Filed
pursuant to Rule 424(b)(5)
Registration
No. 333-215671
The information in this preliminary prospectus supplement is not
complete and may be changed. A registration statement relating to
these securities has been declared effective by the Securities and
Exchange Commission. This preliminary prospectus supplement and the
accompanying prospectus are not an offer to sell these securities,
and we are not soliciting offers to buy these securities in any
jurisdiction where the offer or sale is not permitted.
SUBJECT TO COMPLETION, DATED FEBRUARY 25, 2019
PRELIMINARY
PROSPECTUS SUPPLEMENT
(To
Prospectus Dated July 27, 2017)
Shares
Common Stock
____________________
We are offering
shares of our common stock
pursuant to this prospectus supplement
and accompanying prospectus.
Our
common stock is listed on the Nasdaq Capital Market under the
symbol “VTGN.” On February 22, 2019, the closing price
of our common stock on the Nasdaq Capital Market was $1.38 per
share.
____________________
Investing in our common stock involves a high degree of risk. See
“Risk
Factors” beginning on
page S-10 of this prospectus supplement and under similar
headings in the documents incorporated by reference into this
prospectus supplement.
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Underwriting
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(1)
See “Underwriting”
for additional information regarding underwriting
compensation.
The
underwriters may also purchase up to an
additional shares of
common stock from us, at the public offering price, less the
underwriting discount, within 30 days from the date of this
prospectus supplement.
As
of February 25, 2019, the aggregate market value of our outstanding
common stock held by non-affiliates was $54,393,471, based on
31,120,465 shares of outstanding common stock, of which 30,905,381
shares are held by non-affiliates, and a per share price of $1.76,
which was the closing price of our common stock as quoted on the
Nasdaq Capital Market on February 12, 2019. We have not offered any
securities pursuant to General Instruction I.B.6. of
Form S-3 in the prior 12-month period that ends
on and includes the date of this prospectus
supplement.
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.
Delivery of the
shares is expected to be made on or
about
, 2019.
William Blair
____________________
The
date of this prospectus supplement is
, 2019.
Table of Contents
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-i-
This prospectus supplement and the accompanying
prospectus form a part of a registration statement on Form S-3 that
we filed with the Securities and Exchange Commission (the
SEC) utilizing a “shelf” registration
process. This document is in two parts. The first part is the
prospectus supplement, which describes the specific terms of this
offering. The second part, the accompanying prospectus, provides
more general information about the securities we may offer from
time to time, some of which may not apply to the securities offered
by this prospectus supplement. Generally, when we refer to this
prospectus, we are referring to both parts of this document
combined. Before you invest, you should carefully read this
prospectus supplement, the accompanying prospectus, all information
incorporated by reference herein and therein, and the additional
information described under “Where You Can Find More
Information” on page S-33
of this prospectus supplement. These documents contain information
you should consider when making your investment decision. This
prospectus supplement may add, update or change information
contained in the accompanying prospectus. To the extent that any
statement that we make in this prospectus supplement is
inconsistent with statements made in the accompanying prospectus or
any documents incorporated by reference therein, the statements
made in this prospectus supplement will be deemed to modify or
supersede those made in the accompanying prospectus and such
documents incorporated by reference therein.
Neither
we nor the underwriters have authorized any other person to provide
you with any information that is different. We are offering to
sell, and seeking offers to buy, our securities only in
jurisdictions where offers and sales are permitted. The
distribution of this prospectus supplement and the accompanying
prospectus and the offering of the securities in certain
jurisdictions may be restricted by law. Persons outside the United
States who come into possession of this prospectus supplement
and/or the accompanying prospectus must inform themselves about,
and observe any restrictions relating to, the offering of the
securities and the distribution of this prospectus supplement
and/or the accompanying prospectus outside the United States. This
prospectus supplement and the accompanying prospectus do 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 prospectus by
any person in any jurisdiction in which it is unlawful for such
person to make such an offer or solicitation.
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 the accompanying
prospectus 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.
Unless the context otherwise requires, references
in this prospectus supplement to “we”, “us” and “our” refer to VistaGen Therapeutics,
Inc.
S-1
This summary highlights selected information about our company,
this offering and information appearing elsewhere in this
prospectus supplement, in the accompanying prospectus, in the
documents we incorporate by reference and in any free writing
prospectus that we have authorized for use in connection with this
offering. This summary is not complete and does not contain all the
information that you should consider before investing in our
securities. You should read this entire prospectus supplement and
the accompanying prospectus carefully, including the “Risk
Factors” contained in this prospectus supplement, the
accompanying prospectus and the financial statements and the notes
thereto incorporated by reference in this prospectus supplement and
the accompanying prospectus and the other information that we
incorporated by reference herein, including our Annual Report on
Form 10-K and Quarterly Reports on Form 10-Q we
file from time to time.
Business Overview
We are a clinical-stage biopharmaceutical company
focused on developing new generation medicines for multiple central
nervous system (CNS) diseases and disorders with high unmet need. We
believe each of our CNS pipeline candidates, AV-101, PH94B and
PH10, has the potential to be administered at home and provide
rapid-onset therapeutic benefits without psychological or other
side effects and safety concerns associated with many current and
potential new generation medications for CNS diseases and
disorders, such as major depressive disorder (MDD) and social anxiety disorder (SAD), affecting millions of individuals in the United
States and foreign markets. Each drug candidate in our pipeline is
either currently in or has successfully completed Phase 2 clinical
development. AV-101, our oral NMDA receptor glycine B antagonist,
is in Phase 2 development, initially as an adjunctive treatment of
MDD. The FDA has granted Fast Track designation for
development of AV-101 as both a potential adjunctive treatment of
MDD and as a non-opioid treatment for neuropathic pain. PH94B, our
potentially first-in-class, rapid-onset neuroactive steroid nasal
spray for as-needed (PRN) treatment of SAD, has completed a successful
Phase 2 clinical program, a successful pilot Phase 3 study and is
now being prepared for pivotal Phase 3 clinical development, with
potential to be the first FDA-approved PRN treatment of SAD. PH10,
our potentially first-in-class, rapid-onset neuroactive steroid
nasal spray for MDD, has completed an initial successful
exploratory Phase 2 clinical study and is now being prepared for a
multi-dose follow-on Phase 2 clinical study in
MDD.
AV-101
AV-101, an investigational prodrug candidate in
Phase 2 clinical development, is an orally bioavailable NMDAR GlyB
(N-methyl-D-aspartate receptor glycine B) antagonist in development
as a potential new treatment for multiple CNS indications with high
unmet need, including MDD, neuropathic pain (NP), levodopa-induced dyskinesia associated with
Parkinson’s disease therapy (PD LID) and suicidal ideation (SI). In two NIH-funded AV-101 Phase 1 clinical
safety studies, AV-101 was well tolerated in healthy subjects
at all doses tested, in both single-ascending and
multiple-ascending dose studies, without causing any observed
psychological or sedative side effects. The United States Food and
Drug Administration (FDA) has granted Fast Track designation for
development of AV-101 as a potential new treatment for adjunctive
treatment of MDD and for treatment of NP.
Major Depressive Disorder
Major depressive disorder is a serious
biologically-based mood disorder, affecting approximately 16
million adults in the United States according to the U.S. National
Institute of Mental Health (the NIMH). The CDC estimates that one in four women and
one in six men in the United States have been diagnosed with
MDD.
Individuals diagnosed with MDD exhibit
depressive symptoms, such as a depressed mood or a loss of interest
or pleasure in daily activities, for more than a two-week period,
as well as impaired social, occupational, educational or other
important functioning which has a negative impact on their quality
of life. According to the U.S. Centers for Disease Control and
Prevention (CDC), about one in eight Americans aged 12 and over
takes an FDA-approved antidepressant, and there are an estimated
11.6 million drug-treated patients suffering from MDD. While
current FDA-approved antidepressants are widely used, the STAR*D
study, the largest clinical trial conducted in depression to date,
found that approximately two-thirds of patients with MDD do not
respond to their initial antidepressant treatment, of which
approximately 5.1 million patients remain resistant to treatment
following the second antidepressant treatment. According
to the NIMH, inadequate response to current antidepressants is
among the key reasons MDD is a leading public health concern in the
United States, creating a significant unmet medical need for new
agents with fundamentally different mechanisms of
action.
S-2
We believe oral AV-101 has potential for multiple
applications in global depression markets if successfully developed
and approved. AV-101 has potential as an adjunctive therapy to (i)
augment current antidepressants approved by the FDA for patients
with MDD who have an inadequate response to standard
antidepressants (SSRIs and SNRIs) and (ii) prevent relapse of MDD
following successful intravenous or intranasal treatment with
ketamine hydrochloride (ketamine), a member of a class of drugs that block NMDA
receptor activity. Given its excellent tolerability profile,
we believe it may also have potential as a first-line monotherapy
conveniently administered at home. Ketamine is an FDA-approved,
rapid-acting general anesthetic currently administered only by
intravenous or intramuscular injection. The off-label use of
ketamine in treatment-resistant depression (TRD), defined as those patients
who have failed at least two prior
treatment attempts involving current antidepressants, has been
studied in numerous clinical trials conducted by depression experts
at Yale University and other academic institutions, as well as at
the NIMH, including by Dr. Carlos Zarate, Jr., the NIMH’s
Chief of Experimental Therapeutics & Pathophysiology Branch and
of the Section on Neurobiology and Treatment of Mood and Anxiety
Disorders. In randomized, placebo-controlled, double
blind clinical trials reported by Dr. Zarate and others at the
NIMH, a single sub-anesthetic dose of ketamine (0.5 mg/kg over 40
minutes) produced robust and rapid (within twenty-four hours)
antidepressant effects in MDD patients who had not responded to at
least two prior treatment attempts involving standard
antidepressants. These results were in sharp contrast to
the very slow-onset activity of standard antidepressants,
which usually require many weeks or more of chronic usage to
achieve similar antidepressant effects. We believe AV-101 may
have potential to deliver fast-acting antidepressant effects
similar to ketamine, but as an oral therapy on an at-home basis,
without the requirement for administration in a medical setting or
the required use of needles, and without causing psychological,
sedative or other side effects and safety concerns associated with
ketamine and certain other fast-acting newer generation
antidepressant drug candidates.
AV-101 is currently in Phase 2 clinical
development in the United States for MDD. ELEVATE is our ongoing
Phase 2 multi-center, multi-dose, double blind, placebo-controlled
clinical study to evaluate the efficacy and safety of AV-101 as a
new generation adjunctive treatment of MDD in adult patients with
an inadequate therapeutic response to current FDA-approved
antidepressants (the ELEVATE
Study). Dr. Maurizio Fava,
Professor of Psychiatry at Harvard Medical School and Director,
Division of Clinical Research, Massachusetts General Hospital
(MGH) Research Institute, is the Principal
Investigator of the ELEVATE Study assisting our internal team,
which is led by Mark Smith, MD, PhD, our Chief Medical
Officer. Dr. Fava was the co-Principal Investigator with Dr.
A. John Rush of the STAR*D study, the findings of which were
published in journals such as the New England Journal of
Medicine (NEJM) and the Journal of the American
Medical Association (JAMA).
AV-101 is also the subject of a small randomized,
double-blind, placebo-controlled cross-over Phase 2 clinical study
being conducted and funded by the NIMH, pursuant to our Cooperative
Research and Development Agreement (CRADA) with the NIMH (the NIMH Study). Dr. Carlos Zarate, Jr., Chief of the
NIMH’s Experimental Therapeutics & Pathophysiology Branch
and its Section on Neurobiology and Treatment of Mood and Anxiety
Disorders, is acting as the Principal Investigator for the NIMH
Study. This trial is focused on the pharmacodynamic and potential
therapeutic effects in such patients using standard measurements of
clinical responses and measurement of responses of a number of
biomarkers associated with engagement of the NMDA receptor thought
to be associated with clinical response. Dr. Zarate and the NIMH
were among the first in the U.S. to conduct clinical studies in MDD
patients with inadequate responses to multiple current FDA-approved
antidepressants that demonstrated the robust, fast-acting
antidepressant effects of ketamine within twenty-four hours of a
single sub-anesthetic dose administered by IV
injection.
The
FDA has granted Fast Track designation for development of
AV-101 as a potential new adjunctive treatment of MDD.
S-3
Suicidal Ideation
According to the World Health Organization
(WHO), every year approximately 800,000 people
worldwide take their own life and many more attempt suicide.
The CDC views suicide as a major public health concern in the
United States as rates of suicide have been increasing for both men
and women and across all age groups. Suicide is the 10th leading
cause of death in the U.S. and is one of just three leading causes
that are on the rise. According to experts in the field of
suicidal ideation, characterized as suicidal thoughts and behavior,
the number of Americans who die by suicide is, since 2010, higher
than those who die in motor vehicle accidents. People of all
genders, ages, and ethnicities can be at risk for suicide. Suicidal
ideation is complex and there is no single cause. The NIMH
attributes many different factors contribute to someone making a
suicide attempt, including, but not limited to, depression, other
mental health disorders or substance abuse
disorder. Additionally, according to reports released by the
United States Department of Veterans Affairs (VA), the U.S. Military Veteran population is at
significantly higher risk for suicide than the general
population.
We are collaborating with Baylor College of
Medicine (Baylor) and the VA on a small Phase 1b clinical trial of
AV-101 involving healthy volunteer U.S. Military Veterans from
either Operation Enduring Freedom, Operation Iraqi Freedom or
Operation New Dawn (the Baylor
Study). The Baylor Study is a
randomized, double-blind, placebo-controlled cross-over study
designed as a target engagement study as the first-step in our
plans to test potential anti-suicidal effects of AV-101 in U.S.
Military Veterans. Dr. Marijn Lijffijt of Baylor is the Principal
Investigator of the Baylor Study. VistaGen and the VA entered into
a Material Transfer Cooperative Research and Development Agreement
(MT
CRADA) regarding clinical trial
material for the Baylor Study. Government funding from the VA is
being provided for substantially all other study
costs.
Neuropathic Pain
Neuropathic
pain, a complex, chronic pain state affecting millions of
Americans, results from problems with signals from nerves. The
American Chronic Pain Association has identified various causes of
NP, including tissue injury, nerve damage or disease, diabetes,
infection, toxins, certain types of drugs, such as antivirals and
chemotherapeutic agents, certain cancers, and even chronic alcohol
intake. With NP, damaged, dysfunctional or injured nerve fibers
send incorrect signals to other pain centers and impact nerve
function both at the site of injury and areas around the injury.
Unfortunately, many NP treatments on the market today have side
effects, including anxiety, depression, dizziness, cognitive
impairment and/or sedation.
The
effects of AV-101 as a potential new treatment for NP were assessed
in published peer-reviewed preclinical studies involving four
well-established models of pain. In
these studies, AV-101 was observed to have robust, dose-dependent
anti-nociceptive effects, as measured by dose-dependent reversal
of NP in the Chung (nerve ligation), formalin and carrageenan
thermal models in rats,
and was well-tolerated. The
publication, titled: “Characterization of the
effects of L-4-chlorokynurenine on nociception in
rodents,” by lead author,
Tony L. Yaksh, Ph.D., Professor in Anesthesiology at the University
of California, San Diego, was published in The Journal of
Pain in April 2017 (J
Pain. 18:1184-1196, 2017)). Gabapentin, an FDA-approved
anticonvulsant, has been associated with sedation and mild
cognitive impairment in third party literature and is often
prescribed for NP. Other commonly prescribed medications for NP
include drugs targeting opioid receptors in the brain.
Unfortunately, misuse of such drugs can lead to a significantly
increased risk of addiction, and, we believe, their therapeutic
utility for neuropathic pain is unclear. We are planning to advance
AV-101 into an exploratory Phase 2a clinical study, subject to
securing sufficient capital, to assess its potential as a new oral
non-opioid treatment to reduce debilitating NP, as well as its
potential to avoid sedative side effects and cognitive impairment
that have been observed in third party literature to be associated
with other NP treatments, and to reduce the risk of addiction
associated with pain medications targeting opioid
receptors.
The
FDA has granted Fast Track designation for development of
AV-101 as a potential new, non-opioid treatment of NP.
S-4
Parkinson’s Disease Levodopa-Induced Dyskinesia
Parkinson's disease (PD) is a chronic, progressive motor disorder that
causes tremors, rigidity, slowed movements and postural
instability. The most commonly-prescribed treatments for PD are
levodopa-based therapies. Unfortunately, abnormal involuntary
movements, called dyskinesias, gradually emerge as a prominent
side-effect in response to previously beneficial doses of
levodopa. PD LID can be
severely disabling, rendering patients unable to perform routine
daily tasks.
In
a preclinical monkey model of PD, AV-101 resulted in a 30%
reduction of the mean dyskinesia score associated with PD LID.
Importantly, AV-101 did not reduce the anti-parkinsonian
therapeutic benefit of levodopa. Moreover, the duration of levodopa
response and delay to levodopa effect were not affected by
treatment with AV-101. We believe AV-101 has potential to
reduce troublesome dyskinesia experienced by many patients with PD
as a result of their levodopa therapy, but without interfering with
levodopa or causing side effects resulting from certain current PD
LID treatments, such as amantadine, including hallucinations,
dizziness, dry mouth, swelling of legs and feet, constipation and
falls. We are planning to advance clinical development of AV-101
for PD LID in an exploratory Phase 2a clinical study, subject to
securing sufficient capital, as our next initiative in PD
LID.
Intellectual Property
We have developed a portfolio of intellectual
property (IP) assets around AV-101, which involves obtaining
patents and protecting trade secrets. In addition to these IP
assets, we plan to seek regulatory exclusivity for the use of
AV-101, with initial emphasis on treating depression as our lead
indication in clinical development. These two approaches to
obtaining exclusivity exist separately in the US and in several
other countries and would be expected to provide complementary
protection in countries where they are
available.
AV-101
was not itself patent protected as a chemical compound and a
patent, describing pharmaceutical compositions made with AV-101,
and which was formerly licensed by VistaGen, has expired. As part
of our strategy to seek and secure broad commercial exclusivity for
AV-101, we primarily have pursued patents related to novel
therapeutic uses of AV-101 in major pharmaceutical markets,
including the U.S., Europe, and other selected major pharmaceutical
markets, including China, Japan and Korea. For example, some of our
granted AV-101 patents in the U.S. and Europe, and our pending
patent applications in the U.S. and multiple additional markets
relate to the treatment of depression and others relate to the
treatment of additional CNS diseases and disorders, including,
among others, Parkinson’s disease levodopa-induced dyskinesia
and the management of certain types of neuropathic pain including,
but not limited to hyperalgesia.
In
addition to our U.S. patent relating to the treatment of depression
with AV-101, we were successful in the U.S. in obtaining a patent
related to certain specific oral unit dose formulations of AV-101
with a similar expression in the claims referring to efficacy in
treating depression. We also have been granted patents and are
pursuing pending applications that involve methods of production of
AV-101. We expect that our granted patents will not begin to expire
until 2034, and we plan to seek patent term extensions in places,
such as the U.S., Europe and Japan, where they are
available.
As
mentioned above, a complementary component of our plan is to obtain
regulatory exclusivity for approved therapeutic indications for
AV-101. For example, the FDA’s New Drug Product
Exclusivity is available for NCEs such as AV-101, which have not
been previously approved by the FDA. This provides the holder
of an FDA-approved NDA with up to five years of protection from
competition in the U.S. marketplace from generic versions of the
same product. As applicable, we will pursue similar types of
regulatory exclusivity in other regions, such as Europe, and in
certain other countries.
There
is no guarantee that we will be successful in obtaining any
additional patents related to AV-101 in the U.S., Europe, or any
other country, or that if we are successful in obtaining any
patents that we would also be successful in protecting those
patents against challengers or in enforcing them to stop
infringement. Outside the U.S. and Europe, we are pursuing patent
rights in a limited number of countries that we believe are the
major markets for pharmaceuticals where having patent rights should
substantially facilitate commercialization of AV-101.
S-5
PH94B
In September 2018, we acquired, on a non-cash
basis through the issuance of unregistered shares of our common
stock, a license from Pherin Pharmaceuticals, Inc.
(Pherin) giving us the exclusive worldwide rights to
develop and commercialize PH94B, a rapid-onset neurosteroid nasal
spray with potential to be the first FDA-approved PRN treatment for
SAD.
PH94B is a synthetic investigational neuroactive
steroid for which Phase 2 clinical data showed that the product was
well tolerated and demonstrated a rapid onset of effect, as
measured by the Subjective Units of Distress (SUD) and the Liebowitz Social Anxiety Scale
(LSAS) in SAD, a social phobia that affects as many as
22 million American adults according to the NIMH. SAD is
characterized by an intense and persistent fear of embarrassment,
humiliation, judgment and rejection in everyday social or
performance situations, leading to avoidance of anxiety and
fear-producing social situations when possible. SAD has a
significant impact on the individual’s employment, social
activities and overall quality of life. According to the NIMH, an
estimated 7% of the U.S. population suffers from SAD. SAD is
commonly treated chronically with antidepressants, which have slow
onset of effect (several weeks or months) and known side effects
that may make them unattractive to individuals intermittently or
episodically affected by SAD.
Administered
as a nasal spray, PH94B is designed to act locally on peripheral
nasal chemosensory receptors to trigger rapid activation of the
limbic system areas of the brain associated with SAD. In prior
clinical studies, PH94B demonstrated rapid (10-15 minutes) anxiety
reduction for subjects with SAD, measured by the SUD and LSAS, and
was not observed to be addictive, sedative or have other adverse
events. Benzodiazepines and beta blockers, which are currently
prescribed off-label to treat SAD, have been found in third party
literature to have addictive or sedative properties, and have other
adverse effects when used to treat SAD.
Based
on clinical studies in which PH94B was observed to have rapid onset
of effect on anxiety reduction, as measured by the SUD and LSAS,
and to be well-tolerated, and in light of its novel route of
administration and on-demand dosing design, we believe PH94B has
potential to be the first FDA-approved medication for long-term PRN
treatment of individuals with SAD.
PH10
In October 2018, we acquired, on a non-cash basis
through the issuance of unregistered shares of our common stock, a
second license from Pherin giving us the exclusive worldwide rights
to develop and commercialize PH10, a synthetic investigational
neuroactive steroid nasal spray for which exploratory Phase 2
clinical data showed that it was well tolerated and demonstrated a
rapid onset of antidepressant effects. PH10 is designed to bind
locally on nasal chemosensory receptors and trigger responses in
the hypothalamus, amygdala, prefrontal cortex and hippocampus
affecting depression. It is believed that PH10 may initiate nerve
impulses that follow defined pathways to directly affect brain
function. In a small exploratory Phase 2a study in patients with
MDD, PH10 showed a rapid-onset antidepressant effect, as measured
by the Hamilton Depression Rating Scale (HAM-D),
without psychological side effects or safety concerns. PH10 is a
new generation antidepressant with a mechanism of action that is
fundamentally different from all current antidepressants. As with
AV-101, we believe PH10 intranasal has potential for multiple
applications in global depression markets, as a stand-alone first
line therapy and as an adjunctive therapy, if successfully
developed and approved. In addition to its potential as a
first-line monotherapy administered conveniently at-home, we
believe PH10 has potential as an adjunctive therapy to (i) augment
current antidepressants approved by the FDA for patients with MDD
who have an inadequate response to standard antidepressants (SSRIs
and SNRIs), and (ii) prevent relapse of MDD following successful
treatment, with either intravenously- or intranasally-administered
ketamine.
S-6
VistaStem
In addition to our CNS business, we have two
additional programs through our wholly-owned subsidiary VistaGen
Therapeutics, Inc., a California corporation, dba VistaStem
Therapeutics (VistaStem). VistaStem is focused on applying stem cell
technology to rescue, develop and commercialize (i) proprietary new
chemical entities (NCEs) for CNS and other diseases, and (ii)
regenerative medicine (RM) involving stem cell-derived blood, cartilage,
heart and liver cells. Our internal drug rescue programs are
designed to utilize CardioSafe
3D, our customized cardiac
bioassay system, to develop small molecule NCEs for our CNS
pipeline or out-licensing. We have exclusively sublicensed to
BlueRock Therapeutics LP, a next generation cell therapy and RM
company established by Bayer and Versant Ventures
(BlueRock
Therapeutics), rights to
certain proprietary technologies relating to the production of
cardiac stem cells for the treatment of heart disease
(the BlueRock
Agreement). In a manner
similar to the BlueRock Agreement, we may pursue additional
VistaStem collaborations or licensing transactions involving stem
cell-derived blood, cartilage, and/or liver cells RM
applications.
Corporate Information
VistaGen Therapeutics,
Inc., a Nevada corporation, is the parent of VistaGen Therapeutics,
Inc. (dba VistaStem Therapeutics, Inc.), a wholly owned California
corporation founded in 1998. Our principal executive offices are
located at 343 Allerton Avenue, South San Francisco, California
94080, and our telephone number is (650) 577-3600. Our website
address is www.vistagen.com.
The information contained on our website is not part of this
prospectus supplement or the accompanying prospectus. We have
included our website address as a factual reference and do not
intend it to be an active link to our website.
S-7
THE OFFERING
|
Issuer
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VistaGen Therapeutics, Inc.
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Common Stock Offered by Us
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shares
(or
shares if the underwriters exercise their option to purchase
additional shares in full).
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Option to Purchase Additional Shares
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We have granted the underwriters a 30-day option to purchase up
to additional shares of common stock
at the public offering price, less underwriting discounts and
commissions.
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Common Stock to be Outstanding Immediately After this
Offering
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shares
(or shares if the underwriters exercise
their option to purchase additional shares in full).
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Use of Proceeds
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We currently intend to use the net proceeds from the sale of the
securities offered by this prospectus supplement to fund continued
development of our AV-101, PH94B and PH10 programs, and for general
research and development, working capital and general corporate
purposes. See “Use of
Proceeds” on page
S-14.
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Risk Factors
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Investing in our common shares involves a high degree of risk. For
a discussion of factors that you should consider before buying our
securities, see the information under “Risk
Factors” in this
prospectus supplement and under similar headings in the documents
incorporated by reference into this prospectus
supplement.
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Listing
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Our common stock is listed on the Nasdaq Capital Market under the
symbol “VTGN.”
There is no established public trading market for the warrants
being offered by us in this offering and we do not intend to have
the warrants listed on a national securities exchange or any other
recognized trading system in the future. Without an active market,
the liquidity of any warrants sold by means of this prospectus
supplement and accompanying prospectus will be
limited.
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S-8
The
number of shares of our common stock that will be outstanding
immediately after the offering is based on 31,120,465 shares
outstanding as of February 20, 2019. Unless we specifically state
otherwise, the share information in this prospectus supplement
excludes:
●
6,628,588 shares of common stock reserved
for issuance upon exercise of outstanding stock options under our
Amended and Restated 2016 Stock Incentive Plan, with a weighted
average exercise price of $1.48 per share;
●
2,607,162 shares of common stock reserved
for future issuance in connection with future grants under our
Amended and Restated 2016 Stock Incentive Plan;
●
21,499,955 shares of common stock that have
been reserved for issuance upon exercise of outstanding warrants,
with a weighted average exercise price of $2.54 per
share;
●
750,000 shares of
common stock reserved for issuance upon conversion of 500,000
shares our Series A Preferred Stock (Series A Preferred);
●
1,160,240 shares of
common stock reserved for issuance upon conversion of 1,160,240
shares of our Series B 10% Convertible Preferred Stock
(Series B Preferred) and
2,344,720 shares of common stock reserved for issuance as payment
of accrued dividends on outstanding shares of Series B
Preferred; and
●
2,318,012 shares of
common stock reserved for issuance upon conversion of 2,318,012
shares of our Series C Convertible Preferred Stock (Series C Preferred).
Unless
otherwise indicated, this prospectus supplement reflects and
assumes no exercise by the underwriters of their option to purchase
additional shares of common stock and no exercise and/or conversion
of any outstanding derivative securities as of February 20,
2019.
S-9
RISK FACTORS
Our Annual Report on Form 10-K for the fiscal year ended March 31,
2018 and our Quarterly Report on Form 10-Q for the quarters ended
June 30, 2018, September 30, 2018 and December 31, 2018, which are
incorporated by reference into this prospectus supplement, as well
as our other filings with the SEC, include material risk factors
relating to our business. Those risks and uncertainties and the
risks and uncertainties described below are not the only risks and
uncertainties that we face. Additional risks and uncertainties that
are not presently known to us or that we currently deem immaterial
or that are not specific to us, such as general economic
conditions, may also materially and adversely affect our business
and operations. If any of those risks and uncertainties or the
risks and uncertainties described below actually occurs, our
business, financial condition or results of operations could be
harmed substantially. In such a case, you may lose all or part of
your investment. You should carefully consider the risks and
uncertainties described below and those risks and uncertainties
incorporated by reference into this prospectus supplement, as well
as the other information included in this prospectus supplement,
before making an investment decision with respect to our common
stock.
Risks Related to this Offering
Our management will have broad discretion in the use of the net
proceeds from this offering and may allocate the net proceeds from
this offering in ways that you and other stockholders may not
approve.
Our management will have broad discretion in the
use of the net proceeds, including for any of the purposes
described in the section entitled “Use of
Proceeds,” and you will
not have the opportunity as part of your investment decision to
assess whether the net proceeds are being used appropriately.
Because of the number and variability of factors that will
determine our use of the net proceeds from this offering, their
ultimate use may vary substantially from their currently intended
use. The failure of our management to use these funds effectively
could harm our business. Pending their use, we may invest the net
proceeds from this offering in short- and intermediate-term,
interest-bearing obligations, investment-grade instruments,
certificates of deposit or direct or guaranteed obligations of the
U.S. government. These investments may not yield a favorable return
to our stockholders.
If you purchase shares of our common stock sold in this offering,
you will experience immediate and substantial dilution in your
investment. In addition, we may issue additional equity or
equity-linked securities in the future, which may result in
additional dilution to you.
The price per share of our common stock being offered
may be higher than the net tangible book value per share of our
outstanding common stock prior to this offering. Based on the
public offering price of $ per
share and our net tangible book value as of December 31, 2018 of
approximately $0.05 per share, if you purchase shares of common
stock in this offering, you will suffer immediate and substantial
dilution of $ per share,
representing the difference between the public offering price per
share and the net tangible book value per share of our common stock
as of December 31, 2018 after giving effect to this offering. See
the section entitled “Dilution” below for a more detailed discussion of
the dilution you will incur if you purchase common stock in this
offering.
In
addition, we expect that significant additional capital will be
needed in the future to continue our planned operations. To the
extent that we raise additional capital by issuing equity
securities, our existing shareholders’ ownership may
experience substantial dilution, and the terms of these securities
may include liquidation or other preferences that adversely affect
your rights as a common shareholder.
Sales of a
substantial number of shares of our common stock, or the perception
that such sales may occur, may adversely impact the price of our
common stock.
Sales of a substantial number of shares of our
common stock in the public market could occur at any time. These
sales, or the perception that such sales may occur, may adversely
impact the price of our common stock, even if there is no
relationship between such sales and the performance of our
business. As of February 20, 2019, we have 31,120,465 shares of
common stock outstanding, as well as outstanding options to
purchase an aggregate of 6,628,588 shares of our common stock at a weighted average
exercise price of $1.48 per share, up to 4,228,252 shares of common
stock issuable upon conversion of outstanding shares of our
preferred stock, up to 2,344,720 shares of common stock reserved
for issuance as payment of accrued dividends on outstanding shares
of preferred stock, and outstanding warrants to purchase up to an
aggregate of 21,499,955 shares of our common stock at a weighted
average exercise price of $2.54 per share. The exercise and/or
conversion of such outstanding derivative securities may result in
further dilution of your investment.
S-10
Because we have no current plans to pay cash dividends on our
common stock for the foreseeable future, you may not receive any
return on investment unless you sell your common stock for a price
greater than that which you paid for it.
We
intend to retain future earnings, if any, for future operations and
expansion of our business and have no current plans to pay any cash
dividends for the foreseeable future. The declaration, amount and
payment of any future dividends on shares of common stock will be
at the sole discretion of our Board of Directors. Our Board of
Directors may take into account general and economic conditions,
our financial condition and results of operations, our available
cash and current and anticipated cash needs, capital requirements,
contractual, legal, tax and regulatory restrictions, implications
on the payment of dividends by us to our stockholders or by our
subsidiaries to us and such other factors as our Board of Directors
may deem relevant. In addition, our ability to pay dividends may be
limited by covenants in connection with any indebtedness we or our
subsidiaries may incur. As a result, you may not receive any return
on an investment in our common stock unless you sell our common
stock for a price greater than that which you paid for
it.
This offering could result in a significant limitation on our
ability to utilize our net operating loss carryforwards to offset
future taxable income.
As of March 31, 2018, we had federal and state net
operating loss carryforwards, or NOLs, of approximately $88.5
million and $63.5 million, respectively, which begin to expire in
our fiscal year ending March 31, 2019. Under Section 382 of the
Internal Revenue Code of 1986, as amended (the Code) changes in our ownership may limit the amount of
our net operating loss carryforwards that could be utilized
annually to offset our future taxable income, if any. This
limitation would generally apply in the event of a cumulative
change in ownership of our stock (for Code Section 382 purposes) of
more than 50% within a three-year period. Any such limitation may
significantly reduce our ability to utilize our net operating loss
carryforwards and tax credit carryforwards before they expire and
could have a material adverse effect on our results of operations
in future years. We have not assessed whether such an ownership
change has previously occurred and it is possible that this
offering could result in an ownership change.
If securities or industry analysts do not publish research or
publish inaccurate or unfavorable research about our business, our
stock price and trading volume could decline.
The trading market for our common stock depends in
part on the research and reports that securities or industry
analysts publish about us or our business. We currently have
research coverage by three securities and industry analysts. If one or more
of the analysts who covers us downgrades our stock or publishes
inaccurate or unfavorable research about our business, our stock
price would likely decline. If one or more of these analysts ceases
coverage of us or fails to publish reports on us regularly, demand
for our stock could decrease, which could cause our stock price and
trading volume to decline.
S-11
CAUTIONARY
NOTES REGARDING FORWARD-LOOKING
STATEMENTS
This
prospectus supplement contains forward-looking statements that
involve substantial risks and uncertainties. All statements
contained in this prospectus supplement and the accompanying
prospectus, other than statements of historical facts, are
forward-looking statements including statements regarding our
strategy, future operations, future financial position, future
revenue, projected costs, prospects, plans, objectives of
management and expected market growth. These statements involve
known and unknown risks, uncertainties and other important factors
that may cause our actual results, performance or achievements to
be materially different from any future results, performance or
achievements expressed or implied by the forward-looking
statements.
The
words “anticipate,” “believe,”
“estimate,” “expect,” “intend,”
“may,” “plan,” “predict,”
“project,” “target,”
“potential,” “will,” “would,”
“could,” “should,” “continue,”
and similar expressions are intended to identify forward-looking
statements, although not all forward-looking statements contain
these identifying words. These forward-looking statements include,
among other things, statements about:
●
the
availability of capital to satisfy our working capital
requirements;
●
the
accuracy of our estimates regarding expenses, future revenues and
capital requirements;
●
our plans to develop and commercialize our any of our current
product candidates;
●
our
ability to initiate and complete our clinical trials and to advance
our product candidates into additional clinical trials, including
pivotal clinical trials, and successfully complete such clinical
trials;
●
regulatory
developments in the U.S. and foreign countries;
●
the
performance of the NIMH, our third-party contractors involved with
the manufacturer and production of our drug candidates for
nonclinical and clinical development activities, contract research
organizations and other third-party nonclinical and clinical
development collaborators and regulatory service
providers;
●
our
ability to obtain and maintain intellectual property protection for
our core assets;
●
the
size of the potential markets for our product candidates and our
ability to serve those markets;
●
the
rate and degree of market acceptance of our product candidates for
any indication once approved;
●
the
success of competing products and product candidates in development
by others that are or become available for the indications that we
are pursuing;
●
the
loss of key scientific, clinical and nonclinical development,
and/or management personnel, internally or from one of our
third-party collaborators; and
●
other risks and uncertainties, including
those described under Item
1A, “Risk
Factors,” in our Annual
Report on Form 10-K for the fiscal year ended March 31, 2018 and
subsequent Quarterly Reports on Form 10-Q, which risk factors are
incorporated herein by reference.
S-12
These
forward-looking statements are only predictions and we may not
actually achieve the plans, intentions or expectations disclosed in
our forward-looking statements, so you should not place undue
reliance on our forward-looking statements. Actual results or
events could differ materially from the plans, intentions and
expectations disclosed in the forward-looking statements we make.
We have based these forward-looking statements largely on our
current expectations and projections about future events and trends
that we believe may affect our business, financial condition and
operating results. We have included important factors in the
cautionary statements included in this prospectus supplement, as
well as certain information incorporated by reference into this
prospectus supplement and the accompanying prospectus, that could
cause actual future results or events to differ materially from the
forward-looking statements that we make. Our forward-looking
statements do not reflect the potential impact of any future
acquisitions, mergers, dispositions, joint ventures or investments
we may make.
You
should read this prospectus supplement and the accompanying
prospectus with the understanding that our actual future results
may be materially different from what we expect. We do not assume
any obligation to update any forward-looking statements whether as
a result of new information, future events or otherwise, except as
required by applicable law.
S-13
USE OF PROCEEDS
We estimate
that the net proceeds to us from this offering will be
approximately $
million, after deducting the underwriting discounts and commissions
and estimated offering expenses payable by us.
We currently intend to use the net proceeds from
the sale of the shares of common stock offered by this prospectus
supplement to fund continued development of our AV-101, PH94B and
PH10 programs, and for general research and development,
working capital and general corporate purposes.
Pending
other uses, we intend to invest our proceeds from the offering in
short-term investments or hold them as cash. We cannot predict
whether the proceeds invested will yield a favorable return. Our
management will have broad discretion in the use of the net
proceeds from this offering, and investors will be relying on the
judgment of our management regarding the application of the net
proceeds.
S-14
PRICE RANGE OF OUR COMMON
STOCK
Our common stock was approved for listing and has
traded since May 11, 2016 on the Nasdaq Capital Market under the
symbol “VTGN”. From June 21, 2011 through May 10, 2016,
our common stock traded on the OTC Marketplace (OTCQB), under the symbol
“VSTA”. There was no established trading
market for our common stock prior to June 21,
2011.
Shown
below is the range of high and low sales prices for our common
stock for the periods indicated as reported by the Nasdaq Capital
Market. The market quotations reflect inter-dealer prices,
without retail mark-up, mark-down or commissions and may not
necessarily represent actual transactions.
On
February 22, 2019, the last reported sale price of our common stock
was $1.38 per share.
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Common
Stock
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|||||
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Fiscal
2019
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Fiscal
2018
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Fiscal
2017
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High
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Low
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High
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Low
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High
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Low
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First Quarter,
ending June 30
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$1.76
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$0.81
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$2.40
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$1.72
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$9.00
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$3.40
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Second Quarter,
ending September 30
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$1.53
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$1.20
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$2.05
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$1.53
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$4.69
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$2.81
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Third Quarter,
ending December 31
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$2.44
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$1.26
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$2.65
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$0.69
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$4.50
|
$3.11
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Fourth Quarter,
ending March 31
|
$1.86*
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$1.36*
|
$1.79
|
$0.86
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$3.90
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$1.74
|
*
Through February 22, 2019.
S-15
DIVIDEND
POLICY
We
have never paid or declared any cash dividends on our common stock,
and we do not anticipate paying any cash dividends on our
common stock in the foreseeable future. Covenants in
certain of our debt agreements prohibit us from paying dividends
while the debt remains outstanding. Our Series B
Preferred accrues dividends at a rate of 10% per annum, which
dividends are payable solely in unregistered shares of our common
stock at the time the Series B Preferred is converted into common
stock.
S-16
CAPITALIZATION
The
following table sets forth our cash and cash equivalents and
capitalization as of December 31, 2018:
●
on an actual basis; and
●
on
a pro forma, as adjusted basis giving effect to the sale and
issuance by us of
shares of common stockto purchase up to
shares of common stock in this offering, at a public offering price
of $
per share, and after deducting the underwriting discount and
estimated offering expenses payable by us.
|
As of December 31, 2018
(amounts in dollars and in thousands, except share and per share
amounts)
|
Actual
|
Pro forma
|
|
Cash
and cash equivalents
|
$6,285
|
$
|
|
|
|
|
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Stockholders’
equity:
|
|
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Preferred
stock, $0.001 par value, 10,000,000 shares authorized:
|
|
|
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Series
A Preferred, 500,000 shares authorized and outstanding, actual and
pro forma
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$1
|
$
|
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Series B Preferred,
4,000,000 shares authorized and 1,160,240 shares outstanding,
actual and pro forma
|
1
|
|
|
Series
C Preferred, 3,000,000 shares authorized and 2,318,012 shares
outstanding, actual and pro forma
|
2
|
|
|
Common
stock, $0.001 par value, 100,000,000 shares authorized; 31,204,380
shares issued, actual; shares
issued, pro forma
|
31
|
|
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Additional
paid-in capital
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181,036
|
|
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Treasury
stock, at cost, 135,665 shares, actual and pro forma
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(3,968)
|
|
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Accumulated
deficit
|
(175,410)
|
|
|
Total
stockholders’ equity
|
$1,693
|
$
|
|
Total
capitalization
|
$1,693
|
$
|
Common
stock outstanding in the table above excludes the following
shares as of December 31, 2018:
●
6,410,338
shares of common stock issuable upon exercise of outstanding stock
options with a weighted average exercise price of $1.47 per
share;
●
21,499,955
shares of common stock issuable upon exercise of outstanding
warrants with a weighted average exercise price of $2.54 per
share;
●
750,000
shares of common stock issuable upon conversion of all outstanding
shares of our Series A Preferred;
●
1,160,240
shares of common stock issuable upon conversion of all outstanding
shares of our Series B Preferred and 2,344,720 shares of common
stock reserved for issuance as payment of accrued dividends on
outstanding shares of Series B Preferred;
●
2,318,012
shares of common stock issuable upon conversion of all outstanding
shares of our Series C Preferred; and
●
2,877,162
shares of common stock reserved for future issuance in connection
with future grants under our Amended and Restated 2016 Stock
Incentive Plan.
S-17
If
you purchase shares of our common stock in this offering, you will
experience dilution to the extent of the difference between the
public offering price per share and our as adjusted net tangible
book value per share immediately after this offering.
Net
tangible book value is total assets minus the sum of liabilities
and intangible assets. Net tangible book value per share is net
tangible book value divided by the total number of shares of common
stock outstanding. As of December 31, 2018, our net tangible book
value was approximately $1.693 million, or approximately or
approximately $0.05 per share.
After
giving effect to our receipt of approximately
$
million of estimated net proceeds, after deducting underwriting
discounts and commissions and estimated offering expenses payable
by us, from our sale of shares
of common stock in this offering at a public offering price
of
$
per share, our pro forma net tangible book value as of December 31,
2018, would have been approximately
$
million, or
$
per share. This amount represents an immediate increase in net
tangible book value of
$
per share of our common stock to existing stockholders and an
immediate dilution in net tangible book value of
$
per share of our common stock to new investors purchasing shares of
common stock in this offering.
The
following table illustrates this dilution on a per share basis to
new investors:
|
Public
offering price per share:
|
|
|
|
|
$
|
|
|
|
|
Net
tangible book value per share as of December 31, 2018
|
|
$
|
0.05
|
|
|
|
|
|
|
Increase in net
tangible book value per share after this offering
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pro
forma net tangible book value per share after this
offering
|
|
S
|
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dilution
in pro forma net tangible book value per share to new investors in
this offering
|
|
|
|
|
|
$
|
|
|
If
the underwriters exercise their option to purchase additional
shares in full, the pro forma net tangible book value would
increase to approximately $ per share, representing an increase to
existing stockholders of approximately $ per share, and there would
be an immediate dilution of approximately $ per share to new
investors.
The
foregoing discussion and table do not take into account further
dilution to new investors that could occur upon the exercise of
outstanding options or warrants having a per share exercise price
less than the public offering price in this offering. To the extent
that we raise additional capital through the sale of equity or
convertible debt securities after this offering, the issuance of
those securities could result in further dilution to our
stockholders.
The
table and discussion above are based on 31,068,715 shares of our
common stock outstanding as of December 31, 2018 (actual), and
excludes as of that date the following:
●
6,410,338
shares of common stock issuable upon exercise of outstanding stock
options with a weighted average exercise price of $1.47 per
share;
●
21,499,955
shares of common stock issuable upon exercise of outstanding
warrants with a weighted average exercise price of $2.54 per
share;
●
750,000
shares of common stock issuable upon conversion of all outstanding
shares of our Series A Preferred;
●
1,160,240
shares of common stock issuable upon conversion of all outstanding
shares of our Series B Preferred and 2,344,720 shares of common
stock reserved for issuance as payment of accrued dividends on
outstanding shares of Series B Preferred;
●
2,318,012
shares of common stock issuable upon conversion of all outstanding
shares of our Series C Preferred; and
●
2,877,162
shares of common stock reserved for future issuance in connection
with future grants under our Amended and Restated 2016 Stock
Incentive Plan.
S-18
MATERIAL U.S. FEDERAL
INCOME TAX CONSEQUENCES TO NON-U.S. HOLDERS
The
following is a general discussion of the material U.S. federal
income tax consequences applicable to non-U.S. holders
(as defined herein) with respect to their purchase, ownership and
disposition of shares of our common stock issued pursuant to this
offering. All prospective non-U.S. holders of our common
stock should consult their own tax advisors with respect to the
U.S. federal, state, local and non-U.S. tax consequences
of the purchase, ownership and disposition of our common
stock.
In
general, a non-U.S. holder means a beneficial owner of
our common stock (other than a partnership or an entity or
arrangement treated as a partnership for U.S. federal income tax
purposes) that is not, for U.S. federal income tax
purposes:
●
an individual who
is a citizen or resident of the United States;
●
a corporation, or
an entity treated as a corporation for U.S. federal income tax
purposes, created or organized in the United States or under the
laws of the United States or of any state thereof or the District
of Columbia;
●
an estate, the
income of which is subject to U.S. federal income tax regardless of
its source; or
●
a trust if (i) a
U.S. court can exercise primary supervision over the trust’s
administration and one or more U.S. persons have the authority to
control all of the trust’s substantial decisions or (ii) the
trust has a valid election in effect under applicable U.S. Treasury
Regulations to be treated as a U.S. person.
This
discussion is based on current provisions of the U.S. Internal
Revenue Code of 1986, as amended (the Code), existing U.S. Treasury
Regulations promulgated thereunder, published administrative
pronouncements and rulings of the U.S. Internal Revenue Service,
which we refer to as the IRS, and judicial decisions, all as in
effect as of the date of this prospectus supplement. These
authorities are subject to change and to differing interpretation,
possibly with retroactive effect. Any change or differing
interpretation could alter the tax consequences
to non-U.S. holders described in this
discussion.
We
assume in this discussion that a non-U.S. holder holds
shares of our common stock as a capital asset within the meaning of
Section 1221 of the Code (generally, property held for
investment). This discussion does not address all aspects of U.S.
federal income taxation that may be relevant to a
particular non-U.S. holder in light of
that non-U.S. holder’s individual circumstances,
nor does it address any estate or gift tax consequences, or any
aspects of U.S. state, local or non-U.S. taxes. This
discussion also does not address consequences relevant to non-U.S.
holders subject to special tax rules, such as holders that own, or
are deemed to own, more than 5% of our capital stock (except to the
extent specifically set forth below), corporations that accumulate
earnings to avoid U.S. federal income tax, tax-exempt or
governmental organizations, banks, financial institutions,
insurance companies, brokers, dealers or traders in securities,
commodities or currencies, tax-qualified retirement
plans, holders subject to the alternative minimum tax or the
Medicare contribution tax, holders holding our common stock as part
of a hedge, straddle or other risk reduction strategy, conversion
transaction, synthetic security or other integrated investment,
holders deemed to sell our common stock under the constructive sale
provisions of the Code, controlled foreign corporations, passive
foreign investment companies, accrual method taxpayers subject to
special tax accounting rules under Section 451(b) of the Code,
and U.S. expatriates and certain former U.S. citizens or long-term
residents.
In
addition, this discussion does not address the tax treatment of
partnerships (or entities or arrangements that are treated as
partnerships for U.S. federal income tax purposes) or persons that
hold their common stock through such partnerships. If a
partnership, including any entity or arrangement treated as a
partnership for U.S. federal income tax purposes, holds shares of
our common stock, the U.S. federal income tax treatment of a
partner in such partnership will generally depend upon the status
of the partner, the activities of the partnership and certain
determinations made at the partner level. Such partners and
partnerships should consult their own tax advisors regarding the
tax consequences of the purchase, ownership and disposition of our
common stock.
S-19
There
can be no assurance that a court or the IRS will not challenge one
or more of the tax consequences described herein, and we have not
obtained, nor do we intend to obtain, a ruling with respect to the
U.S. federal income tax consequences to a non-U.S. holder
of the purchase, ownership or disposition of our common
stock.
All
prospective non-U.S. holders of our common stock are urged to
consult their own tax advisors with respect to the U.S. federal
income tax laws to their particular situation as well as any tax
consequences of the purchase, ownership and disposition of our
common stock arising under the U.S. federal estate or gift tax laws
or under the laws of any state, local or non-U.S. taxing
jurisdiction or under any applicable income tax
treaty.
Distributions on Our Common Stock
As
described in the section entitled “Dividend Policy,” we do not
expect to pay any cash dividends in the foreseeable future.
However, if we do make distributions of cash or property on our
common stock, such distributions generally will constitute
dividends for U.S. federal income tax purposes to the extent paid
from our current or accumulated earnings and profits, as determined
under U.S. federal income tax principles. If a distribution exceeds
our current and accumulated earnings and profits, the excess will
be treated as a return of capital and first be applied against
and reduce a non-U.S. holder’s adjusted tax basis in its
common stock, but not below zero. Any remaining excess will be
treated as capital gain from the sale or exchange of our common
stock subject to the tax treatment described below in “Gain
on Sale, Exchange or Other Disposition of Our Common Stock.”
Any such distribution will also be subject to the discussion below
under the headings “Foreign Accounts” and “Backup
Withholding and Information Reporting.”
Subject
to the discussions below on effectively connected income, dividends
paid to a non-U.S. holder of our common stock will be
subject to U.S. federal withholding at a 30% rate of the gross
amount of the dividend (or such lower rate as may be specified by
an applicable income tax treaty between the United States and a
non-U.S. holder’s country of residence).
If
dividends paid to a non-U.S. holder are effectively connected with
a trade or business conducted by a non-U.S. holder within
the United States (and, if an applicable income tax treaty so
provides, that are attributable to a permanent establishment or a
fixed base maintained by the non-U.S. holder within the
United States), the non-U.S. holder will be exempt from the 30%
U.S. federal withholding tax if the non-U.S. holder
satisfies applicable certification and disclosure requirements.
However, such U.S. effectively connected income, net of specified
deductions and credits, will be taxed at the same graduated U.S.
federal income tax rates applicable to “United States
persons” (as defined in the Code). Any U.S. effectively
connected income received by a non-U.S. holder that is a
corporation may also, under certain circumstances, be subject to an
additional “branch profits tax” at a 30% rate (or such
lower rate as may be specified by an applicable income tax treaty
between the United States and a non-U.S. holder’s country of
residence) on a portion of its effectively connected earnings and
profits for the taxable year, as adjusted for certain
items.
To
claim a reduction or exemption from withholding,
a non-U.S. holder of our common stock generally will be
required to provide (a) a properly executed IRS
Form W-8BEN (in the case of individuals)
or W-8BEN-E (in the case of entities), or successor form,
and satisfy applicable certification and other requirements to
claim the benefit of an applicable income tax treaty between the
United States and such holder’s country of residence, or
(b) a properly executed IRS Form W-8ECI stating that
dividends are not subject to withholding because they are
effectively connected with such non-U.S. holder’s
conduct of a trade or business within the United States. The tax
forms referred to above must be provided to us or our paying agent
prior to the payment of dividends and must be updated periodically.
In the case of a non-U.S. holder that is an entity,
Treasury Regulations and any relevant tax treaty provide rules to
determine whether, for purposes of determining the applicability of
an income tax treaty, dividends will be treated as paid to the
entity or to those holding an interest in that entity. If
a non-U.S. Holder holds stock through a financial
institution or other agent acting on the holder’s behalf, the
holder will be required to provide appropriate documentation to
such agent. The holder’s agent will then be required to
provide certification to us or our paying agent, either directly or
through other intermediaries. A non-U.S. holder that is
eligible for a reduced rate of U.S. federal withholding tax under
an income tax treaty may obtain a refund or credit of any excess
amounts withheld by timely filing an appropriate claim for refund
with the IRS. Non-U.S. holders are urged to consult
their tax advisors regarding their entitlement to benefits under a
relevant income tax treaty.
S-20
Gain on Sale, Exchange or Other Disposition of Our Common
Stock
Subject
to the discussion below regarding backup withholding and the
discussion under the heading “Foreign Accounts,” in
general, a non-U.S. holder will not be subject to any
U.S. federal income tax on any gain realized upon such non-U.S.
holder’s sale, exchange or other taxable disposition of
shares of our common stock unless:
●
the gain is
effectively connected with a U.S. trade or business of the non-U.S.
holder (and, if an applicable income tax treaty so provides, is
attributable to a permanent establishment or a fixed base
maintained in the United States by such non-U.S. holder),
in which case the non-U.S. holder generally will be taxed on a
net income basis at the graduated U.S. federal income tax rates
applicable to “United States persons” (as defined in
the Code) and, if the non-U.S. holder is a foreign
corporation, the branch profits tax at a rate of 30% (or such lower
rate specified by an applicable income tax treaty) on such
effectively connected gain, as adjusted for certain items, may also
apply;
●
the non-U.S. holder
is a nonresident alien individual who is present in the United
States for 183 days or more in the taxable year of the disposition
and certain other conditions are met, in which case
the non-U.S. holder will be subject to a 30% U.S. federal
income tax (or such lower rate as may be specified by an applicable
income tax treaty) on the net gain derived from the disposition,
which may be offset by U.S. source capital losses of
the non-U.S. holder, if any (even though the individual
is not considered a resident of the United States), provided
the non-U.S. holder has timely filed U.S. federal income tax
returns with respect to such losses; or
●
our common stock
constitutes U.S. real property interest because we are, or have
been, at any time during the five-year period preceding such
disposition (or the non-U.S. holder’s holding period, if
shorter) a U.S. real property holding corporation for U.S. federal
income tax purposes. Generally, a corporation is a U.S. real
property holding corporation only if the fair market value of its
U.S. real property interests equals or exceeds 50% of the sum of
the fair market value of its worldwide real property interests plus
the fair market value of its other assets used or held for use in a
trade or business. We do not believe that we are, or have been, a
U.S. real property holding corporation, or that we are likely to
become one in the future. However, because the determination of
whether we are a U.S. real property holding corporation depends on
the fair market value of our U.S. real property relative to the
fair market value of our other business assets, there can be no
assurance that we will not become a U.S. real property holding
corporation in the future. Even if we are or become a U.S. real
property holding corporation, provided that our common stock is
regularly traded, as defined by applicable Treasury Regulations, on
an established securities market, our common stock will be treated
as a U.S. real property interest only with respect to
a non-U.S. holder that holds more than 5% of our
outstanding common stock, actually or constructively, during the
shorter of the 5-year period ending on the date of the
disposition or the period that the non-U.S. holder held our
common stock. In such case, such non-U.S. holder
generally will be taxed on its net gain derived from the
disposition at the graduated U.S. federal income tax rates
applicable to “United States persons” (as defined in
the Code). No assurance can be provided that our common stock will
continue to be regularly traded on an established securities market
for purposes of the rules described above.
Non-U.S. Holders
should consult their tax advisors regarding potentially applicable
income tax treaties that may provide for different
rules.
S-21
Backup Withholding and Information Reporting
We must
report annually to the IRS and
to each non-U.S. holder the gross amount of the
dividends on our common stock paid to such holder and the tax
withheld, if any, with respect to
such dividends. Non-U.S. holders will have to
comply with specific certification procedures to establish that the
holder is not a “United States person” (as defined in
the Code) in order to avoid backup withholding at the applicable
rate (currently at a 24% rate) with respect to dividends on our
common stock. A non-U.S. holder generally will
not be subject to U.S. backup withholding with respect to payments
of dividends on our common stock if such non-U.S. holder
certifies its non-U.S. status by providing a
valid IRS Form W-8BEN (in the case of
individuals) or W-8BEN-E (in the case of
entities) or W-8ECI, or successor form, or
otherwise establishes an exemption; provided we do not have actual
knowledge or reason to
know such non-U.S. holder is a “United
States person” (as defined in the Code).
Information
reporting and backup withholding will generally apply to the
proceeds of a disposition of our common stock
by a non-U.S. holder effected by or through the
U.S. office of any broker, U.S. or foreign, unless the non-U.S.
holder certifies its status as a non-U.S. holder as
described above and satisfies certain other requirements, or
otherwise establishes an exemption. Generally, information
reporting and backup withholding will not apply to a payment of
disposition proceeds to a non-U.S. holder where
the transaction is effected outside the United States
through a non-U.S. office of a non-U.S. broker.
However, for information reporting purposes, dispositions effected
through a non-U.S. office of a broker with
substantial U.S. ownership or operations generally will be treated
in a manner similar to dispositions effected through a U.S. office
of a broker. Non-U.S. holders should consult
their own tax advisors regarding the application of the information
reporting and backup withholding rules to them.
Copies
of information returns may be made available under the provisions
of a specific treaty or agreement to the tax authorities of the
country in which the non-U.S. holder resides or
is established.
Backup
withholding is not an additional tax. Any amounts withheld under
the backup withholding rules from a payment
to a non-U.S. holder may be allowed as a credit
against the non-U.S. holder’s U.S.
federal income tax liability, if any, and may entitle such holder
to a refund, provided that the required information is timely
furnished to the IRS.
Foreign Accounts
Withholding taxes
may be imposed under Sections 1471 to 1474 of the Code (such
Sections commonly referred to as the Foreign Account Tax Compliance
Act (FATCA)) on certain
types of payments made to non-U.S. financial institutions and
certain other non-U.S. entities. Specifically, a U.S. federal
withholding tax of 30% may be imposed on dividends on, or on the
gross proceeds from the sale or other disposition of, our common
stock paid to a “foreign financial institution” (as
defined in the Code), unless such foreign financial institution
enters into an agreement with the U.S. Department of Treasury
requiring, among other things, withhold on certain payments and to
collect and provide to the U.S. tax authorities substantial
information regarding accounts held by certain “specified
United States persons” or “United States-owned foreign
entities” (each as defined in the Code), or otherwise
qualifies for an exemption from these rules. Additionally, U.S.
federal withholding tax of 30% may be imposed on dividends on, or
on the gross proceeds from the sale or other disposition of, our
common stock paid to a “non-financial foreign
entity” (as defined in the Code), unless such non-financial
foreign entity provides the withholding agent with either a
certification that it does not have any “substantial United
States owners” (as defined in the Code), provides information
regarding each substantial United States owner, or otherwise
qualifies for an exemption from these rules. An intergovernmental
agreement between the United States and an applicable foreign
country where a foreign financial institution is located may modify
the requirements described in this paragraph.
The
withholding under
FATCA described above currently applies to dividends paid on our
common stock. While withholding under FATCA would have applied also
to payments of gross proceeds from the sale or other disposition of
our common stock on or after January 1, 2019, recently proposed
Treasury Regulations eliminate FATCA withholding on payments of
gross proceeds entirely. Taxpayers generally may rely on these
proposed Treasury Regulations until final Treasury Regulations are
issued.
Prospective
investors should consult their tax advisors regarding the potential
application of withholding under FATCA to their investment in our
common stock.
S-22
UNDERWRITING
William
Blair & Company, L.L.C. is acting as representative of each of
the underwriters named below. Subject to the terms and conditions
set forth in an underwriting agreement among us and the
underwriters, we have agreed to sell to the underwriters, and each
of the underwriters has agreed, severally and not jointly, to
purchase from us, the number of shares of our common stock set
forth opposite its name below.
|
Name
|
|
Numberof Shares
|
|
|
|
William
Blair & Company, L.L.C.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
|
The
underwriters have agreed, severally and not jointly, to purchase
all of the shares sold under the underwriting agreement if any of
these shares are purchased. If an underwriter defaults, the
underwriting agreement provides that the purchase commitments of
the non-defaulting underwriters may be increased or the
underwriting agreement may be terminated.
We have
granted to the underwriters an option, exercisable for 30 calendar
days from the date of this prospectus, to purchase up
to additional shares of
common stock at the public offering price listed on the cover of
this prospectus supplement, less underwriting discounts and
commissions. To the extent the option is exercised, each
underwriter will become obligated, subject to certain conditions,
to purchase approximately the same percentage of the additional
shares of common stock as the number listed next to such
underwriter’s name in the table above bears to the total
number of shares of common stock listed next to the names of all
underwriters in the above table. Any shares issued or sold under
the option will be issued and sold on the same terms and conditions
as the other shares that are the subject of this
offering.
Commissions and Discounts
The
representative has advised us that the underwriters propose
initially to offer the shares to the public at the combined public
offering price per share set forth on the cover page of this
prospectus supplement and to dealers at that price less a
concession not in excess of $
per share. After the public offering, the public
offering price, concession or any other term of this offering may
be changed.
The
following table
shows the public offering price per share, underwriting discount
and proceeds before expenses to us. The information assumes either
no exercise or full exercise by the underwriters of their option to
purchase additional shares.
|
|
Per
Share
|
Without
Option
|
With
Option
|
|
Public offering
price
|
$
|
$
|
$
|
|
Underwriting
discount
|
|
|
|
|
Proceeds, before
expenses, to us
|
|
|
|
The
underwriting agreement provides that the obligations of the several
underwriters to pay for and accept delivery of the shares of common
stock offered by this prospectus supplement are subject to the
approval of certain legal matters by their counsel and to certain
other conditions. The underwriters are obligated to take and pay
for all of the shares of common stock offered by this prospectus
supplement if any such shares are taken. However, the underwriters
are not required to take or pay for the shares covered by the
underwriters’ option to purchase additional shares described
above. If an underwriter defaults, the underwriting agreement
provides that the purchase commitments of the non-defaulting
underwriters may be increased. The underwriters reserve the right
to withdraw, cancel or modify offers to the public and to reject
orders in whole or in part.
The
estimated offering expenses payable by us, exclusive of the
underwriting discounts and commissions, are approximately $
, which includes legal, accounting and
printing costs and various other fees. We have agreed to reimburse
the representative for certain additional expenses incurred in
connection with this offering in an amount up to
$125,000.
S-23
No Sales of Similar Securities
We have
agreed with the underwriters, subject to customary exceptions not
to (i) offer, sell, contract to sell, pledge, grant any option to
purchase, make any short sale or otherwise transfer or dispose of,
directly or indirectly, or file with the SEC a registration
statement under the Act relating to, any shares of our common stock
or any securities that are substantially similar to our common
stock, including but not limited to any options or warrants to
purchase shares of our common stock or any securities that are
convertible into or exchangeable for, or that represent the right
to receive, common stock or any such substantially similar
securities, or publicly disclose the intention to make any offer,
sale, pledge, disposition or filing or (ii) enter into any swap or
other agreement that transfers, in whole or in part, any of the
economic consequences of ownership of our common stock, or any such
other securities, whether any such transaction described in clause
(i) or (ii) above is to be settled by delivery of our common stock
or such other securities, in cash or otherwise, without the prior
written consent of the representative.
Our
directors and executive officers have agreed with the underwriters,
subject to customary exceptions, not to (i) offer, pledge, announce
the intention to sell, sell, contract to sell, sell any option or
contract to purchase, purchase any option or contract to sell,
grant any option, right or warrant to purchase, make any short sale
or otherwise transfer or dispose of, directly or indirectly, any
shares of our common stock or any securities convertible into,
exercisable or exchangeable for or that represent the right to
receive our common stock (including without limitation, our common
stock which may be deemed to be beneficially owned in accordance
with the rules and regulations of the SEC and securities which may
be issued upon exercise of a stock option or warrant), whether now
owned or hereafter acquired, or (ii) enter into any swap or other
agreement that transfers, in whole or in part, any of the economic
consequences of ownership of our common stock, whether any such
transaction is to be settled by delivery of our common stock or
such other securities, in cash or otherwise. These restrictions
will apply through and including the date that is 90 days after the
date of this prospectus supplement.
Listing
Our
common stock is listed on the Nasdaq Capital Market under the
symbol “VTGN.”
Price Stabilization, Short Positions and Penalty Bids
Until
the distribution of the shares is completed, SEC rules may limit
underwriters and selling group members from bidding for and
purchasing shares of our common stock. However, the representative
may engage in transactions that stabilize the price of our common
stock, such as bids or purchases to peg, fix or maintain that
price.
In connection with
this offering, the underwriters may purchase and sell shares of our
common stock in the open market. These transactions may include
short sales, purchases on the open market to cover positions
created by short sales and stabilizing transactions. Short sales
involve the sale by the underwriters of a greater number of shares
than they are required to purchase in this offering.
“Covered” short sales are sales made in an amount not
greater than the underwriters’ option to purchase additional
shares described above. The underwriters may close out any covered
short position by either exercising this option or purchasing
shares in the open market. In determining the source of shares to
close out the covered short position, the underwriters will
consider, among other things, the price of shares available for
purchase in the open market as compared to the price at which they
may purchase shares through this option. “Naked” short
sales are sales in excess of this option. The underwriters must
close out any naked short position by purchasing shares in the open
market. A naked short position is more likely to be created if the
underwriters are concerned that there may be downward pressure on
the price of our common stock in the open market after pricing that
could adversely affect investors who purchase in this offering.
Stabilizing transactions consist of various bids for or purchases
of shares of our common stock made by the underwriters in the open
market prior to the closing of this
offering.
The
underwriters may also impose penalty bids. This occurs when a
particular underwriter repays to the underwriters a portion of the
underwriting discount received by it because the representative has
repurchased shares sold by or for the account of such underwriter
in stabilizing or short covering transactions.
Similar
to other purchase transactions, the underwriters’ purchases
to cover the syndicate short sales may have the effect of raising
or maintaining the market price of our common stock or preventing
or retarding a decline in the market price of our common stock. As
a result, the price of our common stock may be higher than the
price that might otherwise exist in the open market. The
underwriters may conduct these transactions on the Nasdaq Capital
Market, in the over-the-counter market or otherwise.
Neither
we nor any of the underwriters make any representation or
prediction as to the direction or magnitude of any effect that the
transactions described above may have on the price of our common
stock. In addition, neither we nor any of the underwriters make any
representation that the representative will engage in these
transactions or that these transactions, once commenced, will not
be discontinued without notice.
S-24
Electronic Offer, Sale and Distribution of Shares
In
connection with this offering, certain of the underwriters or
securities dealers may distribute prospectuses by electronic means,
such as e-mail. In addition, one or more of the underwriters may
facilitate Internet distribution for this offering to certain of
their Internet subscription customers. Any such underwriter may
allocate a limited number of shares for sale to its online
brokerage customers. An electronic prospectus is available on the
Internet websites maintained by any such underwriter. Other than
the prospectus in electronic format, the information on the
websites of any such underwriter is not part of this prospectus
supplement and the accompanying prospectus.
Other Relationships
The
underwriters and their respective affiliates are full service
financial institutions engaged in various activities, which may
include securities trading, commercial and investment banking,
financial advisory, investment management, investment research,
principal investment, hedging, financing and brokerage activities.
Certain of the underwriters and their affiliates may engage in from
time to time in the future certain investment banking and other
commercial dealings in the ordinary course of business with us or
our affiliates, for which they have received and may continue to
receive customary fees and commissions. In addition, we have
granted William Blair & Company, L.L.C. the right to
participate in any public or private offering of securities by us,
subject to certain limitations.
In the
ordinary course of their various business activities, the
underwriters and their respective affiliates may make or hold a
broad array of investments and actively trade debt and equity
securities (or related derivative securities) and financial
instruments (including bank loans) for their own account and for
the accounts of their customers, and such investment and securities
activities may involve securities and/or instruments of the issuer.
The underwriters and their respective affiliates may also make
investment recommendations and/or publish or express independent
research views in respect of such securities or instruments and may
at any time hold, or recommend to clients that they acquire, long
and/or short positions in such securities and
instruments.
Selling Restrictions
Canada
Resale Restrictions
The
distribution of shares of our common stock in Canada is being made
only in the provinces of Ontario, Quebec, Alberta and British
Columbia on a private placement basis exempt from the requirement
that we prepare and file a prospectus with the securities
regulatory authorities in each province where trades of these
securities are made. Any resale of shares of our common stock in
Canada must be made under applicable securities laws which may vary
depending on the relevant jurisdiction, and which may require
resales to be made under available statutory exemptions or under a
discretionary exemption granted by the applicable Canadian
securities regulatory authority. Purchasers are advised to seek
legal advice prior to any resale of the securities.
Representations of Canadian Purchasers
By
purchasing shares of our common stock in Canada and accepting
delivery of a purchase confirmation, a purchaser is representing to
us and the dealer from whom the purchase confirmation is received
that:
●
the purchaser is
entitled under applicable provincial securities laws to purchase
the shares of common stock without the benefit of a prospectus
qualified under those securities laws as it is an “accredited
investor” as defined under National Instrument
45-106—Prospectus Exemptions,
●
the purchaser is a
“permitted client” as defined in National Instrument
31-103—Registration Requirements, Exemptions and Ongoing
Registrant Obligations,
●
where required by
law, the purchaser is purchasing as principal and not as agent,
and
●
the purchaser has
reviewed the text above under Resale Restrictions.
S-25
Conflicts of Interest
Canadian purchasers
are hereby notified that the underwriters are relying on the
exemption set out in section 3A.3 or 3A.4, if applicable, of
National Instrument 33-105—Underwriting Conflicts from having to
provide certain conflict of interest disclosure in this
document.
Statutory Rights of Action
Securities
legislation in certain provinces or territories of Canada may
provide a purchaser with remedies for rescission or damages if the
offering memorandum (including any amendment thereto) such as this
document contains a misrepresentation, provided that the remedies
for rescission or damages are exercised by the purchaser within the
time limit prescribed by the securities legislation of the
purchaser’s province or territory. The purchaser of these
securities in Canada should refer to any applicable provisions of
the securities legislation of the purchaser’s province or
territory for particulars of these rights or consult with a legal
advisor.
Enforcement of Legal Rights
All of
our directors and officers as well as the experts named herein may
be located outside of Canada and, as a result, it may not be
possible for Canadian purchasers to effect service of process
within Canada upon us or those persons. All or a substantial
portion of our assets and the assets of those persons may be
located outside of Canada and, as a result, it may not be possible
to satisfy a judgment against us or those persons in Canada or to
enforce a judgment obtained in Canadian courts against us or those
persons outside of Canada.
Taxation and Eligibility for Investment
Canadian purchasers
of shares of our common stock should consult their own legal and
tax advisors with respect to the tax consequences of an investment
in the shares of common stock in their particular circumstances and
about the eligibility of shares of our common stock for investment
by the purchaser under relevant Canadian legislation.
European Economic Area
In
relation to each Member State of the European Economic Area that
has implemented the Prospectus Directive, each referred to as a
Relevant Member State, an offer to the public of any shares of our
common stock may not be made in that Relevant Member State, except
that an offer to the public in that Relevant Member State of any
shares of our common stock may be made at any time under the
following exemptions under the Prospectus Directive, if they have
been implemented in that Relevant Member State:
(a)
to any
legal entity which is a “qualified investor” as defined
in the Prospectus Directive;
(b)
to
fewer than 150 natural or legal persons (other than qualified
investors as defined in the Prospectus Directive), subject to
obtaining the prior consent of the underwriters for any such
offer;
or
(c)
in any
other circumstances falling within Article 3(2) of the Prospectus
Directive,
provided
that no such offer of shares of our common stock shall result in a
requirement for the publication by us or any underwriter of a
prospectus pursuant to Article 3 of the Prospectus
Directive.
For the
purposes of this provision, the expression an “offer to the
public” in relation to any shares of our common stock in any
Relevant Member State means the communication in any form and by
any means of sufficient information on the terms of the offer and
any shares of our common stock to be offered so as to enable an
investor to decide to purchase any shares of our common stock, as
the same may be varied in that Relevant Member State by any measure
implementing the Prospectus Directive in that Relevant Member State
and the expression “Prospectus Directive” means
Directive 2003/71/EC (and amendments thereto, including by
Directive 2010/73/EU) and includes any relevant implementing
measure in each Relevant Member State.
S-26
United Kingdom
Each
underwriter has represented and agreed that:
(a)
it has not made or
will not make an offer of shares of our common stock to the public
in the United Kingdom within the meaning of section 102B of the
Financial Services and Markets Act 2000 (as amended) (FSMA) except
to legal entities which are authorized or regulated to operate in
the financial markets or, if not so authorized or regulated, whose
corporate purpose is solely to invest in securities or otherwise in
circumstances which do not require the publication by us of a
prospectus pursuant to the Prospectus Rules of the Financial
Services Authority;
(b)
it has only
communicated or caused to be communicated and will only communicate
or cause to be communicated an invitation or inducement to engage
in investment activity (within the meaning of section 21 of FSMA)
to persons who have professional experience in matters relating to
investments falling within Article 19(5) of the Financial Services
and Markets Act 2000 (Financial Promotion) Order 2005 or in
circumstances in which section 21 of FSMA does not apply to us;
and
(c)
it has complied and
will comply with all applicable provisions of the FSMA with respect
to anything done by it in relation to the securities in, from or
otherwise involving the United Kingdom.
Hong Kong
No
securities have been offered or sold, and no securities may be
offered or sold, in Hong Kong, by means of any document, other than
to persons whose ordinary business is to buy or sell shares or
debentures, whether as principal or agent; or to
‘‘professional investors’’ as defined in
the Securities and Futures Ordinance (Cap. 571) of Hong Kong and
any rules made under that Ordinance; or in other circumstances
which do not result in the document being a
‘‘prospectus’’ as defined in the Companies
Ordinance (Cap. 32) of Hong Kong or which do not constitute an
offer to the public within the meaning of the Companies Ordinance
(Cap. 32) of Hong Kong. No document, invitation or advertisement
relating to the securities has been issued or may be issued or may
be in the possession of any person for the purpose of issue (in
each case whether in Hong Kong or elsewhere), which is directed at,
or the contents of which are likely to be accessed or read by, the
public of Hong Kong (except if permitted under the securities laws
of Hong Kong) other than with respect to securities which are or
are intended to be disposed of only to persons outside Hong Kong or
only to ‘‘professional investors’’ as
defined in the Securities and Futures Ordinance (Cap. 571) of Hong
Kong and any rules made under that Ordinance.
This
prospectus has not been registered with the Registrar of Companies
in Hong Kong. Accordingly, this prospectus may not be issued,
circulated or distributed in Hong Kong, and the securities may not
be offered for subscription to members of the public in Hong Kong.
Each person acquiring the securities will be required, and is
deemed by the acquisition of the securities, to confirm that he is
aware of the restriction on offers of the securities described in
this prospectus and the relevant offering documents and that he is
not acquiring, and has not been offered any securities in
circumstances that contravene any such restrictions.
Singapore
This
prospectus has not been, and will not be, registered as a
prospectus with the Monetary Authority of Singapore. Accordingly,
this prospectus and any other document or material in connection
with the offer or sale, or invitation for subscription or purchase,
of the shares of common stock may not be circulated or distributed,
nor may the shares of common stock be offered or sold, or be made
the subject of an invitation for subscription or purchase, whether
directly or indirectly, to persons in Singapore other than
(i) to an institutional investor (as defined in Section 4A of
the Securities and Futures Act, Chapter 289 of Singapore (the
SFA)) pursuant to
Section 274 of the SFA, (ii) to a relevant person (as
defined in Section 275(2) of the SFA) pursuant to
Section 275(1), or any person pursuant to
Section 275(1A), and in accordance with the conditions
specified in Section 275 of the SFA or (iii) otherwise
pursuant to, and in accordance with the conditions of, any other
applicable provision of the SFA, in each case subject to compliance
with conditions set forth in the SFA.
S-27
Where
the common stock is subscribed or purchased under Section 275
of the SFA by a relevant person which is:
(a)
a
corporation (which is not an accredited investor (as defined in
Section 4A of the SFA)) the sole business of which is to hold
investments and the entire share capital of which is owned by one
or more individuals, each of whom is an accredited investor;
or
(b)
a trust
(where the trustee is not an accredited investor) whose sole
purpose is to hold investments and each beneficiary of the trust is
an individual who is an accredited investor,
securities
(as defined in Section 239(1) of the SFA) of that corporation or
the beneficiaries’ rights and interest (howsoever described)
in that trust shall not be transferred within six months after that
corporation or that trust has acquired the common stock pursuant to
an offer made under Section 275 of the SFA
except:
(a)
to an
institutional investor pursuant to Section 274 of the SFA or to a
relevant person pursuant to Section 275(1) of the SFA, or to any
person arising from an offer referred to in Section 275(1A) or
Section 276(4)(i)(B) of the SFA;
(b)
where
no consideration is or will be given for the transfer;
(c)
where
the transfer is by operation of law;
(d)
as
specified in Section 276(7) of the SFA; or
(e)
as
specified in Regulation 32 of the Securities and Futures (Offers of
Investments) (Shares and Debentures) Regulations 2005 of
Singapore.
Switzerland
The
shares of common stock may not be publicly offered in Switzerland
and will not be listed on the SIX Swiss Exchange (the SIX) or on any other stock exchange or
regulated trading facility in Switzerland. This document has been
prepared without regard to the disclosure standards for issuance
prospectuses under art. 652a or art. 1156 of the Swiss Code of
Obligations or the disclosure standards for listing prospectuses
under art. 27 ff. of the SIX Listing Rules or the listing rules of
any other stock exchange or regulated trading facility in
Switzerland. Neither this document nor any other offering or
marketing material relating to the shares of common stock or the
offering may be publicly distributed or otherwise made publicly
available in Switzerland.
Neither
this document nor any other offering or marketing material relating
to the offering, or the shares of common stock have been or will be
filed with or approved by any Swiss regulatory authority. In
particular, this document will not be filed with, and the offer of
common stock will not be supervised by, the Swiss Financial Market
Supervisory Authority FINMA, and the offer of common stock has not
been and will not be authorized under the Swiss Federal Act on
Collective Investment Schemes, or CISA. Accordingly, no public
distribution, offering or advertising, as defined in CISA, its
implementing ordinances and notices, and no distribution to any
non-qualified investor, as defined in CISA, its implementing
ordinances and notices, shall be undertaken in or from Switzerland,
and the investor protection afforded to acquirers of interests in
collective investment schemes under CISA does not extend to
acquirers of common stock.
S-28
United Arab Emirates
This
offering has not been reviewed, approved or licensed by the Central
Bank of the United Arab Emirates (the UAE), the Emirates Securities and
Commodities Authority of the UAE (the SCA) and/or any other relevant
licensing authority in the UAE including any licensing authority
incorporated under the laws and regulations of any of the free
zones established and operating in the territory of the UAE (the
Free Zones), in particular
the Dubai Financial Services Authority (the DFSA), a regulatory authority of the
Dubai International Financial Centre the (DIFC) or the Financial Services
Regulatory Authority (the FSRA), a regulatory authority of Abu
Dhabi Global Market (ADGM).
This
offering is not intended to, and does not, constitute an offer,
sale or delivery of shares or other securities under the laws of
the UAE. The common stock has not been and will not be registered
with or licensed by the SCA or with the UAE Central Bank, the Dubai
Financial Market, the Abu Dhabi Securities Exchange or with any
other UAE regulatory authority or exchange.
The
issue and/or sale of the common stock has not been approved or
licensed by the SCA, the UAE Central Bank or any other relevant
licensing authority in the UAE, and does not constitute a public
offer of securities in the UAE, DIFC, ADGM and/or any other Free
Zone in accordance with the Commercial Companies Law, Federal Law
No 2 of 2015 (as amended), the Markets Rules of the DFSA, (the
DFSA Markets Rules), the
Markets Rules of the FSRA (the FSRA Markets Rules) and/or Nasdaq Dubai
Listing Rules or under any other law of the UAE. The common stock
may not be offered to the public in the UAE and/or any of the Free
Zones.
No
marketing or promotion of the common stock has been or will be made
from within the UAE and no sale of or subscription for the common
stock may or will be consummated within the UAE. It should not be
assumed that VistaGen Therapeutics Inc., VistaGen Therapeutics,
Inc.’s advisors, their advisors or any other person is a
licensed broker, dealer or investment adviser under the laws of the
UAE or that they advise as to the appropriateness of investing in
or purchasing or selling securities or other financial
products.
This
offering is not intended to constitute a financial promotion, an
offer, sale or delivery of shares or other securities under the
DIFC Markets Law (DIFC Law No. 1 of 2012, as amended) (the
Markets Law), the DFSA
Markets Rules, the Collective Investment Law 2010 (DIFC Law No. 2
of 2010) (the Collective
Investment Law), the ADGM Financial Services and Markets
Regulations 2015 (the FSMR), the FSRA Markets Rules, the
Funds Rules of the FSRA (FSRA
Funds Rules), or any other laws and regulations of the DIFC,
the DFSA, ADGM or the FSRA.
This
offering and the issue or transfer of any securities related to it
have not been approved or licensed by the DFSA, and do not
constitute an offer of securities in the DIFC in accordance with
the Markets Law or the DFSA Markets Rules or the Collective
Investment Law or any other laws and regulations of the DIFC or the
DFSA. This offering and the issue or transfer of any securities
related to it have not been approved or licensed by the FSRA, and
do not constitute an offer of securities in ADGM in accordance with
the FSMR or the FSRA Markets Rules or the FSRA Funds Rules or any
other laws and regulations of ADGM or the FSRA.
France
This
prospectus (including any amendment, supplement or replacement
thereto) is not being distributed in the context of a public
offering of financial instruments (offre au public de titres financiers)
in France within the meaning of Article L. 411-1 of the French
Monetary and Financial Code (Code
monétaire et financier) and Articles 211-1 et seq. of the General Regulations of
the French Autorité des
marchés financiers (the AMF). The common stock have not been
offered or sold and will not be offered or sold, directly or
indirectly, to the public in France.
This
prospectus and any other offering material relating to the common
stock have not been, and will not be, submitted to the AMF for
approval in France and, accordingly, may not and will not be
distributed or caused to be distributed, directly or indirectly, to
the public in France.
S-29
Pursuant to Article
211-3 of the AMF General Regulations, French residents are hereby
informed that:
(a)
the
transaction does not require a prospectus to be submitted for
approval to the AMF;
(b)
the
offer, sale and distribution of the financial instruments shall
only be made in France to (i) qualified investors (investisseurs qualifiés ) acting
for their own account, as defined in and in accordance with
Articles L. 411-2-II-2° and D. 411-1, D. 411-2, D. 734-1, D.
744-1, D. 754-1 and D. 764-1 of the French Monetary and Financial
Code and any implementing regulation and/or (ii) a restricted
number of non-qualified investors (investisseurs non-qualifiés)
acting for their own account, as defined in and in accordance with
Articles L. 411-2-II-2° and D. 411-4, D. 734-1, D. 744-1, D.
754-1 and D. 764-1 of the French Monetary and Financial Code and
any implementing regulation; and
(c)
the
financial instruments thus acquired cannot be distributed, directly
or indirectly, to the public otherwise than in accordance with
Articles L. 411-1, L. 411-2, L. 412-1 and L. 621-8 to L. 621-8-3 of
the French Monetary and Financial Code.
This
prospectus is not to be further distributed or reproduced (in whole
or in part) in France by the recipients of this prospectus. This
prospectus has been distributed on the understanding that such
recipients will only participate in the issue or sale of our common
stock for their own account and undertake not to transfer, directly
or indirectly, our common stock to the public in France, other than
in compliance with all applicable laws and regulations and in
particular with Articles L. 411-1 and L. 411-2 of the French
Monetary and Financial Code and Articles 211-1 et seq. of the AMF General
Regulations.
Notice to Prospective Investors in Israel
The
securities offered by this prospectus supplement and the
accompanying prospectus have not been approved or disapproved by
the Israeli Securities Authority (the ISA), nor have such securities been
registered for sale in Israel. The ISA has not issued permits,
approvals or licenses in connection with the offering or publishing
this prospectus supplement and the accompanying prospectus; nor has
it authenticated the details included herein, confirmed their
reliability or completeness, or rendered an opinion as to the
quality of the securities being offered. The ordinary shares will
not be offered or sold, directly or indirectly, to the public in
Israel, except that the underwriter may offer and sell such shares
to Israeli investors who qualify, in accordance with the Israeli
Securities Law as “qualified investors” (as defined in
the First Appendix to the Israeli Securities Law) and completed and
signed a questionnaire regarding such qualification and delivered
it to the underwriter. Any resale in Israel, directly or
indirectly, to the public of the securities offered by this
prospectus supplement and the accompanying prospectus is subject to
restrictions on transferability and must be effected only in
compliance with the Israeli securities laws and
regulations.
S-30
The validity of the securities offered by this
prospectus will be passed upon by Disclosure Law Group, a
Professional Corporation, San Diego, California
(DLG).
Partners of DLG beneficially own an aggregate of 84,487
registered and/or restricted shares of our common stock.
Latham & Watkins LLP, Chicago,
Illinois, is acting as counsel for the underwriter in connection
with this offering.
EXPERTS
The
financial statements of the Company incorporated in this prospectus
by reference to the Annual Report on Form 10-K for the fiscal year
ended March 31, 2018 have been audited by OUM & Co. LLP, an
independent registered public accounting firm, given on the
authority of said firm as experts in auditing and
accounting.
WHERE YOU CAN FIND MORE INFORMATION
We
are a public company and file annual, quarterly and special
reports, proxy statements and other information with the SEC. You
may read and copy any document we file at the SEC’s public
reference room at 100 F Street, NE, Washington, D.C. 20549. You can
request copies of these documents by writing to the SEC and paying
a fee for the copying cost. Please call the SEC at 1-800-SEC-0330
for more information about the operation of the public reference
room. Our SEC filings are also available, at no charge, to the
public at the SEC’s website at
http://www.sec.gov.
INCORPORATION OF CERTAIN INFORMATION BY
REFERENCE
The
following documents filed by us with the SEC are incorporated by
reference in this prospectus:
●
Annual
Report on Form 10-K for the fiscal year ended March 31, 2018, filed
on June 26, 2018;
●
Quarterly
Report on Form 10-Q for the quarter ended June 30, 2018, filed on
August 14, 2018;
●
Quarterly
Report on Form 10-Q for the quarter ended September 30, 2018, filed
on October 29, 2018;
●
Quarterly
Report on Form 10-Q/A (Amendment No. 1) for the quarter ended
September 30, 2018, filed on October 30, 2018;
●
Quarterly
Report on Form 10-Q for the quarter ended December 31, 2018, filed
on February 12, 2019;
●
Current
Reports on Form 8-K, filed on April 6, 2018, April 10, 2018, May 3,
2018, May 23, 2018, June 11, 2018, June 13, 2018, August 9, 2018,
as amended on December 13, 2018, August 14, 2018, September 13,
2018, September 18, 2018, October 5, 2018, October 26, 2018,
November 13, 2018, January 15, 2019, February 1, 2019 and February
19, 2019; and
●
The
description of our common stock contained in the Registration
Statement on Form 8-A filed pursuant to Section 12(b) of the
Exchange Act on May 3, 2016, including any amendment or report
filed with the SEC for the purpose of updating this
description.
We
also incorporate by reference all documents we file pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act (other than
any portions of filings that are furnished rather than filed
pursuant to Items 2.02 and 7.01 of a Current Report on Form 8-K)
after the date of the initial registration statement of which this
prospectus is a part and prior to effectiveness of such
registration statement. All documents we file in the future
pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act
after the date of this prospectus and prior to the termination of
the offering are also incorporated by reference and are an
important part of this prospectus.
Any
statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or
superseded for the purposes of this registration statement to the
extent that a statement contained herein or in any other
subsequently filed document which also is or deemed to be
incorporated by reference herein modifies or supersedes such
statement. Any statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part
of this registration statement.
We will provide to each person, including any beneficial owner, to
whom a prospectus is delivered, a copy of this prospectus
supplement and any or all of the information that has been
incorporated by reference in the prospectus supplement but not
delivered herewith. You may request a copy of these filings,
excluding the exhibits to such filings which we have not
specifically incorporated by reference in such filings, at no cost,
by writing to or calling us at:
VistaGen Therapeutics, Inc.
Attn: Corporate Secretary
343 Allerton Avenue
South San Francisco, CA 94080
(650) 577-3600
Except for the specific incorporated documents listed above, no
information available on or through our website shall be deemed to
be incorporated in this prospectus supplement or the accompanying
prospectus.
S-31
BASE
PROSPECTUS
$100,000,000
Common Stock
Preferred Stock
Warrants
Units
From
time to time, we may offer and sell, in one or more offerings, up
to $100,000,000 of any combination of the securities described in
this prospectus. We may also offer securities as may be issuable
upon conversion, redemption, repurchase, exchange or exercise of
any securities registered hereunder, including any applicable
anti-dilution provisions.
This prospectus provides a general description of the securities we
may offer from time to time. Each time we offer securities, we will
provide specific terms of the securities offered in a supplement to
this prospectus. We may also authorize one or more free writing
prospectuses to be provided to you in connection with an offering.
The prospectus supplement and any related free writing prospectus
may also add, update or change information contained in this
prospectus. You should carefully read this prospectus, the
applicable prospectus supplement and any related free writing
prospectus, as well as any documents incorporated by reference,
before you invest in any of the securities being
offered.
Our
common stock is quoted on The NASDAQ Capital Market under the
symbol “VTGN”. The last reported sale price of our
common stock on March 31, 2017 was $1.96 per share.
We may offer and sell our securities to or through
one or more agents, underwriters, dealers or other third parties or
directly to one or more purchasers on a continuous or delayed
basis. If agents, underwriters or dealers are used to sell our
securities, we will name them and describe their compensation in a
prospectus supplement. The price to the public of our securities
and the net proceeds we expect to receive from the sale of such
securities will also be set forth in a prospectus supplement. For
additional information on the methods of sale, you should refer to
the section entitled “Plan of
Distribution” in this
prospectus.
As
of January 10, 2017, the aggregate market value of our outstanding
common stock held by non-affiliates was approximately $31.4
million, which was calculated based on 8,543,137 shares of
outstanding common stock held by non-affiliates, at a price per
share of $3.68. Pursuant to General Instruction I.B.6 of Form S-3,
in no event will we sell the securities described in this
prospectus in a public primary offering with a value exceeding more
than one-third (1/3) of the aggregate market value of our common
stock held by non-affiliates in any twelve (12)-month period, so
long as the aggregate market value of our outstanding common stock
held by non-affiliates remains below $75 million. During the twelve
(12) calendar months prior to and including the date of this
prospectus, we have not offered or sold any securities pursuant to
General Instruction I.B.6 of Form S-3.
Our business and investing in our securities involves significant
risks. You should review carefully the risks and uncertainties
referenced under the heading “Risk
Factors” on page 5 of
this prospectus, as well as those contained in the applicable
prospectus supplement and any related free writing prospectus, and
in the other documents that are incorporated by reference into this
prospectus or the applicable prospectus
supplement.
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 July 27, 2017
ABOUT THIS PROSPECTUS
This prospectus is part of a registration
statement filed with the Securities and Exchange Commission
(the SEC), using a “shelf” registration
process. Under this shelf registration process, we may
sell the securities described in this prospectus in one or more
offerings. This prospectus provides you with a general
description of the securities which may be offered. Each
time we offer securities for sale, we will provide a prospectus
supplement that contains information about the specific terms of
that offering. Any prospectus supplement may also add or update
information contained in this prospectus. You should
read both this prospectus and any prospectus supplement together
with additional information described below under
“Where You Can Find More
Information” and
“Incorporation of Certain
Information by Reference.”
You
should rely only on the information contained or incorporated by
reference in this prospectus, and in any prospectus
supplement. We have not authorized any other person to
provide you with different information. If anyone
provides you with different or inconsistent information, you should
not rely on it. We are not making offers to sell or
solicitations to buy the securities described in this prospectus in
any jurisdiction in which an offer or solicitation is not
authorized, or in which the person making that offer or
solicitation is not qualified to do so or to anyone to whom it is
unlawful to make an offer or solicitation. You should
not assume that the information in this prospectus or any
prospectus supplement, as well as the information we file or
previously filed with the SEC that we incorporate by reference in
this prospectus or any prospectus supplement, is accurate as of any
date other than its respective date. Our business,
financial condition, results of operations and prospects may have
changed since those dates.
This prospectus contains summaries of certain
provisions contained in some of the documents described herein, but
reference is made to the actual documents for complete information.
All of the summaries are qualified in their entirety by the actual
documents. Copies of some of the documents referred to herein have
been filed, will be filed or will be incorporated by reference as
exhibits to the registration statement of which this prospectus is
a part, and you may obtain copies of those documents as described
below under the heading “Where You Can Find More
Information”.
COMPANY OVERVIEW
This summary highlights information contained elsewhere in this
prospectus. This summary does not contain all the information you
should consider before buying our common stock. You should read the
following summary together with the more detailed information
appearing in this prospectus, including the section titled
“Risk Factors” on page 5, before deciding whether to
purchase our securities.
All brand names or trademarks appearing in this report are the
property of their respective holders. Unless the context requires
otherwise, references in this report to “VistaGen,” the
“Company,” “we,” “us,” and
“our” refer to VistaGen Therapeutics, Inc., a Nevada
corporation.
Overview
We are a clinical-stage biopharmaceutical company
focused on developing new generation medicines for depression and
other central nervous system (CNS) disorders.
AV-101, our lead CNS product candidate, is a new
generation oral antidepressant prodrug candidate in Phase 2
development as an adjunctive treatment for Major Depressive
Disorder (MDD) in patients with an inadequate response to
standard antidepressants approved by the U.S. Food and Drug
Administration (FDA). We believe AV-101 may also have the
potential to treat multiple additional CNS diseases and disorders,
including chronic neuropathic pain, epilepsy, Huntington’s
disease and Parkinson’s disease. AV-101’s
mechanism of action, as an N-methyl D aspartate receptor
(NMDAR) antagonist binding selectively at the glycine
binding (GlyB) co-agonist site of the NMDAR, is fundamentally
differentiated from all FDA-approved antidepressants currently on
the market, as well as all atypical antipsychotics used as
adjunctive treatments with current
antidepressants.
Clinical studies conducted at the U.S. National
Institute of Mental Health (NIMH), part of the U.S. National Institutes of Health
(NIH), by Dr. Carlos Zarate, Jr., Chief of the
NIMH’s Experimental Therapeutics & Pathophysiology Branch
and its Section on Neurobiology and Treatment of Mood and Anxiety
Disorders, have focused on the antidepressant effects of low dose
intravenous (IV) administration of ketamine hydrochloride
(ketamine), an NMDAR antagonist, in patients with
treatment-resistant MDD. These NIMH studies, as well as clinical
research at Yale University and other academic institutions, have
demonstrated robust antidepressant effects in treatment-resistant
MDD patients within twenty-four hours of a single IV dose of
ketamine.
As published in the October 2015 issue of the
peer-reviewed, Journal of Pharmacology and
Experimental Therapeutics, in an article entitled, The prodrug 4-chlorokynurenine
causes ketamine-like antidepressant effects, but not side effects,
by NMDA/glycineB-site inhibition, using well-established preclinical models of
depression, AV-101 was shown to induce fast-acting, dose-dependent,
persistent and statistically significant antidepressant-like
responses following a single treatment. These responses were
equivalent to those seen with a single sub-anesthetic control dose
of ketamine. In addition, these studies confirmed that the
fast-acting antidepressant effects of AV-101 were mediated through
the GlyB site and also involved the activation of another key
neurological pathway, the
alpha-amino-3-hydroxy-5-methyl-4-isoxazolepropionic acid
(AMPA) receptor pathway
In February 2015, we entered into a Cooperative
Research and Development Agreement (CRADA) with the NIMH. Under the CRADA, the NIMH is
funding, and Dr. Zarate, as Principal Investigator, and his team
are conducting, a 20-25 patient Phase 2 clinical study of AV-101 as
a monotherapy in subjects with treatment-resistant MDD
(the NIMH Study). We believe orally-administered AV-101 may have
potential to deliver ketamine-like antidepressant effects without
ketamine’s psychological and other side effects. We currently
anticipate that the NIMH will complete the NIMH Study at the end of
2017.
We are preparing to launch our Phase 2 clinical
study of AV-101 as a new generation adjunctive treatment of MDD in
adult patients with an inadequate response to standard,
FDA-approved antidepressants (Phase 2
Study). We currently
anticipate commencement of this multi-center, multi-dose, double
blind, placebo-controlled efficacy and safety study of AV-101 by
the end of the second quarter of 2017. Dr. Maurizio Fava, Professor
of Psychiatry at Harvard Medical School and Director, Division of
Clinical Research, Massachusetts General Hospital
(MGH) Research Institute, will be the Principal
Investigator of the Phase 2 Study. Dr. Fava was the
co-Principal Investigator with Dr. A. John Rush of the STAR*D
study, the largest clinical trial conducted in depression to date,
whose findings were published in journals such as the New England
Journal of Medicine (NEJM) and the Journal of the American Medical
Association (JAMA). We currently anticipate top line results of the
Phase 2 Study by the end of 2018.
VistaStem Therapeutics (VistaStem) is our wholly owned subsidiary focused on
applying human pluripotent stem cell (hPSC) technology, internally and with third-party
collaborators, to discover, rescue, develop and commercialize (i)
proprietary new chemical entities (NCEs), including small molecule NCEs with regenerative
potential, for CNS and other diseases and (ii) cellular therapies
involving stem cell-derived blood, cartilage, heart and liver
cells. Our internal drug rescue programs are designed to
utilize CardioSafe
3D, our customized cardiac
bioassay system, to develop small molecule NCEs for our
pipeline. In December 2016, we exclusively sublicensed to
BlueRock Therapeutics LP, a next generation regenerative medicine
company established by Bayer AG and Versant Ventures, rights to
certain proprietary technologies relating to the production of
cardiac stem cells for the treatment of heart disease
(the BlueRock
Agreement). VistaStem may
also pursue additional potential regenerative medicine
(RM) applications, including using blood, cartilage,
and/or liver cells derived from hPSCs for (A) cell-based therapy,
(B) cell repair therapy, and/or (C) tissue engineering. In a
manner similar to our exclusive sublicense agreement with BlueRock
Therapeutics, VistaStem may pursue these additional RM applications
in collaboration with third-parties.
AV-101 and Major Depressive Disorder
Background
The World Health Organization (WHO) estimates that 300 million people worldwide are
affected by depression. According to the NIH, major depression is
one of the most common mental disorders in the U.S. The NIMH
reports that, in 2014, an estimated 15.7 million adults aged 18 or
older in the U.S. had at least one major depressive episode in the
past year. This represented 6.7 percent of all U.S. adults.
According to the U.S. Centers for Disease Control and Prevention
(CDC) one in 10 Americans over the age of 12 takes a
standard, FDA-approved antidepressant.
Most standard, FDA-approved antidepressants target
neurotransmitter reuptake inhibition – either serotonin
(antidepressants known as SSRIs) or serotonin/norepinephrine (antidepressants
known as SNRIs). Even when effective, these standard depression
medications take many weeks to achieve adequate antidepressant
effects. Nearly two out of every three drug-treated depression
patients, including an estimated 6.9 million drug-treated MDD
patients in the U.S., obtain inadequate therapeutic benefit from
initial treatment with a standard antidepressant. Unfortunately,
even after treatment with many different standard antidepressants,
nearly one out of every three drug-treated depression patients
still do not achieve adequate therapeutic benefits from their
antidepressant medication. Such patients with an
inadequate response to standard antidepressants often seek to
augment their treatment regimen by adding an atypical antipsychotic
(drugs such as, for example, aripiprazole), despite only modest
potential therapeutic benefit and the risk of additional side
effects from atypical antipsychotics.
All
standard, FDA-approved antidepressants have risks of significant
side effects, including, among others, potential anxiety, metabolic
syndrome, sleep disturbance and sexual dysfunction. Adjunctive use
of atypical antipsychotics to augment inadequately performing
standard antidepressants increases the risk of serious side
effects, including, potentially, tardive dyskinesia, significant
weight gain, diabetes and heart disease, while offering only a
modest potential increase in therapeutic benefit.
AV-101
AV-101 is our oral new generation antidepressant
prodrug candidate in Phase 2 clinical development in the U.S. for
the adjunctive treatment of MDD patients with an inadequate
response to standard, FDA-approved antidepressants. As published in
the October 2015 issue of the
peer-reviewed, Journal of Pharmacology and
Experimental Therapeutics, in an article entitled, The prodrug 4-chlorokynurenine
causes ketamine-like antidepressant effects, but not side effects,
by NMDA/glycineB-site inhibition, using well-established preclinical models of
depression, AV-101 was shown to induce fast-acting, dose-dependent,
persistent and statistically significant antidepressant-like
responses following a single treatment. These responses were
equivalent to those seen with a single sub-anesthetic control dose
of ketamine. In addition, these studies confirmed that the
fast-acting antidepressant effects of AV-101 were mediated through
the GlyB site and also involved the activation of another key
neurological pathway, the
alpha-amino-3-hydroxy-5-methyl-4-isoxazolepropionic acid
(AMPA) receptor pathway. We believe activation of the
AMPA receptor pathway is a key final common pathway feature of new
generation antidepressants.
Following the completion of our NIH-funded,
randomized, double blind, placebo-controlled AV-101 Phase 1 safety
studies, in February 2015, we entered into a Cooperative Research
and Development Agreement (CRADA) with the NIMH. Under the CRADA, the NIMH is
funding, and Dr. Zarate, as Principal Investigator, and his team
are conducting, a 20-25 patient Phase 2 clinical study of AV-101 as
a monotherapy in subjects with treatment-resistant MDD
(NIMH
Study). We currently
anticipate that the NIMH will complete the NIMH Study by the end of
2017.
We
are preparing to launch our approximately 180-patient Phase 2 Study
of AV-101 as an adjunctive treatment of MDD in patients with an
inadequate response to standard, FDA-approved antidepressants. We
currently anticipate the launch of the Phase 2 Study, with Dr.
Maurizio Fava of Harvard Medical School serving as Principal
Investigator, by the end of the second quarter of 2017. We
currently anticipate top line results of the Phase 2 Study by the
end of 2018.
We
believe prior preclinical studies support the hypothesis that
AV-101 may also have the potential to treat multiple CNS disorders
and neurodegenerative diseases in addition to MDD, including
chronic neuropathic pain, epilepsy, Parkinson’s disease and
Huntington’s disease, where modulation of the NMDAR, AMPA
pathway and/or key active metabolites of AV-101 may achieve
therapeutic benefit. However, human clinical studies will be
required before this therapeutic potential could be demonstrated.
There is no guarantee that human clinical trials would be
successful or that the FDA would approve the use of AV-101 for the
treatment of one or more of these additional CNS
indications.
CardioSafe 3D™; NCE Drug Rescue and Regenerative
Medicine
VistaStem Therapeutics is our wholly owned
subsidiary focused on applying hPSC technology to discover, rescue,
develop and commercialize proprietary small molecule NCEs for CNS
and other diseases, as well as potential cellular therapies
involving stem cell-derived blood, cartilage, heart and liver
cells.CardioSafe 3D™ is our
customized in vitro cardiac bioassay system capable of
predicting potential human heart toxicity of small molecule
NCEs in vitro, long before they are ever tested in animal
and human studies. Potential commercial applications of our stem
cell technology platform involve (i) usingCardioSafe 3D internally for NCE drug discovery and
(ii) regenerative medicine (RM) and cellular therapies. Drug rescue involves
leveraging substantial prior research and development investments
by pharmaceutical companies and others related to public domain NCE
programs terminated before FDA approval due to heart toxicity
risks. In December 2016, we exclusively sublicensed to
BlueRock Therapeutics LP, a next generation RM
company established by Bayer AG and Versant Ventures, rights
to certain proprietary technologies relating to the production of
cardiac stem cells for the treatment of heart disease. We may also
pursue additional potential RM applications using blood, cartilage,
and/or liver cells derived from hPSCs for (A) cell-based therapy
(injection of stem cell-derived mature organ-specific cells
obtained through directed differentiation), (B) cell repair therapy
(induction of regeneration by biologically active molecules
administered alone or produced by infused genetically engineered
cells), or (C) tissue engineering (transplantation
of in
vitro grown complex
tissues) using hPSC-derived blood, bone, cartilage, and/or liver
cells. In a manner similar to the BlueRock Therapeutics
Agreement, we may pursue these additional RM and cellular therapy
applications in collaboration with
third-parties.
Risk Factors
Our business is subject to substantial risk.
Please carefully consider the section titled
“Risk
Factors” on page 5 of
this prospectus for a discussion of the factors you should
carefully consider before deciding to purchase the securities
offered by this prospectus. These risks include, among
others:
●
we
are a development stage biopharmaceutical company with no current
revenues or approved products, and limited experience developing
new drug, biological and/or regenerative medicine candidates, which
makes it difficult to assess our future viability;
●
we
depend heavily on the success of AV-101, and we cannot be certain
that we will be able to obtain regulatory approval for, or
successfully commercialize, AV-101, or any product
candidate;
●
failures
or delays in the commencement or completion of our planned clinical
trials could delay, prevent or limit our ability to generate
revenue and continue our business;
●
we
face significant competition, and if we are unable to compete
effectively, we may not be able to achieve or maintain significant
market penetration or improve our results of
operations;
●
some
of our programs have been partially supported by government grants,
which may not be available to us in the future;
●
if
we are unable to adequately protect our proprietary technology, or
obtain and maintain issued patents that are sufficient to protect
our product candidates, others could compete against us more
directly, which would have a material adverse impact on our
business, results of operations, financial condition and prospects;
and
●
we
have incurred significant net losses since inception and we will
continue to incur substantial operating losses for the foreseeable
future.
Additional risks and uncertainties not presently known to us or
that we currently deem immaterial may also impair our business
operations. You should be able to bear a complete loss of your
investment.
Corporate information
VistaGen Therapeutics,
Inc., a Nevada corporation, is the parent of VistaGen Therapeutics,
Inc. (dba VistaStem Therapeutics, Inc.), a wholly-owned California
corporation founded in 1998. Our principal executive offices are
located at 343 Allerton Avenue, South San Francisco, California
94080, and our telephone number is (650) 577-3600. Our website
address is www.vistagen.com.
The information contained on our website is not part of this
prospectus. We have included our website address as a factual
reference and do not intend it to be an active link to our
website.
RISK FACTORS
An investment in our
securities involves a high degree of risk. You should consider the
risks, uncertainties and assumptions described under Item 1A,
“Risk
Factors,” in our Annual
Report on Form 10-K for the fiscal year ended March 31, 2016, as
well as subsequently filed Quarterly Reports on Form 10-Q, which
risk factors are incorporated herein by reference, and may be
amended, supplemented or superseded from time to time by other
reports we file with the SEC in the future and any prospectus
supplement related to a particular offering. The risks and
uncertainties we have described in our Annual Report on Form 10-K
for the fiscal year ended March 31, 2016 and subsequent Quarterly
Reports on Form 10-Q are not the only ones we face. Additional
risks and uncertainties not presently known to us or that we
currently deem immaterial may also affect our operations. The
occurrence of any of these known or unknown risks might cause you
to lose all or part of your investment in the offered
securities.
CAUTIONARY NOTES REGARDING FORWARD-LOOKING
STATEMENTS
This
prospectus contains forward-looking statements that involve
substantial risks and uncertainties. All statements contained in
this prospectus and/or any applicable prospectus supplement other
than statements of historical facts, including statements regarding
our strategy, future operations, future financial position, future
revenue, projected costs, prospects, plans, objectives of
management and expected market growth, are forward-looking
statements. These statements involve known and unknown risks,
uncertainties and other important factors that may cause our actual
results, performance or achievements to be materially different
from any future results, performance or achievements expressed or
implied by the forward-looking statements.
The
words “anticipate,” “believe,”
“estimate,” “expect,” “intend,”
“may,” “plan,” “predict,”
“project,” “target,”
“potential,” “will,” “would,”
“could,” “should,” “continue,”
and similar expressions are intended to identify forward-looking
statements, although not all forward-looking statements contain
these identifying words. These forward-looking statements include,
among other things, statements about:
●
the
availability of capital to satisfy our working capital
requirements;
●
the
accuracy of our estimates regarding expenses, future revenues and
capital requirements;
●
our plans to develop and commercialize our lead product candidate,
AV-101, initially as an adjunctive treatment for MDD in patients
with an inadequate response to standard, FDA-approved
antidepressants, and subsequently as a treatment for additional CNS
diseases and disorders;
●
our
ability to initiate and complete our clinical trials and to advance
our product candidates into additional clinical trials, including
pivotal clinical trials, and successfully complete such clinical
trials;
●
regulatory
developments in the U.S. and foreign countries;
●
the
performance of the U.S. National Institute of Mental Health, our
third-party contractors involved with the manufacturer and
production of our drug candidates for nonclinical and clinical
development activities, contract research organizations and other
third-party nonclinical and clinical development collaborators and
regulatory service providers;
●
our
ability to obtain and maintain intellectual property protection for
our core assets;
●
the
size of the potential markets for our product candidates and our
ability to serve those markets;
●
the
rate and degree of market acceptance of our product candidates for
any indication once approved;
●
the
success of competing products and product candidates in development
by others that are or become available for the indications that we
are pursuing;
●
the
loss of key scientific, clinical and nonclinical development,
and/or management personnel, internally or from one of our
third-party collaborators; and
●
other risks and uncertainties, including
those described under
Item 1A, “Risk
Factors,” in our Annual
Report on Form 10-K for the fiscal year ended March 31, 2016 and
subsequent Quarterly Reports on Form 10-Q, which risk factors are
incorporated herein by reference.
These
forward-looking statements are only predictions and we may not
actually achieve the plans, intentions or expectations disclosed in
our forward-looking statements, so you should not place undue
reliance on our forward-looking statements. Actual results or
events could differ materially from the plans, intentions and
expectations disclosed in the forward-looking statements we make.
We have based these forward-looking statements largely on our
current expectations and projections about future events and trends
that we believe may affect our business, financial condition and
operating results. We have included important factors in the
cautionary statements included in this prospectus, as well as
certain information incorporated by reference into this prospectus,
that could cause actual future results or events to differ
materially from the forward-looking statements that we make. Our
forward-looking statements do not reflect the potential impact of
any future acquisitions, mergers, dispositions, joint ventures or
investments we may make.
You
should read this prospectus with the understanding that our actual
future results may be materially different from what we expect. We
do not assume any obligation to update any forward-looking
statements whether as a result of new information, future events or
otherwise, except as required by applicable law.
RATIO OF EARNINGS TO FIXED
CHARGES
Our
ratio of earnings to fixed charges for recently completed fiscal
years and any required interim periods will be specified in a
prospectus supplement or in a document that we file with the SEC
and incorporated by reference in the future.
USE OF PROCEEDS
Unless
otherwise provided in the applicable prospectus supplement, we
intend to use the net proceeds from the sale of the securities
under this prospectus for general corporate purposes, including
research and development, working capital and capital
expenditures. We may use a portion of the net proceeds to fund
production of, and nonclinical and clinical studies related to
Phase 2 and Phase 3 development of, AV-101 and other drug
candidates. We may also use the net proceeds from the sale of
the securities under this prospectus to in-license, acquire or
invest in complementary businesses, technologies, products
or assets. However, we have no current commitments or
obligations to do so. We may set forth additional information on
the use of proceeds from the sale or the securities we offer
under this prospectus in a prospectus supplement relating to the
specific offering. We cannot currently allocate specific
percentages of the net proceeds that we may use for the purposes
specified above. As a result, our management will have broad
discretion in the allocation of the net proceeds. Pending the
application of the net proceeds, we intend to invest the
net proceeds in short- and intermediate-term, interest-bearing
obligations, investment-grade instruments, certificates of deposit
or direct or guaranteed obligations of the U.S.
government.
-10-
DESCRIPTION OF
OUR CAPITAL
STOCK
General
Our authorized capital stock consists of 30.0
million shares of common stock, $0.001 par value per share, and
10.0 million shares of preferred stock, $0.001 par value per share.
The following is a description of our common stock and certain
provisions of our Restated Articles of Incorporation
(Articles), and our amended and restated bylaws
(Bylaws), and certain provisions of Nevada
law.
As
of March 31, 2017, there were issued and outstanding, or reserved
for issuance:
●
8,781,471
shares of common stock held by approximately 700 stockholders of
record;
●
750,000
shares of common stock reserved for issuance upon conversion of
500,000 shares our Series A Preferred held by one institutional
investor and one accredited individual investor;
●
1,160,240
shares of common stock reserved for issuance upon conversion of
1,160,240 shares of our Series B Preferred held by two
institutional investors;
●
2,318,012
shares of common stock reserved for issuance upon conversion of
2,318,012 shares of our Series C Preferred held by one
institutional investor;
●
4,549,006
shares of common stock that have been reserved for issuance upon
exercise of outstanding warrants, with a weighted average exercise
price of $6.31 per share;
●
1,659,324
shares of common stock reserved for issuance upon exercise of
outstanding stock options under our 1999 Stock Incentive Plan and
our Amended and Restated 2016 Stock Incentive Plan, with a weighted
average exercise price of $4.76 per share; and
●
1,134,911
shares of common stock reserved for future issuance in connection
with future grants under our Amended and Restated 2016 Stock
Incentive Plan.
We
may elect or be required to amend our Articles to increase the
number of shares of common stock authorized for issuance prior to
completing sales of shares of our common stock, or securities
convertible and/or exchangeable into shares of our common stock
described in this prospectus.
Common Stock
This section describes the general terms of our common stock that
we may offer from time to time. For more detailed information, a
holder of our common stock should refer to our Articles and our
Bylaws, copies of which are filed with the SEC as exhibits to the
registration statement of which this prospectus is a
part.
Except
as otherwise expressly provided in our Articles, or as required by
applicable law, all shares of our common stock have the same rights
and privileges and rank equally, share ratably and are identical in
all respects as to all matters, including, without limitation,
those described below. All outstanding shares of common stock are
fully paid and nonassessable.
Voting Rights
Each
holder of our common stock is entitled to cast one vote for each
share of common stock held on all matters submitted to a vote of
stockholders. Cumulative voting for election of directors is not
allowed under our Articles, which means that a plurality of the
shares voted can elect all of the directors then outstanding for
election. Except as otherwise provided under Nevada law or our
Articles, and Bylaws, on matters other than election of directors,
action on a matter is approved if the votes cast favoring the
action exceed the votes cast opposing the action.
Dividend Rights
The
holders of outstanding shares of our common stock are entitled to
receive dividends out of funds legally available, if our board of
directors, in its discretion, determines to issue dividend, and
only at the times and in the amounts that our board of directors
may determine. Our board of directors is not obligated to declare a
dividend. We have not paid any dividends in the past and we do not
intend to pay dividends in the foreseeable future.
-11-
Liquidation Rights
Upon
our liquidation, dissolution or winding-up, the holders of our
common stock will be entitled to share equally, identically and
ratably in all assets remaining, subject to the prior satisfaction
of all outstanding debt and liabilities and the preferential rights
and payment of liquidation preferences, if any, on any outstanding
shares of preferred stock.
No Preemptive or Similar Rights
Our
common stock is not subject to conversion, redemption, sinking fund
or similar provisions.
Transfer Agent and Registrar
The
transfer agent and registrar for our common stock is Computershare
Trust Company, N.A., Jersey City, New Jersey.
Preferred Stock
This section describes the general terms and provisions of our
outstanding shares of preferred stock, as well as preferred stock
that we may offer from time to time. The applicable prospectus
supplement will describe the specific terms of the shares of
preferred stock offered through that prospectus supplement, which
may differ from the terms we describe below. We will file a
copy of the certificate of designation that contains the terms of
each new series of preferred stock with the SEC each time we issue
a new series of preferred stock, and these certificates of
designation will be incorporated by reference into the registration
statement of which this prospectus is a part. Each certificate of
designation will establish the number of shares included in a
designated series and fix the designation, powers, privileges,
preferences and rights of the shares of each series as well as any
applicable qualifications, limitations or restrictions. A holder of
our preferred stock should refer to the applicable certificate of
designation, our Articles and the applicable prospectus supplement
(and any related free writing prospectus that we may authorize to
be provided to you) for more specific information.
We
are authorized, subject to limitations prescribed by Nevada law, to
issue up to 10.0 million shares of preferred stock in one or more
series, to establish from time to time the number of shares to be
included in each series and to fix the designation, powers,
preferences and rights of the shares of each series and any of its
qualifications, limitations or restrictions. Our board of directors
can increase or decrease the number of shares of any series, but
not below the number of shares of that series then outstanding,
without any further vote or action by our stockholders. Our board
of directors may authorize the issuance of preferred stock with
voting or conversion rights that could adversely affect the voting
power or other rights of the holders of the common stock. The
issuance of preferred stock, while providing flexibility in
connection with possible acquisitions and other corporate purposes,
could, among other things, have the effect of delaying, deferring
or preventing a change in control of the Company and may adversely
affect the market price of our common stock and the voting and
other rights of the holders of our common stock.
-12-
Outstanding Series of Preferred Stock
Currently,
there are three series of our preferred stock outstanding- Series A
Convertible Preferred Stock, Series B 10% Convertible Preferred
Stock, and Series C Convertible Preferred Stock. The rights and
preferences associated with each series are summarized
below.
Series A Preferred
General
In
December 2011, our board of directors authorized the creation of a
series of up to 500,000 shares of Series A Preferred. The
Certificate of Designation of the Relative Rights and Preferences
of the Series A Convertible Preferred Stock was filed with the
Nevada Secretary of State effective December 20, 2011.
Conversion and Rank
At
March 31, 2017, there were 500,000 shares of Series A Preferred
outstanding, which shares are currently subject to beneficial
ownership blockers and are exchangeable at the option of the
holders into an aggregate of 750,000 shares of our common stock.
The Series A Preferred ranks prior to our common stock for purposes
of liquidation preference.
Conversion Restriction
At no time may a holder of shares of Series A
Preferred convert shares of the Series A Preferred if the number of
shares of common stock to be issued pursuant to such conversion
would result in such holder beneficially owning (as determined in
accordance with Section 13(d) of the Exchange Act and the rules
thereunder) more than 9.99% of all of the common stock outstanding
at such time; provided, however, that this limitation may be waived upon
sixty-one (61) days’ notice to us.
Dividend Rights
The Series A Preferred has no separate dividend
rights. However, whenever the board of directors declares a
dividend on the common stock, each holder of record of a share of
Series A Preferred, or any fraction of a share of Series A
Preferred, on the date set by the board of directors to determine
the owners of the common stock of record entitled to receive such
dividend (Record Date) shall be entitled to receive out of any assets
at the time legally available therefor, an amount equal to such
dividend declared on one share of common stock multiplied by the
number of shares of common stock into which such share, or such
fraction of a share, of Series A Preferred could be exchanged on
the Record Date.
Voting Rights
The
Series A Preferred has no voting rights, except with respect to
transactions upon which the Series A Preferred shall be entitled to
vote separately as a class, The common stock into which the Series
A Preferred is exchangeable shall, upon issuance, have all of the
same voting rights as other issued and outstanding shares of our
common stock.
Liquidation Rights
In
the event of the liquidation, dissolution or winding up of our
affairs, after payment or provision for payment of our debts and
other liabilities, the holders of Series A Preferred then
outstanding shall be entitled to receive, out of our assets, if
any, an amount per share of Series A Preferred calculated by taking
the total amount available for distribution to holders of all of
our outstanding common stock before deduction of any preference
payments for the Series A Preferred, divided by the total of (x),
all of the then outstanding shares of our common stock, plus (y)
all of the shares of our common stock into which all of the
outstanding shares of the Series A Preferred can be exchanged
before any payment shall be made or any assets distributed to the
holders of the common stock or any other junior stock.
Series B Preferred
General
In May 2015, our board of directors authorized the
creation of a series of up to 4.0 million shares of Series B 10%
Convertible Preferred Stock (Series B
Preferred). The Certificate of
Designation of the Relative Rights and Preferences of the Series B
10% Convertible Preferred Stock was filed with the Nevada Secretary
of State on May 7, 2015 (the Series B Certificate of
Designation).
-13-
Conversion
Each share of Series B Preferred is convertible,
at the option of the holder (Voluntary
Conversion), into one (1) share
of the Company’s common stock. All outstanding shares of
Series B Preferred are also automatically convertible into common
stock (Automatic
Conversion) upon the closing or
effective date of any of the following transactions or events: (i)
a strategic transaction involving AV-101 with an initial up front
cash payment to the Company of at least $10.0 million; (ii) a
registered public offering of Common Stock with aggregate gross
proceeds to the Company of at least $10.0 million; or (iii) for 20
consecutive trading days the Company’s Common Stock trades at
least 20,000 shares per day with a daily closing price of at least
$12.00 per share; provided, however, that Automatic Conversion and
Voluntary Conversion are subject to certain beneficial ownership
blockers set forth in Section 6 of the Certificate of
Designation.
Following
the completion of our $10.9 million underwritten public offering of
our common stock in May 2016, which public offering occurred
concurrently with and facilitated our listing on the Nasdaq Capital
Market, approximately 2.4 million shares of Series B Preferred were
converted automatically into approximately 2.4 million shares of
our common stock pursuant to the Automatic Conversion provision. At
March 31, 2017, there were 1,160,240 shares of Series B Preferred
outstanding, which shares are currently subject to beneficial
ownership blockers and are exchangeable at the option of the
respective holders by Voluntary Conversion, or pursuant to
Automatic Conversion to the extent not otherwise subject to
beneficial ownership blockers, into an aggregate of 1,160,240
shares of our common stock.
Conversion Restriction
At no time may a holder of shares of Series B
Preferred convert shares of the Series B Preferred, either by
Voluntary Conversion or Automatic Conversion, if the number of
shares of common stock to be issued pursuant to such conversion
would result in such holder beneficially owning (as determined in
accordance with Section 13(d) of the Exchange Act and the rules
thereunder) more than 9.99% of all of the common stock outstanding
at such time; provided, however, that this limitation may be waived upon
sixty-one (61) days’ notice to us.
Rank
The Series B Preferred ranks prior to our common
stock, and pari passu with the Series A Preferred for purposes of
liquidation preference.
Dividend Rights
Prior to either a
Voluntary Conversion or Automatic Conversion, shares of Series B
Preferred will accrue dividends, payable only in unregistered
common stock, at a rate of 10% per annum
(the Accrued
Dividend). The Accrued Dividend
will be payable on the date of either a Voluntary Conversion or
Automatic Conversion solely in that number of shares of Common
Stock equal to the Accrued Dividend.
-14-
Voting Rights
The
Series B Preferred has no voting rights, except with respect to
transactions upon which the Series B Preferred shall be entitled to
vote separately as a class. The common stock into which the Series
B Preferred shall be exchangeable shall, upon issuance, have all of
the same voting rights as other issued and outstanding shares of
our common stock.
Liquidation Rights
Upon
any liquidation, dissolution, or winding-up of the Company, whether
voluntary or involuntary, the holders of Series B Preferred are
entitled to receive out of the Company’s assets, whether
capital or surplus, an amount equal to the stated value of the
Series B Preferred ($7.00 per share), plus any accrued and unpaid
dividends thereon, before any distribution or payment shall be made
to the holders of any junior securities, including holders of our
common stock. If the assets of the Company are insufficient to pay,
in full, such amounts, then the entire assets to be distributed to
the holders of the Series B Preferred shall be ratably distributed
among the holders in accordance with the respective amounts that
would be payable on such shares if all amounts payable thereon were
paid in full.
Series C
Preferred
General
In January 2016, our board of directors authorized
the creation of a series of up to 3.0 million shares of Series C
Convertible Preferred Stock (Series C
Preferred). The Certificate of
Designation of the Relative Rights and Preferences of the Series C
Convertible Preferred Stock was filed with the Nevada Secretary of
State, effective January 25, 2016 (the Series C Certificate of
Designation).
Conversion and Rank
At March 31, 2017, there were 2,318,012 shares of
Series C Preferred outstanding, which shares of Series C Preferred
are currently subject to beneficial ownership blockers and are
exchangeable at the option of the holder into 2,318,012 shares of
our common stock. The Series C Preferred ranks prior to our common
stock for purposes of liquidation preference,
and pari passu with the Series A Preferred and Series B
Preferred.
Conversion Restriction
At no time may a holder of shares of Series C
Preferred convert shares of the Series C Preferred if the number of
shares of common stock to be issued pursuant to such conversion
would result in such holder beneficially owning (as determined in
accordance with Section 13(d) of the Exchange Act and the rules
thereunder) more than 9.99% of all of the common stock outstanding
at such time; provided, however, that this limitation may be waived upon
sixty-one (61) days’ notice to us.
Dividend Rights
The Series C Preferred has no separate dividend
rights. However, whenever the board of directors declares a
dividend on the common stock, each holder of record of a share of
Series C Preferred, or any fraction of a share of Series C
Preferred, on the date set by the board of directors to determine
the owners of the common stock of record entitled to receive such
dividend (Record Date) shall be entitled to receive out of any assets
at the time legally available therefor, an amount equal to such
dividend declared on one share of common stock multiplied by the
number of shares of common stock into which such share, or such
fraction of a share, of Series C Preferred could be exchanged on
the Record Date.
-15-
Voting Rights
The
Series C Preferred has no voting rights, except with respect to
transactions upon which the Series C Preferred shall be entitled to
vote separately as a class. The common stock into which the Series
C Preferred is exchangeable shall, upon issuance, have all of the
same voting rights as other issued and outstanding shares of our
common stock.
Liquidation Rights
In
the event of the liquidation, dissolution or winding up of our
affairs, after payment or provision for payment of our debts and
other liabilities, the holders of Series C Preferred then
outstanding shall be entitled to receive, out of our assets, if
any, an amount per share of Series C Preferred calculated by taking
the total amount available for distribution to holders of all of
our outstanding common stock before deduction of any preference
payments for the Series C Preferred, divided by the total of (x),
all of the then outstanding shares of our common stock, plus (y)
all of the shares of our common stock into which all of the
outstanding shares of the Series C Preferred can be exchanged
before any payment shall be made or any assets distributed to the
holders of the common stock or any other junior stock.
Shares of Preferred Stock Issuable Pursuant to this
Prospectus
We
will incorporate by reference as an exhibit to the registration
statement, which includes this prospectus, the form of any
certificate of designation that describes the terms of the series
of preferred stock we are offering. This description and the
applicable prospectus supplement will include:
●
the
title and stated value;
●
the
number of shares authorized;
●
the
liquidation preference per share;
●
the
purchase price;
●
the
dividend rate, period and payment date, and method of calculation
for dividends;
●
whether
dividends will be cumulative or non-cumulative and, if cumulative,
the date from which dividends will accumulate;
●
the
procedures for any auction and remarketing, if any;
●
the
provisions for a sinking fund, if any;
●
the
provisions for redemption or repurchase, if applicable, and any
restrictions on our ability to exercise such redemption and
repurchase rights;
●
any
listing of the preferred stock on any securities exchange or
market;
●
whether
the preferred stock will be convertible into our common stock, and,
if applicable, the conversion price, or how it will be calculated,
and the conversion period;
●
voting
rights, if any, of the preferred stock;
●
preemptive
rights, if any;
●
restrictions
on transfer, sale or other assignment, if any;
●
a
discussion of any material United States federal income tax
considerations applicable to the preferred stock;
●
the
relative ranking and preferences of the preferred stock as to
dividend rights and rights if we liquidate, dissolve or wind up our
affairs;
●
any
limitations on issuance of any class or series of preferred stock
ranking senior to or on a parity with the series of preferred stock
as to dividend rights and rights if we liquidate, dissolve or wind
up our affairs; and
●
any
other specific terms, preferences, rights or limitations of, or
restrictions on, the preferred stock.
When
we issue shares of preferred stock under this prospectus, the
shares will fully be paid and nonassessable and will not have, or
be subject to, any preemptive or similar rights.
-16-
DESCRIPTION OF OUR
WARRANTS
The following description, together with the additional information
we include in any applicable prospectus supplements or free writing
prospectus, summarizes the material terms and provisions of the
warrants that we may offer under this prospectus, which may consist
of warrants to purchase common stock and/or preferred stock in one
or more series. Warrants may be offered independently or together
with common stock and/or preferred stock offered by any prospectus
supplement or free writing prospectus, and may be attached to or
separate from those securities. While the terms we have summarized
below will generally apply to any future warrants we may offer
under this prospectus, we will describe the particular terms of any
warrants that we may offer in more detail in the applicable
prospectus supplement or free writing prospectus. The terms of any
warrants we offer under a prospectus supplement or free writing
prospectus may differ from the terms we describe
below.
In
the event that we issue warrants, we will issue the warrants under
a warrant agreement which we will enter into with a warrant agent
to be selected by us. Forms of these warrant agreements and forms
of the warrant certificates representing the warrants, and the
complete warrant agreements and forms of warrant certificates
containing the terms of the warrants being offered, will be filed
as exhibits to the registration statement of which this prospectus
is a part or will be incorporated by reference from reports that we
file with the SEC. We use the term “warrant agreement”
to refer to any of these warrant agreements. We use the term
“warrant agent” to refer to the warrant agent under any
of these warrant agreements. The warrant agent will act solely as
an agent of ours in connection with the warrants and will not act
as an agent for the holders or beneficial owners of the
warrants.
The
following summaries of material provisions of the warrants and the
warrant agreements are subject to, and qualified in their entirety
by reference to, all the provisions of the warrant agreement
applicable to a particular series of warrants. We urge you to read
the applicable prospectus supplements or free writing prospectus
related to the warrants that we sell under this prospectus, as well
as the complete warrant agreements that contain the terms of the
warrants.
General
We
will describe in the applicable prospectus supplement or free
writing prospectus the terms relating to a series of warrants. If
warrants for the purchase of common stock or preferred stock are
offered, the prospectus supplement or free writing prospectus will
describe the following terms, to the extent
applicable:
●
the
offering price and the aggregate number of warrants
offered;
●
the
total number of shares that can be purchased if a holder of the
warrants exercises them and, in the case of warrants for preferred
stock, the designation, total number and terms of the series of
preferred stock that can be purchased upon exercise;
●
the
designation and terms of any series of preferred stock with which
the warrants are being offered and the number of warrants being
offered with each share of common stock or preferred
stock;
●
the
date on and after which the holder of the warrants can transfer
them separately from the related common stock or series of
preferred stock;
●
the
number of shares of common stock or preferred stock that can be
purchased if a holder exercises the warrant and the price at which
such common stock or preferred stock may be purchased upon
exercise, including, if applicable, any provisions for changes to
or adjustments in the exercise price and in the securities or other
property receivable upon exercise;
●
the
terms of any rights to redeem or call, or accelerate the expiration
of, the warrants;
●
the
date on which the right to exercise the warrants begins and the
date on which that right expires;
●
federal
income tax consequences of holding or exercising the warrants;
and
●
any
other specific terms, preferences, rights or limitations of, or
restrictions on, the warrants.
-17-
Exercise of Warrants
Each
holder of a warrant is entitled to purchase the number of shares of
common stock or preferred stock, as the case may be, at the
exercise price described in the applicable prospectus supplement or
free writing prospectus. After the close of business on the day
when the right to exercise terminates (or a later date if we extend
the time for exercise), unexercised warrants will become
void.
A
holder of warrants may exercise them by following the general
procedure outlined below:
●
delivering
to the warrant agent the payment required by the applicable
prospectus supplement or free writing prospectus to purchase the
underlying security;
●
properly
completing and signing the reverse side of the warrant certificate
representing the warrants; and
●
delivering
the warrant certificate representing the warrants to the warrant
agent within five business days of the warrant agent receiving
payment of the exercise price.
If
you comply with the procedures described above, your warrants will
be considered to have been exercised when the warrant agent
receives payment of the exercise price, subject to the transfer
books for the securities issuable upon exercise of the warrant not
being closed on such date. After you have completed those
procedures and subject to the foregoing, we will, as soon as
practicable, issue and deliver to you the common stock or preferred
stock that you purchased upon exercise. If you exercise fewer than
all of the warrants represented by a warrant certificate, a new
warrant certificate will be issued to you for the unexercised
amount of warrants. Holders of warrants will be required to pay any
tax or governmental charge that may be imposed in connection with
transferring the underlying securities in connection with the
exercise of the warrants.
Amendments and Supplements to the Warrant Agreements
We
may amend or supplement a warrant agreement without the consent of
the holders of the applicable warrants to cure ambiguities in the
warrant agreement, to cure or correct a defective provision in the
warrant agreement, or to provide for other matters under the
warrant agreement that we and the warrant agent deem necessary or
desirable, so long as, in each case, such amendments or supplements
do not materially adversely affect the interests of the holders of
the warrants.
Warrant Adjustments
Unless
the applicable prospectus supplement or free writing prospectus
states otherwise, the exercise price of, and the number of
securities covered by, a common stock warrant or preferred stock
warrant will be adjusted proportionately if we subdivide or combine
our common stock or preferred stock, as applicable. In addition,
unless the prospectus supplement or free writing prospectus states
otherwise, if we, without receiving payment:
●
issue
capital stock or other securities convertible into or exchangeable
for common stock or preferred stock, or any rights to subscribe
for, purchase or otherwise acquire any of the foregoing, as a
dividend or distribution to holders of our common stock or
preferred stock;
●
pay
any cash to holders of our common stock or preferred stock other
than a cash dividend paid out of our current or retained earnings
or other than in accordance with the terms of the preferred
stock;
●
issue
any evidence of our indebtedness or rights to subscribe for or
purchase our indebtedness to holders of our common stock or
preferred stock; or
●
issue
common stock or preferred stock or additional stock or other
securities or property to holders of our common stock or preferred
stock by way of spinoff, split-up, reclassification, combination of
shares or similar corporate rearrangement,
then
the holders of common stock warrants and preferred stock warrants,
as applicable, will be entitled to receive upon exercise of the
warrants, in addition to the securities otherwise receivable upon
exercise of the warrants and without paying any additional
consideration, the amount of stock and other securities and
property such holders would have been entitled to receive had they
held the common stock or preferred stock, as applicable, issuable
under the warrants on the dates on which holders of those
securities received or became entitled to receive such additional
stock and other securities and property.
-18-
Except
as stated above or as otherwise set forth in the applicable
prospectus supplement or free writing prospectus, the exercise
price and number of securities covered by a common stock warrant
and preferred stock warrant, and the amounts of other securities or
property to be received, if any, upon exercise of those warrants,
will not be adjusted or provided for if we issue those securities
or any securities convertible into or exchangeable for those
securities, or securities carrying the right to purchase those
securities or securities convertible into or exchangeable for those
securities.
Holders
of common stock warrants and preferred stock warrants may have
additional rights under the following circumstances:
●
certain reclassifications, capital reorganizations
or changes of the common stock or preferredstock, as applicable;
●
certain
share exchanges, mergers, or similar transactions involving us and
which result in changes of the common stock or preferred stock, as
applicable; or
●
certain
sales or dispositions to another entity of all or substantially all
of our property and assets.
If
one of the above transactions occurs and holders of our common
stock or preferred stock are entitled to receive stock, securities
or other property with respect to or in exchange for their
securities, the holders of the common stock warrants and preferred
stock warrants then outstanding, as applicable, will be entitled to
receive upon exercise of their warrants the kind and amount of
shares of stock and other securities or property that they would
have received upon the applicable transaction if they had exercised
their warrants immediately before the transaction.
-19-
DESCRIPTION OF OUR UNITS
This section outlines some of the provisions of the units and the
unit agreements. This information may not be complete in all
respects and is qualified entirely by reference to the unit
agreement with respect to the units of any particular series. The
specific terms of any series of units will be described in the
applicable prospectus supplement or free writing prospectus. If so
described in a particular prospectus supplement or free writing
prospectus, the specific terms of any series of units may differ
from the general description of terms presented below.
As
specified in the applicable prospectus supplement, we may issue
units consisting of one or more shares of common stock, shares of
preferred stock, warrants or any combination of such
securities.
The
applicable prospectus supplement will specify the following terms
of any units in respect of which this prospectus is being
delivered:
●
the
terms of the units and of any of the shares of common stock, shares
of preferred stock or warrants comprising the units, including
whether and under what circumstances the securities comprising the
units may be traded separately;
●
a
description of the terms of any unit agreement governing the
units;
●
if
appropriate, a discussion of material U.S. federal income tax
considerations; and
●
a
description of the provisions for the payment, settlement, transfer
or exchange of the units.
-20-
DESCRIPTION OF CERTAIN PROVISIONS OF NEVADA
LAW AND
OUR ARTICLES OF INCORPORATION AND BYLAWS
Transactions with Interested Persons
Under
the Nevada Revised Statutes, or NRS, a transaction with the Company
(i) in which a Company director or officer has a direct or indirect
interest, or (ii) involving another corporation, firm or
association in which one or more of the Company’s directors
or officers are directors or officers of the corporation, firm or
association or have a financial interest in the corporation firm or
association, is not void or voidable solely because of the
director’s or officer’s interest or common role in the
transaction if any one of the following circumstances
exists:
●
the
fact of the common directorship, office or financial interest is
known to the board of directors or a committee of the board of
directors and a majority of disinterested directors on the board of
directors (or on the committee) authorized, approved or ratified
the transaction;
●
the
fact of the common directorship, office or financial interest is
known to the stockholders and disinterested stockholders holding a
majority of the shares held by disinterested stockholders
authorized, approved or ratified the transaction;
●
the
fact of the common directorship, office or financial interest is
not known to the director or officer at the time the transaction is
brought to the board of directors for action; or
●
the
transaction was fair to the Company at the time it is authorized or
approved.
Control Share Acquisition Provisions
Nevada
law precludes an acquirer of the shares of a Nevada corporation who
crosses one of three ownership thresholds (20%, 33 1/3% or 50%)
from obtaining voting rights with respect to those shares unless
the disinterested holders of a majority of the shares of the
Company held by disinterested stockholders vote to accord voting
power to those shares.
Combinations with Interested Stockholders
Under
the NRS, except under certain circumstances, a corporation is not
permitted to engage in a business combination with any
“interested stockholder” for a period of two years
following the date such stockholder became an interested
stockholder. An “interested stockholder” is
a person or entity who owns 10% or more of the outstanding shares
of voting stock. Nevada permits a corporation to opt out
of the application of these business combination provisions by so
providing in the articles of incorporation or
bylaws. The Company’s Bylaws contain a provision
opting out of the application of these business combination
provisions.
-21-
PLAN OF
DISTRIBUTION
We
may sell the securities described in this prospectus to or through
underwriters or dealers, through agents, or directly to one or more
purchasers. A prospectus supplement or supplements (and any related
free writing prospectus that we may authorize to be provided to
you) will describe the terms of the offering of the securities,
including, to the extent applicable:
●
the
name or names of any underwriters or agents, if
applicable;
●
the
purchase price of the securities and the proceeds we will receive
from the sale;
●
any
over-allotment options under which underwriters may purchase
additional securities from us;
●
any
agency fees or underwriting discounts and other items constituting
agents’ or underwriters’ compensation;
●
any
public offering price;
●
any
discounts or concessions allowed or reallowed or paid to dealers;
and
●
any
securities exchange or market on which the securities may be
listed.
Only
underwriters named in a prospectus supplement are underwriters of
the securities offered by the prospectus supplement.
If
underwriters are used in the sale, they will acquire the securities
for their own account and may resell the securities from time to
time in one or more transactions at a fixed public offering price
or at varying prices determined at the time of sale. The
obligations of the underwriters to purchase the securities will be
subject to the conditions set forth in the applicable underwriting
agreement. We may offer the securities to the public through
underwriting syndicates represented by managing underwriters or by
underwriters without a syndicate. Subject to certain conditions,
the underwriters will be obligated to purchase all of the
securities offered by the prospectus supplement. Any public
offering price and any discounts or concessions allowed or
reallowed or paid to dealers may change from time to time. We may
use underwriters with whom we have a material relationship. We will
describe in the prospectus supplement that names the underwriter,
the nature of any such relationship.
We
may sell securities directly or through agents we designate from
time to time. We will name any agent involved in the offering and
sale of securities, and we will describe any commissions we will
pay the agent in the prospectus supplement. Unless the prospectus
supplement states otherwise, our agent will act on a best-efforts
basis for the period of its appointment.
We
may authorize agents or underwriters to solicit offers by certain
types of institutional investors to purchase securities from us at
the public offering price set forth in the prospectus supplement
pursuant to delayed delivery contracts providing for payment and
delivery on a specified date in the future. We will describe the
conditions to these contracts and the commissions we must pay for
solicitation of these contracts in the prospectus
supplement.
We may provide agents and underwriters with
indemnification against civil liabilities related to this offering,
including liabilities under the Securities Act of 1933, as amended
(the Securities
Act), or contribution with
respect to payments that the agents or underwriters may make with
respect to these liabilities. Agents and underwriters may engage in
transactions with, or perform services for, us in the ordinary
course of business.
Any
underwriter may engage in overallotment, stabilizing transactions,
short covering transactions and penalty bids in accordance with
Regulation M under the Exchange Act. Overallotment involves sales
in excess of the offering size, which create a short position.
Stabilizing transactions permit bids to purchase the underlying
security so long as the stabilizing bids do not exceed a specified
maximum. Short covering transactions involve purchases of the
securities in the open market after the distribution is completed
to cover short positions. Penalty bids permit the underwriters to
reclaim a selling concession from a dealer when the securities
originally sold by the dealer are purchased in a covering
transaction to cover short positions. Those activities may cause
the price of the securities to be higher than it would otherwise
be. If commenced, the underwriters may discontinue any of the
activities at any time.
Any
underwriters who are qualified market makers on the NASDAQ Capital
Market may engage in passive market making transactions in
accordance with Rule 103 of Regulation M during the business day
prior to the pricing of the offering, before the commencement of
offers or sales of the securities. Passive market makers must
comply with applicable volume and price limitations and must be
identified as passive market makers. In general, a passive market
maker must display its bid at a price not in excess of the highest
independent bid for such security; if all independent bids are
lowered below the passive market maker’s bid, however, the
passive market maker’s bid must then be lowered when certain
purchase limits are exceeded.
-22-
LEGAL MATTERS
The validity of the securities offered by this
prospectus will be passed upon by Disclosure Law Group, a
Professional Corporation, San Diego, California
(DLG).
Partners of DLG beneficially own an aggregate of 65,987
registered and/or restricted shares of our common
stock.
EXPERTS
The
financial statements of the Company incorporated in this prospectus
by reference to the Annual Report on Form 10-K for the fiscal year
ended March 31, 2016 have been audited by OUM & Co. LLP, an
independent registered public accounting firm, as set forth in
their report thereon.
WHERE YOU CAN FIND
MORE INFORMATION
We
are a public company and file annual, quarterly and special
reports, proxy statements and other information with the SEC. You
may read and copy any document we file at the SEC’s public
reference room at 100 F Street, NE, Washington, D.C. 20549. You can
request copies of these documents by writing to the SEC and paying
a fee for the copying cost. Please call the SEC at 1-800-SEC-0330
for more information about the operation of the public reference
room. Our SEC filings are also available, at no charge, to the
public at the SEC’s website at
http://www.sec.gov.
INCORPORATION OF CERTAIN INFORMATION BY
REFERENCE
The
following documents filed by us with the SEC are incorporated by
reference in this prospectus:
●
Annual
Report on Form 10-K for the fiscal year ended March 31, 2016, filed
on June 24, 2016;
●
Quarterly
Report on Form 10-Q for the quarter ended June 30, 2016, filed on
August 12, 2016;
●
Quarterly
Report on Form 10-Q for the quarter ended September 30, 2016, filed
on November 14, 2016;
●
Quarterly
Report on Form 10-Q for the quarter ended December 31, 2016, filed
on February 13, 2017;
●
Current
Report on Form 8-K filed on May 16, 2016;
●
Current
Report on Form 8-K filed on June 22, 2016;
●
Current
Report on Form 8-K filed on August 17, 2016;
●
Current
Report on Form 8-K filed on September 27, 2016;
●
Current
Report on Form 8-K filed on December 14, 2016;
●
Current
Report on Form 8-K filed on March 29, 2017; and
●
The
description of our common stock contained in the Registration
Statement on Form 8-A filed pursuant to Section 12(b) of the
Exchange Act on May 3, 2016, including any amendment or report
filed with the SEC for the purpose of updating this
description.
We
also incorporate by reference all documents we file pursuant to
Section 13(a), 13(c), 14 or 15 of the Exchange Act (other than any
portions of filings that are furnished rather than filed pursuant
to Items 2.02 and 7.01 of a Current Report on Form 8-K) after the
date of the initial registration statement of which this prospectus
is a part and prior to effectiveness of such registration
statement. All documents we file in the future pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of
this prospectus and prior to the termination of the offering are
also incorporated by reference and are an important part of this
prospectus.
Any
statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or
superseded for the purposes of this registration statement to the
extent that a statement contained herein or in any other
subsequently filed document which also is or deemed to be
incorporated by reference herein modifies or supersedes such
statement. Any statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part
of this registration statement.
We will provide to each person, including any beneficial owner, to
whom a prospectus is delivered, a copy of any or all of the
information that has been incorporated by reference in the
prospectus but not delivered with the prospectus. You may request a
copy of these filings, excluding the exhibits to such filings which
we have not specifically incorporated by reference in such filings,
at no cost, by writing to or calling us at:
VistaGen Therapeutics, Inc.
Attn: Corporate Secretary
343 Allerton Avenue
South San Francisco, CA 94080
(650) 577-3600
This
prospectus is part of a registration statement we filed with the
SEC. You should only rely on the information or representations
contained in this prospectus and any accompanying prospectus
supplement. We have not authorized anyone to provide information
other than that provided in this prospectus and any accompanying
prospectus supplement. We are not making an offer of the securities
in any state where the offer is not permitted. You should not
assume that the information in this prospectus or any accompanying
prospectus supplement is accurate as of any date other than the
date on the front of the document.
-23-
Shares
Common
Stock
____________________
Prospectus
Supplement
February
, 2019
____________________
William
Blair