share, will be immediately exercisable and will expire on the fifth anniversary of the original
issuance date. The shares of common stock and pre-funded warrants, and the accompanying common warrants, as the case may be, can
only be purchased together in this offering but will be issued separately and will be immediately separable upon issuance. This
prospectus also relates to the offering of the shares of common stock issuable upon exercise of the common warrants. |
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|
| Common Stock
to be Outstanding Immediately After this Offering |
5,745,404 shares (assuming all of the pre-funded warrants and none of the common warrants issued in this offering are exercised). |
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| Use of Proceeds |
We estimate that the net proceeds from this offering will be approximately
$5.2 million, assuming exercise of the pre-funded warrants and excluding the proceeds, if any, from the exercise of the common warrants
in this offering, after deducting the placement agent fees and estimated offering expenses payable by us. We currently intend to use $2.0
million of the net proceeds from this offering to make the Third Payment owed to the former stockholders of FWB under the FWB Settlement.
The remaining net proceeds from this offering will be used for working capital and general corporate purposes, including the further development
of our product candidates. See “Use of Proceeds” for additional information. |
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| Risk Factors |
An investment
in our securities involves a high degree of risk. See “Risk Factors” beginning on page 8 of this prospectus and
the other information included and incorporated by reference in this prospectus for a discussion of the risk factors you should carefully
consider before deciding to invest in our securities. |
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|
| Nasdaq symbol |
Our
common stock is listed on The Nasdaq Capital Market under the symbol “FWBI”. There is no established public trading market
for the pre-funded warrants or common warrants, and we do not expect a market to develop. In addition, we do not intend to apply
to list the pre-funded warrants or common warrants on any national securities exchange or other nationally recognized trading system.
Without an active trading market, the liquidity of the pre-funded warrants and common warrants will be limited. |
The above discussion is based on 2,307,008 shares
of our common stock outstanding as of September 9, 2022 and excludes, as of that date, the following:
| ● |
5,320
shares of common stock issuable upon exercise of stock options, with a weighted average exercise price of $383.80 per share, under
our Amended and Restated 2014 Omnibus Equity Incentive Plan (the “2014 Plan”); |
| ● |
2,094
shares of awarded but unissued restricted stock and restricted stock units under our 2014 Plan; |
| ● |
23,947
shares of common stock issuable upon exercise of stock options, with a weighted average exercise price of $83.80 per share, under
our Amended and Restated 2020 Omnibus Equity Incentive Plan (the “2020 Plan”); |
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46,531
shares of common stock available for future issuance under our 2020 Plan; |
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482,361
shares of common stock issuable upon exercise of outstanding warrants, with a weighted average exercise price of $90.19 per share, which reflects the termination of the July 2022 Wainwright Warrants
(as defined herein), issued on July 15, 2022, terminated as of October 5, 2022; |
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24,208
shares of common stock issuable upon conversion of Series B Preferred Stock, including in respect of accrued and unpaid dividends
of approximately $0.738 million through September 9, 2022; |
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either
(x) if the holders of Series B Preferred Stock elect to exchange into our registered direct and private placement offering
from January 2021, up to 24,859 additional shares of common stock issuable upon conversion of Series C Convertible Preferred
Stock (the “Series C Preferred Stock”) and up to 24,859 shares of common stock issuable upon exercise of warrants
or (y) if the holders of Series B Preferred Stock elect to exchange into our sales made on November 30, 2021, at a
price of $78.471 per share, pursuant to our At The Market Offering Agreement dated May 26, 2021 (the “ATM Agreement”)
(such price being the lowest price per share sold under the ATM Agreement to date), up to 71,336 additional shares of common stock,
in each case that may be issued pursuant to the Series B Exchange Right in excess of amounts currently underlying Series B
Preferred Stock; and |
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the shares of common stock
issuable upon exercise of the warrants issued in this offering. |
Except as otherwise indicated, the information
in this prospectus supplement gives effect to the 1-for-30 Reverse Stock Split of our common stock, effected on August 26, 2022, and
assumes no exercise of options or exercise of warrants and no conversion of any shares of preferred stock described above.
RISK FACTORS
An
investment in our securities involves a high degree of risk. Before deciding whether to purchase our securities, including the shares
of common stock offered by this prospectus, you should carefully consider the risks and uncertainties described under “Risk Factors”
in our Annual
Report on Form 10-K for the fiscal year ended December 31, 2021, any subsequent Quarterly Report on Form 10-Q
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 believe are immaterial may also significantly impair our business operations. If any of these risks occur, our
business, results of operations or financial condition and prospects could be harmed. In that event, the market price of our common stock
and the value of the warrants could decline, and you could lose all or part of your investment.
Risks Related to This Offering
Our failure to maintain
compliance with Nasdaq’s continued listing requirements could result in the delisting of our Common Stock.
Our
common stock is currently listed for trading on The Nasdaq Capital Market. We must satisfy the continued listing requirements of Nasdaq,
to maintain the listing of our common stock on The Nasdaq Capital Market.
On
November 26, 2021, we received notice from the Staff of Nasdaq indicating that we were not in compliance with the $2.5 million minimum
stockholders’ equity requirement for continued listing of our common stock on Nasdaq, as set forth in Nasdaq Listing Rule 5550(b)(1).
In that regard, we reported a stockholders’ deficit of $(6,969,988) in our Quarterly Report on Form 10-Q for the period ended
September 30, 2021 (we did not then, and do not now, meet the alternative compliance standards relating to the market value of listed
securities of $35 million or net income from continuing operations of $500,000 in the most recently completed fiscal year or in two of
the last three most recently completed fiscal years).
On
January 10, 2022, we submitted a plan to the Staff to regain compliance with the Minimum Stockholders’ Equity Rule and
on February 15, 2022, the Listing Qualifications Staff notified us that Nasdaq had granted us an extension through May 25,
2022, to regain compliance (this represented the maximum extension period available to the Staff under the Nasdaq Listing Rules). On
May 26, 2022, we received a letter from the Staff indicating that, based upon our continued non-compliance with the Minimum Stockholders’
Equity Rule, the Staff had determined to delist the Company’s securities from Nasdaq unless we timely requested a hearing before
the Panel.
Additionally,
on May 16, 2022, we received notice from the Staff indicating that, based upon the closing bid price of our common stock for the prior
30 consecutive business days, we were not in compliance with the requirement to maintain a minimum bid price of $1.00 per share for continued
listing on Nasdaq, as set forth in Nasdaq Listing Rule 5550(a)(2). We had 180 days from May 16, 2022, or through November 14, 2022, to
regain compliance with the Bid Price Rule. By letter dated September 12, 2022, Nasdaq advised us that we had regained compliance with
the Bid Price Rule. No assurance can be given that we will be able to remain in compliance with the Bid Price Rule.
We
timely requested a hearing before the Panel. Following the hearing, on July 11, 2022 the Panel granted our request for continued
listing of our common stock.
The Exception is subject
to a number of significant conditions that must be satisfied on or before specific deadlines set forth in the Exception, including the
completion of one or more significant equity financings on terms described in the Exception. The final term of the Exception expires
on November 22, 2022.
Pursuant
to the Exception, we are required to provide the Panel with prompt notification of any significant events that occur including any event
that may call into question our ability to satisfy the terms of the Exception. The Panel has reserved the right to reconsider the terms
of the Exception based on any event, condition or circumstance that exists or develops that would, in the Panel’s opinion, make
continued listing of our securities on Nasdaq inadvisable or unwarranted.
In the event that all
of the securities offered hereby are sold, we will have satisfied the equity financing requirement in the Exception. If, however, we
do not sell all of the securities offered hereby, we will be required to complete one or more additional financings prior to the November
22, 2022 compliance deadline. No assurance can be given that we will be able to satisfy the equity financing requirement of the Exception.
There can be no assurance
that we will be able to satisfy the conditions set forth in the Exception on a timely basis, if at all, or that we will ultimately regain
and sustain compliance with all applicable requirements for continued listing on The Nasdaq Capital Market. In the event that we are
unable to comply with the terms of the Exception, our common stock may be delisted from Nasdaq.
If
our common stock were delisted from Nasdaq, trading of our common stock would most likely take place on an over-the-counter market established
for unlisted securities, such as the OTCQB or the Pink Market maintained by OTC Markets Group Inc. An investor would likely find it less
convenient to sell, or to obtain accurate quotations in seeking to buy, our common stock on an over-the-counter market, and many investors
would likely not buy or sell our common stock due to difficulty in accessing over-the-counter markets, policies preventing them from
trading in securities not listed on a national exchange or other reasons. In addition, as a delisted security, our common stock would
be subject to SEC rules as a “penny stock,” which impose additional disclosure requirements on broker-dealers. The regulations
relating to penny stocks, coupled with the typically higher cost per trade to the investor of penny stocks due to factors such as broker
commissions generally representing a higher percentage of the price of a penny stock than of a higher-priced stock, would further limit
the ability of investors to trade in our common stock. In addition, delisting would materially and adversely affect our ability to raise
capital on terms acceptable to us, or at all, and may result in the potential loss of confidence by investors, suppliers, customers and
employees and fewer business development opportunities. For these reasons and others, delisting would adversely affect the liquidity,
trading volume and price of our common stock, causing the value of an investment in us to decrease and having an adverse effect on our
business, financial condition and results of operations, including our ability to attract and retain qualified employees and to raise
capital.
We have broad discretion in the use of the net proceeds from
this offering and may not use them effectively.
Our management will have broad discretion in the
application of the net proceeds, including for any of the purposes described in the section of this prospectus entitled “Use of
Proceeds”. You will be relying on the judgment of our management with regard to the use of these net proceeds, and you will not
have the opportunity, as part of your investment decision, to assess whether the net proceeds are being used appropriately. The failure
by our management to apply these funds effectively could result in financial losses that could have a material adverse effect on our
business, cause the price of our securities to decline and delay the development of our product candidates. Pending the application of
these funds, we may invest the net proceeds from this offering in a manner that does not produce income or that loses value.
You will experience immediate and substantial dilution in the
net tangible book value of the shares you purchase in this offering and may experience additional dilution in the future.
The combined public offering price per share of
common stock and related warrant, and the combined public offering price of each pre-funded warrant and related warrant, is substantially
higher than the pro forma as adjusted net tangible book value per share of our common stock after giving effect to this offering. After
the sale of 255,000 shares of common stock and pre-funded warrants to purchase up to 3,183,396 shares of common stock sold in this offering,
assuming the exercise in full of the pre-funded warrants issued in this offering, no exercise of the common warrants being offered in
this offering and after deducting the placement agent fees and commissions and estimated offering expenses payable by us, you will incur
immediate dilution in pro forma as adjusted net tangible book value of approximately $0.5634 per share. As a result of the dilution to
investors purchasing securities in this offering, investors may receive significantly less than the purchase price paid in this offering,
if anything, in the event of the liquidation of our company. See the section entitled “Dilution” below for a more detailed
discussion of the dilution you will incur if you participate in this offering. To the extent shares are issued under outstanding options
and warrants at exercise prices lower than the public offering price of our common stock in this offering, you will incur further dilution.
There is no public market for the common warrants
or pre-funded warrants being offered by us in this offering.
There is no established public trading market
for the common warrants or the pre-funded warrants, and we do not expect a market to develop. In addition, we do not intend to apply
to list the common warrants or pre-funded warrants on any national securities exchange or other nationally recognized trading system.
Without an active market, the liquidity of the common warrants and pre-funded warrants will be limited.
The common warrants and pre-funded warrants
are speculative in nature.
The common warrants and pre-funded warrants offered
hereby do not confer any rights of share of common stock ownership on their holders, such as voting rights or the right to receive dividends,
but rather merely represent the right to acquire shares of common stock at a fixed price. Specifically, commencing on the date of issuance,
holders of the common warrants may acquire the shares of common stock issuable upon exercise of such warrants at an exercise price of
$1.62 per share of common stock, and holders of the pre-funded warrants may acquire the shares of common stock
issuable upon exercise of such warrants at an exercise price of $0.0001 per share of common stock. Moreover, following this offering,
the market value of the common warrants and pre-funded warrants is uncertain and there can be no assurance that the market value of the
common warrants or pre-funded warrants will equal or exceed their respective public offering prices. There can be no assurance that the
market price of the shares of common stock will ever equal or exceed the exercise price of the common warrants or pre-funded warrants,
and consequently, whether it will ever be profitable for holders of common warrants to exercise the common warrants or for holders of
the pre-funded warrants to exercise the pre-funded warrants.
Holders of the warrants offered hereby will
have no rights as common stockholders with respect to the shares our common stock underlying the warrants until such holders exercise
their warrants and acquire our common stock, except as otherwise provided in the warrants.
Until holders of the common warrants and the pre-funded
warrants acquire shares of our common stock upon exercise thereof, such holders will have no rights with respect to the shares of our
common stock underlying such warrants, except to the extent that holders of such warrants will have certain rights to participate in
distributions or dividends paid on our common stock as set forth in the warrants. Upon exercise of the common warrants and the pre-funded
warrants, the holders will be entitled to exercise the rights of a common stockholder only as to matters for which the record date occurs
after the exercise date.
This is a best efforts offering, no minimum
amount of securities is required to be sold, and we may not raise the amount of capital we believe is required for our business plans,
including our near-term business plans.
The placement agent has agreed to use its reasonable
best efforts to solicit offers to purchase the securities in this offering. The placement agent has no obligation to buy any of the securities
from us or to arrange for the purchase or sale of any specific number or dollar amount of the securities. There is no required minimum
number of securities that must be sold as a condition to completion of this offering. Because there is no minimum offering amount required
as a condition to the closing of this offering, the actual offering amount, placement agent fees and proceeds to us are not presently
determinable and may be substantially less than the maximum amounts set forth above. We may sell fewer than all of the securities offered
hereby, which may significantly reduce the amount of proceeds received by us, and investors in this offering will not receive a refund
in the event that we do not sell an amount of securities sufficient to support our continued operations, including our near-term continued
operations. Thus, we may not raise the amount of capital we believe is required to satisfy the requirements of the Exception or for our
operations in the short-term and may need to raise additional funds, which may not be available or available on terms acceptable to us.
As disclosed above, if we do not sell all of the securities offered hereby, we will be required to complete one or more additional financings
prior to the November 22, 2022 compliance deadline. No assurance can be given that we will be able to satisfy the equity financing requirement
of the Exception.
USE
OF PROCEEDS
We estimate that the net proceeds from the offering
will be approximately $5.2 million, after deducting the placement agent fees and estimated offering expenses payable by us, assuming exercise
of the pre-funded warrants and excluding the proceeds, if any, from the exercise of the common warrants issued in this offering. If the
common warrants are exercised in full for cash, the estimated net proceeds will increase to $10.8 million. No assurance can be given as
to the number of common warrants that may be exercised for cash, if any.
We currently intend to use $2.0 million of the
net proceeds from this offering to make the Third Payment owed to the former stockholders of FWB under the FWB Settlement. The remaining
net proceeds from this offering will be used for working capital and general corporate purposes, including the further development of
our product candidates. This expected use of proceeds from this offering represents our intentions based upon our current plans and prevailing
business conditions, which could change in the future as our plans and prevailing business conditions evolve. The amounts and timing
of our use of proceeds will vary depending on a number of factors, including the amount of cash generated or used by our operations.
As a result, we will retain broad discretion in the allocation of the net proceeds of this offering.
DILUTION
If you invest in our securities in this offering,
your interest will be diluted immediately to the extent of the difference between the public offering price paid by the purchasers of
the shares of common stock and warrants sold in this offering and the as-adjusted net tangible book value per shares of common stock
after this offering.
The net tangible book deficit of our common stock
as of June 30, 2022, was approximately $(15.9 million), or approximately $(21.0738) per share of common stock. Net tangible book deficit
per share represents the amount of our total tangible assets less total liabilities divided by the total number of our shares of common
stock outstanding as of June 30, 2022.
After giving effect to the sale of 1,483,782 shares
under the ATM Agreement and the $2.5 million in payments made to the former stockholders of FWB pursuant to the FWB Settlement since
June 30, 2022, our pro forma net tangible book value would have been approximately $1.5 million, or approximately $0.6752 per share of
common stock.
After giving effect to the sale by us in this offering
of 255,000 shares of common stock, 3,183,396 pre-funded warrants and warrants at a price per share and related warrant of $1.745, and
assuming the exercise in full of pre-funded warrants issued in this offering, our pro forma as adjusted net tangible book value as of
June 30, 2022 would have been approximately $6.7 million, or approximately $1.1816 per share of common stock. This represents an immediate
increase in pro forma net tangible book value of approximately $0.5064 per share of common stock to our existing security holders and
an immediate dilution in pro forma as adjusted net tangible book value of approximately $0.5634 per share of common stock to purchasers
of common stock in this offering, as illustrated by the following table:
| Combined public offering price per share and accompanying common warrant | |
| | | |
$ | 1.745 | |
| Historical net tangible book deficit per share as of June 30, 2022 | |
$ | (21.0738 | ) | |
| | |
| Increase in pro forma net tangible book value per share | |
$ | 21.749 | | |
| | |
| Pro forma net tangible book value per share | |
$ | 0.6752 | | |
| | |
| Increase in pro forma as adjusted net tangible book value per share attributable to this offering | |
$ | 0.5064 | | |
| | |
| Pro forma as adjusted net tangible book value per share after giving effect to this offering | |
| | | |
$ | 1.1816 | |
| Dilution per share to new investors in this offering | |
| | | |
$ | 0.5634 | |
The table and discussion above are based on 756,660
shares of common stock outstanding as of June 30, 2022, and excludes, as of that date, the following:
| ● |
6,585
shares of common stock issuable upon exercise of stock options, with a weighted average exercise price of $414.85 per share, under
our Amended and Restated 2014 Omnibus Equity Incentive Plan (the “2014 Plan”); |
| ● |
2,095
shares of awarded but unissued restricted stock and restricted stock units under our 2014 Plan; |
| ● |
23,883
shares of common stock issuable upon exercise of stock options, with a weighted average exercise price of $85.27 per share, under
our Amended and Restated 2020 Omnibus Equity Incentive Plan (the “2020 Plan”); |
| ● |
46,595
shares of common stock available for future issuance under our 2020 Plan; |
| ● |
416,169
shares of common stock issuable upon exercise of outstanding warrants, with a weighted average exercise price of $104.79 per share; |
| ● |
23,871
shares of common stock issuable upon conversion of Series B Preferred Stock, including in respect of accrued and unpaid dividends
of approximately $0.653 through September 9, 2022; |
| ● |
either (x) if the holders of Series B Preferred Stock elect to exchange
into our registered direct and private placement offering from January 2021, up to 24,487 additional shares of common stock
issuable upon conversion of Series C Preferred Stock and up to 24,487 shares of common stock issuable upon exercise of warrants
or (y) if the holders of Series B Preferred Stock elect to exchange into our sales made on November 30, 2021, at a
price of $78.471 per share, pursuant to our ATM Agreement (such price being the lowest price per share sold under the ATM Agreement
to date), up to 70,243 additional shares of common stock, in each case that may be issued pursuant to the Series B Exchange
Right in excess of amounts currently underlying Series B Preferred Stock; and |
| ● |
the shares of common stock
issuable upon exercise of the warrants issued in this offering. |
The information discussed above is illustrative
only and will adjust based on the actual public offering price, the actual number of shares and common warrants that we offer in this
offering, and other terms of this offering determined at pricing. Except as indicated otherwise, the discussion and table above assumes
(i) no sale of pre-funded warrants, which, if sold, would reduce the number of shares of common stock that we are offering on a
one-for-one basis, and (ii) no exercise of common warrants accompanying the shares of common stock sold in this offering
DESCRIPTION OF CAPITAL
STOCK
The
following summary of the rights of our capital stock is not complete and is subject to and qualified in its entirety by reference to
our Charter and Bylaws, copies of which are filed as exhibits to our Annual
Report on Form 10-K for the year ended December 31, 2021, filed with the SEC on March 31, 2022, as amended by Amendment
No. 1 to the Annual
Report on Form 10-K/A, filed with the SEC on May 10, 2022, and the Certificate of Designations and forms of securities,
copies of which are filed as exhibits to the registration statement of which this prospectus forms a part , which are incorporated by
reference herein.
General
Our authorized capital stock
consists of:
| |
● |
50,000,000 shares of common
stock, par value $0.0001 per share; and |
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|
|
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10,000,000 shares of preferred
stock, par value $0.0001. |
As of September 9, 2022,
there were 50,000,000 shares of Common Stock authorized, and 10,000,000 shares of preferred stock authorized, of which a series of 5,194.81
shares of Series B Convertible Preferred Stock (the “Series B Preferred Stock”), a series of 75,000 shares of Series C
9.00% Convertible Junior Preferred Stock (the “Series C Preferred Stock”), a series of 150 shares of Series D Preferred
Stock and a series of 150 shares of Series E Preferred Stock have been designated.
As of September 9, 2022, there were 2,307,008
shares of Common Stock issued and outstanding, approximately 631.34 shares of Series B Preferred Stock issued and outstanding, 0
shares of Series C Preferred Stock issued and outstanding. 0 shares of Series D Preferred Stock issued and outstanding and
0 shares of Series E Preferred Stock issued and outstanding.
The additional shares of our
authorized capital stock available for issuance may be issued at times and under circumstances so as to have a dilutive effect on earnings
per share and on the equity ownership of the holders of our common stock. The ability of our board of directors to issue additional shares
of stock could enhance the board’s ability to negotiate on behalf of the stockholders in a takeover situation but could also be
used by the board to make a change of control more difficult, thereby denying stockholders the potential to sell their shares at a premium
and entrenching current management. The following description is a summary of the material provisions of our capital stock. You should
refer to our certificate of incorporation, as amended (the “Charter”), and our bylaws, as amended and restated (the “Bylaws”),
both of which are on file with the SEC as exhibits to previous SEC filings, for additional information. The summary below is qualified
by provisions of applicable law.
Common Stock
Holders of our common stock
are entitled to one vote for each share held of record on all matters on which the holders are entitled to vote (or consent pursuant
to written consent). Directors are elected by a plurality of the votes present in person or represented by proxy and entitled to vote.
Our Charter and Bylaws do not provide for cumulative voting rights.
Holders of our common stock
are entitled to receive, ratably, dividends only if, when and as declared by our board of directors out of funds legally available therefor
and after provision is made for each class of capital stock having preference over the common stock.
In the event of our liquidation,
dissolution or winding-up, the holders of common stock are entitled to share, ratably, in all assets remaining available for distribution
after payment of all liabilities and after provision is made for each class of capital stock having preference over the common stock.
Holders of our common stock
have no preemptive, conversion or subscription rights, and there are no redemption or sinking fund provisions applicable to the common
stock. The rights, preferences and privileges of the holders of common stock are subject to, and may be adversely affected by, the rights
of the holders of shares of any series of our preferred stock that we may designate and issue in the future.
Transfer Agent
The transfer agent and registrar
for our common stock is Colonial Stock Transfer Co., Inc., 7840 S. 700 E., Sandy, Utah 84070, Tel: (801) 355-5740.
Preferred Stock
We currently have up to 10,000,000 shares of
preferred stock, par value $0.0001 per share, authorized and available for issuance in one or more series. Our board of directors is
authorized to divide the preferred stock into any number of series, fix the designation and number of each such series, and determine
or change the designation, relative rights, preferences, and limitations of any series of preferred stock. The board of may increase
or decrease the number of shares initially fixed for any series, but no decrease may reduce the number below the shares then outstanding
and duly reserved for issuance. As of September 9, 2022, approximately 5,194.81 shares were designated as Series B Preferred
Stock, of which approximately 631.34 shares were issued and outstanding, 75,000 shares were designated as Series C Preferred Stock,
of which none were issued and outstanding, 150 shares were designated as Series D Preferred Stock, of which none were issued and
outstanding and 150 shares were designated as Series E Preferred Stock, of which none were issued and outstanding.
Transfer Agent and Registrar for Preferred Stock
The transfer agent and registrar
for any series or class of preferred stock will be set forth in each applicable prospectus supplement.
Anti-Takeover Effects of Certain Provisions of
Delaware Law and of Our Charter and Bylaws
Certain provisions of Delaware
law, our Charter and Bylaws discussed below may have the effect of making more difficult or discouraging a tender offer, proxy contest
or other takeover attempt. These provisions are expected to encourage persons seeking to acquire control of our company to first negotiate
with our Board of Directors. We believe that the benefits of increasing our ability to negotiate with the proponent of an unfriendly
or unsolicited proposal to acquire or restructure our company outweigh the disadvantages of discouraging these proposals because negotiation
of these proposals could result in an improvement of their terms.
Delaware Anti-Takeover Law.
We are subject to Section 203
of the Delaware General Corporation Law (the “DGCL”). Section 203 generally prohibits a public Delaware corporation
from engaging in a “business combination” with an “interested stockholder” for a period of three years after
the date of the transaction in which the person became an interested stockholder, unless:
| |
● |
prior to the date of the transaction,
the Board of Directors of the corporation approved either the business combination or the transaction which resulted in the stockholder
becoming an interested stockholder; |
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|
|
| |
● |
upon consummation of the transaction
that resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting
stock of the corporation outstanding at the time the transaction commenced, excluding specified shares; or |
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|
|
| |
● |
at or subsequent to the date
of the transaction, the business combination is approved by the Board of Directors and authorized at an annual or special meeting
of stockholders, and not by written consent, by the affirmative vote of at least 66 2/3% of the outstanding voting stock which is
not owned by the interested stockholder. |
Section 203 defines a
“business combination” to include:
| |
● |
any merger or consolidation
involving the corporation and the interested stockholder; |
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|
|
| |
● |
any sale, lease, exchange,
mortgage, pledge, transfer or other disposition of 10% or more of the assets of the corporation to or with the interested stockholder; |
| |
|
|
| |
● |
subject to exceptions, any
transaction that results in the issuance or transfer by the corporation of any stock of the corporation to the interested stockholder; |
| |
|
|
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● |
subject to exceptions, any
transaction involving the corporation that has the effect of increasing the proportionate share of the stock of any class or series
of the corporation beneficially owned by the interested stockholder; or |
| |
|
|
| |
● |
the receipt by the interested
stockholder of the benefit of any loans, advances, guarantees, pledges or other financial benefits provided by or through the corporation. |
In general, Section 203
defines an “interested stockholder” as any person that is:
| |
● |
the owner of 15% or more of
the outstanding voting stock of the corporation; |
| |
|
|
| |
● |
an affiliate or associate
of the corporation who was the owner of 15% or more of the outstanding voting stock of the corporation at any time within three years
immediately prior to the relevant date; or |
| |
|
|
| |
● |
the affiliates and associates
of the above. |
Under specific circumstances,
Section 203 makes it more difficult for an “interested stockholder” to effect various business combinations with a corporation
for a three-year period, although the stockholders may, by adopting an amendment to the corporation’s certificate of incorporation
or bylaws, elect not to be governed by this section, effective 12 months after adoption.
Our Charter and Bylaws do not
exclude us from the restrictions of Section 203. We anticipate that the provisions of Section 203 might encourage companies
interested in acquiring us to negotiate in advance with our Board of Directors since the stockholder approval requirement would be avoided
if a majority of the directors then in office approve either the business combination or the transaction that resulted in the stockholder
becoming an interested stockholder.
Charter and Bylaws.
Provisions of our Charter and
Bylaws may delay or discourage transactions involving an actual or potential change of control or change in our management, including
transactions in which stockholders might otherwise receive a premium for their shares, or transactions that our stockholders might otherwise
deem to be in their best interests. Therefore, these provisions could adversely affect the price of our common stock.
Stockholder Action by Written Consent
Our Bylaws provide that our
stockholders may take action by written consent or electronic transmission, setting forth the action so taken, signed or e-mailed by
the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action
at a meeting for such purpose.
Potential Effects of Authorized but Unissued
Stock
We have shares of common stock
and preferred stock available for future issuance without stockholder approval. We may utilize these additional shares for a variety
of corporate purposes, including future public offerings to raise additional capital, to facilitate corporate acquisitions or payment
as a dividend on the capital stock.
The existence of unissued and
unreserved common stock and preferred stock may enable our board of directors to issue shares to persons friendly to current management
or to issue preferred stock with terms that could render more difficult or discourage a third-party attempt to obtain control of us by
means of a merger, tender offer, proxy contest or otherwise, thereby protecting the continuity of our management. In addition, the board
of directors has the discretion to determine designations, rights, preferences, privileges and restrictions, including voting rights,
dividend rights, conversion rights, redemption privileges and liquidation preferences of each series of preferred stock, all to the fullest
extent permissible under the DGCL and subject to any limitations set forth in our Charter. The purpose of authorizing the board of directors
to issue preferred stock and to determine the rights and preferences applicable to such preferred stock is to eliminate delays associated
with a stockholder vote on specific issuances. The issuance of preferred stock, while providing desirable flexibility in connection with
possible financings, acquisitions and other corporate purposes, could have the effect of making it more difficult for a third party to
acquire, or could discourage a third party from acquiring, a majority of our outstanding voting stock.
DESCRIPTION OF SECURITIES
WE ARE OFFERING
We are offering 255,000 shares of our common stock
and warrants to purchase up to 3,438,396 shares of common stock. We are also offering pre-funded warrants to purchase up to 3,183,396
shares of common stock to those purchasers whose purchase of shares of common stock in this offering would result in the purchaser, together
with its affiliates and certain related parties, beneficially owning more than 4.99% (or, at the election of the purchaser, 9.99%) of
our outstanding shares of common stock following the consummation of this offering in lieu of the shares of common stock that would result
in such excess ownership. Each pre-funded warrant will be exercisable for one share of common stock. No warrant for fractional shares
of common stock will be issued, rather warrants will be issued only for whole shares of common stock. We are also registering the shares
of common stock issuable from time to time upon exercise of the pre-funded warrants and warrants offered hereby.
Common Stock
The material terms and provisions of our common
stock are described under the caption “Description of Capital Stock” in this prospectus and are incorporated herein by reference.
Warrants
The following is a summary of certain terms and
provisions of the warrants that are being offered hereby is not complete and is subject to, and qualified in its entirety by, the provisions
of the warrant, the form of which is filed as an exhibit to the registration statement of which this prospectus forms a part. Prospective
investors should carefully review the terms and provisions of the form of warrant for a complete description of the terms and conditions
of the warrants.
Duration and Exercise Price
Each warrant offered hereby will have an exercise
price equal to $1.62. The warrants will be immediately exercisable and may be exercised until the fifth anniversary of the issuance date.
The exercise price and number of shares of common stock issuable upon exercise is subject to appropriate adjustment in the event of stock
dividends, stock splits, reorganizations or similar events affecting our common stock and the exercise price. The warrants will be issued
separately from the common stock or pre-funded warrants, respectively, and may be transferred separately immediately thereafter. The warrants
will be issued in certificated form only.
Exercisability
The warrants will be exercisable, at the option
of each holder, in whole or in part, by delivering to us a duly executed exercise notice accompanied by payment in full for the number
of shares of our common stock purchased upon such exercise (except in the case of a cashless exercise as discussed below). A holder (together
with its affiliates) may not exercise any portion of such holder’s warrants to the extent that the holder would own more than 4.99%
of the outstanding common stock immediately after exercise, except that upon at least 61 days’ prior notice from the holder to
us, the holder may increase the amount of ownership of outstanding stock after exercising the holder’s warrants up to 9.99% of
the number of shares of our common stock outstanding immediately after giving effect to the exercise, as such percentage ownership is
determined in accordance with the terms of the warrants.
Cashless Exercise
If, at the time a holder exercises
its warrants, a registration statement registering the issuance of the shares of common stock underlying the warrants under the Securities
Act is not then effective or available for the issuance of such shares, then in lieu of making the cash payment otherwise contemplated
to be made to us upon such exercise in payment of the aggregate exercise price, the holder may elect instead to receive upon such exercise
(either in whole or in part) the net number of shares of common stock determined according to a formula set forth in the warrant.
Fundamental Transactions
In the event of any fundamental transaction, as
described in the warrants and generally including any merger with or into another entity, sale of all or substantially all of our assets,
tender offer or exchange offer, or reclassification of our common stock, then upon any subsequent exercise of a warrant, the holder will
have the right to receive as alternative consideration, for each share of our common stock that would have been issuable upon such exercise
immediately prior to the occurrence of such fundamental transaction, the number of shares of common stock of the successor or acquiring
corporation or of our company, if it is the surviving corporation, and any additional consideration receivable upon or as a result of
such transaction by a holder of the number of shares of our common stock for which the warrant is exercisable immediately prior to such
event. Notwithstanding the foregoing, in the event of a fundamental transaction, the holders of the warrants have the right to require
us or a successor entity to redeem the warrants for cash in the amount of the Black-Scholes Value (as defined in each warrant) of the
unexercised portion of the warrants concurrently with or within 30 days following the consummation of a fundamental transaction.
However, in the event of a fundamental transaction
which is not in our control, including a fundamental transaction not approved by our board of directors, the holders of the warrants
will only be entitled to receive from us or our successor entity, as of the date of consummation of such fundamental transaction the
same type or form of consideration (and in the same proportion), at the Black Scholes Value of the unexercised portion of the warrant
that is being offered and paid to the holders of our common stock in connection with the fundamental transaction, whether that consideration
is in the form of cash, stock or any combination of cash and stock, or whether the holders of our common stock are given the choice to
receive alternative forms of consideration in connection with the fundamental transaction.
Transferability
Subject to applicable laws, a warrant may be transferred
at the option of the holder upon surrender of the warrant to us together with the appropriate instruments of transfer.
Fractional Shares
No fractional shares of common stock will be issued
upon the exercise of the warrants. Rather, the number of shares of common stock to be issued will, at our election, either be rounded
up to the next whole share or we will pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied
by the exercise price.
Trading Market
There is no established trading market for the
warrants, and we do not expect an active trading market to develop. We do not intend to apply to list the warrants on any securities
exchange or other trading market. Without a trading market, the liquidity of the warrants will be extremely limited.
Right as a Stockholder
Except as otherwise provided in the warrants or
by virtue of the holder’s ownership of shares of our common stock, such holder of warrants does not have the rights or privileges
of a holder of our common stock, including any voting rights, until such holder exercises such holder’s warrants. The warrants
will provide that the holders of the warrants have the right to participate in distributions or dividends paid on our shares of common
stock.
Waivers and Amendments
The warrant may be modified or amended or the
provisions of the warrant waived with our and the holder’s written consent.
Pre-funded Warrants
The following summary of certain terms and provisions
of the pre-funded warrants that are being offered hereby is not complete and is subject to, and qualified in its entirety by, the provisions
of the pre-funded warrant, the form of which is filed as an exhibit to the registration statement of which this prospectus forms
a part. Prospective investors should carefully review the terms and provisions of the form of pre-funded warrant for a complete description
of the terms and conditions of the pre-funded warrants.
Duration and Exercise Price
Each pre-funded warrant offered hereby will have
an initial exercise price per share of common stock equal to $0.0001. The pre-funded warrants will be immediately exercisable and will
expire when exercised in full. The exercise price and number of shares of common stock issuable upon exercise is subject to appropriate
adjustment in the event of share dividends, share splits, reorganizations or similar events affecting our shares of common stock and
the exercise price. Subject to the rules and regulations of the applicable trading market, we may at any time during the term of
the pre-funded warrant, subject to the prior written consent of the holders, reduce the then current exercise price to any amount and
for any period of time deemed appropriate by our board of directors.
Exercisability
The pre-funded warrants will be exercisable, at
the option of each holder, in whole or in part, by delivering to us a duly executed exercise notice accompanied by payment in full for
the number of shares of common stock purchased upon such exercise (except in the case of a cashless exercise as discussed below). A holder
(together with its affiliates) may not exercise any portion of the pre-funded warrant to the extent that the holder would own more than
4.99% of the outstanding shares of common stock immediately after exercise, except that upon at least 61 days’ prior notice from
the holder to us, the holder may increase the amount of beneficial ownership of outstanding shares after exercising the holder’s
pre-funded warrants up to 9.99% of the number of our shares of common stock outstanding immediately after giving effect to the exercise,
as such percentage ownership is determined in accordance with the terms of the pre-funded warrants. Purchasers of pre-funded warrants
in this offering may also elect prior to the issuance of the pre-funded warrants to have the initial exercise limitation set at 9.99%
of our outstanding shares of common stock.
Cashless Exercise
In lieu of making the cash payment otherwise contemplated
to be made to us upon such exercise in payment of the aggregate exercise price, the holder may elect instead to receive upon such exercise
(either in whole or in part) the net number of shares of common stock determined according to a formula set forth in the pre-funded warrants.
Fractional Shares
No fractional shares of common stock will be issued
upon the exercise of the pre-funded warrants. Rather, at the Company’s election, the number of shares of common stock to be issued
will be rounded up to the next whole share or the Company will pay a cash adjustment in an amount equal to such fraction multiplied by
the exercise price.
Transferability
Subject to applicable laws, a pre-funded warrant
may be transferred at the option of the holder upon surrender of the pre-funded warrants to us together with the appropriate instruments
of transfer.
Trading Market
There is no trading market available for the pre-funded
warrants on any securities exchange or nationally recognized trading system, and we do not expect a trading market to develop. We do
not intend to list the pre-funded warrants on any securities exchange or nationally recognized trading market. Without a trading market,
the liquidity of the pre-funded warrants will be extremely limited. The shares of common stock issuable upon exercise of the pre-funded
warrants are currently traded on The Nasdaq Capital Market.
Right as a Shareholder
Except as otherwise provided in the pre-funded
warrants or by virtue of such holder’s ownership of shares of common stock, the holders of the pre-funded warrants do not have
the rights or privileges of holders of our shares of common stock, including any voting rights, until they exercise their pre-funded
warrants. The pre-funded warrants will provide that the holders of the pre-funded warrants have the right to participate in distributions
or dividends paid on our shares of common stock.
Fundamental Transaction
In the event of a fundamental transaction, as
described in the pre-funded warrants and generally including any reorganization, recapitalization or reclassification of our shares of
common stock, the sale, transfer or other disposition of all or substantially all of our properties or assets, our consolidation or merger
with or into another person, the acquisition of more than 50% of our outstanding shares of common stock, or any person or group becoming
the beneficial owner of 50% of the voting power represented by our outstanding shares of common stock, the holders of the pre-funded
warrants will be entitled to receive upon exercise of the pre-funded warrants the kind and amount of securities, cash or other property
that the holders would have received had they exercised the pre-funded warrants immediately prior to such fundamental transaction on
a net exercise basis
PLAN OF DISTRIBUTION
We engaged H.C. Wainwright & Co., LLC
(“H.C. Wainwright” or the “placement agent”) to act as our exclusive placement agent to solicit offers to purchase
the securities offered by this prospectus on a reasonable best efforts basis. H.C. Wainwright is not purchasing or selling any securities,
nor are they required to arrange for the purchase and sale of any specific number or dollar amount of securities, other than to use their
“reasonable best efforts” to arrange for the sale of the securities by us. Therefore, we may not sell the entire amount of
securities being offered. There is no minimum amount of proceeds that is a condition to closing of this offering. The placement agent
does not guarantee that it will be able to raise new capital in this offering. The terms of this offering were subject to market conditions
and negotiations between us and prospective investors in consultation with the placement agent. The placement agent will have no authority
to bind us. We will enter into a securities purchase agreement directly with the institutional investors, at the investor’s option,
who purchase our securities in this offering. Investors who do not enter into a securities purchase agreement shall rely solely on this
prospectus in connection with the purchase of our securities in this offering. H.C. Wainwright may engage one or more sub-placement agents
or selected dealers to assist with the offering.
Fees and Expenses
The following table shows the per share and accompanying
warrant, and per pre-funded and accompanying warrant, and total placement agent fees we will pay in connection with the sale of the securities
in this offering.
| Per share and common warrant placement agent cash fees | |
$ | 0.12215 | |
| Per pre-funded warrant and common warrant placement agent cash fees | |
$ | 0.12215 | |
| Total | |
$ | 420,000 | |
We
have agreed to pay the placement agent a total cash fee equal to 7.0% of the aggregate gross proceeds of this offering. We will also
pay the placement agent a non-accountable expense allowance of $25,000 and will reimburse the placement agent’s legal fees and
expenses in an amount up to $150,000 and pay $15,950 for clearing fees. We estimate the total offering expenses of this offering
that will be payable by us, excluding the placement agent fees and expenses, will be approximately $342,000. After deducting the placement
agent fees and our estimated offering expenses, we expect the net proceeds from this offering to be approximately $5.2 million.
Participation Right
In addition, we have granted participation right
to the placement agent pursuant to which it has the right to act as the joint book-running manager, joint-lead placement agent or financial
advisor, if the Company or its subsidiaries raise capital through a public or private offering of equity or equity-linked securities
from January 1, 2023 until June 30, 2023.
Tail
We have also agreed to pay the placement agent
a tail fee equal to the cash compensation in this offering, if any investor, who was brought over-the-wall or introduced to us by the
placement agent during the term of its engagement, provides us with capital in any public or private offering or other financing or capital
raising transaction during the twelve-month period following expiration or termination of our engagement of the placement agent.
Other Relationships
The placement agent acted as the placement agent
in connection with the private placement consummated in July 2022, and as sales agent in connection with sales made under the ATM
Agreement, dated May 26, 2021, for which it has received customary fees and expenses. The placement agent also acted as placement
agent for our February 2022 registered direct offering and received cash compensation and reimbursement of certain expenses of approximately
$848,000 and warrants to purchase up to 12,996 shares of common stock at an exercise price of $51.90 per share. The placement agent may,
from time to time, engage in transactions with or perform services for us in the ordinary course of its business and may continue to
receive compensation from us for such services.
On July 15, 2022, in connection with the private placement that closed
on July 15, 2022, we issued to Wainwright’s designees warrants to purchase up to 4,000 shares of our common stock at an exercise
price of $5.625 per share (the “July 2022 Wainwright Warrants”). On October 5, 2022, we and holders of the July 2022 Wainwright
Warrants agreed to cancel and terminate the July 2022 Wainwright Warrants in their entirety.
Determination of Offering Price
The combined public offering price per share and
common warrant and the combined public offering price per pre-funded warrant and common warrant we are offering and the exercise prices
and other terms of the warrants were negotiated between us and the investors, in consultation with the placement agent based on the trading
of our common stock prior to this offering, among other things. Other factors considered in determining the public offering prices of
the securities we are offering and the exercise prices and other terms of the warrants include the history and prospects of our company,
the stage of development of our business, our business plans for the future and the extent to which they have been implemented, an assessment
of our management, general conditions of the securities markets at the time of the offering and such other factors as were deemed relevant.
Lock-up Agreements
Each of our officers and directors have agreed
with the placement agent to be subject to a lock-up period of 90 days following the date of this prospectus. This means that, during
the applicable lock-up period, they may not offer for sale, contract to sell, or sell any shares of our common stock or any securities
convertible into, or exercisable or exchangeable for, shares of our common stock subject to certain customary exceptions. The placement
agent may, in its sole discretion and without notice, waive the terms of any of these lock-up agreements. In addition, we have agreed
to not issue any shares of common stock or securities exercisable or convertible into shares of common stock for a period of 60 days
following the closing date of this offering, subject to certain exceptions, and to not issue any securities that are subject to a price
reset based on trading prices of our common stock or upon a specified or contingent event in the future, or enter into an agreement to
issue securities at a future determined price, until one year from the closing date of this offering, subject to certain exceptions.
Transfer Agent and Registrar
The transfer agent and registrar for our common
stock is Colonial Stock Transfer Company, Inc.
The Nasdaq Capital Market Listing
Our common stock is currently listed on The Nasdaq
Capital Market under the symbol “FWBI.” On October 6, 2022, the reported closing price per share of our common stock was $1.62.
Indemnification
We have agreed to indemnify the placement agent
against certain liabilities, including certain liabilities arising under the Securities Act, or to contribute to payments that the placement
agent may be required to make for these liabilities.
Regulation M
The placement agent may be deemed to be an underwriter
within the meaning of Section 2(a)(11) of the Securities Act and any fees received by it and any profit realized on the sale of
the securities by it while acting as principal might be deemed to be underwriting discounts or commissions under the Securities Act.
The placement agent will be required to comply with the requirements of the Securities Act and the Exchange Act of 1934, as amended (the
“Exchange Act”), including, without limitation, Rule 10b-5 and Regulation M under the Exchange Act. These rules and
regulations may limit the timing of purchases and sales of our securities by the placement agent. Under these rules and regulations,
the placement agent may not (i) engage in any stabilization activity in connection with our securities; and (ii) bid for or
purchase any of our securities or attempt to induce any person to purchase any of our securities, other than as permitted under the Exchange
Act, until they have completed their participation in the distribution.
Electronic Distribution
A prospectus in electronic format may be made
available on a website maintained by the placement agent and the placement agent may distribute prospectuses electronically. Other than
the prospectus in electronic format, the information on these websites is not part of this prospectus or the registration statement of
which this prospectus forms a part, has not been approved and/or endorsed by us or the placement agent and should not be relied upon
by investors.
INCORPORATION
OF CERTAIN INFORMATION BY REFERENCE
The following documents filed
with the SEC are incorporated by reference into this prospectus:
| |
● |
our Quarterly Report on Form 10-Q
for the period ended March 31, 2022 filed on May 23,
2022 and for the period ended June 30, 2022, filed on August 15,
2022; |
| |
|
|
| |
● |
our Current Report on Form 8-K,
filed on January 14,
2022, February 7,
2022, February 17,
2022, March 1,
2022, April 6,
2022, April 29,
2022, May 3,
2022, May 5,
2022, May 13,
2022, May 16,
2022, May 27,
2022, May 27,
2022, June 17,
2022, July 7,
2022, July 7,
2022, July 15,
2022, July 18,
2022, July 29,
2022 and August 25,
2022 (other than any portions thereof deemed furnished and not filed); |
| |
|
|
| |
● |
the description of our common
stock which is registered under Section 12 of the Exchange Act, in our registration statement on Form 8-A,
filed on August 8, 2016, as supplemented and updated by the description of our capital stock set forth in Exhibit 4.19
of our Annual Report on Form 10-K for the year ended December 31, 2021, filed on March 31, 2022, including any amendment
or reports filed for the purposes 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.
WHERE YOU CAN FIND MORE
INFORMATION
This prospectus is part of
a registration statement we filed with the SEC. This prospectus does not contain all of the information set forth in the registration
statement and the exhibits to the registration statement. For further information with respect to us and the securities we are offering
under this prospectus, we refer you to the registration statement and the exhibits and schedules filed as a part of the registration
statement. You should rely only on the information contained in this prospectus or incorporated by reference into this prospectus. We
have not authorized anyone else to provide you with different information. We are not making an offer of these securities in any jurisdiction
where the offer is not permitted. You should assume that the information contained in this prospectus, or any document incorporated by
reference in this prospectus, is accurate only as of the date of those respective documents, regardless of the time of delivery of this
prospectus or any sale of our securities.
We are subject to the informational
requirements of the Exchange Act and in accordance therewith we file annual, quarterly, and other reports, proxy statements and other
information with the Commission under the Exchange Act. Such reports, proxy statements and other information, including the Registration
Statement, and exhibits and schedules thereto, are available to the public through the Commission’s website at www.sec.gov.
We make available free of charge
on or through our website our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K
and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of
1934, as amended, as soon as reasonably practicable after we electronically file such material with or otherwise furnish it to the Commission.
The registration statement and the documents referred to under “Incorporation of Certain Information by Reference”
are also available on our website, www. firstwavebio.com/investors/regulatory-filings.
We have not incorporated by
reference into this prospectus the information on our website, and you should not consider it to be a part of this prospectus.
LEGAL MATTERS
The validity of the securities offered hereby
will be passed upon for us by Lowenstein Sandler LLP, New York, New York. The placement agent is being represented by Haynes and Boone,
LLP, New York, New York, in connection with this offering.
EXPERTS
The consolidated audited financial
statements incorporated by reference in this prospectus and elsewhere in the registration statement have been incorporated by reference
in reliance upon the report of Mazars USA LLP, independent registered public accounting firm, upon the authority of said firm as experts
in accounting and auditing. The 2021 and 2020 audited annual consolidated financial statements of First Wave BioPharma, Inc. (formerly
known as AzurRx BioPharma, Inc.), as of and for the years ended December 31, 2021 and 2020, have been audited by Mazars USA
LLP, independent registered public accounting firm. The audit report dated March 31, 2022 for the 2021 audited annual consolidated
financial statements includes an explanatory paragraph which states that certain circumstances raise substantial doubt about our ability
to continue as a going concern.
255,000 to Shares of Common Stock
Pre-Funded Warrants to Purchase up to 3,183,396
Shares of Common Stock
Common Warrants to Purchase up to 3,438,396
Shares of Common Stock
Shares of Common Stock underlying the Pre-Funded
Warrants and Common Warrants
PROSPECTUS
H.C. Wainwright & Co.
The date of this prospectus is October 6,
2022.
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