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Our inability to protect our patents, trademarks, trade secrets and other proprietary rights could adversely impact our competitive position.DESCRIPTION OF CAPITAL STOCK
We believe that our patents, trademarks, trade secrets and other proprietary rightsThe following descriptions are important to our success and our competitive position. Accordingly, we commit substantial resources to the establishment and protection of our patents, trademarks, trade secrets and proprietary rights. We use various methods, including confidentiality agreements with employees, vendors, and customers, to protect our trade secrets and proprietary know-how for our products. We currently hold patents for products, and have patents pending in certain countries for additional products that we market or intend to market. However, our actions to establish and protect our patents, trademarks, and other proprietary rights may be inadequate to prevent imitation of our products by others or to prevent others from claiming violations of their trademarks and proprietary rights by us. If our products are challenged as infringing upon patents of other parties, we may be required to modify the designsummaries of the product, obtain a license, or litigate the issues, allmaterial terms of which may have an adverse business effect on us.
We may be subject to claims that our products or processes infringe the intellectual property rights of others, which may cause us to pay unexpected litigation costs or damages, modify our products or processes or prevent us from selling our products.
Although it is our intention to avoid infringing or otherwise violating the intellectual property rights of others, third parties may nevertheless claim that our processes and products infringe their intellectual property and other rights. Our strategies of capitalizing on growing international demand as well as developing new innovative products across multiple business lines present similar infringement claim risks both internationally and in the U.S. as we expand the scope of our product offerings and markets. We compete with other companies for contracts in some small or specialized industries, which increase the risk that the other companies will develop overlapping technologies leading to an increased possibility that infringement claims will arise. Whether or not these claims have merit, we may be subject to costly and time-consuming legal proceedings, and this could divert management’s attention from operating our business. In order to resolve such proceedings, we may need to obtain licenses from these third parties or substantially re-engineer or rename our products in order to avoid infringement. In addition, we might not be able to obtain the necessary licenses on acceptable terms, or at all, or be able to re-engineer or rename our products successfully.
We commercially, in co-branding with Fortis Healthcare, bank and store private cord blood stem cells in our TotipotentRX GMP facility. We could be subject to unexpected litigation costs or damages for loss of one or more family owned units of cord blood or if one of the cord blood units we store causes bodily injury.
We face an inherent business risk of exposure to product liability claims if our products or product candidates are alleged or found to have caused injury, or cannot be used for some reason within our control and are found to result in injury or death. While we believe that our current liability insurance coverage is adequate for our present clinical and commercial activities, we may not be able to maintain insurance on acceptable terms or at all. If we are unable to obtain insurance or any claims against us substantially exceed our coverage, then our business could be adversely impacted.
If our cord blood processing and storage facility in Gurgaon, India is damaged or destroyed, our business, programs and prospects could be negatively affected.
We process and store our customers’ umbilical cord blood at our facility within Fortis Memorial Research Institute (a hospital) in Gurgaon, India. If this facility or the equipment in the facility were to be significantly damaged or destroyed, we could suffer a loss of some or all of the stored cord blood units. Depending on the extent of loss, such an event could reduce our ability to provide cord blood stem cells when requested, could expose us to significant liability from our cord blood banking customers and could affect our ability to continue to provide umbilical cord blood preservation services.
We may not be able to protect our intellectual property in countries outside the United States.
Intellectual property law outside the United States is uncertain and in many countries is currently undergoing review and revisions. The laws of some countries do not protect our patent and other intellectual property rights to the same extent as United States laws. This is particularly relevant to us as a significant amount of our current and projected future sales are outside of the United States. Third parties may attempt to oppose the issuance of patents to us in foreign countries by initiating opposition proceedings. Opposition proceedings against any of our patent filings in a foreign country could have an adverse effect on our corresponding patents that are issued or pending in the United States. It may be necessary or useful for us to participate in proceedings to determine the validity of our patents or our competitors’ patents that have been issued in countries other than the U.S. This could result in substantial costs, divert our efforts and attention from other aspects of our business, and could have a material adverse effect on our results of operations and financial condition.
Any failure to achieve and maintain the high design and manufacturing standards that our products require may seriously harm our business.
Our products require precise, high-quality manufacturing. Achieving precision and quality control requires skill and diligence by our personnel as well as our vendors. Our failure to achieve and maintain these high manufacturing standards, including the incidence of manufacturing errors, design defects or component failures could result in patient injury or death, product recalls or withdrawals, delays or failures in product testing or delivery, cost overruns or other problems that could seriously hurt our business. Additionally, the large amount of AXP® disposable inventory certain distributors and end-users maintain may delay the identification of a manufacturing error and expand the financial impact. A manufacturing error or defect, or previously undetected design defect, or uncorrected impurity or variation in a raw material component, either unknown or undetected, could affect the product. Despite our very high manufacturing standards, we cannot completely eliminate the risk of errors, defects or failures. If we or our vendors are unable to manufacture our products in accordance with necessary quality standards, our business and results of operations may be negatively affected.
Our revenues and operating results may be adversely affected as a result of our required compliance with the adopted EU directive on the restriction of the use of hazardous substances in electrical and electronic equipment, as well as other standards around the world.
A number of domestic and foreign jurisdictions seek to restrict the use of various substances, a number of which have been or are currently used in our products or processes. For example, the EU Restriction of Hazardous Substances in Electrical and Electronic Equipment, or RoHS, Directive now requires that certain substances, which may be found in certain products we have manufactured in the past, be removed from all electronics components. Other countries, such as China, have enacted or may enact laws or regulations similar to RoHS. Eliminating such substances from our manufacturing processes requires the expenditure of additional research and development funds to seek alternative substances for our products, as well as increased testing by third parties to ensure the quality of our products and compliance with the RoHS Directive. While we have implemented a compliance program to ensure our product offerings meet these regulations, there may be instances where alternative substances will not be available or commercially feasible, or may only be available from a single source, or may be significantly more expensive than their restricted counterparts. Therefore, we have focused our compliance efforts on those products and geographical areas in which we have the highest revenue potential. Our failure to comply with past, present and future similar laws could result in reduced sales of our products, substantial product inventory write-offs, reputation damage, penalties and other sanctions, any of which could harm our business and operating results.
Compliance with government regulations regarding the use of “conflict minerals” may result in additional expense and affect our operations.
In August 2012, the SEC adopted disclosure requirements related to certain minerals sourced from the Democratic Republic of Congo or adjoining countries, as required by Section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act. The rule requires us to perform due diligence, and report whether “conflict minerals,” which are defined as tin, tantalum, tungsten and gold, necessary to the functionality of a product we purchase originated from the Democratic Republic of Congo or an adjoining country. We are required to file disclosure reports on Form SD with the SEC regarding such matters, and we will be required to prepare and file such a report on an annual basis in the future. We may incur significant costs to determine the source and custody of conflict minerals that are used in the manufacture of our products in order to comply with these regulatory requirements. We may also face reputational challenges if we are unable to verify the origins for all conflict minerals used in our products, or is we are unable to conclude that our products are “conflict free.” Over time, conflict minerals reporting requirements may affect the sourcing, price and availability of our products, and may affect the availability and price of conflict minerals that are certified as conflict free. Accordingly, we may incur significant costs as a consequence of regulations related to conflict-free minerals, which may adversely affect our business, financial condition or results of operations.
Our products may be subject to product recalls which may harm our reputation and divert our managerial and financial resources.
The FDA and similar governmental authorities in other countries have the authority to order the mandatory recall of our products or order their removal from the market if the governmental entity finds our products might cause adverse health consequences or death. The FDA may also seize product or prevent further distribution. A government-mandated or voluntary recall by us could occur as a result of component failures, manufacturing errors or design defects (including labeling defects). In the past we have initiated voluntary recalls of some of our products and we could do so in the future. Any recall of our products may harm our reputation with customers, divert managerial and financial resources and negatively impact our profitability.
We are dependent on our suppliers and manufacturers to meet existing regulations.
Certain of our suppliers and manufacturers are subject to heavy government regulations, including FDA QSR compliance, in the operation of their facilities, products and manufacturing processes. Any adverse action by the FDA against our suppliers or manufacturers could delay supply or manufacture of component products required to be integrated or sold with our products. Although we attempt to mitigate this risk through inventory held directly or through distributors, and audit our suppliers, there are no assurances we will be successful in identifying issues early enough to allow for corrective action or transition to an alternative supplier, or in locating an alternative supplier or manufacturer to meet product shipment or launch deadlines. As a result, our sales, contractual commitments and financial forecasts may be significantly affected by any such delays.
Dependence on suppliers for disposable products and custom components may impact the production schedule.
We obtain certain disposable products and custom components from a limited number of suppliers. If the supplier raises the price or discontinues production, we may have to find another qualified supplier to provide the item or re-engineer the item. In the event that it becomes necessary for us to find another supplier, we would first be required to qualify the quality assurance systems and product quality of that alternative supplier. Any operational issues with re-engineering or the alternative qualified supplier may impact the production schedule, therefore delaying revenues, and this may cause the cost of disposables or key components to increase.
Failure to meet the financial covenant in our technology license and escrow agreement could decrease our AXP®revenues.
Under our license and escrow agreement with Cord Blood Registry, or CBR, if we fail to meet the financial covenant (of cash balance and short-term investments net of debt or borrowed funds that are payable within one year of not less than $2 million) that must be maintained, they may take possession of the escrowed intellectual property and initiate manufacturing of the applicable device and disposables. If this were to occur, our revenues would be negatively impacted. In order to remain compliant we may have to do additional financings or provide consideration to the counter party to modify the obligations.
Failure to retain or hire key personnel may adversely affect our ability to sustain or grow our business.
Our ability to operate successfully and manage our potential future growth depends significantly upon retaining key research, technical, clinical, regulatory, sales, marketing and managerial personnel. Our future success partially depends upon the continued services of key technical and senior management personnel. Our future success also depends on our continuing ability to attract, retain and motivate highly qualified managerial and technical personnel. The inability to retain or attract qualified personnel could have a significant negative effect upon our efforts and thereby materially harm our business and future financial condition.
Most of our operations are conducted at a single location. Any disruption at our facilities could delay revenues or increase our expenses.
Our U.S. device operations are conducted at a single location although we contract the manufacturing of certain devices, disposables and components. We take precautions to safeguard our facilities, through insurance, health and safety protocols, and off-site storage of computer data. However, a natural disaster, such as a fire, flood or earthquake, could cause substantial delays in our operations, damage or destroy our manufacturing equipment or inventory, and cause us to incur additional expenses. The insurance we maintain against fires, floods, and other natural disasters may not be adequate to cover our losses in any particular case.
Failure to maintain and/or upgrade our information technology systems may have an adverse effect on our operations.
We rely on various information technology systems to manage our operations, and we evaluate these systems against our current and expected requirements. Although we have no current plans to implement modifications or upgrades to our systems, we will eventually be required to make changes to legacy systems and acquire new systems with new functionality. Any information technology system disruptions, if not anticipated and appropriately mitigated, could have an adverse effect on our business and operations.
We are a smaller reporting company, and we cannot be certain if the reduced disclosure requirements applicable to smaller reporting companies will make our common stock less attractive to investors.
We are currently a “smaller reporting company,” meaning that we have a public float of less than $75 million. As long as we are considered a smaller reporting company, we are permitted to provide simplified executive compensation and other disclosures in our SEC filings, we will be exempt from the provisions of Section 404(b) of the Sarbanes-Oxley Act requiring that an independent registered public accounting firm provide an attestation report on the effectiveness of our internal control over financial reporting, and our disclosure obligations in SEC filings will be limited in certain other respects, including, among other things, that we are only required to provide two years of audited financial statements in annual reports. Such limited disclosures in our SEC filings due to our status as a smaller reporting company may make it harder for investors to analyze our results of operations and financial prospects.
If we fail to maintain proper and effective internal controls, our ability to produce accurate and timely financial statements could be impaired, which could harm our operating results, our ability to operate our business and investors’ views of us.
We are required to establish and maintain adequate internal control over financial reporting, which are processes designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. We are also required to comply with Section 404 of the Sarbanes-Oxley Act of 2002, which requires public companies to conduct an annual review and evaluation of their internal control over financial reporting and to obtain attestations of the effectiveness of internal controls by independent auditors. However, as a “smaller reporting company,” we are not required to obtain an auditor attestation. If, in the future, we require an attestation report from our independent registered public accounting firm and that firm is unable to provide an unqualified attestation report on the effectiveness of our internal controls over financial reporting, investor confidence and, in turn, our stock price could be materially adversely affected.
Risks Related to our Industry
Our business is heavily regulated, resulting in increased costs of operations and delays in product sales.
Many of our products require FDA approval or clearance to sell in the U.S. and will require approvals from comparable agencies to sell in foreign countries. These authorizations may limit the U.S. or foreign markets in which our products may be sold. Further, our products must be manufactured under requirements of our quality system for continued CE-Marking so they can continue to be marketed and sold in Europe. These requirements are similar to the QSR of both the FDA and California Department of Public Health. Failure to comply with or incorrectly interpret these quality system requirements and regulations may subject us to delays in production while we correct deficiencies found by the FDA, the State of California, or our notifying body as a result of any audit of our quality system. If we are found to be out of compliance, we could receive a Warning Letter or an untitled letter from the FDA or even be temporarily shut down in manufacturing and product sales while the non-conformances are rectified. Also, we may have to recall products and temporarily cease their manufacture and distribution, which would increase our costs and reduce our revenues. The FDA may also invalidate our PMA or 510(k) if appropriate regulations relative to the PMA or 510(k) product are not met. The notified bodies may elect to not renew CE-Mark certification. Any of these events would negatively impact our revenues and costs of operations.
Changes in governmental regulations may reduce demand for our products or increase our expenses.
We compete in many markets in which we and our customers must comply with federal, state, local and international regulations, such as environmental, health and safety and food and drug regulations. We develop, configure and market our products to meet customer needs created by those regulations. Any significant change in regulations could reduce demand for our products or increase our expenses. For example, many of our instruments are marketed to the industry for enabling new regenerative therapies. Changes in the FDA’s regulation of the devices and products directed at regenerative medicine, and development process for new therapeutic applications could have an adverse effect on the demand for these products.
To sell in international markets, we will be subject to regulation in foreign countries.
In cooperation with our distribution partners, we intend to market our current and future products both domestically and in many foreign markets. A number of risks are inherent in international transactions. In order for us to market our products in certain non-U.S. jurisdictions, we need to obtain and maintain required regulatory approvals or clearances and must comply with extensive regulations regarding safety, manufacturing processes and quality. These regulations, including the requirements for approvals or clearances to market, may differ from the FDA regulatory scheme. International sales also may be limited or disrupted by political instability, price controls, trade restrictions and changes in tariffs. Additionally, fluctuations in currency exchange rates may adversely affect demand for our products by increasing the price of our products in the currency of the countries in which the products are sold.
There can be no assurance that we will obtain regulatory approvals or clearances in all of the countries where we intend to market our products, or that we will not incur significant costs in obtaining or maintaining foreign regulatory approvals or clearances, or that we will be able to successfully commercialize current or future products in various foreign markets. Delays in receipt of approvals or clearances to market our products in foreign countries, failure to receive such approvals or clearances or the future loss of previously received approvals or clearances could have a substantial negative effect on our results of operations and financial condition.
To operate in foreign jurisdictions, we are subject to regulation by non-U.S. authorities.
We have operations in India, and as such are subject to Indian regulatory agencies. A number of risks are inherent in conducting business and clinical operations overseas. In order for us to operate as a majority owned foreign corporation in India, we are subject to financial regulations imposed by the Reserve Bank of India. This includes the rules specific to the capital funding, pledging of assets, repatriation of funds and payment of dividends from and to the foreign subsidiaries and from and to us in the U.S.
In order for us to manufacture and/or market our services and products in India, we need to obtain and maintain required regulatory approvals or clearances and must comply with extensive regulations regarding safety, manufacturing processes and quality. These regulations, including the requirements for approvals or clearances to market, and/or export may differ from the FDA regulatory scheme. Additionally, in order for us to complete clinical trials, clinical trial services and cell banking in India, and other foreign jurisdictions, we need to obtain and maintain approvals and licenses which comply with extensive regulations of the appropriate regulatory body.
International operations also may be limited or disrupted by political, economic or social instability, price controls, trade restrictions and changes in tariffs as ordered by various governmental agencies. Additionally, fluctuations in currency exchange rates may adversely affect the cost of production for our products by increasing the price of materials and other inputs for our products in the currency of the countries in which the products are sold.
If our competitors develop and market products that are more effective than our product candidates or obtain regulatory and market approval for similar products before we do, our commercial opportunity may be reduced or eliminated.
The development and commercialization of new pharmaceutical products which target cardiovascular, orthopedic, chronic dermal wounds and other conditions addressed by our current and future products is competitive, and we will face competition from numerous sources, including major biotechnology and pharmaceutical companies worldwide. Many of our competitors have substantially greater financial and technical resources, and development, production and marketing capabilities than we do. In addition, many of these companies have more experience than we do in pre-clinical testing, clinical trials and manufacturing of compounds, as well as in obtaining FDA and foreign regulatory approvals. As a result, there is a risk that one of the competitors will develop a more effective product for the same indications for which we are developing a product or, alternatively, bring a similar product to market before we can. With regards to the BioArchive® and AXP® Systems, numerous larger and better-financed medical device manufacturers may choose to enter this market as it develops.
Influence by the government and insurance companies may adversely impact sales of our products.
Our business may be materially affected by continuing efforts by government, and third-party payers such as Medicare, Medicaid, and private health insurance plans, to reduce the costs of healthcare. For example, in certain foreign markets the pricing and profit margins of certain healthcare products are subject to government controls. In addition, increasing emphasis on managed care in the U.S. will continue to place pressure on the pricing of healthcare products. As a result, continuing efforts to contain healthcare costs may result in reduced sales or price reductions for our products. To date, we are not aware of any direct impact on our pricing or product sales due to such efforts by governments to contain healthcare costs, and we do not anticipate any impact in the near future.
Product liability and uninsured risks may adversely affect the continuing operations.
We operate in an industry susceptible to significant product liability claims. We may be liable if any of our products cause injury, illness, or death. These claims may be brought by individuals seeking relief or by groups seeking to represent a class. We also may be required to recall certain of our products should they become damaged or if they are defective. We are not aware of any material product liability claims against us. However, product liability claims may be asserted against us in the future based on events we are not aware of at the present time. We maintain a product liability policy and a general liability policy that includes product liability coverage. However, a product liability claim against us could have a material adverse effect on our business or future financial condition.
We commercially process stem cells under a physician’s order for use in clinical applications in India.
Our GMP laboratory within Fortis Memorial Research Institute in Gurgaon, India, processes stem cells for certain uses under a physician’s order, and we charge for these services. This service is primarily focused on our growing initiative in bone marrow transplant. We could face product or service liability claim(s) for a bodily injury asserted by a claimant as a result from our GMP services. We mitigate our risks by adhering to international standards, maintain international certification by BSI to GMP, are U.S FDA registered for such activities and are inspected by the Drugs Controller General of India. We believe our global liability insurance is sufficient to cover claims, but in the event it is not it could materially impact our financial health.
Risks Related to Operating Results and Financial Markets
There is doubt about our ability to continue as a going concern due to our recurring and expected operating losses and cash balance which means that we may not be able to continue operations.
We cannot provide investors with the assurance that we will be able to raise sufficient funds from the generation of revenues or through financing to sustain the Company over the next twelve months. Given our cash balance and the fact that we have had recurring operating losses and expect those losses to continue, we believe there is substantial doubt about our ability to continue as a going concern.
We have incurred net losses and losses will continue.
We have not been profitable for a significant period. For the fiscal years ended June 30, 2016 and 2015, we had a net loss of approximately $18.59 million and $14.85 million respectively and an accumulated deficit at June 30, 2016, of approximately $156.26 million. For the three months ended September 30, 2016 we had a net loss of $22.4 million and an accumulated deficit of $178.7 million. We will continue to incur significant costs as we develop and market our current products and related applications. Although we are executing our business plan to develop, market and launch new products, continuing losses may impair our ability to fully meet our objectives for new product sales or threaten our ability to continue as a going concern in future years.
We will need to raise additional capital to fund our operations and in furtherance of our business plan.
We will need to raise additional capital in the near future to fund our future operations and in furtherance of our business plan, including progression of the CLI and Acute Myocardial Infarction Rapid Stem Cell Therapy, or AMIRST, clinical trials and development of other new products. The proposed financing may include shares of common stock, shares of preferred stock, warrants to purchase shares of common stock or preferred stock, debt securities, units consisting of the forgoing securities, equity investments from strategic development partners or some combination of each. Any additional equity financings may be financially dilutive to, and will be dilutive from an ownership perspective to our stockholders, and such dilution may be significant based upon the size of such financing. Additionally, we cannot assure that such funding will be available on a timely basis, in needed quantities, or on terms favorable to us, if at all.
Our future financial results could be adversely impacted by asset impairment charges.
We are required to test both goodwill and intangible assets for impairment on an annual basis. We have chosen to perform our annual impairment reviews of goodwill and other intangible assets during the fourth quarter of each fiscal year. We also are required to test for impairment between annual tests if events occur or circumstances change that would more likely than not reduce our fair value below book value. These events or circumstances could include results of our on-going clinical trials, activities and results of our competitor’s clinical trials, a significant change in the regulatory climate, legal factors, operating performance indicators, or other factors. If the fair market value is less than the book value, we could be required to record an impairment charge. The valuation requires judgment in estimating future cash flows, discount rates and estimated product life cycles. In making these judgments, we evaluate the financial health of the business, including such factors as industry performance, changes in technology and operating cash flows.
As of September 30, 2016 we have a goodwill balance of approximately $13.20 million and a net intangible assets balance of approximately $20.7 million, out of total assets of approximately $49.2 million. As a result, the amount of any annual or interim impairment could be significant and could have a material adverse effect on our reported financial results for the period in which the charge is taken.
We may incur significant non-operating, non-cash charges resulting from changes in the fair value of warrants.
Our Series A warrants are a derivative instrument; as such, they have been recorded at their respective relative fair values at the issuance date and will be recorded at their respective fair values at each subsequent balance sheet date. Any change in value between reporting periods will be recorded as a non-operating, non-cash charge at each reporting date. The impact of these non-operating, non-cash charges could have an adverse effect on the Company’s financial results. The fair value of the warrants is tied in large part to our stock price. If the stock price increases between reporting periods, the warrants become more valuable. As such, there is no way to forecast what the non-operating, non-cash charges will be in the future or what the future impact will be on our financial statements.
Risks Related to our Common Stock
If the price of our common stock does not meet the requirements of the Nasdaq Capital Market, our shares may be delisted. Our ability to publicly or privately sell equity securities and the liquidity of our common stock could be adversely affected if we are delisted.
The listing standards of the Nasdaq Capital Market provide, among other things, that a company may be delisted if the bid price of its stock drops below $1.00 for a period of 30 consecutive business days. Delisting from the Nasdaq Capital Market could adversely affect our ability to raise additional financing through the public or private sale of equity securities, would significantly affect the ability of investors to trade our securities and would negatively affect the value and liquidity of our common stock. Delisting could also have other negative results, including the potential loss of confidence by employees, the loss of institutional investor interest and fewer business development opportunities.
Liquidity of our common stock.
Although there is a public market for our common stock, trading volume has been historically low, which could impact the stock price and the ability to sell shares of our common stock. We can give no assurance that an active and liquid public market for the shares of the common stock will continue in the future. In addition, future sales of large amounts of common stock could adversely affect the market price of our common stock and our ability to raise capital. The price of our common stock could also drop as a result of the exercise of options for common stock or the perception that such sales or exercise of options could occur. These factors could also have a negative impact on the liquidity of our common stock and our ability to raise funds through future stock offerings.
We do not pay cash dividends.
We have never paid any cash dividends on our common stock and may not pay cash dividends in the future. Instead, we intend to apply earnings to the expansion and development of our business. Thus, the liquidity of your investment is dependent upon your ability to sell stock at an acceptable price. The price can go down as well as up and may limit your ability to realize any value from your investment, including the initial purchase price.
Our stock price is volatile.
The market price of our common stock has been, and we expect will continue to be, subject to significant volatility. The value of our common stock may decline regardless of our operating performance or prospects. Factors affecting our market price include:
our perceived prospects and liquidity;
progress or any lack of progress (or perceptions related to progress) in timely overcoming the remaining substantial technical and commercial challenges related to our product candidates;
variations in our operating results and whether we have achieved key business targets;
changes in, or our failure to meet, earnings estimates;
changes in securities analysts’ buy/sell recommendations;
differences between our reported results and those expected by investors and securities analysts;
market reaction to any acquisitions, joint ventures or strategic investments announced by us or our competitors; and
general economic, political or stock market conditions.
The general economic, political and stock market conditions that may affect the market price of our common stock are beyond our control. The market price of our common stock at any particular time may not remain the market price in the future.
Risks Related to this Offering
We have broad discretion in the use of the net proceeds of this offering, if any, and may not use them effectively.
We will not receive any of the proceeds from the sale of the Shares by the Selling Stockholders, except for payment of any cash exercise price upon exercise of the Series A Warrants. See “Use of Proceeds” on page 15 of this prospectus.
We intend to use the net proceeds from this offering, if any, for general corporate purposes. However, our management will have broad discretion in the application of the net proceeds from this offering and could spend the proceeds in ways that do not improve our results of operations or enhance the value of our securities. You will be relying on the judgment of our management with regard to the use of these net proceeds, and you will not have the opportunity, as part of your investment decision, to assess whether the net proceeds are being used appropriately. The failure by our management to apply these funds effectively could result in financial losses that could have a material adverse effect on our business, cause the price of our securities to decline and delay the development of our product candidates. Pending the application of these funds, we may invest the net proceeds from this offering in a manner that does not produce income or that loses value.
USEOF PROCEEDS
The Shares offered by this prospectus will be sold by the Selling Stockholders. We will not receive any of the proceeds from the sale of the Shares by the Selling Stockholders named in this prospectus, except for payment of any cash exercise price upon exercise of the Series A Warrants, which amounts, if any, will be used for general corporate purposes.
DESCRIPTIONOF SECURITIES
As of January 19, 2017, our amended and restated certificate of incorporation(“Certificate of Incorporation”) and amended and restated bylaws (“Bylaws”). Reference is made to the more detailed provisions of, and the descriptions are qualified in their entirety by reference to, the Certificate of Incorporation and Bylaws, forms of which are filed with the SEC as exhibits to the registration statement of which this prospectus is a part, and applicable law.
General
Our Certificate of Incorporation authorizes the issuance of up to 350,000,000 shares of common stock, par value $0.001 per share, and 2,000,000 shares of preferred stock, par value $0.001 per share. The rights and preferences of the preferred stock may be established from time to time by our board of directors. As of December 10, 2019, there were 2,843,601 shares of common stock issued and outstanding and no shares of preferred stock issued and outstanding.
Common Stock
Each holder of common stock is entitled to one vote for each share on all matters submitted to a vote of the stockholders, except matters that relate only to one or more of the series of preferred stock, and each holder does not have cumulative voting rights. Accordingly, the holders of a majority of the shares of common stock entitled to vote in any election of directors can elect all of the directors standing for election, if they so choose. According to our Bylaws, all matters are decided by the vote of a majority in voting interest of the stockholders present in person or by proxy and voting at any meeting of the stockholders during which a quorum is present, except as otherwise provided in the Certificate of Incorporation, in the Bylaws or by law.
Subject to preferences that may be applicable to any then outstanding preferred stock, holders of common stock are entitled to receive ratably those dividends, if any, as may be declared from time to time by the board of directors out of legally available funds. In the event of our liquidation, dissolution or winding up, holders of common stock will be entitled to share ratably in the net assets legally available for distribution to stockholders after the payment of all of our debts and other liabilities and the satisfaction of any liquidation preference granted to the holders of any outstanding shares of preferred stock.
Holders of common stock have no preemptive or conversion rights or other subscription rights, and there are no redemption or sinking fund provisions applicable to the common stock. All outstanding shares of common stock are, and the shares of common stock offered by us in this offering, when issued and paid for, will be fully paid and non-assessable.nonassessable. The rights, preferences and privileges of the holders of common stock are subject to, and may be adversely affected by, the rights of the holders of shares of any series of preferred stock thatwhich we may designate in the future.
Preferred Stock
Under the terms of our amended and restated certificateCertificate of incorporation, we mayIncorporation, the board of directors is authorized, subject to any limitations prescribed by law, without stockholder approval, to issue such shares of preferred stock with thein one or more series. Each such series of preferred stock shall have such rights, preferences, privileges and restrictions, including voting rights, dividend rights, conversion rights, redemption privileges mayand liquidation preferences, as shall be established from time to timedetermined by ourthe board of directors.
Series A WarrantsThe purpose of authorizing the board of directors to issue preferred stock and determine its rights and preferences is to eliminate delays associated with a stockholder vote on specific issuances. The issuance of preferred stock, while providing desirable flexibility in connection with possible acquisitions and other corporate purposes, could have the effect of making it more difficult for a third party to acquire, or of discouraging a third party from acquiring, a majority of our outstanding voting stock.
On August 31, 2015, we entered into a securities purchase agreement (the “Purchase Agreement”) with certainThe effects of issuing preferred stock could include one or more of the Selling Stockholders, each of which were institutional accredited investors. Pursuant to the terms of the Purchase Agreement, we sold certain of the Selling Stockholders, among other securities, the Series A Warrants to purchase up to an aggregate of 1,102,940 shares of Common Stock at an exercise price originally equal to $13.60 per share. The number of shares of Common Stock for which the Series A Warrants are exercisable is subject to vesting, and only 404,410 shares of Common Stock have and will vest. On February 16, 2016, we entered into an amendment to the Series A Warrants with each of the Selling Stockholders pursuant to which the exercise price per share was reduced from $13.60 per share to $8.00 per share. The Series A Warrants currently entitle the holders to purchase, in the aggregate, up to 404,410 shares of Common Stock at an exercise price of $8.00 per share for a period of five and one-half years. The exercise price of the Series A Warrants is subject to adjustment for stock splits, stock dividends, combinations or similar events. The Series A Warrants may be exercised for cash or, upon the failure to maintain an effective registration statement, on a cashless basis. The exercise of the Series A Warrants is subject to a beneficial ownership limitation, pursuant to which the holder may not exercise for shares if the exercise would cause them to hold more than 9.99% of the number of shares of the Common Stock outstanding upon exercise.
Warrants
In addition to the Series A Warrants, we have issued in private and public offerings warrants to purchase:following:
| | ● | 83,420 sharesdecreasing the amount of earnings and assets available for distribution to holders of common stock at $56.20 per share, which expire on January 29, 2019;stock;
|
| | ● | 112,950 shares ofrestricting dividends on the common stock at $31 per share, which expire on June 18, 2019; andstock;
|
| | ● | 3,529,412 sharesdiluting the voting power of the common stock at $8.00 per share, which expire on February 13, 2021.stock;
|
| ● | impairing the liquidation rights of the common stock; or |
| ● | delaying, deferring or preventing changes in our control or management. |
As of the date of this prospectus, there are no shares of preferred stock outstanding.
Effect of Certain Provisions of Our Amended and Restatedour Certificate of Incorporation and Bylaws and the Delaware Anti-Takeover Statute
Amended and Restated Certificate of Incorporation and Bylaws
Some provisions of Delaware law and our amendedCertificate of Incorporation and restated certificate of incorporation and bylawsBylaws contain provisions that could make the following transactions more difficult:
| | ● | acquisition of us by means of a tender offer; |
| | ● | acquisition of us by means of a proxy contest or otherwise; or |
| | ● | removal of our incumbent officers and directors. |
These provisions, summarized below, are expected to discourage coercive takeover practices and inadequate takeover bids and to promote stability in our management. These provisions are also designed to encourage persons seeking to acquire control of us to first negotiate with our board of directors.
| | ● | Undesignated Preferred Stock.Stock. The ability to authorize undesignated preferred stock makes it possible for our board of directors to issue one or more series of preferred stock with voting or other rights or preferences that could impede the success of any attempt to change control of us. These and other provisions may have the effect of deterring hostile takeovers or delaying changes in control or management of our company. |
| | ● | Stockholder Meetings.Meetings. Our bylawsBylaws provide that a special meeting of stockholders may be called only by the Chief Executive Officer or by the board of directors or the Chairman of the Board or by one or more shareholders holding shares in the aggregate entitled to cast not less than 10% of the votes at that meeting.directors. |
| | ● | Requirements for Advance Notification of Stockholder Nominations and Proposals.Proposals. Our bylawsBylaws establish advance notice procedures with respect to stockholder proposals and the nomination of candidates for election as directors, other than nominations made by or at the direction of our board of directors or a committee of the board of directors. |
| | ● | Board of Directors Vacancies.Vacancies. Under our bylaws,Bylaws, any vacancy on the board of directors, including a vacancy resulting from an enlargement of the board of directors, may only be filled by vote of a majority of the remaining directors. The classification ofstockholders may elect a director or directors at any time to fill any vacancy or vacancies not filled by the board of directors and the limitations on the removal of directors and filling of vacancies would have the effect of making it more difficult for a third party to acquire control of us, or of discouraging a third party from acquiring control of us.directors. |
| | ● | Board of Directors Size.Size. Under our bylaws,Bylaws, the board of directors has the power to set the size of the board. The ability to increase or decrease the size of the board in conjunction with the other provisions above could make it more difficult for a third party to acquire control of the Company. |
Limitation of LiabilityDelaware Anti-Takeover Statute
TheWe are subject to Section 203 of the Delaware General Corporation Law (“DGCL”). This law prohibits a publicly held Delaware corporation from engaging in any business combination with any interested stockholder for a period of three years following the date that the stockholder became an interested stockholder, unless:
| ● | prior to the date of the transaction, the board of directors of the corporation approved either the business combination or the transaction which resulted in the stockholder becoming an interested stockholder; |
| ● | upon consummation of the transaction which resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, excluding for purposes of determining the number of shares outstanding those shares owned by persons who are directors and also officers and by employee stock plans in which employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer; or |
| ● | on or subsequent to the date of the transaction, the business combination is approved by the board of directors and authorized at an annual or special meeting of stockholders, and not by written consent, by the affirmative vote of at least two-thirds of the outstanding voting stock which is not owned by the interested stockholder. |
Section 203 defines “business combination” to include:
| ● | any merger or consolidation involving the corporation and the interested stockholder; |
| ● | any sale, transfer, pledge or other disposition of 10% or more of our assets involving the interested stockholder; |
| ● | in general, any transaction that results in the issuance or transfer by us of any of our stock to the interested stockholder; or |
| ● | the receipt by the interested stockholder of the benefit of any loans, advances, guarantees, pledges or other financial benefits provided by or through the corporation. |
In general, Section 203 of the DGCL defines an “interested stockholder” as an entity or person beneficially owning 15% or more of the outstanding voting stock of the corporation and any entity or person affiliated with or controlling or controlled by the entity or person.
Limitation of Liability
The DGCL permits Delaware corporations to eliminate or limit the monetary liability of directors for breach of their fiduciary duty of care, subject to limitations. Our amended and restated certificateCertificate of incorporationIncorporation provides that our directors shall not be liable to us or our stockholders for monetary damages for breach of fiduciary duty as a director, except to the extent such exemption or limitation thereof is not permitted under the DGCL as the same exists or may hereafter be amended.
The DGCL provides for indemnification of directors, officers, employees and agents, subject to limitations. Both our amendedCertificate of Incorporation and restated certificate of incorporation and bylawsBylaws provide for the indemnification of our directors, officers, employees and agents to the fullest extent permitted by Delaware law. Our directors and officers also are insured against certain liabilities for actions taken in such capacities, including liabilities under the Securities Act.
Section 145(a) of the DGCL provides that a Delaware corporation may indemnify any person who was or is a party or is threatened to be made a party 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 the corporation) by reason of the fact that such person is or was a director, officer, employee or agent of the corporation or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation or enterprise, against expenses, judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the corporation and, with respect to any criminal action or proceeding, if such person had no cause to believe the conduct was unlawful.
Section 145(b) of the DGCL provides that a Delaware corporation may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that such person acted in any of the capacities set forth above, against expenses actually and reasonably incurred by such person in connection with the defense or settlement of such action or suit if such person acted under similar standards to those set forth above, except that no indemnification may be made in respect to any claim, issue or matter as to which such person shall have been adjudged to be liable to the corporation, unless and only to the extent that the court in which such action or suit was brought shall determine that despite the adjudication of liability, but in view of all the circumstances of the case, such person is fairly and reasonably entitled to be indemnified for such expenses which the court shall deem proper.
Section 145 of the DGCL further provides that to the extent a director or officer of a corporation has been successful in the defense of any action, suit or proceeding referred to in subsection (a) and (b) or in the defense of any claim, issue or matter therein, such person shall be indemnified against expenses actually and reasonably incurred by such person in connection therewith; that indemnification provided for by Section 145 shall not be deemed exclusive of any other rights to which the indemnified party may be entitled; and that the corporation may purchase and maintain insurance on behalf of a director or officer of the corporation against any liability asserted against such officer or director and incurred by such person in any such capacity or arising out of such person’s status as such, whether or not the corporation would have the power to indemnify such person against such liabilities under Section 145.
As permitted by Section 102(b)(7) of the DGCL, our amended and restated certificateCertificate of incorporationIncorporation provides that none of our directors shall be liable to us or our stockholders for monetary damages for breach of fiduciary duty as a director. However, this provision does not eliminate or limit the liability of a director for acts or omissions not in good faith or for breaching such person’s duty of loyalty, engaging in intentional misconduct or knowingly violating the law, paying a dividend or approving a stock repurchase which was illegal, or obtaining an improper personal benefit. A provision of this type has no effect on the availability of equitable remedies, such as injunction or rescission, for breach of fiduciary duty.
We have a policy of directors’ liability insurance that insures the directors and officers against the cost of defense, settlement or payment of a judgment under certain circumstances.
We believe that the foregoing policies and provisions of our amendedCertificate of Incorporation and restated certificate of incorporation and bylawsBylaws are necessary to attract and retain qualified officers and directors. Insofar as indemnification for liabilities arising under the Securities Act may be permitted with respect to our directors, officers or persons controlling the registrant pursuant to the foregoing provisions, the registrant has been informed that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.
Listing
Our common stock is listed on the Nasdaq Capital Market under the symbol “THMO.”
Transfer Agent and Registrar
The transfer agent and registrar for our common stock is Computershare Investor Services, LLC, 350 Indiana Street, Suite 750, Golden, CO 80401.
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SELLINGSTOCKHOLDERSDESCRIPTION OF WARRANTS
We may issue warrants in the future for the purchase of debt securities, common stock or other securities. Warrants may be issued independently or together with debt securities or common stock offered by any prospectus supplement and/or other offering material and may be attached to or separate from any such offered securities. Each series of warrants will be issued under a separate warrant agreement to be entered into between us and the warrant holder, with the option to also utilize a bank or trust company, as warrant agent, all as will be set forth in the prospectus supplement and/or other offering material relating to the particular issue of warrants. The warrant agent, if any, will act solely as our agent in connection with the warrants and will not assume any obligation or relationship of agency or trust for or with any holders of warrants or beneficial owners of warrants.
The following table sets forthsummary of certain provisions of the number of shares of our Common Stock beneficially owned by the Selling Stockholders as of January 13, 2017. The percentages shownwarrants we may issue in the table are based on 9,886,402 shares of Common Stock outstanding on that date. Shares of Common Stockfuture does not purport to be complete and is subject to, options, warrants or other convertible securities which are exercisable within 60 daysand is qualified in its entirety by reference to, all provisions of January13, 2017 are deemed to be beneficially owned by the person holding such options, warrants or other convertible securities for the purpose of computing the percentage of ownership of such person but are not treated as outstanding for the purpose of computing the percentage of any other person. Except as described in the preceding sentence, shares of Common Stock issuable upon exercise of outstanding options, warrants and other convertible securities are not deemed to be outstanding.warrant agreements.
The following table assumes that the Selling Stockholders sell all the Shares offered by them under this prospectus and sell none of the other shares of our Common Stock owned by the Selling Stockholders, if any. We cannot estimate the number of shares of Common Stock that will be held by the Selling Stockholders after completion of this offering because the Selling Stockholders may sell all or some of the Shares and because there currently are no agreements, arrangements or understandings with respectReference is made to the sale of any of the Shares. The term “Selling Stockholders” includes the stockholders listed below and their respective transferees, assignees, pledgees, donees prospectus supplement and/or other successors. The Selling Stockholders reserveoffering material relating to the rightparticular issue of warrants offered pursuant to accept such prospectus supplement and/or reject, in whole or in part, any proposed saleother offering material for the terms of Shares. The Selling Stockholders also may offer and sell less than the number of Shares indicated. The Selling Stockholders are not making any representation that any Shares covered by this prospectus will or will not be offered for sale. Except as indicated below in this section or in the documents incorporated by reference in this prospectus, we are not aware of any material relationship between us and the Selling Stockholders within the past three years other than as a result of the Selling Stockholders’ beneficial ownership of our Common Stock.
Selling Stockholders | | Number of Shares Beneficially Owned Prior to the Offering | | | Percent | | | Maximum Number Offered by Selling Stockholder | | | Number of Shares Beneficially Owned After Completion of Offering | | | Percent | |
| | | | | | | | | | | | | | | | | | | | | |
Sabby Healthcare Master Fund, Ltd.(1) | | | 314,077 | (2) | | | 3 | % | | | 257,352 | | | | 56,725 | | | | * | % |
Sabby Volatility Warrant Master Fund, Ltd.(1) | | | 185,183 | (2) | | | 2 | % | | | 147,058 | | | | 38,125 | | | | * | % |
Boyalife (Hong Kong) Limited(3) | | | 10,367,647 | (4) | | | 77 | % | | | 545,590 | | | | 9,822,057 | | | | 68 | % |
information relating to such warrants, including, where applicable:
| *●
| Less than 1%.the designation, aggregate principal amount, currencies, denominations and terms of the series of debt securities purchasable upon exercise of warrants to purchase debt securities and the price at which such debt securities may be purchased upon such exercise;
|
| (1)●
| The address for eachthe number of Sabby Healthcare Master Fund, Ltd.shares of common stock purchasable upon the exercise of warrants to purchase common stock and Sabby Volatility Warrant Master Fund, Ltd. is c/o Sabby Management, 10 Mountainview Road, Suite 205, Upper Saddle River, New Jersey 07458.Sabby Management, LLC is the investment managerprice at which such number of Sabby Healthcare Master Fund, Ltd. and Sabby Volatility Warrant Master Fund, Ltd. and shares voting and investment power with respect to these shares in this capacity. As manager of Sabby Management, LLC, Hal Mintz also shares voting and investment power on behalf of each selling stockholder. Each of Sabby Management, LLC and Hal Mintz disclaims beneficial ownership over the securities listed except to the extent of their pecuniary interest therein.common stock may be purchased upon such exercise;
|
| (2)●
| Consists of warrants exercisable as of January 13, 2017 (including the Series A Warrants),designation and represents the number of sharesunits of Common Stock assumingother securities purchasable upon the exercise of allwarrants to purchase other securities and the price at which such number of units of such other securities may be purchased upon such exercise;
|
| ● | the date on which the right to exercise such warrants shall commence and the date on which such right shall expire; |
| ● | U.S. federal income tax consequences applicable to such warrants; |
| ● | the amount of warrants outstanding as of the most recent practicable date; and |
| ● | any other terms of such warrants. |
The exercise price for warrants will be subject to adjustment in accordance with the applicable prospectus supplement and/or other offering material.
Each warrant will entitle the holder thereof to purchase such principal amount of debt securities or such number of shares of common stock or other securities at such exercise price as shall in each case be set forth in, or calculable from, the prospectus supplement and/or other offering material relating to the warrants, which exercise price may be subject to adjustment upon the occurrence of certain events as set forth in such prospectus supplement and/or other offering material. After the close of business on the expiration date, or such later date to which such expiration date may be extended by us, unexercised warrants will become void. The place or places where, and the manner in which, warrants may be exercised shall be specified in the prospectus supplement and/or other offering material relating to such warrants.
Prior to the exercise of any warrants to purchase debt securities, common stock or other securities, holders of such warrants will not have any of the rights of holders of debt securities, common stock or other securities, as the case may be, purchasable upon such exercise of the warrants, including the right to receive payments of principal of, premium, if any, or interest, if any, on the debt securities purchasable upon such exercise or to enforce covenants in the applicable indenture, or to receive payments of dividends, if any, on the common stock purchasable upon such exercise, or to exercise any applicable right to vote.
DESCRIPTION OF SUBSCRIPTION RIGHTS
We may issue subscription rights to purchase debt securities, common stock, preferred stock, other securities described in this prospectus or any combination thereof. These subscription rights may be issued independently or together with any other security offered by us and may or may not be transferable by the securityholder receiving the subscription rights in such offering. In connection with any offering of subscription rights, we may enter into a standby arrangement with one or more underwriters or other investors pursuant to which the underwriters or other investors may be required to purchase any securities remaining unsubscribed for after such offering.
To the extent appropriate, the applicable prospectus supplement will describe the specific terms of the subscription rights to purchase shares of our securities offered thereby, including the following:
the date of determining the securityholders entitled to the subscription rights distribution;
the price, if any, for the subscription rights;
the exercise price payable for the debt securities, common stock, preferred stock or other securities upon the exercise of the subscription rights;
the number of subscription rights issued to each securityholder;
the amount of debt securities, common stock, preferred stock or other securities that may be purchased per each subscription right;
any provisions for adjustment of the amount of securities receivable upon exercise of the subscription rights or of the exercise price of the subscription rights;
the extent to which the subscription rights are transferable;
the date on which the right to exercise the subscription rights shall commence, and the date on which the subscription rights shall expire;
the extent to which the subscription rights may include an over-subscription privilege with respect to unsubscribed securities;
the material terms of any standby underwriting or purchase arrangement entered into by us in connection with the offering of subscription rights;
any applicable federal income tax considerations; and
any other terms of the subscription rights, including the terms, procedures and limitations relating to the transferability, exchange and exercise of the subscription rights.
DESCRIPTION OF UNITS
We may issue units consisting of one or more purchase contracts, warrants, shares of preferred stock, shares of common stock, debt securities or any combination of such securities. The applicable prospectus supplement will describe the terms of the units and of the securities comprising the units, including whether and under what circumstances the securities comprising the units may be traded separately. You should read the particular terms of the documents pursuant to which the units will be issued, which will be described in more detail in the applicable prospectus supplement.
DESCRIPTION OF PURCHASE CONTRACTS
We may issue purchase contracts obligating holders to purchase from us, and us to sell to the holders, debt securities, common stock or preferred stock. The purchase contracts may require us to make periodic payments to the holders of purchase contracts. These payments may be unsecured or prefunded on a basis to be specified in the prospectus supplement relating to the purchase contracts.
The applicable prospectus supplement will describe the terms of any purchase contract. The purchase contracts will be issued pursuant to documents to be issued by us. You should read the particular terms of such documents, which will be described in more detail in the applicable prospectus supplement.
LEGAL OWNERSHIP OF SECURITIES
We can issue securities in registered form or in the form of one or more global securities. We describe global securities in greater detail below. We refer to those persons who have securities registered in their own names on the books that we or any applicable trustee or depositary or warrant agent maintain for this purpose as the “holders” of those securities. These persons are the legal holders of the securities. We refer to those persons who, indirectly through others, own beneficial interests in securities that are not registered in their own names, as “indirect holders” of those securities. As we discuss below, indirect holders are not legal holders, and investors in securities issued in book-entry form or in street name will be indirect holders.
Book-Entry Holders
We may issue securities in book-entry form only, as we will specify in the applicable prospectus supplement. This means securities may be represented by one or more global securities registered in the name of a financial institution that holds them as depositary on behalf of other financial institutions that participate in the depositary’s book-entry system. These participating institutions, which are referred to as participants, in turn, hold beneficial interests in the securities on behalf of themselves or their customers.
Only the person in whose name a security is registered is recognized as the holder of that security. Global securities will be registered in the name of the depositary or its participants. Consequently, for global securities, we will recognize only the depositary as the holder of the securities, and we will make all payments on the securities to the depositary. The depositary passes along the payments it receives to its participants, which in turn pass the payments along to their customers who are the beneficial owners. The depositary and its participants do so under agreements they have made with one another or with their customers; they are not obligated to do so under the terms of the securities.
As a result, investors in a global security will not own securities directly. Instead, they will own beneficial interests in a global security, through a bank, broker or other financial institution that participates in the depositary’s book-entry system or holds an interest through a participant. As long as the securities are issued in global form, investors will be indirect holders, and not legal holders, of the securities.
Street Name Holders
We may terminate a global security or issue securities that are not issued in global form. In these cases, investors may choose to hold their securities in their own names or in “street name.” Securities held by an investor in street name would be registered in the name of a bank, broker or other financial institution that the investor chooses, and the investor would hold only a beneficial interest in those securities through an account he or she maintains at that institution.
For securities held in street name, we or any applicable trustee or depositary will recognize only the intermediary banks, brokers and other financial institutions in whose names the securities are registered as the holders of those securities, and we or any such trustee or depositary will make all payments on those securities to them. These institutions pass along the payments they receive to their customers who are the beneficial owners, but only because they agree to do so in their customer agreements or because they are legally required to do so. Investors who hold securities in street name will be indirect holders, not legal holders, of those securities.
Legal Holders
Our obligations, as well as the obligations of any applicable trustee or third party employed by us or a trustee, run only to the legal holders of the securities. We do not have obligations to investors who hold beneficial interests in global securities, in street name or by any other indirect means. This will be the case whether an investor chooses to be an indirect holder of a security or has no choice because we are issuing the securities only in global form.
For example, once we make a payment or give a notice to the holder, we have no further responsibility for the payment or notice even if that holder is required, under agreements with its participants or customers or by law, to pass it along to the indirect holders but does not do so.
Special Considerations for Indirect Holders
If you hold securities through a bank, broker or other financial institution, either in book-entry form because the securities are represented by one or more global securities or in street name, you should check with your own institution to find out:
| (3)●
| The address for Boyalife (Hong Kong) Limited. is c/o Boyalife Group, Ltd., 800 Jiefang Road East, Wuxi City, China, F4 214002. Yishu Li has votinghow it handles securities payments and investment power over the Note Shares being registered on behalf of Boyalife (Hong Kong) Limited. Yishu Li is the spouse of Dr. Xiachun Xu, our interim CEO and chairman of our board of directors. Each of Yishu Li and Dr. Xiachun Xu disclaims beneficial ownership over the securities listed except to the extent of their pecuniary interest therein.notices;
|
| (4)●
| Consists of 6,838,235 shares of Common Stock (includingwhether it imposes fees or charges;
|
| ● | how it would handle a request for the Note Shares)holders’ consent, if ever required; |
| ● | whether and 3,529,412 shares of Common Stock issuable uponhow you can instruct it to send you securities registered in your own name so you can be a legal holder, if that is permitted in the future; |
| ● | how it would exercise of warrants,rights under the securities if there were a default or other event triggering the need for holders to act to protect their interests; and represents |
| ● | if the number of shares of Common Stock assumingsecurities are in book-entry form, how the exercise of all such warrants.depositary’s rules and procedures will affect these matters. |
Relationship with Selling StockholdersGlobal Securities
Other than asA global security is a shareholdersecurity that represents one or any other number of individual securities held by a depositary. Generally, all securities represented by the Company, neither Sabby Healthcare Master Fund, Ltd. nor Sabby Volatility Warrant Master Fund, Ltd. has had a relationship with us withinsame global securities will have the past three years.same terms.
Ms. Yishu LiEach security issued in book-entry form will be represented by a global security that we issue to, deposit with and register in the name of a financial institution or its nominee that we select. The financial institution that we select for this purpose is called the sole stockholder of Boyalife (Hong Kong) Limited. Ms. Li isdepositary. Unless we specify otherwise in the spouse of Dr. Xiaochun Xu, our interim Chief Executive Officer and Chairman ofapplicable prospectus supplement, The Depository Trust Company, New York, New York, known as DTC, will be the Board. Pursuant to the terms of the Voting Agreement between the Company, Boyalife (Hong Kong) Limited and Boyalife Investment, Inc., Boyalife (Hong Kong) Limited and Boyalife Investment Inc. have the right to nominate up to three members of the Company’s Board of Directors until such time as they no longer collectively hold at least 50% of our common stock. On December 26, 2016, Boyalife (Hong Kong) Limited acquireddepositary for all the shares of common stock and warrants to purchase shares of the Company’s common stock owned by Boyalife Investment Inc.securities issued in book-entry form.
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A global security may not be transferred to or registered in the name of anyone other than the depositary, its nominee or a successor depositary, unless special termination situations arise. We describe those situations below under “— Special Situations When A Global Security Will Be Terminated.” As a result of these arrangements, the depositary, or its nominee, will be the sole registered owner and legal holder of all securities represented by a global security, and investors will be permitted to own only beneficial interests in a global security. Beneficial interests must be held by means of an account with a broker, bank or other financial institution that in turn has an account with the depositary or with another institution that does. Thus, an investor whose security is represented by a global security will not be a legal holder of the security, but only an indirect holder of a beneficial interest in the global security.
If the prospectus supplement for a particular security indicates that the security will be issued as a global security, then the security will be represented by a global security at all times unless and until the global security is terminated. If termination occurs, we may issue the securities through another book-entry clearing system or decide that the securities may no longer be held through any book-entry clearing system.
Special Considerations For Global Securities
As an indirect holder, an investor’s rights relating to a global security will be governed by the account rules of the investor’s financial institution and of the depositary, as well as general laws relating to securities transfers. We do not recognize an indirect holder as a holder of securities and instead deal only with the depositary that holds the global security.
If securities are issued only as global securities, an investor should be aware of the following:
| ● | an investor cannot cause the securities to be registered in his or her name, and cannot obtain non-global certificates for his or her interest in the securities, except in the special situations we describe below; |
| ● | an investor will be an indirect holder and must look to his or her own bank or broker for payments on the securities and protection of his or her legal rights relating to the securities, as we describe above; |
| ● | an investor may not be able to sell interests in the securities to some insurance companies and to other institutions that are required by law to own their securities in non-book-entry form; |
| ● | an investor may not be able to pledge his or her interest in the global security in circumstances where certificates representing the securities must be delivered to the lender or other beneficiary of the pledge in order for the pledge to be effective; |
| ● | the depositary’s policies, which may change from time to time, will govern payments, transfers, exchanges and other matters relating to an investor’s interest in the global security. We and any applicable trustee have no responsibility for any aspect of the depositary’s actions or for its records of ownership interests in the global security. We and the trustee also do not supervise the depositary in any way; |
| ● | the depositary may, and we understand that DTC will, require that those who purchase and sell interests in the global security within its book-entry system use immediately available funds, and your broker or bank may require you to do so as well; and |
| ● | financial institutions that participate in the depositary’s book-entry system, and through which an investor holds its interest in the global security, may also have their own policies affecting payments, notices and other matters relating to the securities. There may be more than one financial intermediary in the chain of ownership for an investor. We do not monitor and are not responsible for the actions of any of those intermediaries. |
Special Situations When A Global Security Will Be Terminated
In a few special situations described below, a global security will terminate and interests in it will be exchanged for physical certificates representing those interests. After that exchange, the choice of whether to hold securities directly or in street name will be up to the investor. Investors must consult their own banks or brokers to find out how to have their interests in securities transferred to their own names, so that they will be direct holders. We have described the rights of holders and street name investors above.
A global security will terminate when the following special situations occur:
| ● | if the depositary notifies us that it is unwilling, unable or no longer qualified to continue as depositary for that global security and we do not appoint another institution to act as depositary within 90 days; |
| ● | if we notify any applicable trustee that we wish to terminate that global security; or |
| ● | if an event of default has occurred with regard to securities represented by that global security and has not been cured or waived. |
The applicable prospectus supplement may also list additional situations for terminating a global security that would apply only to the particular series of securities covered by the prospectus supplement. When a global security terminates, the depositary, and neither we nor any applicable trustee, is responsible for deciding the names of the institutions that will be the initial direct holders.
PLANOF DISTRIBUTION
We are registering the Shares issuable upon the exercise of the Series A Warrants for possible sale by the Selling Stockholders.
Each Selling Stockholder of the Shares and any of their pledgees, assignees and successors-in-interest may from time to time, sell any or all of their Shares covered hereby on the Nasdaq Capital Market or any other stock exchange, market or trading facility on which the Common Stock is traded orsecurities in private transactions. These sales may be at fixed or negotiated prices. A Selling Stockholder may use any one or more of the following ways from time to time: (i) through agents; (ii) to or through underwriters; (iii) through brokers or dealers; (iv) directly by us to purchasers, including through a specific bidding, auction or other process; (v) through the distribution of subscription rights; or (vi) through a combination of any of these methods when sellingof sale. The applicable prospectus supplement and/or other offering material will contain the Shares:terms of the transaction, name or names of any underwriters, dealers, agents and the respective amounts of securities underwritten or purchased by them, the initial public offering price of the securities, and the applicable agent’s commission, dealer’s purchase price or underwriter’s discount. Any dealers and agents participating in the distribution of the securities may be deemed to be underwriters, and compensation received by them on resale of the securities may be deemed to be underwriting discounts.
ordinary brokerageAny initial offering price, dealer purchase price, discount or commission may be changed from time to time.
The securities may be distributed from time to time in one or more transactions, at negotiated prices, at a fixed price or fixed prices (that may be subject to change), at market prices prevailing at the time of sale, at various prices determined at the time of sale or at prices related to prevailing market prices.
Offers to purchase securities may be solicited directly by us or by agents designated by us from time to time. Any such agent may be deemed to be an underwriter, as that term is defined in the Securities Act of the securities so offered and sold.
If underwriters are utilized in the sale of any securities in respect of which this prospectus is being delivered, such securities will be acquired by the underwriters for their own account and may be resold from time to time in one or more transactions, including negotiated transactions, at fixed public offering prices or at varying prices determined by the underwriters at the time of sale. Securities may be offered to the public either through underwriting syndicates represented by managing underwriters or directly by one or more underwriters. If any underwriter or underwriters are utilized in the sale of securities, unless otherwise indicated in the applicable prospectus supplement and/or other offering material, the obligations of the underwriters are subject to certain conditions precedent, and that the underwriters will be obligated to purchase all such securities if any are purchased.
If a dealer is utilized in the sale of the securities in respect of which this prospectus is delivered, we will sell such securities to the broker dealer, solicits purchasers;
as principal. The dealer may then resell such securities to the public at varying prices to be determined by such dealer at the time of resale. Transactions through brokers or dealers may include block trades in which the broker dealerbrokers or dealers will attempt to sell the securitiesshares as agent but may position and resell a portion of the block as principal to facilitate the transaction;
purchases by atransaction or in crosses, in which the same broker dealer as principal and resale by the broker dealer for its account;
an exchange distribution in accordance with the rules of the applicable exchange;
privately negotiated transactions;
settlement of short sales;
in transactions through broker dealers that agree with the Selling Stockholders to sell a specified number of such Shares at a stipulated price per Share;
through the writing or settlement of options or other hedging transactions, whether through an options exchange or otherwise;
a combination of any such methods of sale; or
any other method permitted pursuant to applicable law.
The Selling Stockholders may also sell securities under Rule 144 under the Securities Act of 1933, as amended (the “Securities Act”), if available, rather than under this prospectus.
Broker dealers engaged by the Selling Stockholders may arrange for other broker dealers to participate in sales. Broker dealers may receive commissions or discounts from the Selling Stockholders (or, if any broker dealer acts as agent for the purchaser of securities, from the purchaser) in amounts to be negotiated, but, except as set forth in a supplement to this prospectus, in the case of an agency transaction not in excess of a customary brokerage commission in compliance with FINRA Rule 2440; and in the case of a principal transaction a markup or markdown in compliance with FINRA IM-2440.
In connection with the saleon both sides of the Shares or interests therein, the Selling Stockholders may enter into hedging transactions with broker-dealers or other financial institutions, which may in turn engage in short sales of the Shares in the course of hedging the positions they assume. The Selling Stockholders may also sell Shares short and deliver these Shares to close out their short positions, or loan or pledge the Shares to broker-dealers that in turn may sell these Shares. The Selling Stockholders may also enter into option or other transactions with broker-dealers or other financial institutions or create one or more derivative securities which require the delivery totrade. Any such broker-dealer or other financial institution of Shares offered by this Prospectus, which Shares such broker-dealer or other financial institution may resell pursuant to this prospectus (as supplemented or amended to reflect such transaction).
The Selling Stockholders and any broker-dealers or agents that are involved in selling the Sharesdealer may be deemed to be “underwriters”an underwriter, as such term is defined in the Securities Act of the securities so offered and sold.
Offers to purchase securities may be solicited directly by us and the sale thereof may be made by us directly to institutional investors or others, who may be deemed to be underwriters within the meaning of the Securities Act with respect to any resale thereof.
If so indicated in connection with such sales. In such event, any commissions received by such broker-dealers the applicable prospectus supplement and/or other offering material, we may authorize agents and any profitunderwriters to solicit offers from certain institutions to purchase securities from us at the public offering price set forth in the applicable prospectus supplement and/or other offering material pursuant to delayed delivery contracts providing for payment and delivery on the resale ofdate or dates stated in the Shares purchased by themapplicable prospectus supplement and/or other offering material. Such delayed delivery contracts will be subject only to those conditions set forth in the applicable prospectus supplement and/or other offering material.
Agents, underwriters and broker-dealers may be deemedentitled under relevant agreements with us to be underwriting commissions or discountsindemnification by us against certain liabilities, including liabilities under the Securities Act. Each Selling Stockholder has informed us that it does not haveAct, or to contribution with respect to payments which such agents, underwriters and dealers may be required to make in respect thereof. The terms and conditions of any writtenindemnification or oral agreement contribution will be described in the applicable prospectus supplement and/or understanding, directly or indirectly, with any person to distribute the Shares.other offering material.
We have not agreed to keepmay also sell shares of our common stock through various arrangements involving mandatorily or optionally exchangeable securities, and this prospectus effectivemay be delivered in connection with those sales.
We may enter into derivative, sale or forward sale transactions with third parties, or sell securities not covered by this prospectus to third parties in privately negotiated transactions. If the applicable prospectus supplement and/or other offering material indicates, in connection with those transactions, the third parties may sell securities covered by this prospectus and the applicable prospectus supplement and/or other offering material, including in short sale transactions and by issuing securities not covered by this prospectus but convertible into, or exchangeable for or representing beneficial interests in such securities covered by this prospectus, or the return of which is derived in whole or in part from the value of such securities. The third parties may use securities received under derivative, sale or forward sale transactions, or securities pledged by us or borrowed from us or others to settle those sales or to close out any minimum periodrelated open borrowings of time.stock, and may use securities received from us in settlement of those transactions to close out any related open borrowings of stock. The Sharesthird party in such sale transactions will be sold only through registered or licensed brokers or dealers if required under applicable state securities laws. In addition, in certain states, the Shares covered hereby may notan underwriter and will be sold unless they have been registered or qualified for saleidentified in the applicable state prospectus supplement (or a post-effective amendment) and/or an exemptionother offering material.
Underwriters, broker-dealers or agents may receive compensation in the form of commissions, discounts or concessions from us. Underwriters, broker-dealers or agents may also receive compensation from the registrationpurchasers of shares for whom they act as agents or qualification requirementto whom they sell as principals, or both. Compensation as to a particular underwriter, broker-dealer or agent might be in excess of customary commissions and will be in amounts to be negotiated in connection with transactions involving shares. In effecting sales, broker-dealers engaged by us may arrange for other broker-dealers to participate in the resales.
Each series of securities will be a new issue and, other than the common stock which is availablelisted on the Nasdaq Capital Market, will have no established trading market. We may elect to list any series of securities on an exchange, and is complied with.in the case of the common stock, on any additional exchange, but, unless otherwise specified in the applicable prospectus supplement and/or other offering material, we shall not be obligated to do so. No assurance can be given as to the liquidity of the trading market for any of the securities.
Under applicable rulesAgents, underwriters and regulationsbroker-dealers may engage in transactions with, or perform services for us and our respective subsidiaries in the ordinary course of business.
Any underwriter may engage in overallotment, stabilizing transactions, short covering transactions and penalty bids in accordance with Regulation M under the Exchange Act, any person engagedAct. Overallotment involves sales in excess of the offering size, which create a short position. Stabilizing transactions permit bids to purchase the underlying security so long as the stabilizing bids do not exceed a specified maximum. Short covering transactions involve purchases of the securities in the open market after the distribution is completed to cover short positions. Penalty bids permit the underwriters to reclaim a selling concession from a dealer when the securities originally sold by the dealer are purchased in a covering transaction to cover short positions. Those activities may cause the price of the Sharessecurities to be higher than it would otherwise be. If commenced, the underwriters may not simultaneously engage in market making activities with respect to the Common Stock for the applicable restricted period, as defined in Regulation M, prior to the commencementdiscontinue any of the distribution. In addition,activities at any time. An underwriter may carry out these transactions on the Selling StockholdersNasdaq Capital Market, in the over-the-counter market or otherwise.
The place and time of delivery for securities will be subject to applicable provisions ofset forth in the Exchange Act and the rules and regulations thereunder, including Regulation M, which may limit the timing of purchases and sales of the Common Stock by the Selling Stockholders accompanying prospectus supplement and/or any other person. We will make copies of this prospectus available to the Selling Stockholders and have informed them of the need to deliver a copy of this prospectus to each purchaser at or prior to the time of the sale (including by compliance with Rule 172 under the Securities Act).offering material for such securities.
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LEGALMATTERS
The validity of the shares of our common stocksecurities offered hereby have beenby this prospectus will be passed upon for us by DorseyFoley & Whitney LLP, Palo Alto, CA.Lardner LLP. The validity of the securities offered by this prospectus will be passed upon for any underwriters or agents by counsel named in the applicable prospectus supplement.
EXPERTS
OurThe consolidated financial statements of the Company as of June 30, 2016December 31, 2018 and 20152017 and for the years thenyear ended incorporatedDecember 31, 2018, the transitional six months ended December 31, 2017 and the year ended June 30, 2017 appearing in this prospectus by reference to our Annual Report on Form 10-K for the fiscal year ended June 30, 2016,December 31, 2018, have been so incorporated in reliance on the report ofaudited by Marcum LLP, an independent registered public accounting firm, as set forth in their report thereon (which contains an explanatory paragraph expressing substantial doubt about the Company’s ability to continue as a going concern), included therein, and incorporated herein by reference. Such consolidated financial statements are incorporated herein by reference in reliance upon such report given on the authority of saidsuch firm as experts in auditingaccounting and accounting.auditing.
INTERESTSOF NAMED EXPERTS AND COUNSEL
No expert or counsel named in this prospectus as having prepared or certified any part of this prospectus or having given an opinion upon the validity of the securities being registered or upon other legal matters in connection with the registration or offering of the securities was employed for such purpose on a contingent basis, or had, or is to receive, in connection with the offering, a substantial interest, direct or indirect, in the Company. Nor was any such person connected with the Company as a promoter, managing or principal underwriter, voting trustee, director, officer, or employee.
WHEREYOU CAN FIND MORE INFORMATION
We file annual, quarterly and current reports, proxy statements and other information with the SEC. You may read and copy any document we file with the SEC at its Public Reference Room at 100 F Street, N.E., Room 1580, Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the Public Reference Room. Our filings with the SEC areWe also available to the public at its web site at http://www.sec.gov/.
This prospectus is part offiled a registration statement on Form S-3, that we filedincluding exhibits, under the Securities Act with the SEC. Pursuantrespect to the SEC rules,securities offered by this prospectus. This prospectus which formsis a part of the registration statement, but does not contain all of the information included in the registration statement.statement or the exhibits. The SEC maintains a web site, www.sec.gov,that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC. You may read or obtain a copy ofreview the registration statement fromand any other document we file on the SEC’s web site. Our SEC infilings are also available to the manner described above.public on our website, www.thermogenesis.com.The information on our website, however, is not, and should not be deemed to be, a part of this prospectus.
The SEC allows us to “incorporateWe are “incorporating by reference” information from otherspecified documents that we file with it, which means that we can disclose important information to you by referring you to those documents. The information incorporated by reference is considered to be part of this prospectus.The following documents, which have been filed with the SEC, pursuant to the Exchange Act, are incorporated by reference:which means:
| ● | incorporated documents are considered part of this prospectus; |
our Annual Report on Form 10-K for the year ended June 30, 2016, filed on September 21, 2016, and amendment thereto on Form 10-K/A filed on October 28, 2016;
| ● | we are disclosing important information to you by referring you to those documents; and |
| ● | information we file with the SEC will automatically update and supersede information contained in this prospectus. |
our Quarterly Report on Form 10-Q for the quarter ended September 30, 2016, filed on November 17, 2016;
36
our Current Reports on Form 8-K filed on July 12, 2016, August 1, 2016, August 4, 2016 (other than information and exhibits furnished under Item 7.01), August 25, 2016 (other than information and exhibits furnished under Item 7.01), September 26, 2016, November 9, 2016, November 22, 2016, December 20, 2016 and January 17, 2017, and our Current Report on Form 8-K/A filed on November 17, 2016; and
In addition, weWe incorporate by reference all reportsthe documents listed below and other documents thatany future filings we filemake with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as amended, (a) after the initial filing date ofwe filed the registration statement of which this prospectus is a part and prior tobefore the effectivenesseffective date of the registration statement and (b) afterany future filings we will make with the effectivenessSEC under those sections, except to the extent that any information in such filing is deemed “furnished” in accordance with rules of the registration statement and priorSEC:
| ● | Our Annual Report on Form 10-K for the fiscal year ended December 31, 2018, filed with the SEC on March 26, 2019; |
| ● | Our Definitive Proxy Statement filed with the SEC on April 30, 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 Commission on May 14, 2019, August 13, 2019 and November 19, 2019, respectively; |
| ● | Our Current Reports on Form 8-K filed with the SEC on January 2, 2019, January 4, 2019, January 31, 2019, April 10, 2019, April 25, 2019 (as amended), June 4, 2019, June 26, 2019, July 29, 2019, September 6, 2019, October 22, 2019, October 31, 2019 and November 27, 2019; |
| ● | Any other reports filed pursuant to Section 13(a) or 15(d) of the Exchange Act since December 31, 2018; and |
| ● | The description of the our common stock in Item 1 of the Registration Statement on Form 8-A for registration of our common stock pursuant to Section 12(g) of the Exchange Act, as updated by the description included in our Current Report on Form 8-K filed on May 18, 2017, including any other amendment or report filed for the purpose of updating such description. |
Notwithstanding the termination of this offering, and all such reports andforegoing, documents will be deemed to be incorporated by reference herein and to be a part hereof from the date of filing of such reports and documents (except foror portions thereof containing information and exhibits furnished under Items 2.02 orand 7.01 of our current reportsany Current Report on FormsForm 8-K, or 8-K/A). Any document or statement incorporated by reference herein shall be deemed to be modified or superseded for purposes of this prospectus toincluding the extent that a statement contained herein or in any other subsequently filed document which also is or is deemed to be incorporated by reference herein modifies or supersedes such document or statement. Any document or statement so modified or superseded shallrelated exhibits under Item 9.01, are not be deemed, except as so modified or superseded, to constitute a part of this prospectus.
We will provide without charge to each person, including any beneficial owner, to whom this prospectus is delivered, upon written or oral request of such person, a copy of any or all of the foregoing documents incorporated herein by reference. Requests for documents should be submitted to Cesca Therapeutics Inc., 2711 Citrus Road, Rancho Cordova, CA 95742; telephone: (916) 858-5100. Exhibits to the documents will not be sent, unless those exhibits have specifically been incorporated by reference in this prospectus.
You may request a copy of any of these filings, at no cost, by request directed to us at the following address or telephone number:
ThermoGenesis Holdings, Inc.
2711 Citrus Road
Rancho Cordova, CA 95742
(916) 858-5100
Attention: Corporate Secretary
You should not assume that the information in this prospectus or any prospectus supplement, as well as the information we file or previously filed with the SEC that we incorporate by reference in this prospectus or any prospectus supplement, is accurate as of any date other than the respective date of such documents. Our business, financial condition, results of operations and prospects may have changed since that date.
2037
\
$30,000,000
Debt Securities
Common Stock
Preferred Stock
Warrants
Subscription Rights
Units
Purchase Contracts
_________________________
PROSPECTUS
_________________________
950,000 Shares, 2019
Common Stock
PROSPECTUS
FEBRUARY 7, 2017
You should rely only on the information contained in this prospectus. NoWe have not authorized any dealer, salesperson or other person is authorized to give any information that isor represent anything not contained in this prospectus. You must not rely on any unauthorized information. If anyone provides you with different or inconsistent information, you should not rely on it. This prospectus does not offer to sell any securities in any jurisdiction where it is unlawful. Neither the delivery of this prospectus, nor any sale made hereunder, shall create any implication that the information in this prospectus is correct after the date hereof.
The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities nor is it seekinga solicitation of an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.
PRELIMINARY PROSPECTUS
SUBJECT TO COMPLETION, DATED DECEMBER13, 2019
$4,400,000
Common Stock
_________________________
We have entered into an at-the-market offering agreement, or the Offering Agreement, dated December 13, 2019, with H.C. Wainwright & Co., LLC, or the Sales Agent or Wainwright, as sales agent relating to the shares of our common stock, par value $0.001 per share, offered by this prospectus supplement. In accordance with the terms of the Offering Agreement, we may offer and sell shares of our common stock having an aggregate offering price of up to $4,400,000 from time to time through Wainwright acting as our sales agent.
Sales of common stock, if any, under this prospectus supplement and the accompanying prospectus may be made in transactions that are deemed to be “at-the-market” offerings as defined in Rule 415 under the Securities Act of 1933, as amended, or the Securities Act, including sales made directly on or through the Nasdaq Capital Market, the existing trading market for our common stock, or any other existing trading market in the Unites States for our common stock, sales made to or through a market maker other than on an exchange or otherwise, directly to the sales agent as principal, in negotiated transactions at market prices prevailing at the time of sale or at prices related to such prevailing market prices, and/or in any other method permitted by law. If we and Wainwright agree on any method of distribution other than sales of shares of our common stock into the Nasdaq Capital Market or another existing trading market in the United States at market prices, we will file a further prospectus supplement providing all information about such offering as required by Rule 424(b) under the Securities Act. Wainwright will act as sales agent on a commercially reasonable efforts basis consistent with its normal trading and sales practices. There is no arrangement for funds to be received in any escrow, trust or similar arrangement.
We will pay Wainwright a commission equal to 3% of the gross sales price per share of common stock issued by us and sold through it as our sales agent under the Offering Agreement. In connection with the sale of the common stock on our behalf, Wainwright will be deemed to be an “underwriter” within the meaning of the Securities Act and the compensation of Wainwright will be deemed to be underwriting commissions or discounts.
Our common stock is traded on the Nasdaq Capital Market under the symbol “THMO.” On December 10, 2019, the closing price of one share of our common stock on the Nasdaq Capital Market was $2.99 per share.
The aggregate market value of our outstanding common stock held by non-affiliates pursuant to General Instruction I.B.6 of Form S-3 was approximately $13,234,000, which was calculated based on 2,843,601 shares of common stock outstanding as of December 10, 2019, of which 684,676 shares were held by affiliates, and a price of $6.13 per share, which was the closing price of our common stock on the Nasdaq Capital Market on October 14, 2019. We have not offered any securities pursuant to General Instruction I.B.6 of Form S-3 during the prior 12 calendar month period that ends on, and includes, the date hereof.
Investment in our common stock involves risks. See “Risk Factors” on page S-6of this prospectus supplement and the risk factors contained in the documents incorporated by reference in this prospectus supplement and the accompanying prospectus for a discussion of certain factors which should be considered before investing in our common stock.
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
H.C. Wainwright & Co.
The date of this prospectus supplement is , 2019.
TABLE OF CONTENTS
Prospectus Supplement
Prospectus
We are responsible for the information contained and incorporated by reference in this prospectus supplement and accompanying prospectus. We have not authorized anyone to give you any other information, and we take no responsibility for any other information that others may give you. If you are in a jurisdiction where offers to sell, or solicitations of offers to purchase, the securities offered by this documentation are unlawful, or if you are a person to whom it is unlawful to direct these types of activities, then the offer presented in this document does not extend to you. The information contained in this prospectus is correctdocument speaks only as of the date of this prospectus, regardlessdocument, unless the information specifically indicates that another date applies. Our business, financial condition, results of the time of the delivery of this prospectus or any sale of these securities.operations and prospects may have changed since those dates.
About This Prospectus Supplement
This prospectus supplement and the accompanying prospectus are part of a “shelf” registration statement on Form S-3 that we filed with the Securities and Exchange Commission ("SEC") and that was declared effective (the “Registration Statement”). Under this “shelf” registration process, we may sell any combination of securities described in the accompanying prospectus in one or more offerings, up to the total dollar amounts appearing on the cover of the Registration Statement. This prospectus supplement describes the specific details regarding this offering, including the price, the amount of our common stock being offered, the risks of investing in our common stock, and other items.
This document is in two parts. The first part is this prospectus supplement, which contains specific information about the terms of the offering, including the types, amounts and prices of the securities being offered and the plan of distribution. This prospectus supplement may also add, update or change information contained in the accompanying prospectus and the documents incorporated by reference. This prospectus supplement may be updated or supplemented. The second part is the accompanying prospectus, which gives more general information, some of which may not apply to this offering. Generally, when we refer to this “prospectus,” we are referring to both documents combined. To the extent the information contained in this prospectus supplement differs or varies from the information contained in the accompanying prospectus or any document filed prior to the date of this prospectus supplement and incorporated by reference, the information in this prospectus supplement will control. You should read carefully both this prospectus supplement and the accompanying prospectus together with the additional information about us to which we refer you in the section of this prospectus supplement entitled “Where You Can Find More Information.”
This prospectus supplement contains summaries of certain provisions contained in some of the documents described herein, but reference is made to the actual documents for complete information. All of the summaries are qualified in their entirety by the actual documents. Copies of some of the documents referred to herein have been filed, will be filed or will be incorporated by reference as exhibits to the registration statement of which this prospectus supplement is a part, and you may obtain copies of those documents as described below under the heading “Where You Can Find More Information.”
Unless the context otherwise requires, references in this prospectus to “we,” “us,” “our” or similar terms, as well as references to the “Company,” refer to ThermoGenesis Holdings, Inc. f/k/a Cesca Therapeutics Inc. and its consolidated subsidiaries.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus supplement and the documents incorporated by reference herein contain certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act”). We have tried, whenever possible, to identify these forward-looking statements using words such as “may,” “will,” “expect,” “believe,” “estimate,” “anticipate,” “intend,” “continue,” “plan,” “predict,” “seek,” “should,” “would,” “could,” “potential,” “ongoing,” and similar expressions to identify forward-looking statements, whether in the negative or the affirmative. These statements reflect our current beliefs and are based on information currently available to us. Accordingly, such forward-looking statements involve known and unknown risks, uncertainties and other factors which could cause our actual results, performance or achievements to differ materially from those expressed in, or implied by, such statements. These risks, uncertainties, factors and contingencies include, without limitation, the sufficiency and source of capital required to fund our operations and in furtherance of our business plan; our ability to remain listed on the Nasdaq Capital Market and remain in compliance with its listing standards; the global perception of the clinical utility of banked cord blood and the amount of investment in research and development supporting clinical data for additional applications; delays in commencing or completing clinical testing of products; the success of any collaborative arrangements to commercialize our products; our reliance on significant distributors or end users; the availability and sufficiency of commercial scale manufacturing facilities and reliance on third party contract manufacturers; and our ability to protect our patents and trademarks in the U.S. and other countries.
Forward-looking statements reflect our management’s expectations or predictions of future conditions, events or results based on various assumptions and management’s estimates of trends and economic factors in the markets in which we are active, as well as our business plans. They are not guarantees of future performance. By their nature, forward-looking statements are subject to risks and uncertainties. Our actual results and financial condition may differ, possibly materially, from the anticipated results and financial condition indicated in these forward-looking statements. There are a number of factors that could cause actual conditions, events or results to differ materially from those described in the forward-looking statements contained in this prospectus and the documents incorporated by reference into this prospectus supplement.
See an additional discussion under “Risk Factors” in this prospectus supplement and in our most recent Annual Report on Form 10-K and any subsequently filed quarterly reports on Form 10-Q. These forward-looking statements are representative only as of the date they are made, and we undertake no obligation to update any forward-looking statement as a result of new information, future events or otherwise.
Prospectus Supplement Summary
This summary is not complete and does not contain all of the information that you should consider before investing in the securities offered by this prospectus. You should read this summary together with the entire prospectus supplement and the accompanying prospectus, including our financial statements, the notes to those financial statements and the additional information described in this prospectus supplement under the heading “Where You Can Find More Information” on page S-15, before making an investment decision. See the “Risk Factors” section of this prospectus supplement beginning on page S-6 and similar headings in the other documents that are incorporated by reference into this prospectus supplement for a discussion of the risks involved in investing in our securities.
Our Business
We develop and commercialize a range of automated technologies for cell-banking, cell-processing, and cell-based therapeutics. Since the 1990’s we have been a pioneer in, and a leading provider of automated systems that isolate, purify and cryogenically store units of hematopoietic stem and progenitor cells for the cord blood banking industry. In July 2017, our subsidiary, ThermoGenesis Corp., completed a strategic acquisition of the business and substantially all of the assets of SynGen Inc. (SynGen), a research and development company for automated cellular processing.
Following the acquisition of SynGen, we utilized the SynGen assets, together with our own proprietary technology, to develop a novel proprietary CAR-TXpress™ platform that addresses the critical unmet need for better efficiency and cost-effectiveness for the emerging immune-oncology field, in particular, the chimeric antigen receptor (CAR) T cell market. Since the first quarter of 2018, we have developed and launched various X-Series® products, including: X-Lab®, X-Wash®, X-Mini® and X-BACS™.
On October 21, 2019, we entered into a Joint Venture Agreement with Healthbanks Biotech (USA) Inc., a stem cell bank network (Healthbanks), under which we and Healthbanks agreed to form a new company named ImmuneCyte Life Sciences Inc. (ImmuneCyte), which will develop, own and operate an immune cell banking business. ImmuneCyte will initially be owned 80% by HealthBanks and 20% by us. In addition to contributing to ImmuneCyte exclusive rights to use ThermoGenesis’ proprietary cell processing technology for the immune cell banking business and non-exclusive rights for other cell-based contract development and manufacturing services, we have contributed our clinical development assets to ImmuneCyte, divesting these programs in order to focus exclusively on the device business. ImmuneCyte, which is expected to be operational by the end of the fourth quarter of 2019, will be among the first immune cell banks in the U.S. and offer customers the ability to preserve younger, healthier and uncontaminated immune cells for future potential use in dendritic and chimeric antigen receptor (CAR-T) cell therapies, in a GMP compliant processing environment.
Corporate Information
We are a Delaware corporation and our corporate headquarters is located at 2711 Citrus Road, Rancho Cordova, California 95742. Our telephone number is (916) 858-5100. Our Internet website address is www.thermogenesis.com. We do not incorporate the information on our website into this prospectus supplement, and you should not consider it part of this prospectus supplement.
The Offering
The following summary contains basic information about this offering. The summary is not intended to be complete. You should read the full text and more specific details contained elsewhere in this prospectus supplement.
Issuer | | ThermoGenesis Holdings, Inc. f/k/a Cesca Therapeutics Inc. |
| | |
Common stock offered by us | | Shares of our common stock with aggregate gross sale proceeds of up to $4,400,000. |
| | |
Common stock to be outstanding after this offering(1) | | Up to 4,315,173 shares, after giving effect to the assumed sale of 1,471,572 shares of our common stock at a price of $2.99 per share, which was the closing price of our common stock on the Nasdaq Capital Market on December 10, 2019. The actual number of shares issued will vary depending on the price at which shares may be sold from time to time during this offering. |
| | |
Form of offering | | The Sales Agent may, according to the terms of the Offering Agreement, sell the shares of our common stock offered under this prospectus supplement in an “at-the-market” offering. |
The Nasdaq Capital Market | | THMO |
Use of proceeds | | We intend to use the net proceeds from this offering for general corporate purposes, including working capital. See “Use of Proceeds.” |
Risk factors | | See “Risk Factors” and the other information included or incorporated by reference in this prospectus supplement and the accompanying prospectus for a discussion of certain factors you should carefully consider before deciding to invest in shares of our common stock. |
| (1) | The number of shares of common stock outstanding after this offering, as reflected above, is based on the actual number of shares outstanding as of December 10, 2019, which was 2,843,601, and does not include, as of that date: |
| ● | 296,029 shares of our common stock issuable upon the exercise of outstanding stock options having a weighted average exercise price of $13.80 per share; |
| ● | 5,830,296 shares of our common stock (assuming the current conversion price of $1.80) issuable upon the conversion of the outstanding principal and accrued but unpaid interest under our Credit Agreement with Boyalife Asset Holding II, Inc.; |
| ● | 798,600 shares of our common stock (assuming a conversion price of $1.80) issuable upon the conversion of outstanding convertible promissory notes and accrued interest having a conversion price equal to the lower of (a) $1.80 per share or (2) 90% of the closing sale price of the Company’s common stock on the date of conversion (subject to a floor conversion price of $0.10), provided that the issuance of 583,333 of such shares is subject to stockholder approval; and |
| ● | 1,597,217 shares of our common stock issuable upon the exercise of outstanding warrants, having a weighted average exercise price of $27.10 per share. |
Risk Factors
You should carefully consider the risks described below before making an investment decision. The risks described below are not the only ones we face. Additional risks we are not presently aware of or that we currently believe are immaterial may also impair our business operations. Our business could be harmed by any of these risks. The trading price of our common stock could decline due to any of these risks, and you may lose all or part of your investment. In assessing these risks, you should also refer to the risk factors and other information contained or incorporated by reference into this prospectus supplement and the accompanying prospectus, specifically including the risk factors contained in our Annual Report on Form 10-K for the year ended December 31, 2018 filed with the SEC on March 26, 2019 and the financial statements and related notes filed therewith.
Risks Related to this Offering
Management will have broad discretion as to the use of the net proceeds from this offering, and we may not use the proceeds effectively.
Our management will have broad discretion as to the application of the net proceeds and could use them for purposes other than those contemplated at the time of this offering. Our stockholders may not agree with the manner in which our management chooses to allocate and spend the net proceeds. Moreover, our management may use the net proceeds for corporate purposes that may not increase our results of operations or the market value of our common stock. Our failure to apply these funds effectively could have a material adverse effect on our business, delay the development of our products and cause the price of our common stock to decline.
You may incur substantial dilution as a result of this offering and future equity issuance.
The offering price per share in this offering may exceed the net tangible book value per share of our common stock outstanding prior to this offering. Assuming that an aggregate of 1,471,572 shares of our common stock are sold at a price of $2.99 per share, the last reported sale price of our common stock on the Nasdaq Capital Market on December 10, 2019, for aggregate gross proceeds of approximately $4,400,000, after deducting commissions and estimated aggregate offering expenses payable by us, you will experience immediate dilution of $1.60 per share as of September 30, 2019, after giving effect to this offering and the assumed offering price. The exercise of outstanding stock options and warrants may result in further dilution of your investment. See the section entitled “Dilution” below for a more detailed illustration of the dilution you would incur if you participate in this offering.
If we raise additional capital in the future, your ownership in us could be diluted.
In order to raise additional capital, we may at any time, including during this offering, offer additional shares of 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, including investors who purchase common stock in this offering. The price per share at which we sell additional shares of common stock or securities convertible into common stock in future transactions may be higher or lower than the price per share in this offering.
Until such time, if ever, as we can generate substantial revenue from our operations, we anticipate financing our cash needs through a combination of equity offerings, debt financings and license agreements. To the extent that we raise additional capital through the further sale of equity securities or convertible debt securities, your ownership interest will be diluted.
Sales of a substantial number of our shares of common stock in the public market could cause our stock price to fall.
We may issue and sell additional shares of commons stock in the public markets, including during this offering. As a result, a substantial number of our shares of common stock may be sold in the public market. Sales of a substantial number of our shares of common stock in the public markets, including during this offering, or the perception that such sales could occur, could depress the market price of our common stock and impair our ability to raise capital through the sale of additional equity securities.
Because we do not currently intend to declare cash dividends on our shares of common stock in the foreseeable future, stockholders must rely on appreciation of the value of our common stock for any return on their investment.
We have never declared or paid cash dividends on our capital stock. We currently intend to retain all of our future earnings, if any, to finance the operation, development and growth of our business. Furthermore, any future debt agreements may also preclude us from paying or place restrictions on our ability to pay dividends. As a result, capital appreciation, if any, of our common stock will be your sole source of gain with respect to your investment for the foreseeable future.
The exercise of our outstanding options and warrants will dilute stockholders and could decrease our stock price.
The exercise of our outstanding options and warrants may adversely affect our stock price due to sales of a large number of shares or the perception that such sales could occur. These factors also could make it more difficult to raise funds through future offerings of our securities, and could adversely impact the terms under which we could obtain additional equity capital. Exercise of outstanding options and warrants or any future issuance of additional shares of common stock or other equity securities, including but not limited to options, warrants, restricted stock units or other derivative securities convertible into our common stock, may result in significant dilution to our stockholders and may decrease our stock price.
The common stock offered hereby will be sold in “at-the-market” offerings, and investors who buy shares at different times will likely pay different prices.
Investors who purchase shares in this offering at different times will likely pay different prices, and so may experience different outcomes in their investment results. We will have discretion, subject to market demand, to vary the timing, prices, and numbers of shares sold, and there is no minimum or maximum sales price. Investors may experience a decline in the value of their shares as a result of share sales made at prices lower than the prices they paid.
The actual number of shares we will issue under the Offering Agreement, at any one time or in total, is uncertain.
Subject to certain limitations in the Offering Agreement and compliance with applicable law, we have the discretion to deliver a sales notice to the Sales Agent at any time throughout the term of the Offering Agreement. The number of shares that are sold by the Sales Agent after delivering a sales notice will fluctuate based on the market price of the common stock during the sales period and limits we set with Wainwright. Because the price per share of each share sold will fluctuate based on the market price of our common stock during the sales period, it is not possible at this stage to predict the number of shares that will be ultimately issued.
If we sell shares of common stock for a per share price under $1.80, such sales may trigger anti-dilution provisions with respect to certain of our outstanding securities.
If we sell shares of common stock for a per share price under $1.80, such sales will (i) cause the conversion price of the outstanding principal and accrued but unpaid interest under our Credit Agreement with Boyalife Asset Holding II, Inc. to be reduced to the lowest sales price and (ii), if such sales are made prior to April 25, 2020, require us to issue a number of shares of common stock (or pre-funded warrants to purchase common stock) equal to the number of shares the investor in our April 2019 private placement would have received had the purchase price for such shares been at such lower sales price. Although we do not intend to sell shares of common stock for a per share price under $1.80, to the extent sales under $1.80 per share are made, you may experience further dilution. Further, the potential application of such anti-dilution rights may prevent us from seeking additional financing, which would adversely affect our ability to finance our operations and continue to support our growth initiatives.
Use of Proceeds
We may issue and sell shares of our common stock having aggregate sales proceeds of up to $4,400,000 from time to time. The amount of proceeds from this offering will depend upon the number of shares of common stock sold and the market price at which they are sold. There can be no assurance that we will be able to sell any shares under or fully utilize the Offering Agreement with the Sales Agent.
We intend to use the net proceeds from the sale of the securities offered under this prospectus for working capital and for general corporate purposes.
Although we have identified some potential uses of the net proceeds to be received upon completion of this offering, we cannot specify these uses with certainty. Our management will have broad discretion in the application of the net proceeds from this offering and could use them for purposes other than those contemplated at the time of this offering. Our stockholders may not agree with the manner in which our management chooses to allocate and spend the net proceeds. Moreover, our management may use the net proceeds for corporate purposes that may not result in our being profitable or increase our market value.
Pending any use, as described above, we intend to invest the net proceeds in high-quality, short-term, interest-bearing securities.
Dilution
If you purchase shares of our common stock in this offering, you will experience dilution to the extent of the difference between the offering price per share and the as adjusted net tangible book value per share after giving effect to this offering.
Our historical net tangible book value on September 30, 2019 was approximately $1,665,000, or $0.62 per share. “Net tangible book value” is total assets minus the sum of liabilities and intangible assets. “Net tangible book value per share” is net tangible book value divided by the total number of shares outstanding.
After giving effect to the sale of shares of our common stock in the aggregate amount of $4,400,000 in this offering at an assumed public offering price of $2.99 per share (which was the last reported sale price of shares of our common stock on December 10, 2019), and after deducting estimated offering expenses and after deducting estimated sales agent discounts payable by us, our as adjusted net tangible book value as of September 30, 2019 would have been approximately $5,808,000 or approximately $1.39 per share of common stock. This represents an immediate increase in net tangible book value of approximately $0.77 per share to existing stockholders and an immediate dilution of approximately $1.60 per share to new investors. The following table illustrates this per share dilution:
Assumed public offering price per share of common stock offered | | $ | 2.99 | |
| | | | | |
Historical net tangible book value per share of common stock as of September 30, 2019 | | $ | 0.62 | |
| | | | | |
Increase in historical net tangible book value per share attributable to new investors | | $ | 0.77 | |
| | | | | |
As adjusted net tangible book value per share as of September 30, 2019 | | $ | 1.39 | |
| | | | | |
Dilution per share to new investors | | $ | 1.60 | |
The table above assumes for illustrative purposes that an aggregate of 1,471,572 shares of our common stock are sold at a price of $2.99 per share, the last reported sale price of our common stock on the Nasdaq Capital Market on December 10, 2019, for aggregate gross proceeds of approximately $4,400,000. The shares sold in this offering, if any, will be sold from time to time at various prices. An increase of $0.10 per share in the price at which the shares are sold from the assumed offering price of $2.99 per share shown in the table above, assuming all of our common stock in the aggregate amount of $4,400,000 is sold at that price, would increase our adjusted net tangible book value per share after this offering to $1.42 per share and would increase the dilution in net tangible book value per share to new investors in this offering to $1.67 per share, after deducting commissions and estimated aggregate offering expenses payable by us. A decrease of $0.10 per share in the price at which the shares are sold from the assumed offering price of $2.99 per share shown in the table above, assuming all of our common stock in the aggregate amount of $4,400,000 is sold at that price, would decrease our adjusted net tangible book value per share after this offering to $1.36 per share and would decrease the dilution in net tangible book value per share to new investors in this offering to $1.53 per share, after deducting commissions and estimated aggregate offering expenses payable by us.
The number of shares of common stock outstanding after this offering as reflected in the table above is based on the actual number of shares outstanding as of September 30, 2019 which was 2,704,837, and does not include, as of that date:
| ● | 296,029 shares of our common stock issuable upon the exercise of outstanding stock options having a weighted average exercise price of $13.80 per share; |
| ● | 5,616,990 shares of our common stock (assuming the current conversion price of $1.80) issuable upon the conversion of the outstanding principal and accrued but unpaid interest under our Credit Agreement with Boyalife Asset Holding II, Inc.; |
| ● | 977,652 shares of our common stock (assuming a conversion price of $1.80) issuable upon the conversion of outstanding convertible promissory notes and accrued interest having a conversion price equal to the lower of (a) $1.80 per share or (2) 90% of the closing sale price of the Company’s common stock on the date of conversion (subject to a floor conversion price of $0.10), provided that the issuance of 581,111 of such shares is subject to stockholder approval; and |
| ● | 1,734,831 shares of our common stock issuable upon the exercise of outstanding warrants, having a weighted average exercise price of $25.02 per share. |
To the extent that any of our outstanding options or warrants are exercised or preferred stock converted, we grant additional options under our stock option plans or issue additional warrants or preferred stock, or we issue additional shares of common stock in the future, there may be further dilution to the new investors.
Description of COMMON STOCK
In this offering, we are offering a maximum of $4,400,000 of shares of our common stock. The material terms and provisions of our common stock are described under the caption “Description of Capital Stock-Common Stock” starting on page 19 of the accompanying prospectus.
Plan of Distribution
We have entered into the Offering Agreement, dated as of December 13, 2019, with Wainwright as sales agent under which we may issue and sell up to $4,400,000 of shares of our common stock from time to time through Wainwright as our agent. The Offering Agreement provides that sales of our common stock, if any, under this prospectus supplement may be made in sales deemed to be “at-the-market” equity offerings as defined in Rule 415(a)(4) promulgated under the Securities Act or in privately negotiated transactions, including but not limited to block trades. If we and Wainwright agree on any method of distribution other than sales of shares of our common stock into the Nasdaq Capital Market or another existing trading market in the United States at market prices, we will file a further prospectus supplement providing all information about such offering as required by Rule 424(b) under the Securities Act.
From time to time during the term of the Offering Agreement, we may deliver a sales notice to the Sales Agent specifying the length of the selling period, the amount of common stock to be sold and the minimum price below which sales may not be made. Upon receipt of a sales notice from us, and subject to the terms and conditions of the Offering Agreement, the Sales Agent agrees to use its commercially reasonable efforts consistent with its normal trading and sales practices and applicable law and regulations to sell such shares of our common stock on such terms. We or the Sales Agent may suspend the offering of our common stock at any time upon proper notice to the other, at which time the sales notice will immediately terminate. Settlement for sales of our common stock will occur at 10:00 a.m. (New York City time), or at some other time that is agreed upon by us and Wainwright in connection with a particular transaction, on the second trading day following the date any sales were made, unless we otherwise agree with the Sales Agent. The obligation of the Sales Agent under the Offering Agreement to sell shares of our common stock pursuant to any sales notice is subject to a number of conditions, which the Sales Agent may waive in its sole discretion. Sales of our common stock as contemplated in this prospectus will be settled through the facilities of The Depository Trust Company or by such other means as we and Wainwright may agree upon. There is no arrangement for funds to be received in an escrow, trust or similar arrangement.
We will pay the Sales Agent a placement fee of 3% of the gross sales price of the shares of our common stock that the Sales Agent sells pursuant to the Offering Agreement. Because there is no minimum offering amount required as a condition to close this offering, the actual total public offering amount, commissions and proceeds to us, if any, are not determinable at this time. We have also agreed to reimburse Wainwright for certain specified expenses, including the fees and disbursements of its legal counsel in an amount not to exceed $50,000. Additionally, pursuant to the terms of the Offering Agreement, we agreed to reimburse Wainwright for the documented fees and costs of its legal counsel reasonably incurred in connection with Wainwright’s ongoing diligence, drafting and other filing requirements arising from the transactions contemplated by the sales agreement in an amount not to exceed $2,500 in the aggregate per calendar quarter.
In connection with the sale of the common stock on our behalf, Wainwright will be deemed to be an “underwriter” within the meaning of the Securities Act and the compensation of Wainwright will be deemed to be underwriting commissions or discounts. We have agreed to provide indemnification and contribution to Wainwright against certain civil liabilities, including liabilities under the Securities Act.
We will report at least quarterly the number of shares of our common stock sold through the Sales Agent, as our agent, in this offering and, to the extent applicable, the number of shares of our common stock issued upon settlement of any terms agreements, and the net proceeds to us in connection with such sales of our common stock.
The offering of our common stock pursuant to the Offering Agreement will terminate upon the earliest of: (1) the sale of all of our common stock subject to the Offering Agreement; (2) termination of the Offering Agreement by either us or the Sales Agent at any time; or (3) the three year anniversary of the date of the Offering Agreement.
To the extent required by Regulation M, Wainwright will not engage in any market making activities involving our shares of common stock while the offering is ongoing under this prospectus supplement.
Wainwright and its affiliates may in the future provide various investment banking and other financial services for us and our affiliates, for which services they may in the future receive customary fees.
We estimate that the total expenses for the offering, excluding compensation and reimbursements payable to Wainwright under the terms of the Offering Agreement, will be approximately $125,000.
Our common stock is listed on the Nasdaq Capital Market under the symbol “THMO.”
Legal Matters
The validity of the shares of common stock offered by this prospectus supplement will be passed upon for us by Foley & Lardner LLP, Tampa, Florida. Certain legal matters with respect to this offering will be passed upon for the Sales Agent by Sheppard Mullin Richter & Hampton LLP, New York, New York.
Experts
The consolidated financial statements of the Company as of December 31, 2018 and 2017 and for the year ended December 31, 2018, the transitional six months ended December 31, 2017 and the year ended June 30, 2017 appearing in our Annual Report on Form 10-K for the fiscal year ended December 31, 2018, have been audited by Marcum LLP, independent registered public accounting firm, as set forth in their report thereon (which contains an explanatory paragraph expressing substantial doubt about the Company’s ability to continue as a going concern), included therein, and incorporated herein by reference. Such consolidated financial statements are incorporated herein by reference in reliance upon such report given on the authority of such firm as experts in accounting and auditing.
Where You Can Find More Information
We file annual, quarterly and current reports, proxy statements and other information with the SEC. We also filed a registration statement on Form S-3, including exhibits, under the Securities Act with respect to the shares of common stock offered by this prospectus. This prospectus supplement and the accompanying prospectus a part of the registration statement, but does not contain all of the information included in the registration statement or the exhibits. The SEC maintains a web site, www.sec.gov,that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC. You may review the registration statement and any other document we file on the SEC’s web site. Our SEC filings are also available to the public on our website, www.thermogenesis.com. The information on our website, however, is not, and should not be deemed to be, a part of this prospectus supplement.
We are “incorporating by reference” specified documents that we file with the SEC, which means:
● incorporated documents are considered part of this prospectus;
● we are disclosing important information to you by referring you to those documents; and
● information we file with the SEC will automatically update and supersede information contained in this prospectus supplement.
This prospectus incorporates by reference the documents listed below and any future filings we will make with the SEC under Sections 13(a), 13(c) 14 or 15(d) of the Exchange Act, (i) after the date of the initial registration statement and prior to effectiveness of the registration statement, and (ii) on or after the date of this prospectus until the earlier of the date on which all of the securities registered hereunder have been sold or the registration statement of which this prospectus is a part has been withdrawn:
| ● | Our Annual Report on Form 10-K for the fiscal year ended December 31, 2018, filed with the SEC on March 26, 2019; |
| ● | Our Definitive Proxy Statement filed with the SEC on April 30, 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 Commission on May 14, 2019, August 13, 2019 and November 19, 2019, respectively; |
| ● | Our Current Reports on Form 8-K filed with the SEC on January 2, 2019, January 4, 2019, January 31, 2019, April 10, 2019, April 25, 2019 (as amended), June 4, 2019, June 26, 2019, July 29, 2019, September 6, 2019, October 22, 2019, October 31, 2019 and November 27, 2019; |
| ● | Any other reports filed pursuant to Section 13(a) or 15(d) of the Exchange Act since December 31, 2018; and |
| ● | The description of the our common stock in Item 1 of the Registration Statement on Form 8-A for registration of our common stock pursuant to Section 12(g) of the Exchange Act, as updated by the description included in our Current Report on Form 8-K filed on May 18, 2017, including any other amendment or report filed for the purpose of updating such description. |
Notwithstanding the foregoing, documents or portions thereof containing information furnished under Items 2.02 and 7.01 of any Current Report on Form 8-K, including the related exhibits under Item 9.01, are not incorporated by reference in this prospectus supplement.
You may request a copy of any of these filings, at no cost, by request directed to us at the following address or telephone number:
ThermoGenesis Holdings, Inc.
2711 Citrus Road
Rancho Cordova, CA 95742
(916) 858-5100
Attention: Corporate Secretary
You should not assume that the information in this prospectus supplement, as well as the information we file or previously filed with the SEC that we incorporate by reference in this prospectus supplement, is accurate as of any date other than the respective date of such documents. Our business, financial condition, results of operations and prospects may have changed since that date.
_________________________
$4,400,000
Common Stock
PROSPECTUS SUPPLEMENT
_________________________
, 2019
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the costs and expenses payable by usthe Company in connection with this offering. All expenses incurred with respect to the sale and distributionregistration of the Shares being registered hereunder. No expenses shallcommon stock will be borne by the Selling Stockholders.Company. All of the amounts shown are estimates, except for the SEC registration fee.
SEC registration fee | | $ | 334.72 | | | $ | 3,894 | |
FINRA filing fee | | | $ | 5,000 | |
Printing expenses | | | $ | * | |
Accounting fees and expenses | | $ | 15,000 | | | $ | * | |
Legal fees and expenses | | $ | 25,000 | | | $ | * | |
Miscellaneous | | $ | 5,000 | | |
Total | | $ | 45,334.72 | | | $ | * | |
* Amount is presently not known.
Item 15. Indemnification of Directors and Officers.INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145102(b)(7) of the Delaware General Corporation Law permits indemnification(the “Delaware Law”) enables a corporation, in its original certificate of incorporation or an amendment thereto, to eliminate or limit the personal liability of a director for monetary damages for breach of the director’s fiduciary duty, except (i) for any breach of the director’s duty of loyalty to the corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) pursuant to Section 174 of the Delaware Law (providing for liability of directors officers and employeesfor unlawful payment of corporations under certain conditions and subject to certain limitations. Ourdividends or unlawful stock purchases or redemptions), or (iv) for any transaction from which the director derived an improper personal benefit. The Company’s Sixth Amended and Restated Certificate of Incorporation, as amended (“Certificate of Incorporation”), contains provisions for the indemnification of our directors and officers to the fullest extent permitted by law.such a provision.
Under such law, we are empowered to In addition, Section 145 of the Delaware Law provides that a corporation may indemnify any personpersons, including officers and directors, who wasare, or is a party or isare threatened to be made, a party to any threatened, pending or completed legal action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of our company to procure a judgment in its favor)the corporation), by reason of the fact that such person is or was an officer, director, employee or other agent of us, against expenses, judgments, fines, settlements and other amounts actually and reasonably incurred in connection with such proceeding if such person acted in good faith and in a manner such person reasonably believed to be in our best interests and, in the case of a criminal proceeding, has no reasonable cause to believe the conduct of such person was unlawful. In addition, we may indemnify, subject to certain exceptions, any person who wascorporation, or is a party or is threatened to be made a party to any threatened, pending or completed action by or in the right of our company to procure a judgment in our favor by reason of the fact that such person is or was anserving at the request of such corporation as a director, officer, director, employee or other agent of our company, againstanother corporation or enterprise. The indemnity may include expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with the defense or settlement of such action, ifsuit or proceeding, provided such personofficer, director, employee or agent acted in good faith and in a manner suchthe person reasonably believed to be in or not opposed to the corporation’s best interestinterests and, with respect to criminal proceedings, had no reasonable cause to believe that the person’s conduct was unlawful. A Delaware corporation may indemnify officers or directors in an action by or in the right of our companythe corporation under the same conditions, 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 expenses (including attorneys’ fees) that he or she actually and stockholders. We may advance expenses incurred in defending any proceeding priorreasonably incurred.
The Company’s Certificate of Incorporation and Restated Bylaws provide for indemnification of directors and officers to final disposition upon receipt of an undertakingthe fullest extent permitted by the agent to repay that amount it shall be determined that the agent is not entitled to indemnification as authorized.Delaware Law.
In addition, we have directors’ and officers’ liability insurance, which our bylaws provide authority to maintain to insure directors or officers against any liability incurred while in capacity as such, or arising out
Item 16. Exhibits.EXHIBITS
The exhibits listed in the accompanying Exhibit Index below are filed or incorporated by reference as part of this Registration Statement.
EXHIBIT INDEX
(1) | Incorporated herein by reference to Exhibit 3.1 to the Form 10-Q filed with the SEC on November 19, 2019. |
(2) | Incorporated herein by reference to Exhibit 3.2 to Form 8-K filed with the SEC on October 30, 2019. |
(3) | Included in Exhibits 5.1 and 5.2. |
(4) | Included on the signature page to this Registration Statement. |
* If necessary, to be filed by amendment or under subsequent Current Report on Form 8-K.
Item 17. Undertakings.UNDERTAKINGS
The undersigned registrantRegistrant hereby undertakes:
| 1) | (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:
|
(i) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Securities and Exchange Commission (the “Commission”) pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20 percent change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement.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. Pstatement;
rovided,provided, however, that paragraphs (1)(i), (1)(ii) and (1)(iii) do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in reports filed with or furnished to the SECCommission by the registrantRegistrant pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in thisthe registration statement, or is contained in a form of prospectus filed pursuant to Rule 424(b) that is part of thisthe registration statement.
(2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post- effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initialbona fide offering thereof.
| 2) | That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. |
| 3) | (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.
|
| 4) | (4) That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser:
|
(i) If the Registrant is relying on Rule 430B:
(A) Each prospectus filed by the registrantRegistrant 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
(B) 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 of 1933 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 thatthe 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; ordate.
(ii) If the registrant is subject to Rule 430C, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness.Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use.
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(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
| 5) | That, for the purpose of determining liability of the Registrant under the Securities Act of 1933 to any purchaser in the initial distribution of 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 registrantRegistrant 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 registrantRegistrant or used or referred to by the undersigned registrant;Registrant;
(iii) The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrantRegistrant or its securities provided by or on behalf of the undersigned registrant;Registrant; and
(iv) Any other communication that is an offer in the offering made by the undersigned registrantRegistrant to the purchaser.
The undersigned registrantRegistrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant’s Annual Report underits annual report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to Section 15(d) of the Securities Exchange Act)Act of 1934) that is incorporated by reference into thisin 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.
For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b) (1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective.
For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrantRegistrant pursuant to the foregoing provisions, or otherwise, the registrantRegistrant has been advised that in the opinion of the SECCommission such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrantRegistrant of expenses incurred or paid by a director, officer or controlling person of the registrantRegistrant 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 registrantRegistrant will, unless in the opinion of its counsel the matterissue has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act of 1933 and will be governed by the final adjudication of such issue.
The undersigned Registrant hereby undertakes to file an application for the purpose of determining the eligibility of the trustee to act under subsection (a) of Section 310 of the Trust Indenture Act in accordance with the rules and regulations prescribed by the Commission under Section 305(b)(2) of the Trust Indenture Act.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrantregistrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this amendment to the registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Rancho Cordova, State of California, on February 7, 2017.
December 13, 2019.
| CESCA THERAPEUTICSTHERMOGENESIS HOLDINGS, INC.
| |
| | | |
| | | |
| By: | /s/ Dr. Xiaochun (Chris) Xu, Ph.D. | |
| | Xiaochun (Chris) Xu, Ph.D. | |
| Name:
| Dr. Xiaochun XuChief Executive Officer
| |
| Title:
| Interim Chief(Principal Executive Officer
Officer) | |
KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby constitutes and appoints Xiaochun Xu and Jeffery Cauble and each of them, the true and lawful attorneys-in-fact of the undersigned, 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 sign this registration statement and any or all amendments to this registration statement, including post-effective amendments, and registration statements filed pursuant to 462(b) under the Securities Act, and to file or cause to be filed the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys or attorneys-in-fact or any of them or their 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 Statementregistration statement has been signed by the following persons on December 13, 2019 in the capacities and on the dates indicated.
Signature | | Title |
/s/ Xiaochun Xu
| | Date
Chief Executive Officer and Chairman of the Board of Directors
|
| Xiaochun Xu | | (Principal Executive Officer) |
/s/ Jeffery Cauble | | Principal Financial and Accounting Officer |
| Jeff Cauble | | (Principal Financial Officer and Principal |
| | | Accounting Officer) |
/s/ Russell Medford
| |
Director
|
| Russell Medford | | |
/s/ Dr. Xiaochun XuJoseph Thomis
| | Interim Chief Executive Officer
| | February 7, 2017
Director
|
Dr. Xiaochun Xu
| | and Director (Principal Executive Officer)
| | |
| | | | |
| | Joseph Thomis | | |
*
/s/ Mark Westgate
| |
Director
| | February 7, 2017
|
James Xu
| | | | |
| | | | |
| | Mark Westgate | | |
*
/s/ James Xu
| |
Director
| | February 7, 2017
|
Mahendra Rao
| | | | |
| | | | |
| | | | |
*
| | Director
| | February 7, 2017
|
Michael Rhein
| | | | |
| | | | |
| | | | |
/s/ Michael Bruch
| | Chief Financial Officer (Principal Financial
| | February 7, 2017
|
Michael Bruch
| | Officer and Principal Accounting Officer)
| | |
| | James Xu | | |
*
| | Director
| | February 7, 2017
|
Vivian Liu
| | | | |
| | | | |
| | | | |
*
| | Director
| | February 7, 2017
|
Joseph Thomis
| | | | |
| | | | |
| | | | |
*
| /s/ Dr. Xiaochun Xu
| |
| Dr. Xiaochun Xu, Attorney-in-Fact
| |
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