tm235118-2_posam - none - 5.3594047s
As filed with the Securities and Exchange Commission on February 7, 2023
Registration No. 333-260726
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
POST-EFFECTIVE AMENDMENT NO. 2
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
PRAXIS PRECISION MEDICINES, INC.
(Exact name of registrant as specified in its charter)
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Delaware
(State or other jurisdiction of
incorporation or organization)
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47-5195942
(I.R.S. Employer
Identification Number)
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99 High Street, 30th Floor
Boston, MA 02110
(617) 300-8460
(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)
Marcio Souza
Chief Executive Officer
Praxis Precision Medicines, Inc.
99 High Street, 30th Floor
Boston, MA 02110
(617) 300-8460
(Address, including zip code, and telephone number, including area code, of agent for service)
Copies to:
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Peter N. Handrinos
Wesley C. Holmes
Jennifer A. Yoon
Latham & Watkins LLP
200 Clarendon Street
Boston, Massachusetts 02116
(617) 880-4500
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Alex Nemiroff
General Counsel
Praxis Precision Medicines, Inc.
99 High Street, 30th Floor
Boston, MA 02110
(617) 300-8460
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time to time after the effective date of this registration statement.
If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. ☐
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, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. ☒
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please 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 registration statement pursuant to General Instruction I.D. or a post-effective amendment thereto that shall become effective on filing with the Commission pursuant to Rule 462(e) under the Securities Act, check the following box. ☐
If this Form is a post-effective amendment to a registration statement filed pursuant to General Instruction I.D. filed to register additional securities or additional classes of securities pursuant to Rule 413(b) under the Securities Act, check the following box. ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, 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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Accelerated filer
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Non-accelerated filer
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Smaller reporting company
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Emerging growth company
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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 7(a)(2)(B) of the Securities Act. ☐
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.
EXPLANATORY NOTE
Post-Effective Amendment No. 1 to the Registration Statement on Form S-3 (File No. 333-260726) (“Post-Effective Amendment No. 1”) of Praxis Precision Medicines, Inc. (the “Company”) was filed because the Company expected that it would no longer be a “well-known seasoned issuer” (as such term is defined in Rule 405 of the Securities Act of 1933, as amended) when it filed its Annual Report on Form 10-K for the fiscal year ended December 31, 2022. Accordingly, the Company filed Post-Effective Amendment No. 1 for the purpose of including disclosure required for a registrant other than a well-known seasoned issuer, identifying the securities being registered, registering a specific amount of securities and paying the associated filing fee. This Post-Effective Amendment No. 2 to the Registration Statement on Form S-3 (“Post-Effective Amendment No. 2”) is being filed using EDGAR submission type POS AM in order to convert the Registration Statement to the proper EDGAR submission type for a non-automatic shelf registration statement.
This Post-Effective Amendment No. 2 contains:
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a base prospectus which covers the offering, issuance and sale by us of up to $300,000,000 in the aggregate of the securities identified herein from time to time in one or more offerings; and
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a sales agreement prospectus supplement covering the offering, issuance and sale by us of up to a maximum aggregate offering price of $95,573,843.36 of our common stock that may be issued and sold under an Open Market Sale AgreementSM, or the sales agreement, with Jefferies LLC acting as sales agent, or the ATM Program.
The base prospectus immediately follows this explanatory note. The specific terms of any securities to be offered pursuant to the base prospectus will be specified in a prospectus supplement to the base prospectus. The sales agreement prospectus supplement immediately follows the base prospectus. The $95,573,843.36 of common stock that may be offered, issued and sold under the sales agreement prospectus is included in the $300,000,000 of securities that may be offered, issued and sold by us under the base prospectus. As of the date of this Post-Effective Amendment No. 2, we have sold $29,426,156.64 under the ATM Program. We are registering the offer and sale of the remaining $95,573,843.36 that has not been sold under the ATM Program. Upon termination of the sales agreement with Jefferies LLC, any portion of the $95,573,843.36 included in the sales agreement prospectus supplement that is not sold pursuant to the sales agreement will be available for sale in other offerings pursuant to the base prospectus and a corresponding prospectus supplement, and if none of such shares are sold, the full $95,573,843.36 of securities may be sold in other offerings pursuant to the base prospectus and a corresponding prospectus supplement.
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 nor does it seek an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.
Subject to Completion, dated February 7, 2023.
PROSPECTUS
PRAXIS PRECISION MEDICINES, INC.
$300,000,000
Common Stock
Preferred Stock
Debt Securities
Warrants
Units
We may offer and sell up to $300,000,000 in the aggregate of the securities identified above from time to time in one or more offerings. This prospectus provides you with a general description of the securities.
Each time we offer and sell securities, we will provide a supplement to this prospectus that contains specific information about the offering and the amounts, prices and terms of the securities. The supplement may also add, update or change information contained in this prospectus with respect to that offering. You should carefully read this prospectus and the applicable prospectus supplement before you invest in any of our securities.
We may offer and sell the securities described in this prospectus and any prospectus supplement to or through one or more underwriters, dealers and agents, or directly to purchasers, or through a combination of these methods. If any underwriters, dealers or agents are involved in the sale of any of the securities, their names and any applicable purchase price, fee, commission or discount arrangement between or among them will be set forth, or will be calculable from the information set forth, in the applicable prospectus supplement. See the sections of this prospectus entitled “About this Prospectus” and “Plan of Distribution” for more information. No securities may be sold without delivery of this prospectus and the applicable prospectus supplement describing the method and terms of the offering of such securities.
INVESTING IN OUR SECURITIES INVOLVES RISKS. SEE THE “RISK FACTORS” ON PAGE 6 OF THIS PROSPECTUS AND ANY SIMILAR SECTION CONTAINED IN THE APPLICABLE PROSPECTUS SUPPLEMENT CONCERNING FACTORS YOU SHOULD CONSIDER BEFORE INVESTING IN OUR SECURITIES.
Our common stock is listed on The Nasdaq Global Select Market under the symbol “PRAX.” On February 3, 2023, the last reported sale price of our common stock on The Nasdaq Global Select Market was $4.64 per share.
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.
The date of this prospectus is , 2023.
TABLE OF CONTENTS
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ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we filed with the U.S. Securities and Exchange Commission, or the SEC, using a “shelf” registration process. By using a shelf registration statement, we may sell securities from time to time and in one or more offerings up to a total dollar amount of $300,000,000 as described in this prospectus. Each time that we offer and sell securities, we will provide a prospectus supplement to this prospectus that contains specific information about the securities being offered and sold and the specific terms of that offering. We may also authorize one or more free writing prospectuses to be provided to you that may contain material information relating to these offerings. The prospectus supplement or free writing prospectus may also add, update or change information contained in this prospectus with respect to that offering. If there is any inconsistency between the information in this prospectus and the applicable prospectus supplement or free writing prospectus, you should rely on the prospectus supplement or free writing prospectus, as applicable. Before purchasing any securities, you should carefully read both this prospectus and the applicable prospectus supplement (and any applicable free writing prospectuses), together with the additional information described under the heading “Where You Can Find More Information; Incorporation by Reference.”
We have not authorized anyone to provide you with any information or to make any representations other than those contained in this prospectus, any applicable prospectus supplement or any free writing prospectuses prepared by or on behalf of us or to which we have referred you. We take no responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you. We will not make an offer to sell these securities in any jurisdiction where the offer or sale is not permitted. You should assume that the information appearing in this prospectus and the applicable prospectus supplement to this prospectus is accurate only as of the date on its respective cover, that the information appearing in any applicable free writing prospectus is accurate only as of the date of that free writing prospectus, and that any information incorporated by reference is accurate only as of the date of the document incorporated by reference, unless we indicate otherwise. Our business, financial condition, results of operations and prospects may have changed since those dates. This prospectus incorporates by reference, and any prospectus supplement or free writing prospectus may contain and incorporate by reference, market data and industry statistics and forecasts that are based on independent industry publications and other publicly available information. Although we believe these sources are reliable, we do not guarantee the accuracy or completeness of this information and we have not independently verified this information. In addition, the market and industry data and forecasts that may be included or incorporated by reference in this prospectus, any prospectus supplement or any applicable free writing prospectus may involve estimates, assumptions and other risks and uncertainties and are subject to change based on various factors, including those discussed under the heading “Risk Factors” contained in this prospectus, the applicable prospectus supplement and any applicable free writing prospectus, and under similar headings in other documents that are incorporated by reference into this prospectus. Accordingly, investors should not place undue reliance on this information.
When we refer to “Praxis,” “we,” “our,” “us” and the “Company” in this prospectus, we mean Praxis Precision Medicines, Inc. and its consolidated subsidiaries, unless otherwise specified. When we refer to “you,” we mean the potential holders of the applicable series of securities.
We have proprietary rights to trademarks, trade names and service marks appearing in this prospectus and the documents incorporated by reference herein that are important to our business. Solely for convenience, the trademarks, trade names and service marks may appear in this prospectus and the documents incorporated by reference herein without the ® and TM symbols, but any such references are not intended to indicate, in any way, that we forgo or will not assert, to the fullest extent under applicable law, our rights or the rights of the applicable licensors to these trademarks, trade names and service marks. All trademarks, trade names and service marks appearing in this prospectus and the documents incorporated by reference herein are the property of their respective owners. We do not intend our use or display of other parties’ trademarks, trade names or service marks to imply, and such use or display should not be construed to imply, a relationship with, or endorsement or sponsorship of us by, these other parties.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus, any applicable prospectus supplement, any related free writing prospectus and the documents that we incorporate by reference herein or therein contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. Any statements about our expectations, beliefs, plans, objectives, assumptions or future events or performance are not historical facts and may be forward-looking. These statements are often, but are not always, made through the use of words or phrases such as “may,” “will,” “could,” “should,” “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “projects,” “potential,” “continue,” and similar expressions, or the negative of these terms, or similar expressions. Accordingly, these statements involve estimates, assumptions, risks and uncertainties which could cause actual results to differ materially from those expressed in them. Any forward-looking statements are qualified in their entirety by reference to the factors discussed throughout this prospectus, and in particular those factors referenced in the section “Risk Factors.”
This prospectus contains forward-looking statements that are based on our management’s belief and assumptions and on information currently available to our management. These statements relate to future events or our future financial performance, and involve known and unknown risks, uncertainties and other 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 these forward-looking statements. Forward-looking statements include, but are not limited to, statements about:
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the success, cost and timing of our product candidate development activities and clinical trials;
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our expectations regarding our ability to obtain and maintain intellectual property protection for our product candidates;
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the ability to license additional intellectual property relating to our product candidates from third parties and to comply with our existing license agreements and collaboration agreements;
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the ability and willingness of our third-party research institution collaborators to continue research and development activities relating to our product candidates;
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our ability to commercialize our product candidates, if approved, in light of the intellectual property rights of others;
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our ability to obtain funding for our operations, including funding necessary to complete further development and, if approved, commercialization of our product candidates;
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the commercialization of our product candidates, if approved;
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our plans to research, develop and, if approved, commercialize our product candidates;
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future agreements with third parties in connection with the commercialization of our product candidates, if approved, and any other approved product;
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the size and growth potential of the markets for our product candidates, and our ability to serve those markets;
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the rate and degree of market acceptance of our product candidates, if approved;
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the pricing and reimbursement of our product candidates, if approved;
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regulatory developments in the United States and foreign countries;
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our ability to contract with third-party suppliers and manufacturers and their ability to perform adequately;
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the success of competing therapies that are or may become available;
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our ability to attract and retain key scientific or management personnel; and
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the accuracy of our estimates regarding expenses, future revenue, capital requirements and needs for additional financing.
These forward-looking statements are neither promises nor guarantees of future performance due to a variety of risks and uncertainties, many of which are beyond our control, which could cause actual results to differ materially from those indicated by these forward-looking statements, including, without limitation the risk factors and cautionary statements described in other documents that we file from time to time with the SEC, specifically under “Item 1A: Risk Factors” and elsewhere in our most recent Annual Report on Form 10-K for the year ended December 31, 2022, and the section of any accompanying prospectus supplement entitled “Risk Factors.”
The forward-looking statements in this prospectus and the documents incorporated by reference represent our views as of their respective dates. We anticipate that subsequent events and developments will cause our views to change. However, while we may elect to update these forward-looking statements at some point in the future, we assume no obligation to update or revise any forward-looking statements except to the extent required by applicable law. You should, therefore, not rely on these forward-looking statements as representing our views as of any date subsequent to the dates on which they were made.
This prospectus and the documents incorporated by reference also contain estimates, projections and other information concerning our industry, our business, and the markets for certain diseases, including data regarding the estimated size of those markets, and the incidence and prevalence of certain medical conditions. Information that is based on estimates, forecasts, projections, market research or similar methodologies is inherently subject to uncertainties and actual events or circumstances may differ materially from events and circumstances reflected in this information. Unless otherwise expressly stated, we obtained this industry, business, market and other data from reports, research surveys, studies and similar data prepared by market research firms and other third parties, industry, medical and general publications, government data and similar sources.
WHERE YOU CAN FIND MORE INFORMATION; INCORPORATION BY REFERENCE
Available Information
We file reports, proxy statements and other information with the SEC. The SEC maintains a website that contains reports, proxy and information statements and other information about issuers, such as us, who file electronically with the SEC. The address of that website is http://www.sec.gov.
Our website address is http://www.praxismedicines.com. The information on our website, however, is not, and should not be deemed to be, a part of this prospectus.
This prospectus and any prospectus supplement are part of a registration statement that we filed with the SEC and do not contain all of the information in the registration statement. The full registration statement may be obtained from the SEC or us, as provided below. Forms of the indenture and other documents establishing the terms of the offered securities are or may be filed as exhibits to the registration statement or documents incorporated by reference in the registration statement. Statements in this prospectus or any prospectus supplement about these documents are summaries and each statement is qualified in all respects by reference to the document to which it refers. You should refer to the actual documents for a more complete description of the relevant matters. You may inspect a copy of the registration statement through the SEC’s website, as provided above.
Incorporation by Reference
The SEC’s rules allow us to “incorporate by reference” information into this prospectus, which means that we can disclose important information to you by referring you to another document filed separately with the SEC. The information incorporated by reference is deemed to be part of this prospectus, and subsequent information that we file with the SEC will automatically update and supersede that information. Any statement contained in this prospectus or a previously filed document incorporated by reference will be deemed to be modified or superseded for purposes of this prospectus to the extent that a statement contained in this prospectus or a subsequently filed document incorporated by reference modifies or replaces that statement.
This prospectus and any accompanying prospectus supplement incorporate by reference the documents set forth below that have previously been filed with the SEC:
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All reports and other documents we subsequently file pursuant to Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as amended, which we refer to as the “Exchange Act” in this prospectus, prior to the termination of this offering, including all such documents we may file with the SEC after the date of this prospectus and prior to the effectiveness of this prospectus, but excluding any information furnished to, rather than filed with, the SEC, will also be incorporated by reference into this prospectus and deemed to be part of this prospectus from the date of the filing of such reports and documents.
You may request a free copy of any of the documents incorporated by reference in this prospectus by writing or telephoning us at the following address:
Praxis Precision Medicines, Inc.
99 High Street, 30th Floor
Boston, MA 02110
(617) 300-8460
Exhibits to the filings will not be sent, however, unless those exhibits have specifically been incorporated by reference in this prospectus or any accompanying prospectus supplement.
THE COMPANY
We are a clinical-stage biopharmaceutical company translating insights from genetic epilepsies into the development of therapies for central nervous system, or CNS, disorders characterized by neuronal excitation-inhibition imbalance. Normal brain function requires a delicate balance of excitation and inhibition in neuronal circuits, which, when dysregulated, can lead to abnormal function and both rare and more prevalent neurological disorders. We are applying genetic insights to the discovery and development of therapies for neurological disorders through two proprietary platforms, using our understanding of shared biological targets and circuits in the brain. Each platform currently has multiple programs, with significant potential for additional program and indication expansion:
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Cerebrum™, our small molecule platform, utilizes deep understanding of neuronal excitability and neuronal networks and applies a series of computational and experimental tools to develop orally available precision therapies
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Solidus™, our antisense oligonucleotide, or ASO, platform, is an efficient, targeted precision medicine discovery and development engine anchored on a proprietary, computational methodology
Our platforms utilize a deliberate, pragmatic and patient-guided approach, leveraging a suite of translational tools, including novel transgenic and predictive translational animal models and electrophysiology markers, to enable an efficient path to proof-of-concept in patients. Through this approach, we have established a diversified, multimodal CNS portfolio with four clinical-stage product candidates across movement disorders and epilepsy.
Corporate Information
We were incorporated under the laws of the State of Delaware on September 22, 2015. Our principal executive office is located at 99 High Street, 30th Floor, Boston, MA 02110, and our telephone number is (617) 300-8460. Our website address is www.praxismedicines.com. We do not incorporate the information on or accessible through our website into this prospectus supplement, and you should not consider any information on, or that can be accessed through, our website as part of this prospectus supplement.
RISK FACTORS
Investment in any securities offered pursuant to this prospectus and the applicable prospectus supplement involves risks. Before deciding whether to invest in our securities, you should carefully consider the risk factors incorporated by reference to our most recent Annual Report on Form 10-K and any subsequent Quarterly Reports on Form 10-Q or Current Reports on Form 8-K, and all other information contained or incorporated by reference into this prospectus, as updated by our subsequent filings under the Exchange Act, and the risk factors and other information contained in the applicable prospectus supplement and any applicable free writing prospectus. The occurrence of any of these risks might cause you to lose all or part of your investment in the offered securities. There may be other unknown or unpredictable economic, business, competitive, regulatory or other factors that could have material adverse effects on our future results. Past financial performance may not be a reliable indicator of future performance, and historical trends should not be used to anticipate results or trends in future periods. If any of these risks actually occurs, our business, financial condition, results of operations or cash flow could be seriously harmed. This could cause the trading price of our securities to decline, resulting in a loss of all or part of your investment. Please also carefully read the section entitled “Special Note Regarding Forward-Looking Statements” included in our most recent Annual Report on Form 10-K and any subsequent Quarterly Reports on Form 10-Q or Current Reports on Form 8-K.
USE OF PROCEEDS
We intend to use the net proceeds from the sale of the securities as set forth in the applicable prospectus supplement.
DESCRIPTION OF CAPITAL STOCK
The following description of our capital stock is not complete and may not contain all the information you should consider before investing in our capital stock. This description is summarized from, and qualified in its entirety by reference to, our certificate of incorporation, which has been publicly filed with the SEC. See “Where You Can Find More Information; Incorporation by Reference.”
Our authorized capital stock consists of:
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150,000,000 shares of common stock, $0.0001 par value; and
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10,000,000 shares of preferred stock, $0.0001 par value.
Common Stock
The holders of our common stock are entitled to one vote for each share held on all matters submitted to a vote of the stockholders. The holders of our common stock do not have any cumulative voting rights. Holders of our common stock are entitled to receive dividends declared by our board of directors out of funds legally available for that purpose. Our common stock has no preemptive rights, conversion rights or other subscription rights or redemption or sinking fund provisions.
In the event of our liquidation, dissolution or winding up, holders of our common stock will be entitled to share pro rata in the distribution of our assets remaining after payment of all debts and other liabilities.
Preferred Stock
Our board of directors or any authorized committee thereof is authorized, without further action by our stockholders, to issue up to 10,000,000 shares of preferred stock in one or more series and to fix the rights, preferences, privileges and restrictions thereof. These rights, preferences and privileges could include dividend rights, conversion rights, voting rights, terms of redemption, liquidation preferences, sinking fund terms and the number of shares constituting, or the designation of, such series, any or all of which may be greater than the rights of common stock. The issuance of our preferred stock could adversely affect the voting power of holders of common stock and the likelihood that such holders will receive dividend payments and payments upon our liquidation. In addition, the issuance of preferred stock could have the effect of delaying, deferring or preventing a change in control of our Company or other corporate action.
Registration Rights
Pursuant to the terms of our Fourth Amended and Restated Investors’ Rights Agreement, dated as of July 24, 2020, as amended, or the Investors’ Rights Agreement, certain of our stockholders are entitled to rights with respect to the registration of their shares (which we refer to herein as “registrable securities”) under the Securities Act, including demand registration rights and piggyback registration rights.
Form S-1 Registration Rights
Under the terms of the Investors’ Rights Agreement, we are required, upon the request of holders holding at least a majority of the registrable securities then outstanding, to file a registration statement on Form S-1 registering the resale of such holders’ registrable securities and the registrable securities of such other holders who elect to have their shares registered; provided that the anticipated aggregate offering price, net of related fees and expenses, of the registrable securities registered on such registration statement would equal at least $10 million. We are required to effect only two registrations pursuant to this provision of the Investors’ Rights Agreement. If the holders requesting registration intend to distribute their shares by means of an underwriting, the managing underwriter of such offering will have the right to limit the numbers of shares to be underwritten for reasons related to the marketing of the shares.
Form S-3 Registration Rights
Pursuant to the Investors’ Rights Agreement, if we are eligible to file a registration statement on Form S-3, we are required, upon the request of holders holding at least a majority of the registrable
securities then outstanding, to file a registration restatement on Form S-3 registering the resale of such holders’ registrable securities and the registrable securities of such other holders who elect to have their shares registered; provided that the anticipated aggregate offering price, net of related fees and expenses, of the registrable securities registered on such registration statement would equal at least $3 million. We are required to effect only two registrations in any twelve-month period pursuant to this provision of the Investors’ Rights Agreement. If the holders requesting registration intend to distribute their shares by means of an underwriting, the managing underwriter of such offering will have the right to limit the numbers of shares to be underwritten for reasons related to the marketing of the shares.
Piggyback Registration Rights
Subject to certain exceptions, if we register any of our securities either for our own account or for the account of security holders other than the holders party to the Investors’ Rights Agreements, the holders of shares of registrable securities are entitled to include their shares in the registration. If our proposed registration involves an underwriting, the managing underwriter of such offering will have the right to limit the number of shares to be underwritten for reasons related to the marketing of the shares.
Indemnification
The Investors’ Rights Agreement contains customary cross-indemnification provisions, under which we are obligated to indemnify holders of registrable securities in the event of material misstatements or omissions in the registration statement attributable to us, and they are obligated to indemnify us for material misstatements or omissions attributable to them.
Expiration of Registration Rights
The demand registration rights and short-form registration rights granted under the Investors’ Rights Agreement will terminate on the earliest to occur of: (i) the fifth anniversary of the completion of our initial public offering and (ii) as to each holder of registrable securities, such time as either Rule 144 as promulgated under the Securities Act or another similar exemption under the Securities Act is available for the sale of all of such holder’s shares without limitation during a three-month period without registration or such holder no longer holds any registrable securities.
Anti-Takeover Effects of our Certificate of Incorporation and Bylaws and Delaware Law
Our certificate of incorporation and bylaws include a number of provisions that may have the effect of delaying, deferring or preventing another party from acquiring control of us and encouraging persons considering unsolicited tender offers or other unilateral takeover proposals to negotiate with our board of directors rather than pursue non-negotiated takeover attempts. These provisions include the items described below.
Undesignated Preferred Stock
Our certificate of incorporation provides for 10,000,000 authorized shares of preferred stock. The existence of authorized but unissued shares of preferred stock may enable our board of directors to discourage an attempt to obtain control of us by means of a merger, tender offer, proxy contest or otherwise. For example, if in the due exercise of its fiduciary obligations, our board of directors were to determine that a takeover proposal is not in the best interests of our stockholders, our board of directors could cause shares of preferred stock to be issued without stockholder approval in one or more private offerings or other transactions that might dilute the voting or other rights of the proposed acquirer or insurgent stockholder or stockholder group. In this regard, our certificate of incorporation grants our board of directors broad power to establish the rights and preferences of authorized and unissued shares of preferred stock. The issuance of shares of preferred stock could decrease the amount of earnings and assets available for distribution to holders of shares of common stock. The issuance may also adversely affect the rights and powers, including voting rights, of these holders and may have the effect of delaying, deterring or preventing a change in control.
Exclusive Jurisdiction for Certain Actions
Our bylaws provide that, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware will be the sole and exclusive forum for (i) any derivative action or proceeding brought on our behalf, (ii) any action asserting a claim of breach of or based on a fiduciary duty owed by any current or former director, officer or other employee or stockholder to us or our stockholders, (iii) any action asserting a claim against us or any current or former director, officer or other employee or stockholder arising pursuant to any provision of the DGCL, our certificate of incorporation or our bylaws or as to which the DGCL confers jurisdiction on the Court of Chancery of the State of Delaware, or (iv) any action asserting a claim governed by the internal affairs doctrine, in each case subject to said Court of Chancery having personal jurisdiction over the indispensable parties named as defendants therein; provided that, the provisions of this sentence do not apply to suits brought to enforce any liability or duty created by the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, or any other claim for which the federal courts have exclusive jurisdiction; and provided further that, if and only if the Court of Chancery of the State of Delaware dismisses any such action for lack of subject matter jurisdiction, such action may be brought in another state or federal court sitting in the State of Delaware. Unless the Corporation consents in writing to the selection of an alternative forum, the federal district courts of the United States of America shall, to the fullest extent permitted by law, be the sole and exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act of 1933, as amended. Any person or entity purchasing or otherwise acquiring any interest in shares of capital stock of the Corporation shall be deemed to have notice of and consented to these exclusive jurisdiction provisions.
Section 203 of the Delaware General Corporation Law
We are subject to Section 203 of the General Corporation Law of the State of Delaware, which prohibits persons deemed to be “interested stockholders” from engaging in a “business combination” with a publicly held Delaware corporation for three years following the date these persons become interested stockholders unless the business combination is, or the transaction in which the person became an interested stockholder was, approved in a prescribed manner or another prescribed exception applies. Generally, an “interested stockholder” is a person who, together with affiliates and associates, owns, or within three years prior to the determination of interested stockholder status did own, 15% or more of a corporation’s voting stock. Generally, a “business combination” includes a merger, asset or stock sale, or other transaction resulting in a financial benefit to the interested stockholder. The existence of this provision may have an anti-takeover effect with respect to transactions not approved in advance by the board of directors.
Certificate of Incorporation and Bylaws
Provisions of our certificate of incorporation and our bylaws may delay or discourage transactions involving an actual or potential change in our 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. Among other things, our certificate of incorporation and bylaws:
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permit our board of directors or any authorized committee thereof to issue up to 10,000,000 shares of preferred stock, with any rights, preferences and privileges as they may designate;
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provide that the authorized number of directors may be changed only by resolution adopted by the board of directors;
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provide that the board of directors or any individual director may only be removed with cause and the affirmative vote of the holders of at least two thirds of the outstanding shares of capital stock then entitled vote at an election of directors;
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provide that all vacancies, including newly created directorships, may, subject to the rights of holders of preferred stock as designated from time to time, be filled by the affirmative vote of a majority of directors then in office, even if less than a quorum;
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divide our board of directors into three classes;
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require that any action to be taken by our stockholders must be effected at a duly called annual or special meeting of stockholders and not be taken by written consent;
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provide that stockholders seeking to present proposals before a meeting of stockholders or to nominate candidates for election as directors at a meeting of stockholders must provide notice in writing in a timely manner and also specify requirements as to the form and content of a stockholder’s notice;
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do not provide for cumulative voting rights (therefore allowing the holders of a majority of the shares of common stock entitled to vote in any election of directors to elect all of the directors standing for election, if they should so choose);
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provide that special meetings of our stockholders may be called only by our board of directors acting pursuant to a resolution approved by the affirmative vote of a majority of the directors then in office; and
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provide that the Court of Chancery of the State of Delaware will be the sole and exclusive forum for state law claims, as described above.
The amendment of any of these provisions included in our certificate of incorporation, with the exception of the ability of our board of directors to issue shares of preferred stock and designate any rights, preferences and privileges thereto, the removal of directors by our stockholders, the filling of vacancies by our board of directors, and cumulative voting rights, would require the affirmative vote of two thirds of the outstanding shares of capital stock entitled to vote on such amendment and the affirmative vote of two thirds of the outstanding shares of each class entitled to vote on such amendment as a class.
The amendment of any of these provisions included in our bylaws, with the exception of the exclusive forum provision, would require the affirmative vote of two thirds of the outstanding shares of capital stock entitled to vote on such amendment, and the affirmative vote of not less than two thirds of the outstanding shares of each class entitled to vote on such amendment as a class; provided, however, that if our Board of Directors recommends that stockholders approve such amendment, such amendment shall only require the affirmative vote of a majority of the outstanding shares entitled to vote on such amendment, voting together as a single class.
Transfer agent and registrar
The transfer agent and registrar for our common stock is Computershare Trust Company, N.A.
DESCRIPTION OF DEBT SECURITIES
The following description, together with the additional information we include in any applicable prospectus supplement or free writing prospectus, summarizes certain general terms and provisions of the debt securities that we may offer under this prospectus. When we offer to sell a particular series of debt securities, we will describe the specific terms of the series in a supplement to this prospectus. We will also indicate in the supplement to what extent the general terms and provisions described in this prospectus apply to a particular series of debt securities.
We may issue debt securities either separately, or together with, or upon the conversion or exercise of or in exchange for, other securities described in this prospectus. Debt securities may be our senior, senior subordinated or subordinated obligations and, unless otherwise specified in a supplement to this prospectus, the debt securities will be our direct, unsecured obligations and may be issued in one or more series.
The debt securities will be issued under an indenture between us and a trustee to be named in the applicable indenture, as trustee. We have summarized select portions of the indenture below. The summary is not complete. The form of the indenture has been filed as an exhibit to the registration statement and you should read the indenture for provisions that may be important to you. In the summary below, we have included references to the section numbers of the indenture so that you can easily locate these provisions. Capitalized terms used in the summary and not defined herein have the meanings specified in the indenture.
As used in this section only, “Praxis,” “we,” “our” or “us” refer to Praxis Precision Medicines, Inc. excluding our subsidiaries, unless expressly stated or the context otherwise requires.
General
The terms of each series of debt securities will be established by or pursuant to a resolution of our board of directors and set forth or determined in the manner provided in a resolution of our board of directors, in an officer’s certificate or by a supplemental indenture. (Section 2.2) The particular terms of each series of debt securities will be described in a prospectus supplement relating to such series (including any pricing supplement or term sheet).
We can issue an unlimited amount of debt securities under the indenture that may be in one or more series with the same or various maturities, at par, at a premium, or at a discount. (Section 2.1) We will set forth in a prospectus supplement (including any pricing supplement or term sheet) relating to any series of debt securities being offered, the aggregate principal amount and the following terms of the debt securities, if applicable:
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the title and ranking of the debt securities (including the terms of any subordination provisions);
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the price or prices (expressed as a percentage of the principal amount) at which we will sell the debt securities;
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any limit on the aggregate principal amount of the debt securities;
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the date or dates on which the principal of the securities of the series is payable;
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the rate or rates (which may be fixed or variable) per annum or the method used to determine the rate or rates (including any commodity, commodity index, stock exchange index or financial index) at which the debt securities will bear interest, the date or dates from which interest will accrue, the date or dates on which interest will commence and be payable and any regular record date for the interest payable on any interest payment date;
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the place or places where principal of, and interest, if any, on the debt securities will be payable (and the method of such payment), where the securities of such series may be surrendered for registration of transfer or exchange, and where notices and demands to us in respect of the debt securities may be delivered;
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the period or periods within which, the price or prices at which and the terms and conditions upon which we may redeem the debt securities;
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any obligation we have to redeem or purchase the debt securities pursuant to any sinking fund or analogous provisions or at the option of a holder of debt securities and the period or periods within which, the price or prices at which and in the terms and conditions upon which securities of the series shall be redeemed or purchased, in whole or in part, pursuant to such obligation;
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the dates on which and the price or prices at which we will repurchase debt securities at the option of the holders of debt securities and other detailed terms and provisions of these repurchase obligations;
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the denominations in which the debt securities will be issued, if other than denominations of $1,000 and any integral multiple thereof;
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whether the debt securities will be issued in the form of certificated debt securities or global debt securities;
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the portion of principal amount of the debt securities payable upon declaration of acceleration of the maturity date, if other than the principal amount;
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the currency of denomination of the debt securities, which may be United States Dollars or any foreign currency, and if such currency of denomination is a composite currency, the agency or organization, if any, responsible for overseeing such composite currency;
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the designation of the currency, currencies or currency units in which payment of principal of, premium and interest on the debt securities will be made;
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if payments of principal of, premium or interest on the debt securities will be made in one or more currencies or currency units other than that or those in which the debt securities are denominated, the manner in which the exchange rate with respect to these payments will be determined;
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the manner in which the amounts of payment of principal of, premium, if any, or interest on the debt securities will be determined, if these amounts may be determined by reference to an index based on a currency or currencies or by reference to a commodity, commodity index, stock exchange index or financial index;
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any provisions relating to any security provided for the debt securities;
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any addition to, deletion of or change in the Events of Default described in this prospectus or in the indenture with respect to the debt securities and any change in the acceleration provisions described in this prospectus or in the indenture with respect to the debt securities;
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any addition to, deletion of or change in the covenants described in this prospectus or in the indenture with respect to the debt securities;
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any depositaries, interest rate calculation agents, exchange rate calculation agents or other agents with respect to the debt securities;
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the provisions, if any, relating to conversion or exchange of any debt securities of such series, including if applicable, the conversion or exchange price and period, provisions as to whether conversion or exchange will be mandatory, the events requiring an adjustment of the conversion or exchange price and provisions affecting conversion or exchange;
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any other terms of the debt securities, which may supplement, modify or delete any provision of the indenture as it applies to that series, including any terms that may be required under applicable law or regulations or advisable in connection with the marketing of the securities; and
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whether any of our direct or indirect subsidiaries will guarantee the debt securities of that series, including the terms of subordination, if any, of such guarantees. (Section 2.2)
We may issue debt securities that provide for an amount less than their stated principal amount to be due and payable upon declaration of acceleration of their maturity pursuant to the terms of the indenture. We will provide you with information on the federal income tax considerations and other special considerations applicable to any of these debt securities in the applicable prospectus supplement.
If we denominate the purchase price of any of the debt securities in a foreign currency or currencies or a foreign currency unit or units, or if the principal of and any premium and interest on any series of debt
securities is payable in a foreign currency or currencies or a foreign currency unit or units, we will provide you with information on the restrictions, elections, general tax considerations, specific terms and other information with respect to that issue of debt securities and such foreign currency or currencies or foreign currency unit or units in the applicable prospectus supplement.
Transfer and Exchange
Each debt security will be represented by either one or more global securities registered in the name of The Depository Trust Company, or the Depositary, or a nominee of the Depositary (we will refer to any debt security represented by a global debt security as a “book-entry debt security”), or a certificate issued in definitive registered form (we will refer to any debt security represented by a certificated security as a “certificated debt security”) as set forth in the applicable prospectus supplement. Except as set forth under the heading “Global Debt Securities and Book-Entry System” below, book-entry debt securities will not be issuable in certificated form.
Certificated Debt Securities. You may transfer or exchange certificated debt securities at any office we maintain for this purpose in accordance with the terms of the indenture. (Section 2.4) No service charge will be made for any transfer or exchange of certificated debt securities, but we may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection with a transfer or exchange. (Section 2.7)
You may effect the transfer of certificated debt securities and the right to receive the principal of, premium and interest on certificated debt securities only by surrendering the certificate representing those certificated debt securities and either reissuance by us or the trustee of the certificate to the new holder or the issuance by us or the trustee of a new certificate to the new holder.
Global Debt Securities and Book-Entry System. Each global debt security representing book-entry debt securities will be deposited with, or on behalf of, the Depositary, and registered in the name of the Depositary or a nominee of the Depositary. Please see “Global Securities.”
Covenants
We will set forth in the applicable prospectus supplement any restrictive covenants applicable to any issue of debt securities. (Article IV)
No Protection in the Event of a Change of Control
Unless we state otherwise in the applicable prospectus supplement, the debt securities will not contain any provisions which may afford holders of the debt securities protection in the event we have a change in control or in the event of a highly leveraged transaction (whether or not such transaction results in a change in control) which could adversely affect holders of debt securities.
Consolidation, Merger and Sale of Assets
We may not consolidate with or merge with or into, or convey, transfer or lease all or substantially all of our properties and assets to any person (a “successor person”) unless:
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we are the surviving entity or the successor person (if other than Praxis) is a corporation, partnership, trust or other entity organized and validly existing under the laws and expressly assumes our obligations on the debt securities and under the indenture; and
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immediately after giving effect to the transaction, no Default or Event of Default, shall have occurred and be continuing.
Notwithstanding the above, any of our subsidiaries may consolidate with, merge into or transfer all or part of its properties to us. (Section 5.1)
Events of Default
“Event of Default” means with respect to any series of debt securities, any of the following:
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default in the payment of any interest upon any debt security of that series when it becomes due and payable, and continuance of such default for a period of 30 days (unless the entire amount of the payment is deposited by us with the trustee or with a paying agent prior to the expiration of the 30-day period);
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default in the payment of principal of any security of that series at its maturity;
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default in the performance or breach of any other covenant or warranty by us in the indenture (other than a covenant or warranty that has been included in the indenture solely for the benefit of a series of debt securities other than that series), which default continues uncured for a period of 60 days after we receive written notice from the trustee or Praxis and the trustee receive written notice from the holders of not less than 25% in principal amount of the outstanding debt securities of that series as provided in the indenture;
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certain voluntary or involuntary events of bankruptcy, insolvency or reorganization of Praxis;
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any other Event of Default provided with respect to debt securities of that series that is described in the applicable prospectus supplement. (Section 6.1)
No Event of Default with respect to a particular series of debt securities (except as to certain events of bankruptcy, insolvency or reorganization) necessarily constitutes an Event of Default with respect to any other series of debt securities. (Section 6.1) The occurrence of certain Events of Default or an acceleration under the indenture may constitute an event of default under certain indebtedness of ours or our subsidiaries outstanding from time to time.
We will provide the trustee written notice of any Default or Event of Default within 30 days of becoming aware of the occurrence of such Default or Event of Default, which notice will describe in reasonable detail the status of such Default or Event of Default and what action we are taking or propose to take in respect thereof. (Section 6.1)
If an Event of Default with respect to debt securities of any series at the time outstanding occurs and is continuing, then the trustee or the holders of not less than 25% in principal amount of the outstanding debt securities of that series may, by a notice in writing to us (and to the trustee if given by the holders), declare to be due and payable immediately the principal of (or, if the debt securities of that series are discount securities, that portion of the principal amount as may be specified in the terms of that series) and accrued and unpaid interest, if any, on all debt securities of that series. In the case of an Event of Default resulting from certain events of bankruptcy, insolvency or reorganization, the principal (or such specified amount) of and accrued and unpaid interest, if any, on all outstanding debt securities will become and be immediately due and payable without any declaration or other act on the part of the trustee or any holder of outstanding debt securities. At any time after a declaration of acceleration with respect to debt securities of any series has been made, but before a judgment or decree for payment of the money due has been obtained by the trustee, the holders of a majority in principal amount of the outstanding debt securities of that series may rescind and annul the acceleration if all Events of Default, other than the non-payment of accelerated principal and interest, if any, with respect to debt securities of that series, have been cured or waived as provided in the indenture. (Section 6.2) We refer you to the prospectus supplement relating to any series of debt securities that are discount securities for the particular provisions relating to acceleration of a portion of the principal amount of such discount securities upon the occurrence of an Event of Default.
The indenture provides that the trustee may refuse to perform any duty or exercise any of its rights or powers under the indenture unless the trustee receives indemnity satisfactory to it against any cost, liability or expense which might be incurred by it in performing such duty or exercising such right or power. (Section 7.1(e)) Subject to certain rights of the trustee, the holders of a majority in principal amount of the outstanding debt securities of any series will have the right to direct the time, method and place of conducting any proceeding for any remedy available to the trustee or exercising any trust or power conferred on the trustee with respect to the debt securities of that series. (Section 6.12)
No holder of any debt security of any series will have any right to institute any proceeding, judicial or otherwise, with respect to the indenture or for the appointment of a receiver or trustee, or for any remedy under the indenture, unless:
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that holder has previously given to the trustee written notice of a continuing Event of Default with respect to debt securities of that series; and
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the holders of not less than 25% in principal amount of the outstanding debt securities of that series have made written request, and offered indemnity or security satisfactory to the trustee, to the trustee to institute the proceeding as trustee, and the trustee has not received from the holders of not less than a majority in principal amount of the outstanding debt securities of that series a direction inconsistent with that request and has failed to institute the proceeding within 60 days. (Section 6.7)
Notwithstanding any other provision in the indenture, the holder of any debt security will have an absolute and unconditional right to receive payment of the principal of, premium and any interest on that debt security on or after the due dates expressed in that debt security and to institute suit for the enforcement of payment. (Section 6.8)
The indenture requires us, within 120 days after the end of our fiscal year, to furnish to the trustee a statement as to compliance with the indenture. (Section 4.3) If a Default or Event of Default occurs and is continuing with respect to the securities of any series and if it is known to a responsible officer of the trustee, the trustee shall mail to each Securityholder of the securities of that series notice of a Default or Event of Default within 90 days after it occurs or, if later, after a responsible officer of the trustee has knowledge of such Default or Event of Default. The indenture provides that the trustee may withhold notice to the holders of debt securities of any series of any Default or Event of Default (except in payment on any debt securities of that series) with respect to debt securities of that series if the trustee determines in good faith that withholding notice is in the interest of the holders of those debt securities. (Section 7.5)
Modification and Waiver
We and the trustee may modify, amend or supplement the indenture or the debt securities of any series without the consent of any holder of any debt security:
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to cure any ambiguity, defect or inconsistency;
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to comply with covenants in the indenture described above under the heading “Consolidation, Merger and Sale of Assets”;
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to provide for uncertificated securities in addition to or in place of certificated securities;
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to add guarantees with respect to debt securities of any series or secure debt securities of any series;
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to surrender any of our rights or powers under the indenture;
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to add covenants or events of default for the benefit of the holders of debt securities of any series;
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to comply with the applicable procedures of the applicable depositary;
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to make any change that does not adversely affect the rights of any holder of debt securities;
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to provide for the issuance of and establish the form and terms and conditions of debt securities of any series as permitted by the indenture;
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to effect the appointment of a successor trustee with respect to the debt securities of any series and to add to or change any of the provisions of the indenture to provide for or facilitate administration by more than one trustee; or
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to comply with requirements of the SEC in order to effect or maintain the qualification of the indenture under the Trust Indenture Act. (Section 9.1)
We may also modify and amend the indenture with the consent of the holders of at least a majority in principal amount of the outstanding debt securities of each series affected by the modifications or amendments. We may not make any modification or amendment without the consent of the holders of each affected debt security then outstanding if that amendment will:
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reduce the amount of debt securities whose holders must consent to an amendment, supplement or waiver;
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reduce the rate of or extend the time for payment of interest (including default interest) on any debt security;
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reduce the principal of or premium on or change the fixed maturity of any debt security or reduce the amount of, or postpone the date fixed for, the payment of any sinking fund or analogous obligation with respect to any series of debt securities;
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reduce the principal amount of discount securities payable upon acceleration of maturity;
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waive a default in the payment of the principal of, premium or interest on any debt security (except a rescission of acceleration of the debt securities of any series by the holders of at least a majority in aggregate principal amount of the then outstanding debt securities of that series and a waiver of the payment default that resulted from such acceleration);
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make the principal of or premium or interest on any debt security payable in currency other than that stated in the debt security;
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make any change to certain provisions of the indenture relating to, among other things, the right of holders of debt securities to receive payment of the principal of, premium and interest on those debt securities and to institute suit for the enforcement of any such payment and to waivers or amendments; or
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waive a redemption payment with respect to any debt security. (Section 9.3)
Except for certain specified provisions, the holders of at least a majority in principal amount of the outstanding debt securities of any series may on behalf of the holders of all debt securities of that series waive our compliance with provisions of the indenture. (Section 9.2) The holders of a majority in principal amount of the outstanding debt securities of any series may on behalf of the holders of all the debt securities of such series waive any past default under the indenture with respect to that series and its consequences, except a default in the payment of the principal of, premium or any interest on any debt security of that series; provided, however, that the holders of a majority in principal amount of the outstanding debt securities of any series may rescind an acceleration and its consequences, including any related payment default that resulted from the acceleration. (Section 6.13)
Defeasance of Debt Securities and Certain Covenants in Certain Circumstances
Legal Defeasance. The indenture provides that, unless otherwise provided by the terms of the applicable series of debt securities, we may be discharged from any and all obligations in respect of the debt securities of any series (subject to certain exceptions). We will be so discharged upon the irrevocable deposit with the trustee, in trust, of money and/or U.S. government obligations or, in the case of debt securities denominated in a single currency other than U.S. Dollars, government obligations of the government that issued or caused to be issued such currency, that, through the payment of interest and principal in accordance with their terms, will provide money or U.S. government obligations in an amount sufficient in the opinion of a nationally recognized firm of independent public accountants or investment bank to pay and discharge each installment of principal, premium and interest on and any mandatory sinking fund payments in respect of the debt securities of that series on the stated maturity of those payments in accordance with the terms of the indenture and those debt securities.
This discharge may occur only if, among other things, we have delivered to the trustee an opinion of counsel stating that we have received from, or there has been published by, the United States Internal Revenue Service a ruling or, since the date of execution of the indenture, there has been a change in the applicable United States federal income tax law, in either case to the effect that, and based thereon such opinion shall confirm that, the holders of the debt securities of that series will not recognize income, gain or loss for United States federal income tax purposes as a result of the deposit, defeasance and discharge and will be subject to United States federal income tax on the same amounts and in the same manner and at the same times as would have been the case if the deposit, defeasance and discharge had not occurred. (Section 8.3)
Defeasance of Certain Covenants. The indenture provides that, unless otherwise provided by the terms of the applicable series of debt securities, upon compliance with certain conditions:
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we may omit to comply with the covenant described under the heading “Consolidation, Merger and Sale of Assets” and certain other covenants set forth in the indenture, as well as any additional covenants which may be set forth in the applicable prospectus supplement; and
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any omission to comply with those covenants will not constitute a Default or an Event of Default with respect to the debt securities of that series (“covenant defeasance”).
The conditions include:
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depositing with the trustee money and/or U.S. government obligations or, in the case of debt securities denominated in a single currency other than U.S. Dollars, government obligations of the government that issued or caused to be issued such currency, that, through the payment of interest and principal in accordance with their terms, will provide money in an amount sufficient in the opinion of a nationally recognized firm of independent public accountants or investment bank to pay and discharge each installment of principal of, premium and interest on and any mandatory sinking fund payments in respect of the debt securities of that series on the stated maturity of those payments in accordance with the terms of the indenture and those debt securities; and
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delivering to the trustee an opinion of counsel to the effect that the holders of the debt securities of that series will not recognize income, gain or loss for United States federal income tax purposes as a result of the deposit and related covenant defeasance and will be subject to United States federal income tax on the same amounts and in the same manner and at the same times as would have been the case if the deposit and related covenant defeasance had not occurred. (Section 8.4)
No Personal Liability of Directors, Officers, Employees or Securityholders
None of our past, present or future directors, officers, employees or securityholders, as such, will have any liability for any of our obligations under the debt securities or the indenture or for any claim based on, or in respect or by reason of, such obligations or their creation. By accepting a debt security, each holder waives and releases all such liability. This waiver and release is part of the consideration for the issue of the debt securities. However, this waiver and release may not be effective to waive liabilities under U.S. federal securities laws, and it is the view of the SEC that such a waiver is against public policy.
Governing Law
The indenture and the debt securities, including any claim or controversy arising out of or relating to the indenture or the securities, will be governed by the laws of the State of New York.
The indenture will provide that we, the trustee and the holders of the debt securities (by their acceptance of the debt securities) irrevocably waive, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to the indenture, the debt securities or the transactions contemplated thereby.
The indenture will provide that any legal suit, action or proceeding arising out of or based upon the indenture or the transactions contemplated thereby may be instituted in the federal courts of the United States of America located in the City of New York or the courts of the State of New York in each case located in the City of New York, and we, the trustee and the holder of the debt securities (by their acceptance of the debt securities) irrevocably submit to the non-exclusive jurisdiction of such courts in any such suit, action or proceeding. The indenture will further provide that service of any process, summons, notice or document by mail (to the extent allowed under any applicable statute or rule of court) to such party’s address set forth in the indenture will be effective service of process for any suit, action or other proceeding brought in any such court. The indenture will further provide that we, the trustee and the holders of the debt securities (by their acceptance of the debt securities) irrevocably and unconditionally waive any objection to the laying of venue of any suit, action or other proceeding in the courts specified above and irrevocably and unconditionally waive and agree not to plead or claim any such suit, action or other proceeding has been brought in an inconvenient forum. (Section 10.10)
DESCRIPTION OF WARRANTS
We may issue warrants for the purchase of shares of our common stock or preferred stock or of debt securities. We may issue warrants independently or together with other securities, and the warrants may be attached to or separate from any offered securities. Each series of warrants will be issued under a separate warrant agreement to be entered into between us and the investors or a warrant agent. The following summary of material provisions of the warrants and warrant agreements are subject to, and qualified in their entirety by reference to, all the provisions of the warrant agreement and warrant certificate applicable to a particular series of warrants. The terms of any warrants offered under a prospectus supplement may differ from the terms described below. We urge you to read the applicable prospectus supplement and any related free writing prospectus, as well as the complete warrant agreements and warrant certificates that contain the terms of the warrants.
The particular terms of any issue of warrants will be described in the prospectus supplement relating to the issue. Those terms may include:
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the number of shares of common stock or preferred stock purchasable upon the exercise of warrants to purchase such shares and the price at which such number of shares may be purchased upon such exercise;
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the designation, stated value and terms (including, without limitation, liquidation, dividend, conversion and voting rights) of the series of preferred stock purchasable upon exercise of warrants to purchase preferred stock;
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the principal amount of debt securities that may be purchased upon exercise of a debt warrant and the exercise price for the warrants, which may be payable in cash, securities or other property;
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the date, if any, on and after which the warrants and the related debt securities, preferred stock or common stock will be separately transferable;
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the terms of any rights to redeem or call the warrants;
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the date on which the right to exercise the warrants will commence and the date on which the right will expire;
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United States Federal income tax consequences applicable to the warrants; and
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any additional terms of the warrants, including terms, procedures, and limitations relating to the exchange, exercise and settlement of the warrants.
Holders of equity warrants will not be entitled:
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to vote, consent or receive dividends;
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receive notice as shareholders with respect to any meeting of shareholders for the election of our directors or any other matter; or
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exercise any rights as shareholders of Praxis.
Each warrant will entitle its holder to purchase the principal amount of debt securities or the number of shares of preferred stock or common stock at the exercise price set forth in, or calculable as set forth in, the applicable prospectus supplement. Unless we otherwise specify in the applicable prospectus supplement, holders of the warrants may exercise the warrants at any time up to the specified time on the expiration date that we set forth in the applicable prospectus supplement. After the close of business on the expiration date, unexercised warrants will become void.
A holder of warrant certificates may exchange them for new warrant certificates of different denominations, present them for registration of transfer and exercise them at the corporate trust office of the warrant agent or any other office indicated in the applicable prospectus supplement. Until any warrants to purchase debt securities are exercised, the holder of the warrants will not have any rights of holders of the debt securities that can be purchased upon exercise, including any rights to receive payments of principal, premium or interest on the underlying debt securities or to enforce covenants in the applicable indenture. Until any warrants to purchase common stock or preferred stock are exercised, the holders of the warrants
will not have any rights of holders of the underlying common stock or preferred stock, including any rights to receive dividends or payments upon any liquidation, dissolution or winding up on the common stock or preferred stock, if any.
DESCRIPTION OF UNITS
We may issue units consisting of any combination of the other types of securities offered under this prospectus in one or more series. We may evidence each series of units by unit certificates that we will issue under a separate agreement. We may enter into unit agreements with a unit agent. Each unit agent will be a bank or trust company that we select. We will indicate the name and address of the unit agent in the applicable prospectus supplement relating to a particular series of units.
The following description, together with the additional information included in any applicable prospectus supplement, summarizes the general features of the units that we may offer under this prospectus. You should read any prospectus supplement and any free writing prospectus that we may authorize to be provided to you related to the series of units being offered, as well as the complete unit agreements that contain the terms of the units. Specific unit agreements will contain additional important terms and provisions and we will file as an exhibit to the registration statement of which this prospectus is a part, or will incorporate by reference from another report that we file with the SEC, the form of each unit agreement relating to units offered under this prospectus.
If we offer any units, certain terms of that series of units will be described in the applicable prospectus supplement, including, without limitation, the following, as applicable:
•
the title of the series of units;
•
identification and description of the separate constituent securities comprising the units;
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the price or prices at which the units will be issued;
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the date, if any, on and after which the constituent securities comprising the units will be separately transferable;
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a discussion of certain United States federal income tax considerations applicable to the units; and
•
any other terms of the units and their constituent securities.
GLOBAL SECURITIES
Book-Entry, Delivery and Form
Unless we indicate differently in any applicable prospectus supplement or free writing prospectus, the securities initially will be issued in book-entry form and represented by one or more global notes or global securities, or, collectively, global securities. The global securities will be deposited with, or on behalf of, The Depository Trust Company, New York, New York, as depositary, or DTC, and registered in the name of Cede & Co., the nominee of DTC. Unless and until it is exchanged for individual certificates evidencing securities under the limited circumstances described below, a global security may not be transferred except as a whole by the depositary to its nominee or by the nominee to the depositary, or by the depositary or its nominee to a successor depositary or to a nominee of the successor depositary.
DTC has advised us that it is:
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a limited-purpose trust company organized under the New York Banking Law;
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a “banking organization” within the meaning of the New York Banking Law;
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a member of the Federal Reserve System;
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a “clearing corporation” within the meaning of the New York Uniform Commercial Code; and
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a “clearing agency” registered pursuant to the provisions of Section 17A of the Exchange Act.
DTC holds securities that its participants deposit with DTC. DTC also facilitates the settlement among its participants of securities transactions, such as transfers and pledges, in deposited securities through electronic computerized book-entry changes in participants’ accounts, thereby eliminating the need for physical movement of securities certificates. “Direct participants” in DTC include securities brokers and dealers, including underwriters, banks, trust companies, clearing corporations and other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation, or DTCC. DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others, which we sometimes refer to as indirect participants, that clear through or maintain a custodial relationship with a direct participant, either directly or indirectly. The rules applicable to DTC and its participants are on file with the SEC.
Purchases of securities under the DTC system must be made by or through direct participants, which will receive a credit for the securities on DTC’s records. The ownership interest of the actual purchaser of a security, which we sometimes refer to as a beneficial owner, is in turn recorded on the direct and indirect participants’ records. Beneficial owners of securities will not receive written confirmation from DTC of their purchases. However, beneficial owners are expected to receive written confirmations providing details of their transactions, as well as periodic statements of their holdings, from the direct or indirect participants through which they purchased securities. Transfers of ownership interests in global securities are to be accomplished by entries made on the books of participants acting on behalf of beneficial owners. Beneficial owners will not receive certificates representing their ownership interests in the global securities, except under the limited circumstances described below.
To facilitate subsequent transfers, all global securities deposited by direct participants with DTC will be registered in the name of DTC’s partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of securities with DTC and their registration in the name of Cede & Co. or such other nominee will not change the beneficial ownership of the securities. DTC has no knowledge of the actual beneficial owners of the securities. DTC’s records reflect only the identity of the direct participants to whose accounts the securities are credited, which may or may not be the beneficial owners. The participants are responsible for keeping account of their holdings on behalf of their customers.
So long as the securities are in book-entry form, you will receive payments and may transfer securities only through the facilities of the depositary and its direct and indirect participants. We will maintain an office or agency in the location specified in the prospectus supplement for the applicable securities, where notices and demands in respect of the securities and the indenture may be delivered to us and where certificated securities may be surrendered for payment, registration of transfer or exchange.
Conveyance of notices and other communications by DTC to direct participants, by direct participants to indirect participants and by direct participants and indirect participants to beneficial owners will be governed by arrangements among them, subject to any legal requirements in effect from time to time.
Redemption notices will be sent to DTC. If less than all of the securities of a particular series are being redeemed, DTC’s practice is to determine by lot the amount of the interest of each direct participant in the securities of such series to be redeemed.
Neither DTC nor Cede & Co. (or such other DTC nominee) will consent or vote with respect to the securities. Under its usual procedures, DTC will mail an omnibus proxy to us as soon as possible after the record date. The omnibus proxy assigns the consenting or voting rights of Cede & Co. to those direct participants to whose accounts the securities of such series are credited on the record date, identified in a listing attached to the omnibus proxy.
So long as securities are in book-entry form, we will make payments on those securities to the depositary or its nominee, as the registered owner of such securities, by wire transfer of immediately available funds. If securities are issued in definitive certificated form under the limited circumstances described below and unless if otherwise provided in the description of the applicable securities herein or in the applicable prospectus supplement, we will have the option of making payments by check mailed to the addresses of the persons entitled to payment or by wire transfer to bank accounts in the United States designated in writing to the applicable trustee or other designated party at least 15 days before the applicable payment date by the persons entitled to payment, unless a shorter period is satisfactory to the applicable trustee or other designated party.
Redemption proceeds, distributions and dividend payments on the securities will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC’s practice is to credit direct participants’ accounts upon DTC’s receipt of funds and corresponding detail information from us on the payment date in accordance with their respective holdings shown on DTC records. Payments by participants to beneficial owners will be governed by standing instructions and customary practices, as is the case with securities held for the account of customers in bearer form or registered in “street name.” Those payments will be the responsibility of participants and not of DTC or us, subject to any statutory or regulatory requirements in effect from time to time. Payment of redemption proceeds, distributions and dividend payments to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC, is our responsibility, disbursement of payments to direct participants is the responsibility of DTC, and disbursement of payments to the beneficial owners is the responsibility of direct and indirect participants.
Except under the limited circumstances described below, purchasers of securities will not be entitled to have securities registered in their names and will not receive physical delivery of securities. Accordingly, each beneficial owner must rely on the procedures of DTC and its participants to exercise any rights under the securities and the indenture.
The laws of some jurisdictions may require that some purchasers of securities take physical delivery of securities in definitive form. Those laws may impair the ability to transfer or pledge beneficial interests in securities.
DTC may discontinue providing its services as securities depositary with respect to the securities at any time by giving reasonable notice to us. Under such circumstances, in the event that a successor depositary is not obtained, securities certificates are required to be printed and delivered.
As noted above, beneficial owners of a particular series of securities generally will not receive certificates representing their ownership interests in those securities. However, if:
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DTC notifies us that it is unwilling or unable to continue as a depositary for the global security or securities representing such series of securities or if DTC ceases to be a clearing agency registered under the Exchange Act at a time when it is required to be registered and a successor depositary is not appointed within 90 days of the notification to us or of our becoming aware of DTC’s ceasing to be so registered, as the case may be;
•
we determine, in our sole discretion, not to have such securities represented by one or more global securities; or
•
an Event of Default has occurred and is continuing with respect to such series of securities,
we will prepare and deliver certificates for such securities in exchange for beneficial interests in the global securities. Any beneficial interest in a global security that is exchangeable under the circumstances described in the preceding sentence will be exchangeable for securities in definitive certificated form registered in the names that the depositary directs. It is expected that these directions will be based upon directions received by the depositary from its participants with respect to ownership of beneficial interests in the global securities.
Euroclear and Clearstream
If so provided in the applicable prospectus supplement, you may hold interests in a global security through Clearstream Banking S.A., which we refer to as “Clearstream,” or Euroclear Bank S.A./N.V., as operator of the Euroclear System, which we refer to as “Euroclear,” either directly if you are a participant in Clearstream or Euroclear or indirectly through organizations which are participants in Clearstream or Euroclear. Clearstream and Euroclear will hold interests on behalf of their respective participants through customers’ securities accounts in the names of Clearstream and Euroclear, respectively, on the books of their respective U.S. depositaries, which in turn will hold such interests in customers’ securities accounts in such depositaries’ names on DTC’s books.
Clearstream and Euroclear are securities clearance systems in Europe. Clearstream and Euroclear hold securities for their respective participating organizations and facilitate the clearance and settlement of securities transactions between those participants through electronic book-entry changes in their accounts, thereby eliminating the need for physical movement of certificates.
Payments, deliveries, transfers, exchanges, notices and other matters relating to beneficial interests in global securities owned through Euroclear or Clearstream must comply with the rules and procedures of those systems. Transactions between participants in Euroclear or Clearstream, on one hand, and other participants in DTC, on the other hand, are also subject to DTC’s rules and procedures.
Investors will be able to make and receive through Euroclear and Clearstream payments, deliveries, transfers and other transactions involving any beneficial interests in global securities held through those systems only on days when those systems are open for business. Those systems may not be open for business on days when banks, brokers and other institutions are open for business in the United States.
Cross-market transfers between participants in DTC, on the one hand, and participants in Euroclear or Clearstream, on the other hand, will be effected through DTC in accordance with the DTC’s rules on behalf of Euroclear or Clearstream, as the case may be, by their respective U.S. depositaries; however, such cross-market transactions will require delivery of instructions to Euroclear or Clearstream, as the case may be, by the counterparty in such system in accordance with the rules and procedures and within the established deadlines (European time) of such system. Euroclear or Clearstream, as the case may be, will, if the transaction meets its settlement requirements, deliver instructions to its U.S. depositary to take action to effect final settlement on its behalf by delivering or receiving interests in the global securities through DTC, and making or receiving payment in accordance with normal procedures for same-day fund settlement. Participants in Euroclear or Clearstream may not deliver instructions directly to their respective U.S. depositaries.
Due to time zone differences, the securities accounts of a participant in Euroclear or Clearstream purchasing an interest in a global security from a direct participant in DTC will be credited, and any such crediting will be reported to the relevant participant in Euroclear or Clearstream, during the securities settlement processing day (which must be a business day for Euroclear or Clearstream) immediately following the settlement date of DTC. Cash received in Euroclear or Clearstream as a result of sales of interests in a global security by or through a participant in Euroclear or Clearstream to a direct participant in DTC will be received with value on the settlement date of DTC but will be available in the relevant Euroclear or Clearstream cash account only as of the business day for Euroclear or Clearstream following DTC’s settlement date.
Other
The information in this section of this prospectus concerning DTC, Clearstream, Euroclear and their respective book-entry systems has been obtained from sources that we believe to be reliable, but we do not
take responsibility for this information. This information has been provided solely as a matter of convenience. The rules and procedures of DTC, Clearstream and Euroclear are solely within the control of those organizations and could change at any time. Neither we nor the trustee nor any agent of ours or of the trustee has any control over those entities and none of us takes any responsibility for their activities. You are urged to contact DTC, Clearstream and Euroclear or their respective participants directly to discuss those matters. In addition, although we expect that DTC, Clearstream and Euroclear will perform the foregoing procedures, none of them is under any obligation to perform or continue to perform such procedures and such procedures may be discontinued at any time. Neither we nor any agent of ours will have any responsibility for the performance or nonperformance by DTC, Clearstream and Euroclear or their respective participants of these or any other rules or procedures governing their respective operations.
PLAN OF DISTRIBUTION
We may sell the securities from time to time pursuant to underwritten public offerings, negotiated transactions, block trades or a combination of these methods or through underwriters or dealers, through agents and/or directly to one or more purchasers. The securities may be distributed from time to time in one or more transactions:
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at a fixed price or prices, which may be changed;
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at market prices prevailing at the time of sale;
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at prices related to such prevailing market prices; or
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at negotiated prices.
Each time that we sell securities covered by this prospectus, we will provide a prospectus supplement or supplements that will describe the method of distribution and set forth the terms and conditions of the offering of such securities, including the offering price of the securities and the proceeds to us, if applicable.
Offers to purchase the securities being offered by this prospectus may be solicited directly. Agents may also be designated to solicit offers to purchase the securities from time to time. Any agent involved in the offer or sale of our securities will be identified in a prospectus supplement.
If a dealer is utilized in the sale of the securities being offered by this prospectus, the securities will be sold to the dealer, as principal. The dealer may then resell the securities to the public at varying prices to be determined by the dealer at the time of resale.
If an underwriter is utilized in the sale of the securities being offered by this prospectus, an underwriting agreement will be executed with the underwriter at the time of sale and the name of any underwriter will be provided in the prospectus supplement that the underwriter will use to make resales of the securities to the public. In connection with the sale of the securities, we or the purchasers of securities for whom the underwriter may act as agent, may compensate the underwriter in the form of underwriting discounts or commissions. The underwriter may sell the securities to or through dealers, and those dealers may receive compensation in the form of discounts, concessions or commissions from the underwriters and/or commissions from the purchasers for which they may act as agent. Unless otherwise indicated in a prospectus supplement, an agent will be acting on a best efforts basis and a dealer will purchase securities as a principal, and may then resell the securities at varying prices to be determined by the dealer.
Any compensation paid to underwriters, dealers or agents in connection with the offering of the securities, and any discounts, concessions or commissions allowed by underwriters to participating dealers will be provided in the applicable prospectus supplement. Underwriters, dealers and agents participating in the distribution of the securities may be deemed to be underwriters within the meaning of the Securities Act of 1933, as amended, and any discounts and commissions received by them and any profit realized by them on resale of the securities may be deemed to be underwriting discounts and commissions. We may enter into agreements to indemnify underwriters, dealers and agents against civil liabilities, including liabilities under the Securities Act, or to contribute to payments they may be required to make in respect thereof and to reimburse those persons for certain expenses.
Any common stock will be listed on The Nasdaq Global Select Market, but any other securities may or may not be listed on a national securities exchange. To facilitate the offering of securities, certain persons participating in the offering may engage in transactions that stabilize, maintain or otherwise affect the price of the securities. This may include over-allotments or short sales of the securities, which involve the sale by persons participating in the offering of more securities than were sold to them. In these circumstances, these persons would cover such over-allotments or short positions by making purchases in the open market or by exercising their over-allotment option, if any. In addition, these persons may stabilize or maintain the price of the securities by bidding for or purchasing securities in the open market or by imposing penalty bids, whereby selling concessions allowed to dealers participating in the offering may be reclaimed if securities sold by them are repurchased in connection with stabilization transactions. The effect of these transactions may be to stabilize or maintain the market price of the securities at a level above that which might otherwise prevail in the open market. These transactions may be discontinued at any time.
We may engage in at the market offerings into an existing trading market in accordance with Rule 415(a)(4) under the Securities Act. In addition, we may enter into derivative transactions with third parties, or sell securities not covered by this prospectus to third parties in privately negotiated transactions. If the applicable prospectus supplement so indicates, in connection with those derivatives, the third parties may sell securities covered by this prospectus and the applicable prospectus supplement, including in short sale transactions. If so, the third party may use securities pledged by us or borrowed from us or others to settle those sales or to close out any related open borrowings of stock, and may use securities received from us in settlement of those derivatives to close out any related open borrowings of stock. The third party in such sale transactions will be an underwriter and, if not identified in this prospectus, will be named in the applicable prospectus supplement (or a post-effective amendment). In addition, we may otherwise loan or pledge securities to a financial institution or other third party that in turn may sell the securities short using this prospectus and an applicable prospectus supplement. Such financial institution or other third party may transfer its economic short position to investors in our securities or in connection with a concurrent offering of other securities.
The specific terms of any lock-up provisions in respect of any given offering will be described in the applicable prospectus supplement.
The underwriters, dealers and agents may engage in transactions with us, or perform services for us, in the ordinary course of business for which they receive compensation.
LEGAL MATTERS
Latham & Watkins LLP will pass upon certain legal matters relating to the issuance and sale of the securities offered hereby on behalf of Praxis Precision Medicines, Inc. Additional legal matters may be passed upon for us or any underwriters, dealers or agents, by counsel that we will name in the applicable prospectus supplement.
EXPERTS
The consolidated financial statements of Praxis Precision Medicines, Inc. appearing in Praxis Precision Medicines, Inc.’s Annual Report (Form 10-K) for the year ended December 31, 2022, have been audited by Ernst & Young LLP, independent registered public accounting firm, as set forth in their report thereon (which contains an explanatory paragraph describing conditions that raise substantial doubt about the Company’s ability to continue as a going concern as described in Note 1 to the consolidated financial statements) included therein and incorporated herein by reference. Such financial statements are, and audited financial statements to be included in subsequently filed documents will be, incorporated herein in reliance upon the report of Ernst & Young LLP pertaining to such financial statements (to the extent covered by consents filed with the Securities and Exchange Commission) given on the authority of such firm as experts in accounting and auditing.
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 nor does it seek an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.
Subject to Completion, dated February 7, 2023.
PROSPECTUS SUPPLEMENT
Up to $95,573,843.36
Common Stock
We have entered into an Open Market Sale AgreementSM, or the sales agreement, with Jefferies LLC, or Jefferies, relating to shares of our common stock, par value $0.0001 per share, offered by this prospectus. In accordance with the terms of the sales agreement, under this prospectus supplement, we may offer and sell shares of our common stock having an aggregate offering price of up to $95,573,843.36 from time to time through Jefferies, acting as our agent, or the ATM Program. As of the date of this prospectus supplement, we have sold $29,426,156.64 of $125,000,000 under the ATM Program. We are registering the offer and sale of the remaining $95,573,843.36 that has not been sold under the ATM Program.
Our common stock is listed on The Nasdaq Global Select Market under the symbol “PRAX”. On February 3, 2023, the closing price of our common stock, as reported on The Nasdaq Global Select Market, was $4.64 per share.
Sales of our common stock, if any, under this prospectus supplement will be made by any method permitted that is deemed an “at the market offering” as defined in Rule 415(a)(4) under the Securities Act of 1933, as amended, or the Securities Act. Jefferies is not required to sell any specific amount, but will act as our sales agent using commercially reasonable efforts consistent with its normal trading and sales practices. There is no arrangement for funds to be received in any escrow, trust or similar arrangement.
Jefferies will be entitled to compensation at a commission rate of 3.0% of the gross sales price of common stock sold under the sales agreement. See “Plan of Distribution” beginning on page
S-12 for additional information regarding the compensation to be paid to Jefferies. In connection with the sale of the common stock on our behalf, Jefferies will be deemed to be an “underwriter” within the meaning of the Securities Act and the compensation of Jefferies will be deemed to be underwriting commissions or discounts. We have also agreed to provide indemnification and contribution to Jefferies with respect to certain liabilities, including liabilities under the Securities Act and the Securities Exchange Act of 1934, as amended, or the Exchange Act.
Investing in our common stock involves a high degree of risk. You should review carefully the risks and uncertainties referenced under the heading “Risk Factors” on page S-5 of this prospectus and in the documents that are incorporated by reference into this prospectus.
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.
Jefferies
Prospectus Supplement dated , 2023
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We are responsible for the information contained and incorporated by reference in this prospectus supplement, the accompanying base prospectus and in any related free writing prospectus we prepare or authorize. We have not authorized anyone to give you any other information, and we take no responsibility for any other information that others may give you. If you are in a jurisdiction where offers to sell, or solicitations of offers to purchase, the securities offered by this documentation are unlawful, or if you are a person to whom it is unlawful to direct these types of activities, then the offer presented in this document does not extend to you. The information contained in this document speaks only as of the date of this document, unless the information specifically indicates that another date applies. Our business, financial condition, results of operations and prospects may have changed since those dates.
ABOUT THIS PROSPECTUS SUPPLEMENT
This prospectus supplement is part of a registration statement that we have filed with the Securities and Exchange Commission, or SEC, utilizing a “shelf” registration process, and relates to the offering of our common stock.
We provide information to you about this offering of our common stock in two separate documents that are bound together: (1) this prospectus supplement, which describes the specific details regarding this offering; and (2) the accompanying base prospectus, which provides general information, some of which may not apply to this offering. Generally, when we refer to this “prospectus,” we are referring to both documents combined. If information in this prospectus supplement is inconsistent with the accompanying base prospectus, you should rely on this prospectus supplement. To the extent there is a conflict between the information contained in this prospectus supplement, on the one hand, and the information contained in any document incorporated by reference in this prospectus supplement, on the other hand, you should rely on the information in this prospectus supplement, except as provided in the follow sentence. If any statement in one of these documents is inconsistent with a statement in another document having a later date—for example, a document incorporated by reference in this prospectus supplement—the statement in the document having the later date modifies or supersedes the earlier statement. Any statement so modified or superseded will not be deemed, except as so modified or superseded, to constitute a part of this prospectus.
You should rely only on the information contained or incorporated by reference in this prospectus, the accompanying base prospectus and any free writing prospectus we may authorize for use in connection with this offering. We have not, and Jefferies has not, authorized anyone to provide you with different information. We and Jefferies take no responsibility for, and can provide no assurance as to the reliability of, any other information that others may provide.
The information contained in this prospectus, the accompanying base prospectus, the documents incorporated by reference herein or therein and any free writing prospectus we may authorize for use in connection with this offering, is accurate only as of their respective dates, regardless of the time of delivery of any such document or the time of any sale of our common stock. Our business, financial condition, results of operations and prospects may have changed since those dates. It is important for you to read and consider all information contained in this prospectus supplement, the accompanying base prospectus, the documents incorporated by reference herein and therein and any free writing prospectus that we have authorized for use in connection with this offering, in making your investment decision. You should read this prospectus and the accompanying base prospectus, as well as the documents incorporated by reference herein and therein, the additional information described under the section titled “Where You Can Find More Information” and “Incorporation of Certain Documents by Reference” in this prospectus supplement, and any free writing prospectus that we have authorized for use in connection with this offering, before investing in our common stock.
We further note that the representations, warranties and covenants made by us in any agreement that is filed as an exhibit to any document that is incorporated by reference in this prospectus supplement were made solely for the benefit of the parties to such agreement, including, in some cases, for the purpose of allocating risk among the parties to such agreements, and should not be deemed to be a representation, warranty or covenant to you. Moreover, such representations, warranties or covenants were accurate only as of the date when made. Accordingly, such representations, warranties and covenants should not be relied on as accurately representing the current state of our affairs.
This prospectus supplement and the documents incorporated by reference herein also contain estimates, projections and other information concerning our industry, our business, and the markets for certain diseases, including data regarding the estimated size of those markets, and the incidence and prevalence of certain medical conditions. Information that is based on estimates, forecasts, projections, market research or similar methodologies is inherently subject to uncertainties and actual events or circumstances may differ materially from events and circumstances reflected in this information. Unless otherwise expressly stated, we obtained this industry, business, market and other data from reports, research surveys, studies and similar data prepared by market research firms and other third parties, industry, medical and general publications, government data and similar sources.
We are offering to sell, and seeking offers to buy, shares of our common stock only in jurisdictions where such offers and sales are permitted. The distribution of this prospectus supplement and the accompanying base prospectus and the offering of our common stock in certain jurisdictions may be restricted by law. Persons outside the United States who come into possession of this prospectus supplement and the accompanying base prospectus must inform themselves about, and observe any restrictions relating to, the offering of our common stock and the distribution of this prospectus supplement and the accompanying base prospectus outside the United States. This prospectus supplement and the accompanying base prospectus does not constitute, and may not be used in connection with, an offer to sell, or a solicitation of an offer to buy, any securities offered by this prospectus supplement and the accompanying base prospectus by any person in any jurisdiction in which it is unlawful for such person to make such an offer or solicitation.
As used in this prospectus, unless the context otherwise requires, references to the “Company,” “Praxis,” “we,” “us” and “our” refer to Praxis Precision Medicines, Inc. and its consolidated subsidiaries.
PROSPECTUS SUPPLEMENT SUMMARY
This summary highlights selected information and does not contain all of the information that you should consider in making your investment decision. Before investing in our common stock, you should carefully read this entire prospectus, the accompanying base prospectus and any free writing prospectus that we have authorized for use in connection with this offering carefully, including the information in our filings with the U.S. Securities and Exchange Commission, or the SEC, incorporated by reference in this prospectus supplement.
Our Company
We are a clinical-stage biopharmaceutical company translating insights from genetic epilepsies into the development of therapies for central nervous system, or CNS, disorders characterized by neuronal excitation-inhibition imbalance. Normal brain function requires a delicate balance of excitation and inhibition in neuronal circuits, which, when dysregulated, can lead to abnormal function and both rare and more prevalent neurological disorders. We are applying genetic insights to the discovery and development of therapies for neurological disorders through two proprietary platforms, using our understanding of shared biological targets and circuits in the brain. Each platform currently has multiple programs, with significant potential for additional program and indication expansion:
▪
Cerebrum™, our small molecule platform, utilizes deep understanding of neuronal excitability and neuronal networks and applies a series of computational and experimental tools to develop orally available precision therapies
▪
Solidus™, our antisense oligonucleotide, or ASO, platform, is an efficient, targeted precision medicine discovery and development engine anchored on a proprietary, computational methodology
Our platforms utilize a deliberate, pragmatic and patient-guided approach, leveraging a suite of translational tools, including novel transgenic and predictive translational animal models and electrophysiology markers, to enable an efficient path to proof-of-concept in patients. Through this approach, we have established a diversified, multimodal CNS portfolio with four clinical-stage product candidates across movement disorders and epilepsy.
Corporate Information
We were incorporated under the laws of the State of Delaware on September 22, 2015. Our principal executive office is located at 99 High Street, 30th Floor, Boston, MA 02110, and our telephone number is (617) 300-8460. Our website address is www.praxismedicines.com. We do not incorporate the information on or accessible through our website into this prospectus supplement, and you should not consider any information on, or that can be accessed through, our website as part of this prospectus supplement.
THE OFFERING
Common stock offered by us:
Shares of our common stock having an aggregate offering price of up to $95,573,843.36.
Common stock to be outstanding immediately after this offering
Up to 69,980,264 shares of our common stock, assuming sales of 20,597,811 shares of our common stock in this offering at a public offering price of $4.64 per share, which was the last reported sale price per share of our common stock on The Nasdaq Global Select Market on February 3, 2023. The actual number of shares of our common stock issued will vary depending on the sales price under this offering.
“At the market offering” that may be made from time to time on The Nasdaq Global Select Market or other existing trading market for our common stock through Jefferies, as sales agent. See “Plan of Distribution” on page
S-12 of this prospectus.
Our management will retain broad discretion regarding the allocation and use of the net proceeds. We currently intend to use the net proceeds from this offering, together with our existing cash, cash equivalents and marketable securities, to fund research and clinical development of current or additional product candidates, including commercial readiness activities, and the remainder for working capital and other general corporate purposes. See “Use of Proceeds” on page
S-9 of this prospectus.
Investing in our common stock involves significant risks. See “Risk Factors” on page
S-5 of this prospectus and under similar headings in the documents incorporated by reference into this prospectus for a discussion of the factors you should carefully consider before deciding to invest in our common stock.
The Nasdaq Global Select Market
symbol:
“PRAX”
The number of shares of common stock to be outstanding after this offering is based on 49,382,453 shares of common stock outstanding as of December 31, 2022 and excludes:
▪
8,838,028 shares of our common stock issuable upon the exercise of stock options outstanding as of December 31, 2022 under our 2017 Stock Incentive Plan and 2020 Stock Option and Incentive Plan, at a weighted average exercise price of $13.93 per share;
▪
1,650,955 shares of our common stock reserved for future issuance under our 2020 Stock Option and Incentive Plan as of December 31, 2022;
▪
839,922 shares of our common stock reserved for future issuance under the 2020 Employee Stock Purchase Plan as of December 31, 2022; and
▪
743,950 shares of our common stock reserved for future vesting of restricted stock units as of December 31, 2022.
Unless otherwise indicated, all information in this prospectus supplement assumes no exercise of outstanding stock options or vesting of restricted stock units described above.
RISK FACTORS
Investing in our common stock involves a high degree of risk. Before making an investment decision, you should carefully consider the risks described below and in our most recent Annual Report on Form 10-K and any subsequent Quarterly Reports on Form 10-Q or Current Reports on Form 8-K, as well as any amendments thereto reflected in subsequent filings with the SEC, each of which are incorporated by reference in this prospectus supplement, and all of the other information in this prospectus supplement, including our financial statements and related notes incorporated by reference herein. If any of these risks is realized, our business, financial condition, results of operations and prospects could be materially and adversely affected. In that event, the trading price of our common stock could decline and you could lose part or all of your investment. Additional risks and uncertainties that are not yet identified or that we currently believe to be immaterial may also materially harm our business, financial condition, results of operations and prospects and could result in a complete loss of your investment.
Risks Related To This Offering
We have broad discretion in the use of the net proceeds from this offering and may invest or spend the proceeds in ways with which you do not agree and in ways that may not yield a return on your investment.
Our management will have broad discretion in the application of the net proceeds from this offering, including for any of the purposes described in the section titled “Use of Proceeds,” and you will be relying on the judgment of our management regarding such application. You will not have the opportunity, as part of your investment decision, to assess whether the proceeds are being used effectively. Our management might not apply the net proceeds in ways that ultimately increase the value of your investment. If we do not invest or apply the net proceeds from this offering in ways that enhance stockholder value, we may fail to achieve expected results, which could cause our stock price to decline. Pending their use, we may invest the net proceeds in a variety of capital preservation instruments, including short-term, investment-grade, interest-bearing instruments and U.S. government securities. These investments may not yield a favorable return to our stockholders.
If you purchase our common stock in this offering, you will incur immediate and substantial dilution in the net tangible book value of your shares.
The offering price per share in this offering may exceed the net tangible book value per share of our common stock outstanding at the time of sale. Assuming that an aggregate of 20,597,811 shares of our common stock are sold at an assumed offering price of $4.64 per share, the last reported sale price of our common stock on The Nasdaq Global Select Market on February 3, 2023, for aggregate gross proceeds of $95.6 million, after deducting commissions and estimated offering expenses payable by us, investors in this offering would experience immediate dilution of $2.23 per share, representing the difference between our as adjusted net tangible book value per share as of December 31, 2022 of $2.41, after giving effect to this offering, and the assumed offering price.
This dilution is due to the substantially lower price paid by some of our investors who purchased shares prior to this offering as compared to the price offered to the public in this offering and the exercise of stock options granted to our employees, directors and consultants. In addition, we have a significant number of stock options and restricted stock units outstanding. The exercise of any of the outstanding options or the vesting of the restricted stock units would result in further dilution. As a result of the dilution to investors purchasing shares in this offering, investors may receive significantly less than the purchase price paid in this offering, if anything, in the event of our liquidation. Further, because we expect we will need to raise additional capital to fund our future activities, we may in the future sell substantial amounts of common stock or securities convertible into or exchangeable for common stock.
Future issuances of common stock or common stock-related securities, together with the exercise of outstanding stock options, if any, may result in further dilution. For a further description of the dilution that you will experience immediately after this offering, see the section titled “Dilution.”
Future sales and issuances of our common stock or rights to purchase common stock, including pursuant to our equity incentive plans, could result in additional dilution of the percentage ownership of our stockholders and could cause our stock price to fall.
Additional capital will be needed in the future to continue our planned operations. To the extent we issue additional equity securities to raise capital or pursuant to our equity incentive plans or other contractual
obligations, our stockholders may experience substantial dilution. We may sell common stock, convertible securities or other equity securities in one or more transactions at prices and in a manner we determine from time to time. If we sell or issue common stock, convertible securities or other equity securities in more than one transaction, investors may be materially diluted by subsequent sales. These sales may also result in material dilution to our existing stockholders, and new investors could gain rights superior to our existing stockholders.
In addition, sales of a substantial number of shares of our outstanding common stock in the public market could occur at any time. These sales, or the perception in the market that the holders of a large number of shares of common stock intend to sell shares, could reduce the market price of our common stock. Persons who were our stockholders prior to our initial public offering continue to hold a substantial number of shares of our common stock that many of them are now able to sell in the public market. Significant portions of these shares are held by a relatively small number of stockholders. Sales by our stockholders of a substantial number of shares, or the expectation that such sales may occur, could significantly reduce the market price of our common stock.
The actual number of shares we will issue under the sales agreement, at any one time or in total, is uncertain.
Subject to certain limitations in the sales agreement and compliance with applicable law, we have the discretion to deliver a transaction proposal to Jefferies at any time throughout the term of the sales agreement. The number of shares that are sold by Jefferies after delivering a transaction proposal will fluctuate based on the market price of our common stock during the sales period and limits we set with Jefferies. Because the price per share of each share sold will fluctuate based on the market price of our common stock during the sales period, it is not possible at this stage to predict the number of shares that will be ultimately issued.
The common stock offered hereby will be sold in “at the market offerings,” and investors who buy shares at different times will likely pay different prices.
Investors who purchase shares in this offering at different times will likely pay different prices, and so may experience different outcomes in their investment results. We will have discretion, subject to market demand, to vary the timing, prices, and numbers of shares sold, and there is no minimum or maximum sales price. Investors may experience a decline in the value of their shares as a result of share sales made at prices lower than the prices they paid.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus supplement, the accompanying base prospectus, the documents that we incorporate by reference herein or therein, and any related free writing prospectus contain forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. Any statements about our expectations, beliefs, plans, objectives, assumptions or future events or performance are not historical facts and may be forward-looking. These statements are often, but are not always, made through the use of words or phrases such as “may,” “will,” “could,” “should,” “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “projects,” “potential,” “continue,” and similar expressions, or the negative of these terms, or similar expressions. Accordingly, these statements involve estimates, assumptions, risks and uncertainties which could cause actual results to differ materially from those expressed in them. Any forward-looking statements are qualified in their entirety by reference to the factors discussed throughout this prospectus supplement, the accompanying base prospectus and the documents incorporated by reference herein and therein, and in particular those factors referenced in the section “Risk Factors” in this prospectus supplement.
This prospectus supplement, the accompanying base prospectus and the documents incorporated by reference herein and therein contain forward-looking statements that are based on our management’s belief and assumptions and on information available to our management as of their respective dates. These statements relate to future events or our future financial performance, and involve known and unknown risks, uncertainties and other 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 these forward-looking statements. Forward-looking statements include, but are not limited to, statements about:
▪
the success, cost and timing of our product candidate development activities and clinical trials;
▪
our expectations regarding our ability to obtain and maintain intellectual property protection for our product candidates;
▪
the ability to license additional intellectual property relating to our product candidates from third parties and to comply with our existing license agreements and collaboration agreements;
▪
the ability and willingness of our third-party research institution collaborators to continue research and development activities relating to our product candidates;
▪
our ability to commercialize our product candidates, if approved, in light of the intellectual property rights of others;
▪
our ability to obtain funding for our operations, including funding necessary to complete further development and, if approved, commercialization of our product candidates;
▪
the commercialization of our product candidates, if approved;
▪
our plans to research, develop and, if approved, commercialize our product candidates;
▪
future agreements with third parties in connection with the commercialization of our product candidates, if approved, and any other approved product;
▪
the size and growth potential of the markets for our product candidates, and our ability to serve those markets;
▪
the rate and degree of market acceptance of our product candidates, if approved;
▪
the pricing and reimbursement of our product candidates, if approved;
▪
regulatory developments in the United States and foreign countries;
▪
our ability to contract with third-party suppliers and manufacturers and their ability to perform adequately;
▪
the success of competing therapies that are or may become available;
▪
our ability to attract and retain key scientific or management personnel;
▪
the accuracy of our estimates regarding expenses, future revenue, capital requirements and needs for additional financing; and
▪
our intended use of proceeds for this offering.
These forward-looking statements are neither promises nor guarantees of future performance due to a variety of risks and uncertainties, many of which are beyond our control, which could cause actual results to differ materially from those indicated by these forward-looking statements, including, without limitation the risk factors and cautionary statements described in other documents that we file from time to time with the SEC, specifically under “Item 1A: Risk Factors” and elsewhere in our most recent Annual Report on Form 10-K for the period ended December 31, 2022, and the section in this prospectus supplement entitled “Risk Factors.”
The forward-looking statements in this prospectus supplement, the accompanying base prospectus and the documents incorporated by reference herein and therein represent our views as of their respective dates. We anticipate that subsequent events and developments will cause our views to change. However, while we may elect to update these forward-looking statements at some point in the future, we assume no obligation to update or revise any forward-looking statements except to the extent required by applicable law. You should, therefore, not rely on these forward-looking statements as representing our views as of any date subsequent to the dates on which they were made.
This prospectus supplement, the accompanying base prospectus and the documents incorporated by reference herein and therein also contain estimates, projections and other information concerning our industry, our business, and the markets for certain diseases, including data regarding the estimated size of those markets, and the incidence and prevalence of certain medical conditions. Information that is based on estimates, forecasts, projections, market research or similar methodologies is inherently subject to uncertainties and actual events or circumstances may differ materially from events and circumstances reflected in this information. Unless otherwise expressly stated, we obtained this industry, business, market and other data from reports, research surveys, studies and similar data prepared by market research firms and other third parties, industry, medical and general publications, government data and similar sources.
USE OF PROCEEDS
We may issue and sell shares of our common stock having aggregate gross sales proceeds of up to $95.6 million from time to time. Because there is no minimum offering amount required as a condition to close this offering, the actual total public offering amount, commissions and proceeds to us, if any, are not determinable at this time. There can be no assurance that we will sell any shares under or fully utilize our sales agreement with Jefferies as a source of financing.
We currently intend to use the net proceeds from this offering, together with our existing cash, cash equivalents and marketable securities, to fund research and clinical development of current or additional product candidates, including commercial readiness activities, and the remainder for working capital and other general corporate purposes. The expected use of the net proceeds from this offering, if any, represents our intentions based upon our current plans and business conditions, which could change in the future as our plans and business conditions evolve. The amounts and timing of our actual expenditures will depend on numerous factors, including the factors described under “Risk Factors” in this prospectus supplement, the accompanying base prospectus and in the documents incorporated by reference herein and therein, as well as the amount of cash used in our operations. We may find it necessary or advisable to use the net proceeds for other purposes, and we will have broad discretion in the application of the net proceeds. Pending the uses described above, we may invest the net proceeds in a variety of capital preservation instruments, including short-term, investment-grade, interest-bearing instruments and U.S. government securities.
DIVIDEND POLICY
We have never declared or paid cash dividends on our capital stock. We intend to retain all available funds and any future earnings to fund the growth and development of our business. We do not intend to pay cash dividends to our stockholders in the foreseeable future. In addition, any future financing instruments could preclude us from paying dividends. Any future determination to pay dividends will be made at the discretion of our board of directors subject to applicable laws, and will depend upon, among other factors, our results of operations, financial condition, contractual restrictions and capital requirements. Investors should not purchase our common stock with the expectation of receiving cash dividends.
DILUTION
If you invest in our common stock in this offering, your ownership interest will be diluted to the extent of the difference between the public offering price per share of our common stock in this offering and the as adjusted net tangible book value per share of our common stock immediately after this offering. Our net tangible book value as of December 31, 2022 was approximately $76.1 million, or approximately $1.54 per share of common stock. Net tangible book value per share represents the amount of total tangible assets (total assets less intangible assets) less total liabilities, divided by the number of shares of our common stock outstanding as of December 31, 2022.
Dilution in net tangible book value per share to new investors participating in this offering represents the difference between the amount per share paid by purchasers in this offering and the as adjusted net tangible book value per share of our common stock immediately after giving effect to this offering. After giving effect to the assumed sale of 20,597,811 shares of our common stock in the aggregate amount of approximately $95.6 million at an assumed offering price of $4.64 per share, the last reported sale price of our common stock on February 3, 2023, and after deducting commissions and estimated offering expenses payable by us, our as adjusted net tangible book value as of December 31, 2022 would have been approximately $168.6 million, or approximately $2.41 per share of common stock. This represents an immediate increase in net tangible book value of $0.87 per share of common stock to our existing stockholders and immediate dilution in net tangible book value of $2.23 per share of common stock to investors participating in this offering at the assumed offering price.
Dilution per share to new investors is determined by subtracting as adjusted net tangible book value per share after this offering from the assumed public offering price per share paid by new investors. The following table illustrates this per share dilution:
| |
Assumed public offering price per share
|
|
|
|
|
|
|
|
|
|
$ |
4.64 |
|
|
| |
Historical net tangible book value per share as of December 31, 2022
|
|
|
|
$ |
1.54 |
|
|
|
|
|
|
|
|
| |
Increase in net tangible book value per share attributable to new investors participating in this offering
|
|
|
|
$ |
0.87 |
|
|
|
|
|
|
|
|
| |
As adjusted net tangible book value per share as of December 31, 2022 after this offering
|
|
|
|
|
|
|
|
|
|
$ |
2.41 |
|
|
| |
Dilution per share to new investors participating in this offering
|
|
|
|
|
|
|
|
|
|
$ |
2.23 |
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The information above and in the foregoing table is based upon 49,382,453 shares of our common stock outstanding as of December 31, 2022. The information above and in the foregoing table excludes:
▪
8,838,028 shares of our common stock issuable upon the exercise of stock options outstanding as of December 31, 2022 under our 2017 Stock Incentive Plan and 2020 Stock Option and Incentive Plan, at a weighted average exercise price of $13.93 per share;
▪
1,650,955 shares of our common stock reserved for future issuance under our 2020 Stock Option and Incentive Plan as of December 31, 2022;
▪
839,922 shares of our common stock reserved for future issuance under the 2020 Employee Stock Purchase Plan as of December 31, 2022; and
▪
743,950 shares of our common stock reserved for future vesting of restricted stock units as of December 31, 2022.
In addition, we may choose to raise additional capital in the future through the sale of equity or convertible debt securities due to market conditions or strategic considerations, even if we believe we have sufficient funds for our current or future operating plans. To the extent that any of our outstanding options are exercised, any of our restricted stock units vest, new options or restricted stock units are issued under our equity incentive plans or we issue additional shares of common stock or other equity or convertible debt securities in the future, there will be further dilution to investors participating in this offering.
PLAN OF DISTRIBUTION
We have entered into a sales agreement with Jefferies, under which we may offer and sell up to $125,000,000 of shares of our common stock from time to time through Jefferies acting as agent, or the ATM Program. As of the date of this prospectus supplement, we have sold $29,426,156.64 under the ATM Program. We are registering the offer and sale of the remaining $95,573,843.36 that has not been sold under the ATM Program. Sales of shares of our common stock, if any, under this prospectus supplement and the accompanying base prospectus will be made by any method that is deemed to be an “at the market offering” as defined in Rule 415(a)(4) under the Securities Act.
Each time we wish to issue and sell shares of our common stock under the sales agreement, we will notify Jefferies of the number of shares to be sold, the dates on which such sales are anticipated to be made, any limitation on the number of shares to be sold in any one day and any minimum price below which sales may not be made. Once we have so instructed Jefferies, unless Jefferies declines to accept the terms of such notice, Jefferies has agreed to use its commercially reasonable efforts consistent with its normal trading and sales practices to sell such shares up to the amount specified on such terms. The obligations of Jefferies under the sales agreement to sell the shares of our common stock are subject to a number of conditions that we must meet.
The settlement of sales of shares between us and Jefferies is generally anticipated to occur on the second trading day following the date on which the sale was made. Sales of our common stock as contemplated in this prospectus supplement will be settled through the facilities of The Depository Trust Company or by such other means as we and Jefferies may agree upon. There is no arrangement for funds to be received in an escrow, trust or similar arrangement.
We will pay Jefferies a commission equal to 3.0% of the aggregate gross proceeds we receive from each sale of shares of our common stock. Because there is no minimum offering amount required as a condition to close this offering, the actual total public offering amount, commissions and proceeds to us, if any, are not determinable at this time. We have agreed to reimburse Jefferies for the fees and disbursements of its counsel, payable upon execution of the sales agreement, in an amount not to exceed $75,000, in addition to certain ongoing disbursements of its legal counsel. We estimate that the total expenses for the offering, excluding any commissions or expense reimbursement payable to Jefferies under the terms of the sales agreement, will be approximately $0.4 million. The remaining proceeds, after deducting any other transaction fees, will equal our net proceeds from the sale of shares of our common stock in this offering.
Jefferies will provide written confirmation to us before the open on The Nasdaq Global Select Market on the day following each day on which shares of our common stock are sold under the sales agreement. Each confirmation will include the number of shares sold on that day, the aggregate gross proceeds of such sales and the proceeds to us.
In connection with the sale of shares of our common stock on our behalf, Jefferies may be deemed to be an “underwriter” within the meaning of the Securities Act, and the compensation of Jefferies will be deemed to be underwriting commissions or discounts. We have agreed to indemnify Jefferies against certain liabilities, including civil liabilities under the Securities Act. We have also agreed to contribute to payments Jefferies may be required to make in respect of such liabilities.
The offering of shares of our common stock pursuant to the sales agreement will terminate upon the earlier of (i) the sale of all shares of our common stock subject to the sales agreement and (ii) the termination of the sales agreement as permitted therein. We and Jefferies may terminate the sales agreement at any time upon ten days’ prior notice.
This summary of the material provisions of the sales agreement does not purport to be a complete statement of its terms and conditions. A copy of the sales agreement is filed as an exhibit to the registration statement of which this prospectus supplement forms a part.
Jefferies and its affiliates may in the future provide various investment banking, commercial banking, financial advisory and other financial services for us and our affiliates, for which services they may in the
future receive customary fees. In the course of its business, Jefferies may actively trade our securities for its own account or for the accounts of customers, and, accordingly, Jefferies may at any time hold long or short positions in such securities.
The prospectus supplement and the accompanying base prospectus in electronic format may be made available on a website maintained by Jefferies, and Jefferies may distribute this prospectus supplement and the accompanying base prospectus electronically.
LEGAL MATTERS
Latham & Watkins LLP will pass upon certain legal matters relating to the issuance and sale of the securities offered hereby on behalf of Praxis Precision Medicines, Inc. Certain legal matters will be passed upon for Jefferies LLC by Mintz, Levin, Cohn, Ferris, Glovsky & Popeo, P.C.
EXPERTS
The consolidated financial statements of Praxis Precision Medicines, Inc. appearing in Praxis Precision Medicines, Inc.’s Annual Report (Form 10-K) for the year ended December 31, 2022, have been audited by Ernst & Young LLP, independent registered public accounting firm, as set forth in their report thereon (which contains an explanatory paragraph describing conditions that raise substantial doubt about the Company’s ability to continue as a going concern as described in Note 1 to the consolidated financial statements) included therein and incorporated herein by reference. Such financial statements are, and audited financial statements to be included in subsequently filed documents will be, incorporated herein in reliance upon the report of Ernst & Young LLP pertaining to such financial statements (to the extent covered by consents filed with the Securities and Exchange Commission) given on the authority of such firm as experts in accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
This prospectus supplement is part of a registration statement on Form S-3 that we have filed with the SEC. This prospectus supplement, filed as part of the registration statement, does not contain all the information set forth in the registration statement and its exhibits and schedules, portions of which have been omitted as permitted by the rules and regulations of the SEC. For further information about us, we refer you to the registration statement and to its exhibits and schedules. Certain information in the registration statement has been omitted from this prospectus supplement in accordance with the rules of the SEC.
We are subject to the reporting and information requirements of the Exchange Act and, in accordance therewith, file annual, quarterly and special reports, proxy statements and other information with the SEC. These documents also may be accessed through the SEC’s electronic data gathering, analysis and retrieval system, or EDGAR, via electronic means, including the SEC’s home page on the Internet (www.sec.gov). Written requests for such copies should be directed to Praxis Precision Medicines, Inc., 99 High Street, 30th Floor, Boston, Massachusetts 02110, telephone: (617) 300-8460 and our website is located at www.praxismedicines.com. Information contained on our website is not incorporated by reference into this prospectus supplement and, therefore, is not part of this prospectus supplement.
We have the authority to designate and issue more than one class or series of stock having various preferences, conversion and other rights, voting powers, restrictions, limitations as to dividends, qualifications, and terms and conditions of redemption. See “Description of Capital Stock” in the accompanying base prospectus. We will furnish a full statement of the relative rights and preferences of each class or series of our stock which has been so designated and any restrictions on the ownership or transfer of our stock to any shareholder upon request and without charge.
INCORPORATION BY REFERENCE
The SEC allows us to incorporate by reference the information and reports we file with it, which means that we can disclose important information to you by referring you to these documents. The information incorporated by reference is an important part of this prospectus, and information that we file later with the SEC will automatically update and supersede the information already incorporated by reference. We are incorporating by reference the documents listed below, which we have already filed with the SEC (SEC File No. 001-39620), and any future filings we make with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act, including all filings made after the date of the Post-Effective Amendment No. 2 to Form S-3 of which this prospectus supplement forms a part and prior to the effectiveness of the Post-Effective Amendment No. 2 to Form S-3 of which this prospectus supplement forms a part, except as to any portion of any future report or document that is not deemed filed under such provisions until we sell all of the securities:
▪
▪
Upon request, we will provide, without charge, to each person, including any beneficial owner, to whom a copy of this prospectus supplement is delivered, a copy of the documents incorporated by reference into this prospectus supplement but not delivered with the prospectus supplement. You may request a copy of these filings, and any exhibits we have specifically incorporated by reference as an exhibit in this prospectus, at no cost by writing or telephoning us at the following address: Praxis Precision Medicines, Inc., 99 High Street, 30th Floor, Boston, Massachusetts 02110, telephone: (617) 300-8460.
You may also access these documents, free of charge on the SEC’s website at www.sec.gov or on our website at www.praxismedicines.com. Information contained on our website is not incorporated by reference into this prospectus supplement, and you should not consider any information on, or that can be accessed from, our website as part of this prospectus supplement.
Notwithstanding the foregoing, unless specifically stated to the contrary, information that we furnish (and that is not deemed “filed” with the SEC) under Items 2.02 and 7.01 of any Current Report on Form 8-K, including the related exhibits under Item 9.01, is not incorporated by reference into this prospectus supplement or the registration statement of which this prospectus supplement is a part.
This prospectus supplement is part of a registration statement we filed with the SEC. We have incorporated exhibits into this registration statement. You should read the exhibits carefully for provisions that may be important to you.
You should rely only on the information incorporated by reference or provided in this prospectus supplement. We have not authorized anyone to provide you with different information. We are not making an offer of these securities in any state where the offer is not permitted. You should not assume that the information in this prospectus supplement or in the documents incorporated by reference is accurate as of any date other than the date on the front of this prospectus supplement or those documents.
Any statement contained in a document that is incorporated by reference will be modified or superseded for all purposes to the extent that a statement contained in this prospectus supplement, or in any other document that is subsequently filed with the SEC and incorporated by reference into this prospectus supplement, modifies or is contrary to that previous statement. Any statement so modified or superseded will not be deemed a part of this prospectus supplement, except as so modified or superseded. Since information that we later file with the SEC will update and supersede previously incorporated information, you should look at all of the SEC filings that we incorporate by reference to determine if any of the statements in this prospectus supplement or in any documents previously incorporated by reference have been modified or superseded.
Up to $95,573,843.36
Common Stock
PROSPECTUS SUPPLEMENT
Jefferies
, 2023
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The following is an estimate of the expenses (all of which are to be paid by the registrant) that we may incur in connection with the securities being registered hereby.
| |
SEC registration fee
|
|
|
|
$ |
33,060 |
|
|
| |
FINRA filing fee
|
|
|
|
$ |
(1) |
|
|
| |
Printing expenses
|
|
|
|
$ |
(1) |
|
|
| |
Legal fees and expenses
|
|
|
|
$ |
(1) |
|
|
| |
Accounting fees and expenses
|
|
|
|
$ |
(1) |
|
|
| |
Blue Sky, qualification fees and expenses
|
|
|
|
$ |
(1) |
|
|
| |
Transfer agent fees and expenses
|
|
|
|
$ |
(1) |
|
|
| |
Trustee fees and expenses
|
|
|
|
$ |
(1) |
|
|
| |
Warrant agent fees and expenses
|
|
|
|
$ |
(1) |
|
|
| |
Miscellaneous
|
|
|
|
$ |
(1) |
|
|
| |
Total
|
|
|
|
$ |
(1) |
|
|
(1)
These fees are calculated based on the securities offered and the number of issuances and accordingly cannot be estimated at this time.
Item 15. Indemnification of Directors and Officers
Subsection (a) of Section 145 of the General Corporation Law of the State of Delaware, or the DGCL, empowers a corporation to indemnify any person who was or is a party or who is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation) by reason of the fact that the person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by the person in connection with such action, suit or proceeding if the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe the person’s conduct was unlawful.
Subsection (b) of Section 145 empowers a corporation to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that the person acted in any of the capacities set forth above, against expenses (including attorneys’ fees) actually and reasonably incurred by the person in connection with the defense or settlement of such action or suit if the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the corporation, except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the corporation unless and only to the extent that the Court of Chancery or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery or such other court shall deem proper.
Section 145 further provides that to the extent a director or officer of a corporation has been successful on the merits or otherwise in the defense of any action, suit or proceeding referred to in subsections (a) and (b) of Section 145, or in defense of any claim, issue or matter therein, such person shall be indemnified against expenses (including attorneys’ fees) actually and reasonably incurred by such person in connection
therewith; that indemnification provided for by Section 145 shall not be deemed exclusive of any other rights to which the indemnified party may be entitled; and the indemnification provided for by Section 145 shall, unless otherwise provided when authorized or ratified, continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of such person’s heirs, executors and administrators. Section 145 also empowers the corporation to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against such person and incurred by such person in any such capacity, or arising out of his status as such, whether or not the corporation would have the power to indemnify such person against such liabilities under Section 145.
Section 102(b)(7) of the DGCL provides that a corporation’s certificate of incorporation may contain a provision eliminating or limiting the personal liability of a director to the corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, provided that such provision shall not eliminate or limit the liability of a director (i) for any breach of the director’s duty of loyalty to the corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the DGCL, or (iv) for any transaction from which the director derived an improper personal benefit.
Any underwriting agreement or distribution agreement that the registrant enters into with any underwriters or agents involved in the offering or sale of any securities registered hereby may require such underwriters or dealers to indemnify the registrant, some or all of its directors and officers and its controlling persons, if any, for specified liabilities, which may include liabilities under the Securities Act of 1933, as amended, or the Securities Act.
We have adopted provisions in our fourth certificate of incorporation and amended and restated by-laws that limit or eliminate the personal liability of our directors to the fullest extent permitted by the DGCL, as it now exists or may in the future be amended. Consequently, a director will not be personally liable to us or our stockholders for monetary damages or breach of fiduciary duty as a director, except for liability for:
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any breach of the director’s duty of loyalty to us or our stockholders;
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any act or omission not in good faith or that involves intentional misconduct or a knowing violation of law;
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any unlawful payments related to dividends or unlawful stock purchases, redemptions or other distributions; or
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any transaction from which the director derived an improper personal benefit.
These limitations of liability do not alter director liability under the federal securities laws and do not affect the availability of equitable remedies such as an injunction or rescission.
In addition, the by-laws provide that:
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we will indemnify our directors, officers and, in the discretion of our board of directors, certain employees to the fullest extent permitted by the DGCL, as it now exists or may in the future be amended; and
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we will advance reasonable expenses, including attorneys’ fees, to our directors and, in the discretion of our board of directors, to our officers and certain employees, in connection with legal proceedings relating to their service for or on behalf of us, subject to limited exceptions.
We have entered into indemnification agreements with each of our directors and our executive officers. These agreements provide that we will indemnify each of our directors, our executive officers and, at times, their affiliates to the fullest extent permitted by Delaware law. We will advance expenses, including attorneys’ fees (but excluding judgments, fines and settlement amounts), to each indemnified director, executive officer or affiliate in connection with any proceeding in which indemnification is available and we will indemnify our directors and officers for any action or proceeding arising out of that person’s services as a director or officer brought on behalf of us or in furtherance of our rights. Additionally, certain of our
directors or officers may have certain rights to indemnification, advancement of expenses or insurance provided by their affiliates or other third parties, which indemnification relates to and might apply to the same proceedings arising out of such director’s or officer’s services as a director referenced herein. Nonetheless, we have agreed in the indemnification agreements that our obligations to those same directors or officers are primary and any obligation of such affiliates or other third parties to advance expenses or to provide indemnification for the expenses or liabilities incurred by those directors are secondary.
We also maintain general liability insurance which covers certain liabilities of our directors and officers arising out of claims based on acts or omissions in their capacities as directors or officers, including liabilities under the Securities Act.
Item 16. Exhibits
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Exhibit
Number
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Description
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1.1*
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Form of Underwriting Agreement.
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1.2
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Open Market Sale Agreement, dated as of November 3, 2021 between Praxis Precision Medicines, Inc. and Jefferies LLC, as amended.
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3.1
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Amended and Restated Certificate of Incorporation of Praxis Precision Medicines, Inc. (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K (File No. 001-39620) filed on October 20, 2020).
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3.2
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Amended and Restated Bylaws of Praxis Precision Medicines, Inc. (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K (File No. 001-39620) filed on January 7, 2022).
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4.1***
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4.2
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Specimen Stock Certificate Evidencing the Shares of Common Stock (incorporated by reference to Exhibit 4.1 to the Registrant’s Registration Statement on Form S-1/A (File No. 333-249074) filed on October 9, 2020).
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4.3*
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Form of Specimen Certificate Representing Preferred Stock.
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4.4***
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4.5*
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Form of Note.
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4.6*
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Form of Warrant.
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4.7*
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Form of Warrant Agreement.
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4.8*
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Form of Unit Agreement.
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5.1***
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23.1
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23.2
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25.1**
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Statement of Eligibility on Form T-1 under the Trust Indenture Act of 1939, as amended, of Debt Trustee (to be filed prior to any issuance of Debt Securities).
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107***
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*
To be filed by amendment or incorporated by reference in connection with the offering of the securities.
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To be filed in accordance with the requirements of Section 305(b)(2) of the Trust Indenture Act of 1939.
***
Previously filed.
Item 17. Undertakings
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the Securities Act;
(ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20 percent change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement ; and
(iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement;
provided, however, that paragraphs (a)(1)(i), (a)(1)(ii), and (a)(1)(iii) above do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in reports filed with or furnished to the 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, or is contained in a form of prospectus filed pursuant to Rule 424(b) that is a part of 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.
(5) That, for the purpose of determining liability under the Securities Act to any purchaser:
(A) Each prospectus filed by the registrant pursuant to Rule 424(b)(3) shall be deemed to be part of the registration statement as of the date the filed prospectus was deemed part of and included in the registration statement; and
(B) Each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as part of a registration statement in reliance on Rule 430B relating to an offering made pursuant to Rule 415(a)(1)(i), (vii), or (x) for the purpose of providing the information required by section 10(a) of the Securities Act shall be deemed to be part of and included in the registration statement as of the earlier of the date such form of prospectus is first used after effectiveness or the date of the first contract of sale of securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any person that is at that date an underwriter, such date shall be deemed to be a new effective date of the registration statement relating to the securities in the registration statement to which that prospectus relates, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such effective date, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such effective date.
(6) That, for the purpose of determining liability of the registrant under the Securities Act to any purchaser in the initial distribution of the securities:
The undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such
purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:
(i) Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424;
(ii) Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant;
(iii) The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and
(iv) Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.
(b) The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act, each filing of the registrant’s annual report pursuant to Section 13(a) or 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.
(h) 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.
(j) The undersigned registrant hereby undertakes to file an application for the purpose of determining the eligibility of the trustee to act under subsection (a) of Section 310 of the Trust Indenture Act (the “Act”) in accordance with the rules and regulations prescribed by the SEC under section 305(b)(2) of the Act.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this Post-Effective Amendment No. 2 to the Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Boston, Massachusetts, on the 7th day of February, 2023.
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PRAXIS PRECISION MEDICINES, INC.
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By:
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/s/ Marcio Souza
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Name:
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Marcio Souza
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Title:
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Chief Executive Officer
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, this registration statement and Power of Attorney has been signed below by the following persons on behalf of the registrant in the capacities and on the dates indicated.
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SIGNATURE
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TITLE
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DATE
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/s/ Marcio Souza
Marcio Souza
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Chief Executive Officer and Director
(Principal Executive Officer)
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February 7, 2023
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/s/ Timothy Kelly
Timothy Kelly
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Chief Financial Officer
(Principal Financial Officer)
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February 7, 2023
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*
Lauren Mastrocola
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Principal Accounting Officer
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February 7, 2023
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*
Dean Mitchell
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Chairman of the Board
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February 7, 2023
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*
Jeffrey Chodakewitz, M.D.
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Director
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February 7, 2023
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*
Merit Cudkowicz, M.D.
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Director
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February 7, 2023
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/s/ Jill DeSimone
Jill DeSimone
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Director
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February 7, 2023
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Gregory Norden
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Director
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February 7, 2023
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*
William Young
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Director
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February 7, 2023
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* By:
/s/ Marcio Souza
Marcio Souza
Attorney-in-Fact
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Exhibit 1.2
OPEN
MARKET SALE AGREEMENTSM
November 3, 2021
JEFFERIES LLC
520 Madison Avenue
New York, New York 10022
Ladies and Gentlemen:
Praxis
Precision Medicines, Inc., a Delaware corporation (the “Company”), proposes, subject to the terms and conditions
stated herein, to issue and sell from time to time through Jefferies LLC, as sales agent and/or principal (the “Agent”),
shares of the Company’s common stock, par value $0.0001 per share (the “Common Shares”), having an aggregate
offering price of up to $125 million on the terms set forth in this agreement (this “Agreement”).
Section 1. DEFINITIONS
(a) Certain
Definitions. For purposes of this Agreement, capitalized terms used herein and not otherwise defined shall have the following respective
meanings:
“Affiliate”
of a Person means another Person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under
common control with, such first- mentioned Person. The term “control” (including the terms “controlling,” “controlled
by” and “under common control with”) means the possession, direct or indirect, of the power to direct or cause the
direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise.
“Agency Period”
means the period commencing on the date of this Agreement and expiring on the earliest to occur of (x) the date on which the Agent
shall have placed the Maximum Program Amount pursuant to this Agreement and (y) the date this Agreement is terminated pursuant to
Section 7.
“Commission”
means the U.S. Securities and Exchange Commission.
“Exchange Act”
means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission thereunder.
“Floor Price”
means the minimum price set by the Company in the Issuance Notice below which the Agent shall not sell Shares during the applicable period
set forth in the Issuance Notice, which may be adjusted by the Company at any time during the period set forth in the Issuance Notice
by delivering written notice of such change to the Agent and which in no event shall be less than $1.00 without the prior written consent
of the Agent, which may be withheld in the Agent’s sole discretion.
SM “Open Market Sale Agreement” is a service
mark of Jefferies LLC
“Issuance Amount”
means the aggregate Sales Price of the Shares to be sold by the Agent pursuant to any Issuance Notice.
“Issuance Notice”
means a written notice delivered to the Agent by the Company in accordance with this Agreement in the form attached hereto as Exhibit A
that is executed by its Chief Executive Officer, President or Chief Financial Officer.
“Issuance Notice
Date” means any Trading Day during the Agency Period that an Issuance Notice is delivered pursuant to Section 3(b)(i).
“Issuance Price”
means the Sales Price less the Selling Commission.
“Maximum Program
Amount” means Common Shares with an aggregate Sales Price of the lesser of (a) the number or dollar amount of Common Shares
registered under the effective Registration Statement (defined below) pursuant to which the offering is being made, (b) the number
of authorized but unissued Common Shares (less Common Shares issuable upon exercise, conversion or exchange of any outstanding securities
of the Company or otherwise reserved from the Company’s authorized capital stock), (c) the number or dollar amount of Common
Shares permitted to be sold under Form S-3 (including General Instruction I.B.6 thereof, if applicable), or (d) the number
or dollar amount of Common Shares for which the Company has filed a Prospectus (defined below).
“Person”
means an individual or a corporation, partnership, limited liability company, trust, incorporated or unincorporated association, joint
venture, joint stock company, governmental authority or other entity of any kind.
“Principal Market”
means The Nasdaq Global Select Market or such other national securities exchange on which the Common Shares, including any Shares, are
then listed.
“Sales Price”
means the actual sale execution price of each Share placed by the Agent pursuant to this Agreement.
“Securities Act”
means the Securities Act of 1933, as amended, and the rules and regulations of the Commission thereunder.
“Selling Commission”
means three percent (3%) of the gross proceeds of Shares sold pursuant to this Agreement, or as otherwise agreed between the Company
and the Agent with respect to any Shares sold pursuant to this Agreement.
“Settlement
Date” means the second business day following each Trading Day during the period set forth in the Issuance Notice on
which Shares are sold pursuant to this Agreement, when the Company shall deliver to the Agent the amount of Shares sold on such Trading
Day and the Agent shall deliver to the Company the Issuance Price received on such sales.
“Shares”
shall mean the Company’s Common Shares issued or issuable pursuant to this Agreement.
“Trading Day”
means any day on which the Principal Market is open for trading.
Section 2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and
warrants to, and agrees with, the Agent that as of (1) the date of this Agreement, (2) each Issuance Notice Date, (3) each
Settlement Date, (4) each Triggering Event Date and (5) as of each Time of Sale (each of the times referenced above is referred
to herein as a “Representation Date”), except as may be disclosed in the Prospectus (including any documents incorporated
by reference therein and any supplements thereto) on or before a Representation Date:
(a) Registration
Statement. The Company has prepared and will file with the Commission an “automatic shelf registration statement,” as
defined under Rule 405 under the Securities Act on Form S-3 that contains a base prospectus (the “Base Prospectus”).
Such registration statement registers the issuance and sale by the Company of the Shares under the Securities Act. The Company may file
one or more additional registration statements from time to time that will contain a base prospectus and related prospectus or prospectus
supplement, if applicable, with respect to the Shares. Except where the context otherwise requires, such registration statement(s), including
any information deemed to be a part thereof pursuant to Rule 430B under the Securities Act, including all financial statements,
exhibits and schedules thereto and all documents incorporated or deemed to be incorporated therein by reference pursuant to Item 12 of
Form S-3 under the Securities Act as from time to time amended or supplemented, is herein referred to as the “Registration
Statement,” and the prospectus constituting a part of such registration statement(s), together with any prospectus supplement
filed with the Commission pursuant to Rule 424(b) under the Securities Act relating to a particular issuance of the Shares,
including all documents incorporated or deemed to be incorporated therein by reference pursuant to Item 12 of Form S-3 under the
Securities Act, in each case, as from time to time amended or supplemented, is referred to herein as the “Prospectus,”
except that if any revised prospectus is provided to the Agent by the Company for use in connection with the offering of the Shares that
is not required to be filed by the Company pursuant to Rule 424(b) under the Securities Act, the term “Prospectus”
shall refer to such revised prospectus from and after the time it is first provided to the Agent for such use. The Registration Statement
at the time it originally became effective is herein called the “Original Registration Statement.” As used in this
Agreement, the terms “amendment” or “supplement” when applied to the Registration Statement or the Prospectus
shall be deemed to include the filing by the Company with the Commission of any document under the Exchange Act after the date hereof
that is or is deemed to be incorporated therein by reference.
All
references in this Agreement to financial statements and schedules and other information which is “contained,” “included”
or “stated” in the Registration Statement or the Prospectus (and all other references of like import) shall be deemed to
mean and include all such financial statements and schedules and other information which is or is deemed to be incorporated by reference
in or otherwise deemed under the Securities Act to be a part of or included in the Registration Statement or the Prospectus, as the case
may be, as of any specified date; and all references in this Agreement to amendments or supplements to the Registration Statement or
the Prospectus shall be deemed to mean and include, without limitation, the filing of any document under the Exchange Act which is or
is deemed to be incorporated by reference in or otherwise deemed under the Securities Act to be a part of or included in the Registration
Statement or the Prospectus, as the case may be, as of any specified date.
At the time the Registration
Statement becomes effective and at the time the Company’s most recent annual report on Form 10-K was filed with the Commission,
if later, the Company met the then-applicable requirements for use of Form S-3 under the Securities Act. During the Agency Period,
each time the Company files an annual report on Form 10-K the Company will meet the then-applicable requirements for use of Form S-3
under the Securities Act.
(b) Compliance
with Registration Requirements. The Original Registration Statement will be or became effective under the Securities Act prior to
the issuance of any Issuance Notices by the Company. The Company has complied to the Commission’s satisfaction with all requests
of the Commission for additional or supplemental information. No stop order suspending the effectiveness of the Registration Statement
is in effect and no proceedings for such purpose have been instituted or are pending or, to the knowledge of the Company, are contemplated
or threatened by the Commission.
The Prospectus when filed
complied in all material respects with the Securities Act and, if filed with the Commission through its Electronic Data Gathering, Analysis
and Retrieval system (“EDGAR”) (except as may be permitted by Regulation S-T under the Securities Act), was identical
to the copy thereof delivered to the Agent for use in connection with the issuance and sale of the Shares. Each of the Registration Statement
and any post-effective amendment thereto, at the time it became effective and at all subsequent times, complied and will comply in all
material respects with the Securities Act and did not and will not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements therein not misleading. As of the date of this Agreement,
the Prospectus and any Free Writing Prospectus (as defined below) considered together (collectively, the “Time of Sale Information”)
did not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading. The Prospectus, as amended or supplemented, as of its date
and at all subsequent times, did not and will not contain any untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. The representations
and warranties set forth in the three immediately preceding sentences do not apply to statements in or omissions from the Registration
Statement or any post-effective amendment thereto, or the Prospectus, or any amendments or supplements thereto, made in reliance upon
and in conformity with information relating to the Agent furnished to the Company in writing by the Agent expressly for use therein,
it being understood and agreed that the only such information furnished by the Agent to the Company consists of the information described
in Section 6 below. There are no contracts or other documents required to be described in the Prospectus or to be filed
as exhibits to the Registration Statement which have not been described or filed as required. The Registration Statement and the offer
and sale of the Shares as contemplated hereby meet the requirements of Rule 415 under the Securities Act and comply in all material
respects with said rule.
(c) Ineligible
Issuer Status. The Company is not an “ineligible issuer” in connection with the offering of the Shares pursuant to Rules 164,
405 and 433 under the Securities Act. Any Free Writing Prospectus that the Company is required to file pursuant to Rule 433(d) under
the Securities Act has been, or will be, filed with the Commission in accordance with the requirements of the Securities Act. Each Free
Writing Prospectus that the Company has filed, or is required to file, pursuant to Rule 433(d) under the Securities Act or
that was prepared by or on behalf of or used or referred to by the Company complies or will comply in all material respects with the
requirements of Rule 433 under the Securities Act including timely filing with the Commission or retention where required and legending,
and each such Free Writing Prospectus, as of its issue date and at all subsequent times through the completion of the issuance and sale
of the Shares did not, does not and will not include any information that conflicted, conflicts with or will conflict with the information
contained in the Registration Statement or the Prospectus, including any document incorporated by reference therein. Except for the Free
Writing Prospectuses, if any, and electronic road shows, if any, furnished to you before first use, the Company has not prepared, used
or referred to, and will not, without your prior consent, prepare, use or refer to, any Free Writing Prospectus.
(d) Incorporated
Documents. The documents incorporated or deemed to be incorporated by reference in the Registration Statement and the Prospectus,
at the time they were filed with the Commission, complied in all material respects with the requirements of the Exchange Act, as applicable,
and, when read together with the other information in the Prospectus, do not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading.
(e) Exchange
Act Compliance. The documents incorporated or deemed to be incorporated by reference in the Prospectus, at the time they were or
hereafter are filed with the Commission, and any Free Writing Prospectus or amendment or supplement thereto complied and will comply
in all material respects with the requirements of the Exchange Act, and, when read together with the other information in the Prospectus,
at the time the Registration Statement and any amendments thereto become effective and at each Time of Sale (as defined below), as the
case may be, will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.
(f) Statistical
and Market-Related Data. All statistical, demographic and market-related data included in the Registration Statement or the Prospectus
are based on or derived from sources that the Company believes to be reliable and accurate.
(g) Disclosure
Controls and Procedures; Deficiencies in or Changes to Internal Control Over Financial Reporting. The Company has established
and maintains disclosure controls and procedures (as defined in Rules 13a-15 and 15d-15 under the Exchange Act), which
(i) are designed to ensure that material information relating to the Company, including its consolidated subsidiaries, is made
known to the Company’s principal executive officer and its principal financial officer by others within those entities,
particularly during the periods in which the periodic reports required under the Exchange Act are being prepared; (ii) have
been evaluated by management of the Company for effectiveness as of the end of the Company’s most recent fiscal quarter; and
(iii) are effective in all material respects to perform the functions for which they were established. Since the end of the
Company’s most recent audited fiscal year, there have been no significant deficiencies or material weaknesses in the
Company’s internal control over financial reporting (whether or not remediated and other than with respect to significant
deficiencies, as disclosed to the Agent) and no change in the Company’s internal control over financial reporting that has
materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.
The Company is not aware of any change in its internal control over financial reporting that has occurred during its most recent
fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over
financial reporting.
(h) This
Agreement. This Agreement has been duly authorized, executed and delivered by the Company.
(i) Authorization
of the Shares. The Shares have been duly authorized for issuance and sale pursuant to this Agreement and, when issued and delivered
by the Company against payment therefor pursuant to this Agreement, will be validly issued, fully paid and nonassessable, and the issuance
and sale of the Shares is not subject to any preemptive rights, rights of first refusal or other similar rights to subscribe for or purchase
the Shares, except for such rights as have been duly waived.
(j) No
Applicable Registration or Other Similar Rights. There are no persons with registration or other similar rights to have any equity
or debt securities registered for sale under the Registration Statement or included in the offering contemplated by this Agreement, except
for such rights as have been duly waived.
(k) No
Material Adverse Change. Except as otherwise disclosed in the Registration Statement and the Prospectus, subsequent to the
respective dates as of which information is given in the Registration Statement and the Prospectus: (i) there has been no
material adverse change, or any development that could be expected to result in a material adverse change, in (A) the financial
position, stockholders' equity, business, properties, operating results, assets, liabilities or prospects of the Company and its
subsidiaries, considered as one entity or (B) the ability of the Company to consummate the transactions contemplated by this
Agreement or perform its obligations hereunder (any such change being referred to herein as a “Material Adverse
Change”); (ii) the Company and its subsidiaries, considered as one entity, have not incurred any material liability
or obligation, indirect, direct or contingent, including without limitation any losses or interference with their business from
fire, explosion, flood, earthquakes, accident or other calamity, whether or not covered by insurance, or from any strike, labor
dispute or court or governmental action, order or decree, that are material, individually or in the aggregate, to the Company and
its subsidiaries, considered as one entity; and (iii) there has not been any material decrease in the capital stock or any
material increase in any short-term or long-term indebtedness of the Company or its subsidiaries and there has been no dividend or
distribution of any kind declared, paid or made by the Company or, except for dividends paid to the Company or other subsidiaries,
by any of the Company’s subsidiaries on any class of capital stock.
(l) Independent
Accountants. Ernst & Young LLP, which has expressed its opinion with respect to the financial statements (which term as
used in this Agreement includes the related notes thereto) filed with the Commission as a part of the Registration Statement and the
Prospectus, is (i) an independent registered public accounting firm as required by the Exchange Act, and the rules of the Public
Company Accounting Oversight Board (“PCAOB”), (ii) in compliance with the applicable requirements relating to
the qualification of accountants under Rule 2-01 of Regulation S-X under the Securities Act and (iii) a registered public accounting
firm as defined by the PCAOB whose registration has not been suspended or revoked and who has not requested such registration to be withdrawn.
(m) Financial
Statements. The financial statements filed with the Commission as a part of the Registration Statement and the Prospectus present
fairly, in all material respects, the consolidated financial position of the Company and its subsidiaries as of the dates indicated and
the results of their operations, changes in stockholders’ equity and cash flows for the periods specified. Such financial statements
have been prepared in conformity with generally accepted accounting principles applied on a consistent basis throughout the periods involved,
except as may be expressly stated in the related notes thereto. The interactive data in eXtensible Business Reporting Language included
or incorporated by reference in the Registration Statement fairly presents the information called for in all material respects and has
been prepared in accordance with the Commission’s rules and guidelines applicable thereto. No other financial statements or
supporting schedules are required by Regulation S-X to be included in the Registration Statement or the Prospectus.
(n) Company’s
Accounting System. The Company and its subsidiaries make and keep accurate books and records and maintain a system of internal accounting
controls sufficient to provide reasonable assurance that: (i) transactions are executed in accordance with management’s general
or specific authorization; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity
with generally accepted accounting principles and to maintain accountability for assets; (iii) access to assets is permitted only
in accordance with management’s general or specific authorization; (iv) the recorded accountability for assets is compared
with existing assets at reasonable intervals and appropriate action is taken with respect to any differences; and (v) the interactive
data in eXtensible Business Reporting Language included or incorporated by reference in the Registration Statement and the Prospectus
fairly presents the information called for in all material respects and is prepared in accordance with the Commission's rules and
guidelines applicable thereto.
(o) Incorporation
and Good Standing of the Company. The Company has been duly incorporated and is validly existing as a corporation in good
standing under the laws of the jurisdiction of its incorporation and has the corporate power and authority to own, lease and operate
its properties and to conduct its business as described in the Registration Statement and the Prospectus and to enter into and perform
its obligations under this Agreement. The Company is duly qualified as a foreign corporation to transact business and is in good standing
in each jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct
of business, except where the failure to so qualify would not result in a Material Adverse Change.
(p) Subsidiaries. Each
of the Company’s “subsidiaries” (for purposes of this Agreement, as defined in Rule 405 under the Securities
Act) has been duly incorporated or organized, as the case may be, and is validly existing as a corporation, partnership or limited
liability company, as applicable, in good standing under the laws of the jurisdiction of its incorporation or organization and has
the power and authority (corporate or other) to own, lease and operate its properties and to conduct its business as described in
the Registration Statement and the Prospectus. Each of the Company’s subsidiaries is duly qualified as a foreign corporation,
partnership or limited liability company, as applicable, to transact business and is in good standing in each jurisdiction in which
such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except where
the failure to so qualify would not result in a Material Adverse Change. All of the issued and outstanding capital stock or other
equity or ownership interests of each of the Company’s subsidiaries have been duly authorized and validly issued, are fully
paid and nonassessable and are owned by the Company, directly or through subsidiaries, free and clear of any security interest,
mortgage, pledge, lien, encumbrance or adverse claim. None of the outstanding capital stock or equity interest in any subsidiary was
issued in violation of preemptive or similar rights of any security holder of such subsidiary. The constitutive or organizational
documents of each of the subsidiaries comply in all material respects with the requirements of applicable laws of its jurisdiction
of incorporation or organization and are in full force and effect. The Company does not own or control, directly or indirectly, any
corporation, association or other entity other than the subsidiaries listed in Exhibit 21.1 to the Company’s most recent
Annual Report on Form 10-K filed with the Commission.
(q) Capitalization
and Other Capital Stock Matters. The authorized, issued and outstanding capital stock of the Company is as set forth in the Registration Statement and the Prospectus (other
than for subsequent issuances, if any, pursuant to this Agreement and employee incentive award plans described in the Prospectus or upon
the exercise or vesting of incentive awards issued pursuant to employee incentive award plans described in the Registration Statement
and the Prospectus). The Common Shares (including the Shares) conform in all material respects to the description thereof contained in
the Prospectus. All of the issued and outstanding Common Shares have been duly authorized and validly issued, are
fully paid and nonassessable and have been issued in compliance with all federal and state securities laws. None of the outstanding Common
Shares was issued in violation of any preemptive rights, rights of first refusal or other similar rights to subscribe for or purchase
securities of the Company. There are no authorized and outstanding options, warrants, preemptive rights, rights of first refusal or other
rights to purchase, or equity or debt securities convertible into or exchangeable or exercisable for, any capital stock of the Company
or any of its subsidiaries other than those described in the Registration Statement and the Prospectus and other than options and other
incentive awards issued by the Company subsequent to the date of such description in the Registration Statement and Prospectus. The descriptions
of the Company’s stock option, stock bonus and other stock plans or arrangements, and the options or other rights granted thereunder,
set forth in the Registration Statement and the Prospectus accurately and fairly presents the information required to be shown with respect
to such plans, arrangements, options and rights.
(r) Stock
Exchange Listing. The Common Shares are registered pursuant to Section 12(b) or 12(g) of the Exchange Act and are
listed on the Principal Market, and the Company has taken no action designed to, or likely to have the effect of, terminating the registration
of the Common Shares under the Exchange Act or delisting the Common Shares from the Principal market, nor has the Company received any
notification that the Commission or the Principal Market is contemplating terminating such registration or listing. To the Company’s
knowledge, it is in compliance with all applicable listing requirements of the Principal Market.
(s) Non-Contravention
of Existing Instruments; No Further Authorizations or Approvals Required. Neither the Company nor any of its subsidiaries is in violation
of its charter or by-laws, partnership agreement or operating agreement or similar organizational documents, as applicable, or is in
default (or, with the giving of notice or lapse of time, would be in default) (“Default”) under any indenture, loan,
credit agreement, note, lease, license agreement, contract, franchise or other instrument (including, without limitation, any pledge
agreement, security agreement, mortgage or other instrument or agreement evidencing, guaranteeing, securing or relating to indebtedness)
to which the Company or any of its subsidiaries is a party or by which it or any of them may be bound, or to which any of their respective
properties or assets are subject (each, an “Existing Instrument”), except for such Defaults as could not reasonably
be expected, individually or in the aggregate, to result in a Material Adverse Change. The Company’s execution, delivery and performance
of this Agreement, consummation of the transactions contemplated hereby and by the Registration Statement and the Prospectus and the
issuance and sale of the Shares (including the use of proceeds from the sale of the Shares as described in the Registration Statement
and the Prospectus under the caption “Use of Proceeds”) (i) will not result in any violation of the provisions of the
charter or by-laws, partnership agreement or operating agreement or similar organizational documents, as applicable, of the Company or
any subsidiary (ii) will not conflict with or constitute a breach of, or Default or a Debt Repayment Triggering Event (as defined
below) under, or result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Company or
any of its subsidiaries pursuant to, or require the consent of any other party to, any Existing Instrument and (iii) will not result
in any violation of any law, administrative regulation or administrative or court decree applicable to the Company or any of its subsidiaries,
except, in the case of clauses (ii) and (iii) above, for any such conflict, breach, violation or default that would not, individually
or in the aggregate, reasonably be expected to result in a Material Adverse Change. No consent, approval, authorization or other order
of, or registration or filing with, any court or other governmental or regulatory authority or agency, is required for the Company’s
execution, delivery and performance of this Agreement and consummation of the transactions contemplated hereby and by the Registration
Statement and the Prospectus, except such as have been obtained or made by the Company and are in full force and effect under the Securities
Act and such as may be required under applicable state securities or blue sky laws or FINRA (as defined below) or The Nasdaq Stock Market
LLC. As used herein, a “Debt Repayment Triggering Event” means any event or condition which gives, or with the giving
of notice or lapse of time would give, the holder of any note, debenture or other evidence of indebtedness (or any person acting on such
holder’s behalf) the right to require the repurchase, redemption or repayment of all or a portion of such indebtedness by the Company
or any of its subsidiaries.
(t) No
Material Actions or Proceedings. Except as otherwise disclosed in the Prospectus, there is no action, suit, proceeding, inquiry or
investigation brought by or before any legal or governmental entity now pending or, to the knowledge of the Company, threatened, against
or affecting the Company or any of its subsidiaries, which could be expected, individually or in the aggregate, to result in a Material
Adverse Change. No material labor dispute with the employees of the Company or any of its subsidiaries, or with the employees of any
principal supplier, manufacturer, customer or contractor of the Company, exists or, to the knowledge of the Company, is threatened or
imminent.
(u) Intellectual
Property Rights. The Company and its subsidiaries own or possess the valid right to use all (i) patents, patent applications,
trademarks, trademark registrations, service marks, service mark registrations, Internet domain name registrations, copyrights,
copyright registrations, licenses, trade secret rights (“Intellectual Property Rights”) and (ii) inventions,
software, works of authorships, trademarks, service marks, trade names, databases, formulae, know how, Internet domain names and
other intellectual property (including trade secrets and other unpatented and/or unpatentable proprietary confidential information, systems,
or procedures) (collectively, “Intellectual Property Assets”) necessary to conduct their respective businesses as
currently conducted, and as proposed to be conducted and described in the Registration Statement and the Prospectus. The Company and
its subsidiaries have not received any opinion from their legal counsel concluding that any activities of their respective businesses
infringe, misappropriate, or otherwise violate, valid and enforceable Intellectual Property Rights of any other person, and except as
set forth in the Registration Statement and the Prospectus, have not received written notice of any challenge, which is to their knowledge
still pending, by any other person to the rights of the Company and its subsidiaries with respect to any Intellectual Property Rights
or Intellectual Property Assets owned or used by the Company or its subsidiaries. To the Company’s knowledge, the Company and its
subsidiaries’ respective businesses as now conducted do not give rise to any infringement of, any misappropriation of, or other
violation of, any valid and enforceable Intellectual Property Rights of any other person. All licenses for the use of the Intellectual
Property Rights described in the Registration Statement and the Prospectus are valid, binding upon, and enforceable by or against the
parties thereto in accordance to its terms. The Company has complied in all material respects with, and is not in breach nor has received
any asserted or threatened claim of breach of any Intellectual Property license, and the Company has no knowledge of any breach or anticipated
breach by any other person to any Intellectual Property license. Except as described in the Registration Statement and Prospectus, no
claim has been made against the Company alleging the infringement by the Company of any patent, trademark, service mark, trade name,
copyright, trade secret, license in or other intellectual property right or franchise right of any person. The Company has taken all
reasonable steps to protect, maintain and safeguard its Intellectual Property Rights, including the execution of appropriate nondisclosure
and confidentiality agreements. The consummation of the transactions contemplated by this Agreement will not result in the loss or impairment
of or payment of any additional amounts with respect to, nor require the consent of any other person in respect of, the Company’s
right to own, use, or hold for use any of the Intellectual Property Rights as owned, used or held for use in the conduct of the business
as currently conducted. With respect to the use of the software in the Company’s business as it is currently conducted, the Company
has not experienced any material defects in such software including any material error or omission in the processing of any transactions
other than defects which have been corrected, and to the Company’s knowledge, no such software contains any device or feature designed
to disrupt, disable, or otherwise impair the functioning of any software or is subject to the terms of any “open source”
or other similar license that provides for the source code of the software to be publicly distributed or dedicated to the public.
(v) All
Necessary Permits, etc. The Company and each of its subsidiaries possess all licenses, certificates, authorizations and permits
issued by, and have made all declarations and filings with, the appropriate local, state, federal or foreign governmental or regulatory
agencies or bodies (including, without limitation, those administered by the United States Food and Drug Administration of the U.S. Department
of Health and Human Services (“FDA”) or by any foreign, federal, state or local governmental or regulatory authority
performing functions similar to those performed by the FDA) that are necessary for the ownership, lease or operation of their respective
properties or the conduct of their respective businesses as described in the Registration Statement and the Prospectus (collectively,
the “Governmental Permits”) except where any failures to possess or make the same would not, singularly or in the
aggregate, result in a Material Adverse Change. The Company and its subsidiaries are in compliance with all such Governmental Permits;
all such Governmental Permits are valid and in full force and effect, except where the invalidity or failure to be in full force and
effect would not, singularly or in the aggregate, result in a Material Adverse Change. Neither the Company nor any subsidiary has received
written notification of any revocation, modification, suspension, termination or invalidation (or proceedings related thereto) of any
such Governmental Permit and the Company has no reason to believe that any such Governmental Permit will not be renewed.
(w) Title
to Properties. Except as otherwise disclosed in the Prospectus, the Company and its subsidiaries has good and marketable title to,
or have valid and marketable rights to lease or otherwise use, all of the real and personal property that is material to the business
of the Company and its subsidiaries free and clear of any security interests, mortgages, liens, encumbrances, equities, adverse claims
and other defects that (i) do not, singularly or in the aggregate, materially affect the value of such property and do not materially
interfere with the use made and proposed to be made of such property by the Company or any of its subsidiaries or (ii) could not
reasonably be expected, singularly or in the aggregate, to result in a Material Adverse Change. .
(x) Tax
Law Compliance. The Company and its subsidiaries have filed all necessary federal, state and foreign income and franchise tax returns
or have properly requested extensions thereof and have paid all taxes required to be paid by any of them and, if due and payable, any
related assessment, fine or penalty levied against any of them except as may be being contested in good faith and by appropriate proceedings
and except in each of the case, that would not, singularly or in the aggregate, result in a Material Adverse Change. The Company has
made adequate charges, accruals and reserves in the applicable financial statements referred to in Section 2(m) above
in respect of all federal, state and foreign income and franchise taxes for all periods as to which the tax liability of the Company
or any of its subsidiaries has not been finally determined.
(y) Company
Not an “Investment Company.” The Company is not, and will not be, either after receipt of payment for the Shares or after
the application of the proceeds therefrom as described under “Use of Proceeds” in the Registration Statement or the Prospectus,
required to register as an “investment company” under the Investment Company Act of 1940, as amended (the “Investment
Company Act”).
(z) Insurance.
Except as otherwise disclosed in the Prospectus, each of the Company and its subsidiaries are insured in such amounts and covering
such risks as are generally deemed adequate and customary for their businesses and the value of their respective properties. The Company has no reason to believe that it or any
of its subsidiaries will not be able (i) to renew its existing insurance coverage as and when such policies expire or
(ii) to obtain comparable coverage from similar institutions as may be necessary or appropriate to conduct its business as now
conducted and at a cost that could not be expected to result in a Material Adverse Change. Neither the Company nor any of its subsidiaries has received written notice from any insurer, agent of such insurer or the broker of the
Company or any of its subsidiaries that any material capital improvements or any other material expenditures (other than premium payments)
are required or necessary to be made in order to continue such insurance.
(aa) No
Price Stabilization or Manipulation; Compliance with Regulation M. Neither the Company nor any of its subsidiaries has taken, directly
or indirectly, any action designed to or that might cause or result in stabilization or manipulation of the price of the Common Shares
or of any “reference security” (as defined in Rule 100 of Regulation M under the Exchange Act (“Regulation
M”)) with respect to the Common Shares, whether to facilitate the sale or resale of the Shares or otherwise, and has taken
no action which would directly or indirectly violate Regulation M.
(bb) Related
Party Transactions. There are no business relationships or related-party transactions involving the Company or any of its subsidiaries
or any other person required to be described in the Registration Statement or the Prospectus which have not been described as required.
(cc) FINRA
Matters. All of the information provided to the Agent or to counsel for the Agent by the Company, and to the Company’s
knowledge, its counsel, its officers and directors and its affiliates (within the meaning of FINRA Rule 5121(f)(1)) in connection
with the offering of the Shares is true, complete, correct and compliant with Financial Industry Regulatory
Authority, Inc.’s (“FINRA”) rules and any letters, filings or other supplemental information
provided by the Company to FINRA pursuant to FINRA Rules or NASD Conduct Rules is true, complete and correct.
(dd) No
Unlawful Contributions or Other Payments. Except as otherwise disclosed in the Prospectus, neither the Company nor any of its
subsidiaries nor, to the Company’s knowledge, any director, employee or agent of the Company or any subsidiary, has made any
contribution or other payment to any official of, or candidate for, any federal, state or foreign office in violation of any law or
of the character required to be disclosed in the Registration Statement and the Prospectus.
(ee) Compliance
with Environmental Laws. Except as described in the Prospectus and except as could not be expected, individually or in the aggregate,
to result in a Material Adverse Change; (i) neither the Company nor any of its subsidiaries is in violation of any federal, state,
local or foreign statute, law, rule, regulation, ordinance, code, policy or rule of common law or any judicial or administrative
interpretation thereof, including any judicial or administrative order, consent, decree or judgment, relating to pollution or protection
of human health, the environment (including, without limitation, ambient air, surface water, groundwater, land surface or subsurface
strata) or wildlife, including, without limitation, laws and regulations relating to the release or threatened release of chemicals,
pollutants, contaminants, wastes, toxic substances, hazardous substances, petroleum or petroleum products (collectively, “Hazardous
Materials”) or to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous
Materials (collectively, “Environmental Laws”), (ii) the Company and its subsidiaries have all permits, authorizations
and approvals required under any applicable Environmental Laws and are each in compliance with their requirements, (iii) there are
no pending or threatened administrative, regulatory or judicial actions, suits, demands, demand letters, claims, liens, notices of noncompliance
or violation, investigation or proceedings relating to any Environmental Law against the Company or any of its subsidiaries and (iv) there
are no events or circumstances that might reasonably be expected to form the basis of an order for clean-up or remediation, or an action,
suit or proceeding by any private party or governmental body or agency, against or affecting the Company or any of its subsidiaries relating
to Hazardous Materials or any Environmental Laws.
(ff) ERISA
Compliance. Except as otherwise disclosed in the Prospectus, the Company and its subsidiaries and any “employee benefit plan”
(as defined under the Employee Retirement Income Security Act of 1974, as amended, and the regulations and published interpretations
thereunder (collectively, “ERISA”)) established or maintained by the Company, its subsidiaries or their “ERISA
Affiliates” (as defined below) are in compliance in all material respects with ERISA. “ERISA Affiliate” means,
with respect to the Company or any of its subsidiaries, any member of any group of organizations described in Sections 414(b), (c),
(m) or (o) of the Internal Revenue Code of 1986, as amended, and the regulations and published interpretations thereunder (the
“Code”) of which the Company or such subsidiary is a member. No “reportable event” (as defined under ERISA)
has occurred or is reasonably expected to occur with respect to any “employee benefit plan” established or maintained by
the Company, its subsidiaries or any of their ERISA Affiliates. No “employee benefit plan” established or maintained by the
Company, its subsidiaries or any of their ERISA Affiliates, if such “employee benefit plan” were terminated, would have any
“amount of unfunded benefit liabilities” (as defined under ERISA). Neither the Company, its subsidiaries nor any of their
ERISA Affiliates has incurred or reasonably expects to incur any liability under (i) Title IV of ERISA with respect to termination
of, or withdrawal from, any “employee benefit plan” or (ii) Sections 412, 4971, 4975 or 4980B of the Code. Each
“employee benefit plan” established or maintained by the Company, its subsidiaries or any of their ERISA Affiliates that
is intended to be qualified under Section 401(a) of the Code is so qualified and nothing has occurred, whether by action or
failure to act, which would cause the loss of such qualification.
(gg) Brokers.
Except as otherwise disclosed in the Prospectus, there is no broker, finder or other party that is entitled to receive from the Company
any brokerage or finder’s fee or other fee or commission as a result of any transactions contemplated by this Agreement.
(hh) No
Outstanding Loans or Other Extensions of Credit. The Company does not have any outstanding extension of credit, in the form of a
personal loan, to or for any director or executive officer (or equivalent thereof) of the Company except for such extensions of credit
as are expressly permitted by Section 13(k) of the Exchange Act.
(ii) Compliance
with Laws. The Company and its subsidiaries have been and are in compliance with all applicable laws, rules and regulations,
except where failure to be so in compliance could not be expected, individually or in the aggregate, to result in a Material Adverse
Change.
(jj) Dividend
Restrictions. Except as disclosed in the Prospectus, no subsidiary of the Company is prohibited or restricted, directly or indirectly,
from paying dividends to the Company, or from making any other distribution with respect to such subsidiary’s equity securities
or from repaying to the Company or any other subsidiary of the Company any amounts that may from time to time become due under any loans
or advances to such subsidiary from the Company or from transferring any property or assets to the Company or to any other subsidiary.
(kk) Anti-Corruption
and Anti-Bribery Laws. Neither the Company nor any of its subsidiaries nor any director, officer, or employee of the Company
or any of its subsidiaries, nor to the knowledge of the Company, any agent, affiliate or other person acting on behalf of the Company
or any of its subsidiaries has, in the course of its actions for, or on behalf of, the Company or any of its subsidiaries (i) used
any corporate funds for any unlawful contribution, gift, entertainment or other unlawful expenses relating to political activity; (ii) made
or taken any act in furtherance of an offer, promise, or authorization of any direct or indirect unlawful payment or benefit to any foreign
or domestic government official or employee, including of any government-owned or controlled entity or public international organization,
or any political party, party official, or candidate for political office; (iii) violated or is in violation of any provision of
the U.S. Foreign Corrupt Practices Act of 1977, as amended (the “FCPA”), the UK Bribery Act 2010, or any other applicable
anti-bribery or anti-corruption law; or (iv) made, offered, authorized, requested, or taken an act in furtherance of any unlawful
bribe, rebate, payoff, influence payment, kickback or other unlawful payment or benefit. The Company and its subsidiaries and, to the
knowledge of the Company, the Company’s affiliates have conducted their respective businesses in compliance with the FCPA and have
instituted and maintain policies and procedures designed to ensure, and which are reasonably expected to continue to ensure, continued
compliance therewith.
(ll) Legal
Proceedings. Except as set forth in the Registration Statement and Prospectus, there is no legal or governmental proceeding to which
the Company or any of its subsidiaries is a party or of which any property or assets of the Company or any of its subsidiaries is the
subject, including any proceeding before the FDA or comparable federal, state, local or foreign governmental bodies (it being understood
that the interaction between the Company and the FDA and such comparable governmental bodies relating to the clinical development and
product approval process, if any, shall not be deemed proceedings for purposes of this representation), which is required to be described
in the Registration Statement or the Prospectus and is not described therein, or which, singularly or in the aggregate, if determined
adversely to the Company or any of its subsidiaries, could reasonably be expected to result in a Material Adverse Change; and no such
proceedings are threatened or, to the Company’s knowledge contemplated by governmental or regulatory authorities or threatened
by others. The Company is in compliance with all applicable federal, state, local and foreign laws, regulations, orders and decrees governing
its business, as described in the Registration Statement and the Prospectus, as prescribed by the FDA, or any other federal, state or
foreign agencies or bodies engaged in the regulation of pharmaceuticals or biohazardous substances or materials, except where noncompliance
would not, singly or in the aggregate, result in a Material Adverse Change. All preclinical and clinical studies conducted by or on behalf
of the Company to support approval for commercialization of the Company’s products have been conducted by the Company, or to the
Company’s knowledge by third parties, in compliance with all applicable federal, state or foreign laws, rules, orders and regulations,
except for such failure or failures to be in compliance as could not reasonably be expected to have, singly or in the aggregate, a Material
Adverse Change. Neither the Company nor any of its subsidiaries is a party to any corporate integrity agreements, monitoring agreements,
consent decrees, settlement orders, or similar agreements with or imposed by any governmental or regulatory authority. Additionally,
neither the Company, any of its subsidiaries nor, to the Company’s knowledge, any of their respective employees, officers, directors,
or agents has been excluded, suspended or debarred from participation in any U.S. federal health care program or human clinical research
or is subject to a governmental inquiry, investigation, proceeding, or other similar action that could reasonably be expected to result
in debarment, suspension, or exclusion.
(mm) Money
Laundering Laws. The operations of the Company and its subsidiaries are, and have been conducted at all times, in compliance with
applicable financial recordkeeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended,
the money laundering statutes of all applicable jurisdictions, the rules and regulations thereunder and any related or similar applicable
rules, regulations or guidelines, issued, administered or enforced by any governmental agency (collectively, the “Money Laundering
Laws”) and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator
involving the Company or any of its subsidiaries with respect to the Money Laundering Laws is pending or, to the knowledge of the Company,
threatened.
(nn) Clinical
Data and Regulatory Compliance. The studies, tests and preclinical or clinical trials conducted by or on behalf of
the Company that are described in the Registration Statement and the Prospectus (the “Company Studies and Trials”)
were and, if still pending, are being, conducted in all material respects in accordance with experimental protocols, procedures and controls,
including all applicable laws and regulations; the descriptions of the results of the Company Studies and Trials contained in the Registration
Statement and Prospectus are accurate in all material respects; the Company has no knowledge of any other studies or trials not described
in the Registration Statement and the Prospectus, the results of which are inconsistent with or call in question the results described
or referred to in the Registration Statement and the Prospectus; and the Company has not received any written notices from or had any
other correspondence with the FDA or any foreign, state or local governmental body exercising comparable authority requiring the termination,
suspension or material modification of any Company Studies or Trials for which termination, suspension or material modification would
reasonably be expected to result in a Material Adverse Change and, to the Company’s knowledge, there are no reasonable grounds
for the same. In using or disclosing patient information received by the Company, if any, in connection with the Company Studies and
Trials, the Company has complied in all material respects with all applicable laws and regulatory rules or requirements, including,
without limitation, the Health Insurance Portability and Accountability Act of 1996 and the rules and regulations thereunder (“HIPAA”).
To the Company’s knowledge, none of the Company Studies and Trials involved any investigator who has been disqualified as a clinical
investigator or has been found by the FDA or a comparable foreign regulatory authority to have engaged in scientific misconduct or violations
of good clinical practices. To the Company’s knowledge, the manufacturing facilities and operations of its suppliers are operated
in compliance in all material respects with all applicable statutes, rules, and regulations of the FDA and comparable regulatory agencies
outside of the United States to which the Company is subject.
(oo) Sanctions.
Neither the Company nor any of its subsidiaries, directors, officers, or employees, nor, to the knowledge of the Company, after due
inquiry, any agent, affiliate or other person acting on behalf of the Company or any of its subsidiaries is currently the subject or
the target of any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Department of the Treasury (“OFAC”)
or the U.S. Department of State, the United Nations Security Council, the European Union, Her Majesty’s Treasury of the United
Kingdom, or other relevant sanctions authority (collectively, “Sanctions”); nor is the Company or any of its subsidiaries
located, organized or resident in a country or territory that is the subject or the target of Sanctions, including, without limitation,
Crimea, Cuba, Iran, North Korea, and Syria; and the Company will not directly or indirectly use the proceeds of this offering, or
lend, contribute or otherwise make available such proceeds to any subsidiary, or any joint venture partner or other person or entity,
for the purpose of financing the activities of or business with any person, or in any country or territory, that at the time of such
financing, is the subject or the target of Sanctions or in any other manner that will result in a violation by any person (including
any person participating in the transaction whether as underwriter, advisor, investor or otherwise) of applicable Sanctions. For the
past five years, the Company and its subsidiaries have not knowingly engaged in and are not now knowingly engaged in any dealings or
transactions with any person that at the time of the dealing or transaction is or was the subject or the target of Sanctions or with
any Sanctioned Country.
(pp) Sarbanes-Oxley.
The Company is in compliance, in all material respects, with all applicable provisions of the Sarbanes-Oxley Act of 2002 and the rules and
regulations promulgated thereunder.
(qq) Duties,
Transfer Taxes, Etc. No stamp or other issuance or transfer taxes or duties and no capital gains, income, withholding or other taxes
are payable by the Agent in the United States or any political subdivision or taxing authority thereof or therein in connection with
the execution, delivery or performance of this Agreement by the Company or the sale and delivery by the Company of the Shares.
(rr) Cybersecurity.
The Company and its subsidiaries’ information technology assets and equipment, computers, systems, networks, hardware,
software, websites, applications, and databases (collectively, “IT Systems”) operate and perform in all material
respects as required in connection with the operation of the business of the Company and its subsidiaries as currently conducted,
and to the Company’s knowledge are free and clear of all material Trojan horses, time bombs, malware and other malicious code.
The Company and its subsidiaries have implemented and maintained commercially reasonable safeguards designed to maintain and protect
their material confidential information and the integrity, availability, privacy and security of the IT Systems and data, including
Personal Data, used in connection with their businesses. “Personal Data” means (i) a natural persons' name,
street address, telephone number, email address, photograph, social security number, bank information, or customer or account
number; (ii) any information which would qualify as “personally identifying information” under the Federal Trade
Commission Act, as amended; (iii) Protected Health Information as defined by HIPAA; (iv) “personal data” as defined by
GDPR; and (v) any other piece of information that allows the identification of such natural person, or his or her family, or permits
the collection or analysis of any data related to an identified person's health or sexual orientation. To the Company’s
knowledge, there have been no breaches, violations, outages or unauthorized uses of or accesses to same, except for those that have
been remedied without material cost or liability or the duty to notify a Governmental Authority or any other person. The Company and
its subsidiaries are presently in material compliance with all applicable laws or statutes and all judgments, orders, rules and
regulations of any court or arbitrator or governmental or regulatory authority, internal policies and contractual obligations
relating to the privacy and security of IT Systems and Personal Data and to the protection of such IT Systems and Personal Data from
unauthorized use, access, misappropriation or modification.
(ss) Compliance
with Data Privacy Laws. The Company and its subsidiaries are, and at all prior times were, in material compliance with all applicable
state and federal data privacy and security laws and regulations, including without limitation HIPAA, and the Company and its subsidiaries
have taken commercially reasonable actions to prepare to comply with, and since May 25, 2018, have been and currently are in compliance
with, the European Union General Data Protection Regulation (“GDPR”) (EU 2016/679) (collectively, the “Privacy
Laws”). To ensure compliance with the Privacy Laws, the Company and its subsidiaries have in place, comply with, and take appropriate
steps reasonably designed to ensure compliance in all material respects with their policies and procedures relating to data privacy and
security and the collection, storage, use, disclosure, handling, and analysis of Personal Data (the “Policies”). The
Company and its subsidiaries have at all times made all disclosures to users or customers required by applicable laws and regulatory
rules or requirements, and none of such disclosures made or contained in any Policy have, to the knowledge of the Company, been
inaccurate or in violation of any applicable laws and regulatory rules or requirements in any material respect. The Company further
certifies that neither it nor any subsidiary: (i) has received notice of any actual or potential liability under or relating to,
or actual or potential violation of, any of the Privacy Laws, and has no knowledge of any event or condition that would reasonably be
expected to result in any such notice; (ii) is currently conducting or paying for, in whole or in part, any investigation, remediation,
or other corrective action pursuant to any Privacy Law; or (iii) is a party to any order, decree, or agreement that imposes any
obligation or liability under any Privacy Law.
(tt) Well-Known
Seasoned Issuer. (i) At the original effectiveness of the Registration Statement, (ii) at
the time of the most recent amendment thereto for the purposes of complying with Section 10(a)(3) of the Securities Act (whether
such amendment was by post-effective amendment or incorporated report filed pursuant to Section 13 or 15(d) of the Exchange
Act or in the form of a prospectus), (iii) at the time the Company or any person acting on its behalf (within the meaning, for this
clause only, of Rule 163(c) under the Securities Act) made any offer relating to the Shares in reliance on the exemption of
Rule 163 under the Securities Act, and (iv) as of the Time of Sale, the Company was and is a “well-known seasoned issuer”
(as defined in Rule 405).
(uu) Other
Underwriting Agreements. The Company is not a party to any agreement with an agent or underwriter for any other “at the market”
or continuous equity transaction.
(vv) Compliance
with Health Care Laws. The Company and its subsidiaries are, and at all times have been,
in material compliance with all Health Care Laws. For purposes of this Agreement, “Health Care Laws” means: (i) the Federal Food,
Drug, and Cosmetic Act (21 U.S.C. Section 301 et seq.), the Public Health Service Act (42 U.S.C. Section 201 et seq.), and
the regulations promulgated thereunder; (ii) all applicable federal, state, local and foreign health care fraud and abuse laws,
including, without limitation, the Anti-Kickback Statute (42 U.S.C. Section 1320a-7b(b)), the Civil False Claims Act (31 U.S.C.
Section 3729 et seq.), the criminal false statements law (42 U.S.C. Section 1320a-7b(a)), 18 U.S.C. Sections 286 and 287,
the criminal health care fraud law (18 U.S.C. Section 1347), the civil monetary penalties law (42 U.S.C.
Section 1320a-7a), the exclusion law (42 U.S.C. Section 1320a-7), the Physician Payments Sunshine Act (42 U.S.C.
Section 1320-7h), and applicable laws governing governmental health care programs; (iii) HIPAA, as amended by the Health
Information Technology for Economic and Clinical Health Act (42 U.S.C. Section 17921 et seq.); (iv) the Patient Protection
and Affordable Care Act of 2010, as amended by the Health Care and Education Reconciliation Act of 2010; (v) licensure,
quality, safety and accreditation requirements under applicable federal, state, local or foreign laws or regulatory bodies; and
(vi) all other local, state, federal, national, supranational and foreign laws, relating to the regulation of the Company or
its subsidiaries, and (vii) the directives and regulations promulgated pursuant to such statutes and any state or non-U.S.
counterpart thereof. Neither the Company nor any of its subsidiaries has received written
notice of any claim, action, suit, proceeding, hearing, enforcement, investigation, arbitration or other action from any court or
arbitrator or governmental or regulatory authority or third party alleging that any product operation or activity is or may be in
violation of any Health Care Laws in any material respect, nor, to the Company’s knowledge, is any such claim, action, suit,
proceeding, hearing, enforcement, investigation, arbitration or other action threatened or contemplated. Except as would not
reasonably be expected to result in a Material Adverse Change, the Company and its
subsidiaries have filed, maintained or submitted all material reports, documents, forms, notices, applications, records, claims,
submissions and supplements or amendments as required by any Health Care Laws, and all such reports, documents, forms, notices,
applications, records, claims, submissions and supplements or amendments were complete and accurate on the date filed in all
material respects (or were corrected or supplemented by a subsequent submission). Neither the Company nor any of its subsidiaries is
a party to any corporate integrity agreement, monitoring agreement, consent decree, settlement order, or similar agreement with or
imposed by any Regulatory Agency. Additionally, neither the Company, any of its subsidiaries,
nor any of their respective employees, officers, directors, managing employees, owners or, to the knowledge have the Company, agents
has been excluded, suspended or debarred from participation in any U.S. governmental health care program or human clinical research
or, to the knowledge of the Company, is subject to a governmental inquiry, investigation, proceeding, or other similar action that
could reasonably be expected to result in debarment, suspension, or exclusion.
Any certificate signed by
any officer or representative of the Company or any of its subsidiaries and delivered to the Agent or counsel for the Agent in connection
with an issuance of Shares shall be deemed a representation and warranty by the Company to the Agent as to the matters covered thereby
on the date of such certificate.
The Company acknowledges
that the Agent and, for purposes of the opinions to be delivered pursuant to Section 4(o) hereof, counsel to the
Company and counsel to the Agent, will rely upon the accuracy and truthfulness of the foregoing representations and hereby consents to
such reliance.
Section 3. ISSUANCE AND SALE OF COMMON SHARES
(a) Sale
of Securities. On the basis of the representations, warranties and agreements herein contained, but subject to the terms and conditions
herein set forth, the Company and the Agent agree that the Company may from time to time seek to sell Shares through the Agent, acting
as sales agent, or directly to the Agent, acting as principal, as follows, with an aggregate Sales Price of up to the Maximum Program
Amount, based on and in accordance with Issuance Notices as the Company may deliver, during the Agency Period.
(b) Mechanics
of Issuances.
(i) Issuance
Notice. Upon the terms and subject to the conditions set forth herein, on any Trading Day during the Agency Period on which the conditions
set forth in Section 5(a) and Section 5(b) shall have been satisfied, the Company may exercise
its right to request an issuance of Shares by delivering to the Agent an Issuance Notice; provided, however, that (A) in
no event may the Company deliver an Issuance Notice to the extent that (I) the sum of (x) the aggregate Sales Price of the
requested Issuance Amount, plus (y) the aggregate Sales Price of all Shares issued under all previous Issuance Notices effected
pursuant to this Agreement, would exceed the Maximum Program Amount; and (B) prior to delivery of any Issuance Notice, the period
set forth for any previous Issuance Notice shall have expired or been terminated. An Issuance Notice shall be considered delivered on
the Trading Day that it is received by e-mail to the persons set forth in Schedule A hereto and confirmed by the Company by telephone
(including a voicemail message to the persons so identified), with the understanding that, with adequate prior written notice, the Agent
may modify the list of such persons from time to time.
(ii) Agent
Efforts. Upon the terms and subject to the conditions set forth in this Agreement, upon the receipt of an Issuance Notice, the Agent
will use its commercially reasonable efforts consistent with its normal sales and trading practices to place the Shares with respect
to which the Agent has agreed to act as sales agent, subject to, and in accordance with the information specified in, the Issuance Notice,
unless the sale of the Shares described therein has been suspended, cancelled or otherwise terminated in accordance with the terms of
this Agreement. For the avoidance of doubt, the parties to this Agreement may modify an Issuance Notice at any time provided they both
agree in writing to any such modification.
(iii) Method
of Offer and Sale. The Shares may be offered and sold (A) in privately negotiated transactions with the consent of the Company;
(B) as block transactions; or (C) by any other method permitted by law deemed to be an “at the market offering”
as defined in Rule 415(a)(4) under the Securities Act, including sales made directly on the Principal Market or sales made
into any other existing trading market of the Common Shares. Nothing in this Agreement shall be deemed to require either party to agree
to the method of offer and sale specified in the preceding sentence, and (except as specified in clauses (A) and (B) above)
the method of placement of any Shares by the Agent shall be at the Agent’s discretion.
(iv) Confirmation
to the Company. If acting as sales agent hereunder, the Agent will provide written confirmation to the Company no later than the
opening of the Trading Day next following the Trading Day on which it has placed Shares hereunder setting forth the number of shares
sold on such Trading Day, the corresponding Sales Price and the Issuance Price payable to the Company in respect thereof.
(v) Settlement.
Each issuance of Shares will be settled on the applicable Settlement Date for such issuance of Shares and, subject to the provisions
of Section 5, on or before each Settlement Date, the Company will, or will cause its transfer agent to, electronically
transfer the Shares being sold by crediting the Agent or its designee’s account at The Depository Trust Company through its Deposit/Withdrawal
At Custodian (DWAC) System, or by such other means of delivery as may be mutually agreed upon by the parties hereto and, upon receipt
of such Shares, which in all cases shall be freely tradable, transferable, registered shares in good deliverable form, the Agent will
deliver, by wire transfer of immediately available funds, the related Issuance Price in same day funds delivered to an account designated
by the Company prior to the Settlement Date. The Company may sell Shares to the Agent as principal at a price agreed upon at each relevant
time Shares are sold pursuant to this Agreement (each, a “Time of Sale”).
(vi) Suspension
or Termination of Sales. Consistent with standard market settlement practices, the Company or the Agent may, upon notice to the other
party hereto in writing or by telephone (confirmed immediately by verifiable email), suspend any sale of Shares, and the period set forth
in an Issuance Notice shall immediately terminate; provided, however, that (A) such suspension and termination shall not
affect or impair either party’s obligations with respect to any Shares placed or sold hereunder prior to the receipt of such notice;
(B) if the Company suspends or terminates any sale of Shares after the Agent confirms such sale to the Company, the Company shall
still be obligated to comply with Section 3(b)(v) with respect to such Shares; and (C) if the Company defaults
in its obligation to deliver Shares on a Settlement Date, the Company agrees that it will hold the Agent harmless against any
loss, claim, damage or expense (including, without limitation, penalties, interest and reasonable and documented legal fees and expenses),
as incurred, arising out of or in connection with such default by the Company. The parties hereto acknowledge and agree that, in performing
its obligations under this Agreement, the Agent may borrow Common Shares from stock lenders in the event that the Company has not delivered
Shares to settle sales as required by subsection (v) above, and may use the Shares to settle or close out such borrowings. The Company
agrees that no such notice shall be effective against the Agent unless it is made to the persons identified in writing by the Agent pursuant
to Section 3(b)(i).
(vii) No
Guarantee of Placement, Etc. The Company acknowledges and agrees that (A) there can be no assurance that the Agent will be successful
in placing Shares; (B) the Agent will incur no liability or obligation to the Company or any other Person if it does not sell Shares;
and (C) the Agent shall be under no obligation to purchase Shares on a principal basis pursuant to this Agreement, except as otherwise
specifically agreed by the Agent and the Company.
(viii) Material
Non-Public Information. Notwithstanding any other provision of this Agreement, the Company and the Agent agree that the Company shall
not deliver any Issuance Notice to the Agent, and the Agent shall not be obligated to place any Shares, during any period in which the
Company is in possession of material non-public information.
(c) Fees.
As compensation for services rendered, the Company shall pay to the Agent, on the applicable Settlement Date, the Selling Commission
for the applicable Issuance Amount (including with respect to any suspended or terminated sale pursuant to Section 3(b)(vi))
by deducting the Selling Commission from the applicable Issuance Amount.
(d) Expenses.
The Company agrees to pay all costs, fees and expenses incurred in connection with the performance of its obligations hereunder and in
connection with the transactions contemplated hereby, including without limitation (i) all expenses incident to the issuance and
delivery of the Shares (including all printing and engraving costs); (ii) all fees and expenses of the registrar and transfer agent
of the Shares; (iii) all necessary issue, transfer and other stamp taxes in connection with the issuance and sale of the Shares;
(iv) all fees and expenses of the Company’s counsel, independent public or certified public accountants and other advisors;
(v) all costs and expenses incurred in connection with the preparation, printing, filing, shipping and distribution of the Registration
Statement (including financial statements, exhibits, schedules, consents and certificates of experts), the Prospectus, any Free Writing
Prospectus (as defined below) prepared by or on behalf of, used by, or referred to by the Company, and all amendments and supplements
thereto, and this Agreement; (vi) all filing fees, attorneys’ fees and expenses incurred by the Company or the Agent in connection
with qualifying or registering (or obtaining exemptions from the qualification or registration of) all or any part of the Shares for
offer and sale under the state securities or blue sky laws or the provincial securities laws of Canada, and, if requested by the Agent,
preparing and printing a “Blue Sky Survey” or memorandum and a “Canadian wrapper,, and any supplements thereto,
advising the Agent of such qualifications, registrations, determinations and exemptions; (vii) the reasonable fees and disbursements
of the Agent’s counsel, including the reasonable fees and expenses of counsel for the Agent in connection with, FINRA review,
if any, and approval of the Agent’s participation in the offering and distribution of the Shares; (viii) the filing fees incident
to FINRA review, if any; (ix) the costs and expenses of the Company relating to investor presentations on any “road show” undertaken in connection with
the marketing of the offering of the Shares, including, without limitation, expenses associated with the preparation or dissemination
of any electronic road show, expenses associated with the production of road show slides and graphics, fees and expenses of any consultants
engaged in connection with the road show presentations with the prior approval of the Company, travel and lodging expenses of the representatives,
employees and officers of the Company and of the Agent and any such consultants, and the cost of any aircraft chartered in connection
with the road show; and (x) the fees and expenses associated with listing the Shares on the Principal Market. The fees and
disbursements of Agent’s counsel pursuant to subsections (vi) and (vii) above shall not exceed (A) $75,000 in connection
with execution of this Agreement and (B) $15,000 in connection with each Triggering Event Date (as defined below) on which the Company
is required to provide a certificate pursuant to Section 4(o).
Section 4. ADDITIONAL COVENANTS
The Company covenants and
agrees with the Agent as follows, in addition to any other covenants and agreements made elsewhere in this Agreement:
(a) Exchange
Act Compliance. During the Agency Period, the Company shall (i) file, on a timely basis, with the Commission all reports and
documents required to be filed under Section 13, 14 or 15 of the Exchange Act in the manner and within the time periods required
by the Exchange Act; and (ii) either (A) include in its quarterly reports on Form 10-Q and its annual reports on Form 10-K,
a summary detailing, for the relevant reporting period, (1) the number of Shares sold through the Agent pursuant to this Agreement
and (2) the net proceeds received by the Company from such sales or (B) prepare a prospectus supplement containing, or include
in such other filing permitted by the Securities Act or Exchange Act (each an “Interim Prospectus Supplement”), such
summary information and, at least once a quarter and subject to this Section 4, file such Interim Prospectus Supplement pursuant
to Rule 424(b) under the Securities Act (and within the time periods required by Rule 424(b) and Rule 430B under
the Securities Act)).
(b) Securities
Act Compliance. After the date of this Agreement, the Company shall promptly advise the Agent in writing (i) of the receipt
of any comments of, or requests for additional or supplemental information from, the Commission in relation to the Registration Statement
or the Prospectus; (ii) of the time and date of any filing of any post-effective amendment to the Registration Statement or any
amendment or supplement to the Prospectus or any Free Writing Prospectus; (iii) of the time and date that any post-effective amendment
to the Registration Statement becomes effective; and (iv) of the issuance by the Commission of any stop order suspending the effectiveness
of the Registration Statement or any post-effective amendment thereto or any amendment or supplement to the Prospectus or of any order
preventing or suspending the use of any Free Writing Prospectus or the Prospectus, or of any proceedings to remove, suspend or terminate
from listing or quotation the Common Shares from any securities exchange upon which they are listed for trading or included or designated
for quotation, or of the threatening or initiation of any proceedings for any of such purposes. If the Commission shall enter any such
stop order at any time, the Company will use its best efforts to obtain the lifting of such order as soon as practicable. Additionally,
the Company agrees that it shall comply with the provisions of Rule 424(b) and Rule 433, as applicable, under the Securities
Act and will use its reasonable efforts to confirm that any filings made by the Company under such Rule 424(b) or Rule 433
were received in a timely manner by the Commission.
(c) Amendments
and Supplements to the Prospectus and Other Securities Act Matters. During any period where an Issuance Notice is pending, if any
event shall occur or condition exist as a result of which it is necessary to amend or supplement the Prospectus so that the Prospectus
does not include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein,
in the light of the circumstances when the Prospectus is delivered to a purchaser, not misleading, or if in the opinion of the Agent
or counsel for the Agent it is otherwise necessary to amend or supplement the Prospectus to comply with applicable law, including the
Securities Act, the Company agrees (subject to Section 4(d) and 4(f)) to promptly prepare, file with the Commission (including
by filing a document incorporated by reference therein) and furnish at its own expense to the Agent, amendments or supplements to the
Prospectus so that the statements in the Prospectus as so amended or supplemented will not include an untrue statement of a material
fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances when the Prospectus
is delivered to a purchaser, not misleading or so that the Prospectus, as amended or supplemented, will comply with applicable law, including
the Securities Act. Neither the Agent’s consent to, or delivery of, any such amendment or supplement shall constitute a waiver
of any of the Company’s obligations under Sections 4(d) and 4(f).
(d) Agent’s
Review of Proposed Amendments and Supplements. Prior to amending or supplementing the Registration Statement or the Prospectus (excluding
any amendment or supplement through incorporation of any report filed under the Exchange Act), the Company shall furnish to the Agent
for review, a reasonable amount of time prior to the proposed time of filing or use thereof, a copy of each such proposed amendment or
supplement insofar as such proposed amendment or supplement relates to the transactions contemplated in this Agreement, and the Company
shall not file or use any such proposed amendment or supplement without the Agent’s prior consent, and to file with the Commission
within the applicable period specified in Rule 424(b) under the Securities Act any prospectus required to be filed pursuant
to such Rule.
(e) Use
of Free Writing Prospectus. Neither the Company nor the Agent has prepared, used, referred to or distributed, or will prepare, use,
refer to or distribute, without the other party’s prior written consent, any “written communication” that constitutes
a “free writing prospectus” as such terms are defined in Rule 405 under the Securities Act with respect to the offering
contemplated by this Agreement (any such free writing prospectus being referred to herein as a “Free Writing Prospectus”).
(f) Free
Writing Prospectuses. The Company shall furnish to the Agent for review, a reasonable amount of time prior to the proposed time of
filing or use thereof, a copy of each proposed Free Writing Prospectus or any amendment or supplement thereto to be prepared by or on
behalf of, used by, or referred to by the Company and the Company shall not file, use or refer to any proposed Free Writing Prospectus
or any amendment or supplement thereto without the Agent’s consent, which shall not be unreasonably withheld, conditioned or delayed.
The Company shall furnish to the Agent, without charge, as many copies of any Free Writing Prospectus prepared by or on behalf of, or
used by the Company, as the Agent may reasonably request. If at any time when a prospectus is required by the Securities Act (including,
without limitation, pursuant to Rule 173(d)) to be delivered in connection with sales of the Shares (but in any event if at any
time through and including the date of this Agreement) there occurred or occurs an event or development as a result of which any Free
Writing Prospectus prepared by or on behalf of, used by, or referred to by the Company conflicted or would conflict with the information
contained in the Registration Statement or included or would include an untrue statement of a material fact or omitted or would omit
to state a material fact necessary in order to make the statements therein, in the light of the circumstances prevailing at that subsequent
time, not misleading, the Company shall promptly amend or supplement such Free Writing Prospectus to eliminate or correct such conflict
or so that the statements in such Free Writing Prospectus as so amended or supplemented will not include an untrue statement of a material
fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances prevailing
at such subsequent time, not misleading, as the case may be; provided, however, that prior to amending or supplementing any such
Free Writing Prospectus, the Company shall furnish to the Agent for review, a reasonable amount of time prior to the proposed time of
filing or use thereof, a copy of such proposed amended or supplemented Free Writing Prospectus and the Company shall not file, use or
refer to any such amended or supplemented Free Writing Prospectus without the Agent’s consent, which shall not be unreasonably
withheld, conditioned or delayed.
(g) Filing
of Agent Free Writing Prospectuses. The Company shall not take any action that would result in the Agent or the Company being required
to file with the Commission pursuant to Rule 433(d) under the Securities Act a free writing prospectus prepared by or on behalf
of the Agent that the Agent otherwise would not have been required to file thereunder.
(h) Copies
of Registration Statement and Prospectus. After the date of this Agreement through the last time that a prospectus is required by
the Securities Act (including, without limitation, pursuant to Rule 173(d)) to be delivered in connection with sales of the Shares,
the Company agrees to furnish the Agent with copies (which may be electronic copies) of the Registration Statement and each amendment
thereto, and with copies of the Prospectus and each amendment or supplement thereto in the form in which it is filed with the Commission
pursuant to the Securities Act or Rule 424(b) under the Securities Act, both in such quantities as the Agent may reasonably
request from time to time; and, if the delivery of a prospectus is required under the Securities Act or under the blue sky or securities
laws of any jurisdiction at any time on or prior to the applicable Settlement Date for any period set forth in an Issuance Notice in
connection with the offering or sale of the Shares and if at such time any event has occurred as a result of which the Prospectus as
then amended or supplemented would include an untrue statement of a material fact or omit to state any material fact necessary in order
to make the statements therein, in the light of the circumstances under which they were made when such Prospectus is delivered, not misleading,
or, if for any other reason it is necessary during such same period to amend or supplement the Prospectus or to file under the Exchange
Act any document incorporated by reference in the Prospectus in order to comply with the Securities Act or the Exchange Act, to notify
the Agent and to request that the Agent suspend offers to sell Shares (and, if so notified, the Agent shall cease such offers as soon
as practicable); and if the Company decides to amend or supplement the Registration Statement or the Prospectus as then amended or supplemented,
to advise the Agent promptly by telephone (with confirmation in writing) and to prepare and cause to be filed promptly with the Commission
an amendment or supplement to the Registration Statement or the Prospectus as then amended or supplemented that will correct such statement
or omission or effect such compliance, including filing a document incorporated by reference therein; provided, however, that if during
such same period the Agent is required to deliver a prospectus in respect of transactions in the Shares, the Company shall promptly prepare
and file with the Commission such an amendment or supplement.
(i) Blue
Sky Compliance. The Company shall cooperate with the Agent and counsel for the Agent to qualify or register the Shares for sale under
(or obtain exemptions from the application of) the state securities or blue sky laws or Canadian provincial securities laws of those
jurisdictions designated by the Agent, shall comply with such laws and shall continue such qualifications, registrations and exemptions
in effect so long as required for the distribution of the Shares. The Company shall not be required to qualify as a foreign corporation
or to take any action that would subject it to general service of process in any such jurisdiction where it is not presently qualified
or where it would be subject to taxation as a foreign corporation. The Company will advise the Agent promptly of the suspension of the
qualification or registration of (or any such exemption relating to) the Shares for offering, sale or trading in any jurisdiction or
any initiation or threat of any proceeding for any such purpose, and in the event of the issuance of any order suspending such qualification,
registration or exemption, the Company shall use its best efforts to obtain the withdrawal thereof as soon as practicable.
(j) Earnings
Statement. As soon as practicable, the Company will make generally available to its security holders and to the Agent an earnings
statement (which need not be audited) covering a period of at least twelve months beginning with the first fiscal quarter of the Company
occurring after the date of this Agreement which shall satisfy the provisions of Section 11(a) of the Securities Act and Rule 158
under the Securities Act; provided that the Company shall be deemed to have furnished such statements to its security holders
and the Agent to the extent they are filed on the Commission’s EDGAR system or any successor to such system.
(k) Listing;
Reservation of Shares. (a) The Company will use commercially reasonable efforts to maintain the listing of the Shares on the
Principal Market; and (b) the Company will reserve and keep available at all times, free of preemptive rights, Shares for the purpose
of enabling the Company to satisfy its obligations under this Agreement.
(l) Transfer
Agent. The Company shall engage and maintain, at its expense, a registrar and transfer agent for the Shares.
(m) Due
Diligence. During the term of this Agreement, the Company will reasonably cooperate with any reasonable due diligence review conducted
by the Agent in connection with the transactions contemplated hereby, including, without limitation, providing information and making
available documents and senior corporate officers, during normal business hours and at the Company’s principal offices, as the
Agent may reasonably request from time to time.
(n) Representations
and Warranties. The Company acknowledges that each delivery of an Issuance Notice and each delivery of Shares on a Settlement Date
shall be deemed to be (i) an affirmation to the Agent that the representations and warranties of the Company contained in or made
pursuant to this Agreement are true and correct as of the date of such Issuance Notice or of such Settlement Date, as the case may be,
as though made at and as of each such date, except as may be disclosed in the Prospectus (including any documents incorporated by reference
therein and any supplements thereto); and (ii) an undertaking that the Company will advise the Agent if any of such representations
and warranties will not be true and correct as of the Settlement Date for the Shares relating to such Issuance Notice, as though made
at and as of each such date (except that such representations and warranties shall be deemed to relate to the Registration Statement
and the Prospectus as amended and supplemented relating to such Shares).
(o) Deliverables
at Triggering Event Dates; Certificates. The Company agrees that on or prior to the date of the first Issuance Notice and, during
the term of this Agreement after the date of the first Issuance Notice, upon:
(A) the
filing of the Prospectus or the amendment or supplement of any Registration Statement or Prospectus (other than a prospectus supplement
relating solely to an offering of securities other than the Shares or a prospectus filed pursuant to Section 4(a)(ii)(B)), by means
of a post-effective amendment, sticker or supplement, but not by means of incorporation of documents by reference into the Registration
Statement or Prospectus;
(B) the
filing with the Commission of an annual report on Form 10-K or a quarterly report on Form 10-Q (including any Form 10-K/A
or Form 10-Q/A containing amended financial information or a material amendment to the previously filed annual report on Form 10-K
or quarterly report on Form 10-Q), in each case, of the Company; or
(C) the
filing with the Commission of a current report on Form 8-K of the Company containing amended financial information (other than information
“furnished” pursuant to Item 2.02 or 7.01 of Form 8-K or to provide disclosure pursuant to Item 8.01 of Form 8-K
relating to reclassification of certain properties as discontinued operations in accordance with Statement of Financial Accounting Standards
No. 144) that is material to the offering of securities of the Company in the Agent’s reasonable discretion;
(any such event, a “Triggering Event
Date”), the Company shall furnish the Agent (but in the case of clause (C) above only if the Agent reasonably determines
that the information contained in such current report on Form 8-K of the Company is material) with a certificate as of the Triggering
Event Date, in the form and substance satisfactory to the Agent and its counsel, substantially similar to the form previously provided
to the Agent and its counsel, modified, as necessary, to relate to the Registration Statement and the Prospectus as amended or supplemented,
(A) confirming that the representations and warranties of the Company contained in this Agreement are true and correct, (B) that
the Company has performed all of its obligations hereunder to be performed on or prior to the date of such certificate and as to the
matters set forth in Section 5(a)(iii) hereof, and (C) containing any other certification that the Agent shall
reasonably request. The requirement to provide a certificate under this Section 4(o) shall be waived for
any Triggering Event Date occurring at a time when no Issuance Notice is pending or a suspension is in effect, which waiver shall continue
until the earlier to occur of the date the Company delivers instructions for the sale of Shares hereunder (which for such calendar quarter
shall be considered a Triggering Event Date) and the next occurring Triggering Event Date. Notwithstanding the foregoing, if the Company
subsequently decides to sell Shares following a Triggering Event Date when a suspension was in effect and did not provide the Agent with
a certificate under this Section 4(o), then before the Company delivers the instructions for the sale of Shares or the Agent sells
any Shares pursuant to such instructions, the Company shall provide the Agent with a certificate in conformity with this Section 4(o) dated
as of the date that the instructions for the sale of Shares are issued.
(p) Legal
Opinions. On or prior to the date of the first Issuance Notice and on or prior to each Triggering Event Date with respect to which
the Company is obligated to deliver a certificate pursuant to Section 4(o) for which no waiver is applicable and excluding
the date of this Agreement, a negative assurances letter and the written legal opinion of Latham & Watkins LLP, counsel to the
Company, Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C., counsel to the Agent, and Morrison & Foerster LLP, intellectual
property counsel to the Company, each dated the date of delivery, in form and substance reasonably satisfactory to Agent and its counsel,
substantially similar to the form previously provided to the Agent and its counsel, modified, as necessary, to relate to the Registration
Statement and the Prospectus as then amended or supplemented. In lieu of such opinions for subsequent periodic filings, in the discretion
of the Agent, the Company may furnish a reliance letter from such counsel to the Agent, permitting the Agent to rely on a previously
delivered opinion letter, modified as appropriate for any passage of time or Triggering Event Date (except that statements in such prior
opinion shall be deemed to relate to the Registration Statement and the Prospectus as amended or supplemented as of such Triggering Event
Date).
(q) Comfort
Letter. On or prior to the date of the first Issuance Notice and on or prior to each Triggering Event Date with respect to which
the Company is obligated to deliver a certificate pursuant to Section 4(o) for which no waiver is applicable and excluding
the date of this Agreement, the Company shall cause Ernst & Young LLP, the independent registered public accounting firm who
has audited the financial statements included or incorporated by reference in the Registration Statement, to furnish the Agent a comfort
letter, dated the date of delivery, in form and substance reasonably satisfactory to the Agent and its counsel, substantially similar
to the form previously provided to the Agent and its counsel; provided, however, that any such comfort letter will only be required on
the Triggering Event Date specified to the extent that it contains financial statements filed with the Commission under the Exchange
Act and incorporated or deemed to be incorporated by reference into a Prospectus. If requested by the Agent, the Company shall also cause
a comfort letter to be furnished to the Agent within ten (10) Trading Days of the date of occurrence of any material transaction
or event requiring the filing of a current report on Form 8-K containing material amended financial information of the Company,
including the restatement of the Company’s financial statements. The Company shall be required to furnish no more than one comfort
letter hereunder per calendar quarter.
(r) Secretary’s
Certificate. On or prior to the date of the first Issuance Notice and on or prior to each Triggering Event Date with respect to which
the Company is obligated to deliver a certificate pursuant to Section 4(o) for which no waiver is applicable and excluding
the date of this Agreement, the Company shall furnish the Agent a certificate executed by the Secretary of the Company, signing in such
capacity, dated the date of delivery (i) certifying that attached thereto are true and complete copies of the resolutions duly adopted
by the Board of Directors of the Company authorizing the execution and delivery of this Agreement and the consummation of the transactions
contemplated hereby (including, without limitation, the issuance of the Shares pursuant to this Agreement), which authorization shall
be in full force and effect on and as of the date of such certificate, (ii) certifying and attesting to the office, incumbency,
due authority and specimen signatures of each Person who executed this Agreement for or on behalf of the Company, and (iii) containing
any other certification that the Agent shall reasonably request.
(s) Agent’s
Own Account; Clients’ Account. The Company consents to the Agent trading, in compliance with applicable law, in the Common
Shares for the Agent’s own account and for the account of its clients at the same time as sales of the Shares occur pursuant to
this Agreement.
(t) Investment
Limitation. The Company shall not invest, or otherwise use the proceeds received by the Company from its sale of the Shares in such
a manner as would require the Company or any of its subsidiaries to register as an investment company under the Investment Company Act.
(u) Market
Activities. The Company will not take, directly or indirectly, any action designed to or that might be reasonably expected to cause
or result in stabilization or manipulation of the price of the Shares or any other reference security, whether to facilitate the sale
or resale of the Shares or otherwise, and the Company will, and shall cause each of its affiliates to, comply with all applicable provisions
of Regulation M. If the limitations of Rule 102 of Regulation M (“Rule 102”) do not apply with respect to
the Shares or any other reference security pursuant to any exception set forth in Section (d) of Rule 102, then promptly
upon notice from the Agent (or, if later, at the time stated in the notice), the Company will, and shall cause each of its affiliates
to, comply with Rule 102 as though such exception were not available but the other provisions of Rule 102 (as interpreted by
the Commission) did apply. The Company shall promptly notify the Agent if it no longer meets the requirements set forth in Section (d) of
Rule 102.
(v) Notice
of Other Sale. Without the written consent of the Agent, the Company will not, directly or indirectly, offer to sell, sell, contract
to sell, grant any option to sell or otherwise dispose of any Common Shares or securities convertible into or exchangeable for Common
Shares (other than Shares hereunder), warrants or any rights to purchase or acquire Common Shares, during the period beginning on the
third Trading Day immediately prior to the date on which any Issuance Notice is delivered to the Agent hereunder and ending on the third
Trading Day immediately following the Settlement Date with respect to Shares sold pursuant to such Issuance Notice; and will not directly
or indirectly enter into any other “at the market” or continuous equity transaction offer to sell, sell, contract to sell,
grant any option to sell or otherwise dispose of any Common Shares (other than the Shares offered pursuant to this Agreement) or securities
convertible into or exchangeable for Common Shares, warrants or any rights to purchase or acquire, Common Shares prior to the termination
of this Agreement; provided, however, that such restrictions will not be required in connection with the Company’s (i) issuance
or sale of Common Shares, options to purchase Common Shares or Common Shares issuable upon the exercise of options or other equity awards
pursuant to any employee or director share option, incentive or benefit plan, share purchase or ownership plan, long-term incentive plan,
dividend reinvestment plan, inducement award under Nasdaq rules or other compensation plan of the Company or its subsidiaries, as
in effect on the date of this Agreement or subsequently disclosed in the filings by the Company available on EDGAR or otherwise publicly
disclosed or disclosed in writing to the Agent, (ii) issuance or sale of Common Shares issuable upon exchange, conversion or redemption
of securities or the exercise or vesting of warrants, options or other equity awards , (iii) modification of any outstanding options,
warrants of any rights to purchase or acquire Common Shares, and (iv) issue Common Shares, or any securities convertible into, or
exercisable, or exchangeable for Common Shares, or enter into an agreement to issue Common Shares, or any securities convertible into
or exercisable or exchangeable for Common Shares, in connection with any merger, joint venture, strategic alliance, commercial or other
collaborative transaction, or the acquisition or license of the business, property, technology or other assets of another individual
or entity, or the assumption of an employee benefit plan in connection with such a merger or acquisition, provided, however, that
the aggregate number of Common Shares, or securities convertible into or exercisable or exchangeable for Common Shares, that the Company
may issue or agree to issue pursuant to this clause (iv) shall not exceed 5.0% of the total outstanding Common Shares immediately
following such issuance.
Section 5. CONDITIONS TO DELIVERY OF ISSUANCE NOTICES AND
TO SETTLEMENT
(a) Conditions
Precedent to the Right of the Company to Deliver an Issuance Notice and the Obligation of the Agent to Sell Shares. The right of
the Company to deliver an Issuance Notice hereunder is subject to the satisfaction, on the date of delivery of such Issuance Notice,
and the obligation of the Agent to use its commercially reasonable efforts to place Shares during the applicable period set forth in
the Issuance Notice is subject to the satisfaction, on each Trading Day during the applicable period set forth in the Issuance Notice,
of each of the following conditions:
| (i) | Accuracy of the Company’s Representations
and Warranties; Performance by the Company. The Company shall have delivered the certificate
required to be delivered pursuant to Section 4(o) on or before the date
on which delivery of such certificate is required pursuant to Section 4(o). The
Company shall have performed, satisfied and complied with all covenants, agreements and conditions
required by this Agreement to be performed, satisfied or complied with by the Company at
or prior to such date, including, but not limited to, the covenants contained in Section 4(p),
Section 4(q) and Section 4(r). |
| (ii) | No Injunction. No statute, rule,
regulation, executive order, decree, ruling or injunction shall have been enacted, entered,
promulgated or endorsed by any court or governmental authority of competent jurisdiction
or any self-regulatory organization having authority over the matters contemplated hereby
that prohibits or directly and materially adversely affects any of the transactions contemplated
by this Agreement, and no proceeding shall have been commenced that may have the effect of
prohibiting or materially adversely affecting any of the transactions contemplated by this
Agreement. |
| (iii) | Material Adverse Changes. Except
as disclosed in the Prospectus and the Time of Sale Information, (a) in the judgment
of the Agent there shall not have occurred any Material Adverse Change; and (b) there
shall not have occurred any downgrading, nor shall any notice have been given of any intended
or potential downgrading or of any review for a possible change that does not indicate the
direction of the possible change, in the rating accorded any securities of the Company or
any of its subsidiaries by any “nationally recognized statistical rating organization”
as such term is defined for purposes of Section 3(a)(62) of the Exchange Act. |
| (iv) | No
Suspension of Trading in or Delisting of Common Shares; Other Events. The trading of
the Common Shares (including without limitation the Shares) shall not have been suspended
by the Commission, the Principal Market or FINRA and the Common Shares (including without
limitation the Shares) shall have been approved for listing or quotation on and shall not
have been delisted from the Principal Market or any of its constituent markets. There shall
not have occurred (and be continuing in the case of occurrences under clauses (i) and
(ii) below) any of the following: (i) trading or quotation in any of the Company’s
securities shall have been suspended or limited by the Commission or by the Principal Market
or trading in securities generally on the Principal Market shall have been suspended or limited,
or minimum or maximum prices shall have been generally established on such stock exchange
by the Commission or the FINRA; (ii) a general banking moratorium shall have been declared
by any of federal or New York, authorities; or (iii) there shall have occurred any outbreak
or escalation of national or international hostilities or any crisis or calamity, or any
change in the United States or international financial markets, or any substantial change
or development involving a prospective substantial change in the United States’ or
international political, financial or economic conditions, as in the judgment of the Agent
is material and adverse and makes it impracticable to market the Shares in the manner and
on the terms described in the Prospectus or to enforce contracts for the sale of securities. |
(b) Documents
Required to be Delivered on each Issuance Notice Date. The Agent’s obligation to use its commercially reasonable efforts to
place Shares hereunder shall additionally be conditioned upon the delivery to the Agent on or before the Issuance Notice Date of a certificate
in form and substance reasonably satisfactory to the Agent, executed by the Chief Executive Officer, President or Chief Financial Officer
of the Company, to the effect that all conditions to the delivery of such Issuance Notice shall have been satisfied as at the
date of such certificate (which certificate shall not be required if the foregoing representations shall be set forth in the Issuance
Notice or in a certificate delivered pursuant to Section 4(o)).
(c) No
Misstatement or Material Omission. Agent shall not have advised the Company that the Registration Statement, the Prospectus or the
Time of Sale Information, or any amendment or supplement thereto, contains an untrue statement of fact that in the Agent’s reasonable
opinion is material, or omits to state a fact that in the Agent’s reasonable opinion is material and is required to be stated therein
or is necessary to make the statements therein not misleading.
Section 6. INDEMNIFICATION AND CONTRIBUTION
(a) Indemnification
of the Agent. The Company agrees to indemnify and hold harmless the Agent, its officers and employees, and each person, if any, who
controls the Agent within the meaning of the Securities Act or the Exchange Act against any loss, claim, damage, liability or expense,
as incurred, to which the Agent or such officer, employee or controlling person may become subject, under the Securities Act, the Exchange
Act, other federal or state statutory law or regulation, or the laws or regulations of foreign jurisdictions where Shares have been offered
or sold or at common law or otherwise (including in settlement of any litigation), insofar as such loss, claim, damage, liability or
expense (or actions in respect thereof as contemplated below) arises out of or is based upon (a) any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement, or any amendment thereto, including any information deemed
to be a part thereof pursuant to Rule 430B under the Securities Act, or the omission or alleged omission therefrom of a material
fact required to be stated therein or necessary to make the statements therein not misleading; or (b) any untrue statement or alleged
untrue statement of a material fact contained in any Free Writing Prospectus that the Company has used, referred to or filed, or is required
to file, pursuant to Rule 433(d) of the Securities Act or the Prospectus (or any amendment or supplement thereto), or the omission
or alleged omission therefrom of a material fact necessary in order to make the statements therein, in the light of the circumstances
under which they were made, not misleading, and to reimburse the Agent and each such officer, employee and controlling person for any
and all documented expenses (including the reasonable and documented fees and disbursements of counsel chosen by the Agent) as such expenses
are reasonably incurred by the Agent or such officer, employee or controlling person in connection with investigating, defending, settling,
compromising or paying any such loss, claim, damage, liability, expense or action; provided, however, that the foregoing indemnity
agreement shall not apply to any loss, claim, damage, liability or expense to the extent, but only to the extent, arising out of or based
upon any untrue statement or alleged untrue statement or omission or alleged omission made in reliance upon and in conformity with written
information furnished to the Company by the Agent expressly for use in the Registration Statement, any such Free Writing Prospectus or
the Prospectus (or any amendment or supplement thereto), it being understood and agreed that the only such information furnished by the
Agent to the Company consists of the information described in Subsection (b) below. The indemnity agreement set forth in this Section 6(a) shall
be in addition to any liabilities that the Company may otherwise have.
(b) Indemnification
of the Company, its Directors and Officers. The Agent agrees to indemnify and hold harmless the Company, each of its directors, each
of its officers who signed the Registration Statement and each person, if any, who controls the Company within the meaning of the Securities
Act or the Exchange Act against any loss, claim, damage, liability or expense, as incurred, to which the Company or any such director,
officer or controlling person may become subject, under the Securities Act, the Exchange Act, or other federal or state statutory law
or regulation, or the laws or regulations of foreign jurisdictions where Shares have been offered or sold or at common law or otherwise
(including in settlement of any litigation), arises out of or is based upon (i) any untrue statement or alleged untrue statement
of a material fact contained in the Registration Statement, or any amendment thereto, including any information deemed to be a part thereof
pursuant to Rule 430B under the Securities Act, or the omission or alleged omission therefrom of a material fact required to be
stated therein or necessary to make the statements therein not misleading; or (ii) any untrue statement or alleged untrue statement
of a material fact contained in any Free Writing Prospectus that the Company has used, referred to or filed, or is required to file,
pursuant to Rule 433(d) of the Securities Act or the Prospectus (or any amendment or supplement thereto), or the omission or
alleged omission therefrom of a material fact necessary in order to make the statements therein, in the light of the circumstances under
which they were made, not misleading; but, for each of (i) and (ii) above, only to the extent arising out of or based upon
any untrue statement or alleged untrue statement or omission or alleged omission made in reliance upon and in conformity with written
information furnished to the Company by the Agent expressly for use in the Registration Statement, any such Free Writing Prospectus or
the Prospectus (or any amendment or supplement thereto), it being understood and agreed that the only such information furnished by the
Agent to the Company consists of the information set forth in the first sentence of the ninth paragraph under the caption “Plan
of Distribution” in the Prospectus, and to reimburse the Company and each such director, officer and controlling person for any
and all documented expenses (including the reasonable and documented fees and disbursements of one counsel chosen by the Company) as
such expenses are reasonably incurred by the Company or such officer, director or controlling person in connection with investigating,
defending, settling, compromising or paying any such loss, claim, damage, liability, expense or action. The indemnity agreement set forth
in this Section 6(b) shall be in addition to any liabilities that the Agent or the Company may otherwise have.
(c) Notifications
and Other Indemnification Procedures. Promptly after receipt by an indemnified party under this Section 6 of notice of the
commencement of any action, such indemnified party will, if a claim in respect thereof is to be made against an indemnifying party under
this Section 6, notify the indemnifying party in writing of the commencement thereof, but the omission so to notify the indemnifying
party will not relieve it from any liability which it may have to any indemnified party for contribution or otherwise than under the
indemnity agreement contained in this Section 6 or to the extent it is not prejudiced as a proximate result of such failure. In
case any such action is brought against any indemnified party and such indemnified party seeks or intends to seek indemnity from an indemnifying
party, the indemnifying party will be entitled to participate in, and, to the extent that it shall elect, jointly with all other indemnifying
parties similarly notified, by written notice delivered to the indemnified party promptly after receiving the aforesaid notice from such
indemnified party, to assume the defense thereof with counsel reasonably satisfactory to such indemnified party; provided, however,
if the defendants in any such action include both the indemnified party and the indemnifying party and the indemnified party shall have
reasonably concluded that a conflict may arise between the positions of the indemnifying party and the indemnified party in conducting
the defense of any such action or that there may be legal defenses available to it and/or other indemnified parties which are different
from or additional to those available to the indemnifying party, the indemnified party or parties shall have the right to select separate
counsel to assume such legal defenses and to otherwise participate in the defense of such action on behalf of such indemnified party
or parties. Upon receipt of notice from the indemnifying party to such indemnified party of such indemnifying party’s election
so to assume the defense of such action and approval by the indemnified party of counsel, the indemnifying party will not be liable to
such indemnified party under this Section 6 for any legal or other expenses subsequently incurred by such indemnified party in
connection with the defense thereof unless (a) the indemnified party shall have employed separate counsel in accordance with the
proviso to the preceding sentence (it being understood, however, that the indemnifying party shall not be liable for the fees and expenses
of more than one separate counsel (together with local counsel), representing the indemnified parties who are parties to such action),
which counsel (together with any local counsel) for the indemnified parties shall be selected by the indemnified party (in the case of
counsel for the indemnified parties referred to in Section 6(a) and Section 6(b) above), (b) the
indemnifying party shall not have employed counsel reasonably satisfactory to the indemnified party to represent the indemnified party
within a reasonable time after notice of commencement of the action or (iii) the indemnifying party has authorized in writing the
employment of counsel for the indemnified party at the expense of the indemnifying party, in each of which cases the fees and expenses
of counsel shall be at the expense of the indemnifying party and shall be paid as they are incurred.
(d) Settlements.
The indemnifying party under this Section 6 shall not be liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a final judgment for the plaintiff, the indemnifying party agrees to indemnify
the indemnified party against any loss, claim, damage, liability or expense by reason of such settlement or judgment. Notwithstanding
the foregoing sentence, if at any time an indemnified party shall have requested an indemnifying party to reimburse the indemnified party
for fees and expenses of counsel as contemplated by Section 6(b) hereof, the indemnifying party agrees that it
shall be liable for any settlement of any proceeding effected without its written consent if (a) such settlement is entered into
more than 30 days after receipt by such indemnifying party of the aforesaid request; and (b) such indemnifying party shall
not have reimbursed the indemnified party in accordance with such request prior to the date of such settlement. No indemnifying party
shall, without the prior written consent of the indemnified party, effect any settlement, compromise or consent to the entry of judgment
in any pending or threatened action, suit or proceeding in respect of which any indemnified party is or could have been a party and indemnity
was or could have been sought hereunder by such indemnified party, unless such settlement, compromise or consent includes an unconditional
release of such indemnified party from all liability on claims that are the subject matter of such action, suit or proceeding.
(e) Contribution.
If the indemnification provided for in this Section 6 is for any reason held to be unavailable to or otherwise insufficient to
hold harmless an indemnified party in respect of any losses, claims, damages, liabilities or expenses referred to therein, then each
indemnifying party shall contribute to the aggregate amount paid or payable by such indemnified party, as incurred, as a result of any
losses, claims, damages, liabilities or expenses referred to therein (a) in such proportion as is appropriate to reflect the relative
benefits received by the Company, on the one hand, and the Agent, on the other hand, from the offering of the Shares pursuant to this
Agreement; or (b) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion
as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault
of the Company, on the one hand, and the Agent, on the other hand, in connection with the statements or omissions which resulted in such
losses, claims, damages, liabilities or expenses, as well as any other relevant equitable considerations. The relative benefits received
by the Company, on the one hand, and the Agent, on the other hand, in connection with the offering of the Shares pursuant to this Agreement
shall be deemed to be in the same respective proportions as the total gross proceeds from the offering of the Shares (before deducting
expenses) received by the Company bear to the total commissions received by the Agent. The relative fault of the Company, on the one
hand, and the Agent, on the other hand, shall be determined by reference to, among other things, whether any such untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a material fact relates to information supplied by the Company,
on the one hand, or the Agent, on the other hand, and the parties’ relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission.
The amount paid or payable
by a party as a result of the losses, claims, damages, liabilities and expenses referred to above shall be deemed to include, subject
to the limitations set forth in Section 6(b), any legal or other fees or expenses reasonably incurred by such party
in connection with investigating or defending any action or claim. The provisions set forth in Section 6(b) with
respect to notice of commencement of any action shall apply if a claim for contribution is to be made under this Section 6(e);
provided, however, that no additional notice shall be required with respect to any action for which notice has been given under
Section 6(b) for purposes of indemnification.
The Company and the Agent
agree that it would not be just and equitable if contribution pursuant to this Section 6(e) were determined by
pro rata allocation or by any other method of allocation which does not take account of the equitable considerations referred to in this
Section 6(e).
Notwithstanding the provisions
of this Section 6(e), the Agent shall not be required to contribute any amount in excess of the agent fees received
by the Agent in connection with the offering contemplated hereby. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section 6(e), each officer and employee of the Agent and each person, if any,
who controls the Agent within the meaning of the Securities Act or the Exchange Act shall have the same rights to contribution as the
Agent, and each director of the Company, each officer of the Company who signed the Registration Statement, and each person, if any,
who controls the Company within the meaning of the Securities Act and the Exchange Act shall have the same rights to contribution as
the Company.
Section 7. TERMINATION & SURVIVAL
(a) Term.
Subject to the provisions of this Section 7, the term of this Agreement shall continue from the date of this Agreement
until the end of the Agency Period, unless earlier terminated by the parties to this Agreement pursuant to this Section 7.
(b) Termination;
Survival Following Termination.
| (i) | Either party may terminate this Agreement
prior to the end of the Agency Period, by giving written notice as required by this Agreement,
upon ten (10) Trading Days’ notice to the other party; provided that, (A) if
the Company terminates this Agreement after the Agent confirms to the Company any sale of
Shares, the Company shall remain obligated to comply with Section 3(b)(v) with
respect to such Shares and (B) Section 2, Section 6,
Section 7 and Section 8 shall survive termination of this
Agreement. If termination shall occur prior to the Settlement Date for any sale of Shares,
such sale shall nevertheless settle in accordance with the terms of this Agreement. |
| (ii) | In addition to the
survival provision of Section 7(b)(i), the respective indemnities, agreements,
representations, warranties and other statements of the Company, of its officers and of the
Agent set forth in or made pursuant to this Agreement will remain in full force and effect,
regardless of any investigation made by or on behalf of the Agent or the Company or any of
its or their partners, officers or directors or any controlling person, as the case may be,
and, anything herein to the contrary notwithstanding, will survive delivery of and payment
for the Shares sold hereunder and any termination of this Agreement. |
Section 8. MISCELLANEOUS
(a) Press
Releases and Disclosure. The Company may issue a press release describing the material terms of the transactions contemplated hereby
as soon as practicable following the date of this Agreement, and may file with the Commission a Current Report on Form 8-K, with
this Agreement attached as an exhibit thereto, describing the material terms of the transactions contemplated hereby, and the Company
shall consult with the Agent prior to making such disclosures, and the parties hereto shall use all commercially reasonable efforts,
acting in good faith, to agree upon a text for such disclosures that is reasonably satisfactory to all parties hereto. No party hereto
shall issue thereafter any press release or like public statement (including, without limitation, any disclosure required in reports
filed with the Commission pursuant to the Exchange Act) related to this Agreement or any of the transactions contemplated hereby without
the prior written approval of the other party hereto, except as may be necessary or appropriate in the reasonable opinion of the party
seeking to make disclosure to comply with the requirements of applicable law or stock exchange rules. If any such press release or like
public statement is so required, the party making such disclosure shall consult with the other party prior to making such disclosure,
and the parties shall use all commercially reasonable efforts, acting in good faith, to agree upon a text for such disclosure that is
reasonably satisfactory to all parties hereto.
(b) No
Advisory or Fiduciary Relationship. The Company acknowledges and agrees that (i) the transactions contemplated by this Agreement,
including the determination of any fees, are arm’s-length commercial transactions between the Company and the Agent, (ii) when
acting as a principal under this Agreement, the Agent is and has been acting solely as a principal and is not the agent or fiduciary
of the Company, or its stockholders, creditors, employees or any other party, (iii) the Agent has not assumed nor will assume an
advisory or fiduciary responsibility in favor of the Company with respect to the transactions contemplated hereby or the process leading
thereto (irrespective of whether the Agent has advised or is currently advising the Company on other matters) and the Agent does not
have any obligation to the Company with respect to the transactions contemplated hereby except the obligations expressly set forth in
this Agreement, (iv) the Agent and its respective affiliates may be engaged in a broad range of transactions that involve interests
that differ from those of the Company, and (v) the Agent has not provided any legal, accounting, regulatory or tax advice with respect
to the transactions contemplated hereby and the Company has consulted its own legal, accounting, regulatory and tax advisors to the extent
it deemed appropriate.
(c) Research
Analyst Independence. The Company acknowledges that the Agent’s research analysts and research departments are required to
and should be independent from their respective investment banking divisions and are subject to certain regulations and internal policies,
and as such the Agent’s research analysts may hold views and make statements or investment recommendations and/or publish research
reports with respect to the Company or the offering that differ from the views of their respective investment banking divisions. The
Company understands that the Agent is a full service securities firm and as such from time to time, subject to applicable securities
laws, may effect transactions for its own account or the account of its customers and hold long or short positions in debt or equity
securities of the companies that may be the subject of the transactions contemplated by this Agreement.
(d) Notices.
All communications hereunder shall be in writing and shall be mailed, hand delivered or telecopied and confirmed to the parties hereto
as follows:
If
to the Agent:
Jefferies LLC
520 Madison Avenue
New York, NY 10022
Attention: General Counsel
with a copy (which shall not constitute
notice) to:
Mintz,
Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
One Financial Center
Boston, MA, 02111
Attention: John T. Rudy.
If to the Company:
Praxis
Precision Medicines, Inc.
99 High Street, 30th Floor
Boston,
MA 02110
Attention: Chief Financial Officer
with a copy (which shall not constitute
notice) to:
Latham & Watkins LLP
200 Clarendon Street
Boston, MA 02116
| Attention: | Peter N. Handrinos |
| | | Wesley C. Holmes |
Any party hereto may change the address for receipt
of communications by giving written notice to the others in accordance with this Section 8(d).
(e) Successors.
This Agreement will inure to the benefit of and be binding upon the parties hereto, and to the benefit of the employees, officers and
directors and controlling persons referred to in Section 6, and in each case their respective successors, and no other
person will have any right or obligation hereunder. The term “successors” shall not include any purchaser of the Shares as
such from the Agent merely by reason of such purchase.
(f) Partial
Unenforceability. The invalidity or unenforceability of any Article, Section, paragraph or provision of this Agreement shall not
affect the validity or enforceability of any other Article, Section, paragraph or provision hereof. If any Article, Section, paragraph
or provision of this Agreement is for any reason determined to be invalid or unenforceable, there shall be deemed to be made such minor
changes (and only such minor changes) as are necessary to make it valid and enforceable.
(g) Governing
Law Provisions. This Agreement shall be governed by and construed in accordance with the internal laws of the State of New York applicable
to agreements made and to be performed in such state. Any legal suit, action or proceeding arising out of or based upon this Agreement
or the transactions contemplated hereby (“Related Proceedings”) may be instituted in the federal courts of the United
States of America located in the Borough of Manhattan in the City of New York or the courts of the State of New York in each case located
in the Borough of Manhattan in the City of New York (collectively, the “Specified Courts”), and each party irrevocably
submits to the exclusive jurisdiction (except for proceedings instituted in regard to the enforcement of a judgment of any such court
(a “Related Judgment”), as to which such jurisdiction is non-exclusive) of such courts in any such suit, action or
proceeding. Service of any process, summons, notice or document by mail to such party’s address set forth above shall be effective
service of process for any suit, action or other proceeding brought in any such court. The parties irrevocably and unconditionally waive
any objection to the laying of venue of any suit, action or other proceeding in the Specified Courts and irrevocably and unconditionally
waive and agree not to plead or claim in any such court that any such suit, action or other proceeding brought in any such court has
been brought in an inconvenient forum.
(h) General
Provisions. This Agreement constitutes the entire agreement of the parties to this Agreement and supersedes all prior written or
oral and all contemporaneous oral agreements, understandings and negotiations with respect to the subject matter hereof. This Agreement
may be executed in two or more counterparts, each one of which shall be an original, with the same effect as if the signatures thereto
and hereto were upon the same instrument, and may be delivered by facsimile transmission or by electronic delivery of a portable document
format (PDF) file. Any signature to this Agreement may be delivered by facsimile, electronic mail (including pdf) or any electronic signature
complying with the U.S. federal ESIGN Act of 2000 or the New York Electronic Signature and Records Act or other transmission method and
any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes to the
fullest extent permitted by applicable law. This Agreement may not be amended or modified unless in writing by all of the parties hereto,
and no condition herein (express or implied) may be waived unless waived in writing by each party whom the condition is meant to benefit.
The Article and Section headings herein are for the convenience of the parties only and shall not affect the construction or
interpretation of this Agreement.
[Signature Page Immediately Follows]
If the foregoing is in accordance
with your understanding of our agreement, kindly sign and return to the Company the enclosed copies hereof, whereupon this instrument,
along with all counterparts hereof, shall become a binding agreement in accordance with its terms
| |
Very truly yours, |
| |
|
| |
PRAXIS PRECISION MEDICINES, INC. |
| |
|
| |
By: |
/s/ Timothy Kelly |
| |
|
Name: |
Timothy Kelly |
| |
|
Title: |
Chief Financial Officer |
The foregoing Agreement is hereby confirmed and
accepted by the Agent in New York, New York as of the date first above written.
| JEFFERIES LLC |
|
| |
|
| By: |
/s/ Michael Magarro |
|
| |
Name: |
Michael Magarro |
|
| |
Title: |
Managing Director |
|
EXHIBIT A
ISSUANCE NOTICE
[Date]
Jefferies LLC
520 Madison Avenue
New York, New York 10022
Attn: Chief Financial Officer
Reference is made to the Open Market Sale Agreement
between Praxis Precision Medicines, Inc. (the “Company”) and Jefferies LLC (the “Agent”) dated
as of November 3, 2021. The Company confirms that all conditions to the delivery of this Issuance Notice are satisfied as of the
date hereof.
Date of Delivery of Issuance Notice (determined pursuant to Section 3(b)(i)):
Issuance Amount (equal to the total Sales Price for such Shares):
| |
$ |
|
|
| |
|
|
| Number of days in selling period: |
|
|
| |
|
|
| First date of selling period: |
|
|
| |
|
|
| Last date of selling period: |
|
|
Settlement Date(s) if other than standard T+2 settlement:
Floor Price Limitation (in no event less than
$1.00 without the prior written consent of the Agent, which consent may be withheld in the Agent’s sole discretion): $
per share
Schedule A
Notice Parties
The Company
Marcio Souza
Timothy Kelly
The Agent
Michael Magarro
Jack Fabbri
Donald Lynaugh
AMENDMENT NO. 1 TO
OPEN MARKET SALE AGREEMENT
February 7, 2023
This Amendment No. 1 (“Amendment
No. 1”) amends that certain Open Market Sale AgreementSM, dated as of November 3, 2021 (the “Agreement”),
by and between Praxis Precision Medicines, Inc. (the “Company”) and Jefferies LLC, as sales agent and/or principal
(the “Agent”). Defined terms used herein and not otherwise defined shall have the meaning assigned to such terms in
the Agreement.
WITNESSETH THAT:
WHEREAS, Section 8(h) of the Agreement
permits the Company and the Agent to amend the Agreement;
WHEREAS, the Company will not be a “well-known
seasoned issuer” as such term is defined in Rule 405 under the Securities Act of 1933, as amended, upon the filing of the Annual
Report on Form 10-K for the year ended December 31, 2022; and
WHEREAS, the Company and the Agent now desire
to amend the Agreement as provided herein.
NOW, THEREFORE, in consideration of the foregoing
premises and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and the
Agent agree as follows:
1. Section 2(tt) of the Agreement
is amended and restated in its entirety as set forth below:
[Reserved.]
2. References
to the date of the Agreement in the form of Issuance Notice included as Exhibit A to the Agreement is hereby revised to read, “November 3,
2021, as amended by Amendment No. 1 thereto, dated February 7, 2023.”
3. This Amendment No. 1 shall be deemed effective
on the date first set forth above.
4. Except as amended hereby, the Agreement as
now in effect is ratified and confirmed hereby in all respects. For the avoidance of doubt, this Amendment No. 1 and all of its provisions
shall be deemed to be a part of the Agreement, as amended hereby. The Agreement as amended by this Amendment constitutes the entire agreement
of the parties hereto and supersedes all prior written or oral and all contemporaneous oral agreements, understandings and negotiations
with respect to the subject matter hereof and thereof.
5. This Amendment No. 1 shall be governed
by and construed in accordance with the internal laws of the State of New York applicable to agreements made and to be performed in such
state. Any legal suit, action or proceeding arising out of or based upon this Amendment No. 1 or the transactions contemplated hereby
may be instituted in the federal courts of the United States of America located in the Borough of Manhattan in the City of New York or
the courts of the State of New York in each case located in the Borough of Manhattan in the City of New York (collectively, the “Specified
Courts”), and each party irrevocably submits to the exclusive jurisdiction (except for proceedings instituted in regard to the
enforcement of a judgment of any such court, as to which such jurisdiction is non-exclusive) of such courts in any such suit, action or
proceeding. Service of any process, summons, notice or document by mail to such party’s address set forth in the Agreement shall
be effective service of process for any suit, action or other proceeding brought in any such court. The parties irrevocably and unconditionally
waive any objection to the laying of venue of any suit, action or other proceeding in the Specified Courts and irrevocably and unconditionally
waive and agree not to plead or claim in any such court that any such suit, action or other proceeding brought in any such court has been
brought in an inconvenient forum.
[Signature page follows.]
If the foregoing is in accordance with your understanding
of our agreement, kindly sign and return to the Company the enclosed copies hereof, whereupon this instrument, along with all counterparts
hereof, shall become a binding agreement in accordance with its terms.
| |
Very truly yours, |
| |
|
| |
PRAXIS PRECISION MEDICINES, INC. |
| |
|
| |
By: |
/s/ Timothy Kelly |
| |
|
Name: Timothy Kelly |
| |
|
Title: Chief Financial Officer |
The foregoing Amendment is hereby confirmed and
accepted by the Agent in New York, New York as of the date first above written.
| JEFFERIES LLC |
|
| |
|
| By: |
/s/ Donald Lynaugh |
|
| |
Name: Donald Lynaugh |
|
| |
Title: Managing Director |
|
Exhibit 23.2
Consent of Independent
Registered Public Accounting Firm
We consent to the reference to our firm under
the caption "Experts" in Amendment No. 2 to the Registration Statement (Form S-3 No. 333-260726) and related Prospectus of Praxis
Precision Medicines, Inc. for the registration of Common Stock, Preferred Stock, Debt Securities, Warrants, and Units and to the incorporation
by reference therein of our report dated February 7, 2023, with respect to the consolidated financial statements of Praxis Precision Medicines,
Inc. included in its Annual Report (Form 10-K) for the year ended December 31, 2022, filed with the Securities and Exchange Commission.
/s/ Ernst & Young LLP
Boston, Massachusetts
February 7, 2023
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