As filed with the Securities and Exchange Commission on April 6, 2016October 2, 2017
Registration No. 333-333-219967
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 1
TO
FORM S-1
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
CYTORI
THERAPEUTICS, INC.(Exact Name of Registrant as Specified in Its Charter)
Delaware | 3841 | 33-0827593 | ||
(State or Other Jurisdiction of Incorporation or Organization) | (Primary Standard Industrial Classification Code Number) | (I.R.S. Employer Identification Number) |
3020 Callan Road
San Diego, CA 92121
(858) 458-0900
(Address, Including Zip Code, and Telephone Number, Including Area Code, of Registrant'sRegistrant’s Principal Executive Offices)
Marc H. Hedrick, MD
President and Chief Executive Officer
Cytori Therapeutics, Inc.
3020 Callan Road
San Diego, CA 92121
(858) 458-0900
(Name, Address, Including Zip Code, and Telephone Number, Including Area Code, of Agent for Service)
Copies to:
Cheston J. Larson, Esq. Latham & Watkins LLP 12670 High Bluff Dr. San Diego, CA 92130 Tel: (858) 523-5400 523-5450Fax: (858) | Sarah E. Williams, Esq. Ellenoff Grossman & Schole LLP 1345 Avenue of the Americas New York, New York 10105 (212) 370-1300 |
Approximate date of commencement of proposed sale to the public:
As soon as practicable after this registration statement becomes effective.If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. ☐
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large“large accelerated filer," "accelerated filer"” “accelerated filer” and "smaller“smaller reporting company"company” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer ☐ | Accelerated filer | ||||||
Non-accelerated filer ☐ | |||||||
(Do not check if a smaller reporting company) | Smaller reporting company ☒ | ||||||
Emerging growth company ☐ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for comply with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of Securities Act. ☐
CALCULATION OF REGISTRATION FEE
|
|
|
Title of each class of securities to be registered | Proposed Maximum Aggregate Offering Price (1) | Amount of registration fee |
Units consisting of shares of Series B Preferred Stock, par value $0.001 per share, and warrants to purchase shares of Common Stock, par value $0.001 per share | $10,000,000 | $1,245 |
Non-transferable Rights to purchase Units (2) | — | — |
Series B Preferred Stock included as part of the Units | Included with Units above | — |
Warrants to purchase shares of Common Stock included as part of the Units (3) | Included with Units above | — |
Common Stock issuable upon conversion of the Series B Preferred Stock (4)(5) | — | — |
Common Stock issuable upon exercise of the Warrants (5) | $6,000,000 | $747 |
Total | $16,000,000 | $1,992 (6) |
Title of each class of securities to be registered | Proposed Maximum Aggregate Offering Price(1) | Amount of Registration Fee | ||||||||
Units, each consisting of one share of common stock, par value $0.001 per share ("Common Stock") and of a warrant to purchase one share of common stock ("Units") | $ | 10,000,000 | $ | 1,007 | ||||||
Non-transferable Rights to purchase Units(2) | – | – | ||||||||
Common Stock included as part of the Units | Included with Units above | – | ||||||||
Warrants included as part of the Units(3) | Included with Units above | – | ||||||||
Common Stock issuable upon exercise of the Warrants included in the Units(1)(4) | $ | 1,000,000 | $ | 101 | ||||||
Total | $ | 11,000,000 | $ | 1,108 | ||||||
(1 | ) | Estimated solely for the purpose of calculating the registration fee in accordance with Rule 457(o) of the Securities Act of 1933 (the "Act"). | ||||||||
(2 | ) | Non-transferable Rights to purchase Units are being issued without consideration. Pursuant to Rule 457(g) under the Act, no separate registration fee is required for the Rights because the Rights are being registered in the same registration statement as the Common Stock of the Registrant underlying the Rights. | ||||||||
(3 | ) | Pursuant to Rule 457(g) of the Act, no separate registration fee is required for the Warrants because the Warrants are being registered in the same registration statement as the Common Stock of the Registrant issuable upon exercise of the Warrants. | ||||||||
(4 | ) | In addition to the shares of Common Stock set forth in this table, pursuant to Rule 416 under the Act, this registration statement also registers such indeterminate number of shares of Common Stock as may become issuable upon exercise of the Warrants as the same may be adjusted as a result of their customary anti-dilution provisions. |
(1) | Estimated solely for purposes of calculating the registration fee in accordance with Rule 457(o) under the Securities Act of 1933, as amended (the “Act”). |
(2) | Non-transferable Rights to purchase Units are being issued without consideration. Pursuant to Rule 457(g) under the Act, no separate registration fee is required for the Rights because the Rights are being registered in the same registration statement as the securities of the Registrant underlying the Rights. |
(3) | Pursuant to Rule 457(g) of the Act, no separate registration fee is required for the Warrants because the Warrants are being registered in the same registration statement as the Common Stock of the Registrant issuable upon exercise of the Warrants. |
(5) | In addition to the shares of Common Stock set forth in this table, pursuant to Rule 416 under the Act, this registration statement also registers such indeterminate number of shares of Common Stock as may become issuable upon conversion or exercise of these securities as the same may be adjusted as a result of stock splits, stock dividends, recapitalizations or other similar transactions. |
(6) | Of this amount, $1,275 was previously paid. |
The Registrantregistrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the Registrantregistrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.
The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.
PRELIMINARY PROSPECTUS | SUBJECT TO COMPLETION | DATED | ||
Subscription Rights to Purchase Up to 10,000 Units
Consisting of an Aggregate of Up to 10,000 Shares of CommonSeries B Preferred Stock
and Warrants to Purchase Up to 12,500,000 Shares of Common Stock
at a Subscription Price of $$1,000 Per Unit
We are distributing at no charge to holders of our common stock, at no charge, non-transferable subscription rights to purchase units. Each unit, which we refer to as a Unit, consists of one share of common stockSeries B Preferred Stock and of a warrant representing the right to purchase one share of common stock,1,250 warrants, which we refer to as the Warrants. Each Warrant will be exercisable for one share of our common stock. We refer to the offering that is the subject of this prospectus as the Rights Offering. In the Rights Offering, you will receive one subscription right for every sharesshare of common stock owned at 5:00 p.m., Eastern Time, on , 2016,October 27, 2017, the record date of the Rights Offering, or the Record Date. The common stockSeries B Preferred Stock and the Warrants comprising the Units will separate upon the closing of the Rights Offering and will be issued separately but may only be purchased as a Unit, and the Units will not trade as a separate security. The subscription rights will not be tradable.
Each subscription right will entitle you to purchase one Unit, which we refer to as the Basic Subscription Right, at a subscription price per Unit of $ ,$1,000, which we refer to as the Subscription Price. Each whole Warrant entitles the holder to purchase one share of common stock at an exercise price of $$0.48 per share from the date of issuance through theirits expiration two years30 months from the date of issuance. If you exercise your Basic Subscription Rights in full, and other stockholders do not fully exercise their Basic Subscriptionany portion of the Units remain available under the Rights Offering, you will be entitled to an over-subscription privilege to purchase a portion of the unsubscribed Units at the Subscription Price, subject to proration and ownership limitations, which we refer to as the Over-Subscription Privilege. Each subscription right consists of a Basic Subscription Right and an Over-Subscription Privilege, which we refer to as the Subscription Right.
The Subscription Rights will expire if they are not exercised by 5:00 p.m., Eastern Time, on , 2016,November 21, 2017, unless the Rights Offering is extended or earlier terminated by the Company. If we elect to extend the Rights Offering, we will issue a press release announcing the extension no later than 9:00 a.m., Eastern Time, on the next business day after the most recently announced expiration date of the Rights Offering. We may extend the Rights Offering for additional periods in our sole discretion. Once made, all exercises of Subscription Rights are irrevocable.
We have not entered into any standby purchase agreement or other similar arrangement in connection with the Rights Offering. The Rights Offering is being conducted on a best-efforts basis and there is no minimum amount of proceeds necessary to be received in order for us to close the Rights Offering.
We have engaged Maxim Group LLC to act as dealer-manager in the Rights Offering.
Investing in our securities involves a high degree of risk. See the section entitled "Risk Factors"“Risk Factors” beginning on page 2119 of this prospectus. You should carefully consider these risk factors, as well as the information contained in this prospectus, before you invest.
Broadridge Corporate Issuer Solutions, Inc. will serve as the Subscription and Information Agent for the Rights Offering. The Subscription Agent will hold the funds we receive from subscribers until we complete, abandon or terminate the Rights Offering. If you want to participate in this Rights Offering and you are the record holder of your shares, or warrants, we recommend that you submit your subscription documents to the Subscription Agent well before the deadline. If you want to participate in this Rights Offering and you hold shares through your broker, dealer, bank or other nominee, you should promptly contact your broker, dealer, bank or other nominee and submit your subscription documents in accordance with the instructions and within the time period provided by your broker, dealer, bank or other nominee. For a detailed discussion, see "The“The Rights Offering – The Subscription Rights."”
Our board of directors reserves the right to terminate the Rights Offering for any reason any time before the closing of the Rights Offering. If we terminate the Rights Offering, all subscription payments received will be returned within 10 business days, without interest or deduction. We expect the Rights Offering to expire on or about , 2016,November 21, 2017, subject to our right to extend the Rights Offering as described above.above, and that we would close on subscriptions within five business days of such date.
Our common stock is listed on Thethe NASDAQ Capital Market, or NASDAQ, under the symbol "CYTX."“CYTX.” On April 5, 2016,September 29, 2017, the last reported sale price of our common stock was $0.23$0.37 per share. There is no established public trading market for the Series B Preferred Stock or the Warrants. We have applieddo not intend to apply for listing of the Series B Preferred Stock on any securities exchange or recognized trading system. We intend to apply to list the Warrants on NASDAQ following their issuance under the symbol "CYTXW."issuance. The Subscription Rights are non-transferrable and will not be listed for trading on NASDAQ or any other stocksecurities exchange or market. You are urged to obtain a current price quote for our common stock before exercising your Subscription Rights.
|
| Per Unit |
|
| Total(2) |
|
Subscription price | $ | 1,000.00 |
| $ | 10,000,000 |
|
Dealer-Manager fees and expenses (1) | $ | 77.50 |
| $ | 775,000 |
|
Proceeds to us, before expenses | $ | 922.50 |
| $ | 9,225,000 |
|
(1) | ||||||||
In connection with this Rights Offering, we have agreed to pay to Maxim Group LLC as the dealer-manager a cash fee equal to (i) 6% of the gross proceeds received by us directly from exercises of the Subscription Rights if the amount of such gross proceeds is less than $7.5 million or (b) 7% of the gross proceeds received by us directly from exercises of the Subscription Rights if the amount of such gross proceeds is at least $7.5 million. We have also agreed to reimburse the dealer-manager for its expenses up to $75,000. See |
(2) | Assumes the Rights Offering is fully subscribed, but excludes proceeds from the exercise of Warrants included within the Units. |
Our board of directors is making no recommendation regarding your exercise of the Subscription Rights. You should carefully consider whether to exercise your Subscription Rights before the expiration date. You may not revoke or revise any exercises of Subscription Rights once made.
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.
Dealer-Manager
Maxim Group LLC
The date of this Prospectus is , 2016
Page | |||||||||
i | |||||||||
1 | |||||||||
2 | |||||||||
11 | |||||||||
20 | |||||||||
33 | |||||||||
34 | |||||||||
35 | |||||||||
Market Price of our Common Stock and Related Stockholder Matters | 36 | ||||||||
36 | |||||||||
37 | |||||||||
46 | |||||||||
57 | |||||||||
62 | |||||||||
63 | |||||||||
63 | |||||||||
64 | |||||||||
64 |
The registration statement of which this prospectus forms a part that we have filed with the Securities and Exchange Commission, or SEC, includes exhibits that provide more detail of the matters discussed in this prospectus. You should read this prospectus and the related exhibits filed with the SEC, together with the additional information described under the headings "Where“Where You Can Find More Information"Information” and "Incorporation“Incorporation by Reference"Reference” before making your investment decision.
You should rely only on the information provided in this prospectus or in a prospectus supplement or any free writing prospectuses or amendments thereto. We have not authorized anyone else to provide you with different information. If anyone provides you with different or inconsistent information, you should not rely on it. You should assume that the information in this prospectus is accurate only as of the date hereof. Our business, financial condition, results of operations and prospects may have changed since that date.
We are not offering to sell or seeking offers to purchase these securities in any jurisdiction where the offer or sale is not permitted. We and the dealer-manager have 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 as to distribution of the prospectus outside of the United States.
Unless the context otherwise requires, references in this prospectus to "Cytori," "the“Cytori,” “the Company," "we," "us"” “we,” “us” and "our"“our” refer to Cytori Therapeutics, Inc. and our subsidiaries. Solely for convenience, our trademarks and tradenames referred to in this registration statement, such as Cytori Cell Therapy, Celution, Celase and Intravase,prospectus may appear without the ® or ™ 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 that the applicable owner will not assert its rights, to these trademarks and tradenames. All other trademarks, service marks and trade names included or incorporated by reference into
Unless the context otherwise requires, references in this prospectus supplement orto shares of our common stock, including prices per share of our common stock, reflect the accompanying prospectus are the propertyone-for-15 reverse split that was approved by our stockholders and board of their respective owners.
i
Dear Stockholders,
We here at Cytori remain fully committed to our mission of bringing our innovative technologies to patients who need them. To achieve this, our next steps are clear.
First, we will discuss the recent results from our STAR trial for scleroderma with the U.S. FDA and regulatory bodies in Japan and the EU, to determine the next steps for our HabeoTM product. Based on the safety of HabeoTM in the STAR trial and its performance in the more severe, diffuse cutaneous scleroderma subset of patients, we believe this technology has the potential to become a significant therapeutic agent in this clinical setting. We plan on making it available to patients as soon as possible pending definitive clinical trials demonstrate its efficacy in this subset of sclerodema patients.
Second, we intend to drive growth and expansion for Cytori has undergone a considerable transformation. Driving that transformation is a fresh, experienced team that is focused on getting the job done, quickly and efficiently.
Finally, we intend to produce our liposomal doxorubicin product, called ATI-0918, for European commercialization through a manner that best recognizespartner. We anticipate manufacturing verification batches at scale later this year and includes our stockholders. We believe this stockholder rights offering will provide sufficient capital to allow the company to complete enrollment and announce the data from our US phase III scleroderma trial and move the company ever closer to our larger goal of enhancing lives through novel cellular therapies.
Thank you for your continued support of the company and confidence in our technology and team.
Sincerely,
Dr. Marc H. Hedrick
President & CEO
The following are examples of what we anticipate will be common questions about this Rights Offering. The answers are based on selected information included elsewhere in this prospectus. The following questions and answers do not contain all of the information that may be important to you and may not address all of the questions that you may have about the Rights Offering. This prospectus and the documents incorporated by reference into this prospectus contain more detailed descriptions of the terms and conditions of the Rights Offering and provides additional information about us and our business, including potential risks related to the Rights Offering, the Units offered hereby, and our business. We urge you to read this entire prospectus and the documents incorporated by reference into this prospectus.
Why are we conducting the Rights Offering?
We are conducting the Rights Offering to raise additional capital for general corporate purposes,research and development, including the development of our clinical trials,current pipeline, for further development of our Celution System products and other related research and development, for general corporate purposes, primarily sales and marketing initiatives relating to our potential commercialization of our Habeo scleroderma therapy and our ATI-0918 in Europe, and for general administrative expenses, working capital and capital expenditures.
What is the Rights Offering?
We are distributing, at no charge, to record holders of our common stock, non-transferable Subscription Rights to purchase Units at a price of $$1,000 per Unit. The Subscription Rights will not be tradable. Each Unit consists of one share of Series B Preferred Stock and 1,250 Warrants. Each share of Series B Preferred Stock is convertible into the number of shares of our common stock determined by dividing the $1,000 stated value per share of the Series B Preferred Stock by a conversion price of $0.40 per share, subject to adjustment and subject to, if required, stockholder approval of aan amendment of our certification of incorporation to increase our authorized shares of common stock, which we refer to as the Stockholder Approval, as described in more detail herein. See “Are there risks in exercising my Subscription Rights?” below. Each Warrant to purchasewill be exercisable for one share of our common stock.stock, subject to obtaining Stockholder Approval. Upon closing of the Rights Offering, the common stockSeries B Preferred Stock and Warrants will immediately separate. We have appliedintend to apply to list the Warrants on NASDAQ under the symbol "CYTXW."NASDAQ. You will receive one Subscription Right for every sharesshare of common stock that you owned as of 5:00 p.m., Eastern Time, on the Record Date. Each Subscription Right entitles the record holder or holder of a warrant to a Basic Subscription Right and an Over-Subscription Privilege. The Subscription Rights will expire if they are not exercised by 5:00 p.m., Eastern Time, on , 2016,November 21, 2017, unless extendedwe extend or earlier terminated byterminate the Company.Rights Offering.
What are the Basic Subscription Rights?
For every shares you ownedshare you owned as of the Record Date, you will receive one Basic Subscription Right, which gives you the opportunity to purchase one Unit, consisting of one share of our common stockSeries B Preferred Stock and of a Warrant to purchase one share of our common stock1,250 Warrants, for a price of $$1,000 per Unit. For example, if you owned 100 shares of common stock as of the Record Date, you will receive 100 Subscription Rights and will have the right to purchase 100 shares of our common stockSeries B Preferred Stock and Warrants to purchase 125,000 shares of our common stock for $$1,000 per Unit (or a total payment of $ ).$100,000). You may exercise all or a portion of your Basic Subscription Rights or you may choose not to exercise any Basic Subscription Rights at all.
If you are a record holder of our common stock, the number of shares you may purchase pursuant to your Basic Subscription Rights is indicated on the enclosed Rights Certificate. If you hold your shares in the name of a broker, dealer, bank or other nominee who uses the services of the Depository Trust Company, or DTC, you will not receive a Rights Certificate. Instead, DTC will issue one Subscription Right to your nominee record holder for every shareseach share of our common stock that you beneficially own as of the Record Date. If you are not contacted by your nominee, you should contact your nominee as soon as possible.
If you exercise your Basic Subscription Rights in full, you may also choose to exercise your Over-Subscription Privilege to purchase a portion of any Units that remain available under the other record holders do not purchase through the exercise of their Basic Subscription Rights.Rights Offering. You should indicate on your Rights Certificate, or the form provided by your nominee if your shares are held in the name of a nominee, how many additional Units you would like to purchase pursuant to your Over-Subscription Privilege.
Subject to stock ownership limitations, if sufficient Units are available, we will seek to honor your Over-Subscription requestRequest in full. If Over-Subscription requestsRequests exceed the number of Units available, however, we will allocate the available Units pro-rata among the record holders exercising the Over-Subscription Privilege in proportion to the number of shares of our common stock each of those record holders owned on the Record Date, relative to the number of shares owned on the Record Date by all record holders exercising the Over-Subscription Privilege. If this pro-rata allocation results in any record holders receiving a greater number of Units than the record holder subscribed for pursuant to the exercise of the Over-Subscription Privilege, then such record holder will be allocated only that number of Units for which the record holder oversubscribed, and the remaining Units will be allocated among all other record holders exercising the Over-Subscription Privilege on the same pro rata basis described above. The proration process will be repeated until all Units have been allocated. See "The“The Rights Offering—Offering—Limitation on the Purchase of Units"Units” for a description of certain stock ownership limitations.
To properly exercise your Over-Subscription Privilege, you must deliver to the Subscription Agent the subscription payment related to your Over-Subscription Privilege before the Rights Offering expires. See "The“The Rights Offering—Offering—The Subscription Rights—Rights—Over-Subscription Privilege."” To the extent you properly exercise your Over-Subscription Privilege for an amount of Units that exceeds the number of unsubscribed Units available to you, any excess subscription payments will be returned to you within 10 business days after the expiration of the Rights Offering, without interest or deduction.
Broadridge Corporate Issuer Solutions, Inc., our Subscription Agent for the Rights Offering, will determine the allocation of Over-Subscription allocationRequests based on the formula described above.
May the Subscription Rights that I exercise be reduced for any reason?
Yes. While we are distributing to holders of our common stock one Subscription Right for every share of common stock owned on the Record Date, we are only seeking to raise $10.0 million dollars in gross proceeds in this Rights Offering. As a result, based on 33,328,401 shares of common stock outstanding as of June 30, 2017, we would grant Subscription Rights to acquire 33,328,401 Units but will only accept subscriptions for 10,000 Units. Accordingly, sufficient Units may not be available to honor your subscription in full. If exercises of Basic Subscription Rights exceed the number of Units available in the Rights Offering, we will allocate the available Units pro-rata among the record holders exercising the Basic Subscription Rights in proportion to the number of shares of our common stock each of those record holders owned on the Record Date, relative to the number of shares owned on the Record Date by all record holders exercising the Basic Subscription Right. If this pro-rata allocation results in any record holders receiving a greater number of Units than the record holder subscribed for pursuant to the exercise of the Basic Subscription Rights, then such record holder will be allocated only that number of Units for which the record holder subscribed, and the remaining Units will be allocated among all other record holders exercising their Basic Subscription Rights on the same pro rata basis described above. The proration process will be repeated until all Units have been allocated. Please also see the discussion under “The Rights Offering—The Subscription Rights—Over-Subscription Privilege” and “The Rights Offering—Limitation on the Purchase of Units” for a description potential proration as to the Over-Subscription Privilege and certain stock ownership limitations.
If for any reason the amount of Units allocated to you is less than you have subscribed for, then the excess funds held by the Subscription Agent on your behalf will be returned to you, without interest, as soon as practicable after the Rights Offering has expired and all prorating calculations and reductions contemplated by the terms of the Rights Offering have been effected, and we will have no further obligations to you.
What are the terms of the Series B Preferred Stock?
Each share of Series B Preferred Stock will be convertible at our option or the option of the holder at any time, and automatically upon receipt of Stockholder Approval, into the number of shares of our common stock determined by dividing the $1,000 stated value per share of the Series B Preferred Stock by a conversion price of $0.40 per share, subject to adjustment; provided that, until we obtain the Stockholder Approval, if the number of shares of common stock issuable upon the conversion of the total number of shares of Series B Preferred Stock issued in this offering is greater than 30,000,000, each holder will only be able to convert that number of shares of Series B Preferred Stock obtained by multiplying the shares of Series B Preferred Stock issued to such holder in this offering by (i) 30,000,000 divided by (ii) the number of shares of common stock issuable upon the conversion of the total number of shares of Series B Preferred Stock issued in this offering (rounded down to the nearest whole share). The Series B Preferred Stock has certain conversion rights, dividend rights and liquidation preferences as described in more detail herein. The Series B Preferred Stock will not be listed on NASDAQ.
What are the terms of the Warrants?
Each Warrant entitles the holder to purchase one share of common stock at an exercise price of $$0.48 per share from the date of issuanceStockholder Approval through theirits expiration two years30 months from the date of issuance. The Warrants will be exercisable for cash, or, solely during any period when a registration statement for the exercise of the Warrants is not in effect, on a cashless basis. We may redeem the Warrants for $0.01 per Warrant if our common stock closes above $$1.20 per share for 10ten consecutive trading days.days, provided that we may not do so prior to the first anniversary of closing of the Rights Offering.
Are the Warrants listed?
We have appliedintend to apply to list the Warrants on NASDAQ, under the symbol "CYTXW," although there is no assurance that a sufficient number of Subscription Rights will be exercised so that the Warrants will meet the minimum listing criteria to be accepted for listing on NASDAQ.
The Warrants will be issued in registered form under a warrant agent agreement with Broadridge Corporate Issuer Solutions, Inc. as warrant agent.
What are the requirements to list the Warrants on Nasdaq?
To satisfy the initial listing requirement for Warrants on the Nasdaq Capital Market,NASDAQ, we must (i) issue at least 400,000 Warrant,Warrants, (ii) maintain the listing of the common stock underlying the Warrants on NASDAQ, (iii) have at least three registered and active market makers, and (4)(iv) have at least 400 round lot holders of the Warrants (meaning a holder of at least 100 warrants).
Will fractional shares be issued upon exercise of Subscription Rights, upon the conversion of Series B Preferred Stock or upon the exercise of Warrants?
No. We will not issue fractional shares of common stock in the Rights Offering. We will only distribute Subscription Rights to acquire whole Units, and rights holders will only be entitled to purchase a number of Units representing a whole number of shares and Warrants, rounded down to the nearest whole number of shares or
Warrants, as applicable, a holder would otherwise be entitled to purchase. Any excess subscription payments received by the Subscription Agent will be returned within 10 business days after expiration of the Rights Offering, without interest or deduction.
What effect will the Rights Offering have on our outstanding common stock?
Assuming no other transactions by us involving our commoncapital stock prior to the expiration of the Rights Offering, and if the Rights Offering is fully subscribed, upon consummation of the Rights Offering we will have 33,328,401 shares of our common stock will beissued and outstanding, 10,000 shares of Series B Preferred Stock issued and outstanding, and Warrants to purchase an additional 12,500,000 shares of our common stock will beissued and outstanding, stock.based on 33,328,401 shares of our common stock outstanding as of June 30, 2017. The exact number of shares of Series B Preferred Stock and Warrants that we will issue in this Rights Offeringoffering will depend on the number of Units that are subscribed for in the Rights Offering.
How was the Subscription Price determined?
In determining the Subscription Price, the directors considered, among other things, the following factors:
the current and historical trading prices of our common stock;
the price at which stockholders might be willing to participate in the Rights Offering;
the value of the Series B Preferred Stock being issued as a component of the Unit;
the value of the Warrant being issued as a component of the Unit;
our need for additional capital and liquidity;
the cost of capital from other sources; and
comparable precedent transactions, including the percentage of shares offered, the terms of the subscription rights being offered, the subscription price and the discount that the subscription price represented to the immediately prevailing closing prices for those offerings.
In conjunction with the review of these factors, the board of directors also reviewed our history and prospects, including our past and present earnings and cash requirements, our prospects for the future, the outlook for our industry and our current financial condition. The board of directors also believed that the Subscription Price should be designed to provide an incentive to our current stockholders to participate in the Rights Offering and exercise their Basic Subscription Right and their Over-Subscription Privilege.
The Subscription Price does not necessarily bear any relationship to any established criteria for value. You should not consider the Subscription Price as an indication of actual value of our company or our common stock. The market price of our common stock may decline during or after the Rights Offering. There is currently no market for our shares of Series B Preferred Stock and, unless we or you choose to convert your shares of Series B Preferred Stock, or they automatically convert upon receipt of Stockholder Approval, into shares of common stock, you will not be able to re-sell such shares. You should obtain a current price quote for our common stock and perform an independent assessment of our Series B Preferred Stock and Warrants before exercising your Subscription Rights and make your own assessment of our business and financial condition, our prospects for the future, the terms of the Rights Offering, the information in this prospectus and the other considerations relevant to your circumstances. Once made, all exercises of Subscription Rights are irrevocable. In addition, there is no established trading market for the Warrants to be issued pursuant to this offering, and the Warrants may not be widely distributed. . We have appliedintend to
apply to list the Warrants for trading on NASDAQ, under the symbol "CYTXW," but there can be no assurance that a sufficient number of Subscription Rights will be exercised so that the Warrants will meet minimum listing criteria to be accepted for listing on NASDAQ or that a market will develop for the Warrants.
Am I required to exercise all of the Basic Subscription Rights I receive in the Rights Offering?
No. You may exercise any number of your Basic Subscription Rights, or you may choose not to exercise any Basic Subscription Rights. If you do not exercise any Basic Subscription Rights, the number of shares of our common stock you own will not change. However, if you choose to not exercise your Basic Subscription Rights in full and other holders of Subscription Rights do exercise, your proportionate ownership interest in our company will decrease. If you do not exercise your Basic Subscription Rights in full, you will not be entitled to exercise your Over-Subscription Privilege.
How soon must I act to exercise my Subscription Rights?
If you received a Rights Certificate and elect to exercise any or all of your Subscription Rights, the Subscription Agent must receive your completed and signed Rights Certificate and payment for both your Basic Subscription Rights and any Over-Subscription Privilege you elect to exercise before the Rights Offering expires on , 2016,November 21, 2017, at 5:00 p.m., Eastern Time.Time, unless we extend or earlier terminate the Rights Offering. If you hold your shares in the name of a broker, dealer, bank or other nominee, your nominee may establish a deadline before the expiration of the Rights Offering by which you must provide it with your instructions to exercise your Subscription Rights, along with the required subscription payment.
May I transfer my Subscription Rights?
No. The Subscription Rights may be exercised only by the stockholders to whom they are distributed, and they may not be sold, transferred, assigned or given away to anyone else, other than by operation of law. As a result, Rights Certificates may be completed only by the stockholder who receives the certificate. We do not intend to apply for the listing of the Subscription Rights on any securities exchange or recognized trading market.
Will our directors and executive officers participate in the Rights Offering?
To the extent they hold common stock as of the Record Date, our directors and executive officers will be entitled to participate in the Rights Offering on the same terms and conditions applicable to other Rights holders. While none of our directors or executive officers has entered into any binding commitment or agreement to exercise Subscription Rights received in the Rights Offering, certainall of our directors and executive officers have indicated an interest in participating in the offering.
Has the board of directors made a recommendation to stockholders regarding the Rights Offering?
No. Our board of directors is making no recommendation regarding your exercise of the Subscription Rights. Rights holders who exercise Subscription Rights will incur investment risk on new money invested. There is currently no market for our shares of Series B Preferred Stock and, unless we or you choose to convert your shares of Series B Preferred Stock, or they automatically convert upon receipt of Stockholder Approval, into shares of common stock, you will not be able to re-sell such shares. We cannot predict the price at which our shares of common stock and, if listed, the Warrants will trade after the Rights Offering. On April 5, 2016,September 29, 2017, the closinglast reported sale price of our common stock on NASDAQ was $0.23$0.37 per share. The market price for our common stock may be above the Subscription Price or may be below the Subscription Price. If you exercise your Subscription Rights, you may not be able to sell the underlying shares of our common stock (or Warrants) in the future at the same price or a higher price. You should make your decision based on your assessment of our business and financial condition, our prospects for the future, the terms of the Rights Offering, the information contained in this prospectus and other considerations relevant to your circumstances. See "Risk Factors"“Risk Factors” for discussion of some of the risks involved in investing in our securities.
How do I exercise my Subscription Rights?
If you are a stockholder of record (meaning you hold your shares of our common stock in your name and not through a broker, dealer, bank or other nominee) and you wish to participate in the Rights Offering, you must deliver a properly completed and signed Rights Certificate, together with payment of the Subscription Price for both your Basic Subscription Rights and any Over-Subscription Privilege you elect to exercise, to the Subscription Agent before 5:00 p.m., Eastern Time, on , 2016.November 21, 2017. If you are exercising your Subscription Rights through your broker, dealer, bank or other nominee, you should promptly contact your broker, dealer, bank or other nominee and submit your subscription documents and payment for the Units subscribed for in accordance with the instructions and within the time period provided by your broker, dealer, bank or other nominee.
What if my shares or warrants are held in "street name"“street name”?
If you hold your shares of our common stock in the name of a broker, dealer, bank or other nominee, then your broker, dealer, bank or other nominee is the record holder of the shares you beneficially own. The record holder must exercise the Subscription Rights on your behalf. Therefore, you will need to have your record holder act for you.
If you wish to participate in this Rights Offering and purchase Units, please promptly contact the record holder of your shares. We will ask the record holder of your shares, who may be your broker, dealer, bank or other nominee, to notify you of this Rights Offering.
What form of payment is required?
You must timely pay the full Subscription Price for the full number of Units you wish to acquired pursuant to the exercise of Subscription Rights by delivering to the Subscription Agent a:
personal check drawn on a U.S. bank;
certified check drawn on a U.S. bank;
U.S. Postal money order; or
wire transfer.
If you send payment by personal uncertified check, payment will not be deemed to have been delivered to the Subscription Agent until the check has cleared.
If you send a payment that is insufficient to purchase the number of Units you requested, or if the number of Units you requested is not specified in the forms, the payment received will be applied to exercise your Subscription Rights to the fullest extent possible based on the amount of the payment received.
When will I receive my new shares of common stockSeries B Preferred Stock and Warrants?
As soon as practicable after the expiration of the Rights Offering, paymentand within five business days thereof, we expect to close on subscriptions and for the Units subscribedSubscription Agent to arrange for has cleared,the issuance of the shares of Series B Preferred Stock and Warrants purchased in the Rights Offering. At closing, all prorating calculations and reductions contemplated by the terms of the Rights Offering will have been effected.effected and payment to us for the subscribed-for
Units will have cleared. All shares and Warrants that you purchase in the Rights Offering will be issued in book-entry, or uncertificated, form meaning that you will receive a direct registration, (DRS)or DRS, account statement from our transfer agent reflecting ownership of these securities if you are a holder of record of shares or warrants. If you hold your shares in the name of a broker, dealer, bank or other nominee, DTC will credit your account with your nominee with the securities you purchase in the Rights Offering. Broadridge Corporate Issuer Solutions, Inc. is acting as the warrant agent in this offering.
After I send in my payment and Rights Certificate to the Subscription Agent, may I cancel my exercise of Subscription Rights?
No. Exercises of Subscription Rights are irrevocable, even if you later learn information that you consider to be unfavorable to the exercise of your Subscription Rights. You should not exercise your Subscription Rights unless you are certain that you wish to purchase Units at the Subscription Price.
How much will our company receive from the Rights Offering?
Assuming that all 10,000 Units are sold in the Rights Offering, we estimate that the net proceeds from the Rights Offering will be approximately $$8.9 million, based on the Subscription Price of $$1,000 per Unit, after deducting fees and expenses payable to the dealer-manager, and after deducting other estimated expenses payable by us and excluding any proceeds received upon exercise of any Warrants. If all Warrants included in the Units are exercised for cash at the exercise price of $$0.48 per share, we will receive an addition $additional $6.0 million. We intend to use up to approximately halfthe first $8 million of the net proceeds from the exercise of Subscription Rights for research and development, including the development of our clinical trials,current pipeline and, if funds remain, for further development of our Celution System products and other related research and development. In addition, we intend to use approximately half of theany remaining net proceeds for general corporate purposes, including ourprimarily sales and marketing initiatives including those relating to our potential commercialization of ECCS-50our Habeo scleroderma therapy and our ATI-0918 in Europe, and any other remaining net proceeds for general administrative expenses, working capital and capital expenditures. See "Use“Use of Proceeds."”
Are there risks in exercising my Subscription Rights?
Yes. The exercise of your Subscription Rights involves risks. Exercising your Subscription Rights involves the purchase of additional shares of our common stockSeries B Preferred Stock and Warrants to purchase common stock and you should consider this investment as carefully as you would consider any other investment. TheThere is currently no market pricefor our shares of ourSeries B Preferred Stock and, unless we or you choose to convert your shares of Series B Preferred Stock, or they automatically convert upon receipt of Stockholder Approval, into shares of common stock, mayyou will not exceedbe able to re-sell such shares. In addition, until we obtain Stockholder Approval of an amendment to our certificate of incorporation to increase our authorized shares of common stock, you will not be able to exercise your Warrants and, if the Subscription Price, and the market pricenumber of ourshares of common stock may decline during orissuable upon the conversion of the total number of shares of Series B Preferred Stock issued in this offering is greater than 30,000,000, you will only be able to convert that number of shares of Series B Preferred Stock obtained by multiplying the shares of Series B Preferred Stock issued to you in this offering by (i) 30,000,000 divided by (ii) the number of shares of common stock issuable upon the conversion of the total number of shares of Series B Preferred Stock issued in this offering, which we refer to as the Pro Rata Conversion Percentage (rounded down to the nearest whole share). All shares of Series B Preferred Stock will automatically convert into common stock after Stockholder Approval is obtained. We intend to seek Stockholder Approval at each annual stockholder meeting until the Rights Offering. Our warrantsStockholder Approval is obtained, but we cannot guarantee that we will obtain the Stockholder Approval. In addition, our Warrants may not be listed on the Nasdaq Capital MarketNASDAQ and, even if listed, a market for the Warrants may not develop. You may not be able to sell shares of our common stock or Warrants purchased in the Rights Offering at a price equal to or greater than the Subscription Price. In addition, you should carefully consider the risks described under the heading "Risk Factors"See “Risk Factors” for discussion of some of theadditional risks involved in investing in our securities.
Can the board of directors terminate or extend the Rights Offering?
Yes. Our board of directors may decide to terminate the Rights Offering at any time and for any reason before the expiration of the Rights Offering. We also have the right to extend the Rights Offering for additional periods in our sole discretion. We do not presently intend to extend the Rights Offering. We will notify stockholders and the public if the Rights Offering is terminated or extended by issuing a press release announcing the extension no later than 9:00 a.m., Eastern Time, on the next business day after the most recently announced expiration date of the Rights Offering.
If the Rights Offering is not completed or is terminated, will my subscription payment be refunded to me?
Yes. The Subscription Agent will hold all funds it receives in a segregated bank account until completion of the Rights Offering. If we do not complete the Rights Offering, all subscription payments received by the Subscription Agent will be returned within 10 business days after the termination or expiration of the Rights Offering, without interest or deduction. If you own shares in "street“street name,"” it may take longer for you to receive your subscription payment because the Subscription Agent will return payments through the record holder of your shares.
How do I exercise my Rights if I live outside the United States?
The Subscription Agent will hold Rights Certificates for stockholders having addresses outside the United States. To exercise Subscription Rights, foreign stockholders must notify the Subscription Agent and timely follow other procedures described in the section entitled "The“The Rights Offering – Foreign Shareholders."
What fees or charges apply if I purchase shares in the Rights Offering?
We are not charging any fee or sales commission to issue Subscription Rights to you or to issue shares of common stock or Warrants to you if you exercise your Subscription Rights. If you exercise your Subscription Rights through a broker, dealer, bank or other nominee, you are responsible for paying any fees your broker, dealer, bank or other nominee may charge you.
What are the U.S. federal income tax consequences of receiving and/or exercising my Subscription Rights?
For U.S. federal income tax purposes, we do not believe you should recognize income or loss in connection with the receipt or exercise of Subscription Rights in the Rights Offering. You should consult your tax advisor as to the tax consequences of the Rights Offering in light of your particular circumstances. For a detailed discussion, see "Material“Material U.S. Federal Income Tax Consequences."
To whom should I send my forms and payment?
If your shares are held in the name of a broker, dealer, bank or other nominee, then you should send your subscription documents and subscription payment to that broker, dealer, bank or other nominee. If you are the record holder, then you should send your subscription documents, Rights Certificate, and subscription payment to the Subscription Agent by hand delivery, first class mail or courier service to:
By mail: | By hand or overnight courier: | |
Broadridge Corporate Issuer Solutions, Inc. Attn: BCIS Re-Organization Dept. |
You or, if applicable, your nominee are solely responsible for completing delivery to the Subscription Agent of your subscription documents, Rights Certificate and payment. You should allow sufficient time for delivery of your subscription materials to the Subscription Agent and clearance of payment before the expiration of the Rights Offering at 5:00 p.m. Eastern Time on , 2016.November 21, 2017.
Whom should I contact if I have other questions?
If you have other questions or need assistance, please contact the Information Agent:
Broadridge Corporate Issuer Solutions, Inc.
(855) 793-5068 (toll free)
Who is the dealer-manager?
Maxim Group LLC will act as dealer-manager for the Rights Offering. Under the terms and subject to the conditions contained in the dealer-manager agreement, the dealer-manager will use its best efforts to solicit the exercise of Subscription Rights. We have agreed to pay the dealer-manager certain fees for acting as dealer-manager and to reimburse the dealer-manager for certain out-of-pocket expenses incurred in connection with this offering. The dealer-manager is not underwriting or placing any of the Subscription Rights or the shares of our common stock or Warrants being issued in the Rights Offering and is not making any recommendation with respect to such Subscription Rights (including with respect to the exercise or expiration of such Subscription Rights), shares of common stockSeries B Preferred Stock or Warrants.
This summary contains basic information about us and this offering. Because it is a summary, it does not contain all of the information that you should consider before investing. Before you decide to invest in our Units, you should read this entire prospectus carefully, including the section entitled "Risk Factors"“Risk Factors” and any information incorporated by reference herein.
Our Business
Our strategy is to build a profitable and growing specialty therapeutics uniquely formulatedcompany focused on rare and optimizedniche opportunities frequently overlooked by larger companies but requiring breadth of scope, expertise and focus often not possessed by or available to smaller companies. To meet this objective, we have, thus far, identified two therapeutic development platforms, discussed below, and candidate therapeutics in our pipeline that hold promise for specificmany patients and significant market potential. Our current corporate activities fall substantially into one of two key areas related to our two therapeutic development platforms: Cytori Cell Therapy and Cytori Nanomedicine.
Cytori Cell Therapy, or CCT, is based on the scientific discovery that the human adipose or fat tissue compartment is a source of a unique mixed population of stem, progenitor and regenerative cells that may hold substantial promise in the treatment of numerous diseases and medical conditionsconditions. To bring this promise to health providers, we are developing novel therapies prepared and related products. administered at the patient’s bedside with proprietary technologies that include therapy-specific reusable, automated Celution devices and single-use procedure sets consisting of Celution consumables, Celase reagent, and Intravase reagent. Our lead therapeutics are currently targetedproduct candidate, Habeo™ Cell Therapy™, is being evaluated in a U.S. pivotal clinical trial for the treatment of impaired hand function in scleroderma. On July 24, 2017, we announced top-line, preliminary data from our Phase III pivotal STAR trial of Habeo in patients with scleroderma. The U.S. multi-center STAR trial enrolled and evaluated 88 patients with scleroderma, osteoarthritisincluding 51 patients within the diffuse cutaneous subset and 37 with limited cutaneous scleroderma. While the primary and secondary endpoints did not reach statistical significance at 24 or 48 weeks, the trial data reported clinically meaningful improvement in the primary and secondary endpoints of both hand function and scleroderma-associated functional disability, for Habeo treated patients compared to placebo, in the pre-specified subgroup of patients with diffuse cutaneous scleroderma. Additional CCT treatments are in various stages of development in the areas of immunology, urology, wounds, and orthopedics. Further, our CCT platform is the subject of investigator-initiated trials conducted by our partners, licensees and other third parties, some of which are supported by us and/or funded by government agencies and other funding sources. Currently, we internally manufacture the CCT capital equipment and procedure sets in the United States and the United Kingdom and source our Celase and Intravase reagents from a third-party supplier. We also have obtained regulatory approval to sell some of our CCT products, including our Celution devices and disposable components, in certain markets outside the United States. In those markets, we have been able to further develop and improve our core technologies, gain expanded clinical and product experience and data, and generate sales.
The Cytori Nanomedicine platform features a versatile protein-stabilized liposomal nanoparticle technology for drug encapsulation that has thus far provided the foundation to bring two promising drugs into early/late stage clinical trials. Nanoparticle encapsulation is promising because it can help improve the trafficking and metabolism of many drugs, thus potentially enhancing the therapeutic profile and patient benefits. Our lead drug candidate, ATI-0918 is a generic version of pegylated liposomal encapsulated doxorubicin. Pegylated liposomal encapsulated doxorubicin is a heavily relied upon chemotherapeutic used in many cancer types on a global basis. We believe that data from a 60-patient European study of ATI-0918 has met the statistical criteria for bioequivalence to CAELYX®, the current reference listed drug in Europe. We intend that these bioequivalence data will serve as a basis for our planned regulatory submission to the European Medicines Agency, or EMA, for ATI-0918. We are currently evaluating our options to ATI-0918 in the U.S. market. Our second nanomedicine drug candidate is ATI-1123, a novel and new chemical entity which is a nanoparticle-encapsulated form of docetaxel, also a standard chemotherapeutic drug used for many cancers. A Phase I clinical trial of ATI-1123 has been completed, and we are investigating possible expansion of this trial to Phase II, most likely in conjunction with a development partner. In addition, we are early in the long-term research and development of encapsulated regenerative medicine drugs, focused first on the treatment of scleroderma and related connective disorders. Finally, in connection with our acquisition of the knee, stress urinary incontinence,ATI-0918 and deep thermal burns including those complicated by radiation exposure.ATI-1123 drug candidates, we have acquired know-how (including proprietary processes and techniques) and a scalable nanoparticle manufacturing plant in San Antonio, Texas from which we intend to test, validate and eventually manufacture commercial quantities of our nanoparticle drugs.
Cytori Cell Therapy and consist of a mixed population of specialized cells including stem cells that are involved in response to injury, repair and healing. These cellular therapeutics are extracted from an adult patient's own adipose (fat) tissue using our fully automated Celution System, proprietary enzymes, and sterile consumable sets at the place where the patient is receiving their care or potentially at an off-site processing center. Cytori Cell Therapy can either be administered to the patient the same day or cryopreserved for future use. An independent published study has reported that our proprietary technology process resulted in higher nucleated cell viability, less residual enzyme activity, less processing time, and improved economics in terms of cell progenitor output compared to the three other semi-automated and automated processes that were reviewed.
The primary near-term goal is for Cytori Cell Therapy to be the first cell therapy to market for the treatment of impaired hand function in scleroderma, through Cytori-sponsored and supported clinical development efforts. The Cytori-sponsored Scleroderma Treatment with Celution Processed Adipose Derived Regenerative Cells, or STAR clinical trial, is a 48-week, randomized, double blind,double-blind, placebo-controlled, phasePhase III pivotal clinical trial of 80 patients in the U.S. The purpose of the STAR trial evaluatesis to evaluate the safety and efficacy of a single administration of CytoriHabeo™ Cell Therapy or ECCS-50,(formerly named ECCS-50) in patients with scleroderma patients affecting the hands and fingers.hands. The first sites for the scleroderma studyour STAR trial were initiated in July 2015. Approximately 402015 and final enrollment of 88 patients had enrolledwas completed in June 2016. As noted above, preliminary assessment of unblinded topline data show that while the primary and secondary endpoints did not reach statistical significance at 24 or 48 weeks, the trial data reported clinically meaningful improvement in the STAR trial byprimary and secondary endpoints of both hand function and scleroderma-associated functional disability, for Habeo treated patients compared to placebo, in the endsubgroup of the first quarter of 2016.
With respect to the remainder of our current cellular therapeutics clinical pipeline, we received Investigational Device Exemption,pipeline:
We completed our Phase II Celution Prepared Adipose Derived Regenerative Cells in the Treatment of OsteoArthritis of the Knee, or IDE, approval from the U.S. Food and Drug Administration, or FDA, in late 2014 for our phase II ACT-OA osteoarthritis study and in early 2015 we initiated this study, and enrollment was completedclinical trial, in June 2015. The 48-week analysis of the ECCO-50 therapeutic was performed as planned and the top-line data are described in the “Osteoarthritis” section below.
In addition, in July 2015, a Company-supported maleJapanese investigator-initiated study of the ECCI-50 therapeutic in men with stress urinary incontinence, or SUI, trial in Japanfollowing prostatic surgery for male prostatectomy patients (after prostate surgery)cancer or benign prostatic hypertrophy, called ADRESU, received approval to begin enrollment from the Japanese Ministry of Health, Labor and Welfare, or MHLW. In June 2017, the ADRESU trial had over 66% enrolled. The goal of this investigator-initiated trial is to gain regulatory approval in Japan of Cytori Cell TherapyAgency for this indication. In addition, weMedical Research and Development, or AMED, has provided partial funding for the ADRESU trial.
We are developing a treatmentthe DCCT-10 therapeutic for thermal burns combined with radiation injury under a contract from the Biomedical Advanced Research Development Authority, or BARDA, a division of the U.S. Department of Health and Human Services. In April 2017, we received approval of an Investigational Device Exemption, or IDE, from the U.S. Food and Drug Administration, or FDA, to conduct a pilot clinical trial of CCT in patients with thermal burn injuries. This trial is referred to as the RELIEF clinical trial. In May 2017, we announced BARDA’s exercise of Option 2 of up to approximately $13.4 million to fund RELIEF. We are also exploring other development opportunitiesanticipate initiation of RELIEF in a variety of other conditions.2017.
In addition to our targeted therapeutic development, we have continued to commercialize the Celution Systemour Cytori Cell Therapy technology under select medical device approvals, clearances and registrations to research and commercial customers in Europe, Japan and other regions. Many of theseThese customers are a mix of research customers evaluating new therapeutic applications of Cytori Cell Therapy.Therapy and commercial customers, including our licensing partners, distributors, and end user hospitals, clinics and physicians, that use our Celution cell processing system mostly for treatment of patients in private pay procedures. In Japan, our largest commercial market, we gained increased utilization of our products in the private pay marketplace in 2016 due to several factors, including increased clarity around the November 2014 Regenerative Medicine Law (implemented in November 2015 as it relates to regenerative medicine products like Cytori Cell Therapy) and we project that our sales of consumable sets and market presence in Japan will continue to grow in 2017. The sale of systems, consumablesCelution devices, procedure sets, and ancillary products contributescontribute a margin that partially offsets our operating expenses and will continue to play a role in fostering familiarity within the medical community with our technology. These sales haveIt also facilitated the discovery of new applications for Cytoriprovides us with product and customer feedback.
Habeo Cell Therapy by customers conducting investigator-initiatedfor Impaired Hand Function in Scleroderma and funded research.
Scleroderma is a rare and chronic connective tissue disease generally classified as an autoimmune disorder associated with fibrosisrheumatic disorder. An estimated 300,000 Americans have scleroderma, about one-third of whom have the systemic form of the skin,disease, known as systemic sclerosis, or SSc. SSc is further sub-classified as diffuse cutaneous and destructive changes in blood vesselslimited cutaneous SSc. Diffuse subset has more severe disease with significant hand dysfunction and multipleinternal organ systems as the resultinvolvement. Diffuse scleroderma accounts for between one third and one half of a generalized overproductionall cases of collagen. Scleroderma affects approximately 50,000 patients in the U.S. (womensystemic sclerosis. Women are affected four times more frequently than men)men and the condition is typically detected between the ages of 30 and 50. More than 90 percent90% of scleroderma patients haveare afflicted with hand involvement that is typically progressive and can result in chronic pain, blood flow changes and severe dysfunction. The limited availableA small number of treatments are occasionally used off-label for hand scleroderma, may provide some benefit but they do little to modify disease progression or substantially improve symptoms. TreatmentCurrent treatment options are directed at protecting the hands from injury and detrimental environmental conditions as well as the use of vasodilators. When the disease is advanced, immunosuppressiveprostanoids, Endothelin-1 receptor antagonists, and other medicationsimmunosuppressants may be used but are often accompanied by significant side effects.
SCLERADEC-I is a completed, investigator-initiated, 12-patient, open-label, Phase I pilot trial sponsored by Assistance Publique-Hôpitaux de Marseille, or AP-HM, in Marseille, France. The SCLERADEC I trial received partial support from Cytori. The six-month results were published in the Annals of the Rheumatic Diseases in May 2014 and demonstrated approximately a 50 percent improvement at six months across four important and validated endpoints used to assess the clinical status in patients with scleroderma with impaired hand function. Two-year follow up data in the SCLERADEC I trial was presented at the Systemic Sclerosis World Congress in February 2016 and published in the journal Current Research in Translational Medicine in November 2016 and demonstrated sustained improvement in the following four key endpoints: CHFS, SHAQ, RCS, and hand pain, as assessed by a standard visual analogue scale.
Further, on December 5, 2016, we released topline results for three-year follow-up data showing sustained benefits materially consistent with those shown in two-year data.
In January 2015,2014, Drs. Guy Magalon and Brigitte Granel, under the FDA granted unrestricted IDE approvalsponsorship of AP-HM, submitted a study for review for a pivotal clinicalfollow-up randomized, double-blind, placebo-controlled trial named the "STAR" trial, to evaluatein France using Cytori Cell Therapy, as a potential treatmentto be supported by us. The trial, named SCLERADEC II, received approval from the French government in April 2015. Enrollment of this trial commenced in October 2015 and is ongoing. The trial is currently approaching 75% enrollment and we expect enrollment to be completed in 2017, approximately one year later than originally projected, due to delays in French regulatory approvals of participating sites. Patients will be followed at six-month post-treatment and compared with placebo treated patients. Pending the six-month results patients in the placebo group will be eligible for impaired hand function in scleroderma.crossover using Habeo cells stored at the time of the initial procedure. This crossover arm will open after all patients have completed six-month follow up.
Based on the results of the SCLERADEC-I trial, we initiated the US-based STAR trial. The STAR trial is a 48-week, 19 site, randomized, double blind, placebo-controlled pivotal clinical trial of 8088 patients in the U.S. for the treatment of impaired hand function in scleroderma. The trial evaluates the safety and efficacy of a single administration of ECCS-50Habeo Cell Therapy in patients with scleroderma affecting the hands and fingers. The STAR trial uses the Cochin Hand Function Scale, or CHFS, a validated measure of hand function, as the primary endpoint measured at six months24 weeks and 48 weeks (approximately 6 and 12 months) after a single administration of ECCS-50Habeo Cell Therapy or placebo. PatientsOf the 88 patients enrolled in STAR, 51 had diffuse cutaneous scleroderma while 37 had the placebo group will be eligible for crossover to the active armlimited form of the trial after all patients have completeddisease.
On July 24, 2017, we announced top-line, preliminary data from the STAR trial. While the primary and secondary endpoints did not reach statistical significance at 24 or 48 weeks, of follow up. In February 2015, the FDA approved our request to increase the number of investigational sites from 12 to up to 20. The increased number of sites is anticipated to broaden the geographic coverage of the trial and facilitate trial enrollment. The enrollment of this trial began in August 2015 and we recentlydata reported that we enrolled 40 patients and expect to complete enrollment of this trial in mid-2016.
In November 2016, the US FDA Office of obtaining regulatory clearance. We believe this MAP program is justified and needed based on a number of factors, including scleroderma's status as a rare disease, the favorable risk-benefit profile reported by the 12-patient, open-label SCLERADEC I clinical study results, our two scleroderma phase III trials currently enrolling, and clear unmet scleroderma patient needs. We hope to offer our ECCS-50 therapy to patients who are unable to participate in our scleroderma clinical trials, generally due to a lack of geographic proximity to a site. Beyond the benefit of helping patients in need of new therapies for scleroderma, the MAP will increase awareness of and facilitate a positive experience withOrphan Products Development granted Cytori Cell Therapy among healthcare providers in advance of commercialization, and will also allow for tracking and collection of key program data and documentation which will provide valuable insight regarding the demand for and use of Cytori Cell Therapy.
Osteoarthritis
Osteoarthritis is a disease of the entire joint involving the cartilage, joint lining, ligaments and underlying bone. The breakdown of tissue leads to pain, joint stiffness and reduced function. It is the most common form of arthritis and affects an estimated 13.9% of US adults over the age of 25, and 33.6% of U.S. adults over the age of 65. Current treatments include physical therapy, non-steroidal anti-inflammatory medications, viscosupplement injections, and total knee replacement. A substantial medical need exists as present medications have limited efficacy and joint replacement is a relatively definitive treatment for those with the most advanced disease.
ACT-OA, iswas a 94-patient, randomized, double-blind, placebo-controlledplacebo controlled study involving two doses of Cytori Cell Therapy, a low dose and a high dose, and is beingwas conducted over 48 weeks. The randomization iswas 1:1:1 between the control, low and high dose groups. Enrollment on thisThe trial began in February 2015 and was completed in June 2015. The goal of this proof-of-concept trial iswas to help determine: (1) safety and feasibility of the ECCO-50 therapeutic for osteoarthritis, (2) provide dosing guidance and (3) explore key trial endpoints useful for a phasePhase III trial.
We completed top-line analysis of 24-weekthe final 48-week data in July 2016. A total of 94 patients were randomized (33 placebo, 30 low dose ECCO-50, 31 high dose ECCO-50). In general, a clear difference between low and high dose ECCO-50 was recently completed. The objectivenot observed and therefore the data for both groups have been combined. We evaluated numerous endpoints that can be summarized as follows:
Intraarticular application of a single dose of ECCO-50 is feasible in an outpatient day-surgery setting; no serious adverse events were reported related to the fat harvest, cell injection or to the cell therapy.
Consistent trends were observed in most secondary endpoints at 12, 24 and 48 weeks in the target knee of the analysis wastreated group relative to provide early dataplacebo control group; 12-week primary endpoint of single pain on walking question did not achieve statistical significance.
Consistent trends were observed in all six pre-specified MRI Osteoarthritis Knee Score (MOAKS) classification scores suggesting a lower degree of target knee joint pathological worsening at 48 weeks for the treated group relative to facilitate key regulatory and business development discussions and provide better understandingplacebo control group. The differences against placebo favored ADRCs, some parameters achieving statistical significance, specifically in the number of bone marrow lesions, the percentage of the therapeutic mechanism of actionbone marrow lesion that may impact other clinical programs. The interim top-line data showsis not a cyst, the following:
In summary, the ACT-OA Phase II trial demonstrated feasibility of same day fat harvesting, cell processing and intraarticular administration of autologous ADRCs (ECCO-50) with a potential for a beneficial effect onof ECCO-50. The accumulated data and experienced gained will be critical in considering designs of further clinical trials in osteoarthritis and other potential indications. In addition, we are actively pursuing partnering and commercialization opportunities for ECCO-50 to further develop our knee cartilage as measured by magnetic resonance imaging results changes between baselineosteoarthritis program and 48 weeks.also to support our growing commercial sales into the knee osteoarthritis market in Japan.
Another therapeutic target under evaluation by Cytori in combination withled by the University of Nagoya and three other sites and partially supported by the Japanese MHLW, is stress urinary incontinence in men following surgical removal of the prostate gland, which is based on positive data reported in a peer reviewed journal resulting from the use of adipose-derived regenerative cells processedADRCs prepared by our Celution System. The ADRESU trial is a 45 patient, investigator-initiated, open-label, multi-center, and single arm trial that was approved by Japan'sthe Japanese MHLW in July 2015 and is being led by both Momokazu Gotoh, MD, Ph.D., Professor and Chairman of the Department of Urology and Tokunori Yamamoto, MD, Ph.D., Associate Professor Department of Urology at University of Nagoya Graduate School of Medicine. The goal of this investigator-initiatedTrial enrollment began in September 2015, and in June 2017, the trial will be to apply for product approval for Cytori Cell Therapy technology for this indication.is over 66% enrolled. This clinical trial is primarily sponsored and funded by the Japanese government. Enrollment of this trial began in September 2015.
Cutaneous and Soft Tissue Thermal and Radiation Injuries
We are also developing Cytori Cell Therapy, is also being developedor DCCT-10, for the treatment of thermal burns combined with radiation injury.burns. In the third quarter of 2012, we were awarded a contract by BARDA valued at up to $106 million with BARDA to develop a medical countermeasure for thermal burns. The initial base period included $4.7 million over two years and covered preclinical research and continued development of Cytori's Celution System to improve cell processing.
Pursuant to this contract, BARDA initially awarded us approximately $4.7 million over the initial two-year base period to fund preclinical research and continued development of our Celution System to improve cell processing. In August 2014, BARDA determined that Cytori had completed the objectives of the initial phase of the contract, and exercised its first contract option in the amount of approximately $12 million. In December 2014 and September 2016, BARDA exercised additional contract options pursuant to which it provided us with $2.0 million and $2.5 million in supplemental funds, respectively. These additional funds supported continuation of our research, regulatory, clinical and other activities required for submission of an IDE request to the FDA for RELIEF, a pilot clinical trial using DCCT-10 for the treatment of thermal burns. In April 2017, we received approval of an IDE from the FDA to conduct a pilot clinical trial of CCT in patients with thermal burn injuries. This trial is referred to as the RELIEF clinical trial. In May 2017, we announced BARDA’s exercise of Option 2 of up to approximately $13.4 million to fund RELIEF.
In accordance with the terms of the Amendments, BARDA will provide us with reimbursement of costs incurred, plus payment of a fixed fee, in the aggregate amount of up to approximately $13.4 million, or the Funding Amount. We are responsible for further costs in excess of the Funding Amount, if any, to meet the objectives of the Pilot Trial. The Amendments also extend the term of the BARDA Agreement and the period of performance of Option 2 of the BARDA Agreement to November 30, 2020.
Other Clinical Indications
In April 2016, the European Commission, acting on the positive recommendation from the European Medicines Agency Committee for Orphan Medicinal Products, issued orphan drug designation to ischemic heart disease does not represent a current clinical target and we have minimized expenses related to its initiatives in this area. The ATHENA and ATHENA II trials, which sought to evaluate the safety and feasibilitybroad range of Cytori Cell Therapy formulations when used for the treatment of systemic sclerosis under Community Register of Orphan Medicinal Products number EU/3/16/1643.
In February 2017, the U.S. FDA Division of Industry and Consumer Education, or DICE, granted us Small Business status for fiscal year 2017, thus entitling us to receive significant financial incentives, fee reductions, and fee waivers for selective FDA medical device regulatory filings. We anticipate that this grant of small business status will substantially reduce filing fees in patients with heart failure due2017 for our planned PMA application for Habeo Cell Therapy, should the STAR Phase III data support filing of this application.
In February 2017, we completed our acquisition of the assets of Azaya Therapeutics, Inc., or Azaya, pursuant to ischemic heart disease, were truncatedthe terms of an Asset Purchase Agreement, dated January 26, 2017. Pursuant to the terms of the agreement, we acquired equipment, certain intellectual property including, a portfolio of investigational therapies and related assets, and assumed certain liabilities, from Azaya in exchange for the issuance of 1,173,241 of shares of our common stock in the amount of $2.3 million, assumption of approximately $1.8 million in Azaya’s payables, and the obligation to pay Azaya future milestones, earn-outs and licensing fees. The acquisition of Azaya brought two additional product candidates, ATI-0918 and ATI-1123, into the Cytori pipeline and we intend to use the data from these trial programs for regulatory support for our other indicationsdevelop and also for publication in peer reviewed forums. An abstract of the 12 month results of the ATHENA Trials has been selected by the Society of Cardiac Angiography and Interventions, or SCAI, to be presented at the SCAI 2016 Scientific Sessions.
ATI-0918 is a complex generic formulation of the accompanying notesmarket leading DOXIL®/CAELYX®, which is a pegylated liposomal encapsulation of doxorubicin and "Management's Discussion and Analysis of Financial Condition and Results of Operations"approved in the documents incorporated by reference into this prospectus. Our consolidated financial statements are prepared and presented in accordance with United States generally accepted accounting principles,for use in ovarian cancer, multiple myeloma, and Kaposi’s Sarcoma; and in the European Union for breast cancer, ovarian cancer, multiple myeloma, and Kaposi’s Sarcoma. The current approval pathway for ATI-0918 is to leverage existing bioequivalence data to CAELYX® for approval in the EU and to demonstrate bioequivalence to Lipodox® in the U.S. A study to demonstrate ATI-0918’s bioequivalence to CAELYX®, for purposes of EMA approval, has been completed and we intend for these data to serve as the basis for our submission of a marketing authorization application for ATI-0918 to the EMA. We are also making plans to perform a bioequivalence study of ATI-0918 to the U.S. Reference Standard, or RS, to serve as the basis for submission of an ANDA for U.S. GAAP.
ATI-1123 is a novel liposomal formulation of docetaxel. Docetaxel is currently approved for non-small cell lung cancer, breast cancer, squamous cell carcinoma of the head and neck cancer, gastric adenocarcinoma, and hormone refractory prostate cancer. Its side effects include hair loss, bone marrow suppression, and allergic reactions. It is currently available as a generic drug and there is no form of docetaxel as a liposomal formulation. There is a protein (albumin) bound form of a similar chemotherapeutic drug, paclitaxel known as Abraxane®, which demonstrated some clinical advantages to paclitaxel. CYTORI THERAPEUTICS, INC.ATI-1123 has shown promising results in preclinical animal models that suggest it may have superior qualities to doxetaxel, including actions against some tumor types that are not amenable to treatment by doxetaxel.
As of December 31, | ||||||||
2015 | 2014 | |||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 14,338,000 | $ | 14,622,000 | ||||
Accounts receivable, net of reserves of $797,000 and of $1,523,000 in 2015 and 2014, respectively | 1,052,000 | 1,243,000 | ||||||
Inventories, net | 4,298,000 | 4,829,000 | ||||||
Other current assets | 1,555,000 | 992,000 | ||||||
Total current assets | 21,243,000 | 21,686,000 | ||||||
Property and equipment, net | 1,631,000 | 1,583,000 | ||||||
Restricted cash and cash equivalents | 350,000 | 350,000 | ||||||
Other assets | 1,521,000 | 1,763,000 | ||||||
Intangibles, net | 9,031,000 | 9,415,000 | ||||||
Goodwill | 3,922,000 | 3,922,000 | ||||||
Total assets | $ | 37,698,000 | $ | 38,719,000 | ||||
Liabilities and Stockholders' Equity (Deficit) | ||||||||
Current liabilities: | ||||||||
Accounts payable and accrued expenses | $ | 6,687,000 | $ | 5,546,000 | ||||
Current portion of long-term obligations, net of discount | — | 7,363,000 | ||||||
Joint Venture purchase obligation | 1,750,000 | 3,008,000 | ||||||
Total current liabilities | 8,437,000 | 15,917,000 | ||||||
Warrant liability | — | 9,793,000 | ||||||
Deferred revenues | 105,000 | 112,000 | ||||||
Long-term deferred rent | 269,000 | 558,000 | ||||||
Long-term obligations, net of discount, less current portion | 16,681,000 | 18,041,000 | ||||||
Total liabilities | 25,492,000 | 44,421,000 | ||||||
Commitments and contingencies | ||||||||
Stockholders' equity: | ||||||||
Series A 3.6% convertible preferred stock, $0.001 par value; 5,000,000 shares authorized; 13,500 shares issued and no shares outstanding in 2015; 13,500 shares issued and 5,311 outstanding in 2014 | — | — | ||||||
Common stock, $0.001 par value; 290,000,000 shares authorized; 195,058,395 and 99,348,377 shares issued and outstanding in 2015 and 2014, respectively | 195,000 | 99,000 | ||||||
Additional paid-in capital | 368,032,000 | 331,772,000 | ||||||
Accumulated other comprehensive income | 996,000 | 700,000 | ||||||
Accumulated deficit | (357,017,000 | ) | (338,273,000 | ) | ||||
Total stockholders' equity (deficit) | 12,206,000 | (5,702,000 | ) | |||||
Total liabilities and stockholders' equity (deficit) | $ | 37,698,000 | $ | 38,719,000 |
For the Years Ended December 31, | ||||||||||||
2015 | 2014 | 2013 | ||||||||||
Product revenues: | ||||||||||||
Related party | $ | — | $ | — | $ | 1,845,000 | ||||||
Third party | 4,838,000 | 4,953,000 | 5,277,000 | |||||||||
4,838,000 | 4,953,000 | 7,122,000 | ||||||||||
Cost of product revenues | 3,186,000 | 2,940,000 | 3,421,000 | |||||||||
Gross profit | 1,652,000 | 2,013,000 | 3,701,000 | |||||||||
Development revenues: | ||||||||||||
Development, related party | — | — | 638,000 | |||||||||
Development | — | — | 1,179,000 | |||||||||
Government contracts and other | 6,821,000 | 2,645,000 | 3,257,000 | |||||||||
6,821,000 | 2,645,000 | 5,074,000 | ||||||||||
Operating expenses: | ||||||||||||
Research and development | 19,000,000 | 15,105,000 | 17,065,000 | |||||||||
Sales and marketing | 2,662,000 | 6,406,000 | 9,026,000 | |||||||||
General and administrative | 9,765,000 | 15,953,000 | 16,031,000 | |||||||||
Change in fair value of warrants | (7,668,000 | ) | (369,000 | ) | (418,000 | ) | ||||||
Change in fair value of option liability | — | — | (2,250,000 | ) | ||||||||
Total operating expenses | 23,759,000 | 37,095,000 | 39,454,000 | |||||||||
Operating loss | (15,286,000 | ) | (32,437,000 | ) | (30,679,000 | ) | ||||||
Other income (expense): | ||||||||||||
Gain (loss) on asset disposal | 3,000 | 42,000 | (257,000 | ) | ||||||||
Loss on debt extinguishment | (260,000 | ) | — | (708,000 | ) | |||||||
Interest income | 9,000 | 6,000 | 4,000 | |||||||||
Interest expense | (3,379,000 | ) | (4,371,000 | ) | (3,396,000 | ) | ||||||
Other income (expense), net | 169,000 | (608,000 | ) | (438,000 | ) | |||||||
Gain on Puregraft divestiture | — | — | 4,453,000 | |||||||||
Gain on previously held equity interest in joint venture | — | — | 4,892,000 | |||||||||
Equity loss from investment in joint venture | — | — | (48,000 | ) | ||||||||
Total other income (expense) | (3,458,000 | ) | (4,931,000 | ) | 4,502,000 | |||||||
Net loss | (18,744,000 | ) | (37,368,000 | ) | (26,177,000 | ) | ||||||
Beneficial conversion feature for convertible preferred stock | (661,000 | ) | (1,169,000 | ) | — | |||||||
Net loss allocable to common stockholders | (19,405,000 | ) | (38,537,000 | ) | (26,177,000 | ) | ||||||
Basic and diluted net loss per share allocable to common stockholders | $ | (0.14 | ) | $ | (0.48 | ) | $ | (0.39 | ) | |||
Basic and diluted weighted average shares used in calculating net loss per share allocable to common stockholders | 140,797,316 | 80,830,698 | 67,781,364 | |||||||||
Comprehensive loss: | ||||||||||||
Net loss | $ | (18,744,000 | ) | $ | (37,368,000 | ) | $ | (26,177,000 | ) | |||
Other comprehensive income – foreign currency translation adjustments | 296,000 | 444,000 | 256,000 | |||||||||
Comprehensive loss | $ | (18,448,000 | ) | $ | (36,924,000 | ) | $ | (25,921,000 | ) |
Summary of the Rights Offering
Securities to be | We are distributing to you, at no charge, one non-transferable Subscription Right to purchase one Unit for every |
Size of offering | 10,000 Units. |
Subscription Price | $1,000 per Unit. |
Series B Preferred Stock | Each share of Series B Preferred Stock will be convertible at our option or at the option of the holder at any time, and automatically upon receipt of Stockholder Approval, into the number of shares of our common stock determined by dividing the $1,000 stated value per share of the Series B Preferred Stock by a conversion price of $0.40 per share, subject to adjustment; provided that, until we obtain the Stockholder Approval, if the number of shares of common stock issuable upon the conversion of the total number of shares of Series B Preferred Stock issued in this offering is greater than 30,000,000, each holder will only be able to convert that number of shares of Series B Preferred Stock obtained by multiplying the shares of Series B Preferred Stock issued to such holder in this offering by (i) 30,000,000 divided by (ii) the number of shares of common stock issuable upon the conversion of the total number of shares of Series B Preferred Stock issued in this offering (rounded down to the nearest whole share). The Series B Preferred Stock has certain conversion rights, dividend rights and liquidation preferences. |
Warrants | Each Warrant entitles the holder to purchase one share of common stock at an exercise price of |
Record Date | 5:00 p.m., Eastern Time, |
Basic Subscription Rights | Your Basic Subscription Right will entitle you to purchase one Unit at the Subscription Price. |
Over-Subscription Privilege | If you exercise your Basic Subscription Rights in full, you may also choose to purchase a portion of any Units that are not purchased by our other stockholders through the exercise of their Basic Subscription Rights, subject to proration and stock ownership limitations described |
Expiration date | The Subscription Rights will expire at 5:00 p.m., Eastern Time, on |
To exercise your Subscription Rights, you must take the following steps: If you are a record holder of our common stock, If you are a beneficial owner of shares that are registered in the name of a broker, dealer, bank or other nominee, you should instruct your broker, dealer, bank or other nominee to exercise your Subscription Rights on your behalf. Please follow the instructions of your nominee, who may require that you meet a deadline earlier than 5:00 p.m., Eastern Time, on | |
Delivery of | As soon as practicable after the expiration of the Rights Offering, and within five business days thereof, we expect to close on subscriptions and for the Subscription Agent |
Non-transferability of Subscription Rights | The Subscription Rights may not be sold, transferred, assigned or given away to anyone. The Subscription Rights will not be listed for trading on any stock exchange or market. |
Transferability of Warrants | The Warrants will be separately transferable following their issuance and through their expiration |
No board recommendation | Our board of directors is not making a recommendation regarding your exercise of the Subscription Rights. You are urged to make your decision to invest based on your own assessment of our business and financial condition, our prospects for the future, the terms of the Rights Offering, the information in this prospectus and other information relevant to your circumstances. Please see |
No | All exercises of Subscription Rights are irrevocable, even if you later learn of information that you consider to be unfavorable to the exercise of your Subscription Rights. |
Use of | Assuming the exercise of Subscription Rights to purchase all 10,000 Units of the Rights Offering, after deducting fees and expenses and excluding any proceeds received upon exercise of any Warrants, we estimate the net proceeds of the Rights Offering will be approximately |
Investing in our securities involves a high degree of risk. Before making an investment decision with respect to our securities, we urge you to carefully consider the risks described in the "Risk Factors"“Risk Factors” section of our Annual Report on Form 10-K for the year ended December 31, 2015,2016 and our subsequent Quarterly Reports on Form 10-Q, which isare incorporated by reference into this prospectus. These risk factors relate to our business, intellectual property, regulatory matters, and ownership of our common stock. In addition, the following risk factors present material risks and uncertainties associated with the Rights Offering. The risks and uncertainties incorporated by reference into this prospectus or described below are not the only ones we face. Additional risks and uncertainties not presently known or which we consider immaterial as of the date hereof may also have an adverse effect on our business. If any of the matters discussed in the following risk factors were to occur, our business, financial condition, results of operations, cash flows or prospects could be materially adversely affected, the market price of our securities could decline and you could lose all or part of your investment in our securities.
Risks Related to the Rights Offering
There is currently a limited market for our securities, and any trading market that exists in our securities may be highly illiquid and may not reflect the underlying value of our net assets or business prospects.
Although our common stock is traded on the NASDAQ, Capital Market, there is currently a limited market for our common stock and an active market may never develop. Investors are cautioned not to rely on the possibility that an active trading market may develop. In addition, the Subscription Rights are non-transferrable.
We could be delisted from NASDAQ, which could seriously harm the liquidity of our stock and our ability to raise capital.
Following notice from the NASDAQNasdaq staff in June 2015 and December 2015, we had a hearing in January 2016 relating to our noncompliance with the $1$1.00 minimum bid price per share requirement. The NasdaqNASDAQ Hearing Panel granted us until May 31, 2016 to come into compliance with the minimum bid price requirement, including requirements to relating to obtaining stockholders approval of a reverse stock split that would bring our stock price above $1$1.00 per share for a minimum of ten10 consecutive trading days. We transferred the listing of our common stock from the NasdaqNASDAQ Global Market or NGM, to the NasdaqNASDAQ Capital Market or NCM, in February 2016. In May 2016, we consummated a 1-for-15 reverse stock split pursuant to which the minimum bid price per share of our common stock rose above $1.00. Pursuant to a letter dated May 26, 2016, the Nasdaq staff delivered notice to us that we had regained compliance with Nasdaq’s minimum bid price rule.
On September 5, 2017, we received notice from Nasdaq staff relating to our noncompliance with the $1.00 minimum bid price per share requirement. Pursuant to NASDAQ Listing Rule 5810(c)(3)(A), we have been granted a 180 calendar day compliance period, or until March 5, 2018, to regain compliance with the minimum bid price requirement. During the compliance period, our shares of common stock will continue to be listed and traded on NASDAQ. To regain compliance, the closing bid price of our shares of common stock must meet or exceed $1.00 per share for at least 10 consecutive business days during the 180 calendar day compliance period.
If we are not in compliance by March 5, 2018, we may be afforded a second 180 calendar day compliance period. To qualify for this additional time, we will be required to meet the continued listing requirement or maintain compliancefor market value of publicly held shares and all other initial listing standards for NASDAQ with the other listing requirements, andexception of the minimum bid price requirement. In addition, we may notwill be eligible for listing onrequired to notify NASDAQ of our intention to cure the NGM, NCM or any comparable trading market. We have committed to consummateminimum bid price deficiency by effecting a reverse stock split, atif necessary. However, if it appears to the Nasdaq staff that we will not be able to cure the deficiency, or if we are otherwise not eligible, NASDAQ would notify us that our annual stockholder meeting (unlesssecurities would be subject to delisting. In the event of such a notification, we may appeal the Nasdaq staff’s determination to delist our stock price organically rises above $1 and curessecurities, but there can be no assurance the Nasdaq staff would grant our bid price deficiency), which could be unfavorably received by the market and could further depress the marketrequest for our shares. A reverse stock split, if consummated, may not cure, in the short-term or long-term, our listing deficiency. continued listing.
If we cease to be eligible to trade on either the NGMNASDAQ Capital Market:
We may have to pursue trading on a less recognized or NCM:accepted market, such as the OTC Bulletin Board or the “pink sheets.”
The trading price of our common stock could suffer, including an increased spread between the “bid” and “asked” prices quoted by market makers.
Shares of our common stock could be less liquid and marketable, thereby reducing the ability of stockholders to purchase or sell our shares as quickly and as inexpensively as they have done historically. If our stock is traded as a “penny stock,” transactions in our stock would be more difficult and cumbersome.
We may be unable to access capital on favorable terms or at all, as companies trading on alternative markets may be viewed as less attractive investments with higher associated risks, such that existing or prospective institutional investors may be less interested in, or prohibited from, investing in our common stock. This may also cause the market price of our common stock to decline.
Our share price is volatile, and you may not be able to resell our shares at a profit or at all.
The market price of our common stock could be subject to wide fluctuations in response to numerous factors, some of which are beyond our control. These factors include, among other things:
fluctuations in our operating results or the operating results of our competitors;
the outcome of clinical trials involving the use of our products, including our sponsored trials;
changes in estimates of our financial results or recommendations by securities analysts;
variance in our financial performance from the expectations of securities analysts;
changes in the estimates of the future size and growth rate of our markets;
changes in accounting principles or changes in interpretations of existing principles, which could affect our financial results;
conditions and trends in the markets we currently serve or which we intend to target with our product candidates;
changes in general economic, industry and market conditions;
success of competitive products and services;
changes in market valuations or earnings of our competitors;
announcements of significant new products, contracts, acquisitions or strategic alliances by us or our competitors;
our continuing ability to list our securities on an established market or exchange;
the timing and outcome of regulatory reviews and approvals of our products;
the commencement or outcome of litigation involving our company, our general industry or both;
• |
changes in our capital structure, such as future issuances of securities or the incurrence of additional debt; |
actual or expected sales of our common stock by the holders of our common stock; and
the trading volume of our common stock.
In addition, the stock market in general, the Nasdaq markets and the market for cell therapy development companies in particular may experience a loss of investor confidence. A loss of investor confidence may result in extreme price and volume fluctuations in our common stock that are unrelated or disproportionate to the operating performance of our business, our financial condition or results of operations, which may materially harm the market price of our common stock and result in substantial losses for stockholders.
The market price of our common stock may decline after you elect to exercise your subscription rights. If that occurs, you may have committed to buy shares of our Series B Preferred Stock which are convertible into shares of our common stock in the rights offering at a price greater than the prevailing market price,price. There is currently no market for our shares of Series B Preferred Stock and, could have an immediate unrealized loss. Moreover, following the exerciseunless we or you choose to convert your shares of your subscription rights you may not be able to sell yourSeries B Preferred Stock, or they automatically convert upon receipt of Stockholder Approval, into shares of common stock, at a price equal to or greater than the Subscription Price. Until shares are delivered upon expiration of the Rights Offering, you will not be able to sell the shares of our common stock that you purchase in the Rights Offering.re-sell such shares. We will not pay you interest on funds delivered to the subscription agentSubscription Agent pursuant to the exercise of subscription rights.
We may be or become the target of securities litigation, which is costly and time-consuming to defend.
In the past, following periods of market volatility in the price of a company'scompany’s securities, or the reporting of unfavorable news or continued decline in a company’s stock price, security holders have often instituted class action litigation. If theThe market value of our securities experience adverse fluctuations and we become involved in this typehas steadily declined over the past several years for a variety of litigation, regardlessreasons, including the announcement of the outcome,results of our Phase III clinical trial in July 2017, and for other reasons discussed elsewhere in the “Risk Factors” section in the Quarterly Report on Form 10-Q filed on August 11, 2017, which heightens our litigation risk. If we face such litigation, we could incur substantial legal costs and our management'smanagement’s attention could be diverted from the operation of our business, causing our business to suffer.
Future sales of our common stock may be futuredepress our share price.
As of June 30, 2017, we had 33,328,401 shares of our common stock outstanding. Sales of a number of shares of common stock in the public market, including pursuant to the Lincoln Park Purchase Agreement, or our ATM program, or the expectation of such sales, could cause the market price of our common stock to decline. We may also sell additional common stock or securities convertible into or exercisable or exchangeable for common stock in subsequent public or private offerings or other dilution of our equity,transactions, which may adversely affect the market price of our common stock.
We are generally not restricted from issuing additional common stock, including any securities that are convertible into or exchangeablehave granted demand registration rights for or that represent the right to receive, common stock. The market priceresale of certain shares of our common stock could declineto each of Astellas Pharma Inc. and Green Hospital Supply, Inc. pursuant to common stock purchase agreements previously entered into with each of these stockholders. An aggregate of approximately 300,000 shares of our common stock are subject to these demand registration rights. If we receive a written request from any of these stockholders to file a registration statement under the Securities Act of 1933, as amended, or the Securities Act, covering its shares of unregistered common stock, we are required to use reasonable efforts to prepare and file with the SEC within 30 business days of such request a resultregistration statement covering the resale of the shares for an offering to be made on a continuous basis pursuant to Rule 415 under the Securities Act.
We have also granted registration rights to Azaya, with respect to the 1,173,241 shares of our common stock that we issued in the name of Azaya at the closing of our acquisition of the Cytori Nanomedicine assets. Under the terms of our asset purchase agreement with Azaya, we are required to use best efforts to have a registration statement covering these shares filed with the SEC, and are thereafter required to use commercially reasonable efforts to have the registration declared effective by the SEC. Though Azaya is subject to certain volume limitations regarding its sales of our common stock, or securities that are convertible into or exchangeable for, or that represent the rightonce Azaya is able to receive, common stock after this offering or the perception thatsell these shares, any such sales could occur. In addition, anti-dilution provisions contained input pressure on our outstanding warrants, as well as the anti-dilution provisions contained in the Warrants forming a part of the Units, may significantly increase the dilutive effect of other issuances of securities by us.
We presently do not intend to pay cash dividends on our common stock.
We have never paid cash dividends in the past, and we currently anticipate that no cash dividends will be paid on the common stock in the foreseeable future. Furthermore, our loan agreementLoan and Security Agreement with Oxford Finance, LLC, and Silicon Valley Bank,or Oxford, as amended, or the Lenders,Loan and Security Agreement, currently prohibits our issuance of cash dividends. This could make an investment in our companycommon stock inappropriate for some investors, and may serve to narrow our potential sources of additional capital. While our dividend policy will be based on the operating results and capital needs of the business, it is anticipated that all earnings, if any, will be retained to finance the future expansion of our business.
Our stockholders may experience substantial dilution in the value of their investment if we issue additional shares of our capital stock.
Our charter allows us to issue up to 290,000,00075,000,000 shares of our common stock and to issue and designate the rights of, without stockholder approval, up to 5,000,000 shares of preferred stock. In order toTo raise additional capital, we may in the future offersell additional shares of our common stock or other securities convertible into or exchangeable for our common stock at prices that may not beare lower than the same as the price per shareprices paid by other investors, and dilution to ourexisting stockholders, could result. We may sell shares or other securities in any other offering at a price per share that is less than the price per share paid by investors, and investors purchasing shares or other securities in the future could have rights superior to existing stockholders. The price per share atstockholders, which we sell additional sharescould result in substantial dilution to the interests of our common stock, or securities convertible or exchangeable into common stock, in future transactions may be higher or lower than the price per share paid by other investors.
We may issue debt and equity securities or securities convertible into equity securities, any of which may be senior to our common stock as to distributions and in liquidation, which could negatively affect the value of our common stock.
In the future, we may attempt to increase our capital resources by entering into debt or debt-like financing that is unsecured or secured by up to all of our assets, or by issuing additional debt or equity securities, which could include issuances of secured or unsecured commercial paper, medium-term notes, senior notes, subordinated notes, guarantees, preferred stock, hybrid securities, or securities convertible into or exchangeable for equity securities. In the event of our liquidation, our lenders and holders of our debt and preferred securities would receive distributions of our available assets before distributions to the holders of our common stock. Because our decision to incur debt and issue securities in future offerings may be influenced by market conditions and other factors beyond our control, we cannot predict or estimate the amount, timing or nature of our future offerings or debt financings. Further, market conditions could require us to accept less favorable terms for the issuance of our securities in the future.
Our management will have broad discretion over the use of the net proceeds from this offering, you may not agree with how we use the proceeds and the proceeds may not be invested successfully.
Our management will have broad discretion as to the use of the net proceeds from this offering and could use them for purposes other than those contemplated at the time of commencement of this offering. Accordingly, you will be relying on the judgment of our management with regard to the use of these net proceeds, and you will not have the opportunity, as part of your investment decision, to assess whether the proceeds are being used appropriately. It is possible that, pending their use, we may invest the net proceeds in a way that does not yield a favorable, or any, return for us. The failure of our management to use such funds effectively could have a material adverse effect on our business, financial condition, operating results and cash flows.
Stockholders who do not fully exercise their Subscription Rights should expect that they will, at the completion of this offering, own a smaller proportional interest in our company than would otherwise be the case had they fully exercised their Subscription Rights. Further, the shares issuable upon the exercise of the Warrants to be issued pursuant to the Rights Offering will dilute the ownership interest of stockholders not participating in this offering or holders of Warrants who have not exercised them.
Further, because the price per Unit being offered may be substantially higher than the net tangible book value per share of our common stock, you may suffer substantial dilution in the net tangible book value of the common stock you purchase in this offering. Ifif you purchase Units in this offering at the Subscription Price, you may suffer immediate and substantial dilution in the net tangible book value of theour common stock. See "Dilution"“Dilution” in this prospectus for a more detailed discussion of the dilution which may incur in connection with this offering.
Completion of the Rights Offering is not subject to us raising a minimum offering amount.
Completion of the Rights Offering is not subject to us raising a minimum offering amount and, therefore, proceeds may be insufficient to meet our objectives, thereby increasing the risk to investors in this offering, including investing in a company that continues to require capital. See "Use“Use of Proceeds."
This Rights Offering may cause the trading price of our common stock to decrease.
The Subscription Price, together with the number of shares of common stock we propose to issue and ultimately will issue if this Rights Offering is completed, may result in an immediate decrease in the market price of our common stock. This decrease may continue after the completion of this Rights Offering. If that occurs, you may have committed to buy shares of our Series B Preferred Stock which are convertible into shares of our common stock in the Rights Offering at a price greater than the prevailing market price. We cannot predict the effect, if any, that the availability of shares for future sale represented by the Warrants issued in connection with the Rights Offering will have on the market price of our common stock from time to time. Further, if a substantial number of Subscription Rights are exercised and the holders of the shares received upon exercise of those Subscription Rights or the related Warrants choose to sell some or all of the shares underlying the Subscription Rights or the related Warrants, the resulting sales could depress the market price of our common stock. Following the exercise of your Subscription Rights you may not be able to sell your common stock at a price equal to or greater than the Subscription Price.
Holders of our sharesWarrants will have no rights as a common stockholder until such holders exercise their Warrants and acquire our common stock.
Until holders of common stock may decline prior to the expiration of this offering or a Subscribing Rights holder may not be able to sell shares of common stock purchased in this offering at a price equal to or greater than the Subscription Price. UntilWarrants acquire shares of our common stock are delivered upon expirationexercise of the Rights Offering, youWarrants, holders of Warrants will not be ablehave no rights with respect to sell or transfer the shares of our common stock that you purchase inunderlying such Warrants. Upon exercise of the Rights Offering. Any such deliveryWarrants, the holders thereof will occurbe entitled to exercise the rights of a common stockholder only as soon as practicableto matters for which the record date occurs after the Rights Offering has expired, payment for the shares of common stock and attached Warrants subscribed for has cleared, and all prorating calculations and reductions contemplated by the terms of the Rights Offering have been effected.
If we terminate this offering for any reason, we will have no obligation other than to return subscription monies within 10 business days.
We may decide, in our sole discretion and for any reason, to cancel or terminate the Rights Offering at any time prior to the expiration date. If this offering is cancelled or terminated, we will have no obligation with respect to Subscription Rights that have been exercised except to return within 10 business days, without interest or deduction, all subscription payments deposited with the Subscription Agent. If we terminate this offering and you have not exercised any Subscription Rights, such Subscription Rights will expire and be worthless.
The Subscription Price determined for this offering is not an indication of the fair value of our common stock.
In determining the Subscription Price, our board of directors considered a number of factors, including, but not limited to, our need to raise capital in the near term to continue our operations, the current and historical trading prices of our common stock, a price that would increase the likelihood of participation in the Rights Offering, the cost of capital from other sources, the value of the WarrantSeries B Preferred Stock and Warrants being issued as a componentcomponents of the Unit, comparable precedent transactions, an analysis of stock price trading multiples for companies similar to us that, among other things, did not need to raise capital in the near-term, and our most recently forecasted revenue relative to our peer group. The Subscription Price does not necessarily bear any relationship to any established criteria for value. No valuation consultant or investment banker has opined upon the fairness or adequacy of the Subscription Price. You should not consider the Subscription Price as an indication of the value of our Companycompany or our common stock. After the date of this prospectus, our common stock may trade at prices above or below the Subscription Price.
If you do not act on a timely basis and follow subscription instructions, your exercise of Subscription Rights may be rejected.
Holders of Subscription Rights who desire to purchase shares of our common stockSeries B Preferred Stock and attached Warrants in this offering must act on a timely basis to ensure that all required forms and payments are actually received by the Subscription Agent prior to 5:00 p.m., New York City time, on the expiration date, unless extended. If you are a beneficial owner of shares of common stock and you wish to exercise your Subscription Rights, you must act promptly to ensure that your broker, dealer, bank, trustee or other nominee acts for you and that all required forms and payments are actually received by your broker, dealer, bank, trustee or other nominee in sufficient time to deliver such forms and payments to the Subscription Agent to exercise the Subscription Rights granted in this offering that you beneficially own prior to 5:00 p.m., New York City time on the expiration date, as may be extended. We will not be responsible if your broker, dealer, bank, trustee or other nominee fails to ensure that all required forms and payments are actually received by the Subscription Agent prior to 5:00 p.m., New York City time, on the expiration date.
If you fail to complete and sign the required subscription forms, send an incorrect payment amount, or otherwise fail to follow the subscription procedures that apply to your exercise in this Rights Offering, the Subscription Agent may, depending on the circumstances, reject your subscription or accept it only to the extent of the payment received. Neither we nor the Subscription Agent undertakes to contact you concerning an incomplete or incorrect subscription form or payment, nor are we under any obligation to correct such forms or payment. We have the sole discretion to determine whether a subscription exercise properly follows the subscription procedures.
You may not receive all of the Units for which you subscribe.
While we are distributing to holders of our common stock one Subscription Rights for every share of common stock owned on the Record Date, we are only seeking to raise $10.0 million dollars in gross proceeds in this Rights Offering. As a result, based on 33,328,401 shares of common stock outstanding as of June 30, 2017, we would grant Subscription Rights to acquire 33,328,401 Units but will only accept subscriptions for 10,000 Units. Accordingly, sufficient Units may not be available to honor your subscription in full. If excess Units are available after the exercise of Basic Subscription Rights, holders who fully exercise their Basic Subscription Rights will be entitled to subscribe for an additional number of Units. Over-Subscription Privileges will be allocated pro rata among Rights holders who over-subscribed, based on the number of over-subscription Units to which they have subscribed. We cannot guarantee that you will receive any or the entire amount of Units for which you over-subscribed.subscribed. If for any reason the prorated amount of Units allocated to you in connection with your Over-Subscription Privilege is less than your Over-Subscription Request,you have subscribed for, then the excess funds held by the Subscription Agent on your behalf will be returned to you, without interest, as soon as practicable after the Rights Offering has expired and all prorating calculations and reductions contemplated by the terms of the Rights Offering have been effected, and we will have no further obligations to you.
Unless we otherwise agree in writing, a person or entity, together with related persons or entities, may not exercise Subscription Rights (including Over-Subscription Privileges) to purchase Units that, when aggregated with their existing ownership, would result in such person or entity, together with any related persons or entities, owning in excess of 19.9%19.99% of our issued and outstanding shares of common stock following the closing of the transactions contemplated by this Rights Offering. If the amount of shares allocated to you is less than your subscription request, then the excess funds held by the Subscription Agent on your behalf will be returned to you, without interest, as soon as practicable after the Rights Offering has expired and all prorating calculations and reductions contemplated by the terms of the Rights Offering have been effected, and we will have no further obligations to you.
If you make payment of the Subscription Price by personal check, your check may not clear in sufficient time to enable you to purchase shares in this Rights Offering.
Any personal check used to pay for shares and Warrants to be issued in this Rights Offering must clear prior to the expiration date of this Rights Offering, and the clearing process may require five or more business days. If you choose to exercise your Subscription Rights, in whole or in part, and to pay for shares and Warrants by personal check and your check has not cleared prior to the expiration date of this Rights Offering, you will not have satisfied the conditions to exercise your Subscription Rights and will not receive the shares and Warrants you wish to purchase.
The receipt of Subscription Rights may be treated as a taxable distribution to you.
We believe the distribution of the Subscription Rights in this Rights Offering should be a non-taxable distribution to holders of shares of common stock under Section 305(a) of the Internal Revenue Code of 1986, as amended, (the "Code").or the Code. Please see the discussion on the "Material“Material U.S. Federal Income Tax Consequences"Consequences” below. This position is not binding on the IRS, or the courts, however. If this Rights Offering is deemed to be part of a "disproportionate distribution"“disproportionate distribution” under Section 305 of the Code, your receipt of Subscription Rights in this offering may be treated as the receipt of a taxable distribution to you equal to the fair market value of the Subscription Rights. Any such distribution would be treated as dividend income to the extent of our current and accumulated earnings and profits, if any, with any excess being treated as a return of capital to the extent thereof and then as capital gain. Each holder of shares of common stock and each holder of a warrant providing for participation is urged to consult his, her or its own tax advisor with respect to the particular tax consequences of this Rights Offering.
Exercising the Subscription Rights limits your ability to engage in certain hedging transactions that could provide you with financial benefits.
By exercising the Subscription rights, you are representing to us that you have not entered into any short sale or similar transaction with respect to our Common Stockcommon stock since the record date for the Rights Offering. In addition, the Subscription Rights provide that, upon exercise of the Subscription Right, you agree not to enter into any short sale or similar transaction with respect to our Common Stockcommon stock for so long as you continue to hold Warrants issued in connection with the exercise of the Subscription Right. These requirements prevent you from pursuing certain investment strategies that could provide you greater financial benefits than you might have realized if the Subscription Rights did not contain these requirements.
The Subscription Rights are not transferable, and there is no market for the Subscription Rights.
You may not sell, transfer, assign or give away your Subscription Rights. Because the Subscription Rights are non-transferable, there is no market or other means for you to directly realize any value associated with the Subscription Rights. You must exercise the Subscription Rights to realize any potential value from your Subscription Rights.
There is no established trading market for the Warrants to be issued pursuant to this offering, and the Warrants may not be widely distributed. We have appliedintend to apply to list the Warrants for trading on NASDAQ, under the symbol "CYTXW," but there can be no assurance that a sufficient number of Subscription Rights will be exercised so that the Warrants will meet minimum listing criteria to be accepted for listing on NASDAQ or that a market will develop for the Warrants. Even if a market for the Warrants does develop, the price of the Warrants may fluctuate and liquidity may be limited. If the Warrants are not accepted for listing on NASDAQ or if a market for the Warrants does not develop, then purchasers of the Warrants may be unable to resell the Warrants or sell them only at an unfavorable price for an extended period of time, if at all. Future trading prices of the Warrants will depend on many factors, including:
our operating performance and financial condition;
our ability to continue the effectiveness of the registration statement, of which this prospectus is a part, covering the Warrants and the common stock issuable upon exercise of the Warrants;
the interest of securities dealers in making a market; and
the market for similar securities.
There is no public market for the Series B Preferred Stock in this offering.
There is no established public trading market for the Series B Preferred Stock, and we do not expect a market to develop. In addition, we do not intend to apply for listing of the Series B Preferred Stock on any securities exchange or recognized trading system.
If we are unable to obtain stockholder approval for the issuance of all of the shares of common stock upon exercise of the Warrants and conversion of the Series B Preferred Stock you will not be able to exercise your Warrants and may not be able to convert all of your Series B Preferred Stock to common stock.
We agreed to seek approval from our stockholders to approve an amendment to our certificate of incorporation to increase our authorized shares of common stock, which we refer to as the Stockholder Approval. If we do not obtain the Stockholder Approval, you will not be able to exercise your Warrantsand, if the number of shares of common stock issuable upon the conversion of the total number of shares of Series B Preferred Stock issued in this offering is greater than 30,000,000, you will only be able to convert that number of shares of Series B Preferred Stock obtained by multiplying the shares of Series B Preferred Stock issued to you in this offering by the Pro Rata Conversion Percentage (rounded down to the nearest whole share). We intend to seek Stockholder Approval at each annual stockholder meeting until the Stockholder Approval is obtained, but we cannot guarantee that we will obtain the Stockholder Approval. There is currently no market for our shares of Series B Preferred Stock and, unless we or you choose to convert your shares of Series B Preferred Stock, or they automatically convert upon receipt of Stockholder Approval, into shares of common stock, you will not be able to re-sell such shares. In addition, our warrants may not be listed on NASDAQ and, even if listed, a market for the Warrants may not develop.
The market price of our common stock may never exceed the exercise price of the Warrants issued in connection with this offering.
The Warrants being issued in connection with this offering become exercisable upon issuance and will expire two years after30 months from the date of issuance. The market price of our common stock may never exceed the exercise price of the Warrants prior to their date of expiration. Any Warrants not exercised by their date of expiration will expire worthless and we will be under no further obligation to the Warrant holder.
The Warrants contain features that allow us to redeem the Warrants and that prohibit you from engaging in certain investment strategies. We may redeem the Warrants for $0.01 per Warrant once the closing price of our common stock has equaled or exceeded $$1.20 per share, subject to adjustment, for 10ten consecutive trading days.days, provided that we may not do so prior to the first anniversary of closing of the Rights Offering, and only upon not less than 30 days’ prior written notice of redemption. If we give notice of redemption, you will be forced to sell or exercise your Warrants or accept the redemption price. The notice of redemption could come at a time when it is not advisable or possible for you to exercise the Warrants. As a result, you may be unable to benefit from owning the Warrants being redeemed. In addition, for so long as you continue to hold Warrants, you will not be permitted to enter into any short sale or similar transaction with respect to our Common Stock. This could prevent you from pursuing investment strategies that could provide you greater financial benefits from owning the Warrant.
The dealer-manager is not underwriting, nor acting as placement agent of, the Subscription Rights or the securities underlying the Subscription Rights.
Maxim Group LLC will act as dealer-manager for this Rights Offering. As provided in the dealer-manager agreement, the dealer-manager will provide marketing assistance in connection with this offering. The dealer-manager is not underwriting or placing any of the Subscription Rights or the shares of our common stockSeries B Preferred Stock or Warrants being issued in this offering and is not making any recommendation with respect to such Subscription Rights (including with respect to the exercise or expiration of such Subscription Rights), shares or Warrants. The dealer-manager will not be subject to any liability to us in rendering the services contemplated by the dealer-manager agreement except for any act of bad faith or gross negligence by the dealer-manager. The Rights Offering may not be successful despite the services of the dealer-manager to us in this offering.
Since the Warrants are executory contracts, they may have no value in a bankruptcy or reorganization proceeding.
In the event a bankruptcy or reorganization proceeding is commenced by or against us, a bankruptcy court may hold that any unexercised Warrants are executory contracts that are subject to rejection by us with the approval of the bankruptcy court. As a result, holders of the Warrants may, even if we have sufficient funds, not be entitled to receive any consideration for their Warrants or may receive an amount less than they would be entitled to if they had exercised their Warrants prior to the commencement of any such bankruptcy or reorganization proceeding.
The report of our independent registered public accounting firm contains an emphasis paragraph regarding the substantial doubt about our ability to continue as a “going concern.”
The audit report of our independent registered public accounting firm covering the December 31, 2016 consolidated financial statements contains an explanatory paragraph that states that our recurring losses from operations, liquidity position, and debt service requirements raises substantial doubt about our ability to continue as a going concern. This going concern opinion could materially limit our ability to raise additional funds through the issuance of new debt or equity securities or otherwise. Future reports on our financial statements may also include an explanatory paragraph with respect to our ability to continue as a going concern. To date, our operating losses have been funded primarily from outside sources of invested capital and gross profits. We have had, and we will likely continue to have, an ongoing need to raise additional cash from outside sources to fund our future operations. However, no assurance can be given that additional capital will be available when required or on terms acceptable to us. If we are unsuccessful in our efforts to raise any such additional capital, we would be required to take actions that could materially and adversely affect our business, including significant reductions in our research, development and administrative operations (including reduction of our employee base), possible surrender or other disposition of our rights to some technologies or product opportunities, delaying of our clinical trials or curtailing or ceasing operations. We also cannot give assurance that we will achieve sufficient revenues in the future to achieve profitability and cash flow positive operations to allow us to continue as a going concern. The perception that we may not be able to continue as a going concern may cause third parties to choose not to deal with us due to concerns about our ability to meet our contractual obligations, which could have a material adverse effect on our business.
We will need substantial additional funding to develop our products and for our future operations. If we are unable to obtain the funds necessary to do so, we may be required to delay, scale back or eliminate our product development activities or may be unable to continue our business.
We have had, and we will continue to have, an ongoing need to raise additional cash from outside sources to continue funding our operations to profitability, including our continuing substantial research and development expenses. We do not currently believe that our cash balance and the revenues from our operations will be sufficient to fund the development and marketing efforts required to reach profitability without raising additional capital from accessible sources of financing in the near future. Although it is difficult to predict future liquidity requirements, we believe that our $9 million in cash and cash equivalents on hand as of June 30, 2017 will be sufficient to fund our currently contemplated operations at least through October 2017. Our future capital requirements will depend on many factors, including:
our ability to raise capital to fund our operations on terms acceptable to us, or at all;
our perceived capital needs with respect to development of our Cytori Cell Therapy and Cytori Nanomedicines development programs, and any delays in, adverse events of, and excessive costs of such programs beyond what we currently anticipate;
our ability to establish and maintain collaborative and other arrangements with third parties to assist in bringing our products to market and the cost of such arrangements at the time;
costs associated with the integration and operation of our newly acquired Cytori Nanomedicine business, including hiring of as many as 20 or more new employees to operate the Cytori Nanomedicine business, and costs of validation, requalification and recommencement of the Cytori Nanomedicine manufacturing operations at our San Antonio, Texas facility;
the cost of manufacturing our product candidates, including compliance with good manufacturing practices, or GMP, applicable to our product candidates;
expenses related to the establishment of sales and marketing capabilities for product candidates awaiting approval or products that have been approved;
the level of our sales and marketing expenses;
competing technological and market developments; and
our ability to introduce and sell new products.
We have secured capital historically from grant revenues, collaboration proceeds, and debt and equity offerings. We will need to secure substantial additional capital to fund our future operations. We cannot be certain that additional capital will be available on terms acceptable to us, or at all. Our ability to raise capital was adversely affected when the FDA put a hold on our ATHENA cardiac trials in mid-2014, which had an adverse impact to stock price performance and our corresponding ability to restructure our debt. Subsequently, a continued downward trend in our stock price resulting from a number of factors, including (i) general economic and industry conditions, (ii) challenges faced by the regenerative medicine industry as a whole, (iii) the market’s unfavorable view of certain of our recent equity financings conducted in 2014 and 2015 (which financings were priced at a discount to market and included 100% warrant coverage), (iv) market concerns regarding our continued need for capital (and the effects of any future capital raising transactions we may consummate), (v) market perceptions of our ATHENA and ACT-OA clinical trial data, and (vi) our recent NASDAQ listing deficiency issues and resultant 1-for-15 reverse stock split, made it more difficult to procure additional capital on terms reasonably acceptable to us. Most recently, the release in July 2017 of the top-line data from our STAR Phase III trial, in which we announced the failure to achieve the trial’s primary and secondary endpoints, resulted in a further substantial decrease in our stock price. Though our recent acquisition of the Cytori Nanomedicine business from Azaya Therapeutics, including our ATI-0918 and ATI-1123 drug candidates, appear to have been viewed favorably by our investors and the marketplace, we cannot assure you that this acquisition will not ultimately be viewed negatively and thus further hamper our efforts to attract additional capital. If we are unsuccessful in our efforts to raise any such additional capital, we may be required to take actions that could materially and adversely harm our business, including a possible significant reduction in our research, development and administrative operations (including reduction of our employee base), surrendering of our rights to some technologies or product opportunities, delaying of our clinical trials or regulatory and reimbursement efforts, or curtailing of or even ceasing operations.
Our financing plans include pursuing additional cash through use of our at-the-market, or ATM, offering program, strategic corporate partnerships, licensing and sales of equity. In addition, in December 2016, we entered into a purchase agreement, or the Lincoln Park Purchase Agreement, with Lincoln Park Capital Fund, LLC, or Lincoln Park, pursuant to which we may direct Lincoln Park to purchase up to $20.0 million in shares of our common stock from time to time over a 30-month period, subject to satisfaction of certain conditions. While we have an established history of raising capital through these platforms, and we are currently involved in negotiations with multiple parties, there is no guarantee that adequate funds will be available when needed from additional debt or equity financing, development and commercialization partnerships or from other sources or on terms acceptable to us. In addition, under current SEC regulations, at any time during which the aggregate market value of our common stock held by non-affiliates, or public float, is less than $75.0 million, the amount we can raise through primary public offerings of securities in any twelve-month period using shelf registration statements, including sales under our ATM offering program, is limited to an aggregate of one-third of our public float. As of June 30, 2017, our public float was 33.1 million shares, the value of which was $36.4 million based upon the closing price of our common stock of $1.10 on such date. The value of one-third of our public float calculated on the same basis was approximately $12.1 million.
Further, our Loan and Security Agreement with Oxford as further described below, requires us to maintain a minimum of $1.5 million in unrestricted cash and cash equivalents on hand to avoid an event of default under the Loan and Security Agreement. Based on our cash and cash equivalents on hand of approximately $9 million at June 30, 2017, we estimate that we will need to raise additional capital, obtain a waiver or further amend the Loan and Security Agreement prior to January 2018 to avoid defaulting under our $1.5 million minimum cash/cash equivalents covenant. If we are unable to avoid an event of default under the Loan and Security Agreement, our business could be severely harmed.
In addition to the funding sources previously mentioned, we continue to seek additional capital through product revenues and state and federal development programs, including additional funding opportunities though our current BARDA contract.
Our level of indebtedness, and covenant restrictions under such indebtedness, could adversely affect our operations and liquidity.
Under our Loan and Security Agreement, Oxford made a term loan to us in an aggregate principal amount of $17.7 million, or the Term Loan, subject to the terms and conditions set forth in the Loan and Security Agreement.
The Term Loan accrues interest at a floating rate equal to the three-month LIBOR rate (with a floor of 1.00%) plus 7.95% per annum. Prior to January 2017, we made interest-only payments on the Term Loan. However, from January 2017 through August 2017, we were required to make payments of principal (in the amount of $590,000 per month) and accrued interest in equal monthly installments of approximately $725,000. On September 20, 2017, we and Oxford amended the Loan and Security Agreement to extend the interest-only period to January 1, 2018, with a further extension through August 1, 2018 if we receive unrestricted net cash proceeds of at least $5 million on or before December 29, 2017. If the interest-only period is extended through August 1, 2018, then, beginning September 2018, we will be required to make payments of principal (in the amount of approximately $1.3 million per month) and accrued interest in equal monthly installments of approximately $1.4 million to amortize the Term Loan through June 1, 2019, the maturity date. If the interest-only period is not extended through August 1, 2018, then, beginning January 2018, we will be required to make payments of principal (in the amount of approximately $720,000 per month) and accrued interest in equal monthly installments of approximately $800,000 to amortize the Term Loan through the maturity date. All unpaid principal and accrued and unpaid interest with respect to the Term Loan is due and payable in full on June 1, 2019.
As security for our obligations under the Loan and Security Agreement, we granted a security interest in substantially all of our existing and after-acquired assets, subject to certain exceptions set forth in the Loan and Security Agreement. If we are unable to discharge these obligations, Oxford could foreclose on these assets, which would, at a minimum, have a severe material effect on our ability to operate our business.
Our indebtedness to Oxford could adversely affect our operations and liquidity, by, among other things:
causing us to use a larger portion of our cash flow to fund interest and principal payments, reducing the availability of cash to fund working capital and capital expenditures and other business activities;
making it more difficult for us to take advantage of significant business opportunities, such as acquisition opportunities, and to react to changes in market or industry conditions; and
limiting our ability to borrow additional monies in the future to fund working capital and capital expenditures and for other general corporate purposes.
The Loan and Security Agreement requires us to maintain at least $1.5 million in unrestricted cash and/or cash equivalents and includes certain reporting and other covenants, that, among other things, restrict our ability to (i) dispose of assets, (ii) change the business we conduct, (iii) make acquisitions, (iv) engage in mergers or consolidations, (v) incur additional indebtedness, (vi) create liens on assets, (vii) maintain any collateral account, (viii) pay dividends, (ix) make investments, loans or advances, (x) engage in certain transactions with affiliates, and (xi) prepay certain other indebtedness or amend other financing arrangements. If we fail to comply with any of these covenants or restrictions, such failure may result in an event of default, which if not cured or waived, could result in Oxford causing the outstanding loan amount ($14.2 million as of June 30, 2017) to become immediately due and payable. If the maturity of our indebtedness is accelerated, we may not have, or be able to timely procure, sufficient cash resources to satisfy our debt obligations, and such acceleration would adversely affect our business and financial condition.
In addition, our indebtedness under the Loan and Security Agreement is secured by a security interest in substantially all of our existing and after-acquired assets, and therefore, if we are unable to repay such indebtedness, Oxford could foreclose on these assets, which would, at a minimum, have a severe material effect on our ability to operate our business.
If we are unable to hire and/or retain key personnel, we may not be able to sustain or grow our business.
Our ability to operate successfully and manage our potential future growth depends significantly upon our ability to attract, retain, and motivate highly skilled and qualified research, technical, clinical, regulatory, sales, marketing, managerial and financial personnel. We compete for talent with numerous companies, as well as universities and non-profit research organizations. In the near term, we intend to hire a significant number of scientists, quality and regulatory personnel, and other technical staff with the requisite expertise to support and expand our Cytori Nanomedicines business. The manufacturing of these oncology drug assets is a highly complex process that requires significant experience and know-how. If we are unable to attract personnel with the necessary skills and experience to reestablish and expand our Cytori Nanomedicines business, which is currently conducted out of our San Antonio, Texas facility, our business could be harmed.
Our future success also depends on the personal efforts and abilities of the principal members of our senior management and scientific staff to provide strategic direction, manage our operations, and maintain a cohesive and stable environment. In particular, we are highly dependent on our executive officers, especially Marc Hedrick, M.D., our Chief Executive Officer, Tiago Girão, our Chief Financial Officer, and John Harris, our Vice President and General Manager of Cell Therapy. Given their leadership, extensive technical, scientific and financial expertise and management and operational experience, these individuals would be difficult to replace. Consequently, the loss of services of one or more of these named individuals could result in product development delays or the failure of our collaborations with current and future collaborators, which, in turn, may hurt our ability to develop and commercialize products and generate revenues. We have not entered into any employment agreements with our executive officers or key personnel, nor do we maintain key man life insurance on the lives of any of the members of our senior management. Although we have a stock option plan pursuant to which we provide our executive officers with various economic incentives to remain employed with us, these incentives may not be sufficient to retain them. The loss of key personnel for any reason or our inability to hire, retain, and motivate additional qualified personnel in the future could prevent us from sustaining or growing our business.
This prospectus and the documents incorporated herein by reference contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on our management'smanagement’s current beliefs, expectations and assumptions about future events, conditions and results and on information currently available to us. Discussions containing these forward-looking statements may be found, among other places, in the Sections entitled "Business," "Risk Factors"“Business,” “Risk Factors” and "Management's“Management’s Discussion and Analysis of Financial Condition and Results of Operations"Operations” incorporated by reference from our most recent Annual Report on Form 10-K and in our Quarterly Reports on Form 10-Q, as well as any amendments thereto, filed with the SEC.
All statements, other than statements of historical fact, included or incorporated herein regarding our strategy, future operations, financial position, future revenues, projected costs, plans, prospects and objectives are forward-looking statements. Words such as "expect," "anticipate," "intend," "plan," "believe," "seek," "estimate," "think," "may," "could," "will," "would," "should," "continue," "potential," "likely," "opportunity"“expect,” “anticipate,” “intend,” “plan,” “believe,” “seek,” “estimate,” “think,” “may,” “could,” “will,” “would,” “should,” “continue,” “potential,” “likely,” “opportunity” and similar expressions or variations of such words are intended to identify forward-looking statements, but are not the exclusive means of identifying forward-looking statements. Additionally, forward-looking statements include statements concerning future matters such as our anticipated expenditures, including those related to pre-clinical and clinical trials and research studies and general and administrative expenses, the potential size of the marketmarkets for our products, future development and/or expansion of our products and therapies in our markets, our ability to generate product revenues or effectively manage our gross profit margins, our ability to obtain regulatory clearance,clearances, our ability to commercialize our novel cell therapy platform products and our nanomedicine platform, expectations as to our future performance, liquidity and capital resources, including our potential need for additional financing and the availability thereof as well as our ability to continue to service our existing debt, and the potential enhancement of our cash position and stock price through development, marketing, and licensing arrangements. Such statements are based on currently available operating, financial and competitive information and are subject to various risks, uncertainties and assumptions that could cause actual results to differ materially from those anticipated or implied in our forward-looking statements due to a number of factors including, but not limited to, our need and ability to raise additional cash, our joint ventures, risks associated with laws or regulatory requirements applicable to us, market conditions, product performance, potential litigation, competition within the regenerative medicine field, and other factors set forth above under the section entitled "Risk Factors"“Risk Factors” in this prospectus and any accompanying prospectus supplement. Given these risks, uncertainties and other factors, many of which are beyond our control, you should not place undue reliance on these forward-looking statements.
Except as required by law, we assume no obligation to update these forward-looking statements publicly, or to revise any forward-looking statements to reflect events or developments occurring after the date of this prospectus, even if new information becomes available in the future.
Assuming that all 10,000 Units are subscribed for in the Rights Offering, we estimate that the net proceeds from the Rights Offering will be approximately $$8.9 million, based on the Subscription Price of $ per Unit, after deducting expenses relating to this offering payable by us estimated at approximately $$1.1 million, including dealer-manager fees and expenses and excluding any proceeds received upon exercise of any Warrants.
We intend to use up to approximately halfthe first $8 million of the net proceeds from the exercise of Subscription Rights for research and development, including the development of our clinical trials,current pipeline and, if funds remain, for further development of our Celution System products and other related research and development. In addition, we intend to use approximately half of theany remaining net proceeds for general corporate purposes, including ourprimarily sales and marketing initiatives including those relating to our potential commercialization of ECCS-50our Habeo scleroderma therapy and our ATI-0918 in Europe, and any other remaining net proceeds for general administrative expenses, working capital and capital expenditures. AnyWe expect to use any proceeds received by uswe receive from the exercise of Warrants will be used for substantially the same purposes and in substantially the same manner. Pending these uses, we intend to invest the net proceeds in investment-grade, short-term, interest-bearing securities. It is possible that, pending their use, we may invest the net proceeds in a way that does not yield a favorable, or any, return for us.
Our management will have broad discretion as to the allocation of the net proceeds from this offering and could use them for purposes other than those contemplated at the time of commencement of this offering.
Purchasers of our common stock contained in the Units sold in the Rights Offering (and upon exercise of the Warrants contained in the Units) will experience an immediate dilution of the net tangible book value per share of our common stock. Our net tangible book value as of December 31, 2015June 30, 2017 was approximately $(0.7)$(0.5) million, or $0.00$(0.02) per share of our common stock (based upon 195,058,39533,328,401 shares of our common stock outstanding). Net tangible book value per share is equal to our total tangible assets less our total liabilities, divided by the number of shares of our outstanding common stock.
Dilution per share of common stock equals the difference between the subscription priceamount per Unitshare of common stock paid by purchasers of Units in the Rights Offering (ascribing(assuming the conversion of shares of Series B Preferred Stock into common stock and ascribing no value to the Warrants contained in the Units) and the net tangible book value per share of our common stock immediately after the Rights Offering.
Based on the sale by us in this Rights Offering of a maximum of 10,000 Units (consisting of shares of our common stock and Warrants to purchase an aggregate of shares of common stock upon exercise), at the Subscription Price of $$1,000 per Unit (assuming the conversion of all shares of Series B Preferred Stock into common stock and no exercise of the Warrants), and after deducting estimated offering expenses and dealer-manager fees and expenses payable by us, and assuming no exercise of the Warrants, our pro forma net tangible book value as of December 31, 2015June 30, 2017 would have been approximately $ ,$8.4 million, or $$0.14 per share. This represents an immediate increase in pro forma net tangible book value to existing stockholders of $$0.16 per share and an immediate dilution to purchasers in the Rights Offering of $$0.26 per share. The following table illustrates this per-share dilution:
Subscription Price | $ |
|
|
|
| $ | 1,000 |
| ||||||||
Net tangible book value per share as of December 31, 2015 | $ | 0.00 | ||||||||||||||
Conversion price per share of Series B Preferred Stock contained in a Unit |
|
|
|
| $ | 0.40 |
| |||||||||
Net tangible book value per share as of June 30, 2017 |
| $ | (0.02) |
|
|
|
|
| ||||||||
Increase in net tangible book value per share attributable to Rights Offering |
| $ | 0.16 |
|
|
|
|
| ||||||||
Pro forma net tangible book value per share as of December 31, 2015, after giving effect to Rights Offering | ||||||||||||||||
Pro forma net tangible book value per share as of June 30, 2017, after giving effect to Rights Offering |
|
|
|
|
| $ | 0.14 |
| ||||||||
Dilution in net tangible book value per share to purchasers in the Rights Offering | $ |
|
|
|
|
| $ | 0.26 |
|
The information above is as of December 31, 2015June 30, 2017 and excludes:
1,297,532 shares of common stock issuable upon the exercise of stock options outstanding as of December 31, 2015June 30, 2017 with a weighted average exercise price of $2.99$11.88 per share;
515 shares of common stock issuable upon the vesting of outstanding restricted stock awards;
1,869,941 shares of common stock available for future grants under our 2014 Equity Incentive Plan as of December 31, 2015; andJune 30, 2017;
261,833 shares of common stock available for future grants under our 2015 New Employee Incentive Plan as of December 31, 2015; andJune 30, 2017;
3,659,504 shares of our common stock issuable upon the exercise of outstanding warrants as of December 31, 2015June 30, 2017 with a weighted-average exercise price of $1.48$4.06 per share.share;
1,387,917 shares of our common stock issued after June 30, 2016 pursuant to our equity line of credit; and
the shares of our common stock issuable upon the exercise of the Warrants offered hereby.
MARKET PRICE OF OUR COMMON STOCK AND RELATED STOCKHOLDER MATTERS
From August 2000 (our initial public offering in Germany) until September 2007, our common stock was quoted on the Frankfurt Stock Exchange under the symbol "XMPA"“XMPA” (formerly XMP). In September 2007, our stock closed trading on the Frankfurt Stock Exchange. In December 2005, our common stock commenced trading on the NASDAQ Capital Market under the symbol "CYTX."“CYTX.” From December 2005 until February 2006, our common stock traded on the NCM,NASDAQ Capital Market, from February 2006 until February 2016, it traded on the NGM,NASDAQ Global Market, and since February 2016, it has traded on the NCM.NASDAQ Capital Market. Our common stock has, from time to time, traded on a limited, sporadic and volatile basis. The following tables show the high and low sales prices for our common stock for the periods indicated, as reported by NASDAQ.on the NASDAQ Global Market or the NASDAQ Capital Market, as applicable. These prices do not include retail markups, markdowns or commissions.
|
| Price Ranges |
| |||||
|
| High |
|
| Low |
| ||
Fiscal Year Ended December 31, 2017 |
|
|
|
|
|
| ||
First Quarter |
|
| $1.99 |
|
|
| $1.53 |
|
Second Quarter |
|
| $1.72 |
|
|
| $0.92 |
|
Third Quarter (through September 29, 2017) |
|
| $1.17 |
|
|
| $0.31 |
|
|
|
|
|
|
|
|
|
|
Fiscal Year Ended December 31, 2016 |
|
|
|
|
|
|
|
|
First Quarter |
|
| $3.30 |
|
|
| $1.95 |
|
Second Quarter |
|
| $5.25 |
|
|
| $2.00 |
|
Third Quarter |
|
| $2.25 |
|
|
| $1.83 |
|
Fourth Quarter |
|
| $2.00 |
|
|
| $1.36 |
|
|
|
|
|
|
|
|
|
|
Fiscal Year Ended December 31, 2015 |
|
| $20.55 |
|
|
| $6.60 |
|
First Quarter |
|
| $20.25 |
|
|
| $8.40 |
|
Second Quarter |
|
| $8.25 |
|
|
| $4.50 |
|
Third Quarter |
|
| $6.30 |
|
|
| $2.85 |
|
Fourth Quarter |
|
|
|
|
|
|
|
|
Price Ranges | ||||
High | Low | |||
Fiscal Year Ended December 31, 2016 | ||||
First Quarter | 0.24 | 0.128 | ||
Second Quarter (through April 5, 2016) | 0.255 | 0.21 | ||
Fiscal Year Ended December 31, 2015 | ||||
First Quarter | 1.37 | 0.44 | ||
Second Quarter | 1.35 | 0.56 | ||
Third Quarter | 0.55 | 0.30 | ||
Fourth Quarter | 0.42 | 0.19 | ||
Fiscal Year Ended December 31, 2014 | ||||
First Quarter | 3.47 | 2.44 | ||
Second Quarter | 2.88 | 2.14 | ||
Third Quarter | 2.52 | 0.66 | ||
Fourth Quarter | 0.70 | 0.36 |
The closing price of our common stock on April 5, 2016September 29, 2017 was $0.23$0.37 per share. All of our outstanding shares have been deposited with the Depository Trust & Clearing Corporation, or DTCC, since December 2005. As of January 31, 2016,August 10, 2017, we had approximately 2115 record holders of our common stock. Because many of our shares are held by brokers and other institutions on behalf of stockholders, we are unable to estimate the total number of individual stockholders represented by these record holders.
We have never declared or paid cashany dividends on our common stock in the past and we currentlydo not anticipate that no cash dividends will be paid on common stockpaying any in the foreseeable future. Furthermore, our loan agreement with Oxford Finance LLCLoan and Security Agreement currently prohibits our issuance of cash dividends. We expect as of the date hereofcurrently intend to retain anyall of our future earnings, if any, to fundfinance the operation and expansion of our business. Any future determination relating to our dividend policy will be made at the discretion of our board of directors and will depend on a number of factors, including future earnings, capital requirements, financial conditions, future prospects, contractual restrictions and covenants and other factors that our board of directors may deem relevant.
The Subscription Rights
We are distributing to the record holders of our common stock, at no charge, non-transferable Subscription Rights to purchase one Unit at a subscription price of $$1,000 per Unit. Each Basic Subscription Right will entitle you to purchase one share of our common stockSeries B Preferred Stock and of a1,250 Warrants. Each Warrant representing the right to purchasewill be exercisable for one share of our common stock at an exercise price of $$0.48 per share from the date of issuance through the expiration two years30 months from the date of issuance. Each record holder of our common stock will receive one Subscription Right for every sharesshare of our common stock owned by such record holder as of the Record Date. Each Subscription Right entitles the record holder to a Basic Subscription Right and an Over-Subscription Privilege.
Basic Subscription Rights
Your Basic Subscription Rights will entitle you to purchase one share of our common stockSeries B Preferred Stock and of a Warrant to purchase one share of our common stock.1,250 Warrants. For example, if you owned 100 shares of common stock as of the Record Date, you will receive 100 Subscription Rights and will have the right to purchase 100 shares of our common stockSeries B Preferred Stock and Warrants to purchase 125,000 shares of our common stock for $$1,000 per whole Unit, or a total payment of $ .$100,000. You may exercise all or a portion of your Basic Subscription Rights, or you may choose not to exercise any of your Basic Subscription Rights. If you do not exercise your Basic Subscription Rights in full, you will not be entitled to exercise your Over-Subscription Privilege.
Over-Subscription Privilege
If you exercise your Basic Subscription Rights in full, you may also choose to exercise your Over-Subscription Privilege. Subject to proration and stock ownershipthe limitations if applicable,described in this prospectus, we will seek to honor the Over-Subscription Privilege requestsRequests in full. If Over-Subscription Privilege requestsRequests exceed the number of Units available, however, we will allocate the available Units pro rata among the stockholders as of the record date exercising the Over-Subscription Privilege in proportion to the number of shares of our common stock each of those stockholders owned on the Record Date, relative to the number of shares owned on the Record Date by all stockholders as of the record date exercising the Over-Subscription Privilege. If this pro rata allocation results in any stockholder receiving a greater number of Units than the record holder subscribed for pursuant to the exercise of the Over-Subscription Privilege, then such record holder will be allocated only that number of Units for which the record holder oversubscribed, and the remaining Units will be allocated among all other stockholders exercising the Over-Subscription Privilege on the same pro rata basis described above. The proration process will be repeated until all Units have been allocated.
Broadridge Corporate Issuer Solutions, Inc., the Subscription Agent for the Rights Offering, will determine the over-subscription allocation based on the formula described above.
To the extent the aggregate subscription payment of the actual number of unsubscribed Units available to you pursuant to the Over-Subscription Privilege is less than the amount you actually paid in connection with the exercise of the Over-Subscription Privilege, you will be allocated only the number of unsubscribed Units available to you, and any excess subscription payments will be returned to you, without interest or deduction, with 10 business days after expiration of the Rights Offering.
We can provide no assurances that you will actually be entitled to purchase the number of Units issuable upon the exercise of your Over-Subscription Privilege in full at the expiration of the Rights Offering. We will not be able to satisfy any requests for Units pursuant to the Over-Subscription Privilege if all of our stockholders exercise their Basic Subscription Rights in full, and we will only honor an Over-Subscription Privilege to the extent sufficient Units are available following the exercise of Basic Subscription Rights.
Limitation on the Purchase of Units
You may only purchase the number of whole Units purchasable upon exercise of the number of Basic Subscription Rights distributed to you in the Rights Offering, plus the Over-Subscription Privilege, if any. Accordingly, the number of Units that you may purchase in the Rights Offering is limited by the number of shares of our common stock you held on the Record Date and by the extent to which other stockholders exercise their Basic Subscription Rights and Over-Subscription Privileges, which we cannot determine prior to completion of the Rights Offering. However, due to stock exchange restrictions, we will not issue Units in the Rights Offering to the extent that a holder would beneficially own, together with any other person with whom such holder'sholder’s securities may be aggregated under applicable law, more than 19.9% of our outstanding shares of common stock.
Subscription Price
The Subscription Price is $$1,000 per Unit. The Subscription Price does not necessarily bear any relationship to our past or expected future results of operations, cash flows, current financial condition, or any other established criteria for value. No change will be made to the Subscription Price by reason of changes in the trading price of our common stock or other factor prior to the expiration of this Rights Offering.
Determination of Subscription Price
In the determining the Subscription Price, the board of directors considered a variety of factors including those listed below:
our need to raise capital in the near term to continue our operations;
the current and historical trading prices of our common stock;
a price that would increase the likelihood of participation in the Rights Offering;
the cost of capital from other sources;
the value of the Series B Preferred Stock being issued as a component of the Unit;
the value of the Warrant being issued as a component of the Unit;
comparable precedent transactions, including the percentage of shares offered, the terms of the subscription rights being offered, the subscription price and the discount that the subscription price represents to the immediately prevailing closing prices for these offerings;
an analysis of stock price trading multiples for companies similar to us that, among other things, did not need to raise capital in the near-term; and
our most recently forecasted revenue relative to our peer group.
The Subscription Price does not necessarily bear any relationship to any established criteria for value. No valuation consultant or investment banker has opined upon the fairness or adequacy of the Subscription Price. You should not consider the Subscription Price as an indication of actual value of our company or our common stock. You should not assume or expect that, after the Rights Offering, our shares of common stock will trade at or above the Subscription Price in any given time period. The market price of our common stock may decline during or after the Rights Offering. We cannot assureThere is currently no market for our shares of Series B Preferred Stock and, unless we or you thatchoose to convert your shares of Series B Preferred Stock, or they automatically convert upon receipt of Stockholder Approval, into shares of common stock, you will not be able to sellre-sell such shares. We cannot predict the price at which our shares of our common stock purchased duringand, if listed, the Warrants will trade after the Rights Offering at a price equal to or greater than the Subscription Price.Offering. You should obtain a current price quote for our common stock and perform an independent assessment of our Series B Preferred Stock and Warrants before exercising your Subscription Rights and make your own assessment of our business and financial condition, our prospects for the future, and the terms of this Rights Offering. Once made, all exercises of Subscription Rights are irrevocable.
No Short-Sales
By exercising the Subscription rights, you are representing to us that you have not entered into any short sale or similar transaction with respect to our Common Stockcommon stock since the record date for the Rights Offering. In addition, the Subscription Rights provide that, upon exercise of the Subscription Right, you represent that you have not since the Record Date and, for so long as you continue to hold Warrants issued in connection with the exercise of the Subscription Right, agree to not to enter into any short sale or similar transaction with respect to our Common Stock.common stock. These requirements prevent you from pursuing certain investment strategies that could provide you greater financial benefits than you might have realized if the Subscription Rights did not contain these requirements.
No Recombination
The common stockSeries B Preferred Stock and Warrants comprising the Units will separate upon the exercise of the Subscription Rights, and the Units will not trade as a separate security. Holders may not recombine shares of common stockSeries B Preferred Stock and Warrants to receive a Unit.
Non-Transferability of Subscription Rights
The Subscription Rights are non-transferable (other than by operation of law) and, therefore, you may not sell, transfer, assign or give away your Subscription Rights to anyone. The Subscription Rights will not be listed for trading on any stock exchange or market.
Expiration Date; Extension
The subscription period, during which you may exercise your Subscription Rights, expires at 5:00 p.m., Eastern Time, on , 2016,November 21, 2017, which is the expiration of the Rights Offering. If you do not exercise your Subscription Rights before that time, your Subscription Rights will expire and will no longer be exercisable. We will not be required to issue shares to you if the Subscription Agent receives your Rights Certificate or your subscription payment after that time. We have the option to extend the Rights Offering in theour sole discretion, of the Company and Maxim, although we do not presently intend to do so. We may extend the Rights Offering by giving oral or written notice to the Subscription Agent before the Rights Offering expires. If we elect to extend the Rights Offering, we will issue a press release announcing the extension no later than 9:00 a.m., Eastern Time, on the next business day after the most recently announced expiration date of the Rights Offering.
If you hold your shares of common stock in the name of a broker, dealer, bank or other nominee, the nominee will exercise the Subscription Rights on your behalf in accordance with your instructions. Please note that the nominee may establish a deadline that may be before 5:00 p.m., Eastern Time, on , 2016,November 21, 2017, which is the expiration date that we have established for the Rights Offering.
We may terminate the Rights Offering at any time and for any reason prior to the completion of the Rights Offering. If we terminate the Rights Offering, we will issue a press release notifying stockholders and the public of the termination.
Return of Funds upon Completion or Termination
The Subscription Agent will hold funds received in payment for shares in a segregated account pending completion of the Rights Offering. The Subscription Agent will hold this money until the Rights Offering is completed or is terminated. To the extent you properly exercise your Over-Subscription Privilege for an amount of Units that exceeds the number of unsubscribed Units available to you, any excess subscription payments will be returned to you within 10 business days after the expiration of the Rights Offering, without interest or deduction. If the Rights Offering is terminated for any reason, all subscription payments received by the Subscription Agent will be returned within 10 business days, without interest or deduction.
Shares of Our CommonCapital Stock and Warrants Outstanding After the Rights Offering
Assuming no other transactions by us involving our commoncapital stock prior to the expiration of the Rights Offering, and if the Rights Offering is fully subscribed, upon consummation of the Rights Offering we will have 33,328,401 shares of common stock issued and outstanding, 10,000 shares of Series B Preferred Stock issued and outstanding, and Warrants to purchase an additional 12,500,000 shares of our common stock (excluding the 3,275,693 currentlyissued and outstanding, warrants).based on 33,328,401 shares of our common stock outstanding as of June 30, 2017. The exact number of shares of Series B Preferred Stock and Warrants that we will issue in this offering will depend on the number of Units that are subscribed for in the Rights Offering.
Methods for Exercising Subscription Rights
The exercise of Subscription Rights is irrevocable and may not be cancelled or modified. You may exercise your Subscription Rights as follows:
Subscription by Record Holders
If you are a stockholder of record, or a holder of warrants, the number of Units you may purchase pursuant to your Subscription Rights in indicated on the enclosed Rights Certificate. You may exercise your Subscription Rights by properly completing and executing the Rights Certificate and forwarding it, together with your full payment, to the Subscription Agent at the address given below under "Subscription“Subscription Agent,"” to be received before 5:00 p.m., Eastern Time, on , 2016.November 21, 2017.
Subscription by Beneficial Owners
If you are a beneficial owner of shares of our common stock that are registered in the name of a broker, dealer, bank or other nominee, you will not receive a Rights Certificate. Instead, we will issue one Subscription Right to such nominee record holder for all shares of our common stock held by such nominee at the Record Date. If you are not contacted by your nominee, you should promptly contact your nominee in order to subscribe for shares in the Rights Offering and follow the instructions provided by your nominee.
To properly exercise your Over-Subscription Privilege, you must deliver the subscription payment related to your Over-Subscription Privilege before the Rights Offering expires. Because we will not know the total number of unsubscribed Units before the Rights Offering expires, if you wish to maximize the number of shares you purchase pursuant to your Over-Subscription Privilege, you will need to deliver payment in an amount equal to the aggregate subscription payment for the maximum number of Units that you wish to purchase.
Payment Method
Payments must be made in full in U.S. currency by personal check, certified check or bank draft, or by wire transfer, and payable to "Broadridge“Broadridge Corporate Issuer Solutions, Inc., as Subscription Agent for Cytori Therapeutics, Inc."” You must timely pay the full subscription payment, including payment for the Over-Subscription Privilege, for the full number of shares of our common stock you wish to acquired pursuant to the exercise of Subscription Rights by delivering a:
certified or personal check drawn against a U.S. bank payable to "Broadridge“Broadridge Corporate Issuer Solutions, Inc., as Subscription Agent for Cytori Therapeutics, Inc."”;
U.S. Postal money order payable to "Broadridge“Broadridge Corporate Issuer Solutions, Inc., as Subscription Agent for Cytori Therapeutics, Inc."”; or
If you elect to exercise your Subscription Rights, you should consider using a wire transfer or certified check drawn on a U.S. bank to ensure that the Subscription Agent receives your funds before the Rights Offering expires. If you send a personal check, payment will not be deemed to have been received by the Subscription Agent until the check has cleared. The clearinghouse may require five or more business days to clear a personal check. Accordingly, holders who wish to pay the Subscription Price by means of a personal check should make payment sufficiently in advance of the expiration of the Rights Offering to ensure that the payment is received and clears by that date. If you send a certified check, payment will be deemed to have been received by the Subscription Agent immediately upon receipt of such instrument.
You should read the instruction letter accompanying the Rights Certificate carefully and strictly follow it. DO NOT SEND RIGHTS CERTIFICATES OR PAYMENTS DIRECTLY TO US. We will not consider your subscription received until the Subscription Agent has received delivery of a properly completed and duly executed Rights Certificate and payment of the full subscription payment.
The method of delivery of Rights Certificates and payment of the subscription payment to the Subscription Agent will be at the risk of the holders of Subscription Rights. If sent by mail, we recommend that you send those certificates and payments by registered mail, properly insured, with return receipt requested, or by overnight courier, and that you allow a sufficient number of days to ensure delivery to the Subscription Agent and clearance of payment before the Rights Offering expires.
If you fail to complete and sign the Rights Certificate or otherwise fail to follow the subscription procedures that apply to the exercise of your Subscription Rights before the Rights Offering expires, the Subscription Agent will reject your subscription or accept it to the extent of the payment received. Neither we nor our Subscription Agent undertakes any responsibility or action to contact you concerning an incomplete or incorrect subscription form, nor are we under any obligation to correct such forms. We have the sole discretion to determine whether a subscription exercise properly complies with the subscription procedures.
If you send a payment that is insufficient to purchase the number of shares you requested, or if the number of shares you requested is not specified in the forms, the payment received will be applied to exercise your Subscription Rights to the fullest extent possible based on the amount of the payment received. Any excess subscription payments received by the Subscription Agent will be returned, without interest or deduction, within 10 business days following the expiration of the Rights Offering.
Issuance of common stockSeries B Preferred Stock and Warrants
The shares of common stockSeries B Preferred Stock and Warrants that are purchased in the Rights Offering as part of the Units will be issued in book-entry, or uncertificated, form meaning that you will receive a direct registration (DRS)DRS account statement from our transfer agent reflecting ownership of these securities if you are a holder of record of shares or warrants. If you hold your shares of common stock in the name of a bank, broker, dealer, or other nominee, DTC will credit your account with your nominee with the securities you purchased in the Rights Offering.
Subscription and Information Agent
The Subscription and Information Agent for the Rights Offering is Broadridge Corporate Issuer Solutions, Inc.Inc.. The address to which Rights Certificates and payments should be mailed or delivered by overnight courier is provided below. If sent by mail, we recommend that you send documents and payments by registered mail, properly insured, with return receipt requested, and that you allow a sufficient number of days to ensure delivery to the Subscription Agent and clearance or payment before the Rights Offering expires. Do not send or deliver these materials to us.
By mail: | By hand or overnight courier: | |
Broadridge Corporate Issuer Solutions, Inc. Attn: BCIS Re-Organization Dept. |
If you deliver the Rights Certificates in a manner different than that described in this prospectus, we may not honor the exercise of your Subscription Rights.
You should direct any questions or requests for assistance concerning the method of subscribing for the shares of our common stock or for additional copies of this prospectus to the Information Agent as follows:
Broadridge Corporate Issuer Solutions, Inc.
The Warrant Agentwarrant agent for the Warrants is Broadridge Corporate Issuer Solutions, Inc.Inc.
No Fractional Shares
We will not issue fractional shares of common stockSeries B Preferred Stock in the Rights Offering. Subscription Rights holders will only be entitled to purchase a number of Units representing a whole number of shares of common stock,and Warrants, rounded down to the nearest whole number of Unitsshares or Warrants, as applicable, a holder would otherwise be entitled to purchase. Any excess subscription payments received by the Subscription Agent will be returned within 10 business days after expiration of the Rights Offering, without interest or deduction. Similarly, no fractional shares of common stock will be issued in connection with the exercise of a Warrant. Instead, for any such fractional share that would otherwise have been issuable upon exercise of the Warrant, the holder will be entitled to a cash payment equal to the pro-rated per share market price of the common stock on the last trading day preceding the exercise.
Notice to Brokers and Nominees
If you are a broker, dealer, bank or other nominee holder that holds shares of our common stock for the account of others on the Record Date, you should notify the beneficial owners of the shares for whom you are the nominee of the Rights Offering as soon as possible to learn their intentions with respect to exercising their Subscription Rights. If a beneficial owner of our common stock so instructs, you should complete the Rights Certificate and submit it to the Subscription Agent with the proper subscription payment by the expiration date. You may exercise the number of Subscription Rights to which all beneficial owners in the aggregate otherwise would have been entitled had they been direct holders of our common stock on the Record Date, provided that you, as a nominee record holder, make a proper showing to the Subscription Agent by submitting the form entitled "Nominee“Nominee Holder Certification,"” which is provided with your Rights Offering materials. If you did not receive this form, you should contact our Subscription Agent to request a copy.
Validity of Subscriptions
We will resolve all questions regarding the validity and form of the exercise of your Subscription Rights, including time of receipt and eligibility to participate in the Rights Offering. Our determination will be final and binding. Once made, subscriptions are irrevocable; we will not accept any alternative, conditional, or contingent subscriptions. We reserve the absolute right to reject any subscriptions not properly submitted or the acceptance of which would be unlawful. You must resolve any irregularities in connection with your subscriptions before the expiration date of the Rights Offering, unless we waive them in our sole discretion. Neither we nor the Subscription Agent is under any duty to notify you or your representative of defects in your subscriptions. A subscription will be considered accepted, subject to our right to withdraw or terminate the Rights Offering, only when the Subscription Agent receives a properly completed and duly executed Rights Certificate and any other required documents and the full subscription payment including final clearance of any personal check. Our interpretations of the terms and conditions of the Rights Offering will be final and binding.
Stockholder Rights
You will have no rights as a holder of the shares of our common stock you purchaseissuable upon conversion of the Series B Preferred Stock issued in the Rights Offering until such Series B Preferred Stock is converted to common stock and such shares of common stock are issued in book-entry form or your account at your broker, dealer, bank or other nominee is credited with the shares of our common stock purchased in the Rights Offering.stock. Holders of Warrants issued in connection with the Rights Offering will not have rights as holders of our common stock until such Warrants are exercised and the shares of common stock underlying the Warrants are issued to the holder.
We will not mail this prospectus or Rights Certificates to stockholders with addresses that are outside the United States or that have an army post office or foreign post office address. The Subscription Agent will hold these Rights Certificates for their account. To exercise Subscription Rights, our foreign stockholders must notify the Subscription Agent prior to 5:00 p.m., Eastern Time, on , 2016,November 21, 2017, the third business day prior to the expiration date, of your exercise of Subscription Rights and provide evidence satisfactory to us, such as a legal opinion from local counsel, that the exercise of such Subscription Rights does not violate the laws of the jurisdiction in which such stockholder resides and payment by a U.S. bank in U.S. dollars before the expiration of the offer. If no notice is received by such time or the evidence presented is not satisfactory to us, the Subscription Rights represented thereby will expire.
No Revocation or Change
Once you submit the Rights Certificate or have instructed your nominee of your subscription request, you are not allowed to revoke or change the exercise or request a refund of monies paid. All exercises of Subscription Rights are irrevocable, even if you learn information about us that you consider to be unfavorable. You should not exercise your Subscription Rights unless you are certain that you wish to purchase shares at the Subscription Price.
U.S. Federal Income Tax Treatment of Rights Distribution
For U.S. federal income tax purposes, we do not believe holders of shares of our common stock or warrants should recognize income or loss upon receipt or exercise of a Subscription Right. See "Material“Material U.S. Federal Income Tax Consequences."
No Recommendation to Rights Holders
Our board of directors is not making a recommendation regarding your exercise of the Subscription Rights. Stockholders who exercise Subscription Rights risk investment loss on money invested. There is currently no market for our shares of Series B Preferred Stock and, unless we or you choose to convert your shares of Series B Preferred Stock, or they automatically convert upon receipt of Sotckholder Approval, into shares of common stock, you will not be able to re-sell such shares. We cannot assure you thatpredict the market price at which our shares of our common stock and, if listed, the Warrants will reach or exceed the Subscription Price, and even if it does so, that it will not decline during ortrade after the Rights Offering. We also cannot assure you that you will be able to sell shares of our common stock or Warrants purchased in the Rights Offering at a price equal to or greater than the Subscription Price. You should make your investment decision based on your assessment of our business and financial condition, our prospects for the future and the terms of this Rights Offering. Please see "Risk Factors"“Risk Factors” for a discussion of some of the risks involved in investing in our common stock.
Fees and Expenses
We will pay all fees charged by the Subscription Agent and the Information Agent, and by the dealer-manager. You are responsible for paying any other commissions, fees, taxes or other expenses incurred in connection with the exercise of your Subscription Rights.
The Subscription Rights may not be sold, transferred, assigned or given away to anyone, and will not be listed for trading on any stock exchange or market. There is no established public trading market for the Series B Preferred Stock and we do not intend to apply for listing of Series B Preferred Stock on any securities exchange or recognized trading system. We have appliedintend to apply to have the Warrants listed for trading on NASDAQ, under the symbol "CYTXW," however, there is no assurance that a sufficient number of Subscription Rights will be exercised so that the Warrants will meet the minimum listing criteria to be accepted for listing on NASDAQ. The shares of our common stock includingissuable upon conversion of the shares to be issued in the Rights OfferingSeries B Preferred Stock and the shares underlying the Warrants to be issued in the Rights Offering are traded on NASDAQ under the symbol "CYTX."“CYTX.”
Important
Do not send Rights Certificates directly to us. You are responsible for choosing the payment and delivery method for your Rights Certificate and you bear the risks associated with such delivery. If you choose to deliver your Rights Certificate and payment by mail, we recommend that you use registered mail, properly insured, with return receipt requested. We also recommend that you allow a sufficient number of days to ensure delivery to the Subscription Agent and clearance of payment prior to the expiration time.
Distribution Arrangements
Maxim Group LLC is the dealer-manager for the Rights Offering. The dealer-manager will provide marketing assistance and advice to us in connection with the Rights Offering and will use theirits best efforts to solicit the exercise of Subscription Rights and participation in the Over-Subscription Privilege. The dealer-manager is not underwriting or placing any of the Subscription Rights or the shares of our common stockSeries B Preferred Stock or Warrants to be issued in the Rights Offering and dodoes not make any recommendation with respect to such Subscription Rights (including with respect to the exercise or expiration of such Subscription Rights), shares or Warrants. We have agreed to pay the dealer-manager certain fees and to reimburse the dealer-manager for certain out-of-pocket expenses incurred in connection with this offering. See "Plan“Plan of Distribution.”
The following discussion is a summary of the material U.S. federal income tax consequences relating toof the receipt and exercise (or expiration) of the Subscription Rights acquired through the Rights Offering, and the ownership and disposition of shares of our common stockSeries B Preferred Stock and Warrants received upon exercise of the Subscription Rights or Warrants.
This discussion is limited to holders that hold the Subscription Rights, shares of our Series B Preferred Stock, Warrants and shares of our common stock, in each case, as a “capital asset” within the meaning of Section 1221 of the Code (generally, property held for investment). This discussion does not address all U.S. federal income tax consequences relevant to a holder’s particular circumstances, including the impact of the alternative minimum tax or the unearned income Medicare contribution tax. In addition, it does not address consequences relevant to holders subject to particular rules, including, without limitation:
U.S. expatriates and former citizens or long-term residents of the United States;
persons holding the Subscription Rights, shares of our Series B Preferred Stock, Warrants or shares of our common stock as part of a hedge, straddle or other risk reduction strategy or as part of a conversion transaction or other integrated investment;
banks, insurance companies, and other financial institutions;
brokers, dealers or traders in securities;
“controlled foreign corporations,” “passive foreign investment companies,” and corporations that accumulate earnings to avoid U.S. federal income tax;
partnerships or other entities or arrangements treated as partnerships for U.S. federal income tax purposes (and investors therein);
tax-exempt organizations or governmental organizations;
persons deemed to sell the Subscription Rights, shares of Series B Preferred Stock, or Warrants or shares of our common stock under the constructive sale provisions of the Code;
persons for whom our stock constitutes “qualified small business stock” within the meaning of Section 1202 of the Code;
tax-qualified retirement plans.
If an entity treated as a partnership for U.S. federal income tax purposes holds our common stock, Subscription Rights, shares of our Series B Preferred Stock and Warrants acquired upon exercise of Subscription Rights or shares of our common stock acquired upon conversion of our Series B Preferred Stock or exercise of the Warrants, as the case may be, that is for U.S. federal incomethe tax purposes: (1) an individual who istreatment of a citizen or residentpartner in the partnership will depend on the status of the United States; (2) a corporation (or other entity treated as a corporation for U.S. federal income tax purposes) created or organized in or underpartner, the lawsactivities of the United States or any state thereof orpartnership and certain determinations made at the District of Columbia; (3) an estatepartner level. Accordingly, partnerships and the income of which is subject to U.S. federal income taxation regardless of its source; or (4) a trust (a) the administration of which is subject to the primary supervision of a court within the United States and one or more United States persons as describedpartners in Section 7701(a)(30) of the Code have authority to control all substantial decisions of the trust, or (b) that has a valid election in effect to be treated as a United States person. A "Non-U.S. Holder" is such a beneficial owner (other than an entity or arrangement that is treated as a partnership for U.S. federal incomepartnerships should consult their tax purposes) that is not a U.S. Holder.
THIS DISCUSSION IS FOR INFORMATION PURPOSES ONLY AND SERIES R WARRANTSIS NOT TAX ADVICE. INVESTORS SHOULD CONSULT THEIR OWN TAX ADVISORS REGARDINGWITH RESPECT TO THE APPLICATION OF THE U.S. FEDERAL INCOME TAX LAWS TO THEIR PARTICULAR SITUATIONS AND THEAS WELL AS ANY TAX CONSEQUENCES UNDER FEDERAL ESTATE AND GIFT TAX LAWS, FOREIGN, STATE, AND LOCAL LAWS AND TAX TREATIES OF THE RECEIPT, OWNERSHIP AND EXERCISE OF SUBSCRIPTION RIGHTS AND THE ACQUISITION, OWNERSHIP, AND DISPOSITION OF SHARES OF OUR COMMONSERIES B PREFERRED STOCK AND WARRANTS ACQUIRED UPON EXERCISE OF SUBSCRIPTION RIGHTS AND SHARES OF OUR COMMON STOCK ACQUIRED UPON CONVERSION OF SERIES B PREFERRED STOCK OR EXERCISE OF WARRANTS.
Tax ConsequencesConsiderations Applicable to U.S. Holders
Definition of a U.S. Holder
For purposes of this discussion, a “U.S. holder” is any beneficial owner of shares of our common stock Subscription Rights, shares of our Series B Preferred Stock and Warrants acquired upon exercise of Subscription Rights or shares of our common stock acquired upon conversion of our Series B Preferred Stock or exercise of Warrants, as the case may be, that, for U.S. federal income tax purposes, is:
an individual who is a citizen or resident of the United States;
a corporation (or other entity treated as a corporation for U.S. federal income tax purposes) created or organized under the laws of the United States, any state thereof, or the District of Columbia;
an estate, the income of which is subject to U.S. federal income tax regardless of its source; or
a trust that (1) is subject to the primary supervision of a U.S. court and the control of one or more United States persons (within the meaning of Section 7701(a)(30) of the Code), or (2) has made a valid election under applicable Treasury Regulations to continue to be treated as a United States person.
Although the authorities governing transactions such as this Rights Offering are complex and do not speak directly to the consequences of certain aspects of this Rights Offering, including the inclusion of the right to purchase Warrants in the Subscription Rights (rather than the right to purchase only shares of our common stock)Series B Preferred Stock) and the effects of the Over-Subscription Privilege, we do not believe youra U.S. holder’s receipt of Subscription Rights pursuant to the Rights Offering should be treated as a taxable distribution with respect to yourtheir existing shares of common stock or warrants for U.S. federal income tax purposes. Section 305(a) of the Code states that a stockholder'sstockholder’s taxable income does not include in-kind stock dividends; however, the general non-recognition rule in Section 305(a) of the Code is subject to exceptions described in Section 305(b), of the Code, which include "disproportionate“disproportionate distributions."” A disproportionate distribution is a distribution or a series of distributions, including deemed distributions, that has the effect of the receipt of cash or other property by some stockholders or holders of debt instruments convertible into stock and an increase in the proportionate interest of other stockholders in a corporation'scorporation’s assets or earnings and profits. We do not believe that the receipt of Subscription Rights pursuant to the Rights Offering is a disproportionate distribution for these purposes.
Our position regarding the tax-free treatment of the Subscription Right distribution is not binding on the IRS, or the courts. If this position is finally determined by the IRS or a court to be incorrect, whether on the basis that the issuance of the Subscription Rights is a "disproportionate distribution"“disproportionate distribution” or otherwise, the fair market value of the Subscription Rights would be taxable to U.S. holders of our common stock as a dividend to the extent of the holder'sU.S. holder’s pro rata share of our current and accumulated earnings and profits, if any, with any excess being treated as a return of capital to the extent thereof and then as capital gain. Although no assurance can be given, it is anticipated that we will not have current and accumulated earnings and profits through the end of 2016. Further, ifIf our position is incorrect, the treatment of holders of warrants in that case is not clear, and it may differ from the treatment of the Subscription Right distributiontax consequences applicable to the holders of our common stock.
The following discussion is based upon the treatment of the Subscription Right issuance as a non-taxable distribution with respect to youra U.S. holders’ existing shares of common stock or warrants for U.S. federal income tax purposes.
Tax Basis in the Subscription Rights
If the fair market value of the Subscription Rights you receivea U.S. holder receives is less than 15% of the fair market value of yourthe U.S. holder’s existing shares of common stock or warrants (with respect to which the Subscription Rights are distributed) on the date you receivethe U.S. holder receives the Subscription Rights, the Subscription Rights will be allocated a zero tax basis for U.S. federal income tax purposes, unless you electthe U.S. holder elects to allocate yourits tax basis in yourits existing shares of common stock or warrants between yourits existing shares of common stock or warrants and the Subscription Rights in proportion to the relative fair market values of the existing shares of common stock or warrants and the Subscription Rights determined on the date of receipt of the Subscription Rights. If you choosea U.S. holder chooses to allocate tax basis between yourits existing common shares or warrants and the Subscription Rights, youthe U.S. holder must make this election on a statement included with yourits timely filed tax return (including extensions) for the taxable year in which you receivethe U.S. holder receives the Subscription Rights. Such an election is irrevocable.
The fair market value of the Subscription Rights on the date that the Subscription Rights are distributed is uncertain, and we have not obtained, and do not intend to obtain, an appraisal of the fair market value of the Subscription Rights on that date. In determining the fair market value of the Subscription Rights, youU.S. holders should consider all relevant facts and circumstances, including any difference between the Subscription Price of the Subscription Rights and the trading price of our shares of common stock on the date that the Subscription Rights are distributed, the fair market value of the Series B Preferred Stock, the exercise price of the warrants,Warrants, the length of the period during which the Subscription Rights may be exercised and the fact that the Subscription Rights are non-transferable.
Exercise of Subscription Rights
Generally, youa U.S. holder will not recognize gain or loss upon the exercise of a Subscription Right in the Rights Offering. YourA U.S. holder’s adjusted tax basis, if any, in the Subscription Right plus the Subscription Price should be allocated between the new common share of Series B Preferred Stock and the Warrant acquired upon exercise of the Subscription Right in proportion to their relative fair market values on the exercise date. This allocation will establish yourthe U.S. holder’s initial tax basis for U.S. federal income tax purposes in yourthe new common shares of Series B Preferred Stock and Warrants.Warrants received upon exercise. The holding period of a share of common stockSeries Preferred Stock or a Warrant acquired upon exercise of a Subscription Right in the Rights Offering will begin on the date of exercise.
If, youat the time of the receipt or exercise aof the Subscription Right, received in the Rights Offering after disposing ofU.S. holder no longer holds the shares of our common stock or warrants with respect to which suchthe Subscription Right is received,was distributed, then certain aspects of the tax treatment of the receipt and exercise of the Subscription Right are unclear, including (1) the allocation of the tax basis between the shares of our common stock or warrants previously sold and the Subscription Right, (2) the impact of such allocation on the amount and timing of gain or loss recognized with respect to the shares of our common stock or warrants previously sold, and (3) the impact of such allocation on the tax basis of the shares of our common stockSeries B Preferred Stock and warrantsWarrants acquired upon exercise of the Subscription Right. If you exercisea U.S. holder exercises a Subscription Right received in the Rights Offering after disposing of shares of our common stock or warrants with respect to which the Subscription Right is received, youthe U.S. holder should consult with yourits tax advisor.
Expiration of Subscription Rights
If you allowa U.S. holder allows Subscription Rights received in the Rights Offering to expire, youthe U.S. holder should not recognize any gain or loss for U.S. federal income tax purposes, and youthe U.S. holder should re-allocate any portion of the tax basis in yourits existing common shares or warrants previously allocated to the Subscription Rights that have expired to the existing common shares or warrants.
Sale or other TaxableOther Disposition, Exercise or Expiration of Warrants
Upon the sale exchange or other taxable disposition of a Warrant in general, you(other than by exercise), a U.S. holder will generally recognize taxablecapital gain or loss measured byequal to the difference if any, between (i) the amount of cashrealized on the sale or other disposition and the fair market value of any property received upon such taxable disposition, and (ii) your adjustedU.S. holder’s tax basis in the Warrant as allocated pursuant to the rules discussed above. Your gain or loss generally will beWarrant. This capital gain or loss and generally will be long-term capital gain or loss if the U.S. holder’s holding period in such Warrant is more than one year at the time of the sale or other disposition, yourdisposition. The deductibility of capital losses is subject to certain limitations.
In general, a U.S. holder will not be required to recognize income, gain or loss upon exercise of a Warrant for its exercise price. A U.S. holder’s tax basis in a share of our common stock received upon exercise of the Warrants will be equal to the sum of (1) the U.S. holder’s tax basis in the Warrants exchanged therefor and (2) the exercise price of such Warrants. A U.S. holder’s holding period forin the shares of our common stock received upon exercise will commence on the day after such U.S. holder exercises the Warrants. Although there is no direct legal authority as to the U.S. federal income tax treatment of an exercise of a Warrant on a cashless basis, we intend to take the position that such exercise will not be taxable, either because the exercise is not a gain realization event or because it qualifies as a tax-free recapitalization. In the former case, the holding period of the shares of our common stock received upon exercise of Warrants should commence on the day after the Warrants are exercised. In the latter case, the holding period of the shares of our common stock received upon exercise of Warrants would include the holding period of the exercised Warrants. However, our position is not binding on the IRS and the IRS may treat a cashless exercise of a Warrant as a taxable exchange. U.S. holders are urged to consult their tax advisors as to the consequences of an exercise of a Warrant on a cashless basis, including with respect to their holding period and tax basis in the common stock received.
If a Warrant expires without being exercised, a U.S. holder will recognize a capital loss in an amount equal to such holder’s tax basis in the Warrant. Such loss will be long-term capital loss if, at the time of the expiration, the U.S. holder’s holding period in such Warrant is more than one year. The deductibility of capital losses is subject to certain limitations.
Constructive Dividends on Warrants
As described in the Warrant exercised, increased by the amount of cash paidsection entitled “Dividend Policy,” we do not anticipate declaring or paying dividends to exercise the Warrant and decreased by the adjusted tax basis allocable to any fractional share that would otherwise have been issuable upon exercise of the Warrant. Your holding period for the sharesholders of our common stock received on exercise generally will commence onin the day of exercise.
We are currently required to you if,report the amount of any deemed distributions on our website or to the IRS and to holders not exempt from reporting. On April 12, 2016, the extent that, such adjustment hasIRS proposed regulations addressing the effectamount and timing of increasing your proportionate interestdeemed distributions, as well as, obligations of withholding agents and filing and notice obligations of issuers in our earnings and profits or assets, depending on the circumstancesrespect of such adjustment (for example, if such adjustmentdeemed distributions. If adopted as proposed, the regulations would generally provide that (i) the amount of a deemed distribution is to compensate for a distribution of cash or other property to our stockholders). Adjustments to the exercise price of Warrants made pursuant to a bona fide reasonable adjustment formula that has the effect of preventing dilutionexcess of the interestfair market value of the holdersright to acquire stock immediately after the conversion rate adjustment over the fair market value of the Warrants should generally not be consideredright to result in a constructive distribution. Any such constructiveacquire stock (after the conversion rate adjustment) without the adjustment, (ii) the deemed distribution would be taxable whether or not there is anoccurs at the earlier of the date the adjustment occurs under the terms of the instrument and the date of the actual distribution of cash or other property. Seeproperty that results in the more detailed discussiondeemed distribution and (iii) we are required to report the amount of any deemed distributions on our website or to the rules applicableIRS and to all holders (including holders that would otherwise be exempt from reporting). The final regulations will be effective for deemed distributions made by usoccurring on or after the date of adoption, but holders and withholding agents may rely on them prior to that date under certain circumstances.
Distributions on Series B Preferred Stock and Common Stock
As described in the heading "Taxation of Common Shares – Distributions" below.
Sale, Exchange or Other Disposition of Series B Preferred Stock and thereafter as capital gain.
Upon a sale, exchange, or otherwise disposeother disposition of shares ofour Series B Preferred Stock (other than by conversion) or our common stock, acquired upon exercise of Subscription Rights or upon exercise of Warrants in a taxable transaction, youU.S. holder generally will generally recognize capital gain or loss equal to the difference between the amount realized (not including any amount attributable to declared and yourunpaid dividends, which will be taxable as described above to U.S. holders of record who have not previously included such dividends in income) and the U.S. holder’s adjusted tax basis in our Series B Preferred Stock or our common stock. The U.S. holder’s adjusted tax basis in our Series B Preferred Stock generally will equal its cost for the shares.Series B Preferred stock, reduced by the amount of any cash distributions treated as a return of capital as described above. A U.S. holder’s adjusted tax basis in our common stock generally will equal its initial tax basis in our common stock (discussed below under “—Conversion of the Series B Preferred Stock into Our Common Stock”) reduced by the amount of any cash distributions treated as a return of capital as described above. Such capital gain or loss generally will be long-term capital gain or loss if yourthe U.S. holder’s holding period for such shares is more thanour Series B Preferred Stock or our common stock exceeded one year at the time of disposition.disposition (see the discussion below under “—Conversion of Our Series B Preferred Stock into Our Common Stock” regarding a U.S. holder’s holding period for our common stock). Long-term capital gain of agains recognized by certain non-corporate U.S. Holder isHolders, including individuals, generally taxed at preferentialare subject to reduced rates of U.S. federal income tax.taxation. The deductibility of capital losses is subject to limitations.
Conversion of Our Series B Preferred Stock into Our Common Stock
Generally, a U.S. holder will not recognize any gain or loss in respect of the receipt of our common stock upon the conversion of our Series B Preferred Stock. The adjusted tax basis of our common stock that a U.S. holder receives on conversion will equal the adjusted tax basis of the Series B Preferred Stock converted, and the holding period of such common stock received on conversion will include the period during which the U.S. holder held the Series B Preferred Stock prior to conversion.
In the event a U.S. holder’s Series B Preferred Stock is converted pursuant to an election by such U.S. holder in the case of certain acquisitions or fundamental changes or pursuant to certain other transactions (including our consolidation or merger into another person), the tax treatment of such a conversion will depend upon the facts underlying the particular transaction triggering such a conversion. In this regard, it is possible that any related adjustments of the conversion rate would be treated as a constructive distribution to the U.S. holder as described below under “—Tax Consequences Applicable to U.S. Holders— Constructive Dividends on Series B Preferred Stock.” U.S. holders should consult their own tax advisors to determine the specific tax treatment of a conversion under such circumstances.
Constructive Dividends on Series B Preferred Stock
The conversion rate of our Series B Preferred Stock is subject to adjustment under certain circumstances, as described above under “Description of Securities—Series B Preferred Stock.” Section 305(c) of the Code and Treasury regulations thereunder will treat a U.S. holder of our Series B Preferred Stock as having received a constructive distribution includable in such U.S. holder’s income in the manner as described above under “—Tax Consequences Applicable to U.S. Holders — Distributions on Series B Preferred Stock and Common Stock,” if and to the extent that certain adjustments in the conversion rate (or failures to make such an adjustment) increase the proportionate interest of such U.S. holder in our earnings and profits. For example, an increase in the conversion rate to reflect a taxable dividend to holders of our common stock or an increase in the conversion rate upon certain events as described above will generally give rise to a deemed taxable dividend to the holders of our Series B Preferred Stock to the extent of our current or accumulated earnings and profits. In certain other circumstances, an adjustment to the conversion rate of our Series B Preferred Stock or a failure to make such an adjustment could potentially give rise to constructive distributions to U.S. holders of our common stock. Thus, under certain circumstances, U.S. holders may recognize income in the event of a constructive distribution even though they may not receive any cash or property. Certain adjustments to the conversion rate made pursuant to a bona fide reasonable adjustment formula which has the effect of preventing dilution in the interest of the U.S. holders of our Series B Preferred Stock will generally not be considered to result in a constructive distribution. In the event the Stockholder Approval is not obtained, the treatment of the resulting cumulative dividends that are not paid in cash is not entirely clear. A U.S. holder may be required to include in income such cumulative dividends as constructive dividends even though they are not paid in cash. U.S. holders should consult their tax advisors regarding the proper treatment of the cumulative dividends.
Information Reporting and Backup Withholding
A U.S. holder may be subject to information reporting and/orand backup withholding with respect to the grosswhen such holder receives dividend payments (including constructive dividends) or receives proceeds from the sale or other taxable disposition of the Warrants, shares of our common stockSeries B Preferred Stock acquired through the exercise of Subscription Rights or shares of our common stock acquired through theconversion of our Series B Preferred Stock or exercise of Warrants, or dividend payments. Backupthe Warrants. Certain U.S. holders are exempt from backup withholding, (currently at the rate of 28%) may apply underincluding corporations and certain circumstancestax-exempt organizations. A U.S. holder will be subject to backup withholding if you (1) failsuch holder is not otherwise exempt and such holder:
fails to furnish your social security or otherthe holder’s taxpayer identification number, which for an individual is ordinarily his or TIN, (2) furnishher social security number;
furnishes an incorrect TIN, (3) failtaxpayer identification number;
is notified by the IRS that the holder previously failed to properly report payments of interest or dividends properly,dividends; or (4) fail
fails to provide a certified statement, signedcertify under penaltypenalties of perjury that the TIN providedholder has furnished a correct taxpayer identification number and that the IRS has not notified the holder that the holder is correct, that you are not subject to backup withholding.
Backup withholding and that you are a U.S. person on IRS Form W-9 or Substitute Form W-9.is not an additional tax. Any amountamounts withheld from a payment under the backup withholding rules is allowablemay be allowed as a refund or a credit against (and may entitle you to a refund with respect to) yourU.S. holder’s U.S. federal income tax liability, provided that the required information is timely furnished to the IRS. Certain persons are exempt from information reporting and backup withholding, including corporations and financial institutions, provided that they demonstrate this fact, if requested. You are urged toU.S. holders should consult your owntheir tax advisor as to youradvisors regarding their qualification for an exemption from backup withholding and the procedureprocedures for obtaining such an exemption.
Tax ConsequencesConsiderations Applicable to Non-U.S. Holders
For purposes of this discussion, a “non-U.S. holder” is a beneficial owner of the Subscription Rights, shares of our Series B Preferred Stock, Warrants or shares of our common stock that is neither a U.S. holder nor an entity treated as a partnership for U.S. federal income tax purposes.
Receipt, Exercise and Expiration of the Subscription Rights
The discussion assumes that the receipt of Subscription Rights will be treated as a nontaxable distribution. See "“— Tax Consequences Applicable to U.S. Holders – Taxation of Subscription Rights – Receipts of Subscription Rights"Rights” above. YouNon-U.S. holders will not be subject to U.S. federal income tax (or any withholding thereof) on the receipt, exercise or expiration of the Subscription Rights.
Exercise andof Warrants
A non-U.S. holder generally will not be subject to U.S. federal income tax on the exercise of Warrants into shares of our common stock. However, if a cashless exercise of the Warrants results in a taxable exchange, as described in “— Tax Considerations Applicable to U.S. holders — Sale or Other Disposition, Exercise or Expiration of Warrants,” the rules described below under “Sale or Other Disposition of Series B Preferred Stock, Common Stock or Warrants” would apply.
Constructive Dividends on Warrants
As described in the section entitled “Dividend Policy,” we do not anticipate declaring or paying dividends to holders of our Series B Preferred Stock or common stock in the foreseeable future. However, if at any time during the period in which a non-U.S. holder holds Warrants we were to pay a taxable dividend to our stockholders and, Certain Adjustmentsin accordance with the anti-dilution provisions of the Warrants, the exercise price of the Warrants were decreased, that decrease would be deemed to Warrants
Distributions on Series B Preferred Stock and Common Stock
As described in the section entitled “Dividend Policy,” we do not anticipate declaring or paying dividends to holders of our Series B Preferred Stock or common stock in the foreseeable future. However, if we do make distributions of cash or property on our Series B Preferred Stock or common stock, such distributions will constitute dividends for U.S. federal income tax purposes upon exercise of a Warrant, except to the extent paid from our current or accumulated earnings and profits, as determined under U.S. federal income tax principles. Amounts not treated as dividends for U.S. federal income tax purposes will constitute a return of capital and first be applied against and reduce a non-U.S. holder’s adjusted tax basis in its Series B Preferred Stock or common stock, as the Non-U.S. Holder receives a cash payment for any such fractional share that would otherwise have been issuable upon exercise of the Warrant, whichcase may be, but not below zero. Any excess will be treated as a sale subjectcapital gain and will be treated as described below in the section relating to the rules described under "Salesale or Other Dispositiondisposition of Commonour Series B Preferred Stock, our common stock or Warrants" below.
Subject to the discussion below on backup withholding and foreign accounts, dividends paid to a non- U.S. holder of our Series B Preferred Stock or common stock that are not effectively connected with the Non-U.S. Holder'snon-U.S. holder’s conduct of a trade or business within the United States (and, if an income tax treaty applies, is attributable to a permanent establishment in the United States) or is treated as a U.S.-source loss and the Non-U.S. Holder is present 183 days or more in the taxable year of disposition and certain other conditions are met.
Non-U.S. holders will be requiredentitled to a reduction in or an exemption from withholding on dividends as a result of either (a) an applicable income tax treaty or (b) the non-U.S. holder holding our Series B Preferred Stock or common stock in connection with the conduct of a trade or business within the United States and dividends being effectively connected with that trade or business. To claim such a reduction in or exemption from withholding, the non-U.S. holder must provide anthe applicable withholding agent with a properly executed (a) IRS Form W-8BEN or W-8BEN-E (or other applicable documentation) claiming an exemption from or reduction of the withholding tax under the benefit of an income tax treaty between the United States and the country in which the non-U.S. holder resides or is established, or (b) IRS Form W-8BEN-E, as applicable, certifying your entitlement to benefits under a treaty. In addition, you willW-8ECI stating that the dividends are not be subject to withholding tax if you provide an IRS Form W-8ECI certifying that the distributionsbecause they are effectively connected with yourthe conduct by the non-U.S. holder of a trade or business within the United States, as may be applicable. These certifications must be provided to the applicable withholding agent prior to the payment of dividends and must be updated periodically. Non-U.S. holders that do not timely provide the applicable withholding agent with the required certification, but that qualify for a reduced rate under an applicable income tax treaty, may obtain a refund of any excess amounts withheld by timely filing an appropriate claim for refund with the IRS.
If dividends paid to a non-U.S. holder are effectively connected with the non-U.S. holder’s conduct of a trade or business within the United States (and, if required by an applicable income tax treaty, are attributable tothe non-U.S. holder maintains a permanent establishment withinin the United States); instead, you generallyStates to which such dividends are attributable), then, although exempt from U.S. federal withholding tax (provided the non-U.S. holder provides appropriate certification, as described above), the non-U.S. holder will be subject to U.S. federal income tax on such dividends on a net of certain deductions, with respect to such income basis at the same rates applicable toregular graduated U.S. persons, and if you arefederal income tax rates. In addition, a non-U.S. holder that is a corporation may be subject to a "branch profits tax" at a rate of 30% (or asuch lower rate prescribed inspecified by an applicable income tax treaty) also may applyon its effectively connected earnings and profits for the taxable year that are attributable to such effectively connected income.
Sale or Other Disposition of OurSeries B Preferred Stock, Common Stock or Warrants
Subject to the discussions below on backup withholding and foreign accounts, a non-U.S. holder will not be subject to U.S. federal income tax on any gain realized on aupon the sale or other taxable disposition of shares ofour Series B Preferred Stock, Warrants or our common stock or Warrants unless:
the gain is effectively connected with yourthe non-U.S. holder’s conduct of a trade or business within the United States (and, if required by an applicable income tax treaty, applies, is attributable tothe non-U.S. holder maintains a permanent establishment in the United States)States to which such gain is attributable);
the non-U.S. holder is a nonresident alien individual you hold your Subscription Rights, shares of common stock or Warrants as capital assets, you are present in the United States for 183 days or more induring the taxable year of the disposition and certain other conditionsrequirements are met; or
our Series B Preferred Stock, Warrants or have beenour common stock constitutes a "United StatesU.S. real property interest, or USRPI, by reason of our status as a U.S. real property holding corporation," or USRPHC, for U.S. federal income tax purposes unless an exception for 5% or less stockholders applies.purposes.
Gain that is effectively connected with your conduct of a trade or business withindescribed in the United States (and, if an income tax treaty applies, is attributable to a permanent establishment within the United States)first bullet point above generally will be subject to U.S. federal income tax on a net of certain deductions,income basis at the same rates applicable to U.S. persons. If you areregular graduated rates. A Non-U.S. holder that is a corporation also may be subject to a "branch profits tax" at a rate of 30% (or asuch lower rate prescribed inspecified by an applicable income tax treaty) also may apply toon such effectively connected gain.
Gain described in the future. If we are a USRPHC or become a USRPHC in the future, a Non-U.S. Holder may still notsecond bullet point above will be subject to U.S. federal income tax at a rate of 30% (or such lower rate specified by an applicable income tax treaty) on any gain derived from the disposition, which may be offset by U.S. source capital losses of the non-U.S. holder (even though the individual is not considered a resident of the United States), provided the non-U.S. holder has timely filed U.S. federal income tax returns with respect to such losses.
With respect to the third bullet point above, we believe we are not currently and do not anticipate becoming a USRPHC. Because the determination of whether we are a USRPHC depends on the fair market value of our USRPIs relative to the fair market value of our other business assets and our non- U.S. real property interests, however, there can be no assurance we are not a USRPHC or will not become one in the future.
Non-U.S. holders should consult their tax advisors regarding potentially applicable income tax treaties that may provide for different rules.
Conversion of Our Series B Preferred Stock into Our Common Stock
A non-U.S. holder generally will not recognize any gain or loss in respect of the receipt of our common stock upon the conversion of our Series B Preferred Stock.
Constructive Dividends on Series B Preferred Stock
As described above under “— Tax Consequences Applicable to U.S. Holders — Constructive Dividends on Series B Preferred Stock,” in certain circumstances, a non-U.S. holder will be deemed to receive a constructive distribution from us. Adjustments in the conversion rate (or failures to adjust the conversion rate) that increase the proportionate interest of a non-U.S. holder in our earnings and profits could result in deemed distributions to the non-U.S. holder that are treated as dividends for U.S. federal income tax purposes. Any constructive dividend deemed paid to a non-U.S. holder will be subject to U.S. federal income tax or withholding tax in the manner described above under “— Tax Consequences Applicable to Non-U.S. Holders — Distributions on Series B Preferred Stock and Common Stock.” It is possible that U.S. federal tax on the constructive dividend would be withheld, if applicable, from subsequent payments on the Series B Preferred Stock or our common stock. As discussed above, in the event the Stockholder Approval is not obtained, the resulting cumulative dividends may also result in constructive dividends even if they are not paid in cash. Non-U.S. holders should consult their tax advisors regarding the proper treatment of the cumulative dividends.
Information Reporting and Backup Withholding
Subject to the discussion below on foreign accounts, a non-U.S. holder will not be subject to backup withholding with respect to distributions on our Series B Preferred Stock or common stock we make to the non-U.S. holder, provided the applicable withholding agent does not have actual knowledge or reason to know such holder is a United States person and the holder certifies its non-U.S. status, such as by providing a valid IRS Form W-8BEN, W-8BEN-E or W-8ECI, or other applicable certification. However, information returns generally will be filed with the IRS in connection with any distributions (including deemed distributions) made on our Series B Preferred Stock, Warrants and our common stock to the non-U.S. holder, regardless of whether any tax was actually withheld. Copies of these information returns may also be made available under the provisions of a specific treaty or agreement to the tax authorities of the country in which the non-U.S. holder resides or is established.
Information reporting and backup withholding may apply to the proceeds of a sale or other taxable disposition if an exception for 5%of our Series B Preferred Stock, Warrants or less stockholders applies. You are urged to consult your own tax advisor regarding the U.S. federal income tax considerations that could result if we are, or become, a USRPHC and with respect to the exception for 5% or less stockholders.
Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules may be allowed as a refund or a credit against youra non-U.S. holder’s U.S. federal income tax liability, provided that the required information is timely furnished to the IRS.
Additional Withholding Tax on Payments Made to asForeign Accounts
Withholding taxes may be imposed under the Foreign Account Tax Compliance Act, or FATCA, may impose withholding taxes on certain types of payments made to "foreignnon-U.S. financial institutions" and certain other non-U.S. entities. The legislation imposesSpecifically, a 30% withholding tax may be imposed on dividends (including deemed dividends) paid on shares of our common stock and on or after January 1, 2017, theWarrants, or gross proceeds from the sale or other disposition of our shares ofSeries B Preferred Stock, Warrants or our common stock paid to a “foreign financial institution” or Warrants received bya “non-financial foreign entity” (each as defined in the Code), unless (1) the foreign financial institution undertakes certain diligence and reporting obligations, (2) the non-financial foreign entity either certifies it does not have any “substantial United States owners” (as defined in the Code) or furnishes identifying information regarding each substantial United States owner, or (3) the foreign financial institution or non-financial foreign entity otherwise qualifies for an exemption from these rules. If the payee is a foreign financial institution unlessand is subject to the foreign financial institution entersdiligence and reporting requirements in (1) above, it must enter into an agreement with the U.S. Department of the Treasury torequiring, among other things, that it undertake to identify accounts held by certain U.S. persons“specified United States persons” or U.S.-owned“United States-owned foreign entities,entities” (each as defined in the Code), annually report certain information about such accounts, and withhold 30% on certain payments to non-compliant foreign financial institutions and certain other account holders whose actions prevent it from complying with these reporting and other requirements. In addition, the legislation imposes a 30% withholding tax on the same types of payments to a non-financial foreign entity unless the entity certifies that it does not have any substantial U.S. owners or furnishes identifying information regarding each substantial U.S. owner.holders. Foreign financial institutions located in jurisdictions that have an intergovernmental agreement with the United States governing FATCA may be subject to different rules. Depending
Under the applicable Treasury Regulations and administrative guidance, withholding under FATCA generally applies to payments of dividends (including deemed dividends), and will apply to payments of gross proceeds from the sale or other disposition of our Series B Preferred Stock, Warrants or our common stock on your circumstances, youor after January 1, 2019. Because we may be entitlednot know the extent to which a refunddistribution is a dividend for U.S. federal income tax purposes at the time it is made, for purposes of these withholding rules we or credit in respect of some or all of this withholding. However, even if you are entitled to have any suchthe applicable withholding refunded,agent may treat the required procedures could be cumbersome and significantly delay your receipt of any withheld amounts.entire distribution as a dividend. Prospective investors should consult their tax advisors regarding this legislation.the potential application of these withholding provisions.
In this offering, we are offering for sale 10,000 Units, with each Unit consisting of one share of Series B Preferred Stock and 1,250 Warrants. Each Warrant will be exercisable for one share of our common stock. The shares of Series B Preferred Stock and Warrants comprising the units are immediately separable and will be issued separately, but will be purchased together in this offering. We are also registering the shares of common stock issuable upon conversion of the Series B Preferred Stock and exercise of the Warrants. These securities are being issued pursuant to a dealer-manager agreement between us and the dealer-manager. You should review the dealer-manager agreement, certificate of designation for the Series B Preferred Stock and the form of Warrant, each filed as exhibits to the registration statement of which this prospectus is a part, for a complete description of the terms and conditions applicable to the Series B Preferred Stock and the Warrants. The following brief summary of the material terms and provisions of the Series B Preferred Stock and the Warrants is subject to, and qualified in its entirety by, the certificate of designation for the Series B Preferred Stock and the form of Warrant.
Preferred Stock
We have 5,000,000 shares of authorized preferred stock, $0.001 par value, 13,500 shares of which were issued and none of which were outstanding as of June 30, 2017. Of this amount, 13,500 shares have been designated Series A convertible preferred stock, none of which are outstanding as of June 30, 2017. Our board of directors is authorized, without action by our stockholders, to classify or reclassify any unissued portion of our authorized shares of preferred stock to provide for the issuance of shares of other classes or series, including preferred stock in one or more series. Our board of directors may fix or alter the dividend rights, dividend rate, conversion rights, voting rights, rights and terms of redemption (including sinking fund provisions), the redemption price or prices, the liquidation preferences of any wholly unissued series of preferred stock, and the number of shares constituting any such series and the designation thereof, or any of them. Our board of directors may also increase or decrease the number of shares of any series subsequent to the issue of shares of that series, but not below the number of shares of such series then outstanding. In case the number of shares of any series shall be so decreased, the shares constituting such decrease shall resume the status which they had prior to the adoption of the resolution originally fixing the number of shares of such series.
We will authorize the Series B Preferred Stock by filing a certificate of designation with the Secretary of State of the State of Delaware. The certificate of designation may be authorized by our board of directors without approval by our stockholders.
Conversion. Each share of Series B Preferred Stock will be convertible at our option or the option of the holder at any time, or automatically upon receipt of Shareholder Approval, into the number of shares of our common stock determined by dividing the $1,000 stated value per share of the Series B Preferred Stock by a conversion price of $0.40 per share; provided that, until we obtain Stockholder Approval, if the number of shares of common stock issuable upon the conversion of the total number of shares of Series B Preferred Stock issued in this offering is greater than 30,000,000, each holder will only be able to convert that number of shares of Series B Preferred Stock obtained by multiplying the shares of Series B Preferred Stock issued to such holder in this offering by the Pro Rata Conversion Percentage (rounded down to the nearest whole share). In addition, the conversion price per share is subject to adjustment for stock dividends, distributions, subdivisions, combinations, or reclassifications, and for certain dilutive issuances. Subject to limited exceptions, a holder of the Series B Preferred Stock will not have the right to convert any portion of the Series B Preferred Stock to the extent that, after giving effect to the conversion, the holder, together with its affiliates, would beneficially own in excess of 9.99% of the number of shares of our common stock outstanding immediately after giving effect to its conversion.
Fundamental Transactions. In the event we effect certain mergers, consolidations, sales of substantially all of our assets, tender or exchange offers, reclassifications or share exchanges in which our common stock is effectively converted into or exchanged for other securities, cash or property, we consummate a business combination in which another person acquires 50% of the outstanding shares of our common stock, or any person or group becomes the beneficial owner of 50% of the aggregate ordinary voting power represented by our issued and outstanding common stock, then, upon any subsequent conversion of the Series B Preferred Stock, the holders of the Series B Preferred Stock will have the right to receive any shares of the acquiring corporation or other consideration it would have been entitled to receive if it had been a holder of the number of shares of common stock then issuable upon conversion in full of the Series B Preferred Stock.
Dividends. If the Stockholder Approval is not obtained before the date that is six months after the closing of the Rights Offering, or Stockholder Approval Deadline, holders of the Series B Preferred Stock will be entitled to receive cumulative dividends until the date of the Stockholder Approval at the rate per share (as a percentage of the stated value per share) of 10% per annum, in cash; provided that such dividends will not be payable until such time as the Loan and Security Agreement is terminated or our secured lender consents to the payment of such dividends. In addition, no holder of the Series B Preferred Stock will be entitled to receive dividends on the number of its shares of Series B Preferred Stock calculated by multiplying the number of shares of Series B Preferred Stock purchased by such holder in the Rights Offering by the Pro Rata Conversion Percentage.
Voting Rights. Except as otherwise provided in the certificate of designation or as otherwise required by law, the Series B Preferred Stock has no voting rights.
Liquidation Preference. Upon our liquidation, dissolution or winding-up, whether voluntary or involuntary, holders of Series B Preferred Stock will be entitled to receive out of our assets, whether capital or surplus, an amount equal to the $1,000 stated value per share for each share of Series B Preferred Stock before any distribution or payment shall be made to the holders of any junior securities.
Redemption Rights. We are not obligated to redeem or repurchase any shares of Series B Preferred Stock. Shares of Series B Preferred Stock are not otherwise entitled to any redemption rights, or mandatory sinking fund or analogous fund provisions.
Warrants
Warrants Included in Units Issuable in the Rights Offering
The Warrants to be issued as a part of this Rights Offering will be designated as our “Series S” warrants. These Warrants will be separately transferable following their issuance and through their expiration 30 months from the date of issuance. Each Warrant will entitle the holder to purchase one share of common stock at an exercise price of $0.48 per share from the date of issuance through its expiration. We intend to apply to have the Warrants listed for trading on NASDAQ, however, there is no assurance that a sufficient number of Subscription Rights will be exercised so that the Warrants will meet the minimum listing criteria to be accepted for listing on NASDAQ. The common stock underlying the Warrants, upon issuance, will also be traded on NASDAQ under the symbol “CYTX.”
All Warrants that are purchased in the Rights Offering as part of the Units will be issued in book-entry, or uncertificated, form meaning that you will receive a DRS account statement from our transfer agent reflecting ownership of Warrants if you are a holder of record of shares or warrants. The Subscription Agent will arrange for the issuance of the Warrants as soon as practicable after the closing, which will occur as soon as practicable after the Rights Offering has expired but which may occur up to five business days thereafter. At closing, all prorating calculations and reductions contemplated by the terms of the Rights Offering will have been effected and payment to us for the subscribed-for Units will have cleared. If you hold your shares of common stock in the name of a bank, broker, dealer, or other nominee, DTC will credit your account with your nominee with the Warrants you purchased in the Rights Offering.
Exercisability. Each Warrant will be exercisable at any time and from time to time after the date the Stockholder Approval is obtained and will expire 30 months from the date of issuance. 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 and 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.
Cashless Exercise. If at the time of exercise there is no effective registration statement registering, or the prospectus contained therein is not available for issuance of, the shares issuable upon exercise of the Warrant, the holder may exercise the Warrant on a cashless basis. When exercised on a cashless basis, a portion of the Warrant is cancelled in payment of the purchase price payable in respect of the number of shares of our common stock purchasable upon such exercise.
Exercise Price. Each Warrant represents the right to purchase one share of common stock at an exercise price of $0.48 per share. In addition, the exercise price per share is subject to adjustment for stock dividends, distributions, subdivisions, combinations, or reclassifications, and for certain dilutive issuances. Subject to limited exceptions, a holder of Warrants will not have the right to exercise any portion of the Warrant to the extent that, after giving effect to the exercise, the holder, together with its affiliates, would beneficially own in excess of 4.99% of the number of shares of our common stock outstanding immediately after giving effect to its exercise.
Transferability. Subject to applicable laws and restrictions, a holder may transfer a Warrant upon surrender of the Warrant to us with a completed and signed assignment in the form attached to the Warrant. The transferring holder will be responsible for any tax that liability that may arise as a result of the transfer.
Exchange Listing. We intend to apply to list the Warrants on NASDAQ, although there is no assurance that a sufficient number of Subscription Rights will be exercised so that the Warrants will meet the minimum listing criteria to be accepted for listing on NASDAQ.
Rights as Stockholder. Except as set forth in the Warrant, the holder of a Warrant, solely in such holder’s capacity as a holder of a Warrant, will not be entitled to vote, to receive dividends, or to any of the other rights of our stockholders.
Redemption Rights. We may redeem the Warrants for $0.01 per Warrant if our common stock closes above $1.20 per share for ten consecutive trading days, provided that we may not do so prior to the first anniversary of closing of the Rights Offering.
Amendments and Waivers. The provisions of each Warrant may be modified or amended or the provisions thereof waived with the written consent of us and the holder.
The Warrants will be issued pursuant to a warrant agent agreement by and between us and Broadridge Corporate Issuer Solutions, Inc., the warrant agent.
Common Stock
This section describes the general terms and provisions of the shares of our common stock, $0.001 par value. This description is only a summary and is qualified in its entirety by reference to the description of our common stock included in our amended and restated certificate of incorporation, as amended, and our amended and restated bylaws, as amended, which have been filed as exhibits to the registration statement of which this prospectus is a part. You should read our amended and restated certificate of incorporation and our amended and restated bylaws for additional information before you buy any of our common stock or other securities. See "Where“Where You Can Find More Information"Information” and "Incorporation“Incorporation by Reference."”
We have 290,000,00075,000,000 shares of authorized common stock. As of December 31, 2015,June 30, 2017, there were 195,058,39533,328,401 shares of common stock issued and outstanding, as well as warrants to purchase 3,275,6933,659,504 shares of common stock outstanding, on that date.options to purchase 1,297,532 shares of common stock outstanding and 515 shares of common stock issuable upon vesting of restricted stock awards. The holders of Common Stockcommon stock possess exclusive voting rights in us, except to the extent our board of directors specifies voting power with respect to any other class of securities issued in the future. Each holder of our common stock is entitled to one vote for each share held of record on each matter submitted to a vote of stockholders, including the election of directors. Stockholders do not have any right to cumulate votes in the election of directors.
Subject to preferences that may be granted to the holders of preferred stock, each holder of our common stock is entitled to share ratably in distributions to stockholders and to receive ratably such dividends as may be declared by our board of directors out of funds legally available therefor. In the event of our liquidation, dissolution or winding up, the holders of our common stock will be entitled to receive, after payment of all of our debts and liabilities and of all sums to which holders of any preferred stock may be entitled, the distribution of any of our remaining assets. Holders of our common stock have no conversion, exchange, sinking fund, redemption or appraisal rights (other than such as may be determined by our board of directors in its sole discretion) and have no preemptive rights to subscribe for any of our securities.
All of the outstanding shares of our common stock are, and the shares of common stock issued upon the conversion of any securities convertible into our common stock will be, fully paid and non-assessable. The shares of common stock offered by this prospectus or upon the conversion of any preferred stock or debt securities or exercise of any warrantsWarrants offered pursuant to this prospectus, when issued and paid for, will also be, fully paid and non-assessable.
Our common stock is listed on the NASDAQ Capital Market under the symbol "CYTX."
Possible Anti-Takeover Effects of Delaware Law and our Certificate of Incorporation and Bylaws
Delaware Anti-Takeover Statute
We are subject to Section 203 of the DGCL, an anti-takeover statute. In general, Section 203 of the DGCL prohibits a publicly held Delaware corporation from engaging in a "business combination"“business combination” with an "interested stockholder"“interested stockholder” for a period of three years following the time the person became an interested stockholder, unless the business combination or the acquisition of shares that resulted in a stockholder becoming an interested stockholder is approved in a prescribed manner. Generally, a "business combination"“business combination” includes a merger, asset or stock sale, or other transaction resulting in a financial benefit to the interested stockholder. Generally, an "interested stockholder"“interested stockholder” is a person who, together with affiliates and associates, owns (or within three years prior to the determination of interested stockholder status did own) 15% or more of a corporation'scorporation’s voting stock. The existence of this provision would be expected to have an anti-takeover effect with respect to transactions not approved in advance by our board of directors, including discouraging attempts that might result in a premium over the market price for the shares of common stock held by our stockholders.
Board Vacancies
Our amended and restated bylaws provide that any vacancy or vacancies in our board of directors shall be deemed to exist in the case of the death, resignation or removal of any director, or if the authorized number of directors be increased. Vacancies may be filled by a majority of the remaining directors, though less than a quorum, or by a sole remaining director, unless otherwise provided in the Certificateour amended and restated of Incorporation.incorporation, as amended. The stockholders may elect a director or directors at any time to fill any vacancy or vacancies not filled by the directors.
The authority possessed by our board of directors to issue preferred stock could potentially be used to discourage attempts by third parties to obtain control of our company through a merger, tender offer, proxy contest or otherwise by making such attempts more difficult or more costly. Our board of directors may issue preferred stock with voting rights or conversion rights that, if exercised, could adversely affect the voting power of the holders of our common stock:
Special Meeting Requirements
Our amended and restated bylaws provide that special meetings of our stockholders may only be called at the request of our president, chief executive officer or chairman of the board or by a majority of our Board of Directors.
No Cumulative Voting
The DGCL provides that stockholders are denied the right to cumulate votes in the election of directors unless our certificateamended and restated of incorporation, as amended, provides otherwise. Our certificateamended and restated of incorporation does not provide for cumulative voting.
Authorized but Unissued Shares
Our authorized but unissued shares of common stock and preferred stock will be available for future issuance without stockholder approval. We may use additional shares for a variety of purposes, including future public offerings to raise additional capital, to fund acquisitions and as employee compensation. The existence of authorized but unissued shares of common stock and preferred stock could render more difficult or discourage an attempt to obtain control of us by means of a proxy contest, tender offer, merger or otherwise.
The above provisions may deter a hostile takeover or delay a change in control or management of us.
Transfer Agent
The transfer agent and registrar for our common stock is Computershare Trust Company, N.A.
Warrant Agent
The warrant agent for the warrantsWarrants is Broadridge Corporate Issuer Solutions, Inc.
On or about , 2016,November 1, 2017, we will distribute the Subscription Rights, Rights Certificates and copies of this prospectus to the holders of our common stock on the Record Date. Subscription Rights holders who wish to exercise their Subscription Rights and purchase Units must complete the Subscription Rights Certificate and return it with payment for the shares to the Subscription Agent at the following address:
By mail: | By hand or overnight courier: | |
Attn: BCIS Re-Organization Dept. | Attn: BCIS IWS | |
P.O. Box 1317 | 51 Mercedes Way | |
Brentwood, New York 11717-0693 | Edgewood, New York 11717 | |
(855) 793-5068 (toll free) | (855) 793-5068 |
If you have any questions, you should contact our Information Agent for the Rights Offering:
Broadridge Corporate Issuer Solutions, Inc.
(855) 793-5068 (toll free)
Other than as described in this prospectus, we do not know of any existing agreements between any stockholder, broker, dealer, underwriter or agent relating to the sale or distribution of the underlying common stock.
Maxim Group LLC is the dealer-manager of this Rights Offering. In such capacity, such dealer-manager will provide marketing assistance and financial advice (including determining the Subscription Price and the structure of the Rights Offering) to us in connection with this offering and will solicit the exercise of Subscription Rights and participation in the Over-Subscription Privilege. The dealer-manager will provide us with updated investor feedback and recommendations on pricing and structure through to the end of the subscription period. The dealer-manager is not underwriting or placing any of the Subscription Rights or the shares of our common stockSeries B Preferred Stock or Warrants being issued in this offering and does not make any recommendation with respect to such Subscription Rights (including with respect to the exercise or expiration of such Subscription Rights), shares or Warrants.
In connection with this Rights Offering, we have agreed to pay fees to Maxim Group LLC as dealer-manager a cash fee equal to (i) 6% of the gross proceeds received by us directly from exercises of the Subscription Rights if the amount of such gross proceeds is less than $7.5 million or (b) 7% of the gross proceeds received by us directly from exercises of the Subscription Rights if the amount of such gross proceeds is at least $7.5 million.million. We advanced $30,000$20,000 to Maxim Group LLC against reimbursement of accountable expenses upon their engagement as a dealer-manager, or the Advance, and agreed to reimburse the reasonable fees and expenses (including legal fees) of the dealer-manager up to $75,000. Any portion of the Advance will be returned to us to the extent it is not actually incurred.
We have also agreed to indemnify the dealer-manager and its respective affiliates against certain liabilities arising under the Securities Act of 1933, as amended. The dealer-manager'sdealer-manager’s participation in this offering is subject to customary conditions contained in the dealer-manager agreement, including the receipt by the dealer-manager of an opinion of our counsel. The dealer-manager and its affiliates may provide to us from time to time in the future in the ordinary course of their business certain financial advisory, investment banking and other services for which they will be entitled to receive fees.
Maxim Group LLC is a broker-dealer and member of the Financial Industry Regulatory Authority, Inc. The principal business address of Maxim Group LLC is 405 Lexington Avenue, New York, New York 10174.10174.
The consolidated financial statements and schedule of Cytori Therapeutics, Inc. as of December 31, 2015 and 2014, and for each of the years in the three-year periodyear ended December 31, 2015, and management's assessment of the effectiveness of internal control over financial reporting as of December 31, 2015, have been2016 incorporated by reference hereinin this prospectus and in the registration statement have been so incorporated in reliance uponon the reportsreport of KPMGBDO USA, LLP, an independent registered public accounting firm (the report on the consolidated financial statements and schedule contains an explanatory paragraph regarding the Company’s ability to continue as a going concern), incorporated herein by reference, herein, and upongiven on the authority of said firm as experts in auditing and accounting.
KPMG LLP, independent registered public accounting firm, has audited the consolidated financial statements as of and for the year ended December 31, 2015 included in our Annual Report on Form 10-K for the year ended December 31, 2016, as set forth in their report, which is incorporated herein by reference. Our financial statements are incorporated by reference in reliance on KPMG LLP’s report, given on their authority as experts in accounting and auditing.
The audit report covering the December 31, 2015 consolidated financial statements contains an explanatory paragraph that states that the Company'sour recurring losses from operations, liquidity position and debt service requirements raises substantial doubt about the Company'sour ability to continue as a going concern. The consolidated financial statements and financial statement schedule do not include any adjustments that might result from the outcome of that uncertainty.
We have agreed to indemnify and hold KPMG LLP harmless against and from any and all legal costs and expenses incurred by KPMG in successful defense of any legal action or proceeding that arises as a result of KPMG’s consent to the incorporation by reference of its audit report on the Company’s past financial statements incorporated herein by reference.
The validity of the securities offered hereby will be passed upon for us by DLA PiperLatham & Watkins LLP, (US), San Diego, California. The dealer-manager is being represented by Ellenoff Grossman & Schole LLP, New York, New York.York.
We have filed a registration statement on Form S-1 with the SEC under the Securities Act of 1933, as amended. This prospectus is part of the registration statement but the registration statement includes additional information and exhibits. We file annual, quarterly and current reports, proxy statements and other information with the SEC. You may read and copy the registration statement and any document we file with the SEC at the public reference room maintained by the SEC at 100 F Street, N.E., Washington, D.C. 20549. You may obtain information on the operation of the public reference room by calling the SEC at 1-800-SEC-0330. The SEC also maintains a web site that contains reports, proxy and information statements and other information regarding companies, such as ours, that file documents electronically with the SEC. The website address is www.sec.gov. The information on the SEC'sSEC’s website is not part of this prospectus, and any references to this website or any other website are inactive textual references only.
The SEC permits us to "incorporate“incorporate by reference"reference” the information contained in documents we have filed with the SEC, which means that we can disclose important information to you by referring you to those documents rather than by including them in this prospectus. Information that is incorporated by reference is considered to be part of this prospectus and you should read it with the same care that you read this prospectus. We have filed with the SEC, and incorporate by reference in this prospectus:
our Annual Report on Form 10-K for the year ended December 31, 2015;2016;
our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2017 and June 30, 2017, filed on May 12, 2017 and August 11, 2017, respectively;
our definitive proxy statement filed on March 15, 2016;April 10, 2017;
our Current Reports on Form 8-K or 8-K/A filed on January 19, 2017, February 15, 2017, March 3, 2017, April 5, 2016, January 29, 2016, February 4, 2016, February2017, April 10, 2017, April 12, 2017, May 22, 2017, May 31, 2017, June 16, 2017, July 24, 2016,2017, September 5, 2017, September 8, 2017 and March 2, 2016.September 21, 2017; and
the description of our common stock contained in our registration statement on Form 10/A filed with the SEC on July 16, 2001 (File No. 000-32501).
Any statement contained in any document incorporated by reference herein will be deemed to be modified or superseded for purposes of this prospectus to the extent that a statement contained in this prospectus or any additional prospectus supplements modifies or supersedes such statement. Any statement so modified or superseded will not be deemed, except as so modified or superseded, to constitute a part of this prospectus.
All reports and other documents we subsequently file pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act prior to the termination of this offering, including all such documents we may file with the SEC after the date of the initial registration statement and prior to the effectiveness of the registration statement, but excluding any information furnished to, rather than filed with, the SEC, will also be incorporated by reference into this prospectus and deemed to be part of this prospectus from the date of the filing of such reports and documents.
We will provide without charge to each person, including any beneficial owner, to whom this prospectus is delivered, upon written or oral request, a copy of any or all documents that are incorporated by reference into this prospectus, but not delivered with the prospectus, supplement, other than exhibits to such documents unless such exhibits are specifically incorporated by reference into the documents that this prospectus supplement incorporates. You should direct written requests to: Cytori Therapeutics, Inc., 3020 Callan Road, San Diego, CA 92121, Attn: Investor Relations, or you may call us at (858) 458-0900.
PROSPECTUS
Subscription Rights to Purchase Up to 10,000 Units
Consisting of an Aggregate of Up to 10,000 Shares of CommonSeries B Preferred Stock
and Warrants to Purchase Up to 12,500,000 Shares of Common Stock
at a Subscription Price of $$1,000 Per Unit
Dealer-Manager
Maxim Group LLC
, 20162017
Information Not Required In Prospectus
Item 13. | Other Expenses of Issuance and Distribution. |
The following is a statement of estimated expenses in connection with the issuance and distribution of the securities being registered, excluding dealer-manager fees. All expenses incurred with respect to the registration of the common stock will be borne by us. All amounts are estimates except the SEC registration fee and the FINRA filing fee.
|
| Amount to be Paid |
| |
SEC Registration Fee |
| $ | 1,992 |
|
FINRA Filing Fee |
|
| 2,900 |
|
Printing Expenses |
|
| 10,000 |
|
Legal Fees and Expenses |
|
| 150,000 |
|
Accounting Fees and Expenses |
|
| 50,000 |
|
Subscription Agent, Information Agent and Warrant Agent Fees and Expenses |
|
| 50,000 |
|
Miscellaneous Expenses |
|
| 30,000 |
|
Total |
| $ | 294,892 |
|
Amount to be Paid | ||||
SEC Registration Fee | $ | 1,108 | ||
FINRA Filing Fee | 2,150 | |||
Printing Expenses | ||||
Legal Fees and Expenses | ||||
Accounting Fees and Expenses | ||||
Subscription Agent, Information Agent and Warrant Agent Fees and Expenses | ||||
Miscellaneous Expenses | ||||
$ | ||||
Item 14. | Indemnification of Directors and Officers. |
Section 145 of the DGCL authorizes a court to award or a corporation'scorporation’s board of directors to grant indemnification to directors and officers in terms sufficiently broad to permit such indemnification under certain circumstances for liabilities (including reimbursement for expenses incurred) arising under the Securities Act of 1933, as amended, or the Securities Act.
Our amended and restated certificate of incorporation, as amended (our "Certificate"“Certificate”), includes a provision that, to the fullest extent permitted by the Delaware General Corporation Law, eliminates the personal liability of our directors for monetary damages for breach of fiduciary duty as a director. In addition, together our Certificate and our amended and restated bylaws, as amended (our "Bylaws"“Bylaws”), require us to indemnify, to the fullest extent permitted by law, any person made or threatened to be made a party to an action or proceeding (whether criminal, civil, administrative or investigative) by reason of the fact that such person is or was a director, officer or employee of Cytori or any predecessor of ours, or serves or served at any other enterprise as a director, officer or employee at our request or the request of any predecessor of ours, against expenses (including attorneys'attorneys’ fees), judgments, fines, settlements and other amounts actually and reasonably incurred in connection with any proceeding, arising by reason of the fact that such person is or was an agent of ours. Our Bylaws also provide that we may, to the fullest extent provided by law, indemnify any person against expenses (including attorneys'attorneys’ fees), judgments, fines, settlements and other amounts actually and reasonably incurred in connection with any proceeding, arising by reason of the fact that such person is or was an agent of ours. We are required to advance expenses incurred by our directors, officers, employees and agents in defending any action or proceeding for which indemnification is required or permitted, subject to certain limited exceptions. The indemnification rights conferred by our Bylaws are not exclusive.
II-
The following is a summary of all securities that we have sold within the past three years without registration under the Securities Act of 1933, as amended (the "Securities Act"“Securities Act”).
On September 11, 2014, in connection with and pursuant to an amendment entered into on September 4, 2014 with 13 holders of existing warrants, we issued warrants to purchase 4,032,389268,826 shares of common stock having an exercise price of $2.00$30.00 per share, exercisable on the date that is six months and one day from the date of issuance and expiring five years from the date of issuance. The warrants also contain a cashless exercise feature. The warrants were issued in reliance on an exemption from registration under the Securities Act pursuant to Section 4(2)4(a)(2) thereof based on the offering of such securities to thirteen investors and the lack of any general solicitation or advertising in connection with such issuance.
On September 19, 2014, pursuant to the terms and conditions of a letter agreement with Oxford Finance LLC and Silicon Valley Bank, we cancelled the warrants issued June 28, 2013 and issued new warrants to purchase an aggregate of up to 596,55339,771 shares of our common stock at an exercise price equal to $0.67$10.05 per share. The warrants were immediately exercisable for cash or by net exercise and will expire seven years after their issuance, which is June 28, 2020. The warrants were offered and sold to accredited investors in reliance upon exemptions from registration under Section 4(a)(2) of the Securities Act and Rule 506 of Regulation D promulgated thereunder.
On May 29, 2015, pursuant to the terms and conditions of the Loan and Security Agreement with Oxford Finance LLC, as collateral agent and as a lender, we issued to Oxford warrants to purchase an aggregate of up to 1,416,61894,442 shares of our common stock at an exercise price equal to $0.6872$10.305 per share. The warrants were exercisable on or after November 30, 2015 for cash or by net exercise and will expire ten10 years after their issuance on May 29, 2025. The warrants were offered and sold to accredited investors in reliance upon exemptions from registration under Section 4(a)(2) of the Securities Act and Rule 506 of Regulation D promulgated thereunder.
On December 22, 2016, we issued 127,491 shares of common stock to Lincoln Park Capital Fund, LLC as an initial fee for its commitment to purchase shares of our common stock pursuant to the Purchase Agreement dated December 22, 2016 between us and Lincoln Park Capital Fund, LLC. The shares were issued in reliance on an exemption from registration under Section 4(a)(2) of the Securities Act.
On February 15, 2017, pursuant to the terms and conditions of an Asset Purchase Agreement with Azaya Therapeutics, Inc., or Azaya, we issued 1,173,241 shares of common stock to Azaya, 293,310 of which were deposited into a 15-month escrow. The shares were issued in reliance on an exemption from registration under Section 4(a)(2) of the Securities Act.
On April 17, 2017 and May 31, 2017, pursuant to the terms and conditions of an Underwriting Agreement with Maxim Group LLC, or Maxim, we issued warrants to purchase 86,000 shares and 8,490 shares, respectively, of common stock to Maxim. The shares were issued in reliance on an exemption from registration under Section 4(a)(2) of the Securities Act.
Item 16. | Exhibits and Financial Statement Schedules. |
(a) Exhibits
The exhibits to the registration statement are listed in the Exhibit Index to this registration statement and are incorporated herein by reference.
(b) Financial statement schedules
II-
All schedules have been omitted because either they are not required, are not applicable or the information is otherwise set forth in the financial statements and related notes thereto.
Item 17. | Undertakings. |
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Securities and Exchange Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20 percent change in the maximum aggregate offering price set forth in the "Calculation“Calculation of Registration Fee"Fee” table in the effective registration statement; and
(iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement.
(2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.
(4) That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser:
(A) Each prospectus filed by the registrant pursuant to Rule 424(b)(3) shall be deemed to be part of the registration statement as of the date the filed prospectus was deemed part of and included in the registration statement; and
II-
(B) Each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use.
(5) That for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution of securities, the undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:
(i) Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424;
(ii) Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant;
(iii) The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and
(iv) Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.
(6) The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant’s annual report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
(7) The undersigned registrant hereby undertakes to supplement the prospectus, after the expiration of the subscription period, to set forth the results of the subscription offer, the transactions by the underwriters during the subscription period, the amount of unsubscribed securities to be purchased by the underwriters, and the terms of any subsequent reoffering thereof. If any public offering by the underwriters is to be made on terms differing from those set forth on the cover page of the prospectus, a post-effective amendment will be filed to set forth the terms of such offering.
(8) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to any charter provision, by law or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.
(i) For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(I) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective; and
(ii) For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
II-
CYTORI THERAPEUTICS, INC. | |||||
Exhibit Number | Exhibit Title | Filed Herewith | Incorporated by Reference | ||
Form | File No. | Date Filed | |||
1.1 | Form of Dealer-Manager Agreement by and between Cytori Therapeutics, Inc. and Maxim Group LLC. | X | |||
3.1 | 10-K | 000-32501 Exhibit 3.1 | 03/11/2016 | ||
3.2 | 10-Q | 000-32501 Exhibit 3.2 | 08/14/2003 | ||
3.3 | Amendment to Amended and Restated Bylaws of Cytori Therapeutics, Inc. | 8-K | 001-34375 Exhibit 3.1 | 05/06/2014 | |
3.4 | 8-K | 001-34375 Exhibit 3.1 | 10/08/2014 | ||
3.5 | Certificate of Amendment to Amended and Restated Certificate of Incorporation, as amended | 8-K | 001-34375 Exhibit 3.1 | 05/10/2016 | |
3.6 | X | ||||
4.1 | 10-K | 000-32501 Exhibit 10.62 | 03/06/2009 | ||
4.2 | 8-K | 001-34375 Exhibit 10.73 | 06/17/2010 | ||
4.3 | 8-K | 001-34375 Exhibit 10.74 | 06/17/2010 | ||
4.4 | 8-K | 001-34375 Exhibit 10.75 | 06/17/2010 | ||
8-K | 001-34375 Exhibit 10.84 | 09/15/2011 | |||
4.6 | 8-K | 001-34375 Exhibit 10.85 | 09/15/2011 | ||
4.7 | 8-K | 001-34375 Exhibit 10.86 | 09/15/2011 | ||
4.8 | 8-K | 001-34375 Exhibit 10.87 | 09/15/2011 | ||
4.9 | 10-Q | 001-34375 Exhibit 4.17 | 08/09/2013 | ||
4.10 | 10-Q | 001-34375 Exhibit 4.18 | 08/09/2013 | ||
4.11 | 10-Q | 001-34375 Exhibit 4.19 | 08/09/2013 | ||
4.12 | 10-Q | 001-34375 Exhibit 4.20 | 08/09/2013 | ||
10-Q | 001-34375 Exhibit 4.21 | 08/09/2013 | |||
4.14 | Form of Warrant to Purchase Common Stock for Investors in the Units issued in May 2014. | 8-K | 001-34375 Exhibit 4.1 | 05/30/2014 | |
4.15 | Form of Warrant to Purchase Common Stock for Placement Agent of the Units issued in May 2014. | 8-K | 001-34375 Exhibit 4.2 | 05/30/2014 | |
4.16 | 8-K | 001-34375 Exhibit 4.1 | 09/08/2014 | ||
4.17 | 8-K | 001-34375 Exhibit 4.2 | 09/08/2014 | ||
4.18 | Form of Warrant for Purchasers of the Units issued in October 2014. | 8-K | 001-34375 Exhibit 4.1 | 10/08/2014 | |
4.19 | 8-K | 001-34375 Exhibit 4.1 | 05/05/2015 | ||
4.20 | 8-K | 001-34375 Exhibit 4.2 | 05/05/2015 | ||
4.21 | 8-K | 001-34375 Exhibit 4.3 | 05/05/2015 | ||
4.22 | 10-K | 001-34375 Exhibit 4.23 | 03/11/2016 | ||
4.23 | 10-K | 001-34375 Exhibit 4.24 | 03/11/2016 | ||
4.24 | 10-K | 001-34375 Exhibit 4.25 | 03/11/2016 | ||
4.25 | Form of Non-Transferable Subscription Rights Certificate issued in 2016. | S-1/A | 333-210628 Exhibit 4.26 | 05/11/2016 | |
4.26 | S-1/A | 333-210628 Exhibit 4.27 | 05/11/2016 | ||
X | |||||
4.28 | S-1/A | 333-210628 Exhibit 4.28 | 05/11/2016 | ||
4.29 | Form of Warrant by and between Cytori Therapeutics, Inc. and Maxim Group LLC. | 8-K | 000-32501 Exhibit 4.1 | 04/12/2017 | |
4.30 | 10-Q | 001-34375 Exhibit 4.2 | 08/11/2017 | ||
4.31 | X | ||||
4.32 | X | ||||
5.1 | X | ||||
8.1 | X | ||||
10.1# | Amended and Restated 1997 Stock Option and Stock Purchase Plan. | 10-K | 000-32501 Exhibit 10.1 | 03/30/2001 | |
10.2# | 8-K | 000-32501 Exhibit 10.1 | 08/27/2004 | ||
10.3# | Form of Options Exercise and Stock Purchase Agreement Relating to the 2004 Equity Incentive Plan. | 10-Q | 000-32501 Exhibit 10.23 | 11/15/2004 | |
10.4# | Form of Notice of Stock Options Grant Relating to the 2004 Equity Incentive Plan. | 10-Q | 000-32501 Exhibit 10.24 | 11/15/2004 | |
10.5+ | 10-Q | 000-32501 Exhibit 10.49 | 11/13/2007 | ||
10.6 | 10-Q | 000-32501 Exhibit 10.46 | 05/11/2007 | ||
10.7 | 8-K | 000-32501 Exhibit 10.51 | 2/19/2008 |
10.8 | 8-K | 000-32501 Exhibit 10.51 | 2/29/2008 | ||
10.9 | 10-Q | 001-34375 Exhibit 10.69 | 05/06/2010 | ||
10.10 | 8-K | 001-34375 Exhibit 10.76 | 12/09/2010 | ||
10.11# | 8-K | 001-34375 Exhibit 10.1 | 03/04/2011 | ||
10.12 | 10-Q | 001-34375 Exhibit 10.88 | 11/08/2011 | ||
10.13# | DEF 14A | 001-34375 Appendix A | 05/02/2011 | ||
10.14 | X | ||||
10.15 | 10-Q | 001-34375 Exhibit 10.91 | 05/10/2013 | ||
10.16+ | 10-Q/A | 001-34375 Exhibit 10.93 | 11/12/2013 |
10.17+ | 8-K | 001-34375 Exhibit 10.94 | 02/04/2014 | ||
10.18 | 8-K | 001-34375 Exhibit 10.1 | 05/12/2014 | ||
8-K | 001-34375 Exhibit 10.99 | 08/19/2014 | |||
10.20 | 8-K | 001-34375 Exhibit 10.1 | 10/08/2014 | ||
10.21 | 10-K | 001-34375 Exhibit 10.21 | 03/24/2017 | ||
10.22 | 10-K | 001-34375 Exhibit 10.22 | 03/24/2017 | ||
10.23 | 10-Q | 001-34375 Exhibit 10.1 | 05/11/2015 | ||
10.24 | 8-K | 001-34375 Exhibit 10.1 | 05/05/2015 | ||
10.25 | 8-K | 001-34375 Exhibit 10.2 | 05/05/2015 | ||
10.26 | 8-K | 001-34375 Exhibit 10.1 | 05/05/2015 | ||
10.27 | 10-Q | 001-34375 Exhibit 10.4 | 08/10/2015 | ||
10.28 | 10-K | 001-34375 Exhibit 10.111 | 03/11/2016 | ||
10.29# | 8-K | 001-34375 Exhibit 10.1 | 01/05/2016 | ||
10.30# | 10-K | 001-34375 Exhibit 10.113# | 03/11/2016 | ||
Form of Stock Option Agreement under the New Employee Incentive Plan. | S-8 | 333-210211 Exhibit 99.4 | 03/15/2016 | ||
10.32# | Form of Notice of Grant of Stock Option under the 2015 New Employee Incentive Plan. | S-8 | 333-210211 Exhibit 99.5 | 03/15/2016 | |
10.33# | 2014 Equity Incentive Plan of Cytori Therapeutics, Inc., as amended and restated. | DEF 14A | 001-34375 Appendix A | 04/10/2017 | |
10.34 | Amendment Two to Joint Venture Termination Agreement, dated January 8, 2016. | 10-Q | 001-34375 Exhibit 10.4 | 05/10/2016 | |
10.35 | 10-Q | 001-34375 Exhibit 10.1 | 08/05/2016 | ||
10.36 | 10-Q | 001-34375 Exhibit 10.1 | 11/09/2016 | ||
10.37 | 8-K | 001-34375 Exhibit 10.1 | 12/29/2016 | ||
10.38 | 8-K | 001-34375 Exhibit 10.2 | 12/29/2016 | ||
10.39+ | 10-K | 001-34375 Exhibit 10.40 | 03/24/2017 | ||
10.40 | 10-K | 001-34375 Exhibit 10.41 | 03/24/2017 | ||
10.41# | 10-K | 001-34375 Exhibit 10.42 | 03/24/2017 | ||
10.42 | 10-Q | 001-34375 Exhibit 10.1 | 05/12/2017 | ||
10.43+ | 10-Q | 001-34375 Exhibit 10.3 | 08/11/2017 | ||
10-Q | 001-34375 Exhibit 10.4 | 08/11/2017 | |||
10.45 | X | ||||
23.1 | Consent of BDO USA, LLP, Independent Registered Public Accounting Firm. | X | |||
23.2 | Consent of KPMG, LLP, Independent Registered Public Accounting Firm. | X | |||
23.3 | X | ||||
24.1 | S-1 | 333-219967 Exhibit 24.1 | 08/14/2017 | ||
99.1 | Form of Instructions as to Use of Subscription Rights Certificates. | X | |||
99.2 | X | ||||
99.3 | Form of Letter to Brokers, Dealers, Banks and Other Nominees. | X | |||
99.4 | Form of Broker Letter to Clients Who are Beneficial Holders. | X | |||
99.5 | X | ||||
99.6 | X | ||||
99.7 | X |
# | Indicates management contract or compensatory plan or arrangement. |
+ | Confidential treatment has been granted with respect to certain portions of this exhibit. Omitted portions have been filed separately with the Securities and Exchange Commission. |
Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of San Diego, State of California, on April 6, 2016.October 2, 2017.
CYTORI THERAPEUTICS, INC. | ||
By: | /s/ Marc H. Hedrick, M.D. | |
Marc H. Hedrick, M.D. | ||
President and Chief Executive Officer |
Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.
SIGNATURE | TITLE | DATE | ||||
* | ||||||
Chairman of the Board | October 2, 2017 | |||||
David M. Rickey | ||||||
/s/ Marc H. Hedrick, M.D. | President & Chief Executive Officer | October 2, 2017 | ||||
Marc H. Hedrick, M.D. | (Principal Executive Officer) | |||||
/s/ Tiago Girão | VP of Finance and Chief Financial Officer | October 2, 2017 | ||||
Tiago Girão | (Principal Financial and Accounting Officer) | |||||
* | Director | October 2, 2017 | ||||
Richard J. Hawkins | ||||||
* | Director | October 2, 2017 | ||||
Gregg A. Lapointe | ||||||
* | Director | October 2, 2017 | ||||
Gary A. Lyons | ||||||
* | Director | October 2, 2017 | ||||
Ronald A. Martell | ||||||
* | Director | October 2, 2017 | ||||
Gail K. Naughton, Ph.D. | ||||||
*By: | /s/ Tiago Girão | ||||
Tiago Girão | |||||
Attorney-in-fact |