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| EX-23.2 - CONSENTS OF EXPERTS AND COUNSEL - AzurRx BioPharma, Inc. | ex23-2.htm |
As
filed with the Securities and Exchange Commission on December 31,
2019
Registration
No. 333-
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
AZURRX BIOPHARMA, INC.
(Exact
name of registrant as specified in its charter)
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Delaware
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2834
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46-4993860
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(State
or Other Jurisdiction of
Incorporation
or Organization)
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(Primary
Standard Industrial
Classification
Code Number)
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(I.R.S.
Employer
Identification
Number)
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760 Parkside Avenue
Downstate Biotechnology Incubator, Suite 304
Brooklyn, New York 11226
(646) 699-7855
(Address,
including zip code, and telephone number,
including
area code, of registrant’s principal executive
offices)
James Sapirstein, President and Chief Executive
Officer
AzurRx BioPharma, Inc.
760 Parkside Avenue
Downstate Biotechnology Incubator, Suite 304
Brooklyn, New York 11226
(646) 699-7855
(Name,
address, including zip code, and telephone number,
including
area code, of agent for service)
Copies to
Daniel W. Rumsey, Esq.
Jessica R. Sudweeks, Esq.
Disclosure Law Group, a Professional Corporation
655 West Broadway, Suite 870
San Diego, CA 92101
Telephone: (619) 272-7050
Facsimile: (619) 330-2101
Approximate date of commencement of proposed sale to the
public: As soon as practicable after this registration
statement becomes effective.
If any
of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, check the following
box. [X]
If this
Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the
following box and list the Securities Act registration statement
number of the earlier effective registration statement for the same
offering. ☐
If this
Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier
effective registration statement for the same
offering. ☐
If this
Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier
effective registration statement for the same
offering. ☐
Indicate
by check mark whether the registrant is a large accelerated filer,
an accelerated filer, a non-accelerated filer, a smaller reporting
company, or an emerging growth company. See the definitions of
“large accelerated filer,” “accelerated
filer,” “smaller reporting company” and
“emerging growth company” in Rule 12b-2 of the Exchange
Act:
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Large accelerated filer
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[
]
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Accelerated filer
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[
]
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Non-accelerated
filer
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[X]
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Smaller reporting company
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[X]
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Emerging
growth company
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[X]
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If an
emerging growth company, indicate by check mark if the registrant
has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided
pursuant to Section 13(a) of the Exchange Act. ☐
CALCULATION OF REGISTRATION FEE
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Title
of each class of
securities
to be registered
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Amount
to
be
registered
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Proposed
maximum
offering
price per
share
(1)
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Proposed
maximum
aggregate
offering
price
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Amount
of
registration
fee
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Common stock, par value $0.0001 per
share
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8,880,760
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$1.07
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$9,502,414
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$1,233.41
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(1)
Pursuant to Rule
457(c) of the Securities Act of 1933, as amended, calculated on the
basis of the average of the high and low prices per share of the
registrant’s common stock as reported by The Nasdaq Capital
Market on December 27, 2019.
The Registrant hereby amends this Registration Statement on such
date or dates as may be necessary to delay its effective date until
the Registrant shall file a further amendment which specifically
states that this Registration Statement shall thereafter become
effective in accordance with Section 8(a) of the Securities
Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said
Section 8(a), may determine.
The
information in this preliminary prospectus is not complete and may
be changed. These securities may not be sold until the registration
statement filed with the Securities and Exchange Commission is
effective. This preliminary prospectus is not an offer to sell
these securities nor does it seek an offer to buy these securities
in any jurisdiction where the offer or sale is not
permitted.
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PRELIMINARY PROSPECTUS
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SUBJECT TO COMPLETION
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DATED DECEMBER 31, 2019
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8,880,760 Shares of Common Stock
This
prospectus relates to the offer and sale of up to 8,880,760 shares
of our common stock by Lincoln Park Capital Fund, LLC, or Lincoln
Park or the selling stockholder.
The
shares of common stock being offered by the selling stockholder
have been or may be issued pursuant to a purchase agreement dated
November 13, 2019 that we entered into with Lincoln Park. See
The Lincoln Park
Transaction on page 13 of this prospectus for a description
of that agreement and Selling
Stockholder on page 12 of this prospectus for additional
information regarding Lincoln Park. The prices at which Lincoln
Park may sell the shares will be determined by the prevailing
market price for the shares or in negotiated
transactions.
We are
not selling any securities under this prospectus and will not
receive any of the proceeds from the sale of shares by the selling
stockholder.
The
selling stockholder may sell the shares of common stock described
in this prospectus in a number of different ways and at varying
prices. See Plan of
Distribution on page 17 of this prospectus for more
information about how the selling stockholder may sell the shares
of common stock being registered pursuant to this prospectus. The
selling stockholder is an “underwriter” within the
meaning of Section 2(a)(11) of the Securities Act of 1933, as
amended.
We will
pay the expenses incurred in registering the shares, including
legal and accounting fees. See Plan of Distribution on page 17 of
this prospectus.
Our
common stock is currently listed on The Nasdaq Capital Market under
the symbol “AZRX”. On December 27, 2019, the last
reported sale price of our common stock on The Nasdaq Capital
Market was $1.11.
We are
an “emerging growth company” as defined in
Section 2(a) of the Securities Act of 1933, as amended, and we
have elected to comply with certain reduced public company
reporting requirements.
Investing in our securities involves risks. See “Risk
Factors” beginning on page 8 of this prospectus for a
discussion of the risks that you should consider in connection with
an investment in our securities.
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.
The
date of this prospectus is
,
2019.
TABLE OF
CONTENTS
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1
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8
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9
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10
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11
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11
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12
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13
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17
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20
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24
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PROSPECTUS SUMMARY
This summary highlights information contained elsewhere in this
prospectus. This summary does not contain all of the information
that you should consider before deciding to invest in our
securities. You should read this entire prospectus carefully,
including the “Risk Factors” section in this prospectus
and under similar captions in the documents incorporated by
reference into this prospectus. In this prospectus, unless
otherwise stated or the context otherwise requires, references to
“AzurRx”, “Company”, “we”,
“us”, “our” or similar references mean
AzurRx BioPharma, Inc. and its subsidiaries on a consolidated
basis. References to “AzurRx BioPharma” refer to AzurRx
BioPharma, Inc. on an unconsolidated basis. References to
“AzurRx SAS” refer to AzurRx SAS, AzurRx
BioPharma’s wholly-owned subsidiary through which we conduct
our European operations.
Overview
We are
engaged in the research and development of non-systemic biologics
for the treatment of patients with gastrointestinal disorders.
Non-systemic biologics are non-absorbable drugs that act locally,
i.e. the intestinal lumen, skin or mucosa, without reaching an
individual’s systemic circulation.
Our
current product pipeline consists of two therapeutic programs under
development, each of which are described below.
MS1819-SD
MS1819-SD is a
yeast derived recombinant lipase for exocrine pancreatic
insufficiency (“EPI”) associated with chronic
pancreatitis (“CP”) and cystic fibrosis
(“CF”). A
lipase is an enzyme that breaks up fat molecules. MS1819-SD is
considered recombinant because it was created from new combinations
of genetic material in yeast called Yarrowia lipolytica. In June 2018, the
Company completed an open-label, dose escalation Phase 2a trial of
MS1819-SD in France, Australia, and New Zealand to investigate both
the safety of escalating doses of MS1819-SD, and the efficacy of
MS1819-SD through the analysis of each patient’s coefficient
of fat absorption (“CFA”) and its change from
baseline. A total of 11 CP patients with EPI were enrolled in the
study and final data showed a strong safety and efficacy profile.
Although the study was not powered for efficacy, in a pre-planned
analysis, the highest dose cohort of MS1819-SD showed statistically
significant and clinically meaningful increases in CFA compared to
baseline with a mean increase of 21.8% and a p value of p=0.002 on
a per protocol basis. Additionally, maximal absolute CFA response
to treatment was up to 57%, with an inverse relationship to
baseline CFA.
In
October 2018, the U.S. Food and Drug Administration
(“FDA”)
cleared the Company’s Investigational New Drug
(“IND”)
application for MS1819-SD in patients with EPI due to CF. In
connection with the FDA’s clearance of the IND, the Company
initiated a multi-center Phase 2 OPTION study in the fourth quarter
of 2018 in the United States and Europe (the “OPTION Study”). The Company
targeted enrollment of 30 to 35 patients for the OPTION Study and
dosed the first patients in February 2019. In June 2019, the
Company reached its enrollment target for the study.
On
September 25, 2019, the Company announced positive results from the
OPTION Study. Results showed that the primary efficacy endpoint of
CFA was comparable to the CFA in a prior phase two study in
patients with CP, while using the same dosage of MS1819-SD. The
dosage used in both studies was 2.2 grams per day, which was
determined in agreement with the FDA as a bridging dose. Although
the study was not powered for statistical significance, the data
demonstrated meaningful efficacy results, with approximately 50% of
the patients showing CFAs high enough to reach non-inferiority with
standard porcine enzyme replacement therapy (“PERT”). Additionally,
coefficient of nitrogen absorption (“CNA”) was comparable between the
MS1819-SD and PERT arms, 93% vs. 97%, respectively, in the Option
Study. This important finding confirms that protease
supplementation is not likely to be required with MS1819-SD
treatment. A total of 32 patients, ages 18 or older, completed the
OPTION Study. The Company recently met with the FDA to discuss a
Phase 2b or Phase 3 trial design exploring the use of higher doses
and/or enteric-coated capsules to ensure higher levels of MS1819-SD
in the duodenum. The new protocol is currently under review with
the FDA and a response is anticipated within the next 60
days.
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In addition
to the OPTION Study, in July 2019 the Company launched a Phase 2
multi-center clinical trial (the “Combination Trial”) in Hungary to
investigate MS1819-SD in combination with PERT, for CF patients who
suffer from severe EPI, but continue to experience clinical
symptoms of fat malabsorption despite taking the maximum daily dose
of PERTs. The Combination 2 study is designed to investigate the
safety, tolerability and efficacy of escalating doses of MS1819-SD,
in conjunction with a stable dose of PERTs, in order to increase
CFA and relieve abdominal symptoms.
On October 15,
2019, the Company announced that it dosed the first patients in its
Combination Trial. This study is designed to investigate the
safety, tolerability and efficacy of escalating doses of MS1819-SD
(700 mg, 1120 mg and 2240 mg per day, respectively), in conjunction
with a stable dose of porcine PERTs, in order to increase the CFA
and relieve abdominal symptoms. A combination therapy of PERT and
MS1819-SD has the potential to: (i) correct macronutrient and
micronutrient maldigestion; (ii) eliminate abdominal symptoms
attributable to maldigestion; and (iii) sustain optimal nutritional
status on a normal diet in CF patients with severe EPI. Planned
enrollment is expected to include approximately 24 CF patients with
severe EPI, with study completion anticipated in 2020.
On October 17,
2019, the Company announced that the Cystic Fibrosis Foundation
Data Safety Monitoring Board has completed its review of the
Company’s final results of the OPTION Study and has found no
safety concerns for MS1819-SD, and that the group supports the
Company’s plan to proceed to a higher four-gram dose of
MS1819-SD in its next planned Phase 2 clinical trial.
b-Lactamase Program
Our
b-lactamase program focuses on products with an enzymatic
combination of bacterial origin for the prevention of
hospital-acquired infections and antibiotic-associated diarrhea
(“AAD”) by
resistant bacterial strains induced by parenteral administration of
several antibiotic classes. Currently, we have two compounds in
pre-clinical development in this program, AZX1101 and AZX1103. Both
AZX1101 and AZX1103 are composed of several distinct enzymes that
break up individual classes of antibiotic molecules. AZX1103 is a
b-lactamase enzyme combination that has shown positive pre-clinical
activity, with degradation of amoxicillin in the presence of
clavulanic acid in the upper gastrointestinal tract in the
Gottingen minipig model. Currently, we are focused on advancing
pre-clinical development of AZX1103. We are also currently
assessing our plans for the continuation of the development of
AZX1101.
We do not expect to
generate revenue from drug candidates that we develop until we
obtain approval for one or more of such drug candidates and
commercialize our product or enter into a collaborative agreement
with a third party. We do not have any products approved for sale
at the present and have never generated revenue from product
sale.
Recent Developments
Asset Purchase Agreement with Mayoly
On March 27, 2019,
the Company entered into an Asset Purchase Agreement with
Mayoly (the “Mayoly APA”), pursuant to which the
Company purchased all rights, title and interest in and to
MS1819-SD. Upon execution of the Mayoly APA, the Joint Development
and License Agreement (the “JDLA”) previously executed by
AzurRx SAS and Mayoly was terminated. In addition, the Company
granted to Mayoly an exclusive, royalty-bearing right to revenue
received from commercialization of MS1819-SD within certain
territories.
In accordance with
the Mayoly APA, the Company provided to Mayoly the following
consideration for the purchase of MS1819-SD:
(i)
the Company assumed certain of Mayoly’s liabilities with
respect to MS1819-SD;
(ii)
the Company forgave all amounts currently owed to AzurRx SAS by
Mayoly under the JDLA;
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(iii)
the Company agreed to pay, within 30 days after the execution of
the Mayoly APA, all amounts incurred by Mayoly for the maintenance
of patents related to MS1819-SD from January 1, 2019 through the
date of the Mayoly APA;
(iv)
the Company made an
initial payment to Mayoly of €800,000, which amount was paid
by the issuance of 400,481 shares of the Company’s common
stock at a price of $2.29 per share (the “Closing
Payment Shares”) and the
Company recognized $917,101 as part of stockholders’ equity;
and
(v)
the Company agreed to
pay to Mayoly an additional €1,500,000, payable in a mix of
cash and shares of the Company’s common stock as follows (the
“Milestone
Payments”): (y) on
December 31, 2019, a cash payment of €400,000 and 200,240
shares of common stock (the “2019
Escrow Shares”) and (z) on
December 31, 2020, a cash payment of €350,000 and 175,210
shares of common stock (the “2020
Escrow Shares” and, together
with the 2019 Escrow Shares, the “Escrow
Shares”) and the
Company recognized $823,858 as part of stockholders’ equity.
The Company paid €400,000
to Mayoly on December 26, 2019, as required by the Mayoly
APA.
The Closing Payment
Shares and the Escrow Shares were all issued upon execution of the
Mayoly APA; provided, however,
per the terms of the Mayoly APA, the Escrow Shares will be held in
escrow until the applicable Milestone Payment date, at which time
the respective Escrow Shares will be released to
Mayoly.
April 2019 Registered Direct Public Offering
In April 2019, the
Company completed a public offering of 1,294,930 shares of its
common stock at a public offering price of $2.13 per share,
resulting in net proceeds of approximately $2,500,000, after
deducting the selling agent fee paid to Alexander Capital, L.P. and
other offering expenses payable by the Company (the
“April
2019 Public Offering”). The April
2019 Public Offering was completed pursuant to the Company’s
effective shelf registration statement on Form S-3 (File No.
333-226065) and the prospectus supplement filed on April 2,
2019.
In connection with the
April 2019 Public Offering, the Company entered into a Selling
Agent Agreement with Alexander Capital, L.P., pursuant to which we
paid to Alexander Capital, L.P. (i) a cash fee equal to 7% of the
aggregate gross proceeds of the April 2019 Public Offering, and
(ii) issued to Alexander Capital, L.P. warrants to purchase 38,848
shares of the Company’s common stock (the
“April
2019 Selling Agent Warrants”), an amount
equal to 3% of the aggregate number of shares of common stock sold
in the April 2019 Public Offering. The April 2019 Selling Agent
Warrants will become exercisable one year from the date of
issuance, expire on April 2, 2024 and have an exercise price of
$2.55 per share. Also see Note 12. The Company also reimbursed
Alexander Capital, L.P. for its expenses on a non-accountable basis
in an amount equal to 1% of the gross proceeds of the April 2019
Public Offering and $50,000 for other accountable
expenses.
May 2019 Registered Direct Public Offering
On May 9, 2019, the
Company completed a second public offering with Alexander Capital
of 1,227,167 shares of the Company’s common stock at a public
offering price of $2.35 per share, resulting in net proceeds of
approximately $2,550,000, after deducting the selling agent fee
paid to Alexander Capital and other offering expenses payable by
the Company (the “May
2019 Public Offering”). The May 2019
Public Offering was completed pursuant to the Company’s
effective shelf registration statement on Form S-3 (File No.
333-226065) and the prospectus supplement filed on May 9,
2019.
In connection with the May 2019 Public Offering, the Company
entered into a Selling Agent Agreement with Alexander Capital,
pursuant to which the Company (i) paid Alexander Capital a cash fee
equal to 7.0% of the aggregate gross proceeds of the May 2019
Public Offering, and (ii) issued Alexander Capital warrants to
purchase up to 36,815 shares of common stock, an amount equal to
3.0% of the aggregate number of shares of common stock sold in the
Offering. The May 2019 Selling Agent Warrants will become
exercisable one year from the date of issuance, expire on May 9,
2024 and have an exercise price of $2.82 per share. Also see Note
12. The Company also agreed to reimburse Alexander Capital for its
expenses in connection with the Offering on a non-accountable basis
in an amount equal to 1.0% of the gross proceeds of the Offering
and up to $50,000 for other accountable expenses.
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July 2019 Underwritten Public Offering
On July 17, 2019, we
entered into an underwriting agreement (the
“Underwriting
Agreement”) with H.C.
Wainwright & Co., LLC. (“Wainwright”)
as representatives of the several underwriters named therein (the
“Underwriters”),
relating to the issuance and sale of 5 million shares of our common
stock. Each share of common stock was sold at a public offering
price of $1.00 per share, resulting in gross proceeds to us of
$5,000,000, or net proceeds of approximately $4,500,000, after
deducting the underwriting discount, estimated legal fees and other
offering expenses payable by the Company (the
“July
2019 Public Offering”). In addition,
pursuant to the terms of the Underwriting Agreement, the Company
granted to the Underwriters a 30-day option to purchase up to an
additional 750,000 shares of common stock at the same public
offering price per share.
The July 2019 Public
Offering was conducted pursuant to our effective shelf registration
statement on Form S-3 (File No. 333-231954), filed with the
Securities and Exchange Commission (the “SEC”)
on June 5, 2019, and declared effective on June 25, 2019, including
the base prospectus dated June 4, 2019 included therein and the
related prospectus supplement filed on July 19,
2019.
In addition to the
underwriting discount received by the Underwriters, we also issued
unregistered common stock purchase warrants to Wainwright to
purchase up to 200,000 shares of common stock (the
“Wainwright
Warrants”). The
Wainwright Warrants are exercisable immediately upon issuance,
expire on July 17, 2024 and have an exercise price of $1.25 per
share.
Cyber-Related Fraud
On August 8, 2019,
management was advised that it was a victim of a cyber-related
fraud whereby ahacker impersonated one of the Company’s key
vendors to redirect payments, totaling $418,765. The Company,
including the Audit Committee, completed its investigation and is
reviewing all available avenues of recovery, including from the
Company’s financial institution to recover the payments. As
of September 30, 2019, the Company had recovered $50,858 from its
financial institution but management is unable to determine the
probability of recovering anything further from the cyber-related
fraud. Therefore, as of September 30, 2019, the Company recorded a
loss of $367,908 which is included in General and Administrative
(“G&A”)
expenses. As a result of the cyber-related fraud, the Company has
instituted additional controls and procedures and all employees
have now undergone cybersecurity training.
Amendment to Charter and Approved Reverse Stock Split
On December 19, 2019, at the Company’s
Annual Meeting of Stockholders (“Annual
Meeting”), the
Company’s stockholders approved an amendment to the
Company’s Amended and Restated Certificate of Incorporation
(the “Charter”)
to increase the number of authorized shares of common stock by
50,000,000 shares to 150,000,000 shares, and to authorize the
Company’s Board of Directors to effect a reverse stock split
of both the issued and outstanding and authorized shares of common
stock of the Company, at a specific ratio, ranging from one-for-two
(1:2) to one-for-five (1:5), any time prior to the one-year
anniversary date of the Annual Meeting, with the exact ratio to be
determined by the Board of Directors.
The
Company filed a Certificate of Amendment to its Charter with the
Secretary of State of the State of Delaware on December 20, 2019,
to increase the number of authorized shares of common stock to
150,000,000 shares.
December 2019 Convertible Note Offering
On December 20, 2019, the Company began an
offering of (i) Senior Convertible Promissory Notes (each a
“Note,” and together, the
“Notes”) in the principal amount of up to $8.0
million to certain accredited investors (the
“Investors”), and (ii) warrants
(“Warrants”) to purchase shares of the Company’s
common stock, each pursuant to Note Purchase Agreements entered
into by and between the Company and each of the Investors (the
“NPAs”) (the “Note
Offering”).
On December 20, 2019, December 24, 2019 and December
30, 2019, the Company issued Notes to the Investors in the
aggregate principal amount of $3,318,100. Each Note has a maturity
date that is nine months from the date of issuance, accrues
interest at a rate of 9% per annum, and is convertible, at the
option of the holder, into shares of the Company’s Common
Stock at a price of $0.97 per share (the “Conversion
Shares”). As additional
consideration for the execution of the NPA, each Investor also
received Warrants to purchase that number of shares of the
Company’s Common Stock equal to one-half of the Conversion
Shares issuable upon conversion of the Notes (the
“Warrant
Shares”). The Warrants
have an exercise price of $1.07 per share and expire five years
from the date of issuance. The Company and each Investor executed a
Registration Rights Agreement (the “RRA”), pursuant to which the Company agreed to
file a registration statement with the Securities and Exchange
Commission (“SEC”) no later than 30 days after the beginning
of the Note Offering, on behalf of Investors, to register the
Conversion Shares and Warrant Shares.
In connection with the Note Offering, ADEC
Private Equity Investments, LLC (“ADEC”), the holder of certain
Senior Convertible Notes issued under that certain Note Purchase
Agreement, dated as of February 14, 2019, in the aggregate original
principal amount of $2.0 million, consented to the issuance of the Notes in the Note
Offering in consideration for the repayment, in full, of
$554,153.42 remaining due under the terms of the Senior Convertible
Notes on or before January 2, 2020, net of the payment to ADEC of
$550,000 made by the Company on December 23, 2019 from proceeds
from the issuance of the Notes and a payment of $1.0 million on
December 31, 2019, from the anticipated issuance of additional
Notes.
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Equity Offering
On
November 13, 2019
(the “Execution
Date”), we entered into a purchase agreement, dated as
of the Execution Date (the “Purchase Agreement”), and a
registration rights agreement, dated as of the Execution Date (the
“Registration Rights
Agreement”), with Lincoln Park Capital Fund, LLC
(“Lincoln
Park”), pursuant to which Lincoln Park has committed
to purchase up to $15,000,000 of the Company’s common stock.
Pursuant to the Registration Rights Agreement, the Company is
required to register the maximum number of shares of common stock
that have been or may be issued to Lincoln Park under the Purchase
Agreement and as shall be permitted to be registered in accordance
with applicable rules, regulations and interpretations of the SEC.
We have filed the registration statement with the SEC that includes
this prospectus to register for resale under the Securities Act of
1933, as amended, (the “Securities Act”), up to 8,880,760
shares of common stock, representing 33.33% of the issued and
outstanding shares of common stock on November 13,
2019.
Under
the terms and subject to the conditions of the Purchase Agreement,
the Company has the right, but not the obligation, to sell to
Lincoln Park, and Lincoln Park is obligated to purchase up to
$15,000,000 of shares of common stock. Such sales of common stock
by the Company, if any, will be subject to certain limitations, and
may occur from time to time, at the Company’s sole
discretion, over the 30-month period commencing on the date that a
registration statement covering the resale of shares of common
stock that have been and may be issued under the Purchase
Agreement, which the Company agreed to file with the SEC pursuant
to the Registration Rights Agreement, is declared effective by the
SEC, a final prospectus in connection therewith is filed and the
other conditions set forth in the Purchase Agreement are satisfied,
all of which are outside the control of Lincoln Park (such date on
which all of such conditions are satisfied, the “Commencement Date”). The Company
has 60 business days to file the registration statement. In
consideration for entering into the Purchase Agreement, we
previously issued to Lincoln Park 487,168 shares of common stock as
a commitment fee on November 13, 2019.
Thereafter, under the Purchase Agreement, on any
business day over the term of the Purchase Agreement, the Company
has the right, in its sole discretion, to present Lincoln Park with
a purchase notice (each, a “Purchase
Notice”) directing
Lincoln Park to purchase up to 150,000 shares per business day (the
“Regular
Purchase”) (subject to
adjustment for any reorganization, recapitalization, non-cash
dividend, stock split, reverse stock split or other similar
transaction as provided in the Purchase Agreement). In each case,
Lincoln Park’s maximum commitment in any single Regular
Purchase may not exceed $1,000,000. The Purchase Agreement provides
for a purchase price per Purchase Share (the
“Purchase
Price”) equal to the
lesser of the lowest sale price of the Company’s common stock
on the purchase date; and the average of the three lowest closing
sale prices for the Company’s common stock during the ten
consecutive business days ending on the business day immediately
preceding the purchase date of such shares.
In
addition, on any date on which the Company submits a Purchase
Notice to Lincoln Park, the Company also has the right, in its sole
discretion, to present Lincoln with an accelerated purchase notice
(each, an “Accelerated
Purchase Notice”) directing Lincoln Park to purchase
an amount of stock (the “Accelerated Purchase”) equal to
up to the lesser of (i) three times the number of shares purchased
pursuant to such Regular Purchase; and (ii) 30% of the aggregate
shares of the Company’s common stock traded 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 (such period of time on the
applicable Accelerated Purchase Date, the “Accelerated Purchase Measurement
Period”), provided that Lincoln Park will not be
required to buy shares pursuant to an Accelerated Purchase Notice
that was received by Lincoln Park on any business day on which the
last closing trade price of the Company’s common stock on The
Nasdaq Capital Market (or alternative national exchange in
accordance with the Purchase Agreement) is below $0.25 per share.
The purchase price per share for each such Accelerated Purchase
will be equal to the lesser of 97% of the volume weighted average
price of the Company’s common stock 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 the applicable Accelerated Purchase
Date.
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The
Company 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 properly delivered to Lincoln
Park in accordance with the Purchase Agreement, to purchase an
amount of stock (the “Additional Accelerated
Purchase”) equal to up to the lesser of (i) three
times the number of shares purchased pursuant to such Regular
Purchase; and (ii) 30% of the aggregate number of shares of the
Company’s common stock traded during a certain portion of the
normal trading hours on the applicable Additional Accelerated
Purchase date as determined in accordance with the Purchase
Agreement (such period of time on the applicable Additional
Accelerated Purchase date, the “Additional Accelerated Purchase Measurement
Period”), provided that the closing price of the
Company’s common stock on the business day immediately
preceding such business day is not below $0.25 (subject to
adjustment for any reorganization, recapitalization, non-cash
dividend, stock split, reverse stock split or other similar
transaction as provided in the Purchase Agreement). Additional
Accelerated Purchases will be equal to the lower of 97% of the
volume weighted average price of the Company’s common stock
during the applicable Additional Accelerated Purchase Measurement
Period on the applicable Additional Accelerated Purchase date; and
the closing sale price of the Company’s common stock on the
applicable Additional Accelerated Purchase date.
As of
November 13, 2019, there were 26,155,111 shares of our common stock
issued and outstanding immediately prior to the execution of the
Purchase Agreement, of which 23,504,132 shares were held by
non-affiliates. Although the Purchase Agreement provides that we
may sell up to $15,000,000 of our common stock to Lincoln Park,
only 8,880,760 shares of our common stock are being offered under
this prospectus, which represents shares which may be issued to
Lincoln Park in the future under the Purchase Agreement, if and
when we sell shares to Lincoln Park under the Purchase Agreement.
Depending on the market prices of our common stock at the time we
elect to issue and sell shares to Lincoln Park under the Purchase
Agreement, we may need to register for resale under the Securities
Act additional shares of our common stock in order to receive
aggregate gross proceeds equal to the $15,000,000 total commitment
available to us under the Purchase Agreement. If all of the
8,880,760 shares offered by Lincoln Park under this prospectus were
issued and outstanding as of the date hereof, such shares would
represent approximately 25% of the total number of shares of our
common stock issued and outstanding and approximately 27.4% of the
total number of issued and outstanding shares held by
non-affiliates, in each case as of the date hereof. If we elect to
issue and sell more than the 8,880,760 shares offered under this
prospectus to Lincoln Park, which we have the right, but not the
obligation, to do, we must first register for resale under the
Securities Act any such additional shares, which could cause
additional substantial dilution to our stockholders. The number of
shares ultimately offered for resale by Lincoln Park is dependent
upon the number of shares we sell to Lincoln Park under the
Purchase Agreement.
Under
applicable rules of The Nasdaq Capital Market, in no event may we
issue or sell to Lincoln Park under the Purchase Agreement more
than 19.99% of the shares of our common stock outstanding
immediately prior to the execution of the Purchase Agreement (which
is 5,231,022 shares based on 26,155,111 shares issued and
outstanding immediately prior to the execution of the Purchase
Agreement), which limitation we refer to as the Exchange Cap,
unless (i) we obtain stockholder approval to issue shares of common
stock in excess of the Exchange Cap or (ii) the average of the
closing prices of our common stock on The Nasdaq Capital Market for
the five business days immediately preceding November 13, 2019 plus
an incremental amount, such that issuances and sales of our common
stock to Lincoln Park under the Purchase Agreement would be exempt
from the Exchange Cap limitation under applicable Nasdaq rules. In
any event, the Purchase Agreement specifically provides that we may
not issue or sell any shares of our common stock under the Purchase
Agreement if such issuance or sale would breach any applicable
Nasdaq rules.
The
Purchase Agreement also prohibits us from directing Lincoln Park to
purchase any shares of common stock if those shares, when
aggregated with all other shares of our common stock then
beneficially owned by Lincoln Park and its affiliates, would result
in Lincoln Park and its affiliates having beneficial ownership, at
any single point in time, of more than 9.99% of the then total
outstanding shares of our common stock, as calculated pursuant to
Section 13(d) of the Securities Exchange Act of 1934, as amended,
or the Exchange Act, and Rule 13d-3 thereunder (the
“Beneficial Ownership
Cap”).
Issuances of our
common stock in this offering will not affect the rights or
privileges of our existing stockholders, except that the economic
and voting interests of each of our existing stockholders will be
diluted as a result of any such issuance. Although the number of
shares of common stock that our existing stockholders own will not
decrease, the shares owned by our existing stockholders will
represent a smaller percentage of our total outstanding shares
after any such issuance to Lincoln Park.
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The Offering
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Shares of common stock offered by the selling
stockholders
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8,880,760
shares consisting of:
●
487,168 commitment
shares issued to Lincoln Park upon execution of the Purchase
Agreement; and
●
8,393,592 shares we
may sell to Lincoln Park under the Purchase Agreement from time to
time after the date of this prospectus.
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Shares of common stock outstanding before this
offering
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26,642,279
shares of common stock
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Shares of common stock to be outstanding after giving effect to the
issuance of 8,880,760 shares under the Purchase Agreement
registered hereunder
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35,035,871
shares of common stock
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Use of proceeds
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We
will receive no proceeds from the sale of shares of common stock by
Lincoln Park in this offering. We may receive up to $15,000,000
aggregate gross proceeds under the Purchase Agreement from any
sales we make to Lincoln Park pursuant to the Purchase Agreement
after the date of this prospectus.
Any
proceeds that we receive from sales to Lincoln Park under the
Purchase Agreement will be used for working capital and general
corporate purposes including, without limitation, development of
our product candidates, and general and administrative expenses.
See “Use of
Proceeds” on page 11 of this prospectus.
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Terms of this offering
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The
selling stockholders, including their transferees, donees,
pledgees, assignees and successors-in-interest, may sell, transfer
or otherwise dispose of any or all of the shares of common stock
offered by this prospectus from time to time on The Nasdaq Capital
Market or any other stock exchange, market or trading facility on
which the shares are traded or in private transactions. The shares
of common stock may be sold at fixed prices, at market prices
prevailing at the time of sale, at prices related to prevailing
market price or at negotiated prices.
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Nasdaq symbol
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Our
common stock is listed on The Nasdaq Capital Market under the
symbol “AZRX”.
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Risk Factors
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Investing
in our securities involves significant risks. Before making a
decision whether to invest in our securities, please read the
information contained in or incorporated by reference under the
heading “Risk
Factors” in this prospectus, the documents we have
incorporated by reference herein, and under similar headings in
other documents filed after the date hereof and incorporated by
reference into this prospectus. See “Incorporation of Certain Information by
Reference” and “Where You Can Find More
Information”.
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RISK FACTORS
Investing in our
common stock involves a high degree of risk. Before deciding
whether to purchase our securities, including the shares of common
stock and warrants offered by this prospectus, you should carefully
consider the risks and uncertainties described under
“Risk Factors”
in our Annual Report on Form 10-K for the fiscal year ended
December 31, 2018, any subsequent Quarterly Report on
Form 10-Q and our other filings with the SEC, all of which are
incorporated by reference herein. If any of these risks actually
occur, our business, financial condition and results of operations
could be materially and adversely affected and we may not be able
to achieve our goals, the value of our securities could decline and
you could lose some or all of your investment. Additional risks not
presently known to us or that we currently believe are immaterial
may also significantly impair our business operations. If any of
these risks occur, our business, results of operations or financial
condition and prospects could be harmed. In that event, the market
price of our common stock and the value of the warrants could
decline, and you could lose all or part of your
investment.
Risks Related to this Offering
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
November 13, 2019, we entered into the Purchase Agreement with
Lincoln Park, pursuant to which Lincoln Park has committed to
purchase up to $15,000,000 of our common stock. Upon the execution
of the Purchase Agreement, we issued 487,168 Commitment Shares to
Lincoln Park as a fee for its commitment to purchase shares of our
common stock under the Purchase Agreement. The remaining 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 30-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 that
includes this prospectus. 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.
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, some or none 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 and
without it we may not be able to continue operations.
We may direct
Lincoln Park to purchase up to $15,000,000 worth of shares of our
common stock under our agreement over a 30-month period generally
in amounts up to 150,000 shares of our common stock, which share
amount may be increased to include additional shares of our common
stock depending on the market price of our common stock at the time
of sale, and subject to a maximum limit of $1,000,000 per purchase,
on any such business day. Assuming a purchase price of $1.07 per
share (the average of the high and low prices per share on December
27, 2019) and the purchase by Lincoln Park of the balance of the
8,393,592 purchase shares, proceeds to us would only be
approximately $9.0 million.
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. Even if we sell all
$15,000,000 under the Purchase Agreement to Lincoln Park, we may
still need additional capital to fully implement our business,
operating and development plans. 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.
INCORPORATION BY
REFERENCE
The
following documents filed by us with the SEC are incorporated by
reference in this prospectus:
●
our Annual Report
on Form 10-K for the year ended December 31, 2018, filed on April
1, 2019;
●
Amendment No. 1 to
our Annual Report on Form 10-K for the year ended December 31,
2018, filed on April 30, 2019;
●
our Quarterly
Report on Form 10-Q for the period ended March 31, 2019, filed on
May 15, 2019;
●
our Quarterly
Report on Form 10-Q for the period ended June 30, 2019, filed on
August 13, 2019;
●
our Quarterly
Report on Form 10-Q for the period ended September 30, 2019, filed
on November 14, 2019;
●
our Current
Reports on Form 8-K, filed on February 20, 2019;
●
our Current Report
on Form 8-K, filed on March 28, 2019;
●
our Current Report
on Form 8-K, filed on April 3, 2019;
●
our Current Report
on Form 8-K, filed on April 11, 2019;
●
our Current Report
on Form 8-K, filed on April 24, 2019;
●
our Current Report
on Form 8-K, filed on May 14, 2019;
●
our Current Report
on Form 8-K, filed on May 20, 2019;
●
our Current Report
on Form 8-K, filed on May 23, 2019;
●
our Current Report
on Form 8-K, filed on June 7, 2019;
●
our Current Report
on Form 8-K, filed on July 9, 2019;
●
our Current Report
on Form 8-K, filed on July 10, 2019;
●
our Current Report
on Form 8-K, filed on July 22, 2019;
●
our Current Report
on Form 8-K, filed on September 25, 2019 (with respect to Item 8.01
and Exhibit 99.1 only);
●
our Current Report
on Form 8-K, filed on October 11, 2019;
●
our Current Report
on Form 8-K, filed on October 15, 2019;
●
our Current Report
on Form 8-K, filed on October 17, 2019;
●
our Current Report
on Form 8-K, filed on November 1, 2019;
●
our Current Report
on Form 8-K, filed on November 14, 2019;
●
our Current Report
on Form 8-K, filed on December 30, 2019; and
●
the description of
our common stock which is registered under Section 12 of the
Exchange Act, in our registration statement on Form 8-A, filed on
August 8, 2016, including any amendment or reports filed for the
purposes of updating this description.
We
also incorporate by reference all documents we file pursuant to
Section 13(a), 13(c), 14 or 15 of the Exchange Act (other than any
portions of filings that are furnished rather than filed pursuant
to Items 2.02 and 7.01 of a Current Report on Form 8-K) after the
date of the initial registration statement of which this prospectus
is a part and prior to effectiveness of such registration
statement. All documents we file in the future pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of
this prospectus and prior to the termination of the offering are
also incorporated by reference and are an important part of this
prospectus.
Any
statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or
superseded for the purposes of this registration statement to the
extent that a statement contained herein or in any other
subsequently filed document which also is or deemed to be
incorporated by reference herein modifies or supersedes such
statement. Any statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part
of this registration statement.
CAUTIONARY NOTE
REGARDING FORWARD-LOOKING STATEMENTS
This
prospectus, and any documents we incorporate by reference, contain
certain forward-looking statements that involve substantial risks
and uncertainties. All statements contained in this prospectus and
any documents we incorporate by reference, other than statements of
historical facts, are forward-looking statements including
statements regarding our strategy, future operations, future
financial position, future revenue, projected costs, prospects,
plans, objectives of management and expected market growth. These
statements involve known and unknown risks, uncertainties and other
important factors that may cause our actual results, performance or
achievements to be materially different from any future results,
performance or achievements expressed or implied by the
forward-looking statements.
The
words “anticipate”, “believe”,
“estimate”, “expect”, “intend”,
“may”, “plan”, “predict”,
“project”, “target”,
“potential”, “will”, “would”,
“could”, “should”, “continue”
and similar expressions are intended to identify forward-looking
statements, although not all forward-looking statements contain
these identifying words. These forward-looking statements include,
among other things, statements about:
●
the availability
of capital to satisfy our working capital
requirements;
●
the accuracy of
our estimates regarding financial data as of September 30, 2019, as
well as other estimates regarding expenses, future revenues and
capital requirements;
●
our ability to
continue operating as a going concern;
●
our plans to
develop and commercialize our principal product candidates,
consisting of MS1819-SD and AZX1103;
●
our ability to
initiate and complete our clinical trials and to advance our
principal product candidate into additional clinical trials,
including pivotal clinical trials, and successfully complete such
clinical trials;
●
regulatory
developments in the U.S. and foreign countries;
●
the performance of
our third-party contract manufacturer(s), contract research
organization(s) and other third-party non-clinical and clinical
development collaborators and regulatory service
providers;
●
our ability to
obtain and maintain intellectual property protection for our core
assets;
●
the size of the
potential markets for our product candidates and our ability to
serve those markets;
●
the rate and
degree of market acceptance of our product candidates for any
indication once approved;
●
the success of
competing products and product candidates in development by others
that are or become available for the indications that we are
pursuing;
●
the loss of key
scientific, clinical and nonclinical development, and/or management
personnel, internally or from one of our third-party collaborators;
and
●
other risks and
uncertainties, including those listed in the “Risk Factors” section of this
prospectus and the documents incorporated by reference
herein.
These
forward-looking statements are only predictions and we may not
actually achieve the plans, intentions or expectations disclosed in
our forward-looking statements, so you should not place undue
reliance on our forward-looking statements. Actual results or
events could differ materially from the plans, intentions and
expectations disclosed in the forward-looking statements we make.
We have based these forward-looking statements largely on our
current expectations and projections about future events and trends
that we believe may affect our business, financial condition and
operating results. We have included important factors in the
cautionary statements included in this prospectus supplement, as
well as certain information incorporated by reference into this
prospectus supplement and the accompanying prospectus, that could
cause actual future results or events to differ materially from the
forward-looking statements that we make. Our forward-looking
statements do not reflect the potential impact of any future
acquisitions, mergers, dispositions, joint ventures or investments
we may make.
You
should read this prospectus supplement and the accompanying
prospectus with the understanding that our actual future results
may be materially different from what we expect. We do not assume
any obligation to update any forward-looking statements whether as
a result of new information, future events or otherwise, except as
required by applicable law.
USE OF
PROCEEDS
This
prospectus relates to shares of our common stock that may be
offered and sold from time to time by Lincoln Park. We will receive
no proceeds from the sale of shares of common stock by Lincoln Park
in this offering. We may receive up to $15,000,000 aggregate gross
proceeds under the Purchase Agreement from any sales we make to
Lincoln Park pursuant to the Purchase Agreement after the date of
this prospectus. However, we may not be registering for sale or
offering for resale under the registration statement of which this
prospectus is a part all of the shares issuable pursuant to the
Purchase Agreement. As we are unable to predict the timing or
amount of potential issuances of all of the shares offered hereby
(other than the commitment shares), we have not allocated any
proceeds of such issuances to any particular purpose. Accordingly,
all such proceeds are expected to be used primarily for research
and development expenses associated with continuing clinical
development and testing of MS1819-SD and advancing our preclinical
programs for AZX1103, and for other working capital and
capital expenditures.
DIVIDEND POLICY
We
have never declared or paid any cash dividends on our capital
stock, and we do not currently intend to pay any cash dividends on
our common stock for the foreseeable future. We expect to retain
future earnings, if any, to fund the development and growth of our
business. Any future determination to pay dividends on our common
stock will be at the discretion of our board of directors and will
depend upon, among other factors, our results of operations,
financial condition, capital requirements and any contractual
restrictions.
SELLING
STOCKHOLDER
This
prospectus relates to the resale by the selling stockholder,
Lincoln Park, of shares of common stock that have been or may be
issued to Lincoln Park pursuant to the Purchase Agreement. We are
filing the registration statement of which this prospectus forms a
part pursuant to the provisions of the Registration Rights
Agreement, which we entered into with Lincoln Park on November 13,
2019 concurrently with our execution of the Purchase Agreement, in
which we agreed to provide certain registration rights with respect
to sales by Lincoln Park of the shares of our common stock that
have been or may be issued to Lincoln Park under the Purchase
Agreement.
Lincoln Park, as
the selling stockholder, may, from time to time, offer and sell
pursuant to this prospectus any or all of the shares that we have
issued or may sell to Lincoln Park under the Purchase Agreement.
The selling stockholder may sell some, all or none of its shares.
We do not know how long the selling stockholder will hold the
shares before selling them, and we currently have no agreements,
arrangements or understandings with the selling stockholder
regarding the sale of any of the shares.
The
following table presents information regarding the selling
stockholder and the shares that it may offer and sell from time to
time under this prospectus. The table is prepared based on
information supplied to us by the selling stockholder, and reflects
its holdings as of December 27, 2019. Neither Lincoln Park nor any
of its affiliates has held a position or office, or had any other
material relationship, with us or any of our predecessors or
affiliates. Beneficial ownership is determined in accordance with
Section 13(d) of the Exchange Act and Rule 13d-3
thereunder.
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Selling
Stockholder
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Shares
Beneficially
Owned
Before this
Offering
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Percentage
of
Outstanding
Shares
Beneficially
Owned
Before
this Offering
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Shares
to be Sold in this Offering Assuming The
Company issues the Maximum Number of Shares
Under the Purchase Agreement
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Percentage
of
Outstanding
Shares
Beneficially
Owned
After
this Offering
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Lincoln Park
Capital Fund, LLC (1)
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815,680(2)
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3.06%(3)
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8,880,760(4)
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0.93%
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(1)
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Josh
Scheinfeld and Jonathan Cope, the Managing Members of Lincoln Park
Capital, LLC, are deemed to be beneficial owners of all of the
shares of common stock owned by Lincoln Park Capital Fund, LLC.
Messrs. Cope and Scheinfeld have shared voting and investment power
over the shares being offered under the prospectus filed with the
SEC in connection with the transactions contemplated under the
Purchase Agreement. Lincoln Park Capital, LLC is not a licensed
broker dealer or an affiliate of a licensed broker
dealer.
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(2)
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Represents
(i) the 487,168 shares issued to Lincoln Park as Commitment Shares
under the Purchase Agreement and being registered under the
registration statement of which this prospectus is a part and (ii)
an aggregate of 328,512 shares, underlying warrants that are
beneficially owned by Lincoln Park subject to blocker provisions
which restrict the exercise of such instrument if, as a result of
such exercise, Lincoln Park, the holder, together with its
affiliates and any other person whose beneficial ownership of
Common Stock would be aggregated with Lincoln Park for purposes of
Section 13(d) of the Exchange Act, would cause Lincoln Park to
beneficially own in excess of 4.99% of our then issued and
outstanding shares of Common Stock. The warrants held by Lincoln
Park were previously acquired in one or more transactions not
related to the transactions contemplated by the Purchase Agreement,
and are not being registered under the registration statement of
which this prospectus is a part. In accordance with Rule 13d-3(d)
under the Exchange Act, we have excluded from the number of shares
beneficially owned prior to the offering all of the shares of
common stock that Lincoln Park may be required to purchase pursuant
to the Purchase Agreement because the issuance of such shares is
solely at our discretion and is subject to certain conditions, the
satisfaction of all of which are outside of Lincoln Park’s
control, including the registration statement of which this
prospectus is a part becoming and remaining effective. Furthermore,
under the terms of the Purchase Agreement, issuances and sales of
shares of our common stock to Lincoln Park are subject to certain
limitations on the amounts we may sell to Lincoln Park at any time,
including the Exchange Cap and the Beneficial Ownership Cap. See
the description under the heading “The Lincoln Park
Transaction” for more information about the Purchase
Agreement.
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(3)
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Based
on 26,642,279 outstanding shares of our common stock as of December
27, 2019.
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(4)
|
Although
the Purchase Agreement provides that we may sell up to $15,000,000
of our common stock to Lincoln Park in addition to the 487,168
shares that have already been issued to Lincoln Park, only
8,880,760 shares of our common stock are being offered under this
prospectus that may be sold by us to Lincoln Park at our discretion
from time to time over a 30-month period commencing after the date
of the Commencement. Depending on the price per share at which we
sell our common stock to Lincoln Park pursuant to the Purchase
Agreement, we may need to sell to Lincoln Park under the Purchase
Agreement more shares of our common stock than are offered under
this prospectus in order to receive aggregate gross proceeds equal
to the $15,000,000 total commitment available to us under the
Purchase Agreement. If we choose to do so, we must first register
for resale under the Securities Act such additional shares. The
number of shares ultimately offered for resale by Lincoln Park is
dependent upon the number of shares we sell to Lincoln Park under
the Purchase Agreement.
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LINCOLN PARK
TRANSACTION
General
On
November 13, 2019, we entered into a Purchase Agreement and
Registration Rights Agreement with Lincoln Park. Pursuant to the
terms of the Purchase Agreement, Lincoln Park has agreed to
purchase from us up to $15,000,000 of our common stock from time to
time during the term of the Purchase Agreement, subject to certain
limitations.
We do
not have the right to commence any sales to Lincoln Park under the
Purchase Agreement until the Commencement has occurred. Thereafter,
we may, from time to time and at our sole discretion, on any single
business day, direct Lincoln Park to purchase shares of our common
stock in amounts up to 150,000 shares, which amounts may be
increased depending on the market price of our common stock at the
time of sale and subject to a maximum commitment by Lincoln Park of
$1,000,000 per single purchase (“Regular Purchases”). In addition, at our
discretion, Lincoln Park has committed to purchase other amounts
under an Accelerated Purchase (as defined below) and/or additional
amounts under an Additional Accelerated Purchase (as defined below)
under certain circumstances. The purchase price per share sold will
be based on the market price of our common stock immediately
preceding the time of sale as computed under the Purchase
Agreement. Lincoln Park may not assign or transfer its rights and
obligations under the Purchase Agreement.
Under
applicable rules of The Nasdaq Capital Market, in no event may we
issue or sell to Lincoln Park under the Purchase Agreement share of
our common stock in excess of the Exchange Cap (which is 5,231,022
shares, or 19.99% of the shares of our common stock outstanding
immediately prior to the execution of the Purchase Agreement),
unless (i) we obtain stockholder approval to issue shares of common
stock in excess of the Exchange Cap or (ii) the average price of
all applicable sales of our common stock to Lincoln Park under the
Purchase Agreement equals or exceeds the average of the closing
prices of our common stock on The Nasdaq Capital Market for the
five business days immediately preceding November 13, 2019 plus an
incremental amount, such that issuances and sales of our common
stock to Lincoln Park under the Purchase Agreement would be exempt
from the Exchange Cap limitation under applicable Nasdaq rules. In
any event, the Purchase Agreement specifically provides that we may
not issue or sell any shares of our common stock under the Purchase
Agreement if such issuance or sale would breach any applicable
rules Nasdaq rules.
The
Purchase Agreement also prohibits us from directing Lincoln Park to
purchase any shares of common stock if those shares, when
aggregated with all other shares of our common stock then
beneficially owned by Lincoln Park and its affiliates, would result
in Lincoln Park exceeding the Beneficial Ownership
Cap.
Pursuant
to the
Registration Rights Agreement, the Company is required to register
the maximum number of shares of common stock that have been or may
be issued to Lincoln Park under the Purchase Agreement and as shall
be permitted to be registered in accordance with applicable rules,
regulations and interpretations of the SEC. We have filed the
registration statement with the SEC that includes this prospectus
to register for resale under the Securities Act, up to 8,880,760
shares of common stock, representing 33.33% of the issued and
outstanding shares of common stock on November 13,
2019.
Purchase of Shares Under the Purchase Agreement
Under
the terms and subject to the conditions of the Purchase Agreement,
the Company has the right, but not the obligation, to sell to
Lincoln Park, and Lincoln Park is obligated to purchase up to
$15,000,000 of shares of common stock. Such sales of common stock
by the Company, if any, will be subject to certain limitations, and
may occur from time to time, at the Company’s sole
discretion, over the 30-month period commencing on the date that a
registration statement covering the resale of shares of common
stock that have been and may be issued under the Purchase
Agreement, which the Company agreed to file with the SEC pursuant
to the Registration Rights Agreement, is declared effective by the
SEC and a final prospectus in connection therewith is filed and the
other conditions set forth in the Purchase Agreement are satisfied,
all of which are outside the control of Lincoln Park (such date on
which all of such conditions are satisfied, the “Commencement Date”). The Company
has 60 business days to file the registration
statement.
Thereafter, under
the Purchase Agreement, on any business day over the term of the
Purchase Agreement, the Company has the right, in its sole
discretion, to present Lincoln Park with a purchase notice (each, a
“Purchase
Notice”) directing Lincoln Park to purchase up to
150,000 shares per business day (the “Regular Purchase”), (subject to
adjustment for any reorganization, recapitalization, non-cash
dividend, stock split, reverse stock split or other similar
transaction as provided in the Purchase Agreement). In each case,
Lincoln Park’s maximum commitment in any single Regular
Purchase may not exceed $1,000,000. The Purchase Agreement provides
for a purchase price per Purchase Share (the “Purchase Price”) equal to the
lesser of:
●
the lowest sale
price of the Company’s common stock on the purchase date;
and
●
the average of the
three lowest closing sale prices for the Company’s common
stock during the ten consecutive business days ending on the
business day immediately preceding the purchase date of such
shares.
In
addition, on any date on which the Company submits a Purchase
Notice to Lincoln Park, the Company also has the right, in its sole
discretion, to present Lincoln with an accelerated purchase notice
(each, an “Accelerated
Purchase Notice”) directing Lincoln Park to purchase
an amount of stock (the “Accelerated Purchase”) equal to
up to the lesser of (i) three times the number of shares purchased
pursuant to such Regular Purchase; and (ii) 30% of the aggregate
shares of the Company’s common stock traded 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 (such period of time on the
applicable Accelerated Purchase Date, the “Accelerated Purchase Measurement
Period”), provided that Lincoln Park will not be
required to buy shares pursuant to an Accelerated Purchase Notice
that was received by Lincoln Park on any business day on which the
last closing trade price of the Company’s common stock on The
Nasdaq Capital Market (or alternative national exchange in
accordance with the Purchase Agreement) is below $0.25 per share.
The purchase price per share for each such Accelerated Purchase
will be equal to the lesser of:
●
97% of the volume
weighted average price of the Company’s common stock 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 the applicable
Accelerated Purchase Date.
The
Company 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 properly delivered to Lincoln
Park in accordance with the Purchase Agreement, to purchase an
amount of stock (the “Additional Accelerated
Purchase”) equal to up to the lesser of (i) three
times the number of shares purchased pursuant to such Regular
Purchase; and (ii) 30% of the aggregate number of shares of the
Company’s common stock traded during a certain portion of the
normal trading hours on the applicable Additional Accelerated
Purchase date as determined in accordance with the Purchase
Agreement (such period of time on the applicable Additional
Accelerated Purchase date, the “Additional Accelerated Purchase Measurement
Period”), provided that the closing price of the
Company’s common stock on the business day immediately
preceding such business day is not below $0.25 (subject to
adjustment for any reorganization, recapitalization, non-cash
dividend, stock split, reverse stock split or other similar
transaction as provided in the Purchase Agreement). Additional
Accelerated Purchases will be equal to the lower of:
●
97% of the volume
weighted average price of the Company’s common stock during
the applicable Additional Accelerated Purchase Measurement Period
on the applicable Additional Accelerated Purchase date;
and
●
the closing sale
price of the Company’s common stock on the applicable
Additional Accelerated Purchase date.
In the
case of the 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 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 resale of any or all of the Securities to be
issued to the Investor under the Transaction Documents, 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 the Investor 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);
●
the suspension of
the common stock from trading on the Principal Market for a period
of one (1) Business Day, provided that the Company may not direct
the Investor to purchase any shares of common stock during any such
suspension;
●
the delisting of
the common stock from The Nasdaq Capital Market, provided, however,
that the common stock is not immediately thereafter trading on the
New York Stock Exchange, The Nasdaq Global Market, The Nasdaq
Global Select Market, the NYSE American, the NYSE Arca, the OTC
Bulletin Board, the OTCQX operated by the OTC Markets Group, Inc.
or the OTCQB operated by the OTC Markets Group, Inc. (or nationally
recognized successor to any of the foregoing);
●
If at any time
after the Commencement Date, the Exchange Cap is exceeded unless
and until stockholder approval is obtained pursuant to the Purchase
Agreement. The Exchange Cap shall be deemed to be exceeded at such
time if, upon submission of a Regular Purchase Notice or
Accelerated Purchase Notice under this Agreement, the issuance of
such shares of common stock would exceed that number of shares of
common stock which the Company may issue under this Agreement
without breaching the Company’s obligations under the rules
or regulations of the Principal Market;
●
the failure for any
reason by the Transfer Agent to issue Purchase Shares to the
Investor within three (3) Business Days after the applicable
Purchase Date, Accelerated Purchase Date or Additional Accelerated
Purchase Date (as applicable) on which the Investor is entitled to
receive such Purchase Shares;
●
the Company
breaches any representation, warranty, covenant or other term or
condition under any Transaction Document if such breach has or
could have a Material Adverse Effect and except, in the case of a
breach of a covenant which is reasonably curable, only if such
breach continues for a period of at least five (5) Business
Days;
●
if any Person
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 any Subsidiary; or
●
if at any time the
Company is not eligible to transfer its common stock electronically
as DWAC Shares.
Lincoln Park does
not have the right to terminate the Purchase Agreement upon any of
the events of default set forth above. 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.
Our Termination Rights
We
have the unconditional right, at any time, for any reason and
without any payment or liability to us, to give notice to Lincoln
Park to terminate the Purchase Agreement. In the event of
bankruptcy proceedings by or against us, the Purchase Agreement
will automatically terminate without action of any
party.
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 Variable Rate Transactions
There
are no restrictions on future financings, rights of first refusal,
participation rights, penalties or liquidated damages in the
Purchase Agreement or Registration Rights Agreement other than a
prohibition on entering into a “Variable Rate
Transaction” as defined in the Purchase
Agreement.
Effect of Performance of the Purchase Agreement on Our
Stockholders
All
8,880,760 shares registered in this offering which have been or may
be issued or sold by us to Lincoln Park under the Purchase
Agreement are expected to be freely tradable. It is anticipated
that shares registered in this offering will be sold over a period
of up to 30-months commencing on the date that the registration
statement including this prospectus becomes effective. The sale by
Lincoln Park of a significant amount of shares registered in this
offering at any given time could cause the market price of our
common stock to decline and to be highly volatile. Sales of our
common stock to Lincoln Park, if any, 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, some or none of those shares at any
time or from time to time in its discretion. 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 $15,000,000 of
our common stock. Depending on the price per share at which we sell
our common stock to Lincoln Park pursuant to the Purchase
Agreement, we may need to sell to Lincoln Park under the Purchase
Agreement more shares of our common stock than are offered under
this prospectus in order to receive aggregate gross proceeds equal
to the $15,000,000 total commitment available to us under the
Purchase Agreement. If we choose to do so, we must first register
for resale under the Securities Act such additional shares of our
common stock, which could cause additional substantial dilution to
our stockholders. The number of shares ultimately offered for
resale by Lincoln Park under this prospectus is dependent upon the
number of shares we direct Lincoln Park to purchase 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 equal or exceed the average of the closing
prices of our common stock on The Nasdaq Capital Market for the
five business days immediately preceding November 13, 2019 plus an
incremental amount, 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 and its
affiliates, would exceed the Beneficial Ownership Cap.
The
following table sets forth the amount of gross proceeds we would
receive from Lincoln Park from our sale of shares to Lincoln Park
under the Purchase Agreement at varying purchase
prices:
|
Assumed
Average Purchase Price Per Share
|
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)
|
Proceeds
from the Sale of Shares to Lincoln Park Under the $15M Purchase
Agreement
|
|
$0.50
|
4,743,854
|
15.11%
|
$2,371,927
|
|
$1.00
|
8,393,592
|
24.0%
|
$8,393,592
|
|
$1.11(3)
|
8,393,592
|
24.0%
|
$9,316,887
|
|
$1.50
|
8,393,592
|
24.0%
|
$12,590,388
|
(1)
Includes the total
number of purchase shares which we would have sold under the
Purchase Agreement at the corresponding assumed purchase price per
share set forth in the adjacent column, which does not include the
487,168 commitment shares previously issued to Lincoln Park.
Although the Purchase Agreement provides that we may sell up to
$15,000,000 of our common stock to Lincoln Park, we are only
registering 8,880,760 shares (including the 487,168 commitment
shares previously issued to Lincoln Park) under this prospectus,
which may or may not cover all the shares we ultimately sell to
Lincoln Park under the Purchase Agreement, depending on the
purchase price per share. As a result, we have included in this
column only those shares that we are registering in this offering.
If we seek to issue shares of our common stock, including shares
from other transactions that may be aggregated with the
transactions contemplated by the Purchase Agreement under the
applicable rules of The Nasdaq Capital Market, in excess of
5,213,022 shares, or 19.99% of the total common stock outstanding
immediately prior to the execution of the Purchase Agreement unless
the average price per share exceeds the average of the closing
prices of our common stock on The Nasdaq Capital Market for the
five business days immediately preceding November 13, 2019 plus an
incremental amount, such that issuances and sales of our common
stock to Lincoln Park under the Purchase Agreement would be exempt
from the Exchange Cap limitation under applicable Nasdaq rules, we
may be required to seek stockholder approval to maintain compliance
with the rules of The Nasdaq Capital Market.
(2)
The denominator is
based on 26,642,279 shares outstanding as of December 27, 2019,
which includes (i) 487,168 commitment shares issued to Lincoln Park
upon the execution of the Purchase Agreement and (ii) the number of
shares set forth in the adjacent column which we would have sold to
Lincoln Park, assuming the purchase price in the adjacent column.
The numerator is based on the number of shares issuable under the
Purchase Agreement at the corresponding assumed purchase price set
forth in the adjacent column.
(3)
The closing sale
price of our shares on December 27, 2019.
PLAN OF
DISTRIBUTION
The
common stock offered by this prospectus is being offered by the
selling stockholder, Lincoln Park. The common stock may be sold or
distributed from time to time by the selling stockholder 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. The sale of the common stock offered by this prospectus
could be affected 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 the common
stock;
●
in other ways not
involving market makers or established business markets, including
direct sales to purchasers or sales effected through
agents;
●
in privately
negotiated transactions; or
●
any combination of
the foregoing.
In
order to comply with the securities laws of certain states, if
applicable, the shares may be sold only through registered or
licensed brokers or dealers. In addition, in certain states, the
shares may not be sold unless they have been registered or
qualified for sale in the state or an exemption from the
state’s registration or qualification requirement is
available and complied with.
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-dealer to
effectuate all sales, if any, of the common stock that it may
purchase 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 unaffiliated
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 will receive commissions from Lincoln Park
that will not exceed customary brokerage commissions.
Brokers, dealers,
underwriters or agents participating in the distribution of the
shares as agents may receive compensation in the form of
commissions, discounts, or concessions from the selling stockholder
and/or purchasers of the common stock for whom the broker-dealers
may act as agent. The compensation paid to a particular
broker-dealer 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.
We
know of no existing arrangements between Lincoln Park or any other
stockholder, broker, dealer, underwriter or agent relating to the
sale or distribution of the shares offered by this prospectus. 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
will pay 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 has agreed to
indemnify us against liabilities under the Securities Act that may
arise from certain written information furnished to us by Lincoln
Park specifically for use in this prospectus or, if such indemnity
is unavailable, to contribute amounts required to be paid in
respect of such liabilities.
Lincoln Park has
represented to us that at no time prior to 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, which establishes a net short position with
respect to our common stock. 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 the selling stockholder, any
affiliated purchasers, and any broker-dealer or other person who
participates in the distribution from bidding for or purchasing, or
attempting to induce any person to bid for or purchase any security
which is the subject of the distribution until the entire
distribution is complete. Regulation M also prohibits any bids or
purchases made in order to stabilize the price of a security in
connection with the distribution of that security. All of the
foregoing may affect the marketability of the securities offered by
this prospectus.
This
offering will terminate on the earlier of (i) termination of the
Purchase Agreement or (ii) the date that all shares offered by this
prospectus have been sold by Lincoln Park.
Our
common stock is quoted on The Nasdaq Capital Market under the
symbol “AZRX”.
DESCRIPTION OF
CAPITAL STOCK
The following summary of the rights of our capital stock is not
complete and is subject to and qualified in its entirety by
reference to our certificate of incorporation and bylaws, copies of
which are filed as exhibits to our Annual Report on Form 10-K for
the year ended December 31, 2018, filed with the SEC on April 1,
2019, which is incorporated by reference
herein.
General
Our
certificate of
incorporation, as amended and restated on December 20, 2019 (our
“Charter”)
authorizes the issuance of up to 150,000,000 shares of common
stock, par value $0.0001 per share, and 10,000,000 shares of
preferred stock, par value $0.0001 per share.
Common Stock
This section
describes the general terms of our common stock that we may offer
from time to time. For more detailed information, a holder of our
common stock should refer to our Charter and our amended and
restated Bylaws. A copy of our Charter is filed with the SEC as an
exhibit to our Current Report on Form 8-K filed on December 30,
2019, and a copy of our amended and restated Bylaws is filed with
the SEC as an exhibit to our Annual Report on Form 10-K for the
year ended December 31, 2018, each of which is incorporated by
reference into the registration statement of which this prospectus
forms a part.
As of
December 30, 2019, there were 26,642,279 shares of our common stock
issued and outstanding, which were held by approximately 105
stockholders of record, approximately 5,338,211 shares of common
stock subject to outstanding warrants, 1,887,500 shares of common
stock subject to outstanding stock options under our Amended and
Restated 2014 Omnibus Equity Incentive Plan and 849,973 issuable
upon conversion of outstanding senior convertible notes. Each
holder of common stock is entitled to one vote for each share of
common stock held on all matters submitted to a vote of the
stockholders, including the election of directors. Our Charter and
Bylaws do not provide for cumulative voting rights.
Holders of our
common stock have no preemptive, conversion or subscription rights,
and there are no redemption or sinking fund provisions applicable
to the common stock. The rights, preferences and privileges of the
holders of common stock are subject to, and may be adversely
affected by, the rights of the holders of shares of any series of
our preferred stock that we may designate and issue in the
future.
Listing
Our
common stock is listed on The Nasdaq Capital Market under the
symbol “AZRX”.
Transfer Agent
The
transfer agent and registrar for our common stock is Colonial Stock
Transfer, 66 Exchange Place, 1st Floor, Salt Lake City, Utah 84111,
Tel: (801) 355-5740.
Anti-Takeover Effects of Certain Provisions of Delaware Law and of
the Company’s Certificate of Incorporation and
Bylaws
Certain provisions
of Delaware law, our Charter and Bylaws discussed below may have
the effect of making more difficult or discouraging a tender offer,
proxy contest or other takeover attempt. These provisions are
expected to encourage persons seeking to acquire control of our
company to first negotiate with our Board of Directors. We believe
that the benefits of increasing our ability to negotiate with the
proponent of an unfriendly or unsolicited proposal to acquire or
restructure our company outweigh the disadvantages of discouraging
these proposals because negotiation of these proposals could result
in an improvement of their terms.
Delaware Anti-Takeover Law.
We are
subject to Section 203 of the Delaware General Corporation
Law. Section 203 generally prohibits a public Delaware
corporation from engaging in a “business combination”
with an “interested stockholder” for a period of three
years after the date of the transaction in which the person became
an interested stockholder, unless:
●
prior to the date
of the transaction, the Board of Directors of the corporation
approved either the business combination or the transaction which
resulted in the stockholder becoming an interested
stockholder;
●
upon consummation
of the transaction that resulted in the stockholder becoming an
interested stockholder, the interested stockholder owned at least
85% of the voting stock of the corporation outstanding at the time
the transaction commenced, excluding specified shares;
or
●
at or subsequent
to the date of the transaction, the business combination is
approved by the Board of Directors and authorized at an annual or
special meeting of stockholders, and not by written consent, by the
affirmative vote of at least 66 2/3% of the outstanding voting
stock which is not owned by the interested
stockholder.
Section 203
defines a “business combination” to
include:
●
any merger or
consolidation involving the corporation and the interested
stockholder;
●
any sale, lease,
exchange, mortgage, pledge, transfer or other disposition of 10% or
more of the assets of the corporation to or with the interested
stockholder;
●
subject to
exceptions, any transaction that results in the issuance or
transfer by the corporation of any stock of the corporation to the
interested stockholder;
●
subject to
exceptions, any transaction involving the corporation that has the
effect of increasing the proportionate share of the stock of any
class or series of the corporation beneficially owned by the
interested stockholder; or
●
the receipt by the
interested stockholder of the benefit of any loans, advances,
guarantees, pledges or other financial benefits provided by or
through the corporation.
In
general, Section 203 defines an “interested
stockholder” as any person that is:
●
the owner of 15%
or more of the outstanding voting stock of the
corporation;
●
an affiliate or
associate of the corporation who was the owner of 15% or more of
the outstanding voting stock of the corporation at any time within
three years immediately prior to the relevant date; or
●
the affiliates and
associates of the above.
Under
specific circumstances, Section 203 makes it more difficult
for an “interested stockholder” to effect various
business combinations with a corporation for a three-year period,
although the stockholders may, by adopting an amendment to the
corporation’s certificate of incorporation or bylaws, elect
not to be governed by this section, effective 12 months after
adoption.
Our
Charter and Bylaws do not exclude us from the restrictions of
Section 203. We anticipate that the provisions of
Section 203 might encourage companies interested in acquiring
us to negotiate in advance with our Board of Directors since the
stockholder approval requirement would be avoided if a majority of
the directors then in office approve either the business
combination or the transaction that resulted in the stockholder
becoming an interested stockholder.
Charter and Bylaws.
Provisions of our
Charter and Bylaws may delay or discourage transactions involving
an actual or potential change of control or change in our
management, including transactions in which stockholders might
otherwise receive a premium for their shares, or transactions that
our stockholders might otherwise deem to be in their best
interests. Therefore, these provisions could adversely affect the
price of our common stock.
LEGAL
MATTERS
The
validity of the securities offered hereby will be passed upon for
us by Disclosure Law Group, a Professional Corporation, San Diego,
California.
EXPERTS
The
audited financial statements incorporated by reference in this
prospectus and elsewhere in the registration statement have been
incorporated by reference in reliance upon the report of Mazars USA
LLP, independent registered public accounting firm, upon the
authority of said firm as experts in accounting and auditing. The
2018 and 2017 audited annual consolidated financial statements of
AzurRx BioPharma, Inc., as of and for the years ended December 31,
2018 and 2017, have been audited by Mazars USA LLP, independent
registered public accounting firm. The audit report dated April 1,
2019 for the 2018 audited annual consolidated financial statements
includes an explanatory paragraph which states that certain
circumstances raise substantial doubt about our ability to continue
as a going concern.
WHERE YOU CAN FIND MORE INFORMATION
We are
subject to the informational requirements of the Exchange Act and
in accordance therewith we file annual, quarterly, and other
reports, proxy statements and other information with the Commission
under the Exchange Act. Such reports, proxy statements and other
information, including the Registration Statement, and exhibits and
schedules thereto, are available to the public through the
Commission’s website at www.sec.gov.
We
make available free of charge on or through our website our Annual
Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current
Reports on Form 8-K and amendments to those reports filed or
furnished pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934, as amended, as soon as reasonably practicable
after we electronically file such material with or otherwise
furnish it to the Commission.
We have
filed with the Commission a registration statement under the
Securities Act of 1933, as amended, relating to the offering of
these securities. The registration statement, including the
attached exhibits, contains additional relevant information about
us and the securities. This prospectus does not contain all of the
information set forth in the registration statement. You can obtain
a copy of the registration statement, at prescribed rates, from the
Commission at the address listed above, or for free at www.sec.gov.
The registration statement and the documents referred to below
under “Incorporation of
Certain Information by Reference” are also available
on our website,
www.azurrx.com/investors/regulatory-filings.
We
have not incorporated by reference into this prospectus supplement
the information on our website, and you should not consider it to
be a part of this prospectus supplement.
8,880,760 Shares
Common Stock
PROSPECTUS
We
have not authorized any dealer, salesperson or other person to give
any information or to make any representations not contained in
this prospectus. You must not rely on any unauthorized information.
This prospectus is not an offer to sell these securities in any
jurisdiction where an offer or sale is not permitted.
,
2019
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 13. Other Expenses of Issuance and
Distribution.
The
following table indicates the expenses to be incurred in connection
with the offering described in this registration statement, other
than underwriting discounts and commissions, all of which will be
paid by us. All amounts are estimated except the Securities and
Exchange Commission registration fee.
|
|
|
Amount
|
|
|
|
SEC
Registration Fee
|
|
$
|
1,233.41
|
|
|
Legal
Fees and Expenses
|
|
|
*
|
|
|
Accounting Fees
and Expenses
|
|
|
*
|
|
|
Transfer Agent and
Registrar fees and expenses
|
|
|
*
|
|
|
Miscellaneous
Expenses
|
|
|
*
|
|
|
|
|
|
|
|
|
Total
expenses
|
|
$
|
*
|
|
* To
be provided by amendment.
Amended and Restated Bylaws
Pursuant to our
bylaws, our directors and officers will be indemnified to the
fullest extent allowed under the laws of the State of Delaware for
their actions in their capacity as our directors and
officers.
We must
indemnify any person made a party to any threatened, pending, or
completed action, suit, or proceeding, whether civil, criminal,
administrative, or investigative (“Proceeding”) by reason of the
fact that he is or was a director, against judgments, penalties,
fines, settlements and reasonable expenses (including
attorney’s fees) (“Expenses”) actually and
reasonably incurred by him in connection with such Proceeding if:
(a) he conducted himself in good faith, and: (i) in the case of
conduct in his own official capacity with us, he reasonably
believed his conduct to be in our best interests, or (ii) in all
other cases, he reasonably believes his conduct to be at least not
opposed to our best interests; and (b) in the case of any criminal
Proceeding, he had no reasonable cause to believe his conduct was
unlawful.
We
must indemnify any person made a party to any Proceeding by or in
the right of us, by reason of the fact that he is or was a
director, against reasonable expenses actually incurred by him in
connection with such proceeding if he conducted himself in good
faith, and: (a) in the case of conduct in his official capacity
with us, he reasonably believed his conduct to be in our best
interests; or (b) in all other cases, he reasonably believed his
conduct to be at least not opposed to our best interests; provided
that no such indemnification may be made in respect of any
proceeding in which such person shall have been adjudged to be
liable to us.
No
indemnification will be made by unless authorized in the specific
case after a determination that indemnification of the director is
permissible in the circumstances because he has met the applicable
standard of conduct.
Reasonable
expenses incurred by a director who is party to a proceeding may be
paid or reimbursed by us in advance of the final disposition of
such Proceeding in certain cases.
We
have the power to purchase and maintain insurance on behalf of any
person who is or was our director, officer, employee, or agent or
is or was serving at our request as an officer, employee or agent
of another corporation, partnership, joint venture, trust, other
enterprise, or employee benefit plan against any liability asserted
against him and incurred by him in any such capacity or arising out
of his status as such, whether or not we would have the power to
indemnify him against such liability under the provisions of the
amended and restated bylaws.
Delaware Law
We are
incorporated under the laws of the State of Delaware. Section 145
of the Delaware General Corporation Law provides that a Delaware
corporation may indemnify any persons who are, or are threatened to
be made, parties to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of such
corporation), by reason of the fact that such person was an
officer, director, employee or agent of such corporation, or is or
was serving at the request of such person as an officer, director,
employee or agent of another 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 such action,
suit or proceeding, provided that such person acted in good faith
and in a manner he or she reasonably believed to be in or not
opposed to the corporation’s best interests and, with respect
to any criminal action or proceeding, had no reasonable cause to
believe that his or her conduct was illegal. A Delaware corporation
may indemnify any persons who are, or are threatened to be made, a
party to any threatened, pending or completed action or suit by or
in the right of the corporation by reason of the fact that such
person was a director, officer, employee or agent of such
corporation, or is or was serving at the request of such
corporation as a director, officer, employee or agent of another
corporation or enterprise. The indemnity may include expenses
(including attorneys’ fees) actually and reasonably incurred
by such person in connection with the defense or settlement of such
action or suit provided such person acted in good faith and in a
manner he or she reasonably believed to be in or not opposed to the
corporation’s best interests except that no indemnification
is permitted without judicial approval if the officer or director
is adjudged to be liable to the corporation. Where an officer or
director is successful on the merits or otherwise in the defense of
any action referred to above, the corporation must indemnify him or
her against the expenses which such officer or director has
actually and reasonably incurred. Our amended and restated
certificate of incorporation and amended and restated bylaws
provide for the indemnification of our directors and officers to
the fullest extent permitted under the Delaware General Corporation
Law.
Section 102(b)(7)
of the Delaware General Corporation Law permits a corporation to
provide in its certificate of incorporation that a director of the
corporation shall not be personally liable to the corporation or
its stockholders for monetary damages for breach of fiduciary
duties as a director, except for liability for any:
●
transaction from
which the director derives an improper personal
benefit;
●
act or omission
not in good faith or that involves intentional misconduct or a
knowing violation of law;
●
unlawful payment
of dividends or redemption of shares; or
●
breach of a
director’s duty of loyalty to the corporation or its
stockholders.
Our
amended and restated certificate of incorporation and amended and
restated bylaws include such a provision. Expenses incurred by any
officer or director in defending any such action, suit or
proceeding in advance of its final disposition shall be paid by us
upon delivery to us of an undertaking, by or on behalf of such
director or officer, to repay all amounts so advanced if it shall
ultimately be determined that such director or officer is not
entitled to be indemnified by us.
Section 174 of the
Delaware General Corporation Law provides, among other things, that
a director who willfully or negligently approves of an unlawful
payment of dividends or an unlawful stock purchase or redemption
may be held liable for such actions. A director who was either
absent when the unlawful actions were approved, or dissented at the
time, may avoid liability by causing his or her dissent to such
actions to be entered in the books containing minutes of the
meetings of the board of directors at the time such action occurred
or immediately after such absent director receives notice of the
unlawful acts.
Indemnification Agreements
As
permitted by the Delaware General Corporation Law, we have entered,
and intend to continue to enter, into separate indemnification
agreements with each of our directors and executive officers, that
require us to indemnify such persons against any and all expenses
(including attorneys’ fees), witness fees, damages,
judgments, fines, settlements and other amounts incurred (including
expenses of a derivative action) in connection with any action,
suit or proceeding, whether actual or threatened, to which any such
person may be made a party by reason of the fact that such person
is or was a director, an officer or an employee of us or any of our
affiliated enterprises, provided that such person acted in good
faith and in a manner such person reasonably believed to be in or
not opposed to our best interests and, with respect to any criminal
proceeding, had no reasonable cause to believe his or her conduct
was unlawful. The indemnification agreements also set forth certain
procedures that will apply in the event of a claim for
indemnification thereunder.
At
present, there is no pending litigation or proceeding involving any
of our directors or executive officers as to which indemnification
is required or permitted, and we are not aware of any threatened
litigation or preceding that may result in a claim for
indemnification.
We
have an insurance policy covering its officers and directors with
respect to certain liabilities, including liabilities arising under
the Securities Act or otherwise.
Insofar as
indemnification for liabilities arising under the Securities Act
may be permitted to our directors, officers or controlling persons,
we have been advised that in the opinion of the SEC this
indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable.
Item 15. Recent Sales of Unregistered
Securities
The
information below lists all of the securities sold by us during the
past three years which were not registered under the Securities Act
and are not otherwise described in the accompanying
prospectus:
●
On March 27, 2019,
we entered into an Asset Purchase Agreement with Mayoly Spindler, a
European pharmaceutical company ("Mayoly"). As partial consideration for
this purchase, we issued to Mayoly an aggregate total of 775,931
unregistered shares of our common stock, of which 400,481 shares
were issued to Mayoly on March 27, 2019 and the remaining 375,450
shares are currently being held in escrow and will be released to
Mayoly in the following installments: (i) 200,240 shares will be
released on December 31, 2019 and (ii) 175,210 shares will be
released on December 31, 2020.
These
securities were issued pursuant to the exemption from registration
provided by Section 4(a)(2) of the Securities Act of 1933, as
amended, and Rule 506 of Regulation D promulgated thereunder, in
reliance on the recipient’s status as an “accredited
investor” as defined in Rule 501(a) of Regulation D, except
for the restricted stock grants which were issued pursuant to Rule
701 or Rule 506.
Item 16. Exhibits
|
Exhibit No.
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|
Description
|
|
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|
|
|
|
Amended and Restated Certificate of
Incorporation of the Registrant (Incorporated by reference from
Exhibit 3.1 filed with Registration Statement on Form S-1, filed
July 13, 2016).
|
|
|
3.2
|
|
Certificate of Amendment to
Certificate of Incorporation of the Registrant (Incorporated by
reference from Exhibit 3.1 filed with Current Report on Form 8-K,
filed December 30, 2019).
|
|
|
Amended and Restated Bylaws of the
Registrant (Incorporated by reference from Exhibit 3.2 filed with
Registration Statement on Form S-1, filed July 13,
2016).
|
|
|
|
Form
of common stock Certificate (Incorporated by reference from Exhibit
4.1 filed with Amendment No 1. to Registration Statement on Form
S-1, filed July 29, 2016).
|
|
|
|
Form
of Investor Warrant (Incorporated by reference from Exhibit 4.2
filed with Registration Statement on Form S-1, filed July 13,
2016).
|
|
|
|
Form
of Underwriter Warrant (Incorporated by reference from Exhibit 4.3
filed with Amendment No 1. to Registration Statement on Form S-1,
filed July 29, 2016).
|
|
|
|
Form
of Underwriter Warrant (Incorporated by reference from Exhibit 4.1
filed with Current Report on Form 8-K, filed May 4,
2018).
|
|
|
4.5
|
|
Form
of Selling Agent Warrant (Incorporated by reference from Exhibit
4.1 filed with Current Report on Form 8-K, filed April 3,
2019).
|
|
4.6
|
|
Form
of Selling Agent Warrant (Incorporated by reference from Exhibit
4.1 filed with Current Report on Form 8-K, filed May 14,
2019).
|
|
4.7
|
|
Form
of Underwriter Warrant (Incorporated by reference from Exhibit 4.1
filed with Current Report on Form 8-K, filed July 22,
2019).
|
|
5.1*
|
|
Opinion
of Disclosure Law Group, a Professional Corporation.
|
|
|
Stock
Purchase Agreement dated May 21, 2014 between the Registrant,
Protea Biosciences Group, Inc. and its wholly-owned subsidiary,
Protea Biosciences, Inc (Incorporated by reference from Exhibit
10.1 filed with Registration Statement on Form S-1, filed July 13,
2016).
|
|
|
|
Amended
and Restated Joint Research and Development Agreement dated January
1, 2014 between the Registrant and Mayoly (Incorporated by
reference from Exhibit 10.2 filed with Registration Statement on
Form S-1, filed July 13, 2016).
|
|
|
|
Amended
and Restated AzurRx BioPharma, Inc. 2014 Omnibus Equity Incentive
Plan (Incorporated by reference from Exhibit 10.3 filed with
Registration Statement on Form S-1, filed July 13,
2016).
|
|
|
Employment Agreement
between the Registrant and Mr. Spoor (Incorporated by reference
from Exhibit 10.4 filed with Registration Statement on Form S-1,
filed July 13, 2016).
|
|
|
|
Securities
Purchase Agreement dated April 11, 2017 between the Registrant and
Lincoln Park Capital Fund, LLC (Incorporated by reference from
Exhibit 10.1 filed with Current Report on Form 8-K, filed April 12,
2017).
|
|
|
|
12%
Senior Secured Original Issue Discount Convertible Debenture
between the Registrant and Lincoln Park Capital Fund, LLC
(Incorporated by reference from Exhibit 10.2 filed with Current
Report on Form 8-K, filed April 12, 2017).
|
|
|
|
Form
of Series A Warrant dated April 11, 2017 between the Registrant and
Lincoln Park Capital Fund, LLC (Incorporated by reference from
Exhibit 10.3 filed with Current Report on Form 8-K, filed April 12,
2017).
|
|
|
|
Registration
Rights Agreement dated April 11, 2017 between the Registrant and
Lincoln Park Capital Fund, LLC (Incorporated by reference from
Exhibit 10.4 filed with Current Report on Form 8-K, filed April 12,
2017).
|
|
|
|
Form
of Securities Purchase Agreement dated June 5, 2017 (Incorporated
by reference from Exhibit 10.1 filed with Current Report on Form
8-K, filed June 9, 2017).
|
|
|
|
Form
of Registration Rights Agreement dated June 5, 2017 (Incorporated
by reference from Exhibit 10.2 filed with Current Report on Form
8-K, filed April 12, 2017).
|
|
|
|
Form
of Series A Warrant, dated June 5, 2017 (Incorporated by reference
from Exhibit 10.3 filed with Current Report on Form 8-K, filed June
9, 2017).
|
|
|
|
Form
of Series A-1 Warrant, dated June 5, 2017 (Incorporated by
reference from Exhibit 10.4 filed with Current Report on Form 8-K,
filed June 9, 2017).
|
|
|
|
Sublicense
Agreement dated August 7, 2017 by and between the Registrant and
TransChem, Inc. (Incorporated by reference from Exhibit 10.1 filed
with Current Report on Form 8-K, filed August 11,
2017).
|
|
|
|
Employment
Agreement between the Registrant and Mr. Shenouda (Incorporated by
reference from Exhibit 10.1 filed with Current Report on Form 8-K,
filed October 2, 2017).
|
|
|
|
Modification
to 12% Senior Secured Original Issue Discount Convertible
Debenture, dated November 10, 2017 (Incorporated by reference from
Exhibit 10.1 filed with Quarterly Report on Form 10-Q, filed
November 13, 2017).
|
|
|
|
Form
of Exercise Letter (Incorporated by reference from Exhibit 10.1
filed with Current Report on Form 8-K, filed January 5,
2018).
|
|
|
|
Form
of Partial Exercise Letter (Incorporated by reference from Exhibit
10.2 filed with Current Report on Form 8-K, filed January 5,
2018).
|
|
|
|
Asset
Sale and Purchase Agreement, dated December 7, 2018, by and between
Protea Biosciences Group, Inc., Protea Biosciences, Inc. and AzurRx
Biopharma, Inc. (Incorporated by reference from Exhibit 10.1 filed
with Current Report on Form 8-K, filed December 13,
2018).
|
|
|
|
Note
Purchase Agreement, dated February 14, 2019 (Incorporated by
reference from Exhibit 10.1 filed with Current Report on Form 8-K,
filed February 20, 2019).
|
|
|
|
Senior
Convertible Note A, dated February 14, 2019 (Incorporated by
reference from Exhibit 10.2 filed with Current Report on Form 8-K,
filed February 20, 2019).
|
|
|
|
Senior
Convertible Note B, dated February 14, 2019 (Incorporated by
reference from Exhibit 10.3 filed with Current Report on Form 8-K,
filed February 20, 2019).
|
|
|
|
Pledge
Agreement, dated February 14, 2019 (Incorporated by reference from
Exhibit 10.4 filed with Current Report on Form 8-K, filed February
20, 2019).
|
|
|
|
Warrant
Amendment, dated February 14, 2019 (Incorporated by reference from
Exhibit 10.5 filed with Current Report on Form 8-K, filed February
20, 2019).
|
|
|
|
Registration
Rights Agreement, dated February 14, 2019 (Incorporated by
reference from Exhibit 10.6 filed with Current Report on Form 8-K,
filed February 20, 2019).
|
|
|
|
Asset
Purchase Agreement, by and between AzurRx BioPharma, Inc., AzurRx
BioPharma SAS and Laboratories Mayoly Spindler SAS, dated March 27,
2019 (Incorporated by
reference from Exhibit 10.25 filed with Annual Report on Form 10-K,
filed April 1, 2019).
|
|
|
|
Patent
License Agreement, by and between AzurRx BioPharma, Inc. and
Laboratories Mayoly Spindler SAS, dated March 27, 2019 (Incorporated by
reference from Exhibit 10.26 filed with Annual Report on Form 10-K,
filed April 1, 2019).
|
|
|
Selling
Agent Agreement, by and between AzurRx BioPharma, Inc. and
Alexander Capital, L.P., dated April 1, 2019 (Incorporated by
reference from Exhibit 10.1 filed with Current Report on Form 8-K,
filed April 3, 2019).
|
|
|
|
Selling
Agent Agreement, by and between AzurRx BioPharma, Inc. and
Alexander Capital, L.P., dated May 9, 2019 (Incorporated by
reference from Exhibit 10.1 filed with Current Report on Form 8-K,
filed May 14, 2019).
|
|
|
|
Employment
Agreement between the Registrant and Mr. Sapirstein (Incorporated
by reference from Exhibit 10.1 filed with Current Report on Form
8-K, filed October 11, 2019).
|
|
|
|
Securities
Purchase Agreement, dated November 13, 2019 (Incorporated by
reference from Exhibit 10.1 filed with Current Report on Form 8-K,
filed November 14, 2019).
|
|
|
|
Registration
Rights Agreement, dated November 13, 2019 (Incorporated by
reference from Exhibit 10.2 filed with Current Report on Form 8-K,
filed November 14, 2019).
|
|
|
|
Form of Note Purchase
Agreement (Incorporated by reference from Exhibit 10.1 filed
with Current Report on Form 8-K, filed December 30,
2019).
|
|
|
|
Form of Senior Convertible
Promissory Note (Incorporated by reference from Exhibit 10.2 filed
with Current Report on Form 8-K, filed December 30,
2019).
|
|
|
|
Form of Warrant (Incorporated by
reference from Exhibit 10.3 filed with Current Report on Form 8-K,
filed December 30, 2019).
|
|
|
|
Form of Registration Rights
Agreement (Incorporated by reference from Exhibit 10.4 filed with
Current Report on Form 8-K, filed December 30,
2019).
|
|
|
|
Code
of Ethics of AzurRx BioPharma, Inc. Applicable To Directors,
Officers And Employees (Incorporated by reference from Exhibit 14.1
filed with Registration Statement on Form S-1, filed July 13,
2016).
|
|
|
|
Subsidiaries
of the Registrant (Incorporated by reference from Exhibit 21.1
filed with Registration Statement on Form S-1, filed July 13,
2016).
|
|
|
23.1*
|
|
Consent
of Disclosure Law Group, a Professional Corporation (included in
Exhibit 5.1).
|
|
|
Consent
of Independent Registered Public Accounting Firm – Mazars USA
LLP, filed herewith.
|
|
|
|
Power
of Attorney (located on signature page).
|
|
*
|
To be
filed by amendment.
|
|
|
+
|
Confidential
treatment has been granted with respect to portions of this
exhibit.
|
|
|
#
|
Certain
portions of this exhibit (indicated by “[*****]”) have
been omitted as the Company has determined (i) the omitted
information is not material and (ii) the omitted information would
likely cause harm to the Company if publicly
disclosed.
|
|
Item 17. Undertakings
The
undersigned registrant hereby undertakes to provide to the
underwriters at the closing specified in the underwriting agreement
certificates in such denominations and registered in such names as
required by the underwriters to permit prompt delivery to each
purchaser.
Insofar as
indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers, and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against
public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant
of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in
the Securities Act and will be governed by the final adjudication
of such issue.
The
undersigned registrant hereby undertakes:
|
(1)
|
To
file, during any period in which offers or sales are being made, a
post-effective amendment to this registration
statement:
|
|
|
(i)
|
To
include any prospectus required by Section 10(a)(3) of the
Securities Act;
|
|
|
(ii)
|
To
reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set
forth in the registration statement. Notwithstanding the foregoing,
any increase or decrease in volume of securities offered (if the
total dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high end of
the estimated maximum offering range may be reflected in the form
of prospectus filed with the Commission pursuant to Rule 424(b) if,
in the aggregate, the changes in volume and price represent no more
than 20 percent change in the maximum aggregate offering price
set forth in the “Calculation of Registration Fee”
table in the effective registration statement;
|
|
|
(iii)
|
To
include any material information with respect to the plan of
distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement;
|
Provided, however,
that Paragraphs (a)(1)(i), (a)(1)(ii) and (a)(1)(iii) of this
section do not apply if the registration statement is on Form S-1
and the information required to be included in a post-effective
amendment by those paragraphs is contained in reports filed with or
furnished to the Commission by the Registrant pursuant to Section
13 or Section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the registration
statement.
|
(2)
|
That,
for the purpose of determining any liability under the Securities
Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to
be the initial bona fide offering thereof.
|
|
(3)
|
To
remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the
termination of the offering.
|
(4) That,
for the purpose of determining liability under the Securities Act
to any purchaser:
(i) 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.
(b) The
undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each
filing of the registrant’s annual report pursuant to section
13(a) or 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 of 1934) that is incorporated by reference in the registration
statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial
bona fide offering
thereof.
(c)
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to the provisions
referenced in Item 14 of this Registration Statement, or
otherwise, the Registrant has been advised that in the opinion of
the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant
of expenses incurred or paid by a director, officer, or controlling
person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being
registered hereunder, the registrant will, unless in the opinion of
its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question of
whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication
of such issue.
SIGNATURES
Pursuant to the
requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-1 and has duly caused
this registration statement or amendment thereto to be signed on
its behalf by the undersigned, thereunto duly
authorized, in the City
of Brooklyn, New York on December 31, 2019.
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AZURRX BIOPHARMA, INC.
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December
31, 2019
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By: /s/
James Sapirstein
Name: James Sapirstein
Title: President and Chief Executive
Officer
(Principal Executive Officer, Principal
Financial and Principal Accounting
Officer
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KNOW
ALL PERSONS BY THESE PRESENTS, that each
person whose signature appears below constitutes and appoints James
Sapirstein as his or her true and lawful attorney-in-fact and
agent, with full power of substitution and resubstitution, for him
and in his or her name, place, and stead, in any and all
capacities, to (i) act on, sign and file with the Securities
and Exchange Commission any and all amendments (including
post-effective amendments) to this registration statement together
with all schedules and exhibits thereto and any subsequent
registration statement filed pursuant to Rule 462(b) under the
Securities Act of 1933, as amended, together with all schedules and
exhibits thereto, (ii) act on, sign and file such
certificates, instruments, agreements and other documents as may be
necessary or appropriate in connection therewith, (iii) act on
and file any supplement to any prospectus included in this
registration statement or any such amendment or any subsequent
registration statement filed pursuant to Rule 462(b) under the
Securities Act of 1933, as amended, and (iv) take any and all
actions which may be necessary or appropriate to be done, as fully
for all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said
attorney-in-fact and agent, or his or her substitute or
substitutes, may lawfully do or cause to be done by virtue
hereof.
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Signature
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Title
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Date
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/s/
James Sapirstein
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President,
Chief Executive Officer and Director
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December
31, 2019
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James
Sapirstein
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(Principal
Executive Officer, Principal Financial and Principal Accounting
Officer)
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/s/
Edward J. Borkowski
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Chair
of the Board of Directors
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December
31, 2019
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Edward
J. Borkowski
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/s/
Charles Casamento
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Director
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December
31, 2019
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Charles
Casamento
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/s/
Alastair Riddell
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Director
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December
31, 2019
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Alastair
Riddell
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/s/
Vern Lee Schramm
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Director
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December
31, 2019
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Vern
Lee Schramm
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/s/
Johan (Thijs) M. Spoor
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Director
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December
31, 2019
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Johan
(Thijs) M. Spoor
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