RISK
FACTORS
Investing
in our securities involves a high degree of risk. Before making a decision to invest in our common stock, you should carefully consider
the risks described below as well as the other information included in this prospectus, including “Cautionary Note Regarding Forward-Looking
Statements,” and the applicable prospectus supplement, and those risks discussed under Part I, Item 1A of our most recent
Annual Report on Form 10-K under the heading “Risk Factors”, and updated in Part II, Item 1A of our subsequent
Quarterly Reports on Form 10-Q under the heading “Risk Factors”, as well as any amendments thereto, which are incorporated
by reference into this prospectus and the applicable prospectus supplement in their entirety, together with other information in this
prospectus and the applicable prospectus supplement, the documents incorporated by reference herein and therein. Additional risks and
uncertainties not presently known to us or that we currently deem immaterial may also affect our business, financial condition or results
of operations. The occurrence of any of these known or unknown risks might cause you to lose all or part of your investment in our securities.
For more information, see sections of this prospectus entitled “Where You Can Find More Information” and “Incorporation
of Documents by Reference.”
Risks
Related to this Offering
The
sale or issuance of our common stock to Lincoln Park may cause dilution and the sale of the shares of common stock acquired by Lincoln
Park, or the perception that such sales may occur, could cause the price of our common stock to fall.
On
April 10, 2023, we entered into the Purchase Agreement with Lincoln Park, which provides that, upon the terms and subject to the
conditions and limitations set forth therein, we have the right, but not the obligation, to sell to Lincoln Park up to $50,000,000 of
our common stock from time to time over the 36-month term of the Purchase Agreement. Upon the execution of the Purchase Agreement, we
issued 635,593 shares of common stock to Lincoln Park as consideration for its commitment to purchase shares of our common stock under
the Purchase Agreement. The shares of our common stock that may be issued under the Purchase Agreement may be sold by us to Lincoln Park
at our discretion from time to time over a 36-month period commencing after the satisfaction of certain conditions set forth in the Purchase
Agreement, including that the SEC has declared effective the registration statement of which this prospectus is a part and that such
registration statement remains effective. The purchase price for the shares that we may sell to Lincoln Park under the Purchase Agreement
will fluctuate based on the price of our common stock. Depending on market liquidity at the time, sales of such shares may cause the
trading price of our common stock to fall.
Subject
to the terms of the Purchase Agreement, we generally have the right to control the timing and amount of any future sales of our shares
to Lincoln Park. Additional sales of our common stock, if any, to Lincoln Park will depend upon market conditions and other factors to
be determined by us. We may ultimately decide to sell to Lincoln Park all, some, or none of the additional shares of our common stock
that may be available for us to sell pursuant to the Purchase Agreement. If and when we do sell shares to Lincoln Park, after Lincoln
Park has acquired the shares, Lincoln Park may resell all or some of those shares at any time or from time to time in its discretion.
Therefore, sales to Lincoln Park by us could result in substantial dilution to the interests of other holders of our common stock. Additionally,
the sale of a substantial number of shares of our common stock to Lincoln Park, or the anticipation of such sales, could make it more
difficult for us to sell equity or equity-related securities in the future at a time and at a price that we might otherwise wish to effect
sales.
We
may require additional financing to sustain our operations, without which we may not be able to continue operations, and the terms of
subsequent financings may adversely impact our stockholders.
We
may direct Lincoln Park to purchase up to $50,000,000 of our common stock under our agreement over a 36-month period generally in amounts
up to 200,000 shares of our common stock (such purchases, “Regular Purchases”), which may be increased to up to 250,000 shares,
300,000 shares or 400,000 shares of our common stock depending on the market price of our common stock at the time of sale.
The
extent we rely on Lincoln Park as a source of funding will depend on a number of factors, including the prevailing market price of our
common stock and the extent to which we are able to secure working capital from other sources. If obtaining sufficient funding from Lincoln
Park were to prove unavailable or prohibitively dilutive, we will need to secure another source of funding in order to satisfy our working
capital needs. Depending on the type and the terms of any financing we pursue, stockholders’ rights and the value of their investment
in our common stock could be reduced. A financing could involve one or more types of securities including common stock, convertible debt
or warrants to acquire common stock. These securities could be issued at or below the then prevailing market price for our common stock.
Should the financing we require to sustain our working capital needs be unavailable or prohibitively expensive when we require it, the
consequences could be a material adverse effect on our business, operating results, financial condition and prospects.
We
do not have enough authorized shares of common stock to issue all 50,000,000 shares offered hereunder and we require stockholder approval
and the subsequent filing with the Secretary of State of the State of Delaware a certificate of amendment to our second amended and restated
certificate of incorporation to effect an increase of the authorized number of shares of common stock available for issuance under the
Purchase Agreement. There is no assurance that such stockholder approval will be obtained which will limit the funding from Lincoln Park
and could materially and adversely affect the Company’s business, financial condition and results of operations.
We
do not have enough shares of common stock currently authorized under our second amended and restated certificate of incorporation (the
“certificate of incorporation”) to issue 50,000,000 shares to Lincoln Park pursuant to the Purchase Agreement. We currently
have 110,000,000 shares of common stock authorized under our certificate of incorporation. As of March 31, 2023, we had 52,261,643
shares of common stock issued and outstanding, 26,369,557 shares issuable upon exercise of outstanding warrants, 3,301,314 shares issuable
upon exercise of outstanding options, 2,332,883 shares issuable upon vesting of outstanding restricted stock units, and 273,643 shares
available for future issuance as awards under the Company’s 2021 Equity Incentive Plan. Accordingly, we have approximately 25,460,960
authorized shares of common stock available for issuance. We currently do not have sufficient remaining authorized shares of common stock
to fully utilize the $50 million under the Purchase Agreement unless and until an increase of our authorized shares of common stock is
approved by stockholders and we file with the Secretary of State of the State of Delaware a certificate of amendment to our certificate
of incorporation effecting such increase. If our stockholders do not approve the increase of authorized shares of common stock, our business
development and financing alternatives will be limited by the lack of sufficient unissued and unreserved authorized shares of common
stock, and stockholder value may be harmed, perhaps severely, by this limitation.
We
have used almost all of our unreserved, authorized shares.
We
have currently used almost all of our unreserved authorized shares and will need stockholder approval to implement an increase in our
authorized shares of common stock. Our certificate of incorporation and the Delaware General Corporation Law (the “DGCL”),
currently require the approval of stockholders holding not less than a majority of all outstanding shares of capital stock entitled to
vote in order to approve an increase in our authorized shares of common stock. We currently plan to seek stockholder approval at our
annual meeting, which is scheduled to be held on June 13, 2023. There are no assurances that stockholder approval will be obtained,
in which event will be unable to raise additional capital through the issuance of shares of common stock to fund our future operations.
Our
management will have broad discretion over the use of the net proceeds from our sale of shares of common stock to Lincoln Park, you may
not agree with how we use the proceeds and the proceeds may not be invested successfully.
Our
management will have broad discretion as to the use of the net proceeds from our sale of shares of common stock to Lincoln Park, and
we could use them for purposes other than those contemplated at the time of commencement of this offering. Accordingly, you will be relying
on the judgment of our management with regard to the use of those net proceeds, and you will not have the opportunity, as part of your
investment decision, to assess whether the proceeds are being used appropriately. It is possible that, pending their use, we may invest
those net proceeds in a way that does not yield a favorable, or any, return for us. The failure of our management to use such funds effectively
could have a material adverse effect on our business, financial condition, operating results and cash flows.
It
is not possible to predict the actual number of shares we will sell under the Purchase Agreement to the Selling Stockholder, or the actual
gross proceeds resulting from those sales.
Because
the purchase price per share to be paid by Lincoln Park for the shares of common stock that we may elect to sell to Lincoln Park under
the Purchase Agreement, if any, will fluctuate based on the market prices of our common stock during the applicable period for each purchase
made pursuant to the Purchase Agreement, if any, it is not possible for us to predict, as of the date of this prospectus and prior to
any such sales, the number of shares of common stock that we will sell to Lincoln Park under the Purchase Agreement, the purchase price
per share that Lincoln Park will pay for shares purchased from us under the Purchase Agreement, or the aggregate gross proceeds that
we will receive from those purchases by Lincoln Park under the Purchase Agreement, if any.
Moreover,
although the Purchase Agreement provides that we may sell up to an aggregate of $50,000,000 worth of our common stock to Lincoln Park
(the “Total Commitment”), 50,635,593 shares of our common stock, which includes 635,593 Commitment Shares, are being registered
for resale by Lincoln Park under the registration statement that includes this prospectus, among which we may elect to sell to Lincoln
Park, in our sole discretion, from time to time from and after the Commencement Date under the Purchase Agreement up to 50,000,000 shares
of common stock. If, after the Commencement Date, the price of our stock declines and we elect to sell to Lincoln Park shares of common
stock being registered for resale under this prospectus that are available for sale by us to Lincoln Park under the Purchase Agreement,
depending on the market prices of our common stock during the applicable period for each purchase made pursuant to the Purchase Agreement,
the actual gross proceeds from the sale of all such shares may be substantially less than the $50,000,000 Total Commitment available
to us under the Purchase Agreement, which could materially adversely affect our liquidity.
Based
on our current stock price, if it becomes necessary for us to issue and sell to Lincoln Park under the Purchase Agreement more than the
50,000,000 shares of our common stock in order to receive aggregate gross proceeds equal to the Total Commitment of $50,000,000 under
the Purchase Agreement, we must file with the SEC one or more additional registration statements to register under the Securities Act
the resale by Lincoln Park of any such additional shares of our common stock we wish to sell from time to time under the Purchase Agreement,
which the SEC must declare effective. Plus, we will need to obtain stockholder approval to issue shares of common stock in excess of
10,447,102 shares (the “Exchange Cap”), which is 19.99% of the shares of common stock outstanding immediately prior to the
execution of the Purchase Agreement, under the Purchase Agreement in accordance with applicable Nasdaq rules, unless the average per
share purchase price paid by Lincoln Park for all shares of common stock sold under the Purchase Agreement equals or exceeds $1.08, in
which case, under applicable Nasdaq rules, the Exchange Cap limitation will not apply to issuances and sales of common stock under the
Purchase Agreement, in each case, before we may elect to sell any additional shares of our common stock to Lincoln Park under the Purchase
Agreement. Any issuance and sale by us under the Purchase Agreement of a substantial amount of shares of common stock in addition to
the 50,635,593 shares of common stock being registered for resale by Lincoln Park under this prospectus could cause additional substantial
dilution to our stockholders. The number of shares of our common stock ultimately offered for sale by Lincoln Park is dependent upon
the number of shares of common stock, if any, we ultimately sell to Lincoln Park under the Purchase Agreement.
The
number of shares that may be issued to Lincoln Park under the terms of the Purchase Agreement may be limited due to the requirements
of the Nasdaq Capital Market.
Under
Nasdaq Listing Rule 5635(d), in the event our common stock price declines below $1.08 per share, we need stockholder approval for
the potential issuance and sale of 20% or more of our common stock in order to issue shares of common stock to receive all the $50,000,000
Total Commitment proceeds under the Purchase Agreement. We currently plan to seek such stockholder approval at our annual meeting, which
is scheduled to be held on June 13, 2023. There is no assurance that such stockholder approval will be obtained which could adversely
prevent us from receiving all the $50,000,000 Total Commitment under the Purchase Agreement.
Investors
who buy shares at different times will likely pay different prices.
Pursuant
to the Purchase Agreement, we will have discretion, subject to market demand, to vary the timing, prices, and numbers of shares sold
to Lincoln Park. If and when we do elect to sell shares of our common stock to Lincoln Park pursuant to the Purchase Agreement, after
Lincoln Park has acquired such shares, Lincoln Park may resell all, some or none of such shares at any time or from time to time in its
discretion and at different prices. As a result, investors who purchase shares from Lincoln Park in this offering at different times
will likely pay different prices for those shares, and so may experience different levels of dilution and in some cases substantial dilution
and different outcomes in their investment results.
Investors
may experience a decline in the value of the shares they purchase from Lincoln Park in this offering as a result of future sales made
by us to Lincoln Park at prices lower than the prices such investors paid for their shares in this offering.
LINCOLN
PARK TRANSACTION
On
April 10, 2023, we entered into the Purchase Agreement and the Registration Rights Agreement with Lincoln Park. Pursuant to the
Purchase Agreement, we have the right to sell to Lincoln Park up to $50 million of our common stock, subject to certain limitations and
conditions set forth in the Purchase Agreement, from time to time during the term of the Purchase Agreement. Sales of common stock pursuant
to the Purchase Agreement, and the timing of any sales, are solely at our option, and we are under no obligation to sell any securities
to Lincoln Park under the Purchase Agreement. In accordance with our obligations under the Registration Rights Agreement, we have filed
the registration statement that includes this prospectus with the SEC to register under the Securities Act the resale by Lincoln Park
of up to 50,635,593 shares of common stock, consisting of 635,593 Commitment Shares (as defined in the Purchase Agreement) that we issued
to Lincoln Park as payment of a commitment fee for its commitment to purchase shares of common stock at our election under to the Purchase
Agreement, and up to 50,000,000 shares of common stock that we may elect, in our sole discretion, to issue and sell to Lincoln Park,
from time to time from and after the Commencement Date under the Purchase Agreement.
We
do not have the right to commence any sales of our common stock to Lincoln Park under the Purchase Agreement until the Commencement Date,
which is the date on which all of the conditions to Lincoln Park’s purchase obligation set forth in the Purchase Agreement have
been satisfied, including that the registration statement that includes this prospectus be declared effective by the SEC. From and after
the Commencement Date, we will have the right, but not the obligation, from time to time at our sole discretion over the 36-month period
commencing on the Commencement Date, to direct Lincoln Park to purchase up to 200,000 shares of our common stock on such business day
(or the purchase date) provided that the closing sale price of our common stock on Nasdaq is not below $0.50 on the applicable purchase
date, which we refer to as a Regular Purchase (such maximum number of purchase shares, as may be adjusted from time to time, the “Regular
Purchase Share Limit”). However, that the Regular Purchase Share Limit shall be increased to: (i) a Regular Purchase may be increased
to up to 250,000 shares if the closing sale price of our common stock on Nasdaq is not below $1.50 on the applicable purchase date, (ii)
a Regular Purchase may be increased to up to 300,000 shares if the closing sale price of our common stock on Nasdaq is not below $3.00
on the applicable purchase date, and (iii) a Regular Purchase may be increased to up to 400,000 shares if the closing sale price of our
common stock on Nasdaq is not below $5.00 on the applicable purchase date.
From
and after the Commencement Date, we will control the timing and amount of any sales of common stock to Lincoln Park. Actual sales of
shares of our common stock to Lincoln Park under the Purchase Agreement will depend on a variety of factors to be determined by us from
time to time, including, among other things, market conditions, the trading price of our common stock and determinations by us as to
the appropriate sources of funding for our business and its operations.
Under
the applicable Nasdaq rules, in no event may we issue to Lincoln Park under the Purchase Agreement more than 10,447,102 shares of common
stock, which number of shares is equal to 19.99% of the shares of the common stock outstanding as of the date of the Purchase Agreement
(the “Exchange Cap”), unless (i) we obtain stockholder approval to issue shares of common stock in excess of the Exchange
Cap in accordance with applicable Nasdaq rules or (ii) the average price per share paid by Lincoln Park for all of the shares of common
stock that we direct Lincoln Park to purchase from us pursuant to the Purchase Agreement, if any, equals or exceeds $1.08 per share (representing
the lower of the official closing price of our common stock on Nasdaq on the trading day immediately preceding the date of the Purchase
Agreement or the average official closing price of our common stock on Nasdaq for the five consecutive trading days ending on the trading
day immediately preceding the date of the Purchase Agreement, as adjusted pursuant to applicable Nasdaq rules). Moreover, we may not
issue or sell any shares of common stock to Lincoln Park under the Purchase Agreement which, when aggregated with all other shares of
common stock then beneficially owned by Lincoln Park and its affiliates (as calculated pursuant to Section 13(d) of the Exchange
Act and Rule 13d-3 promulgated thereunder), would result in Lincoln Park beneficially owning shares of common stock in excess of
the 9.99% Beneficial Ownership Limitation (as such term defined in the Purchase Agreement).
Purchase
of Shares of Common Stock Under the Purchase Agreement
Regular
Purchases
Under
the Purchase Agreement, after the Commencement Date (as defined below), on any business day selected by us, we may direct Lincoln Park
to purchase up to 200,000 shares of its Common Stock on such business day (or the purchase date) (a “Regular Purchase”),
provided that the closing sale price of the Company’s Common Stock on the Nasdaq Stock Market (“Nasdaq”) on the applicable
purchase date is not below $0.50 and subject to other adjustments. A Regular Purchase may be increased to up to (i) 250,000 shares if
the closing sale price of the Company’s Common Stock on Nasdaq is not below $1.50 on the applicable purchase date; (ii) 300,000
shares if the closing sale price of the Company’s Common Stock on Nasdaq is not below $3.00 on the applicable purchase date; and
(iii) 400,000 shares if the closing sale price of the Company’s common stock on Nasdaq is not below $5.00 on the applicable purchase
date. The foregoing share amounts and per share prices will be adjusted for any reorganization, recapitalization, non-cash dividend,
stock split, reverse stock split or other similar transaction occurring after the date of the Purchase Agreement.
The
purchase price per share for each such Regular Purchase will be equal to the lesser of:
| ● | the
lowest sale price for the Company’s Common Stock on Nasdaq on the purchase date of
such shares; and |
| ● | the
average of the three lowest closing sale prices for the Company’s Common Stock on Nasdaq
during the 10 consecutive business days prior to the purchase date of such shares. |
Accelerated
Purchases
We
may also direct Lincoln Park, on any business day on which we have submitted a Regular Purchase notice for the maximum amount allowed
for such Regular Purchase, to purchase an additional amount of our common stock, which we refer to as an Accelerated Purchase, of up
to the lesser of:
| ● | three
times the number of shares purchased pursuant to such Regular Purchase; and |
| ● | 30%
of the aggregate shares of the Company’s Common Stock traded on Nasdaq during all or,
if certain trading volume or market price thresholds specified in the Purchase Agreement
are crossed on the applicable Accelerated Purchase date, the portion of the normal trading
hours on the applicable Accelerated Purchase date prior to such time that any one of such
thresholds is crossed (the “Accelerated Purchase Measurement Period”). |
The
purchase price per share for each such Accelerated Purchase will be equal to 95% of the lower of:
| ● | the
volume-weighted average price of the Company’s Common Stock on Nasdaq during the applicable
Accelerated Purchase Measurement Period on the applicable Accelerated Purchase date; and |
| ● | the
closing sale price of the Company’s Common Stock on Nasdaq on the applicable Accelerated
Purchase date. |
Additional
Accelerated Purchases
We
may also direct Lincoln Park on any business day on which an Accelerated Purchase has been completed and all of the shares to be purchased
thereunder have been delivered to Lincoln Park in accordance with the Purchase Agreement, to purchase an additional amount of our common
stock (the “Additional Accelerated Purchase”), of up to the lesser of:
| ● | three
times the number of shares purchased pursuant to the applicable corresponding Regular Purchase;
and |
| ● | 30%
of the aggregate shares of the Company’s Common Stock traded on Nasdaq during all or,
if certain trading volume or market price thresholds specified in the Purchase Agreement
are crossed on the applicable Accelerated Purchase date, the portion of the normal trading
hours on the applicable Additional Accelerated Purchase date prior to such time that any
one of such thresholds is crossed (the “Additional Accelerated Purchase Measurement
Period”). |
We
may, in our sole discretion, submit multiple Additional Accelerated Purchase notices to Lincoln Park on a single Accelerated Purchase
date, provided that all prior Accelerated Purchases and Additional Accelerated Purchases (including those that have occurred earlier
on the same day) have been completed and all of the shares to be purchased thereunder have been properly delivered to Lincoln Park in
accordance with the Purchase Agreement.
The
purchase price per share for each such Additional Accelerated Purchase will be equal to 95% of the lower of:
| ● | the
volume-weighted average price of our common stock on Nasdaq during the applicable Additional
Accelerated Purchase Measurement Period on the applicable Additional Accelerated Purchase
date; and |
| ● | the
closing sale price of our common stock on Nasdaq on the applicable Additional Accelerated
Purchase date. |
In
the case of Regular Purchases, Accelerated Purchases and Additional Accelerated Purchases, the purchase price per share will be equitably
adjusted for any reorganization, recapitalization, non-cash dividend, stock split, reverse stock split or other similar transaction occurring
during the business days used to compute the purchase price
Other
than as described above, there are no trading volume requirements or restrictions under the Purchase Agreement, and we will control the
timing and amount of any sales of our common stock to Lincoln Park.
Events
of Default
Events
of default under the Purchase Agreement include the following:
| ● | the
effectiveness of a registration statement registering the sale or resale of the securities
lapses for any reason (including, without limitation, the issuance of a stop order or similar
order) or such registration statement (or the prospectus forming a part thereof) is unavailable
to the Investor for sale or resale of any or all of the securities to be issued to Lincoln
Park under the Transaction Documents (as defined in the Purchase Agreement) that are required
to be included therein, and such lapse or unavailability continues for a period of ten (10)
consecutive Business Days or for more than an aggregate of thirty (30) business days in any
365-day period, but excluding a lapse or unavailability where (i) the Company terminates
a registration statement after Lincoln Park has confirmed in writing that all of the securities
covered thereby have been resold or (ii) the Company supersedes one registration statement
with another registration statement, including (without limitation) by terminating a prior
registration statement when it is effectively replaced with a new registration statement
covering securities (provided in the case of this clause (ii) that all of the securities
covered by the superseded (or terminated) registration statement that have not theretofore
been resold are included in the superseding (or new) registration statement); |
| ● | suspension
by the principal market of our common stock from trading for a period of one business day,
provided that the Company may not direct Lincoln Park to purchase any shares of common stock
during any such suspension; |
| ● | the
delisting of our common stock from the Nasdaq Capital Market, our principal market, unless
our common stock is immediately thereafter trading on the Nasdaq Global Select Market, the
Nasdaq Global Market, the New York Stock Exchange, the Nasdaq Capital Market, the NYSE American,
the NYSE Arca, the OTC Bulletin Board or the OTCQB or the OTCQX operated by the OTC Markets
Group, Inc. (or any nationally recognized successor to any of the foregoing); |
| ● | the
failure for any reason by our transfer agent to issue shares of our common stock to Lincoln
Park within two business days after any Regular Purchase date, Accelerated Purchase date
or Additional Accelerated Purchase date, as applicable, on which Lincoln Park is entitled
to receive such shares; |
| ● | any
breach of the representations, warranties, covenants or other terms or conditions contained
in the Purchase Agreement or Registration Rights Agreement or any other certificate, instrument
or document executed by the Company contemplated in such transaction documents if such breach
would reasonably be expected to have a Material Adverse Effect (as defined in the Purchase
Agreement) except, in the case of a breach of a covenant that is reasonably curable, that
is not cured within a period of at least five business days; |
| ● | if
any Person (as defined in the Purchase Agreement) commences a proceeding against the Company
pursuant to or within the meaning of any Bankruptcy Law; |
| ● | if
the Company is at any time insolvent, or, pursuant to or within the meaning of any Bankruptcy
Law, (i) commences a voluntary case, (ii) consents to the entry of an order for relief against
it in an involuntary case, (iii) consents to the appointment of a Custodian of it or for
all or substantially all of its property, or (iv) makes a general assignment for the benefit
of its creditors or is generally unable to pay its debts as the same become due; |
| ● | a
court of competent jurisdiction enters an order or decree under any Bankruptcy Law that (i)
is for relief against the Company in an involuntary case, (ii) appoints a Custodian of the
Company or for all or substantially all of its property, or (iii) orders the liquidation
of the Company; or |
| ● | if
at any time the Company is not eligible to transfer its Common Stock electronically as DWAC
Shares or if the Company fails to maintain the service of its transfer agent (or a successor
transfer agent) with respect to the issuance of Purchase Shares under this Agreement, including
but not limited to, maintaining the effectiveness of the Commencement Irrevocable Transfer
Instructions, payment of all owed to the Transfer Agent and satisfaction of all conditions
required by the Transfer Agent to issue Purchase Shares pursuant to the Commencement Irrevocable
Transfer Agent Instructions. |
Lincoln
Park does not have the right to terminate the Purchase Agreement upon any of the events of default set forth above however, the Purchase
Agreement will automatically terminate upon initiation of insolvency or bankruptcy proceedings by or against us. During an event of default,
all of which are outside of Lincoln Park’s control, we may not direct Lincoln Park to purchase any shares of our common stock under
the Purchase Agreement.
Termination
of the Purchase Agreement
Unless
earlier terminated as provided in the Purchase Agreement, the Purchase Agreement will terminate automatically on the earliest to occur
of:
| ● | the
first day of the month immediately following the 36-month anniversary of the Commencement
Date; |
| ● | the
date on which the Company commences a voluntary bankruptcy case or any third party commences
a bankruptcy proceeding against the Company, a custodian is appointed for the Company in
a bankruptcy proceeding for all or substantially all of its property, or the Company makes
a general assignment for the benefit of its creditors; and |
| ● | the
date on which Lincoln Park shall have purchased shares of our common stock under the Purchase
Agreement for an aggregate gross purchase price equal to $50 million. |
We
have the right to terminate the Purchase Agreement at any time after the Commencement Date for any reason or for no reason, without any
liability whatsoever, upon one business day’s notice to Lincoln Park.
We
and Lincoln Park also have the option to terminate the Purchase Agreement in the event that the Commencement Date has not occurred on
or before August 1, 2023, due to the other party’s failure to satisfy its conditions set forth in the Purchase Agreement.
No
Short-Selling or Hedging by Lincoln Park
Lincoln
Park has agreed that neither it nor any of its affiliates shall engage in any direct or indirect short-selling or hedging of our common
stock during any time prior to the termination of the Purchase Agreement.
Prohibitions
on Other Equity Lines of Credit
Subject
to specified exceptions included in the Purchase Agreement, until the expiration of the 36-month term of the Purchase Agreement, we are
limited in our ability to enter into any “equity line of credit” or other similar continuous offering in which we may offer,
issue or sell common stock or securities convertible into or exercisable for common stock at a future determined price, other than an
“at the market offering” exclusively through a registered broker-dealer acting as our agent.
Effect
of Sales of our Common Stock under the Purchase Agreement on our Stockholders
All
shares of common stock that may be issued or sold by us to Lincoln Park under the Purchase Agreement that are being registered under
the Securities Act for resale by Lincoln Park in this offering are expected to be freely tradable. The shares of common stock being registered
for resale in this offering may be issued and sold by us to Lincoln Park from time to time at our discretion over a period of up to 36
months commencing on the Commencement Date. The resale by Lincoln Park of a significant amount of shares registered for resale in this
offering at any given time, or the perception that these sales may occur, could cause the market price of our common stock to decline
and to be highly volatile. Sales of our common stock, if any, to Lincoln Park under the Purchase Agreement will depend upon market conditions
and other factors to be determined by us. We may ultimately decide to sell to Lincoln Park all, some or none of the shares of our common
stock that may be available for us to sell to Lincoln Park pursuant to the Purchase Agreement.
If
and when we do elect to sell shares of our common stock to Lincoln Park pursuant to the Purchase Agreement, after Lincoln Park has acquired
such shares, Lincoln Park may resell all, some or none of such shares at any time or from time to time in its discretion and at different
prices. Therefore, sales to Lincoln Park by us under the Purchase Agreement may result in substantial dilution to the interests of other
holders of our common stock. In addition, if we sell a substantial number of shares to Lincoln Park under the Purchase Agreement, or
if investors expect that we will do so, the actual sales of shares or the mere existence of our arrangement with Lincoln Park may make
it more difficult for us to sell equity or equity-related securities in the future at a time and at a price that we might otherwise wish
to effect such sales. However, we have the right to control the timing and amount of any additional sales of our shares to Lincoln Park
and the Purchase Agreement may be terminated by us at any time at our discretion without any cost to us.
Pursuant
to the terms of the Purchase Agreement, we have the right, but not the obligation, to direct Lincoln Park to purchase up to $50,000,000
of our common stock, exclusive of the 635,593 Commitment Shares issued to Lincoln Park as consideration for its commitment to purchase
shares of our common stock under the Purchase Agreement. The Purchase Agreement prohibits us from issuing or selling to Lincoln Park
under the Purchase Agreement (i) shares of our common stock in excess of the Exchange Cap, unless we obtain stockholder approval to issue
shares in excess of the Exchange Cap or the average price of all applicable sales of our common stock to Lincoln Park under the Purchase
Agreement equals or exceeds $1.08 per share, such that the transactions contemplated by the Purchase Agreement are exempt from the Exchange
Cap limitation under applicable Nasdaq rules and (ii) any shares of our common stock if those shares, when aggregated with all other
shares of our common stock then beneficially owned by Lincoln Park, would exceed the 9.99% of our outstanding shares of common stock.
The
following table sets forth the sale of shares of common stock to Lincoln Park under the Purchase Agreement at varying purchase prices:
Assumed Average Purchase Price | |
Number of Registered Shares to be Issued if Full Purchase(1) | |
Percentage of Outstanding Shares After Giving Effect to the Issuance to Lincoln Park(2) |
| $1.00 (3) | |
50,635,593 | |
48.9% |
| $1.08 (4) | |
46,931,889 | |
47.0% |
| $1.50 (5) | |
33,968,926 | |
39.1% |
| $3.00 | |
17,302,260 | |
24.7% |
| $5.00 | |
10,635,593 | |
16.7% |
| (1) | Includes
the total number of Purchase Shares that we would have sold under the Purchase Agreement
at the corresponding assumed average purchase price set forth in the first column, up to
the aggregate purchase price of $50,000,000, if available, without giving effect to the Exchange
Cap or the Beneficial Ownership Cap, and includes the Commitment Shares. Also assumes an
increase of our authorized shares of common stock when the assumed average purchase price
equals to $1.00, $1.08, or $1.50. The assumed average purchase prices per share are solely
for illustrative purposes and are not intended to be estimates or predictions of the future
performance of our common stock. |
| (2) | The
denominator is based on 52,261,643 shares of our common stock outstanding as of March 31,
2023, as adjusted to include the issuance of (i) 635,593 Commitment Shares being issued to
Lincoln Park as consideration for its commitment to purchase shares of our common stock under
the Purchase Agreement, and (ii) the sale of the number of shares set forth in the adjacent
column (which is comprised of the number of shares we may sell to Lincoln Park under the
Purchase Agreement, assuming the average purchase price in the first column). The numerator
is based on the aggregate number of shares issuable under the Purchase Agreement (that are
the subject of this offering) at the corresponding assumed average purchase price set forth
in the first column. |
| (3) | Also
assumes stockholder approval for an increase of our authorized shares of common stock and
stockholder approval for the potential issuance and sale of 20% or more of our common stock
to Lincoln Park pursuant to the Purchase Agreement. |
| (4) | The
Minimum Price, which was the closing sale price of our common stock on The Nasdaq Capital
Market on April 10, 2023. Also assumes stockholder approval for an increase of our authorized
shares of common stock and stockholder approval for the potential issuance and sale of 20%
or more of our common stock to Lincoln Park pursuant to the Purchase Agreement. |
| (5) | Also
assumes stockholder approval for an increase of our authorized shares of common stock. |
PLAN
OF DISTRIBUTION
The shares of common stock offered by this prospectus
are being offered by the Selling Stockholder, Lincoln Park Capital Fund, LLC (“Lincoln Park”). The shares may be sold or distributed from time to time
by Lincoln Park directly to one or more purchasers or through brokers, dealers, or underwriters who may act solely as agents at market
prices prevailing at the time of sale, at prices related to the prevailing market prices, at negotiated prices, or at fixed prices, which
may be changed.
We entered into the
Purchase Agreement with Lincoln Park on April 10, 2023. The Purchase Agreement provides that, upon the terms and subject to the
conditions set forth therein, Lincoln Park is committed to purchase an aggregate of up to $50,000,000 of our common stock over the
36-month term of the Purchase Agreement. In consideration for entering into the Purchase Agreement, we issued 635,593 Commitment
Shares to Lincoln Park. See section titled “Lincoln Park Transaction.”
The sale
of the shares of our common stock offered by this prospectus could be effected in one or more of the following methods:
| ● | ordinary
brokers’ transactions; |
| ● | transactions
involving cross or block trades; |
| ● | through
brokers, dealers or underwriters who may act solely as agents; |
| ● | “at
the market” into an existing market for our common stock; |
| ● | in
other ways not involving market makes or established business markets, including direct sales
to purchasers or sales effected through agents; |
| ● | in
privately negotiated transactions; |
| ● | any
combination of the foregoing; or. |
| ● | any
other method permitted pursuant to applicable law. |
In order to comply with the securities laws of
certain states, if applicable, the shares may be sold only through registered or licensed brokers or dealers.
Lincoln Park is an “underwriter”
within the meaning of Section 2(a)(11) of the Securities Act.
Lincoln Park has informed
us that it intends to use an unaffiliated broker to effectuate all sales, if any, of our common stock that it may acquire from us pursuant
to the Purchase Agreement. Such sales will be made at prices and at terms then prevailing or at prices related to the then current market
price. Each such registered broker-dealer will be an underwriter within the meaning of Section 2(a)(11) of the Securities Act. Lincoln
Park has informed us that each such broker-dealer, may receive commissions from Lincoln Park for executing such sales for Lincoln Park
and, if so, such commissions will not exceed customary brokerage commissions.
Brokers, dealers, underwriters or agents participating
in the distribution of the shares of our common stock offered by this prospectus may receive compensation in the form of commissions,
discounts, or concessions from the purchasers, for whom the broker-dealers may act as agent, of the shares sold by Lincoln Park through
this prospectus. The compensation paid to any such particular broker-dealer by any such purchasers of shares of our common stock sold
by Lincoln Park may be less than or in excess of customary commissions. Neither we nor Lincoln Park can presently estimate the amount
of compensation that any agent will receive from any purchasers of shares of our common stock sold by Lincoln Park.
We know of no existing arrangements between Lincoln
Park and any other stockholder, broker, dealer, underwriter, or agent relating to the sale or distribution of the shares offered by this
prospectus.
We may from time to time file with the SEC one
or more supplements to this prospectus or amendments to the registration statement of which this prospectus forms a part to amend, supplement
or update information contained in this prospectus, including, if and when required under the Securities Act, to disclose certain information
relating to a particular sale of shares offered by this prospectus by Lincoln Park, including with respect to any compensation paid or
payable by Lincoln Park to any brokers, dealers, underwriters or agents that participate in the distribution of such shares by Lincoln
Park, and any other related information required to be disclosed under the Securities Act. At the time a particular offer of shares is
made, a prospectus supplement, if required, will be distributed that will set forth the names of any agents, underwriters, or dealers
and any compensation from the selling stockholder, and any other required information.
We may engage in “at-the-market offerings”
into an existing trading market in accordance with Rule 415(a)(4) under the Securities Act. In addition, we may enter into derivative
transactions with third parties, or sell securities not covered by this prospectus to third parties in privately negotiated transactions.
If the applicable prospectus supplement so indicates, in connection with those derivatives, the third parties may sell securities covered
by this prospectus and the applicable prospectus supplement, including in short sale transactions. If so, the third party may use securities
pledged by us or borrowed from us or others to settle those sales or to close out any related open borrowings of stock, and may use securities
received from us in settlement of those derivatives to close out any related open borrowings of stock. The third party in such sale transactions
will be an underwriter and, if not identified in this prospectus, will be named in the applicable prospectus supplement (or a post-effective
amendment). In addition, we may otherwise loan or pledge securities to a financial institution or other third party that in turn may sell
the securities short using this prospectus and an applicable prospectus supplement. Such financial institution or other third party may
transfer its economic short position to investors in our securities or in connection with a concurrent offering of other securities.
We will pay all of the expenses incident to the
registration, offering, and sale of the shares to Lincoln Park.
We have agreed to indemnify Lincoln Park and certain
other persons against certain liabilities in connection with the offering of shares of common stock offered hereby, including liabilities
arising under the Securities Act or, if such indemnity is unavailable, to contribute amounts required to be paid in respect of such liabilities.
Lincoln Park represented to us that at no time
prior to the date of the Purchase Agreement has Lincoln Park or its agents, representatives or affiliates engaged in or effected, in any
manner whatsoever, directly or indirectly, any short sale (as such term is defined in Rule 200 of Regulation SHO of the Exchange
Act) of our common stock or any hedging transaction. Lincoln Park agreed that during the term of the Purchase Agreement, it, its agents,
representatives or affiliates will not enter into or effect, directly or indirectly, any of the foregoing transactions.
We have advised Lincoln Park that it is required
to comply with Regulation M promulgated under the Exchange Act. With certain exceptions, Regulation M precludes Lincoln Park, any affiliated
purchasers, and any broker-dealer or other person who participates in the distribution from bidding for or purchasing, or attempting to
induce any person to bid for or purchase any security which is the subject of the distribution until the entire distribution is complete.
Regulation M also prohibits any bids or purchases made in order to stabilize the price of a security in connection with the distribution
of that security. All of the foregoing may affect the marketability of the shares offered by this prospectus.
The underwriters, dealers and agents may engage
in transactions with us, or perform services for us, in the ordinary course of business for which they receive compensation.
No securities may be sold under this prospectus
without delivery, in paper format or in electronic format, or both, of the applicable prospectus or prospectus supplement describing the
method and terms of the offering.