| | | | Use of proceeds | The selling stockholder will receive all of
| We currently expect to use the net proceeds from the sale of the shares offered for sale by it under this prospectus. We will not receive proceeds from the sale of the shares by the selling stockholder. However, we may receive up to $15.0 million in proceeds from the sale of our common stock to the selling stockholder under the common stock purchase agreement described below. Proceeds that we receive under the common stock purchase agreement will be used to advance our research and development activities andoffering for working capital and general corporate purposes.purposes, which may include research and development expenses and general and administrative expenses. For additional information please refer to the section titled “Use of Proceeds” of this prospectus. |
| | NASDAQ Global Market Symbol
| TCON
| |
| | | Risk Factorsfactors | | Investing in our securities involves a high degree of risk. You should carefully review and consider the section titled “Risk Factors” section of this prospectus beginning on page 6 for a discussion of factors to consider before deciding to invest in sharespurchase any of our securities in this offering. | | | | Market symbol and trading | | Our common stock.stock is listed on the Nasdaq Capital Market under the symbol “TCON.” There is no established trading market for the pre-funded warrants and we do not expect a market to develop. In addition, we do not intend to apply for the listing of the pre-funded warrants on any national securities exchange or other trading market. Without an active trading market, the liquidity of the pre-funded warrants will be limited. |
Unless otherwise stated, all information contained in this prospectus assumes no sale of any pre-funded warrants in lieu of common stock in this offering. The number of shares of our common stock to be outstanding after this offering is based on an aggregate2,213,499 shares of 2,993,746 sharesour common stock issued and outstanding as of October 18, 2019December 31, 2023, and excludes the 142,658 Commitment Shares (on a post-reverse stock split basis) as defined below, and also excludes: following: | | | | | •
| | 369,037•
156,066 shares of common stock issuable upon the exercise of options outstanding as of October 18, 2019 at a weighted average exercise price of $36.90 per share; | | •
| | 3,523 shares of common stock issuable upon the vesting of restricted stock units outstanding as of October 18, 2019;
| | •
| | 126,442 shares of common stock reserved for future issuance under the 2015 Equity Incentive Plan as of October 18, 2019;
| | •
| | 76,130 shares of common stock reserved for future issuance under the 2015 Employee Stock Purchase Plan as of October 18, 2019; and
| | •
| | 1,561,911 shares of common stock issuable upon the exercise of warrants outstanding as of October 18, 2019 at a weighted average exercise price of $24.30 per share.
|
On October 18, 2019, we entered into a common stock purchase agreementissuable upon the exercise of outstanding stock options at a weighted-average exercise price of $130.66 per share, as of December 31, 2023;
•76,671 shares of common stock issuable upon the exercise of outstanding warrants at a weighted-average exercise price of $494.17 per share, as of December 31, 2023; •21,568 shares of common stock reserved for future issuance under our 2015 Equity Incentive Plan, as amended, as of December 31, 2023; •21,475 shares of common stock reserved for future issuance under our 2015 Employee Stock Purchase Plan as of December 31, 2023; and •344,730 shares of common stock sold after December 31, 2023 under our Capital on DemandTM Sales Agreement, dated December 9, 2020, as amended March 15, 2022 (the Sales Agreement), between us and JonesTrading Institutional Services LLC (JonesTrading) for gross proceeds of approximately $1.7 million. In addition, the number of shares of our common stock to be outstanding immediately after this offering as shown above does not include the $39.8 million of shares of our common stock that remain available for sale as of the date of this prospectus under the Sales Agreement and $25 million of shares of our common stock that remain available for sale as of December 31, 2023 under our May 2023 LPC Purchase Agreement (LPC Purchase Agreement), with AspireLincoln Park Capital Fund, LLC (Lincoln Park).
RISK FACTORS Investing in our securities involves a high degree of risk. You should consider carefully the risks described below, together with all of the other information included or incorporated by reference in this prospectus, including the risks and uncertainties discussed underthe section titled “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2023, which has been filed with the SEC and is incorporated by reference in this prospectus, as well as any updates thereto contained in subsequent filings with the SEC or any free writing prospectus, before deciding whether to purchase our securities in this offering. All of these risk factors are incorporated herein in their entirety. The risks described below and incorporated by reference are material risks currently known, expected or reasonably foreseeable by us. However, the risks described below are not the only ones that we face. Additional risks not presently known to us or that we currently deem immaterial may also affect our business, operating results, prospects or financial condition. If any of these risks actually materialize, our business, prospects, financial condition, and results of operations could be seriously harmed. This could cause the trading price of our common stock and the value of the warrants to decline, resulting in a loss of all or part of your investment. Risks Relating to This Offering This is a best efforts offering, no minimum amount of securities is required to be sold, and we may not raise the amount of capital we believe is required for our business plans, including our near-term business plans. The placement agent has agreed to use its reasonable best efforts to solicit offers to purchase the securities in this offering. The placement agent has no obligation to buy any of the securities from us or to arrange for the purchase or sale of any specific number or dollar amount of the securities. There is no required minimum number of securities that must be sold as a condition to completion of this offering. Because there is no minimum offering amount required as a condition to the closing of this offering, the actual offering amount, placement agent fees and proceeds to us are not presently determinable and may be substantially less than the maximum amounts set forth herein. We may sell fewer than all of the securities offered hereby, which may significantly reduce the amount of proceeds received by us, and investors in this offering will not receive a refund in the event that we do not sell an Illinois limited liability company (Aspireamount of securities sufficient to support our continued operations, including our near-term continued operations. Thus, we may not raise the amount of capital we believe is required for our operations in the short-term, to maintain our listing on the Nasdaq Capital Market or to continue as a going concern, and may need to raise additional funds. Such additional fundraises may not be available or available on terms acceptable to us. If you purchase our securities in this offering, you may incur immediate and substantial dilution in the book value of your shares. The public offering price per share of our common stock may be substantially higher than the net tangible book value per share of our common stock immediately prior to the offering. After giving effect to the assumed sale of shares of our common stock in this offering, at an assumed public offering price of $ per share (the last reported sale price of our common stock on The Nasdaq Capital Market on , 2024), and after deducting the placement agent fees and estimated offering expenses payable by us, purchasers of our common stock in this offering will incur immediate dilution of $ per share in the net tangible book value of the common stock they acquire. For a further description of the dilution that investors in this offering may experience, seethe section titled “Dilution.”
Future sales and issuances of our common stock or rights to purchase common stock or the selling stockholder),perception that such sales could occur, could result in additional dilution to you and could cause our stock price to fall. In order to raise additional capital, we may in the future offer additional shares of our common stock or other securities convertible into or exchangeable for our common stock at prices that may not be the same as the price per share in this offering. 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 in this offering, and investors purchasing shares or other securities in the future could have rights superior to existing stockholders. The price per share at which we sell additional shares 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 investors in this offering. In addition, to the extent outstanding stock options and warrants, including any pre-funded warrants issued in this offering, are exercised, there will be further dilution to the new investors. In addition, pursuant to the Sales Agreement, we may issue and sell from time to time through JonesTrading shares of our common stock, in an aggregate amount not to exceed $50.0 million of shares of our common stock, of which $39.8 million of our common stock remain available for sale as of the date of this prospectus supplement. We may also issue and sell shares to Lincoln Park under the LPC Purchase Agreement, which provides that, upon the terms and subject to the conditions and limitations set forth therein, Aspire CapitalLincoln Park is committed to purchase up to an aggregate of $15.0$26.0 million of shares of our common stock over the 30-month term of the Purchase Agreement. In consideration for entering into the Purchase Agreement, concurrently with the execution of the Purchase Agreement, we issuedfrom time to Aspire Capital 142,658 shares (on a post-reverse stock split basis) of our common stock as a commitment fee (the Commitment Shares). Concurrently with entering into the Purchase Agreement, we also entered into a registration rights agreement with Aspire Capital (the Registration Rights Agreement) in which we agreed to file one or more registration statements, including the registration statement of which this prospectus is a part, as permissibletime and necessary to register under the Securities Act, the sale of the shares of our common stock that have been and may be issued to Aspire Capital under the Purchase Agreement. As of October 18, 2019, there were 2,993,746 shares of our common stock outstanding, excluding the 1,642,658 shares offered that have been issued or may be issuable to Aspire Capital pursuant to the Purchase Agreement. If all of such 1,642,658 shares of our common stock offered hereby were issued and outstanding as of the date hereof, such shares would represent 54.9% of the total common stock outstanding as of October 18, 2019. The number of shares of our common stock ultimately offered for sale by Aspire Capital is dependent upon the number of shares purchased by Aspire Capital under the Purchase Agreement.
The aggregate number of shares that we may issue to Aspire Capital under the Purchase Agreement, including the Commitment Shares, may in no case exceed 1,642,658 shares of our common stock (which is equal to 54.9% of the common
stock outstanding on the date of the Purchase Agreement) unless (i) stockholder approval is obtained to issue more, in which case this 1,642,658 share limitation will not apply, or (ii) stockholder approval has not been obtained and at any time the 1,642,658 share limitation is reached and at all times thereafter the average price paid for all shares issued under the Purchase Agreement (including the Commitment Shares) is equal to or greater than $3.154, referred to as the Minimum Price; provided that at no one point in time shall Aspire Capital (together with its affiliates) beneficially own more than 19.99% of our common stock.
Pursuant to the Purchase Agreement and the Registration Rights Agreement, we are registering 1,642,658 shares of our common stock under the Securities Act, which includes the 142,658 Commitment Shares (on a post-reverse stock split basis) that have already been issued to Aspire Capital and 1,500,000 shares of common stock that we may issue to Aspire Capital after this registration statement is declared effective under the Securities Act. All 1,642,658 shares of common stock are being offered pursuant to this prospectus. If we elect to sell more than the 1,642,658 shares of common stock offered hereby, we must first register under the Securities Act the sale by Aspire Capital of such additional shares.
After the SEC has declared effective the registration statement of which this prospectus is a part, on any trading day on which the closing sale price of our common stock exceeds $0.25, we have the right, in our sole discretion to present Aspire Capital with a purchase notice (each, a Purchase Notice), directing Aspire Capital (as principal) to purchase up to 15,000 shares of our common stock (not to exceed $500,000 worth of shares) per trading day, up to $15.0 million of our common stock in the aggregate at a per share price (the Purchase Price) calculated by reference to the prevailing market price of our common stock (as more specifically described below in the section titled “The Aspire Capital Transaction”).
In addition, on any date on which we submit a Purchase Notice for 15,000 shares to Aspire Capital, we also have the right, in our sole discretion, to present Aspire Capital with a volume-weighted average price purchase notice (each, a VWAP Purchase Notice) directing Aspire Capital to purchase an amount of stock equal to up to 30% of the aggregate shares of the Company’s common stock traded on The Nasdaq Global Market on the next trading day (the VWAP Purchase Date), subject to a maximum number of shares we may determine (the VWAP Purchase Share Volume Maximum) and a minimum trading price (the VWAP Minimum Price Threshold) (as more specifically described below). The purchase price per Purchase Share pursuant to such VWAP Purchase Notice (the VWAP Purchase Price) is calculated by reference to the prevailing market price of our common stock (as more specifically described below in the section titled “The Aspire Capital Transaction”).
The Purchase Agreement provides that we and Aspire Capital shall not effect any sales under the Purchase Agreement on any purchase date where the closing sale price of our common stock is less than $0.25 per share (the Floor Price). There are no trading volume requirements or restrictions under the Purchase Agreement, and we will control the timing and amount of any sales of our common stock to Aspire Capital. Aspire Capital has no right to require any sales by us, but is obligated to make purchases from us as we direct in accordance with the Purchase Agreement. There are no limitations on use of proceeds, financial or business covenants, restrictions on future fundings, rights of first refusal, participation rights, penalties or liquidated damages in the Purchase Agreement. Aspire Capital may not assign its rights or obligations under the Purchase Agreement. The Purchase Agreement may be terminated by us at any time, at our discretion, without any penalty or cost to us.
RISK FACTORS
Investing in our common stock involves a high degree of risk. You should consider carefully the following risks and uncertainties as well as the risks and uncertainties described in the section entitled “Risk Factors” contained in our Annual Report on Form 10-K for the year ended December 31, 2018, as filed with the SEC on March 1, 2019, as well as in our subsequent Quarterly and Current Reports filed with the SEC, which descriptions are incorporated into this prospectus by reference in their entirety, as well as in any prospectus supplement hereto. These risks and uncertainties are not the only risks and uncertainties we face. Additional risks and uncertainties not currently known to us, or that we currently view as immaterial, may also impair our business. If any of the risks or uncertainties described in our SEC filings or any additional risks and uncertainties actually occur, our business, financial condition, results of operations and cash flow could be materially and adversely affected. In that case, the trading price of our common stock could decline and you might lose all or part of your investment. You should carefully consider the following information about risks, together with the other information contained in this prospectus, before making an investment in our common stock.
We will need to raise substantial additional capital in the future to fund our operations and we may be unable to raise such funds when needed and on acceptable terms.
We will need to raise substantial additional capital in the future to fund our operations. The extent to which we utilize the Purchase Agreement with Aspire Capital as a source of funding will depend on a number of factors, including the prevailing market price of our common stock, the volume of trading in our common stock and the extent to which we are able to secure funds from other sources. The number of shares that we may sell to Aspire Capital under the Purchase Agreement on any given day and duringover the term of the LPC Purchase Agreement, is limited. See “The Aspire Capital Transaction”$25.0 million of which remained available for additional information. Additionally,sale as of December 31, 2023. If we and Aspire Capital may not effect any sales of shares of our common stock under the Purchase Agreement during the continuance of an event of default or on any trading day that the closing sale price of our common stock is less than $0.25 per share. Even if we are able to access the full $15.0 million under the Purchase Agreement, we will still needraise additional capital to fully implement our business, operating and development plans.
The sale of our common stock to Aspire Capital may cause substantial dilution to our existing stockholders andthrough the sale of the shares of common stock acquired by Aspire Capitalequity or convertible securities, or there is a perception that such sales may occur, this could causeresult in downward pressure on the price of our common stock and impact our ability to decline.
We are registering for sale the Commitment Shares that we have issued and 1,500,000 additional shares that we may sell to Aspire Capital from time to time under the Purchase Agreement. It is anticipated that shares registered in this offering will be sold over a period of up to approximately 30 months from the date of this prospectus. The number of shares ultimately offered for sale by Aspire Capital under this prospectus is dependent upon the number of shares we elect to sell to Aspire Capital under the Purchase Agreement. Depending on a variety of factors, including market liquidity of our common stock, the sale of shares under the Purchase Agreement may cause the trading price of our common stock to decline.
Aspire Capital may ultimately purchase all, some or none of the $15.0 million of common stock that, together with the Commitment Shares, is the subject of this prospectus. Aspire Capital may sell all, some or none of our shares that it holds or comes to hold under the Purchase Agreement. Sales by us to Aspire Capital of shares pursuant to the Purchase Agreement may result in dilution to the interests of other holders of our common stock. The sale of a substantial number of shares of our common stock by Aspire Capital in this offering, or anticipation of such sales, could cause the trading price of our common stock to decline or make it more difficult for us to sell equity or equity-related securitiesraise capital in the future at a time and at a price that we might otherwise desire.future.
Management will have broad discretion as to the use of the proceeds from this offering, and may not use the proceeds effectively. Because we have not designated the amount of net proceeds from this offering to be used for any particular purpose, ourOur management will have broad discretion as to the application of the net proceeds from this offering, if any, and could use them for purposes other than those contemplated at the time of the offering. Our management may use the net proceeds for corporate purposes that may not improve our financial condition or market value.
WeThere is no public market for the pre-funded warrants being offered in this offering.
There is no established public trading market for the pre-funded warrants being offered in this offering, and we do not expect a market to develop. In addition, we do not intend to pay dividendsapply to list the pre-funded warrants on any national securities exchange or other nationally recognized trading system, including the Nasdaq Capital Market. Without an active trading market, the liquidity of the pre-funded warrants will be limited. Holders of pre-funded warrants purchased in this offering will have no rights as common stockholders until such holders exercise their pre-funded warrants and acquire our common stock. Until holders of the foreseeable future. We have never paid cash dividends onpre-funded warrants acquire shares of our common stock and currently doupon exercise of such pre-funded warrants, the holders will have no rights with respect to the shares of our common stock underlying such pre-funded warrants, such as voting rights or the rights to receive dividends. Upon exercise of the pre-funded warrants, the holders will be entitled to exercise the rights of a common stockholder only as to matters for which the record date occurs after the exercise.
We will not planreceive significant additional funds upon the exercise of the pre-funded warrants being offered. Each pre-funded warrant will be exercisable by means of payment of the nominal cash purchase price upon exercise or by means of a “cashless exercise” according to pay any cash dividendsa formula set forth in the foreseeable future.pre-funded warrant. Accordingly, we will not receive any meaningful additional funds upon the exercise of the pre-funded warrants.
Holders of the pre-funded warrants will not be entitled to exercise any portion of any pre-funded warrant which, upon giving effect to such exercise, would cause the aggregate number of shares of our common stock beneficially owned by the holder (together with its affiliates) to exceed a specified percentage of the number of shares of our common stock outstanding immediately after giving effect to the exercise, as such percentage ownership is determined in accordance with the terms of the pre-funded warrants. As a result, you may not be able to exercise your pre-funded warrants for shares of our common stock at a time when it would be financially beneficial for you to do so. In such circumstance you could seek to sell your pre-funded warrants to realize value, but you may be unable to do so in the absence of an established trading market for the pre-funded warrants.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS This prospectus and the documents incorporated herein by reference herein contain forward-looking statements. The forward-looking statements are contained principally in the sections titled “Prospectus Summary,” “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Business” in this prospectus or the documents incorporated herein by reference. These statements relate to future events or to our future financial performance and involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Forward-looking statements include, but are not limited to, statements about: •the success, cost and timing of results of our and our collaborators’ ongoing clinical trials; •our and our collaborators’ plans to develop and commercialize our product candidates; •the potential benefits of our collaboration arrangements and our ability to enter into additional collaboration arrangements; •the ability of our clinical trials to demonstrate safety and efficacy of our product candidates, and other positive results; •our regulatory strategy and potential benefits associated therewith; •the timing of, and our ability to obtain and maintain, regulatory approvals for our product candidates; •the effects of unfavorable U.S. and global economic conditions on our business, financial condition and results of operations; •the rate and degree of market acceptance and clinical utility of any approved product candidate; •the success of competing products that are or may become available; •the size and growth potential of the markets for our product candidates, and our ability to serve those markets; •our commercialization, marketing and manufacturing capabilities and strategy; •the potential effects of macroeconomic and geopolitical developments, such as the ongoing military conflict between Ukraine and Russia, the war between Israel and Hamas and the related risk of a larger regional conflict, recent and potential future disruptions in access to bank deposits or lending commitments due to bank failures, actual and anticipated changes in interest rates, and economic inflation and the responses by central banking authorities to control such inflation, on our operations; •our intellectual property position; •our ability to remain listed on a national securities exchange; •our estimates regarding expenses, future revenues, capital requirements, the sufficiency of our current and expected cash resources, and our need for additional financing; •our ability to realize the anticipated benefits associated with our capital efficiency focused initiatives; and •our expected use of the net proceeds from this offering. We may, in some cases, use words such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “will,” “would” or the negative of those terms, and similar expressions that convey uncertainty of future events or outcomes, to identify these forward-looking statements. Any statements contained herein that are not statements of historical facts may be deemed to be forward-looking statements. These forward-looking statements reflect our management’smanagement’s beliefs and views with respect to future events and are subject to substantial risksbased on estimates and uncertainties within the meaning of Section 27Aassumptions as of the Securities Act and Section 21Edate of the Securities Exchange Act of 1934, as amended (the Exchange Act). All statements, other than statements of historical fact, contained in this prospectus and are subject to risks and uncertainties. We discuss many of these risks in greater detail under the documents incorporated by reference herein, including statements regarding our strategy, future operations, future financial position, future revenue, projected costs, prospects, plans and objectives of management, are forward-looking statements. Forward-looking statements can be identified by the use of forward-looking words such as “believes,section titled “Risk Factors.” “expects,” “may,” “will,” “plans,” “intends,” “estimates,” “could,” “should,” “would,” “continue,” “seeks,” “aims,” “projects,” “predicts,” “pro forma,” “anticipates,” “potential” or other similar words (including their use in the negative), or by discussions of future matters such as the development of product candidates or products, technology enhancements, possible changes in legislation, and other statements that are not historical. The forward-looking statements in this prospectus include, among other things, statements about:
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| | the success, cost, design and timing of results of our and our collaborators’ ongoing clinical trials;
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| | our and our collaborators’ plans to develop and commercialize our product candidates;
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| | the potential benefits of our collaboration arrangements and our ability to enter into additional collaboration arrangements;
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| | our regulatory strategy and potential benefits associated therewith;
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| | the timing of, and our ability to obtain and maintain, regulatory approvals for our product candidates;
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| | the rate and degree of market acceptance and clinical utility of any approved product candidate;
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| | the success of competing products that are or may become available;
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| | the size and growth potential of the markets for our product candidates, and our ability to serve those markets;
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| | our commercialization, marketing and manufacturing capabilities and strategy;
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| | our intellectual property position;
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| | our estimates regarding expenses, future revenues, capital requirements, the sufficiency of our current and expected cash resources, and our need for additional financing;
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| | our ability to realize the anticipated benefits associated with our capital efficiency focused initiatives;
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| | our ability to sell shares of common stock to Aspire Capital pursuant to the terms of the Purchase Agreement and our ability to register and maintain the registration of the shares issued and issuable thereunder; and
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| | our anticipated use of the net proceeds from the potential sale of shares of our common stock to Aspire Capital.
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We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements. WeMoreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our
management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements we make, and accordinglyGiven these uncertainties, you should not place undue reliance on ourthese forward-looking statements. We have included important factors in the cautionary statements included in You should carefully read this prospectus, particularly in the “Risk Factors” section indocuments that we incorporate by reference into this prospectus and the documents incorporated bywe reference herein, that we believe could cause actual results or events to differ materially from the forward-looking statements that we make. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or investments we may make. You should readin this prospectus the documents incorporated by reference herein and the documents that we have filed as exhibits to the registration statement, of which this prospectus is a part, completely and with the understanding that our actual future results may be materially different from what we expect. We qualify all of the forward-looking statements in this prospectus and the documents incorporated by reference herein by these cautionary statements.
Except as required by law, we undertakeassume no obligation to update these forward-looking statements publicly, or to update the reasons actual results could differ materially from those anticipated in any forward-looking statements, whether as a result of new information, future events or otherwise.
USE OF PROCEEDS
THE ASPIRE CAPITAL TRANSACTION
General
On October 18, 2019, we entered intoWe estimate that the Purchase Agreement, which provides that, uponnet proceeds of this offering will be approximately $ million, based on the terms and subject to the conditions and limitations set forth therein, Aspire Capital is committed to purchase up to an aggregateassumed public offering price of $15.0 million of our shares of common stock over the term of the Purchase Agreement. In consideration for entering into the Purchase Agreement, concurrently with the execution of the Purchase Agreement, we issued to Aspire Capital the 142,658 Commitment Shares (on a post-reverse stock split basis). Concurrently with entering into the Purchase Agreement, we also entered into the Registration Rights Agreement, in which we agreed to file one or more registration statements as permissible and necessary to register under the Securities Act, the$ per share (the last reported sale of the sharesprice of our common stock that have beenon The Nasdaq Capital Market on , 2024), after deducting the placement agent fees and may be issuedestimated offering expenses payable by us. Each $1.00 increase (decrease) in the assumed public offering price of $ per share would increase (decrease) the net proceeds to Aspire Capital underus from this offering by approximately $ million, assuming the Purchase Agreement.
Asnumber of October 18, 2019, there were 2,993,746 shares of our common stock outstanding, excluding the 1,642,658 shares offered that have been issuedby us, as set forth on the cover page of this prospectus, remains the same, after deducting the placement agent fees and estimated offering expenses payable by us. We may also increase or may be issuable to Aspire Capital pursuant todecrease the Purchase Agreement. If all of such 1,642,658 shares of our common stock offered hereby were issued and outstanding as of October 18, 2019, such shares would represent 54.9% of the total common stock outstanding. The number of shares of our common stock ultimately offered for sale by Aspire Capital is dependent uponwe are offering. Each 1.0 million share increase (decrease) in the number of shares purchasedsold in this offering would increase (decrease) the expected net proceeds of the offering to us by Aspire Capital underapproximately $ million, assuming that the Purchase Agreement.assumed public offering price per share remains the same.
The aggregate numberWe currently intend to use the net proceeds of sharesthe offering for working capital and general corporate purposes, which may include research and development expenses and general and administrative expenses.
We cannot currently allocate specific percentages of the net proceeds to us from this offering that we may issueuse for the purposes specified above and our management will have broad discretion in the allocation of the net proceeds.
DIVIDEND POLICY We have never declared or paid any dividends on our common stock. We currently intend to Aspire Capital underretain all available funds and any future earnings, if any, to fund the Purchase Agreement, includingdevelopment and expansion of our business and we do not anticipate paying any cash dividends in the Commitment Shares,foreseeable future. Any future determination related to our dividend policy will be made at the discretion of our board of directors and will depend upon, among other factors, our results of operations, financial condition, capital requirements, contractual restrictions, business prospects and other factors our board of directors may deem relevant.
DILUTION If you purchase our securities in no case exceed 1,642,658this offering, you may experience dilution to the extent of the difference between the public offering price per share in this offering and our as adjusted net tangible book value (deficit) per share immediately after this offering. Net tangible book value (deficit) per share is equal to the amount of our total tangible assets, less total liabilities, divided by the number of outstanding shares of our common stock. As of December 31, 2023, our net tangible book value (deficit) was approximately ($0.8) million, or approximately ($0.02) per share. After giving effect to the assumed sale by us of shares of our common stock (which is equal to 54.9%(assuming no pre-funded warrants in lieu of the common stock outstanding on the dateare issued) at an assumed public offering price of the Purchase Agreement) unless (i) stockholder approval is obtained to issue more, in which case this 1,642,658$ per share limitation will not apply, or (ii) stockholder approval has not been obtained and at any time the 1,642,658 share limitation is reached and at all times thereafter the average(the last reported sale price paid for all shares issued under the Purchase Agreement (including the Commitment Shares) is equal to or greater than $3.154, referred to as the Minimum Price; provided that at no one point in time shall Aspire Capital (together with its affiliates) beneficially own more than 19.99% of our common stock. Pursuantstock on the Nasdaq Capital Market on , 2024), after deducting the placement agent fees and estimated offering expenses payable by us, our as adjusted net tangible book value (deficit) as of December 31, 2023 would have been approximately $ million, or approximately $ per share. This represents an immediate increase in net tangible book value of $ per share to the Purchase Agreementexisting stockholders and the Registration Rights Agreement, we are registering 1,642,658an immediate dilution of $ per share to new investors purchasing shares of our common stock underin this offering. The following table illustrates this dilution on a per share basis:
| | | | | Assumed public offering price per share | | | $ | | Net tangible book value (deficit) per share of common stock as of December 31, 2023 | $ | (0.02) | | | Increase in net tangible book value (deficit) per share attributable to new investors | $ | | | | As adjusted net tangible book value (deficit) per share as of December 31, 2023, after giving effect to this offering | | | $ | | Dilution per share to new investors purchasing shares in this offering | | | $ | |
A $1.00 increase in the Securities Act, which includesassumed public offering price of $ per share (the last reported sale price of our common stock on the Commitment SharesNasdaq Capital Market on , 2024) would result in an increase in our as adjusted net tangible book value (deficit) after this offering of approximately $ , or approximately $ per share, and the dilution per share to investors purchasing common stock in this offering would be approximately $ per share, assuming that have already been issuedthe number of shares of our common stock sold by us remains the same, after deducting the placement agent fees and estimated offering expenses payable by us. Similarly, a decrease of $1.00 in the assumed public offering price of $ per share would result in a decrease in our as adjusted net tangible book value (deficit) after this offering of approximately $ , or approximately $ per share, and the dilution per share to Aspire Capitalinvestors purchasing common stock in this offering would be $ per share, assuming that the number of shares of our common stock sold by us remains the same, after deducting the placement agent fees and 1,500,000estimated offering expenses payable by us. We may also increase or decrease the number of shares of common stock which we may issue to Aspire Capital after this registration statement is declared effective underare offering from the Securities Act. All 1,642,658number of shares of common stock set forth above. An increase of 1.0 million in the assumed number of shares of common stock sold by us in this offering would result in an increase in our as adjusted net tangible book value (deficit) of approximately $ , or approximately $ per share, and the dilution per share to investors purchasing common stock in this offering would be approximately $ per share, assuming that the assumed public offering price per share of common stock remains the same, after deducting the placement agent fees and estimated offering expenses payable by us. A decrease of 1.0 million in the assumed number of shares of common stock sold by us in this offering would result in a decrease in our as adjusted net tangible book value (deficit) after this offering of approximately $ million, or approximately $ per share, and the dilution per share to investors purchasing common stock in this offering would be approximately $ per share, assuming that the assumed public offering price per share of common stock remains the same, after deducting the placement agent fees and estimated offering expenses payable by us. The information discussed above is illustrative only and will adjust based on the actual public offering price, the actual number of shares sold in this offering and other terms of this offering determined at pricing. The discussion and table above assume no pre-funded warrants are issued in lieu of common stock in connection with this offering.
The foregoing discussion and table do not take into account further dilution to new investors that could occur upon the exercise of outstanding options or warrants having a per share exercise price less than the public offering price per share of common stock sold in this offering. In addition, we may choose to raise additional capital due to market conditions or strategic considerations even if we believe we have sufficient funds for our current or future operating plans. To the extent that additional capital is raised through the sale of equity or convertible debt securities, the issuance of these securities could result in further dilution to our stockholders. The table and discussion above are based on 2,213,499 shares of our common stock issued and outstanding as of December 31, 2023, and excludes the following: •156,066 shares of common stock issuable upon the exercise of outstanding stock options at a weighted-average exercise price of $130.66 per share, as of December 31, 2023; •76,671 shares of common stock issuable upon the exercise of outstanding warrants at a weighted-average exercise price of $494.17 per share, as of December 31, 2023; •21,568 shares of common stock reserved for future issuance under our 2015 Equity Incentive Plan, as amended, as of December 31, 2023; •21,475 shares of common stock reserved for future issuance under our 2015 Employee Stock Purchase Plan as of December 31, 2023; and •344,730 shares of common stock sold after December 31, 2023 under our Capital on DemandTM Sales Agreement, dated December 9, 2020, as amended March 15, 2022 (the Sales Agreement), between us and JonesTrading Institutional Services LLC (JonesTrading) for gross proceeds of approximately $1.7 million. In addition, the number of shares of our common stock issued and outstanding as of December 31, 2023 upon which the table and discussion above are based does not include the $39.8 million of shares of our common stock that remain available for sale as of the date of this prospectus under the Sales Agreement and $25 million of shares of our common stock that remain available for sale as of December 31, 2023 under our May 2023 LPC Purchase Agreement (LPC Purchase Agreement) with Lincoln Park Capital Fund, LLC.
DESCRIPTION OF THE SECURITIES WE ARE OFFERING We are offering shares of our common stock, or for certain investors pre-funded warrants in lieu of shares of common stock, in connection with this offering. We are also registering the shares of common stock issuable from time to time upon exercise of the pre-funded warrants issued in connection with this offering, if any. Common Stock The material terms and provisions of our common stock and each other class of our securities which, if designated and issued, qualifies or limits our common stock are described in Exhibit 4.2 to our Annual Report on Form 10-K and incorporated by reference herein. Pre-Funded Warrants The following summary of certain terms and provisions of the pre-funded warrants that are being offered hereby is not complete and is subject to, and qualified in its entirety by the provisions of, the pre-funded warrant. Prospective investors should carefully review the terms and provisions of the form of pre-funded warrant for a complete description of the terms and conditions of the pre-funded warrants. The term “pre-funded” refers to the fact that the purchase price of each pre-funded warrant, at closing, will equal the price per share at which shares of our common stock are being sold to the public in this offering, minus $0.01, and the exercise price of each pre-funded warrant will equal $0.01 per share of common stock. The purpose of the pre-funded warrants is to enable investors that may have restrictions on their ability to beneficially own more than % (or, upon election of the holder, %) of our outstanding common stock following the consummation of this offering the opportunity to invest capital into us without triggering their ownership restrictions, by receiving pre-funded warrants in lieu of our common stock to the extent it would result in such ownership of more than % (or %), and receive the ability to purchase the shares underlying the pre-funded warrants at such nominal price at a later date. Duration. The pre-funded warrants offered hereby will entitle the holders thereof to purchase shares of our common stock at a nominal exercise price of $0.01 per share for a period commencing immediately on the date of issuance. Exercise Limitation. A holder will not have the right to exercise any portion of the pre-funded warrant if the holder (together with its affiliates and certain related parties) would beneficially own in excess of % (or, upon election of the holder, %) of the number of shares of our common stock outstanding immediately after giving effect to the exercise, as such percentage ownership is determined in accordance with the terms of the pre-funded warrants. However, any holder may increase or decrease such percentage, provided that any increase will not be effective until the 61st day after notice of such election is provided to us. Exercise Price. The pre-funded warrants will have an exercise price of $0.01 per share. The exercise price is subject to appropriate adjustment in the event of certain stock dividends and distributions, stock splits, stock combinations, reclassifications or similar events affecting our common stock and also upon any distributions of assets, including cash, stock or other property to our stockholders. Transferability. Subject to applicable laws, the pre-funded warrants may be offered for sale, sold, transferred or assigned without our consent. Exchange Listing. There is no established trading market for the pre-funded warrants and we do not expect a market to develop. In addition, we do not intend to apply for the listing of the pre-funded warrants on any national securities exchange or other trading market. Without an active trading market, the liquidity of the pre-funded warrants, if any, will be limited.
Fundamental Transactions. If a fundamental transaction occurs, then the successor entity will succeed to, and be substituted for us, and may exercise every right and power that we may exercise and will assume all of our obligations under the pre-funded warrants with the same effect as if such successor entity had been named in the pre-funded warrant itself. If holders of our common stock are given a choice as to the securities, cash or property to be received in a fundamental transaction, then the holder shall be given the same choice as to the consideration it receives upon any exercise of the pre-funded warrant following such fundamental transaction. Rights as a Stockholder. Except as otherwise provided in the pre-funded warrants or by virtue of such holder’s ownership of shares of our common stock, the holder of a pre-funded warrant does not have the rights or privileges of a holder of our common stock, including any voting rights, until the holder exercises the pre-funded warrant.
MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES The following is a general discussion of the material U.S. federal income tax considerations of the purchase, ownership and disposition of shares of our common stock issued pursuant to this offering, or the shares, and the purchase, ownership and disposition of pre-funded warrants to purchase shares of our common stock issued pursuant to this offering, or the pre-funded warrants. The shares and the pre-funded warrants are collectively referred to herein as our “securities.” All prospective holders of our securities should consult their tax advisors with respect to the U.S. federal, state, local and non-U.S. tax consequences of the purchase, ownership and disposition of our securities. This discussion is not a complete analysis of all potential U.S. federal income tax consequences relating to the purchase, ownership and disposition of our securities. This discussion is based on current provisions of the U.S. Internal Revenue Code of 1986, as amended (the Code), existing U.S. Treasury Regulations promulgated thereunder, published administrative pronouncements and rulings of the U.S. Internal Revenue Service (the IRS), and judicial decisions, all as in effect as of the date of this prospectus supplement. These authorities are subject to change and to differing interpretation, possibly with retroactive effect. Any change or differing interpretation could alter the tax consequences to holders described in this discussion. There can be no assurance that a court or the IRS will not challenge one or more of the tax consequences described herein, and we have not obtained, nor do we intend to obtain, a ruling with respect to the U.S. federal income tax consequences to a holder of the purchase, ownership or disposition of our securities. We assume in this discussion that a holder holds our securities as a “capital asset” within the meaning of Section 1221 of the Code (generally, property held for investment). This discussion does not address all aspects of U.S. federal income taxation that may be relevant to a particular holder in light of that holder’s individual circumstances, nor does it address any alternative minimum, Medicare contribution, estate or gift tax consequences, or any aspects of U.S. state, local or non-U.S. taxes or any other U.S. federal tax laws. This discussion also does not address consequences relevant to holders subject to special tax rules, such as holders that own, or are deemed to own, more than 5% of our capital stock (except to the extent specifically set forth below), corporations that accumulate earnings to avoid U.S. federal income tax, tax-exempt organizations, governmental organizations, banks, financial institutions, investment funds, insurance companies, brokers, dealers or traders in securities, commodities or currencies, regulated investment companies or real estate investment trusts, persons that have a “functional currency” other than the U.S. dollar, tax-qualified retirement plans, holders who hold or receive our securities pursuant to the exercise of employee stock options or otherwise as compensation, holders holding our securities as part of a hedge, straddle or other risk reduction strategy, conversion transaction or other integrated investment, holders deemed to sell our securities under the constructive sale provisions of the Code, holders subject to special tax accounting rules under Section 451(b) of the Code, controlled foreign corporations, passive foreign investment companies and certain former U.S. citizens or long-term residents. In addition, this discussion does not address the tax treatment of partnerships (or entities or arrangements that are treated as partnerships or disregarded entities for U.S. federal income tax purposes) or persons that hold our securities through such partnerships. If a partnership, including any entity or arrangement treated as a partnership for U.S. federal income tax purposes, holds our securities, the U.S. federal income tax treatment of a partner in such partnership generally will depend upon the status of the partner, and the activities of the partnership and certain determinations made at the partner level. Such partners and partnerships should consult their tax advisors regarding the tax consequences of the purchase, ownership and disposition of our securities.
Treatment of Pre-Funded Warrants Although it is not entirely free from doubt, we believe a pre-funded warrant should be treated as a share for U.S. federal income tax purposes and a holder of pre-funded warrants should generally be taxed in the same manner as a holder of shares, as described below. Accordingly, no gain or loss should be recognized (other than with respect to cash paid in lieu of a fractional share) upon the exercise of a pre-funded warrant and, upon exercise, the holding period of a pre-funded warrant should carry over to the share received. Similarly, the tax basis of the pre-funded warrant should carry over to the shares received upon exercise, increased by the exercise price of $0.001 per share. However, our characterization is not binding on the IRS, and the IRS may treat the pre-funded warrants as warrants to acquire our shares. If so, the amount and character of your gain or loss with respect to an investment in our pre-funded warrants could change. Accordingly, each holder should consult his, her or its own tax advisor regarding the risks associated with the acquisition of pre-funded warrants pursuant to this offering (including potential alternative characterizations). Except where specifically noted below, the balance of this discussion generally assumes that the characterization described above is respected for U.S. federal income tax purposes. However, some portions of the below discussion make reference to potential consequences associated with the acquisition, ownership and disposition of the pre-funded warrants independent of their potential characterization as shares for U.S. federal income tax purposes. Tax Considerations Applicable to U.S. Holders Definition of U.S. Holder In general, a “U.S. holder” means a beneficial owner of our securities (other than a partnership or an entity or arrangement treated as a partnership for U.S. federal income tax purposes) that is, for U.S. federal income tax purposes: | | | | | • | | an individual who is a citizen or resident of the United States; |
| | | | | • | | a corporation, or an entity treated as a corporation for U.S. federal income tax purposes, created or organized in the United States or under the laws of the United States or of any state thereof or the District of Columbia; |
| | | | | • | | an estate, the income of which is subject to U.S. federal income tax regardless of its source; or |
| | | | | • | | a trust if (a) a U.S. court can exercise primary supervision over the trust’s administration and one or more U.S. persons have the authority to control all of the trust’s substantial decisions or (b) the trust has a valid election in effect under applicable U.S. Treasury Regulations to be treated as a U.S. person. |
Distributions on the Shares and Pre-Funded Warrants We do not anticipate declaring or paying any future distributions. However, if we do make distributions on our securities, such distributions will constitute dividends to the extent paid from our current or accumulated earnings and profits, as determined under U.S. federal income tax principles, and will be includible in your income as ordinary income when received. However, with respect to dividends received by individuals, such dividends are generally taxed at the lower applicable long-term capital gains rates, provided certain holding period and other requirements are satisfied. If a distribution exceeds our current and accumulated earnings and profits, the excess will be treated as a tax-free return of the U.S. holder’s investment, up to such U.S. holder’s adjusted tax basis in our securities. Any remaining excess will be treated as capital gain from the sale or exchange of such securities, subject to the tax treatment described below in “—Sale or Other Taxable Disposition of the Shares or Pre-Funded Warrants.”
Sale or Other Taxable Disposition of the Shares or Pre-Funded Warrants Upon the sale, exchange or other taxable disposition of our securities, a U.S. holder generally will recognize capital gain or loss equal to the difference between the amount of cash and the fair market value of any property received upon the sale, exchange or other taxable disposition and such U.S. holder’s adjusted tax basis in our securities. This capital gain or loss will be long-term capital gain or loss if the U.S. holder’s holding period in such securities is more than one year at the time of the sale, exchange or other taxable disposition. Long-term capital gains recognized by certain non-corporate U.S. holders, including individuals, generally will be subject to reduced rates of U.S. federal income tax. The deductibility of capital losses is subject to certain limitations. Constructive Distributions on Pre-Funded Warrants A U.S. holder of a pre-funded warrant may, in some circumstances, be deemed to have received a distribution subject to U.S. federal income tax as a result of an adjustment or the non-occurrence of an adjustment to the exercise price or number of shares of common stock issuable upon exercise of the pre-funded warrant. U.S. holders should consult their tax advisors regarding the proper treatment of any adjustments (or the non-occurrence of any adjustments) to the pre-funded warrants. Backup Withholding and Information Reporting A U.S. holder may be subject to information reporting and backup withholding when such holder receives payments on our securities (including constructive distributions) or receives proceeds from the sale or other taxable disposition of our securities. Certain U.S. holders are exempt from backup withholding, including C corporations and certain tax-exempt organizations. A U.S. holder will be subject to backup withholding if such holder is not otherwise exempt and such holder: | | | | | • | | fails to furnish the holder’s taxpayer identification number, which for an individual is ordinarily his or her social security number; |
| | | | | • | | furnishes an incorrect taxpayer identification number; |
| | | | | • | | is notified by the IRS that the holder previously failed to properly report payments of interest or dividends; or |
| | | | | • | | fails to certify under penalties of perjury that the holder has furnished a correct taxpayer identification number and that the IRS has not notified the holder that the holder is subject to backup withholding. |
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 a U.S. holder’s U.S. federal income tax liability, provided the required information is timely furnished to the IRS. U.S. holders should consult their tax advisors regarding their qualification for an exemption from backup withholding and the procedures for obtaining such an exemption. Tax Considerations Applicable to Non-U.S. Holders Definition of non-U.S. Holder For purposes of this discussion, a “non-U.S. holder” is a beneficial owner of our securities that is neither a U.S. holder nor a partnership or an entity or arrangement treated as a partnership for U.S. federal income tax purposes. Distributions on the Shares and Pre-Funded Warrants If we make distributions on our securities such distributions will constitute dividends to the extent paid from our current or accumulated earnings and profits, as determined under U.S. federal income tax principles. If a distribution exceeds our current and accumulated earnings and profits, the excess will be treated as a tax-free return of the non-U.S. holder’s investment, up to such non-U.S. holder’s adjusted tax basis in our securities. Any remaining excess will be treated as capital gain from the sale or exchange of such securities, subject to the tax treatment described below in “—Gain on Sale, Exchange or Other Taxable Disposition of Our Shares or Pre-Funded Warrants.”
Dividends paid to a non-U.S. holder will generally be subject to withholding of U.S. federal income tax at a 30% rate of the gross amount of the dividend or such lower rate as may be specified by an applicable income tax treaty between the United States and such non-U.S. holder’s country of residence for purposes of such treaty. Dividends that are treated as effectively connected with a trade or business conducted by a non-U.S. holder within the United States and, if an applicable income tax treaty so provides, that are attributable to a permanent establishment or a fixed base maintained by the non-U.S. holder within the United States, are generally exempt from the 30% withholding tax if the non-U.S. holder satisfies applicable certification and disclosure requirements. However, such U.S. effectively connected income, net of specified deductions and credits, is taxed at the same U.S. federal income tax rates applicable to U.S. persons (as defined in the Code). Any U.S. effectively connected income received by a non-U.S. holder that is a corporation may also, under certain circumstances, be subject to an additional “branch profits tax” at a 30% rate or such lower rate as may be specified by an applicable income tax treaty between the United States and such non-U.S. holder’s country of residence for purposes of such treaty. To claim a reduction or exemption from withholding, a non-U.S. holder generally will be required to provide (a) a properly executed IRS Form W-8BEN or IRS Form W-8BEN-E (or successor form) and satisfy applicable certification and other requirements to claim the benefit of an applicable income tax treaty between the United States and such non-U.S. holder’s country of residence, or (b) a properly executed IRS Form W-8ECI stating that dividends are not subject to withholding because they are effectively connected with such non-U.S. holder’s conduct of a trade or business within the United States. Non-U.S. holders are urged to consult their tax advisors regarding their entitlement to benefits under a relevant income tax treaty. A non-U.S. holder that is eligible for a reduced rate of U.S. withholding tax under an income tax treaty may obtain a refund or credit of any excess amounts withheld by timely filing an appropriate claim for refund with the IRS. Distributions will also be subject to the discussion below under the sections titled “—Backup Withholding and Information Reporting” and “—Foreign Accounts.” Gain on Sale, Exchange or Other Taxable Disposition of Our Shares or Pre-Funded Warrants Subject to the discussion below under the sections titled “—Backup Withholding and Information Reporting” and “—Foreign Accounts,” in general, a non-U.S. holder will not be subject to any U.S. federal income tax on any gain realized upon such non-U.S. holder’s sale, exchange or other taxable disposition of our securities unless: | | | | | • | | the gain is effectively connected with a U.S. trade or business of the non-U.S. holder and, if an applicable income tax treaty so provides, is attributable to a permanent establishment or a fixed base maintained in the United States by such non-U.S. holder, in which case the non-U.S. holder generally will be taxed at the U.S. federal income tax rates applicable to U.S. persons (as defined in the Code) and, if the non-U.S. holder is a foreign corporation, the branch profits tax described above in “—Distributions on the Shares and Pre-Funded Warrants” also may apply; |
| | | | | • | | the non-U.S. holder is a nonresident alien individual who is present in the United States for 183 days or more in the taxable year of the disposition and certain other conditions are met, in which case the non-U.S. holder will be subject to a 30% U.S. federal income tax (or such lower rate as may be specified by an applicable income tax treaty) on the net gain derived from the disposition, which may be offset by U.S. source capital losses of the non-U.S. holder, if any (even though the individual is not considered a resident of the United States); or |
| | | | | • | | we are, or have been, at any time during the five-year period preceding such disposition (or the non-U.S. holder’s holding period, if shorter) a “U.S. real property holding corporation” in which case such non-U.S. holder generally will be taxed on its net gain derived from the disposition as effectively connected income taxable at the U.S. federal income tax rates applicable to U.S. persons (as defined in the Code); however, the branch profits tax described above will not apply to a U.S. holder that is a foreign corporation. Generally, a corporation is a U.S. real property holding corporation if the fair market value of its U.S. real property interests equals or exceeds 50% of the sum of the fair market value of its worldwide real property interests plus its other assets used or held for use in a trade or business. Although there can be no assurance, we do not believe that we are, or have been, a U.S. real property holding corporation, or that we are likely to become one in the future. Even if we are or become a U.S. real property holding corporation, provided that our common stock is regularly traded, as defined by applicable U.S. Treasury Regulations, on an established securities market, our securities will be treated as a U.S. real property interest only with respect to a non-U.S. holder that holds more than 5% of our securities (as determined under U.S. federal income tax principles), directly or indirectly, actually or constructively, during the shorter of the 5-year period ending on the date of the disposition or the period that the non-U.S. holder held our securities. There can be no assurance that our common stock will continue to qualify as regularly traded on an established securities market. |
Constructive Distributions on Pre-Funded Warrants A non-U.S. holder of pre-funded warrants can be treated as receiving deemed payment of a taxable dividend under certain circumstances as a result of an adjustment or the non-occurrence of an adjustment to the exercise price or number of shares issuable upon exercise of the pre-funded warrant. Any resulting withholding tax attributable to deemed dividends may be collected from other amounts payable or distributable to the non-U.S. holder. Non-U.S. holders should consult their tax advisors regarding the proper treatment of any adjustments (or the non-occurrence of any adjustments) to the pre-funded warrants. Backup Withholding and Information Reporting We must report annually to the IRS and to each non-U.S. holder the gross amount of the distributions (including constructive distributions) on our securities paid to such non-U.S. holder and the tax withheld, if any, with respect to such distributions. Non-U.S. holders will have to comply with specific certification procedures to establish that the holder is not a U.S. person (as defined in the Code) in order to avoid backup withholding at the applicable rate with respect to any dividends on our securities. A non-U.S. holder generally will not be subject to U.S. backup withholding with respect to payments of distributions on our securities if it certifies its non-U.S. status by providing a valid IRS Form W-8BEN or IRS Form W-8BEN-E (or successor form) or IRS Form W-8ECI, or otherwise establishes an exemption; provided we do not have actual knowledge or reason to know such non-U.S. holder is a U.S. person, as defined in the Code. Distributions paid to non-U.S. holders subject to the U.S. withholding tax, as described above in “—Distributions on the Shares and Pre-Funded Warrants” generally will be exempt from U.S. backup withholding. Information reporting and backup withholding generally will apply to the proceeds of a disposition of our securities by a non-U.S. holder effected by or through the U.S. office of any broker, U.S. or foreign, unless the holder certifies its status as a non-U.S. holder and satisfies certain other requirements, or otherwise establishes an exemption. Generally, information reporting and backup withholding will not apply to a payment of disposition proceeds to a non-U.S. holder where the transaction is effected outside the United States through a non-U.S. office of a broker. However, for information reporting purposes, dispositions effected through a non-U.S. office of a broker with substantial U.S. ownership or operations generally will be treated in a manner similar to dispositions effected through a U.S. office of a broker. Non-U.S. holders should consult their tax advisors regarding the application of the information reporting and backup withholding rules to them. Copies of information returns may be made available to the tax authorities of the country in which the non-U.S. holder resides or is established under the provisions of a specific treaty or agreement.
Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules from a payment to a non-U.S. holder may be allowed as a credit against the non-U.S. holder’s U.S. federal income tax liability, if any, and may entitle such holder to a refund, provided that the required information is timely furnished to the IRS. Foreign Accounts The Code generally imposes a U.S. federal withholding tax of 30% on dividends and, subject to the discussion below regarding proposed regulations issued by the U.S. Treasury Department, the gross proceeds of a disposition of our securities paid to a “foreign financial institution” (as defined in the Code), unless such institution enters into an agreement with the U.S. government to, among other things, withhold on certain payments and to collect and provide to the U.S. tax authorities substantial information regarding accounts held by certain “specific United States persons” or “United States owned foreign entities” (each as defined in the Code), or otherwise qualifies for an exemption from these rules. A U.S. federal withholding tax of 30% also applies to dividends and, subject to the discussion below regarding proposed regulations issued by the U.S. Treasury Department, will apply to the gross proceeds of a disposition of our securities paid to a “non-financial foreign entity” (as defined in the Code), unless such entity provides the withholding agent with either a certification that it does not have any “substantial United States owners” (as defined in the Code), provides information regarding each substantial United States owners of the entity, or otherwise qualifies for an exemption from these rules. Under certain circumstances, a non-U.S. holder might be eligible for refunds or credits of such taxes. An intergovernmental agreement between the United States and an applicable foreign country may modify the requirements described in this paragraph. The withholding provisions described above currently apply to dividends paid on our securities. The U.S. Treasury Department released proposed regulations which, if finalized in their present form, would eliminate the U.S. federal withholding tax of 30% applicable to the gross proceeds of a sale or other disposition of our securities. In its preamble to such proposed regulations, the U.S. Treasury Department stated that taxpayers may generally rely on the proposed regulations until final regulations are issued. EACH PROSPECTIVE INVESTOR SHOULD CONSULT ITS TAX ADVISOR REGARDING THE PARTICULAR U.S. FEDERAL, STATE AND LOCAL AND NON-U.S. TAX CONSEQUENCES OF PURCHASING, HOLDING AND DISPOSING OF OUR SECURITIES, INCLUDING THE CONSEQUENCES OF ANY PROPOSED CHANGE IN APPLICABLE LAWS.
PLAN OF DISTRIBUTION Pursuant to an engagement agreement, dated as of , 2024, we have engaged , or the placement agent, to act as our exclusive placement agent to solicit offers to purchase the securities offered pursuant to this prospectus. Underprospectus on a reasonable best-efforts basis. The engagement agreement does not give rise to any commitment by the Purchase Agreement,placement agent to purchase any of our securities, and the placement agent will have no authority to bind us by virtue of the engagement agreement. The placement agent is not purchasing or selling any of the securities offered by us under this prospectus, nor is it required to arrange for the purchase or sale of any specific number or dollar amount of securities. The placement agent does not guarantee that it will be able to raise new capital in any prospective offering. This offering will terminate on , 2024, unless we decide to terminate the offering (which we may do at any time in our discretion) prior to that date. We will have one closing for all the right but not the obligation to issue more than the 1,642,658 shares of common stock includedsecurities purchased in this prospectusoffering. The public offering price per share (or pre-funded warrant) will be fixed for the duration of this offering. We will enter into a securities purchase agreement with each of the investors who purchase our securities in this offering, the form of which is attached as an exhibit to Aspire Capital under some circumstances. If we elect to sell more than the 1,642,658 shares of common stock offered hereby, we must first register under the Securities Act the sale by Aspire Capital of any such additional shares. After the SEC has declared effective the registration statement of which this prospectus is a part, on any trading day on which the closing sale price of our common stock is not less than $0.25 per share, we have the right, in our sole discretion, to present Aspire Capital with a Purchase Notice, directing Aspire Capital (as principal) to purchase up to 15,000 shares of our common stock per business day, up to $15.0 million of our common stock in the aggregate over the term of the Purchase Agreement, at a Purchase Price calculated by reference to the prevailing market price of our common stock over the preceding 10-business day period (as more specifically described below); however, no sale pursuant to a Purchase Notice may exceed $500,000 per trading day.part.
In addition, on any date on which we submit a Purchase Notice for 15,000 shares to Aspire Capital, we also have the right, in our sole discretion, to present Aspire Capital with a VWAP Purchase Notice directing Aspire Capital to purchase an amount of stock equal to up to 30% of the aggregate shares of our common stock traded on The Nasdaq Global Market on the next trading day, subject to the VWAP Purchase Share Volume MaximumFees and the VWAP Minimum Price Threshold. The VWAP Purchase Price is calculated by reference to the prevailing market price of our common stock (as more specifically described below).
The Purchase Agreement provides that we and Aspire Capital shall not effect any sales under the Purchase Agreement on any purchase date where the closing sale price of our common stock is less than the Floor Price. There are no trading volume requirements or restrictions under the Purchase Agreement, and we will control the timing and amount of any sales of our common stock to Aspire Capital. Aspire Capital has no right to require any sales by us, but is obligated to make purchases from us as we direct in accordance with the Purchase Agreement. There are no limitations on use of proceeds, financial or business covenants, restrictions on future financings, rights of first refusal, participation rights, penalties or liquidated damages in the Purchase Agreement.Expenses
Aspire Capital may not assign its rights or obligations under the Purchase Agreement. The Purchase Agreement may be terminated by us at any time, at our discretion, without any penalty or cost to us.
Purchase of Shares under the Purchase Agreement
Under the Purchase Agreement, on any trading day selected by us on which the closing sale price of our common stock exceeds $0.25 per share, we may direct Aspire Capital to purchase up to 15,000 shares of our common stock per trading day. The Purchase Price of such shares is equal to the lesser of:
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| | the lowest sale price of our common stock on the purchase date; or
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| | the average of the three lowest closing sale prices for our common stock during the ten consecutive trading days ending on the trading day immediately preceding the purchase date.
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In addition, on any date on which we submit a Purchase Notice to Aspire Capital for the purchase of up to 15,000 shares, we also have the right to direct Aspire Capital to purchase an amount of stock equal to up to 30% of the aggregate shares of the our common stock traded on The Nasdaq Global Market on the next trading day, subject to the VWAP Purchase Share Volume Maximum and the VWAP Minimum Price Threshold, which is equal to the greater of (a) 80% of the closing price of the Company’s common stock on the business day immediately preceding the VWAP Purchase Date or (b) such higher price as set forth by the Company in the VWAP Purchase Notice. The VWAP Purchase Price of such shares is the lower of:
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| | the closing sale price on the VWAP Purchase Date; or
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| | 97% of the volume-weighted average price for our common stock traded on The Nasdaq Global Market:
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| | on the VWAP Purchase Date, if the aggregate shares to be purchased on that date have not exceeded the VWAP Purchase Share Volume Maximum or
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| | during that portion of the VWAP Purchase Date until such time as the sooner to occur of (i) the time at which the aggregate shares traded on The Nasdaq Global Market exceed the VWAP Purchase Share Volume Maximum or (ii) the time at which the sale price of the Company’s common stock falls below the VWAP Minimum Price Threshold.
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The Purchase Price will be adjusted for any reorganization, recapitalization, non-cash dividend, stock split, or other similar transaction occurring during the trading day(s) used to compute the Purchase Price. We may deliver multiple Purchase Notices and VWAP Purchase Notices to Aspire Capital from time to time during the term of the Purchase Agreement, so long as the most recent purchase has been completed.
Minimum Share Price
Under the Purchase Agreement, we and Aspire Capital may not effect any sales of shares of our common stock under the Purchase Agreement on any trading day that the closing sale price of our common stock is less than $0.25 per share.
Events of Default
Generally, Aspire Capital may terminate the Purchase Agreement upon the occurrence of any of the following, among other, events of default:
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| | the effectiveness of any registration statement that is required to be maintained effective pursuant to the terms of the Registration Rights Agreement between us and Aspire Capital lapses for any reason (including, without limitation, the issuance of a stop order) or is unavailable to Aspire Capital for sale of our shares of common stock, and such lapse or unavailability continues for a period of ten consecutive business days or for more than an aggregate of 30 business days in any 365-day period, which is not in connection with a post-effective amendment to any such registration statement; in connection with any post-effective amendment to such registration statement that is required to be declared effective by the SEC such lapse or unavailability may continue for a period of no more than 30 consecutive business days;
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| | the suspension from trading or failure of our common stock to be listed on our principal market for a period of three consecutive business days;
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| | the delisting of our common stock from our principal market, provided our common stock is not immediately thereafter trading on the New York Stock Exchange, the NYSE American, The Nasdaq Capital Market, The Nasdaq Global Select Market or The Nasdaq Global Market;
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| | our transfer agent’s failure to issue to Aspire Capital shares of our common stock which Aspire Capital is entitled to receive under the Purchase Agreement within five business days after an applicable purchase date;
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| | any breach by us of the representations or warranties or covenants contained in the Purchase Agreement or any related agreements which could have a material adverse effect on us, subject to a cure period of five business days;
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| | if we become insolvent or are generally unable to pay our debts as they become due; or
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| | if we become a party to insolvency or bankruptcy proceedings by or against us.
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Our Termination Rights
The Purchase Agreement may be terminated by us at any time, at our discretion, without any penalty or cost to us.
No Short-Selling or Hedging by Aspire Capital
Aspire Capital has agreed that neither it nor any of its agents, representatives and affiliates shall engage in any direct or indirect short-selling or hedging of our common stock during any time prior to the termination of the Purchase Agreement.
Effect of Performance of the Purchase Agreement on Our Stockholders
The Purchase Agreement does not limit the ability of Aspire Capital to sell any or all of the 1,642,658 shares registered in this offering. It is anticipated that shares registered in this offering will be sold over a period of up to approximately 30 months from the date of this prospectus. The sale by Aspire Capital of a significant amount of shares registered in this offering at any given time could cause the market price of our common stock to decline and/or to be highly volatile. Aspire Capital may ultimately purchase all, some or none of the 1,500,000 shares of common stock not yet issued but registered in this offering. After it has acquired such shares, it may sell all, some or none of such shares. Therefore, sales to Aspire Capital by us pursuant to the Purchase Agreement also may result in substantial dilution to the interests of other holders of our common stock. However, we have the right to control the timing and amount of any sales of our shares to Aspire Capital and the Purchase Agreement may be terminated by us at any time at our discretion without any penalty or cost to us.
Percentage of Outstanding Shares after Giving Effect to the Purchased Shares Issued to Aspire Capital
In connection with entering into the Purchase Agreement, we authorized the sale to Aspire Capital of up to $15.0 million of our shares of common stock. However, we estimate that we will sell no more than 1,642,658 shares to Aspire Capital under the Purchase Agreement (including the Commitment Shares), all of which are included in this offering. Subject to any required approval by our board of directors, we have the right but not the obligation to issue more than the 1,642,658 shares included in this prospectus to Aspire Capital under the Purchase Agreement under some circumstances. In the event we elect to issue more than 1,642,658 shares under the Purchase Agreement, we will be required to file a new registration statement and have it declared effective by the SEC. The number of shares ultimately offered for sale by Aspire Capital in this offering is dependent upon the number of shares purchased by Aspire Capital under the Purchase Agreement. The following table sets forthshows the numberper share and percentage of outstanding shares to be held by Aspire Capital after giving effect toper pre-funded warrant placement agent fees we will pay in connection with the sale of shares of common stock sold to Aspire Capital at varying purchase prices:the securities in this offering.
| | | | | | | | | | | | | | | | | | | | | Per Share | | Per Pre-Funded Warrant | Placement Agent Fees | | | | | | | | | | | | Total | | | | |
| | | | | | | | | | | | | | | | | | | Assumed
Average
Purchase
Price | | | Proceeds from the
Sale of Shares to
Aspire Capital
Under the Purchase
Agreement
Registered in this
Offering | | | Number of Shares to
be Issued in this
Offering at the
Assumed Average
Purchase Price (1) | | | Total Number of
Outstanding Shares
After Giving Effect
to the Shares Issued
to Aspire Capital (2) | | | Percentage of
Outstanding Shares
After Giving Effect
to the Purchased
Shares Issued to
Aspire Capital (3) | | $ | 2.50 | | | $ | 3,750,000 | | | | 1,500,000 | | | | 4,636,404 | | | | 35.43% | | $ | 5.00 | | | $ | 7,500,000 | | | | 1,500,000 | | | | 4,636,404 | | | | 35.43% | | $ | 7.50 | | | $ | 11,250,000 | | | | 1,500,000 | | | | 4,636,404 | | | | 35.43% | | $ | 10.0 | | | $ | 15,000,000 | | | | 1,500,000 | | | | 4,636,404 | | | | 35.43% | | $ | 15.0 | | | $ | 15,000,000 | | | | 1,000,000 | | | | 4,636,404 | | | | 27.62% | | $ | 20.0 | | | $ | 15,000,000 | | | | 750,000 | | | | 3,886,404 | | | | 22.97% | | $ | 25.0 | | | $ | 15,000,000 | | | | 600,000 | | | | 3,736,404 | | | | 19.88% | | $ | 30.0 | | | $ | 15,000,000 | | | | 500,000 | | | | 3,636,404 | | | | 17.67% | |
| | (1)
| Excludes the 142,658 Commitment Shares (on a post-reverse stock split basis) issued under the Purchase Agreement between us and Aspire Capital.
| (2)
| Based on an assumed number of shares outstanding as of October 18, 2019, which includes the 2,993,746 shares of common stock outstanding immediately prior to the execution of the Purchase Agreement, 142,658 Commitment Shares (on a post-reverse stock split basis) previously issued to Aspire Capital and the number of shares set forth in the adjacent column that we would have sold to Aspire Capital.
| (3)
| The numerator includes the 142,658 Commitment Shares (on a post-reverse stock split basis) plus the number of shares set forth in the column titled, “Number of Shares to be Issued in this Offering at the Assumed Average Purchase Price.” The denominator is set forth in the adjacent column.
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Lock-up Agreements _USE OF PROCEEDS
This prospectus relates to sharesWe and each of our common stock that mayofficers and directors have agreed with the placement agent to be offered and sold from timesubject to time by Aspire Capital. We will not receive any proceeds upona lock-up period of days following the saledate of shares by Aspire Capital. However, we may receive gross proceeds of up to $15.0 million from the sale of shares under the Purchase Agreement to Aspire Capital. The proceeds will be used for the advancement of our research and development activities, working capital and general corporate purposes. This anticipated use of net proceeds from the sale of our common stock to Aspire Capital under the Purchase Agreement represents our intentions based upon our current plans and business conditions.
_SELLING STOCKHOLDER
The selling stockholder may from time to time offer and sell any or allclosing of the shares of our common stock set forth belowoffering pursuant to this prospectus. WhenThis means that, during the lock-up period, we referand such persons may not offer for sale, contract to the “selling stockholder” in this prospectus, we mean the entity listed in the table below, and its respective pledgees, donees, permitted transferees, assignees, successors and others who later comesell, sell, distribute, grant any option, right or warrant to holdpurchase, pledge, hypothecate or otherwise dispose of, directly or indirectly, any of the selling stockholder’s interests in shares of our common stock other than through a public sale.
The following table sets forth, as of the date of this prospectus, the name of the selling stockholder for whom we are registering shares for sale to the public, the number of shares of common stock beneficially owned by the selling stockholder prior to this offering, the total number ofor any securities convertible into, or exercisable or exchangeable for, shares of common stock, thatsubject to customary exceptions. The placement agent may waive the selling stockholderterms of these lock-up agreements in its sole discretion and without notice.
Regulation M The placement agent may offer pursuantbe deemed to this prospectus and the number of shares of common stock that the selling stockholder will beneficially own after this offering. Except as noted below, the selling stockholder does not have, orbe an underwriter within the past three years has not had,meaning of Section 2(a)(11) of the Securities Act, and any material relationship with us orcommissions received by it and any of our predecessors or affiliates and the selling stockholder is not or was not affiliated with registered broker-dealers. Basedprofit realized on the information provided to us by the selling stockholder, assuming that the selling stockholder sells allresale of the shares of our common stock beneficially ownedsecurities sold by it that have been registered by us and does not acquire any additional shares duringwhile acting as principal might be deemed to be underwriting discounts or commissions under the offering,Securities Act. As an underwriter, the selling stockholder will not own any shares, as reflected inplacement agent would be required to comply with the column entitled “Beneficial Ownership After This Offering.” We cannot advise you as to whether the selling stockholder will in fact sell any or all of such shares of common stock. In addition, the selling stockholder may have sold, transferred or otherwise disposed of, or may sell, transfer or otherwise dispose of, at any time and from time to time, the shares of our common stock in transactions exempt from the registration requirements of the Securities Act afterand the date on whichExchange Act, including, without limitation, Rule 10b-5 and Regulation M under the Exchange Act. These rules and regulations may limit the timing of purchases and sales of our securities by the placement agent acting as principal. Under these rules and regulations, the placement agent (i) may not engage in any stabilization activity in connection with our securities and (ii) may not bid for or purchase any of our securities or attempt to induce any person to purchase any of our securities, other than as permitted under the Exchange Act, until it provided the information set forthhas completed its participation in the table below.distribution.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Shares of Common
Stock Owned Prior
to this Offering | | | Additional Shares of
Common Stock Being
Offered | | | Beneficial
Ownership After
this Offering (1) | | Name | | | | Number of
Shares | | | % | | | Aspire Capital Fund, LLC (2) | | | 142,658 | (3) | | | 1,500,000 | | | | — | | | | 0% | |
21
| | | | | | | (1)
| Assumes the sale of all shares of common stock registered pursuant to this prospectus, although the selling stockholder is under no obligation known to us to sell any shares of common stock at this time.
| (2)
| Aspire Capital Partners LLC (Aspire Partners) is the Managing Member of Aspire Capital Fund LLC (Aspire Fund). SGM Holdings Corp (SGM) is the Managing Member of Aspire Partners. Mr. Steven G. Martin (Mr. Martin) is the president and sole shareholder of SGM, as well as a principal of Aspire Partners. Mr. Erik J. Brown (Mr. Brown) is the president and sole shareholder of Red Cedar Capital Corp (Red Cedar), which is a principal of Aspire Partners. Mr. Christos Komissopoulos (Mr. Komissopoulos) is president and sole shareholder of Chrisko Investors Inc. (Chrisko), which is a principal of Aspire Partners. Mr. William F. Blank, III (Mr. Blank) is president and sole shareholder of WML Ventures Corp. (WML Ventures), which is a principal of Aspire Partners. Each of Aspire Partners, SGM, Red Cedar, Chrisko, WML Ventures, Mr. Martin, Mr. Brown, Mr. Komissopoulos and Mr. Blank may be deemed to be a beneficial owner of common stock held by Aspire Fund. Each of Aspire Partners, SGM, Red Cedar, Chrisko, WML Ventures, Mr. Martin, Mr. Brown, Mr. Komissopoulos and Mr. Blank disclaims beneficial ownership of the common stock held by Aspire Fund.
|
| | | | | (3)
| As of the date hereof, Aspire Capital owns (1) 142,658 Commitment Shares (on a post-reverse stock split basis) that we issued to Aspire Capital as a commitment fee, and (2) 106,194 shares of common stock acquirable upon exercise of
warrants. The warrants contain provisions that restrict exercise of the warrants if the holder’s beneficial ownership would exceed 9.99% of the Company’s common stock. We may elect in our sole discretion to sell to Aspire Capital up to an additional 1,500,000 shares under the Purchase Agreement but Aspire Capital does not presently beneficially own those shares as determined in accordance with the rules of the SEC.
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PLAN OF DISTRIBUTIONIndemnification
We have agreed to indemnify the placement agent against certain liabilities, including certain liabilities arising under the Securities Act, or to contribute to payments that the placement agent may be required to make for these liabilities. Determination of Offering Price The actual offering price of the securities we are offering has been negotiated between us and the investors in the offering based on the trading of our shares of common stock may be sold or distributed from timeprior to time by the selling stockholder directlyoffering, among other things. Other factors considered in determining the public offering price of the securities we are offering include our history and prospects, the stage of development of our business, our business plans for the future and the extent to one or more purchasers or through brokers, dealers, or underwriters who may act solely as agents at market prices prevailingwhich they have been implemented, an assessment of our management, the general conditions of the securities markets at the time of sale, at prices related to the prevailing market prices, at negotiated prices, or at fixed prices, whichoffering and such other factors as were deemed relevant. Electronic Offer, Sale and Distribution of Securities A prospectus in electronic format may be changed. The salemade available on the websites maintained by the placement agent, if any, participating in this offering and the placement agent may distribute prospectuses electronically. Other than the prospectus in electronic format, the information on these websites is not part of this prospectus or the registration statement of which this prospectus forms a part, has not been approved or endorsed by us or the placement agent, and should not be relied upon by investors. Other Relationships From time to time, the placement agent or its affiliates have in the past or may in the future provide, various advisory, investment and commercial banking and other services to us in the ordinary course of business, for which they have received and may continue to receive customary fees and commissions. However, except as disclosed in this prospectus, we have no present arrangements with the placement agent for any further services. Listing Our shares of common stock offered by this prospectus may be effected in one or more ofare listed on the following methods:Nasdaq Capital Market under the symbol “TCON.” 22 | •
| ordinary brokers’ transactions;
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| •
| transactions involving cross or block trades;
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| •
| through brokers, dealers, or underwriters who may act solely as agents;
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| “at the market” into an existing market for the common stock;
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| in other ways not involving market makers or established business markets, including direct sales to purchasers or sales effected through agents;
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| •
| in privately negotiated transactions; or
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| •
| any combination of the foregoing.
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In order to comply with the securities laws of certain states, if applicable, the shares may be sold only through registered or licensed brokers or dealers. In addition, in certain states, the shares may not be sold unless they have been registered or qualified for sale in the state or an exemption from the registration or qualification requirement is available and complied with.LEGAL MATTERS
The selling stockholder may transfervalidity of the shares of common stock by other means not described in this prospectus. Brokers, dealers, underwriters, or agents participating in the distribution of the shares as agents may receive compensation in the form of commissions, discounts, or concessions from the selling stockholder and/or purchasers of the common stock for whom the broker-dealers may act as agent. Aspire Capital has informed us that each such broker-dealer will receive commissions from Aspire Capital which will not exceed customary brokerage commissions.
The selling stockholder and its affiliates have agreed not to engage in any direct or indirect short selling or hedging of our common stock during the term of the Purchase Agreement.
The selling stockholder is an “underwriter” within the meaning of the Securities Act. We have agreed to provide indemnification and contribution to the selling stockholder against certain civil liabilities, including liabilities under the Securities Act.
We have advised the selling stockholder that while it is engaged in a distribution of the shares included in this prospectus, it is required to comply with Regulation M promulgated under the Exchange Act. With certain exceptions, Regulation M precludes the selling stockholder, any affiliated purchasers, and any broker-dealer or other person who participates in the distribution from bidding for or purchasing, or attempting to induce any person to bid for or purchase any security which is the subject of the distribution until the entire distribution is complete. Regulation M also prohibits any bids or purchases made in order to stabilize the price of a security in connection with the distribution of that security. All of the foregoing may affect the marketability of the shares offered hereby this prospectus.
We may suspend the sale of shares by the selling stockholder pursuant to this prospectus for certain periods of time for certain reasons, including if the prospectus is required to be supplemented or amended to include additional material information.
This offering as it relates to Aspire Capital will terminate on the date that all sharespre-funded warrants being offered by this prospectus have been sold by Aspire Capital.
LEGAL MATTERS
The validity of the securities offered hereby is beingwill be passed upon for us by Cooley LLP, San Diego, CA.California. The placement agent is being represented by .
EXPERTS Ernst & Young LLP, independent registered public accounting firm, has audited our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2018,2023, as set forth in their report (which contains an explanatory paragraph describing conditions that raise substantial doubt about the Company’s ability to continue as a going concern as described in Note 1 to the consolidated financial statements), which is incorporated by reference in this prospectus and elsewhere in the registration statement. Our financial statements are incorporated by reference in reliance on Ernst & Young LLP’sLLP’s report, given on their authority as experts in accounting and auditing. WHERE YOU CAN FIND MORE INFORMATION We have filed with the SEC a registration statement on Form S-1 under the Securities Act with respect to the securities being offered by this prospectus. This prospectus does not contain all of the information in the registration statement and its exhibits. For further information with respect to us and the securities offered by this prospectus, we refer you to the registration statement and its exhibits. Statements contained in this prospectus as to the contents of any contract or any other document referred to are not necessarily complete, and in each instance, we refer you to the copy of the contract or other document filed as an exhibit to the registration statement. Each of these statements is qualified in all respects by this reference. We are subject to the information and periodic reporting requirements of the Exchange Act, and we file periodicannual, quarterly and current reports, proxy statements and other information with the SEC. The SEC maintains a website that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC, including us. The address of the SEC website is www.sec.gov. You can read our SEC filings, including the registration statement, over the Internet at the SEC’s website at www.sec.gov. You may also read and copy any document we file with the SEC at its public reference facilities at 100 F Street NE, Washington, D.C. 20549. You may also obtain copies of these documents at prescribed rates by writing to the Public Reference Section of the SEC at 100 F Street NE, Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the operation of the public reference facilities.such address. You may also request a copy of these filings, at no cost, by writing us at 4350 La Jolla Village Drive, Suite 800, San Diego, CACalifornia 92122 or telephoning us at (858) 550-0780. We also maintain a website at www.traconpharma.com, at which you may access these materials free of charge after they are electronically filed with, or furnished to, the SEC. The information contained in, or that can be accessed through, our website is not incorporated by reference into,in, and is not part of, this prospectus.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE The SEC allows us to “incorporate“incorporate by reference”reference” information from other documents that we file with it, which means that we can disclose important information to you by referring you to those documents. Unless otherwise noted below, the SEC file number for the documents incorporated by reference in this prospectus is 001-36818. The information incorporated by reference is considered to be part of this prospectus. We incorporate by reference into this prospectus and the registration statement of which this prospectus formforms a part the information or documents listed below that we have filed with the SEC, and any future filings we will make with the SEC under Sections 13(a), 13(c), 14, or 15(d) of the Exchange Act after the date of the initial filing of the registration statement of which this prospectus is a part and prior to effectiveness of such registration statement, and until the termination of the offering of theall shares covered by this prospectus (other than information furnished under Item 2.02 or Item 7.01 of any current reports on Form 8-K)8-K, and portions of other documents that are furnished but not filed or are otherwise not incorporated into registration statements pursuant to the applicable rules promulgated by the SEC): | | | | | •
| | our Annual Report onForm10-K for the fiscal year ended December 31, 2018 and filedwith the SEC on February 28, 2019;
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| | the information specifically incorporated by reference into our Annual Report on Form 10-K for the fiscal year ended December 31, 2018 from our definitive proxy statement on Schedule 14A (other than information furnished rather than filed) filed with the SEC on April 25, 2019;
| | •
| | our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2019, June 30, 2019, and September 30, 2019 filed with the SEC on May 14, 2019, August 7, 2019, and November 5, 2019, respectively;
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•our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the Commission on March 5, 2024; | | | | | •
| | our Current Reports on Form 8-K (other than information furnished rather than filed)filed with the SECon April
10, 2019, April 12, 2019, May 31, 2019, June 14, 2019, August 16, 2019, September 6, 2019, September 20, 2019, October 17, 2019, October 21, 2019, and November 6, 2019.
| | •
| | the descriptionof our common stock which is registered under Section12 of the Exchange Act, in our registrationstatement on Form8-A,filed with the SEConJanuary 27, 2015, including any amendments or reports filed for the purpose of updating such description.
|
•the description of the Registrant’s Common Stock contained in the Registrant’s Registration Statement on Form 8-A (File No. 001-36818), filed with the Commission under Section 12(b) of the Securities Exchange Act of 1934, as amended (the Exchange Act) on January 27, 2015, including any amendments or reports filed for the purpose of updating such description, including Exhibit 4.2 to the Registrant's Annual Report on Form 10-K referenced in (a) above. Any statement contained in this prospectus or in a document incorporated or deemed to be incorporated by reference into this prospectus 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 other subsequently filed document that is deemed to be incorporated by reference into this prospectus modifies or supersedes the statement. Any statements so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this prospectus. We will furnishprovide to each person, including any beneficial owners, to whom this prospectus is delivered without charge, to you, onupon written or oral request, a copy of any or all of the documents that are incorporated by reference into this prospectus but not delivered with this prospectus, including exhibits to thesewhich are specifically incorporated by reference into such documents. You should direct any requests for documents to TRACON Pharmaceuticals, Inc. 4350 La Jolla Village Drive, Suite 800, San Diego, CACalifornia 92122; telephone: (858) 550-0780.550-0780; email: info@traconpharma.com. You also may access these filings on our website at www.traconpharma.com. We do not incorporate the information on our website into this prospectus or any supplement to this prospectus and you should not consider any information on, or that can be accessed through, our website as part of this prospectus or any supplement to this prospectus (other than those filings with the SEC that we specifically incorporate by reference into this prospectus). DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION FOR SECURITIES ACT LIABILITY
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers and controlling persons, we have been advised that in the opinion of the SEC this indemnification is against public policy as expressed in the Securities Act and is therefore, unenforceable.24
Shares of Common Stock 1,642,658Pre-Funded Warrants to Purchase up to Shares
of Common Stock PROSPECTUS , 20192024
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 13. Other Expenses of Issuance and Distribution The following table sets forth the expenses to be incurred in connection with the offering described in this registration statement, all of which will be paid by the registrant. All amounts are estimates except the Securities and Exchange Commission, or SEC, registration fee. | | | | | | | | | | | | Amount | | SEC registration fee | | $ | 1,476 | | FINRA filing fee | | | 2,000 | | Accounting fees and expenses | | | * | | Legal fees and expenses | | | * | | Transfer agent fees and expenses | | | * | | Miscellaneous fees and expenses | | | * | | Total expenses | | $ | * | |
* To provided by amendment | | | | | | | | | | | | Amount | | SEC registration fee | | $ | 819 | | Accounting fees and expenses | | | 10,000 | | Legal fees and expenses | | | 50,000 | | Printing and miscellaneous expenses | | | 5,000 | | Total expenses | | $ | 65,819 | |
Item 14. Indemnification of Directors and Officers We are incorporated under the laws of the State of Delaware. Section 145 of the Delaware General Corporation Law, or DGCL, provides that a Delaware corporation may indemnify any persons who were, are, or are threatened to be made, parties to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of such corporation), by reason of the fact that such person is or was an officer, director, employee or agent of such corporation, or is or was serving at the request of such corporation as an officer, director, employee or agent of another corporation or enterprise. The indemnity may include expenses (including attorneys’attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding, provided that such person acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the corporation’scorporation’s best interests and, with respect to any criminal action or proceeding, had no reasonable cause to believe that his or her conduct was illegal. A Delaware corporation may indemnify any persons who were, are, or are threatened to be made, a party to any threatened, pending or completed action or suit by or in the right of the corporation by reason of the fact that such person is or was a director, officer, employee or agent of such corporation, or is or was serving at the request of such corporation as a director, officer, employee or agent of another corporation or enterprise. The indemnity may include expenses (including attorneys’attorneys’ fees) actually and reasonably incurred by such person in connection with the defense or settlement of such action or suit provided such person acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the corporation’scorporation’s best interests except that no indemnification is permitted without judicial approval if the officer or director is adjudged to be liable to the corporation. Where an officer or director is successful on the merits or otherwise in the defense of any action referred to above, the corporation must indemnify him or her against the expenses (including attorneys’attorneys’ fees) actually and reasonably incurred. Our amended and restated certificate of incorporation, as amended, and amended and restated bylaws provide for the indemnification of our directors and officers to the fullest extent permitted under the Delaware General Corporation Law.DGCL. Section 102(b)(7) of the Delaware General Corporation LawDGCL permits a corporation to provide in its certificate of incorporation that a director or officer of the corporation shall not be personally liable to the corporation or its stockholders for monetary damages for breach of fiduciary duties as a director or officer, except for liability for any: •transaction from which the director or officer derives an improper personal benefit; •act or omission not in good faith or that involves intentional misconduct or a knowing violation of law; •in the case of a director, unlawful payment of dividends or redemption of shares;
| | | | | •
| | transaction from which the director derives an improper personal benefit;
| | •
| | act or omission not in good faith or that involves intentional misconduct or a knowing violation of law;
| | •
| | unlawful payment of dividends or redemption of shares; or
| | •
| | breach of a director’s duty of loyalty to the corporation or its stockholders.
|
•breach of a director’s duty of loyalty to the corporation or its stockholders; or •in the case of an officer, action by or in the right of the corporation. Our amended and restated certificate of incorporation, as amended, includes such a provision.provision with respect to our directors. Expenses incurred by any officer or director in defending any such action, suit or proceeding in advance of its final disposition will be paid by us upon delivery to us of an undertaking, by or on behalf of such director or officer, to repay all amounts so advanced if it shall ultimately be determined that such director or officer is not entitled to be indemnified by us. Section 174 of the Delaware General Corporation LawDGCL provides, among other things, that a director who willfully or negligently approves of an unlawful payment of dividends or an unlawful stock purchase or redemption, may be held liable II-1
for such actions. A director who was either absent when the unlawful actions were approved or dissented at the time may avoid liability by causing his or her dissent to such actions to be entered in the books containing minutes of the meetings of the board of directors at the time such action occurred or immediately after such absent director receives notice of the unlawful acts. As permitted by the Delaware General Corporation Law,DGCL, we have entered, into, and continue to enter, into separate indemnity agreements with each of our directors and executive officers that require us to indemnify such persons against any and all costs and expenses (including attorneys’attorneys’, witness or other professional fees) actually and reasonably incurred by such persons in connection with any action, suit or proceeding (including derivative actions), whether actual or threatened, to which any such person may be made a party by reason of the fact that such person is or was a director or officer or is or was acting or serving as an officer, director, employee or agent of ours or any of our affiliated enterprises. Under these agreements, we are not required to provide indemnification for certain matters, including: | | | | | •
| | indemnification beyond that permitted by the Delaware General Corporation Law;
| | •
| | indemnification for any proceeding with respect to the unlawful payment of remuneration to the director or officer;
| | •
| | indemnification for certain proceedings involving a final judgment that the director or officer is required to disgorge profits from the purchase or sale of our stock;
| | •
| | indemnification for proceedings involving a final judgment that the director’s or officer’s conduct was in bad faith, knowingly fraudulent or deliberately dishonest or constituted willful misconduct or a breach of his or her duty of loyalty, but only to the extent of such specific determination;
| | •
| | indemnification for proceedings or claims brought by an officer or director against us or any of our directors, officers, employees or agents, except for (1) claims to establish a right of indemnification or proceedings, (2) claims approved by our board of directors, (3) claims required by law, (4) when there has been a change of control as defined in the indemnification agreement with each director or officer, or (5) by us in our sole discretion pursuant to the powers vested to us under the Delaware General Corporate Law;
| | •
| | indemnification for settlements the director or officer enters into without our consent; or
| | •
| | indemnification in violation of any undertaking required by the Securities Act of 1933, as amended (the Securities Act), or in any registration statement we file.
|
•indemnification beyond that permitted by the DGCL; •indemnification for any proceeding with respect to the unlawful payment of remuneration to the director or officer; •indemnification for certain proceedings involving a final judgment that the director or officer is required to disgorge profits from the purchase or sale of our stock; •indemnification for proceedings involving a final judgment that the director’s or officer’s conduct was in bad faith, knowingly fraudulent or deliberately dishonest or constituted willful misconduct or a breach of his or her duty of loyalty, but only to the extent of such specific determination; •indemnification for proceedings or claims brought by an officer or director against us or any of our directors, officers, employees or agents, except for (1) claims to establish a right of indemnification or proceedings, (2) claims approved by our board of directors, (3) claims required by law, (4) when there has been a change of control as defined in the indemnification agreement with each director or officer, or (5) by us in our sole discretion pursuant to the powers vested to us under the Delaware General Corporate Law; •indemnification for settlements the director or officer enters into without our consent; or •indemnification in violation of any undertaking required by the Securities Act of 1933, as amended, or the Securities Act, or in any registration statement we file. The indemnification agreements also set forth certain procedures that will apply in the event of a claim for indemnification thereunder. There is at present no pending litigation or proceeding involving any of our directors or executive officers as to which indemnification is required or permitted, and we are not currently aware of any threatened litigation or proceeding that may result in a claim for indemnification. We have an insurance policy in place that covers our officers and directors with respect to certain liabilities, including liabilities arising under the Securities Act or otherwise. Any underwriting agreement that we may enter into may provide that the underwriters are obligated, under some circumstances, to indemnify our directors, officers and controlling persons against specified liabilities, including liabilities under the Securities Act.II-2
Item 15. Recent Sales of Unregistered Securities Set
The following list sets forth below is information regarding shares of common stock and preferred stockall unregistered securities issued and options granted, by us since January 1, 2016 that were not registered under2021 through the Securities Act. Also included is the consideration, if any, received by us for such shares and options and information relating to the sectiondate of the Securities Act, or rule of the Securities and Exchange Commission (the SEC), under which exemption from registration was claimed. Issuances of Securities
On October 18, 2019, we entered into the Common Stock Purchase Agreement with Aspire Capital Fund, LLC (Aspire Capital). Pursuant to the termsprospectus that is a part of this agreement,registration statement:
(1)In March 2023, we issued 142,658 shares of our common stock (on a post-reverse stock split basis) to Aspire Capital in consideration for entering into the agreement.II-2
On May 3, 2018, we entered into a third amendment to our amended and restated loan and security agreement with Silicon Valley Bank (SVB) to borrow $7.0 million, all of which was used to refinance amounts outstanding under prior credit facilities with SVB. In connection with the third amendment, we issued SVB a warrant to purchase up to 5,363 shares of our common stock at an exercise price of $26.10 per share. The warrant is fully exercisable and expires on May 3, 2025.
On March 22, 2018, we entered into a definitive securities purchase agreement with certain purchasers pursuant to which we sold an aggregate of approximately 1.2 million174,508 shares of our common stock at a purchase price of $27.00$1.38 per share and pre-funded warrants to purchase approximately 0.2 million2,013,999 shares of our common stock at a purchase price of $26.90$1.37 per share andof underlying common stock with an exercise price of $0.10$0.01 per share and warrants to purchaseof underlying common stock, or the 2023 Pre-Funded Warrants, for net proceeds of approximately 1.4$3.0 million in a private placement with an accredited institutional healthcare-focused fund. In accordance with their terms, the 2023 Pre-Funded Warrants may not be exercised if the holder’s ownership of our common stock would exceed 19.99% of the shares of our common stock at a purchase priceoutstanding immediately after giving effect to such exercise, unless approval by our stockholders is obtained as required under the Nasdaq listing standards, including Nasdaq Listing Rules 5635(b) and (d). At our 2023 Annual Meeting of $1.25 per share and an exercise priceStockholders held on April 19, 2023, stockholder approval, in accordance with applicable rules of $27.00 per share,the Nasdaq Stock Market, was obtained for aggregate gross proceedsthe issuance of approximately $38.7 million. The pre-funded warrants are exercisable for a period of seven years and the common warrants are exercisable for a period of six years.
On March 14, 2017, we issued 22,223 shares of our common stock at $45.00 per shareupon the potential future exercise of certain outstanding warrants held by this accredited institutional healthcare-focused fund, including the 2023 Pre-Funded Warrants, that would result in it and its affiliates owning in excess of 19.99% of the shares of common stock outstanding immediately after giving effect to Aspire Capital, and further issued 19,573such exercise.
(2)In May 2023, as consideration for the selling stockholder’s commitment to purchase shares of our common stock from us at our direction from time to Aspire Capital.In January 2017, we entered into a second amendmenttime from and after the date on which all of conditions are satisfied pursuant to an amendedthe purchase agreement between us and restated loan and security agreement with SVB under which SVB provided us with an $8.0 million loan, and in connection withLincoln Park Capital Fund, LLC, or Lincoln Park, dated May 8, 2023, or the loan,Purchase Agreement, promptly following our execution of the Purchase Agreement, we issued SVB a warrant to purchase 4,669 shares of our common stock at an exercise price of $51.40 per share.
In September 2016, we entered into transactions with Janssen Pharmaceutica N.V. (Janssen) and its affiliate Johnson & Johnson Innovation-JJDC, Inc. (JJDC) consisting of a license and option agreement with Janssen and a stock purchase agreement and investor agreement, each with JJDC, and in connection with the stock purchase agreement we sold 84,003 shares of our common stock at a purchase price of $59.50 per share to JJDC.
In September 2016, we issued 1,234599,216 shares of common stock upon execution ofto Lincoln Park in a consulting agreement. Theprivate placement as commitment shares were issued in consideration of the consulting services to be provided.
and without cash consideration. The offers, sales and issuances of the securities described in this Item 15 were deemed to be exempt from registration under the Securities Act in reliance on Section 4(a)(2) of the Securities Act andand/or Rule 506 promulgated under Regulation D promulgated thereunder as transactions by an issuer not involving a public offering. The recipients of securities in each of these transactions represented to us that they acquired the securities for investment only and not with a view to or for sale in connection with any distribution thereof, and appropriate legends were affixed to the securities issued in these transactions. Each of the recipients of securities in these transactions was an accredited investor within the meaning of Rule 501 of Regulation D under the Securities Act and had adequate access, through employment, business or other relationships, to information about the Company.our company. No underwriters were involved in these transactions. Item 16. Exhibits and Financial Statement Schedules (a) The exhibits to the registration statement are set forth within the Exhibit Index below. (b) No financial statement schedules are provided because the information called for is not required or is shown either in the financial statements or notes.Exhibits
II-3
| | | | | 4.4(7)
| | Stock Purchase Agreement by and between the Registrant and Johnson & Johnson-JJDC, Inc. dated
September 27, 2016.
| | | | 4.5(12)
| | Securities Purchase Agreement, dated March 22, 2018, by and among the Registrant and the purchasers listed on Exhibit A thereto.
| | | | 4.6(12)
| | Form of Pre-Funded Warrant dated March 27, 2018.
| | | | 4.7(12)4.2
| | Form of Common Warrant dated March 27, 2018 (attached as Exhibit B-2 to the Securities Purchase Agreement) (incorporated by reference to the Registrant’s Current Report on Form 8-K, filed with the SEC on March 23, 2018).. | | | | 4.8(13)4.3
| | Description of Common Stock (incorporated by reference to the Registrant’s Annual Report on Form 10-K, filed with the SEC on February 28, 2020). | | | | 4.4 | | Warrant to Purchase Stock issued to Silicon Valley Bank on June 4, 2014 (incorporated by reference to the Registrant’s Registration Statement on Form S-1 (File No. 333-201280), as amended). | | | | 4.5 | | Warrant to Purchase Stock issued to Silicon Valley Bank on May 3, 2018 (incorporated by reference to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2018, filed with the SEC on May 10, 2018). | | | | 4.6 | | Form of Warrant to Purchase Common Stock dated September 2, 2022 (incorporated by reference to the Registrant’s Current Report on Form 8-K, filed with the SEC on September 6, 2022). | | | | 4.7# | | Registration Rights Agreement dated October 18, 2019, by and between the Registrant and AspireLincoln Park Capital Fund, LLC, dated May 8, 2023 (incorporated by reference to the Registrant’s Quarterly Report on Form 10-Q for the period ended March 31, 2023, filed with the SEC on May 10, 2023).. | | | | 5.15.1†
| | Opinion of Cooley LLP.LLP. | | | | 10.1+(2) | | Form of Indemnity Agreement by and between the Registrant and its directors and officers (incorporated by reference to the Registrant’s Registration Statement on Form S-1 (File No. 333-201280), as amended). | | | | 10.2+ | | TRACON Pharmaceuticals, Inc. 2011 Equity Incentive Plan and Forms of Stock Option Agreement and Notice of Exercise thereunder (incorporated by reference to the Registrant’s Registration Statement on Form S-1 (File No. 333-201280), as amended).. | | | | 10.2+(3)10.3+
| | TRACON Pharmaceuticals, Inc. 2015 Equity Incentive Plan and Forms of Stock Option Grant Notice, Stock Option Agreement, Notice of Exercise and Restricted Stock Unit Agreement thereunder, as amended December 14, 2015June 28, 2021 (incorporated by reference to the Registrant’s Current Report on Form 8-K, filed with the SEC on June 30, 2021).. | | | | 10.3+(6)10.4+
| | TRACON Pharmaceuticals, Inc. Non-Employee Director Compensation Policy, as amended JuneFebruary 1, 20162023 (incorporated by reference to the Registrant’s Annual Report on Form 10-K, filed with the SEC on March 8, 2023).. | | | | 10.4+(4)10.5+
| | TRACON Pharmaceuticals, Inc. 2015 Amended and Restated Employee Stock Purchase Plan, as amended June 10, 2021 (incorporated by reference to the Registrant’s Current Report on Form 8-K, filed with the SEC on June 11, 2021).. | | | | 10.5+(11)10.6+
| | TRACON Pharmaceuticals, Inc. Bonus Plan, as amended January 20, 201729, 2021 (incorporated by reference to the Registrant’s Annual Report on Form 10-K, filed with the SEC on February 25, 2021).. | | | | 10.6+(14)10.7+
| | Amended and Restated Employment Agreement by and between the Registrant and Charles P. Theuer, M.D., Ph.D., dated February 5, 2019 (incorporated by reference to the Registrant’s Annual Report on Form 10-K, filed with the SEC on March 1, 2019).. | | | |
| | | 10.7+(14)Exhibit
Number
| | Description of Document | 10.8+ | | Employment Agreement by and between the Registrant and Mark Wiggins,Scott Brown, dated May 29, 2018January 28, 2020 (incorporated by reference to Registrant’s Annual Report on Form 10-K, filed with the SEC on February 28, 2020).. | | | | 10.8+(2)10.9+
| | Severance Agreement by and between the Registrant and Scott Brown, dated December 4, 2019 (incorporated by reference to Registrant’s Annual Report on Form 10-K, filed with the SEC on February 28, 2020). | | | | 10.10+ | | TRACON Pharmaceuticals, Inc. Severance Plan and Summary Plan Description (incorporated by reference to the Registrant’s Registration Statement on Form S-1 (File No. 333-201280), as amended).. | | | 10.9+(14)
| | Severance Agreement by and between the Registrant and Mark Wiggins, dated May 29, 2018.
| | | 10.10*(2)
| | License Agreement by and between the Registrant and Santen Pharmaceutical Co., Ltd., dated March 3, 2014, as amended.
| | | 10.11*(7)# | | Second Amendment to LicenseCollaboration and Clinical Trial Agreement by and betweenamong the Registrant, and Santen Pharmaceutical3D Medicines (Beijing) Co., Ltd.LTD. and Jiangsu Alphamab Biopharmaceuticals Co., LTD. dated January 31, 2016December 20, 2019 (incorporated by reference to Registrant’s Annual Report on Form 10-K, filed with the SEC on February 28, 2020)..
| | | 10.12*(2)
| | License Agreement by and among the Registrant and Roswell Park Cancer Institute and Health Research, Inc., dated November 1, 2005, as amended on November 12, 2009, February 11, 2010 and September 18, 2014.
| | | 10.13*(2)
| | License Agreement by and between the Registrant and Case Western Reserve University, dated August 2, 2006.
| | | 10.14*(4)
| | Amendment to License Agreement by and between the Registrant and Case Western Reserve University, dated April 3, 2015.
| | | 10.15*(9)
| | License and Option Agreement by and between the Registrant and Janssen Pharmaceutica N.V., dated September 27, 2016.
| | | 10.16(2)
| | Warrant to Purchase Stock issued to Silicon Valley Bank on November 14, 2013.
| | | 10.17(2)
| | Warrant to Purchase Stock issued to Silicon Valley Bank on June 4, 2014.
| | | 10.18(4)
| | Warrant to Purchase Stock issued to Silicon Valley Bank on May 13, 2015.
| | | 10.19(8)
| | Warrant to Purchase Stock issued to Silicon Valley Bank on January 25, 2017.
| | | 10.20(15)
| | Warrant to Purchase Stock issued to Silicon Valley Bank on May 3, 2018.
| | | 10.21*(14)
| | Amendment One to License and Option Agreement between the Registrant and Janssen Pharmaceutica N.V. dated January 15, 2019.
| | | 10.22(16)10.12
| | Capital on DemandTMSales Agreement, dated as of September 6, 2018,December 9, 2020, by and between the Registrant and JonesTrading Institutional Services LLC (incorporated by reference to the Registrant’s Current Report on Form 8-K, filed with the SEC on December 9, 2020).. |
II-4
| | | | | | | 10.23(17)10.13
| | Amendment No. 1 to the Capital on DemandTMSales Agreement, dated as of February 28, 2019,March 15, 2022, by and between the Registrant and JonesTrading Institutional Services LLC (incorporated by reference to the Registrant’s Registration Statement on Form S-3, filed with the SEC on March 16, 2022).. | | | | 10.24(4)10.14*#
| | AmendedCollaborative Development and Restated Loan and SecurityCommercialization Agreement by and betweenamong the Registrant, Eucure (Beijing) Biopharma Co., Ltd. and Silicon Valley Bank,Biocytogen Pharmaceuticals (Beijing) Co., Ltd., dated May 13, 2015as of October 8, 2021 (incorporated by reference to the Registrant’s Quarterly Report on Form 10-Q, filed with the SEC on November 3, 2021)..
| | | | 10.25(6)10.15#
| | First Amendment to Amended and Restated Loan and Security Agreement by and between the Registrant and Silicon Valley Bank, dated August 9, 2016.
| | | 10.26(8)
| | Second Amendment to Amended and Restated Loan and Security Agreement by and between the Registrant and Silicon Valley Bank, dated January 25, 2017.
| | | 10.27(15)
| | Third Amendment to Amended and Restated Loan and Security Agreement by and between the Registrant and Silicon Valley Bank, dated May 3, 2018.
| | | 10.28*(2)
| | Cooperative Research and Development Agreement by and between the Registrant and the U.S. Department of Health and Human Services, as represented by National Cancer Institute, dated December 22, 2010.
| | | 10.29(5)
| | Amendment #2 to Cooperative Research and Development Agreement by and between the Registrant and the U.S. Department of Health and Human Services, as represented by National Cancer Institute, dated November 12, 2015.
| | | 10.30*(2)
| | Cooperative Research and Development Agreement by and between the Registrant and the U.S. Department of Health and Human Services, as represented by National Cancer Institute, dated January 28, 2011, as amended on March 12, 2013.
| | | 10.31(5)
| | Amendment #2 to Cooperative Research and Development Agreement by and between the Registrant and the U.S. Department of Health and Human Services, as represented by National Cancer Institute, dated January 27, 2016.
| | | 10.32*(2)
| | Cooperative Research and Development Agreement by and between the Registrant and the U.S. Department of Health and Human Services, as represented by National Cancer Institute, dated August 7, 2012.
| | |
10.33*(2)
| | Sponsored Research Agreement by and between the Registrant and Tufts Medical Center, Inc., dated December 16, 2014.
| | | 10.34(10)
| | Lease by and between the Registrant and 4350 La Jolla Village LLC, dated December 12, 2016.
| | | 10.35(13)
| | Common Stock Purchase Agreement by and between the Registrant and AspireLincoln Park Capital Fund, LLC, dated October 18, 2019as of May 8, 2023 (incorporated by reference to the Registrant’s Quarterly Report on 10-Q for the quarter ended March 31, 2023, filed with the SEC on May 10, 2023)..
| | | | 10.16*# | | License Agreement, dated November 17, 2023, by and between the Registrant and Inhibrx, Inc. (incorporated by reference to the Registrant’s Annual Report on Form 10-K, filed with the SEC on March 5, 2024). | | | | 10.19† | | Form of Securities Purchase Agreement. | | | | 23.1 | | Consent of Independent Registered Public Accounting FirmFirm.. | | | | 23.2 | | Consent of Cooley LLP (included in Exhibit 5.1). | | | | 24.1 | | Power of Attorney (included onAttorney. Reference is made to the signature page of this Registration Statement)hereto. | | | | 107 | | Filing Fee Table. | | | |
| | | | † | | To be filed by amendment. | + | | Indicates management contract or compensatory plan. | * | Confidential treatment has been granted or requested with respect
| Pursuant to Item 601(b)(10) of Regulation S-K, certain portions of this exhibit. Omitted portionsexhibit have been filed separately withomitted (indicated by “[***]”) because the SEC.Registrant has determined that the information is both not material and is the type that the Registrantcustomarily and actually treats as private or confidential. |
(1)
| Incorporated by reference to the Registrant’s Current Report on Form 8-K, filed with the SEC on February 4, 2015.
| (2)
| Incorporated by reference to the Registrant’s Registration Statement on Form S-1 (File No. 333-201280), as amended.
| (3)
| Incorporated by reference to the Registrant’s Current Report on Form 8-K, filed with the SEC on December 17, 2015.
| (4)
| Incorporated by reference to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2015, filed with the SEC on May 14, 2015.
| (5)
| Incorporated by reference to the Registrant’s Annual Report on Form 10-K, filed with the SEC on February 19, 2016.
| (6)
| Incorporated by reference to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2016, filed with the SEC on August 11, 2016.
| (7)
| Incorporated by reference to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2016, filed with the SEC on November 9, 2016.
| (8)
| Incorporated by reference to the Registrant’s Current Report on Form 8-K, filed with the SEC on January 31, 2017.
| | |
# | | Schedules (or similar attachments, including exhibits) to this exhibit have been omitted pursuant to Item 601(a)(5) of Regulation S-K. A copy of any omitted schedule and/or exhibit will be furnished to the Securities and Exchange Commission or its staff upon request. | (b) Financial Statement Schedules II-5No financial statement schedules are provided because the information called for is not required or is shown either in the financial statements or related notes, which are incorporated herein by reference.
Item 17. Undertakings
| | | | (9)
| Incorporated by reference to the Registrant’s Quarterly Report on Form 10-Q/A for the quarter ended September 30,
2016, filed with the SEC on February 16, 2017.
| | | (10)
| Incorporated by reference to the Registrant’s Current Report on Form 8-K, filed with the SEC on December 13, 2016.
| | | (11)
| Incorporated by reference to the Registrant’s Annual Report on Form 10-K, filed with the SEC on March 1, 2017.
| | | (12)
| Incorporated by reference to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2018, filed with the SEC on May 9, 2018.
| | (13)
| Incorporated by reference to the Registrant’s Current Report on Form 8-K, filed with the SEC on October 21, 2019.
| | (14)
| Incorporated by reference to the Registrant’s Annual Report on Form 10-K, filed with the SEC on March 1, 2019.
| | (15)
| Incorporated by reference to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2018, filed with the SEC on May 9, 2018.
| | (16)
| Incorporated by reference to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2018, filed with the SEC on November 7, 2018.
| | (17)
| Incorporated by reference to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2019, filed with the SEC on November 5, 2019.
| |
Item 17. Undertakings
| | | | (a)
| | | | | (a) 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; | | (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 Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the “Calculationsection titled “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; provided, however, that the undertakings set forth in paragraphs (a)(1)(i), (a)(1)(ii) and (a)(1)(iii) above do not apply if the registration statement is on Form S-1 and the information required to be included in a post-effective amendment by those paragraphs is contained in reports filed with or furnished to the SEC by the registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934, as amended, (theor the Exchange Act)Act, that are incorporated by reference in this registration statement or is contained in a form of prospectus filed pursuant to Rule 424(b) that is part of this registration statement. | | | | | (2) | That, for the purpose of determining any liability under the Securities Act, 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; and | |
| | | | | | | (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. |
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| | | | | | | (4) | That, for the purpose of determining liability under the Securities Act to any purchaser: (i) 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) Each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as part of a registration statement in reliance on Rule 430B relating to an offering made pursuant to Rule 415(a)(1)(i), (vii), or (x) for the purpose of providing the information required by Section 10(a) of the Securities Act shall be deemed to be part of and included in the registration statement as of the earlier of the date such form of prospectus is first used after effectiveness or the date of the |
| | | | | first contract of sale of securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any person that is at that date an underwriter, such date shall be deemed to be a new effective date of the registration statement relating to the securities in the registration statement to which that prospectus relates, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. 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 effective date, 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 effective date. | | | | | (5) | That, for the purpose of determining liability of the registrant under the Securities Act to any purchaser in the initial distribution of the 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) | That, for purposes of determining any liability under the Securities Act, each filing of the registrant’s annual report pursuant to Section 13(a) or 15(d) of the Exchange Act (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to Section 15(d) of the Exchange Act) 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) | That for purposes of determining any liability under the Securities Act, (i) the information omitted from the form of prospectus filed as part of the registration statement in reliance upon Rule 430A and contained in the form of prospectus filed by the registrant pursuant to Rule 424(b)(l) or (4) or 497(h) under the Securities Act shall be deemed to be a part of the registration statement as of the time it was declared effective; and (ii) 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 offing of such securities at that time shall be deemed to be the initial bona fide offering thereof. | | | |
| | | | | Insofar as indemnification for liabilities arising under the Securities Act may be permitted for our directors, officers and controlling persons of the Registrant pursuant to our Amended and Restated Certificate of Incorporation or Amended and Restated Bylaws, or otherwise, the registrant has been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer, or controlling person 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 the registrant is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.
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Insofar as indemnification for liabilities arising under the Securities Act may be permitted for our directors, officers and controlling persons of the Registrant pursuant to our Amended and Restated Certificate of Incorporation or Amended and Restated Bylaws, or otherwise, the registrant has been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer, or controlling person 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 the registrant is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.
SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this registration statementRegistration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of San Diego, State of California on NovemberApril 12, 2019.2024. | | | | | | | | | TRACON Pharmaceuticals, Inc. | | | By: | | /s/ Charles P. Theuer, M.D., Ph.DPh.D. | | | Charles P. Theuer, M.D., Ph.DPh.D. | | | President and Chief Executive Officer |
POWER OF ATTORNEY KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Charles P. Theuer, M.D., Ph.D. and Scott B. Brown, CPA, and each and either of them, his or her true and lawful attorneys-in-fact and agents, each with full power of substitution and resubstitution, for him or her and in his or her name, place, and stead, in any and all capacities, to (i) act on, sign and file with the Securities and Exchange Commission any and all amendments (including post-effective amendments) to this registration statement together with all schedules and exhibits thereto and any subsequent registration statement filed pursuant to Rule 462(b) under the Securities Act of 1933, as amended, together with all schedules and exhibits thereto, (ii) act on, sign and file such certificates, instruments, agreements and other documents as may be necessary or appropriate in connection therewith, (iii) act on and file any supplement to any prospectus included in this registration statement or any such amendment or any subsequent registration statement filed pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and (iv) take any and all actions which may be necessary or appropriate to be done, as fully for all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or their or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities indicated on the dates indicated. | | | | | | | | | | Signature | | Title | | Date | | | | | | /s/ Charles P. Theuer, M.D., Ph.D Charles P. Theuer, M.D., Ph.D. | | President, Chief Executive Officer and Member of the Board of Directors | | April 12, 2024 | Charles P. Theuer, M.D., Ph.D. | | (Principal Executive and Financial Officer) | | November 12, 2019
| | | | | | /s/ Scott Brown Scott B. Brown, CPA
| | Chief AccountingFinancial Officer (Principal Accounting Officer) | | NovemberApril 12, 20192024
| Scott B. Brown, CPA | | (Principal Financial and Accounting Officer) | | | | | | | | /s/ William R. LaRueLisa Johnson-Pratt, M.D. | | Member of the Board of Directors | | April 12, 2024 | Lisa Johnson-Pratt, M.D. | | | | | | | | | | /s/ Carol C. Lam, J.D. | | Member of the Board of Directors | | April 12, 2024 | Carol C. Lam. J.D. | | | | | | | | | | /s/ William R. LaRue | | Member of the Board of Directors | | NovemberApril 12, 20192024
| William R. LaRue | | | | | | | | | | /s/ Martin A. Mattingly, Pharm. D. Martin A. Mattingly, Pharm.D. | | Member of the Board of Directors | | NovemberApril 12, 20192024
| Martin A. Mattingly, Pharm.D. | | | | |
| | | | | | | | | | /s/ J. Rainer Twiford, J.D., Ph.D.Saundra Pelletier | | Member of the Board of Directors | | April 12, 2024 | Saundra Pelletier | | | | | | | | | | /s/ J. Rainer Twiford, J.D., Ph.D. | | Member of the Board of Directors | | NovemberApril 12, 20192024
| J. Rainer Twiford, J.D., Ph.D. | | | | | /s/ Paul Walker
Paul Walker
| | Member of the Board of Directors
| | November 12, 2019
| | | | /s/ Stephen T. Worland, Ph.D. | | Member of the Board of Directors | | April 12, 2024 | Stephen T. Worland.,Worland, Ph.D. | | Member of the Board of Directors
| | November 12, 2019
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