2836 |
85-1231852 | |||
(State or other jurisdiction of incorporation or organization) |
(Primary Standard Industrial Classification Code Number) |
(I.R.S. Employer Identification Number) |
Mitchell S. Bloom, Esq. Marianne Sarrazin, Esq. Goodwin Procter LLP Three Embarcadero Center, 28 th FloorSan Francisco, California 94111 Tel: (415) 733-6000 |
Ellenoff Grossman & Schole LLP Barry Grossman, Esq. Sarah E. Williams, Esq. Matthew Bernstein, Esq. Ellenoff Grossman & Schole LLP 1345 Avenue of the Americas New York, New York 10105 (212) 370-1300 |
Large accelerated filer |
☐ |
Accelerated filer |
☐ | |||
☒ |
Smaller reporting company |
|||||
Emerging growth company |
Per Unit |
Total(2) |
|||||||
Public offering price |
$ |
$ |
||||||
Underwriting discounts and commissions (up to %) (1) |
$ |
$ |
||||||
Proceeds to Clarus Therapeutics Holdings, Inc. before expenses |
$ |
$ |
(1) |
We have also agreed to issue warrants to purchase shares of Common Stock to the underwriter and to reimburse the underwriter for certain expenses. The underwriter’s warrants are exercisable for a number of shares of Common Stock equal to up to 5% of the number of shares of Common Stock or pre-funded warrants in the Units sold in this offering, at an exercise price equal to 110% of the public offering price per Unit. See “ Underwriting |
(2) |
Assumes no pre-funded warrants are issued and all units issued in the offering include Common Stock. |
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F-1 |
• | “ Blue Water |
• | “ Blue Water IPO IPO |
• | “ Board |
• | “ Business Combination |
• | “ Bylaws |
• | “ Certificate of Incorporation |
• | “ Code |
• | “ DGCL |
• | “ Effective Time |
• | “ Exchange Act |
• | “ Founder Shares |
• | “ Legacy Clarus |
• | “ Merger |
• | “ Merger Agreement |
• | “ Merger Closing |
• | “ Merger Closing Date |
• | “ PIPE Closing |
• | “ PIPE Closing Date |
• | “ PIPE Common Warrants |
• | “ PIPE Pre-Funded WarrantsPre-Funded Warrant entitles the holder thereof to purchase one share of Common Stock for $0.00001 per share. |
• | “ PIPE Shares |
• | “ PIPE Warrants Pre-Funded Warrants and the PIPE Common Warrants. |
• | “ Placement Warrants |
• | “ Private Placement Pre-Funded Warrants and PIPE Common Warrants described in this prospectus were issued, and the other transactions contemplated by the Securities Purchase Agreement. |
• | “ Public Warrants |
• | “ SEC |
• | “ Securities Act |
• | “ Securities Purchase Agreement |
• | “ Sponsor |
• | “ Warrant Agreement |
• | “ Warrants |
• | our ability to obtain funding for our operations and to grow our business; |
• | our ability to successfully commercialize and market JATENZO and any future product candidates, if approved, and the timing of any commercialization and marketing efforts; |
• | the potential market size, opportunity and growth potential for JATENZO and any future product candidates, if approved; |
• | the benefits of testosterone (“ T |
• | our plans and expectations regarding our strategic alternative review process and the timing and success of such process regarding a potential transaction; |
• | the timing of our product development activities and the initiation, timing, progress and results of our exploratory trials and studies to guide the development of JATENZO for additional potential indications; |
• | the implementation of our business model, strategic plans for our business, product candidates and technology; |
• | expectations regarding sales of JATENZO and the costs of supplying, manufacturing and continuing to commercialize JATENZO; |
• | our ability to obtain marketing approval and acceptance for JATENZO in territories outside of the United States; |
• | our ability to maintain the listing of the Common Stock on the Nasdaq Global Market and the potential liquidity and trading of our securities; |
• | our future financial performance and expectations regarding future expenditures; |
• | the accuracy of our estimates regarding expenses, capital requirements and our future needs for additional financing; |
• | our ability to retain the continued service of our key professionals and to identify, hire and retain additional qualified professional; |
• | developments relating to our competitors and our industry, and our ability to compete effectively in a competitive industry; |
• | our ability to contract with third-party suppliers, manufacturers and other service providers and their ability to perform adequately and to produce sufficient quantities of clinical and potentially future commercial supplies; |
• | our ability to enter into marketing or co-promotional arrangements and strategic partnerships; |
• | the scope of protection we are able to establish and maintain for intellectual property rights covering our product candidates and technology; |
• | regulatory, judicial, and legislative developments and their impact on our business; |
• | the impact from the outcome of any known and unknown litigation; and |
• | other risks and uncertainties, including those listed under the section titled “Risk Factors.” |
• | We have incurred significant operating losses and there is substantial doubt about our ability to continue as a going concern, which may affect our ability to obtain future financing and may require us to curtail our operations. We will need to raise additional capital to support our operations. This additional funding may not be available on acceptable terms or at all. Failure to obtain this necessary capital or address our liquidity needs may force us to delay, limit or terminate our operations, make reductions in our workforce, discontinue our commercialization efforts for JATENZO as well as other development programs, liquidate all or a portion of our assets or pursue other strategic alternatives, and/or seek protection under the provisions of the U.S. Bankruptcy Code. |
• | We have significant indebtedness and servicing our debt requires a significant amount of cash. We may not have sufficient cash flow from our operations to satisfy the financial covenants in our debt agreements. We may not receive a waiver of default for outstanding indebtedness for which we may be in default in the future. |
• | We may not be successful in identifying and implementing any strategic business combination or other transaction and any strategic transactions that we may consummate in the future could have negative consequences. |
• | JATENZO is the only product we are commercializing. If we fail to successfully commercialize JATENZO, we may need to acquire additional product candidates and our business may be impaired. |
• | We have limited experience as a commercial company and the marketing and sale of JATENZO or any future approved drugs may be unsuccessful or less successful than anticipated. |
• | Our ability to utilize our net operating loss carryforwards and certain other tax attributes may be limited. |
• | Our reliance on third-party suppliers and distributors could harm our ability to commercialize JATENZO or any product candidates that may be approved in the future. |
• | The ongoing COVID-19 pandemic is having, and is expected to have, an adverse impact on our business. |
• | The FDA and other regulatory agencies actively enforce the laws and regulations prohibiting the promotion of off-label uses. If we are found to have improperly promoted off-label uses, we may become subject to significant liability. |
• | Even though we have received marketing approval for JATENZO in the United States, we may never receive marketing approval outside of the United States, or receive pricing and reimbursement outside the United States at acceptable levels. |
• | Recent federal legislation may increase pressure to reduce prices of certain pharmaceutical products paid for by Medicare, which could materially adversely affect our revenue and our results of operations. |
• | T is a Schedule III (non-narcotic) substance under the Controlled Substances Act and any failure to comply with this Act or its state equivalents would have a negative impact on our business. |
• | If coverage and reimbursement for JATENZO are limited, it may be difficult for us to profitably sell JATENZO. |
• | Our market is subject to intense competition. If we are unable to compete effectively, our opportunity to generate revenue from the sale of JATENZO will be impaired. |
• | If we are unable to obtain or protect intellectual property rights related to JATENZO, we may not be able to compete effectively in our market. |
• | We may be involved in lawsuits and proceedings to protect or enforce our patents, which could be expensive, time consuming and unsuccessful. |
• | We have identified material weaknesses in our internal control over financial reporting, and we may identify future material weaknesses in our internal control over financial reporting. |
• | We will need to grow our company, and we may encounter difficulties in managing this growth, which could disrupt our operations. |
• | Our future success depends on our ability to retain our chief executive officer, chief financial officer and chief commercial officer and to attract, retain and motivate qualified personnel. |
• | Our debt agreements contain restrictions that limit our flexibility in operating our business. |
Issuer |
Clarus Therapeutics Holdings, Inc. |
Securities offered by us |
13,934,426 Units on a firm commitment basis. Each Unit consists of one share of Common Stock and Class A Warrant (together with the shares of Common Stock underlying the Class A Warrants). |
We are also offering to each purchaser, with respect to the purchase of Units that would otherwise result in the purchaser’s beneficial ownership exceeding 4.99% of our outstanding Common Stock immediately following the consummation of this offering, the opportunity to purchase one pre-funded warrant in lieu of one share of Common Stock. Subject to limited exceptions, a holder of pre-funded warrants will not have the right to exercise any portion of its pre-funded warrant if the holder, together with its affiliates, would beneficially own in excess of 4.99% (or, at the election of the holder, such limit may be increased to up to 9.99%) of the number of shares of Common Stock outstanding immediately after giving effect to such exercise. Each whole pre-funded warrant will be exercisable for one share of Common Stock. The purchase price per pre-funded warrant will be equal to the price per share of Common Stock, minus $ , and the exercise price of each pre-funded warrant will equal $ per share. The pre-funded warrants will be immediately exercisable (subject to the beneficial ownership cap) and may be exercised at any time in perpetuity until all of the pre-funded warrants are exercised in full. |
The Units will not be certificated or issued in stand-alone form. The Common Stock and/or pre-funded warrants and the Class A Warrants comprising the Units are immediately separable upon issuance and will be issued separately in this offering. |
Public offering price |
$ per Unit. |
Description of Class A Warrants |
Each Class A Warrant will have an exercise price of $ per share, will be exercisable upon issuance and will expire years from issuance. Each whole Class A Warrant is exercisable for one share of Common Stock, subject to adjustment in the event of stock dividends, stock splits, stock combinations, reclassifications, reorganizations or similar events affecting the Common Stock as described herein. The terms of the Class A Warrants will be governed by a Warrant Agency Agreement, dated as of the closing date of this offering, that we expect to be entered into between us and Continental Stock Transfer & Trust Company or its affiliate (the “ Warrant Agent Description of Securities We Are Offering |
Over-allotment option |
We have granted the underwriters an option for a period of up to 45 days to purchase up to 2,090,164 additional shares of Common Stock and/or additional Class A Warrants. |
Underwriter’s warrants |
Upon the closing of this offering, we will issue to Maxim Group LLC or its designees, as the representative of the underwriters in this offering, warrants entitling it to purchase a number of shares of Common Stock equal to up to 5% of the shares of Common Stock or pre-funded warrants in the Units sold in this offering at an exercise price equal to 110% of the public offering price of the Units in this offering. The Underwriter’s Warrants shall be exercisable commencing six months after the commencement of sales of this offering and will expire five years from the commencement of sales of the offering. |
Common Stock to be outstanding immediately after the offering(1) |
37,960,243 shares (or 40,050,407 shares, assuming full exercise of the underwriters’ option to purchase additional shares), assuming we do not issue any pre-funded warrants and assuming that none of the holders of Class A Warrants issued in this offering exercise their Class A Warrants. |
Use of proceeds |
We estimate that we will receive net proceeds of approximately $15.4 million, and approximately $17.7 million if the underwriters exercise their option to purchase additional shares of Common Stock and/or Class A Warrants in full, after deducting underwriting discounts and commissions and estimated expenses payable by us. This amount is based on an assumed public offering price of $1.22 per Unit, the last reported sale price of the Common Stock on Nasdaq on April 8, 2022 and assuming no exercise of the Class A Warrants sold in this offering. |
We intend to use the net proceeds of this offering together with our existing cash, for working capital and general corporate purposes. See “ Use of Proceeds |
Listing |
The Common Stock currently trades on the Nasdaq Global Market under the symbol “CRXT.” There are no established public trading markets for the pre-funded warrants or the Class A Warrants, and we do not expect such markets to develop. We do not intend to apply for listing of the pre-funded warrants or the Class A Warrants on any securities exchange or other nationally recognized trading system. Without an active trading market, the liquidity of the pre-funded warrants and the Class A Warrants will be limited. |
Risk factors |
Your investment in our securities will involve risks. You should carefully consider all the information in this prospectus, including the information referred to in the section entitled “ Risk Factors Cautionary Note Regarding Forward-Looking Statements |
Participation by Private Placement investor |
The institutional accredited investor from the Private Placement has indicated an intent to participate in this offering for up to $10.0 million. Subject to such participation, we intend to amend the PIPE Common Warrants to acquire 1,320,968 shares of Common Stock issued to such investor at the PIPE Closing concurrent with the closing of this offering, to reduce the exercise price to $ , the public offering price per Unit in this offering, and to seek stockholder approval to reduce the exercise price to $ , of the remaining PIPE Common Warrants to acquire 1,703,226 shares of Common Stock issued to such investor at the PIPE Closing. |
(1) | The number of shares of Common Stock to be outstanding after this offering is based on 24,025,817 shares of Common Stock outstanding as of December 31, 2021 and excludes: |
• | 1,958,030 shares of Common Stock reserved for issuance under the 2021 Stock Option and Incentive Plan (the “ 2021 Plan |
• | 1,516,970 shares of Common Stock underlying options and restricted stock units granted under the 2021 Plan; |
• | 347,500 shares of Common Stock reserved for issuance under the Employee Stock Purchase Plan (“ ESPP |
• | up to 9,915,000 shares of Common Stock issuable upon the exercise of the Placement Warrants and the Public Warrants, at an exercise price of $11.50 per share; |
• | up to 9,246 shares of Common Stock issuable upon the exercise of certain private warrants, at an exercise price of $29.74 per share; |
• | up to 3,024,194 shares of Common Stock issuable upon the exercise of the PIPE Common Warrants, at an exercise price of $5.25 per share; and |
• | 724,194 shares of Common Stock issued subsequent to such date upon the exercise of the PIPE Pre-Funded Warrants, at an exercise price of $0.00001 per share. |
• | establish and maintain our relationships with healthcare providers who will be treating the patients who may receive JATENZO and any future products; |
• | obtain adequate pricing and reimbursement for JATENZO and any future products; |
• | develop and maintain successful strategic alliances; and |
• | manage our spending as costs and expenses increase due to clinical trials, marketing approvals, and commercialization. |
• | adversely impacting the third parties we solely rely on to sufficiently manufacture JATENZO in quantities we require including the availability of raw materials and other supply chain requirements; |
• | decreasing the demand for JATENZO; and |
• | the ability of our sales representatives to reach healthcare customers. |
• | physicians’ views as to the scope of the approved indication and limitations on use and warnings and precautions contained in JATENZO’s approved labeling; |
• | the availability, efficacy and safety of competitive therapies; |
• | pricing and the perception of physicians and payors as to cost effectiveness; |
• | the existence of sufficient third-party coverage or reimbursement; and |
• | the effectiveness of our sales, marketing and distribution strategies. |
• | issue warning or untitled letters or notice of violation letters; |
• | seek an injunction or impose civil or criminal penalties or monetary fines; |
• | suspend or withdraw marketing approval; |
• | suspend any ongoing clinical trials; |
• | refuse to approve pending applications or supplements to applications submitted by us; |
• | suspend or impose restrictions on operations, including costly new manufacturing requirements; or |
• | seize or detain products, refuse to permit the import or export of products, or request that we initiate a product recall. |
• | the demand for our products and any products for which we may obtain regulatory approval; |
• | our ability to set a price that we believe is fair for our products; |
• | our ability to obtain coverage and reimbursement approval for a product; |
• | our ability to generate revenues and achieve or maintain profitability; and |
• | the level of taxes that we are required to pay. |
• | T-gels, such as AndroGel, marketed by AbbVie Inc. (“AbbVie Endo |
• | generic T-injectables; |
• | oral methyl-T; |
• | transdermal patches, such as Androderm, marketed by Allergan Sales, LLC, a subsidiary of AbbVie; buccal patches, such as Striant, marketed by Endo; |
• | implanted subcutaneous pellets, such as Testopel, marketed by Endo; |
• | Aveed, a long-acting T-injectable marketed by Endo; |
• | Xyosted, a sub-cutaneous weekly auto-injector T-therapy marketed by Antares Pharma, Inc.; and |
• | Natesto, an intranasal T-therapy, marketed by Acerus Pharmaceuticals. |
• | TLANDO, an oral TU formulation developed by Lipocine, was licensed to Antares Pharma who announced on March 29, 2022 that FDA had granted full approval to TLANDO. Such approval required the expiry of JATENZO’s Hatch-Waxman market exclusiviy that occurred on March 27, 2022. |
• | KYZATREX, an oral TU formulation as a T-replacement therapy being developed by Marius Pharmaceuticals with a Prescription Drug User Fee Act (“PDUFA |
• | BGS-649 (leflutrozole), a once weekly aromatase inhibitor (that increases testosterone levels), as first-line therapy for the treatment of infertility in obese men with hypogonadotropic hypogonadism, which has completed its Phase 2b trials, currently being developed by Mereo BioPharma Group Ltd; and |
• | TesoRx Pharma, LLC is developing an oral TU product (TSX-049) for testosterone replacement therapy in hypogonadal men. |
• | substantial monetary awards to patients from our clinical trials or other claimants; |
• | decreased demand for JATENZO; |
• | damage to our business reputation and exposure to adverse publicity; |
• | increased FDA warnings on product labels; |
• | costs of related litigation; |
• | distraction of management’s attention from our primary business; |
• | loss of revenue; and |
• | the inability to successfully commercialize JATENZO. |
• | sell, transfer, lease or dispose of certain assets; |
• | encumber or permit liens on certain assets; |
• | make certain restricted payments, including paying dividends on, or repurchasing or making distributions with respect to, Common Stock; and |
• | enter into certain transactions with affiliates. |
• | a limited availability of market quotations for our securities; |
• | reduced liquidity for our securities; |
• | a determination that the Common Stock is a “penny stock,” which will require brokers trading in Common Stock to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our securities; |
• | a limited amount of news and analyst coverage; |
• | a decreased ability to issue additional securities or obtain additional financing in the future. |
• | potential loss of confidence by partners and employees; and |
• | loss of institutional investor interest and fewer business development opportunities. |
• | results of operations that vary from the expectations of securities analysts and investors; |
• | results of operations that vary from those our competitors; |
• | changes in expectations as to our future financial performance, including financial estimates and investment recommendations by securities analysts and investors; |
• | declines in the market prices of stocks generally; |
• | strategic actions by us or our competitors; |
• | announcements by us or our competitors of significant contracts, acquisitions, joint ventures, other strategic relationships or capital commitments; |
• | any significant change in our management; |
• | changes in general economic or market conditions or trends in our industry or markets; |
• | changes in business or regulatory conditions, including new laws or regulations or new interpretations of existing laws or regulations applicable to our business; |
• | future sales of Common Stock or other securities; |
• | investor perceptions of the investment opportunity associated with the Common Stock relative to other investment alternatives; |
• | the public’s response to press releases or other public announcements by our or third parties, including our filings with the SEC; |
• | litigation involving our, our industry, or both, or investigations by regulators into our operations or those of our competitors; |
• | guidance, if any, that we provide to the public, any changes in this guidance or our failure to meet this guidance; |
• | the development and sustainability of an active trading market for the Common Stock; |
• | actions by institutional or activist stockholders; |
• | changes in accounting standards, policies, guidelines, interpretations or principles; and |
• | other events or factors, including those resulting from pandemics, natural disasters, war, including the ongoing conflict in Ukraine, acts of terrorism or responses to these events. |
• | a classified board of directors with three-year staggered terms, which could delay the ability of stockholders to change the membership of a majority of the Board; |
• | opting out of Section 203 of the DGCL to allow us to establish our own rules governing business combinations with interested parties; |
• | the ability of the Board to issue shares of preferred stock, including “blank check” preferred stock and to determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquirer; |
• | the limitation of the liability of, and the indemnification of, our directors and officers; |
• | the exclusive right of the Board to elect a director to fill a vacancy created by the expansion of the Board or the resignation, death or removal of a director, which prevents stockholders from being able to fill vacancies on the Board; |
• | the requirement that directors may only be removed from the Board for cause; |
• | a prohibition on stockholder action by written consent, which forces stockholder action to be taken at an annual or special meeting of stockholders and could delay the ability of stockholders to force consideration of a stockholder proposal or to take action, including the removal of directors; |
• | the requirement that a special meeting of stockholders may be called only by the Board, the chairperson of the Board, our chief executive officer or our president (in the absence of a chief executive officer), which could delay the ability of stockholders to force consideration of a proposal or to take action, including the removal of directors; |
• | controlling the procedures for the conduct and scheduling of board of directors and stockholder meetings; |
• | the requirement for the affirmative vote of holders of at least 2/3 of the voting power of all of the then outstanding shares of the voting stock, voting together as a single class, to amend, alter, change or repeal any provision of the Certificate of Incorporation and Bylaws, which could preclude stockholders from bringing matters before annual or special meetings of stockholders and delay changes in the Board and also may inhibit the ability of an acquirer to effect such amendments to facilitate an unsolicited takeover attempt; |
• | the ability of the Board to amend the bylaws, which may allow the Board to take additional actions to prevent an unsolicited takeover and inhibit the ability of an acquirer to amend the bylaws to facilitate an unsolicited takeover attempt; and |
• | advance notice procedures with which stockholders must comply to nominate candidates to the Board or to propose matters to be acted upon at a stockholders’ meeting, which could preclude stockholders from bringing matters before annual or special meetings of stockholders and delay changes in the Board and also may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting to obtain control of our company. |
• | on an actual basis; and |
• | on an adjusted basis after giving effect to the issuance and sale of 13,934,426 Units in this offering, at the assumed public offering price of $1.22 per Unit, which is the last reported sale price of the Common Stock on the Nasdaq Global Market on April 8, 2022, and after deducting underwriting discounts and commissions and estimated offering expenses payable by us. |
As of December 31, 2021 |
||||||||
(in thousands, except share and per share data) | Actual |
As Adjusted (1) |
||||||
Cash and cash equivalents |
$26,415 | $ | 41,790 | |||||
|
|
|
|
|||||
Senior notes payable |
42,269 | 42,269 | ||||||
Stockholders’ equity (deficit): |
||||||||
Preferred stock, $0.0001 par value, 10,000,000 shares authorized, no shares issued and outstanding at December 31, 2021 |
— | — | ||||||
Common stock, $0.0001 par value; 125,000,000 shares authorized, 24,025,817 shares issued and outstanding, actual; 125,000,000 shares authorized, 37,960,243 shares issued and outstanding, as adjusted |
2 | 4 | ||||||
Additional paid-in capital |
$ | 305,734 | $ | 321,307 | ||||
Accumulated deficit |
(321,655 | ) | (321,655 | ) | ||||
Total stockholders’ equity (deficit) |
(15,919 | ) | (544 | ) | ||||
Total Capitalization |
$ |
26,350 |
$ |
41,725 |
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|
|
|
|
(1) | Each $1.00 increase or decrease in the assumed public offering price of $1.22 per Unit, after deducting underwriting discounts and commissions and estimated offering expenses payable by us, would increase or decrease cash, additional paid-in capital, total stockholders’ equity and total capitalization on a pro forma, as adjusted basis by $13.0 million, assuming that the number of Securities offered by us, as set forth on the cover page of this prospectus, remains the same. Each increase or decrease of 1,000,000 in the number of Securities we are offering at the assumed public offering price of $1.22 per Unit, after deducting underwriting discounts and commissions and estimated offering expenses payable by us, would increase or decrease cash, additional paid-in capital, total stockholders’ equity and total capitalization on a pro forma, as adjusted basis by $1.1 million. The as adjusted information is illustrative only of our capitalization following the closing of this offering and will change based on the actual public offering price and other terms of this offering determined at pricing. |
• | 1,958,030 shares of Common Stock reserved for issuance under the 2021 Plan, as well as any automatic increases in the number of Common Stock reserved for issuance under the 2021 Plan; |
• | 1,516,970 shares of Common Stock underlying options and restricted stock units granted under the 2021 Plan; |
• | 347,500 shares of Common Stock reserved for issuance under the ESPP, as well as any automatic increases in the number of shares of Common Stock reserved for issuance under the ESPP; |
• | up to 9,915,000 shares of Common Stock issuable upon the exercise of the Placement Warrants and the Public Warrants, at an exercise price of $11.50 per share; |
• | up to 9,246 shares of Common Stock issuable upon the exercise of certain private warrants, at an exercise price of $29.74 per share; |
• | up to 3,024,194 shares of Common Stock issuable upon the exercise of the PIPE Common Warrants, at an exercise price of $5.25 per share; and |
• | 724,194 shares of Common Stock issued subsequent to such date upon the exercise of the PIPE Pre-Funded Warrants, at an exercise price of $0.00001 per share. |
Assumed public offering price per Unit |
$ | 1.22 | ||||||
Net tangible book value per share as of December 31, 2021 |
$ | (0.66) | ||||||
Increase in pro forma, net tangible book value per share attributable to new investors purchasing Securities in this offering |
$ | 0.65 | ||||||
Pro forma, as adjusted net tangible book value per share after this offering |
$ | (0.01) | ||||||
Dilution per share to new investors purchasing Securities in this offering |
$ | 1.23 | ||||||
|
|
• | 1,958,030 shares of Common Stock reserved for issuance under the 2021 Plan as well as any automatic increases in the number of Common Stock reserved for issuance under the 2021 Plan; |
• | 1,516,970 shares of Common Stock underlying options and restricted stock units granted under the 2021 Plan; |
• | 347,500 shares of Common Stock reserved for issuance under the ESPP, as well as any automatic increases in the number of shares of Common Stock reserved for issuance under the ESPP; |
• | up to 9,915,000 shares of Common Stock issuable upon the exercise of the Placement Warrants and the Public Warrants, at an exercise price of $11.50 per share; |
• | up to 9,246 shares of Common Stock issuable upon the exercise of certain private warrants, at an exercise price of $29.74 per share; |
• | up to 3,024,194 shares of Common Stock issuable upon the exercise of the PIPE Common Warrants, at an exercise price of $5.25 per share; and |
• | 724,194 shares of Common Stock issued subsequent to such date upon the exercise of the PIPE Pre-Funded Warrants, at an exercise price of $0.00001 per share. |
• | continue to commercialize JATENZO in the United States for the treatment of adult males with a deficiency or absence of endogenous T; |
• | incur sales and marketing costs to support the commercialization of JATENZO; |
• | incur contractual manufacturing costs for JATENZO; |
• | implement post-approval requirements related to JATENZO; |
• | actively pursue additional indications and line extensions for JATENZO for the treatment of adult males with a deficiency or absence of endogenous T; |
• | seek to attract and retain new and existing skilled personnel; |
• | invest in measures to protect and expand our intellectual property; |
• | seek to discover and develop additional product candidates; |
• | seek to in-license or acquire additional product candidates for other medical conditions; |
• | adapt our regulatory compliance efforts to incorporate requirements applicable to marketed products; |
• | maintain, expand and protect our intellectual property portfolio; |
• | hire additional clinical, manufacturing and scientific personnel; |
• | add operational, financial and management information systems and personnel, including personnel to support our product development and planned future commercialization efforts; |
• | create additional infrastructure to support operations as a public company and incur increased legal, accounting, investor relations and other expenses; and |
• | experience delays or encounter issues with additional outbreaks of the pandemic in addition to any of the above. |
• | salaries, benefits and other related costs, including stock-based compensation expense, for personnel engaged in research and development functions; |
• | post-marketing requirements of the FDA for JATENZO and pharmaceutical development expense related to our internally -in-licensed |
• | costs of outside consultants, including their fees and related travel expenses engaged in research and development functions. |
Years Ended December 31, |
||||||||||||
2021 |
2020 |
Change |
||||||||||
Net product revenue |
$ | 13,957 | $ | 6,369 | $ | 7,588 | ||||||
Cost of product sales |
2,720 | 8,687 | (5,967 | ) | ||||||||
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Gross profit |
11,237 | (2,318 | ) | 13,555 | ||||||||
Operating expenses: |
||||||||||||
Sales and marketing |
30,677 | 30,524 | 153 | |||||||||
General and administrative |
16,662 | 11,937 | 4,725 | |||||||||
Research and development |
3,630 | 2,398 | 1,232 | |||||||||
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|
|
|
|
|||||||
Total operating expenses |
50,969 | 44,859 | 6,110 | |||||||||
|
|
|
|
|
|
|||||||
Loss from operations |
(39,732 | ) | (47,177 | ) | 7,445 | |||||||
Other (expense) income, net: |
||||||||||||
Change in fair value of warrant liability and derivative, net |
12,508 | 66,891 | (54,383 | ) | ||||||||
Interest income |
2 | 25 | (23 | ) | ||||||||
Interest expense |
(15,895 | ) | (15,394 | ) | (501 | ) | ||||||
Litigation settlement |
2,500 | — | 2,500 | |||||||||
|
|
|
|
|
|
|||||||
Total other (expense) income, net |
(885 | ) | 51,522 | (52,407 | ) | |||||||
|
|
|
|
|
|
|||||||
Net (loss) income |
$ | (40,617 | ) | $ | 4,345 | $ | (44,962 | ) | ||||
|
|
|
|
|
|
• | a $1.8 million increase in in commercial analytic and market research costs, primarily related to prescription and payor data; |
• | a $1.5 million decrease in in outsourced advertising and promotion costs due to timing of media buys and agency activities; and |
• | a $0.1 million increase in other sales and marketing related costs. |
• | a $2.8 million increase in personnel costs, including stock-based compensation expense, primarily due to an increase in headcount and external consultants; |
• | a $1.0 million increase in insurance fees, related to directors’ and officers’ insurance; |
• | a $0.6 million increase in in consulting and professional fees, primarily in connection with operating as a public company; and |
• | a $0.3 million increase in in other general and administrative costs. |
• | a $0.9 million increase in license fees related to the license agreements with HavaH Therapeutics (“ HavaH McGill |
• | a $0.7 million increase in clinical costs related to Phase 4 studies related to the development of JATENZO, our lead commercial product; offset by |
• | a $0.4 million decrease in costs related to research and development consulting services. |
Years Ended December 31, |
||||||||
2021 |
2020 |
|||||||
Net cash used in operating activities |
(43,786 | ) | (41.580 | ) | ||||
Net cash used in investing activities |
(25 | ) | (63 | ) | ||||
Net cash provided by financing activities |
62,993 | 47,220 | ||||||
|
|
|
|
|||||
Net increase in cash and cash equivalents |
$ | 19,182 | $ | 5,577 | ||||
|
|
|
|
• | The costs, timing and ability to manufacture JATENZO; |
• | the costs of future activities, including product sales, marketing, manufacturing and distribution of JATENZO; |
• | the costs of manufacturing commercial-grade product and necessary inventory to support continued commercial launch; |
• | the costs of potential milestones related to license agreements; |
• | the ability to receive additional non-dilutive funding, including grants from organizations and foundations; |
• | the revenue from commercial sale of its products; |
• | the costs of preparing, filing and prosecuting patent applications, obtaining, maintaining, expanding and enforcing its intellectual property rights and defending intellectual property-related claims; and |
• | our ability to establish and maintain collaborations on favorable terms, if at all. |
• | the estimated number of competing products being launched as well as the expected launch date, which we determine based on market intelligence; |
• | the estimated decline in the market price of product, which we determine based on historical experience and customer input; and |
• | the estimated levels of inventory held by customers at the time of the anticipated decrease in market price, which we determine based upon historical experience and customer input. |
• | the prices at which it sold shares of preferred stock and the superior rights and preferences of the preferred stock relative to common stock at the time of each grant; |
• | the progress of research and development programs, including the status and results of preclinical studies for product candidates; |
• | stage of development and commercialization and its business strategy; |
• | external market conditions affecting the biopharmaceutical industry and trends within the biopharmaceutical industry; |
• | Legacy Clarus’ financial position, including cash on hand, and historical and forecasted performance and operating results; |
• | the lack of an active public market for common stock and preferred stock; |
• | the likelihood of achieving a liquidity event, such as an initial public offering or sale in light of prevailing market conditions; and |
• | the analysis of initial public offerings and the market performance of similar companies in the biopharmaceutical industry. |
• | Establish JATENZO as the preferred choice among appropriate hypogonadal men for T-replacement |
• | Accelerate the build of our commercial infrastructure to successfully grow the market for JATENZO and launch any additional products we develop or acquire |
• | Explore additional indications for JATENZO and consider business development opportunities to grow our pipeline and product portfoli female-to-male |
• | a growing awareness among physicians to diagnose and treat hypogonadism and willingness by patients to discuss signs and symptoms of their medical condition than in the past; |
• | recognition and association by HCPs of the association of hypogonadism with other increasingly prevalent diseases, such as metabolic syndrome, type 2 diabetes, chronic renal disease and chronic heart disease; |
• | the ability to easily identify low serum T levels through a simple blood test; and |
• | continuing guidance from medical societies (including the Endocrine Society, American Association of Clinical Endocrinologists and American Urological Association), that clinicians measure serum T levels of patients if they present with symptoms or signs typically associated with hypogonadism. |
• | Convenient Oral Dosing easy-to-swallow |
• | Normalized T Levels |
• | Avoids Administration Challenges non-oral products. JATENZO avoids the risk of T transfer to partners and children that exists with gel treatment; injection site pain, risk of POME and polycythemia seen with injections, and the gum, nasal and skin irritation and difficulty of administration seen with other TRT products |
• | Safety Profile |
• | qualified two sources of bulk TU, Pfizer and Xianju, both of which are subject to continuing FDA review and periodic inspection, and entered into a commercial supply agreement with each; |
• | entered into an exclusive manufacturing agreement with Catalent for the manufacture of JATENZO softgel capsules; and |
• | entered into an agreement with a commercial packager for finished JATENZO capsules. |
• | nonclinical laboratory and animal tests that must be conducted in accordance with Good Laboratory Practices; |
• | submission to the FDA of an Investigational New Drug (“ IND |
• | approval by an independent institutional review board (“ IRB |
• | adequate and well controlled human clinical trials to establish the safety and efficacy of the proposed product candidate for its intended use, performed in accordance with good clinical practices (“ GCPs |
• | submission to the FDA of an NDA and payment of user fees; |
• | satisfactory completion of an FDA advisory committee review, if applicable; |
• | pre-approval inspection of manufacturing facilities and selected clinical investigators for their compliance with cGMP and GCP; |
• | satisfactory completion of FDA audits of clinical trial sites to assure compliance with GCPs and the integrity of the clinical data; and |
• | FDA review and approval of an NDA to permit commercial marketing for particular indications for use. |
• | Phase 1 — Studies are initially conducted to test the product candidate for safety, dosage tolerance, structure-activity relationships, mechanism of action, absorption, metabolism, distribution and excretion in healthy volunteers or subjects with the target disease or condition. If possible, Phase 1 clinical trials may also be used to gain an initial indication of product effectiveness. |
• | Phase 2 — Controlled studies are conducted with groups of subjects with a specified disease or condition to provide enough data to evaluate the preliminary efficacy, optimal dosages and dosing schedule and expanded evidence of safety. Multiple Phase 2 clinical trials may be conducted to obtain information prior to beginning larger and more expansive Phase 3 clinical trials. |
• | Phase 3 — These clinical trials are generally undertaken in larger subject populations to provide statistically significant evidence of clinical efficacy and to further test for safety in an expanded subject population at multiple clinical trial sites. These clinical trials are intended to establish the overall risk/benefit ratio of the product and provide an adequate basis for product labeling. These clinical trials may be done at trial sites outside the United States as long as the global sites are also representative of the U.S. population and the conduct of the study at global sites comports with FDA regulations and guidance, such as compliance with GCPs. In most cases, FDA requires two adequate and well-controlled Phase 3 clinical trials to demonstrate the efficacy of the drug. A single trial may be sufficient in rare instances, including (1) where the study is a large multicenter trial demonstrating internal consistency and a statistically very persuasive finding of a clinically meaningful effect on mortality, irreversible morbidity or prevention of a disease with a potentially serious outcome and confirmation of the result in a second trial would be practically or ethically impossible or (2) when in conjunction with other confirmatory evidence. |
• | The federal Anti-Kickback Statute, which prohibits, among other things, persons and entities from knowingly and willfully soliciting, offering, paying, receiving or providing any remuneration (including any kickback, bride or certain rebate), directly or indirectly, overtly or covertly, in cash or in kind, to induce or reward or in return for, either the referral of an individual for, or the purchase order or recommendation of, any good or service, for which payment may be made, in whole or in part, under a federal healthcare program such as Medicare and Medicaid; a person or entity need not have actual knowledge of the federal Anti-Kickback Statute or specific intent to violate it in order to have committed a violation. On November December 20, 2020, the HHS Office of Inspector General (“ OIG |
• | Pursuant to an order entered by the U.S. District Court for the District of Columbia, the portion of the rule eliminating safe harbor protection for certain rebates related to the sale or purchase of a pharmaceutical product from a manufacturer to a plan sponsor under Medicare Part D has been delayed to January 1, 2023. Implementation of this change and new safe harbors for point-of-sale |
• | The federal civil and criminal false claims laws, including the civil False Claims Act (“ FCA |
• | The federal civil monetary penalties laws, which impose civil fines for, among other things, the offering or transfer or remuneration to a Medicare or state healthcare program beneficiary if the person knows or should know it is likely to influence the beneficiary’s selection of a particular provider, practitioner or supplier of services reimbursable by Medicare or a state health care program, unless an exception applies; |
• | HIPAA, which imposes criminal and civil liability for knowingly and willfully executing a scheme or attempting to execute a scheme, to defraud any healthcare benefit program, including private payors, knowingly and willfully embezzling or stealing from a healthcare benefit program, willfully obstructing a criminal investigation of a healthcare offense or falsifying, concealing or covering up a material fact or making any materially false statements in connection with the delivery of or payment for healthcare benefits, items or services. Similar to the federal Anti-Kickback Statute, a person or entity need not have actual knowledge of the statute or specific intent to violate it in order to have committed a violation; |
• | HIPAA, as amended by HITECH, and their respective implementing regulations, which imposes, among other things, specified requirements on covered entities and their business associates relating to the privacy and security of individually identifiable health information including mandatory contractual terms and required implementation of technical safeguards of such information. HITECH also created new tiers of civil monetary penalties, amended HIPAA to make civil and criminal penalties directly applicable to business associates in some cases, and gave state attorneys general new authority to file civil actions for damages or injunctions in federal courts to enforce the federal HIPAA laws and seek attorneys’ fees and costs associated with pursuing federal civil actions; |
• | The Physician Payments Sunshine Act, enacted as part of ACA, which imposed new annual reporting requirements for certain manufacturers of drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program, for certain payments and “transfers of value” provided to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors) and teaching hospitals, as well as ownership and investment interests held by such physicians and their immediate family members. In addition, many states also require reporting of payments or other transfers of value, many of which differ from each other in significant ways, are often not pre-empted and may have a more prohibitive effect than the Physician Payments Sunshine Act, thus further complicating compliance efforts. Effective January 1, 2022, these reporting obligations extend to include transfers of value made and investment and ownership interested held in the previous year to certain non-physician providers such as physician assistants and nurse practitioners; |
• | The ACA, which became law in the United States in March 2010, increases minimum Medicaid rebates owed by manufacturers under the Medicaid Drug Rebate Program and extends the rebate program to individuals enrolled in Medicaid managed care organizations, establishes annual fees and taxes on manufacturers of certain branded prescription drugs and biologic products, and creates a new Medicare Part D coverage gap discount program, in which manufacturers must agree to offer 50% (increased to 70%, effective January 1, 2019, by the Bipartisan Budget Act of 2018) point-of-sale |
• | The MMA expanded Medicare coverage for drug purchases by the elderly and introduced a new reimbursement methodology based on average sales prices for physician-administered drugs. In addition, this legislation provided authority for limiting the number of drugs that will be covered in any therapeutic class. While the MMA applies only to drug benefits for Medicare beneficiaries, private payors often follow Medicare coverage policies and payment limitations in setting their own reimbursement rates; |
• | Federal government price reporting laws, which require us to calculate and report complex pricing metrics in an accurate and timely manner to government programs; and |
• | Analogous state and foreign laws and regulations, such as state anti-kickback and false claims laws, which may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third-party-payors, including private insurers, and may be broader in scope than their federal equivalents; state and foreign laws require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government or otherwise restrict payments that may be made to healthcare providers; state and foreign laws that require drug manufacturers to report information related to drug pricing and payments and other transfers of value to physicians and other healthcare providers and restrict marketing practices or require disclosure of marketing expenditures and pricing information; state and local laws that require the registration of pharmaceutical sales representatives; state and foreign laws that govern the privacy and security of health information in some circumstances. These data privacy and security laws may differ from each other in significant ways and often are not pre-empted by HIPAA, which may complicate compliance efforts. |
• | created an annual, nondeductible fee on any entity that manufactures or imports specified branded prescription drugs and biologic products, apportioned among these entities according to their market share in certain government healthcare programs; |
• | expanded eligibility criteria for Medicaid programs by, among other things, allowing states to offer Medicaid coverage to certain individuals with income at or below 133% of the federal poverty level, thereby potentially increasing a manufacturer’s Medicaid rebate liability; |
• | expanded manufacturers’ rebate liability under the Medicaid Drug Rebate Program by increasing the minimum rebate for both branded and generic drugs and revising the definition of “average manufacturer price,” (“ AMP |
• | addressed a new methodology by which rebates owed by manufacturers under the Medicaid Drug Rebate Program are calculated for drugs that are inhaled, infused, instilled, implanted or injected; |
• | expanded the types of entities eligible for the 340B drug discount program; |
• | established the Medicare Part D coverage gap discount program by requiring manufacturers to provide point-of-sale-discounts |
• | created a Patient-Centered Outcomes Research Institute to oversee, identify priorities in and conduct comparative clinical effectiveness research, along with funding for such research. |
Name |
Age |
Position | ||
Robert E. Dudley, Ph.D. | 67 | Chief Executive Officer, President and Chairman of the Board | ||
Richard Peterson | 54 | Chief Financial Officer | ||
Steven A. Bourne | 60 | Chief Administrative Officer, Secretary and Treasurer | ||
Frank Jaeger | 51 | Chief Commercial Officer |
Name |
Age |
Position | ||
John Amory | 54 | Director | ||
Elizabeth A. Cermak | 64 | Director | ||
Joseph Hernandez | 49 | Director | ||
Kimberly Murphy | 59 | Chairman of the Board | ||
Mark A. Prygocki, Sr | 55 | Director | ||
Alex Zisson | 52 | Director |
• | the Class I directors are Alex Zisson and John Amory, and their terms will expire at the annual meeting of stockholders to be held in 2022; |
• | the Class II directors are Mark Prygocki and Elizabeth Cermak, and their terms will expire at the annual meeting of stockholders to be held in 2023; and |
• | the Class III directors are Robert Dudley, Kimberly Murphy and Joseph Hernandez, and their terms will expire at the annual meeting of stockholders to be held in 2024. |
• | selecting a qualified firm to serve as the independent registered public accounting firm to audit our financial statements; |
• | helping to ensure the independence and performance of the independent registered public accounting firm; |
• | discussing the scope and results of the audit with the independent registered public accounting firm, and reviewing, with management and the independent accountants, our interim and year-end operating results; |
• | developing procedures for employees to submit concerns anonymously about questionable accounting or audit matters; |
• | reviewing policies on risk assessment and risk management; |
• | reviewing related party transactions; |
• | obtaining and reviewing a report by the independent registered public accounting firm at least annually, that describes our internal quality-control procedures, any material issues with such procedures, and any steps taken to deal with such issues when required by applicable law; and |
• | approving (or, as permitted, pre-approving) all audit and all permissible non-audit service to be performed by the independent registered public accounting firm. |
• | reviewing and approving on an annual basis the corporate goals and objectives relevant to the Chief Executive Officer’s compensation, evaluating the Chief Executive Officer’s performance in light of such goals and objectives and determining and approving the remuneration (if any) of the Chief Executive Officer based on such evaluation; |
• | reviewing and approving the compensation of the other executive officers; |
• | reviewing and recommending to the Board the compensation of the directors; |
• | reviewing our executive compensation policies and plans; |
• | reviewing and approving, or recommending that the Board approve, incentive compensation and equity plans, severance agreements, change-of-control |
• | administering our incentive compensation equity-based incentive plans; |
• | selecting independent compensation consultants and assessing whether there are any conflicts of interest with any of the committee’s compensation advisors; |
• | assisting management in complying with this prospectus statement and annual report disclosure requirements; |
• | if required, producing a report on executive compensation to be included in the annual proxy statement; |
• | reviewing and establishing general policies relating to compensation and benefits of our employees; and |
• | reviewing our overall compensation philosophy. |
• | identifying, evaluating and selecting, or recommending that the Board approve, nominees for election to the Board; |
• | evaluating the performance of the Board and of individual directors; |
• | reviewing developments in corporate governance practices; |
• | evaluating the adequacy of our corporate governance practices and reporting; |
• | reviewing management succession plans; and |
• | developing and making recommendations to the Board regarding corporate governance guidelines and matters. |
Name |
Fees Earned or Paid in Cash ($)(1) |
Stock Awards ($)(2) |
Option Awards ($)(3) |
All Other Compensation ($) |
Total ($) |
|||||||||||||||
John Amory (4) |
15,489 | 18,374 | 31,329 | 65,192 | ||||||||||||||||
Elizabeth Cermak (5) |
20,136 | 18,374 | 31,329 | 69,839 | ||||||||||||||||
Joseph Hernandez (6) |
19,361 | 18,374 | 31,329 | 69,064 | ||||||||||||||||
Kimberly Murphy (7) |
27,106 | 18,374 | 31,329 | 76,809 | ||||||||||||||||
Mark A. Prygocki (8) |
20,136 | 18,374 | 31,329 | 115,310 | (9) | 223,149 | ||||||||||||||
Alex Zisson |
— | — | — | — |
(1) | The amounts reported represent the annual cash retainer and committee fees paid to or earned by each of our non-employee directors pursuant to our NED Policy. |
(2) | The amounts reported represent the aggregate grant date fair value of the RSUs granted to our non-employee directors during the year ended December 31, 2021, calculated in accordance with FASB ASC Topic 718. Such grant date fair values do not take into account any estimated forfeitures. The assumptions used in calculating the grant date fair value of the RSUs reported in this column are set forth in Note 10 of our consolidated financial statements included elsewhere in this prospectus. The amounts reported in this column reflect the accounting cost for these grants, and do not correspond to the actual economic value that may be received by our non-employee directors from the vesting and settlement of the RSUs or any sale of the underlying shares of Common Stock. |
(3) | The amounts reported represent the aggregate grant date fair value of the stock option awards granted to our non-employee directors during the year ended December 31, 2021, calculated in accordance with FASB ASC Topic 718. Such grant date fair values do not take into account any estimated forfeitures. The assumptions used in calculating the grant date fair value of the stock option awards reported in this column are set forth in Note 10 of our consolidated financial statements included elsewhere in this prospectus. The amounts reported in this column reflect the accounting cost for these grants, and do not correspond to the actual economic value that may be received by our non-employee directors upon the exercise of the stock option awards or any sale of the underlying shares of Common Stock. |
(4) | As of December 31, 2021, Mr. Amory held 9,610 outstanding stock options and 3,844 outstanding RSUs. |
(5) | As of December 31, 2021, Ms. Cermak held 9,610 outstanding stock options and 3,844 outstanding RSUs. |
(6) | As of December 31, 2021, Mr. Hernandez held 9,610 outstanding stock options and 3,844 outstanding RSUs. |
(7) | As of December 31, 2021, Ms. Murphy held 9,610 outstanding stock options and 3,844 outstanding RSUs. |
(8) | As of December 31, 2021, Mr. Prygocki held 9,610 outstanding stock options and 3,844 outstanding RSUs. |
(9) | Represents amounts paid to Mr. Prygocki for service as an Executive Director for the period January 1, 2021 through May 15, 2021, consisting of $92,250 in cash compensation and $15,185 for medical insurance premiums. Mr. Prygocki also received consulting fees in the amount of $7,875 for assistance with business development activities after the conclusion of his duties as Executive Director. In connection with Mr. Prygocki’s appointment as an Executive Director in July 2020, the Board approved the following compensation to Mr. Prygocki: (i) a cash payment in an amount equal to 70% of our Chief Executive Officer’s salary, payable on a monthly basis, if Mr. Prygocki is not eligible for and has not elected coverage under our healthcare plans, (ii) a cash payment amount equal to 60% of our Chief Executive Officer’s salary, payable on a monthly basis, if Mr. Prygocki is eligible for and has elected coverage under our healthcare plans, and (iii) eligibility to receive an annual bonus in an amount of up to 60% of our Chief Executive Officer’s bonus, contingent upon achievement of certain performance measures as determined by the Board in its sole discretion. Accordingly, Mr. Prygocki earned a bonus in the amount of $110,656 for his 2020 performance, which amount is not included in the table above. |
• | Robert E. Dudley, Ph.D., President and Chief Executive Officer |
• | Richard Peterson, Chief Financial Officer |
• | Frank A. Jaeger, Chief Commercial Officer |
Name and Principal Position |
Year |
Salary ($)(1) |
Bonus ($)(2) |
Stock Awards ($)(3) |
Option Awards ($)(4) |
Nonequity Incentive Plan Compensation ($)(5) |
Total ($) |
|||||||||||||||||||||
Robert E. Dudley President and Chief Executive Officer |
2021 | 471,811 | — | 645,300 | 1,100,250 | 328,860 | 2,546,221 | |||||||||||||||||||||
2020 | 410,000 | — | — | — | 147,600 | 557,600 | ||||||||||||||||||||||
Richard Peterson Chief Financial Officer |
2021 | 406,767 | 30,000 | 266,724 | 454,770 | 177,221 | 1,335,482 | |||||||||||||||||||||
Frank A. Jaeger Chief Commercial Officer |
2021 | 348,296 | — | 138,620 | 236,350 | 162,000 | 885,266 | |||||||||||||||||||||
2020 | 325,000 | — | — | 24,000- | 89,234 | 438,734 |
(1) | Amounts reported reflect salary increases that took effect September 9, 2021. In addition, Mr. Peterson joined Legacy Clarus in February 2021, and his salary has been prorated to reflect such start date. |
(2) | Reflects a sign-on bonus paid to Mr. Peterson in February 2021. |
(3) | The amounts reported represent the aggregate grant date fair value of the RSUs granted to our named executive officers during 2021 calculated in accordance with FASB ASC Topic 718. Such grant date fair values do not take into account any estimated forfeitures. The assumptions used in calculating the grant date fair value of the RSUs reported in this column are set forth in Note 10 of our consolidated financial statements included elsewhere in this prospectus. The amounts reported in this column reflect the accounting cost for these grants, and do not correspond to the actual economic value that may be received by our named executive officers from the vesting and settlement of the RSUs or the sale of the underlying shares of Common Stock. |
(4) | The amounts reported represent the aggregate grant date fair value of the stock option awards granted to our named executive officers during the applicable fiscal year, calculated in accordance with FASB ASC Topic 718. Such grant date fair values do not take into account any estimated forfeitures. The assumptions used in calculating the grant date fair value of the stock option awards reported in this column are set forth in Note 10 of our consolidated financial statements included for Fiscal Year 2021 which are included elsewhere in this prospectus. The amounts reported in this column reflect the accounting cost for these grants, and do not correspond to the actual economic value that may be received by our named executive officers upon the exercise of the stock option awards or any sale of the underlying shares of Common Stock. |
(5) | The amounts reported reflect bonuses earned based on the achievement of pre-defined performance objectives. Bonuses are reported in the year earned, even though paid the following year. |
(6) | Mr. Peterson commenced employment with us in February 2021. His base salary and bonus were pro-rated accordingly. |
Name |
2020 Base Salary ($) |
2021 Base Salary ($)(1) |
||||||
Robert E. Dudley |
410,000 | 609,000 | ||||||
Richard Peterson |
0 | 445,000 | ||||||
Frank A. Jaeger |
325,000 | 400,000 |
(1) | 2021 salary increases from 2020 amounts (or from 348,000 as of February 2021 for Mr. Peterson) were effective as of September 9, 2021. |
Option awards (1) |
Stock Awards (2) |
|||||||||||||||||||||||||||||||
Name |
Grant date |
Vesting commencement date |
Number of securities underlying unexercised options (#) exercisable |
Number of securities underlying unexercised options (#) unexercisable |
Option exercise price ($) |
Option expiration date |
Number of Shares or Units of Stock that Have Not Vested (#) |
Market Value of Shares or Units of Stock That Have Not Vested ($)(5) |
||||||||||||||||||||||||
Robert E. Dudley |
12/12/2021 | 9/9/2021 | — | 337,500 | (3) | 4.78 | 12/12/2031 | |||||||||||||||||||||||||
12/12/2021 | 9/9/2021 | 135,000 | (4) | 328,050 | ||||||||||||||||||||||||||||
Richard Peterson |
12/11/2021 | 9/9/2021 | — | 139,500 | (3) | 4.78 | 12/11/2031 | 55,800 | (4) | 135,594 | ||||||||||||||||||||||
12/11/2021 | 9/9/2021 | — | ||||||||||||||||||||||||||||||
Frank A. Jaeger |
12/11/2021 | 9/9/2021 | — | 72,500 | (3) | 4.78 | 12/11/2031 | |||||||||||||||||||||||||
12/11/2021 | (4) | 9/9/2021 | 29,000 | (4) | 70,470 |
(1) | Each option grant is subject to the terms of our 2021 Stock Option and Incentive Plan (the “ 2021 Plan |
(2) | Each RSU grant is subject to the terms of our 2021 Plan. |
(3) | 25% of the shares subject to this stock option vest on the one year anniversary of the vesting commencement date, and 75% of the shares subject to the stock option vest in 36 equal monthly installments thereafter, in each case, subject to the named executive officer’s continued service relationship through each applicable vesting date. |
(4) | 25% of the shares subject to this RSU vest on the one year anniversary of the vesting commencement date, and 75% of the shares subject to the RSU vest in 36 equal monthly installments thereafter, in each case, subject to the named executive officer’s continued service relationship through each applicable vesting date. |
(5) | Calculated in accordance with SEC rules as the number of unvested shares or units multiplied by the closing market price of a share of Common Stock on December 31, 2021, which was $2.43. |
• | any breach of the director’s duty of loyalty to the corporation or its stockholders; |
• | any act or omission not in good faith or that involves intentional misconduct or a knowing violation of law; |
• | unlawful payments of dividends or unlawful stock repurchases or redemptions; or |
• | any transaction from which the director derived an improper personal benefit. |
Name and Date of Issuance |
Aggregate Principal |
|||
February Notes |
||||
February 13, 2018 |
||||
Entities affiliated with Thomas, McNerney & Partners(1) |
$ | 1,654,756.18 | ||
Entities affiliated with H.I.G. BioVentures(2) |
$ | 783,554.49 | ||
CBC SPVI Ltd(3) |
$ | 876,618.82 | ||
|
|
|||
August Notes |
||||
Initial 2018 Closing |
||||
Entities affiliated with Thomas, McNerney & Partners(1) |
$ | 1,946,771.98 | ||
Entities affiliated with H.I.G. BioVentures(2) |
$ | 1,727,269.09 | ||
CBC SPVI Ltd(3) |
$ | 1,031,316.26 | ||
First Subsequent 2019 Closing |
||||
Entities affiliated with Thomas, McNerney & Partners(1) |
$ | 3,893,543.96 | ||
Entities affiliated with H.I.G. BioVentures(2) |
$ | 3,454,538.18 | ||
CBC SPVI Ltd(3) |
$ | 2,062,632.52 | ||
Second Subsequent 2019 Closing |
||||
Entities affiliated with Thomas, McNerney & Partners(1) |
$ | 1,946,774.98 | ||
Entities affiliated with H.I.G. BioVentures(2) |
$ | 1,727,269.09 | ||
CBC SPVI Ltd(3) |
$ | 1,031,316.52 | ||
Third Subsequent 2019 Closing |
||||
Entities affiliated with Thomas, McNerney & Partners(1) |
$ | 1,946,774.98 | ||
Entities affiliated with H.I.G. BioVentures(2) |
$ | 1,727,269.09 | ||
CBC SPVI Ltd(3) |
$ | 1,031,316.26 | ||
First Subsequent 2021 Closing |
||||
Entities affiliated with Thomas, McNerney & Partners(1) |
$ | 2,920,157.98 | ||
Entities affiliated with H.I.G. BioVentures(2) |
$ | 2,590,903.63 | ||
CBC SPVI Ltd(3) |
$ | 1,546,974.38 | ||
Second Subsequent 2021 Closing |
||||
Entities affiliated with Thomas, McNerney & Partners(1) |
$ | 2,133,681.77 | ||
Entities affiliated with H.I.G. BioVentures(2) |
$ | 1,413,053.83 | ||
CBC SPVI Ltd(3) |
$ | 1,130,333.05 |
Name and Date of Issuance |
Aggregate Principal |
|||
Third Subsequent 2021 Closing |
||||
Entities affiliated with Thomas, McNerney & Partners(1) |
$ | 1,160,295.79 | ||
Entities affiliated with H.I.G. BioVentures(2) |
$ | 549,419.29 | ||
CBC SPVI Ltd(3) |
$ | 614,674.90 |
(1) | James E. Thomas is a partner at Thomas, McNerney & Partners and was a member of Legacy Clarus’s board of directors. |
(2) | Bruce C. Robertson, Ph.D. and Alex Zisson are managing directors at H.I.G. BioHealth Partners and were members of Legacy Clarus’s board of directors. Alex Zisson is a member of the Board. |
(3) | Mengjiao Jiang is a managing partner at C-Bridge Capital Partners and was a member of Legacy Clarus’s board of directors. |
• | any director or executive officer of the Company; |
• | any director nominee; |
• | security holders known to the Company to beneficially own more than 5% of any class of the Company’s voting securities, and |
• | any immediate family member of any of the foregoing persons, which means any child, stepchild, parent, stepparent, spouse, sibling, mother-in-law, father-in-law, daughter-in-law, brother-in-law sister-in-law |
• | each person who is known by us to be the beneficial owner of more than 5% of the outstanding shares of the Common Stock; |
• | each current named executive officer and director of the Company; and |
• | all current executive officers and directors of the Company, as a group. |
Name of Beneficial Owner |
Number of Shares |
Percentage of Outstanding Shares |
||||||
Directors and Named Executive Officers |
||||||||
Kimberly Murphy |
— | — | ||||||
John Amory |
— | — | ||||||
Elizabeth A. Cermak |
— | — | ||||||
Joseph Hernandez(1) |
1,302,500 | 5.3 | % | |||||
Mark A. Prygocki, Sr |
— | — | ||||||
Alex Zisson(2) |
— | — | ||||||
Robert E. Dudley |
4,566 | * | ||||||
Richard Peterson |
— | — | ||||||
Frank Jaeger |
— | — | ||||||
All directors and executive officers as a group (9 individuals) |
1,307,066 | 5.3 | % | |||||
Five Percent Holders: |
||||||||
Entities affiliated with H.I.G. BioVentures(2) |
5,692,381 | 23.0 | % | |||||
Entities affiliated with Thomas, McNerney & Partners(3) |
5,498,571 | 22.2 | % | |||||
CBC SPVI Ltd.(4) |
3,602,287 | 14.6 | % | |||||
Armistice Capital Master Fund Ltd.(5) |
2,452,376 | 9.9 | % | |||||
Entities affiliated with Bracebridge Capital, LLC(6) |
2,002,495 | 8.1 | % | |||||
Blue Water Sponsor LLC(1) |
1,302,500 | 5.3 | % |
* | Less than 1%. |
(1) | Joseph Hernandez, a member of the Board, is the managing member of Blue Water Sponsor LLC, and as such may be deemed to have sole voting and investment discretion with respect to the securities held by Blue Water Sponsor LLC. |
(2) | Information herein is based on the Schedule 13D filed with the SEC on September 21, 2021 by H.I.G. Bio – Clarus I, L.P. (“ H.I.G. I LP H.I.G. II LP H.I.G. LLC H.I.G. GP H.I.G. Entities |
(3) | Information herein is based on the Schedule 13D filed with the SEC on December 10, 2021 by James E. Thomas, Thomas, McNerney & Partners, LLC (“ TMP LLC TMP II LLC TMP Partners TMP Partners II TMP Nominee TMP Nominee II TMP Associates TMP Associates II TMP Entities |
(4) | Information herein is based on the Schedule 13G filed with the SEC on September 24, 2021 by CBC SPVI Ltd (“ CBC C-Bridge Healthcare Fund, L.P. (“C-Bridge FundC-Bridge Healthcare Fund GP, L.P. (“C-Bridge Fund GPC-Bridge Capital GP, Ltd. (“C-Bridge GPC-Bridge Fund and C-Bridge Fund GP, the “C-Bridge EntitiesC-Bridge Fund, which is controlled by its general partner, C-Bridge Fund GP, which is controlled by its general partner, C-Bridge GP, which is controlled by Mr. Fu, serving as its director. C-Bridge Fund, C-Bridge Fund GP, C-Bridge GP and Mr. Fu may be deemed to beneficially own the securities owned by the entities which they control. The address for Mr. Fu and the C-Bridge Entities is Suites 3306-3307, Two Exchange Square, 8 Connaught Place, Central, Hong Kong. |
(5) | Based on the Schedule 13G filed with the SEC on February 15, 2022 by Armistice Capital, LLC (“ Armistice Capital Master Fund |
(6) | Information herein is based on the Schedule 13G/A filed with the SEC on February 14, 2022 by FFI Fund Ltd., FYI Ltd., Olifant Fund, Ltd. (collectively, the “ Bracebridge Funds |
Consists of (i) 1,461,822 shares of Common Stock held by FFI Fund Ltd., (ii) 280,349 shares of Common Stock held by FYI Ltd. and (iii) 260,324 shares of Common Stock held by Olifant Fund, Ltd. Bracebridge Capital, LLC is the investment manager of each of the Bracebridge Funds, and has the authority to vote and dispose of all of the shares reflected herein. The business address of the Bracebridge Funds and Bracebridge Capital, LLC is 888 Boylston St., 15th Floor, Boston, MA 02199. |
• | holders that own or are deemed to own more than 5% of our capital stock; |
• | certain former citizens or long-term residents of the United States; |
• | persons for whom shares of Common Stock or pre-funded warrants constitute “qualified small business stock” within the meaning of Section 1202 of the Code; |
• | persons holding our securities as part of a hedge, straddle or other risk reduction strategy or as part of a conversion transaction or other integrated investment; |
• | persons deemed to sell our securities under the constructive sale provisions of the Code; |
• | banks, insurance companies, and other financial institutions; |
• | brokers, dealers or traders in securities or currencies; |
• | “controlled foreign corporations,” “passive foreign investment companies,” and corporations that accumulate earnings to avoid U.S. federal income tax; |
• | S corporations, partnerships or other entities or arrangements treated as partnerships for U.S. federal income tax purposes (and investors therein); |
• | tax-exempt organizations or governmental organizations; |
• | tax-qualified retirement plans; |
• | holders who hold or receive our securities pursuant to the exercise of employee stock options or otherwise as compensation; and |
• | “qualified foreign pension funds” as defined in Section 897(l)(2) of the Code and entities all of the interests of which are held by one or more qualified foreign pension funds. |
• | 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 (a) 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 (b) the trust has a valid election in effect under applicable U.S. Treasury Regulations to be treated as a U.S. person. |
• | fails to furnish the holder’s taxpayer identification number, which for an individual is ordinarily his or her social security number; |
• | furnishes an incorrect taxpayer identification number; |
• | is notified by the IRS that the holder previously failed to properly report payments of interest or dividends; or |
• | fails to certify under penalties of perjury that the holder has furnished a correct taxpayer identification number and that the IRS has not notified the holder that the holder is subject to backup withholding. |
• | the gain is effectively connected with the non-U.S. holder’s conduct of a trade or business within the United States (and, if required by an applicable income tax treaty, the non-U.S. holder maintains a permanent establishment in the United States to which such gain is attributable); |
• | the non-U.S. holder is a nonresident alien individual present in the United States for a period or periods aggregating 183 days or more during the taxable year of the disposition and certain other requirements are met; or |
• | 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”, or USRPHC, for U.S. federal income tax purposes. |
• | in whole and not in part; |
• | at a price of $0.01 per warrant; |
• | upon not less than 30 days’ prior written notice of redemption to each warrantholder; and |
• | if, and only if, the reported last sale price of the Common Stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within a 30-trading day period ending three business days before we send the notice of redemption to the warrantholders. |
• | 1% of the total number of shares of common stock then outstanding; or |
• | the average weekly reported trading volume of the common stock during the four calendar weeks preceding the filing of a notice on Form 144 with respect to the sale. |
• | the issuer of the securities that was formerly a shell company has ceased to be a shell company; |
• | the issuer of the securities is subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act; |
• | the issuer of the securities has filed all Exchange Act reports and material required to be filed, as applicable, during the preceding 12 months (or such shorter period that the issuer was required to file such reports and materials), other than Form 8-K reports; and |
• | at least one year has elapsed from the time that the issuer filed current Form 10 type information with the SEC reflecting its status as an entity that is not a shell company. |
• | permit the Board to issue up to 10,000,000 shares of preferred stock, with any rights, preferences and privileges as they may designate, including the right to approve an acquisition or other change of control; |
• | provide that the authorized number of directors may be changed only by resolution of the Board; |
• | provide that, subject to the rights of any series of preferred stock to elect directors, directors may be removed only with cause by the holders of not less than two thirds (2/3) of all of our then-outstanding shares of the capital stock entitled to vote generally at an election of directors; |
• | provide that, subject to the rights of any series of preferred stock to fill director vacancies, all director vacancies, including newly created directorships, may, except as otherwise required by law, be filled by the affirmative vote of a majority of directors then in office, even if less than a quorum; |
• | provide that stockholders seeking to present proposals before a meeting of stockholders or to nominate candidates for election as directors at a meeting of stockholders must provide advance notice in writing, and also specify requirements as to the form and content of a stockholder’s notice; |
• | provide that Special Meetings of our stockholders may be called the Board pursuant to a resolution adopted by a majority of the total number of authorized directors; |
• | provide that the Board will be divided into three classes of directors, with the classes to be as nearly equal as possible, and with the directors serving three-year terms, therefore making it more difficult for stockholders to change the composition of the Board; and |
• | not provide for cumulative voting rights, therefore allowing the holders of a majority of the shares of common stock entitled to vote in any election of directors to elect all of the directors standing for election, if they should so choose. |
Underwriter |
Number of Units |
|||
Maxim Group LLC |
||||
TOTAL |
Total | ||||||||||||
Per Unit | Without Option(1) |
With Option(1) |
||||||||||
Public offering price |
$ | $ | $ | |||||||||
Underwriting discounts and commissions (up to %) |
$ | $ | $ | |||||||||
Proceeds, before expenses, to us |
$ | $ | $ |
(1) | Assumes no pre-funded warrants are issued and all Units issued in the offering include Common Stock. |
• | Stabilizing transactions permit bids to purchase securities so long as the stabilizing bids do not exceed a specified maximum, and are engaged in for the purpose of preventing or retarding a decline in the market price of the securities while the offering is in progress. |
• | Over-allotment transactions involve sales by the underwriters of securities in excess of the number of securities the underwriters are obligated to purchase. This creates a syndicate short position which may be either a covered short position or a naked short position. In a covered short position, the number of securities over-allotted by the underwriters is not greater than the number of securities that they may purchase in the over-allotment option. In a naked short position, the number of securities involved is greater than the number of securities in the over-allotment option. The underwriters may close out any short position by exercising their over-allotment option and/or purchasing securities in the open market. |
• | Syndicate covering transactions involve purchases of securities in the open market after the distribution has been completed in order to cover syndicate short positions. In determining the source of the |
securities to close out the short position, the underwriters will consider, among other things, the price of securities available for purchase in the open market as compared with the price at which they may purchase securities through exercise of the over-allotment option. If the underwriters sell more securities than could be covered by exercise of the over-allotment option and, therefore, have a naked short position, the position can be closed out only by buying securities in the open market. A naked short position is more likely to be created if the underwriters are concerned that after pricing there could be downward pressure on the price of the securities in the open market that could adversely affect investors who purchase in the offering. |
• | Penalty bids permit the Representative to reclaim a selling concession from a syndicate member when the securities originally sold by that syndicate member are purchased in stabilizing or syndicate covering transactions to cover syndicate short positions. |
• | to Italian qualified investors, as defined in Article 100 of Decree No. 58 by reference to Article 34-ter of CONSOB Regulation no. 11971 of 14 May 1999 (“Regulation no. 11971 Qualified Investors |
• | in other circumstances that are exempt from the rules on public offer pursuant to Article 100 of Decree No. 58 and Article 34-ter of Regulation No. 11971 as amended. |
• | made by investment firms, banks or financial intermediaries permitted to conduct such activities in Italy in accordance with Legislative Decree No. 385 of 1 September 1993 (as amended), Decree No. 58, CONSOB Regulation No. 16190 of 29 October 2007 and any other applicable laws; and |
• | in compliance with all relevant Italian securities, tax and exchange controls and any other applicable laws. |
Consolidated Financial Statements for the Years Ended December 31, 2021 and 2020: |
||
F-2 | ||
F-3 | ||
F-4 | ||
F-5 | ||
F-6 | ||
F-7 |
December 31, 2021 |
December 31, 2020 |
|||||||
Assets |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ | $ | ||||||
Accounts receivable, net |
||||||||
Inventory, net |
||||||||
Prepaid expenses |
||||||||
|
|
|
|
|||||
Total current assets |
||||||||
Property and equipment, net |
||||||||
|
|
|
|
|||||
Total assets |
$ | $ | ||||||
|
|
|
|
|||||
Liabilities, and stockholders’ equity (deficit) |
||||||||
Current liabilities: |
||||||||
Senior notes payable |
$ | $ | ||||||
Accounts payable |
||||||||
Accrued expenses |
||||||||
Deferred revenue |
||||||||
|
|
|
|
|||||
Total current liabilities |
||||||||
Convertible notes payable to related parties |
||||||||
Royalty obligation |
||||||||
Derivative warrant liability |
||||||||
|
|
|
|
|||||
Total liabilities |
||||||||
Commitments and contingencies (See Note 12) |
||||||||
Redeemable convertible preferred stock, $ |
||||||||
Stockholders’ equity (deficit): |
||||||||
Preferred stock, $ |
||||||||
Common stock $ |
||||||||
Additional paid-in capital |
||||||||
Accumulated deficit |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Total stockholders’ equity (deficit) |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Total liabilities, redeemable convertible preferred stock, and stockholders’ deficit |
$ | $ | ||||||
|
|
|
|
Years Ended December 31, |
||||||||
2021 |
2020 |
|||||||
Net product revenue |
$ | $ | ||||||
Cost of product sales |
||||||||
Gross profit (loss) |
( |
) | ||||||
Operating expenses: |
||||||||
Sales and marketing |
||||||||
General and administrative |
||||||||
Research and development |
||||||||
Total operating expenses |
||||||||
Loss from operations |
( |
) | ( |
) | ||||
Other (expense) income, net: |
||||||||
Change in fair value of warrant liability and derivative, net |
||||||||
Interest income |
||||||||
Interest expense |
( |
) | ( |
) | ||||
Litigation settlement |
||||||||
Total other (expense) income, net |
( |
) | ||||||
Net (loss) income before income taxes |
( |
) | ||||||
Provision for income taxes |
||||||||
Net (loss) income |
$ | ( |
) | $ | ||||
Net loss attributable to common stockholders, basic (Note 14) |
$ | ( |
) | $ | ( |
) | ||
Net loss attributable to common stockholders, diluted (Note 14) |
$ | ( |
) | $ | ( |
) | ||
Net loss per common share, basic |
$ | ( |
) | $ | ||||
Net loss per common, diluted |
$ | ( |
) | $ | ( |
) | ||
Weighted-average common shares used in net loss, basic (Note 14) |
||||||||
Weighted-average common shares used in net loss, diluted (Note 14) |
||||||||
Redeemable Convertible Preferred Stock |
Common Stock |
Additional Paid-in Capital |
Accumulated Deficit |
Total Stockholders’ Deficit |
||||||||||||||||||||||||||||||
Shares |
Amount |
Shares |
Amount |
|||||||||||||||||||||||||||||||
Balance at December 31, 2019 |
$ | $ | $ | $ | ( |
) | $ | ( |
) | |||||||||||||||||||||||||
Retroactive application of the recapitalization due to the Business Combination (Note 3) |
— | — | ( |
) | ( |
) | — | — | ||||||||||||||||||||||||||
Adjusted balance at December 31, 2019 |
$ | $ | $ | ( |
) | ( |
) | |||||||||||||||||||||||||||
Accretion of redeemable convertible preferred stock to redemption value |
— | — | — | ( |
) | ( |
) | ( |
) | |||||||||||||||||||||||||
Stock-based compensation |
— | — | — | — | — | |||||||||||||||||||||||||||||
Net income (loss) |
— | — | — | — | — | |||||||||||||||||||||||||||||
Balance at December 31, 2020 |
$ | $ | $ | ( |
) | $ | ( |
) | ||||||||||||||||||||||||||
Conversion of Legacy Clarus convertible notes payable into Legacy Clarus Series D redeemable convertible preferred stock (1) |
— | — | — | — | — | |||||||||||||||||||||||||||||
Accretion of Legacy Clarus Series D redeemable convertible preferred stock to redemption value (1) |
— | — | — | ( |
) | — | ( |
) | ||||||||||||||||||||||||||
Recapitalization on September 9, 2021 |
( |
) | ( |
) | ||||||||||||||||||||||||||||||
Proceeds from Blue Water Acquisition Corp. in Business Combination |
— | — | — | |||||||||||||||||||||||||||||||
Issuance of shares in connection with the Private Placement Equity Offering |
— | — | — | — | ||||||||||||||||||||||||||||||
Stock-based compensation |
— | — | — | — | — | |||||||||||||||||||||||||||||
Net loss |
— | — | — | — | — | ( |
) | ( |
) | |||||||||||||||||||||||||
Balance at December 31, 2021 |
$ | $ | $ | ( |
) | $ | ( |
) | ||||||||||||||||||||||||||
(1) | Relates to activity associated with the Redeemable Convertible Preferred Stock prior to the reverse recapitalization on September 9, 2021. |
Years Ended December 31, |
||||||||
2021 |
2020 |
|||||||
Operating activities |
||||||||
Net (loss) income |
$ | ( |
) | $ | .345 | |||
Adjustments to reconcile net loss (income) to net cash used in operating activities: |
||||||||
Non-cash interest expense related to debt financing and royalty obligation |
||||||||
Settlement of interest with payment-in-kind |
||||||||
Non-cash gain on partial extinguishment of senior notes |
( |
) | — | |||||
Change in fair value of warrant liability |
( |
) | ( |
) | ||||
Change in fair value of derivative liability |
( |
) | ||||||
Stock-based compensation expense |
||||||||
Depreciation |
||||||||
Changes in operating assets and liabilities: |
||||||||
Accounts receivable |
( |
) | ( |
) | ||||
Inventory |
( |
) | ||||||
Prepaid expenses and other current assets |
( |
) | ( |
) | ||||
Accounts payable |
||||||||
Accrued expenses |
||||||||
Deferred revenue |
||||||||
|
|
|
|
|||||
Net cash used in operating activities |
( |
) | ( |
) | ||||
Investing activities |
||||||||
Purchases of property and equipment |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Net cash used in investing activities |
( |
) | ( |
) | ||||
Financing activities |
||||||||
Proceeds from business combination, net |
— | |||||||
Proceeds from issuance of convertible notes payable |
||||||||
Proceeds from issuance of senior notes payable |
||||||||
Proceeds from issuance of common stock and warrants, net of issuance costs |
— | |||||||
Proceeds from PPP loan |
||||||||
Repayment of PPP loan |
( |
) | ||||||
Debt issuance costs |
( |
) | ||||||
|
|
|
|
|||||
Net cash provided by financing activities |
||||||||
Net increase in cash and cash equivalents |
||||||||
Cash and cash equivalents—beginning of period |
||||||||
|
|
|
|
|||||
Cash and cash equivalents—end of period |
$ | $ | ||||||
|
|
|
|
|||||
Supplemental disclosure of cash flow information: |
||||||||
Cash paid for interest |
$ | $ | ||||||
|
|
|
|
|||||
Conversion of convertible notes payable into Series D redeemable convertible preferred stock |
$ | $ | ||||||
|
|
|
|
|||||
Accretion of redeemable convertible preferred stock to redemption value, including dividends on preferred stock |
||||||||
|
|
|
|
|||||
Senior secured note principal and royalty obligation balance conversion to shares of common stock upon merger (Note 3) |
$ | — | ||||||
|
|
|
|
|||||
Convertible notes principal and accrued interest balance conversion to shares of common stock upon merger (Note 3) |
$ | — | ||||||
|
|
|
|
|||||
Conversion of Series D redeemable convertible preferred stock into share of common stock |
$ | — | ||||||
|
|
|
|
|||||
Value of warrants assumed upon merger (Note 3) |
— | |||||||
|
|
|
|
Level 1: |
Quoted market prices in active markets for identical assets or liabilities. | |
Level 2: |
Inputs other than Level 1 inputs that are either directly or indirectly observable, such as quoted market prices, interest rates and yield curves. | |
Level 3: |
Unobservable inputs for the asset or liability (i.e., supported by little or no market activity). Level 3 inputs include management’s own assumptions about the assumptions that market participants would use in pricing the asset or liability (including assumptions about risk). |
Asset Class |
Estimated Useful Life | |
Computer and office equipment |
||
Furniture and fixtures |
Deferred Revenue |
||||
Balance at December 31, 2020 |
$ | |||
Amounts deferred |
||||
Revenue recognized |
( |
) | ||
|
|
|||
Balance at December 31, 2021 | $ | |||
|
|
Cash – Blue Water Trust Account and cash (net of redemptions) |
$ | |||
Less: Equity issuance costs and other costs paid |
( |
) | ||
|
|
|||
Net Proceeds from the Business Combination |
$ | |||
|
|
Blue Water shares outstanding prior to the Business Combination |
||||
Conversion of Legacy Clarus Series D Preferred Stock |
||||
Conversion of Legacy Clarus convertible notes |
||||
Conversion of additional capital provided by Legacy Clarus convertible note and senior note holders |
||||
Conversion of Senior Secured Note principal and royalty rights |
||||
|
|
|||
Total shares of the Company’s common stock outstanding immediately following the Business Combination |
||||
|
|
Conversion of senior notes and royalty obligation carrying value |
$ | |||
Conversion of Legacy Clarus convertible notes carrying value |
||||
Conversion of Series D redeemable convertible preferred stock carrying value |
||||
Assumption of warrant liabilities |
( |
) | ||
|
|
|||
Total reverse recapitalization impact on statement of equity |
$ | |||
|
|
December 31, 2021 |
||||||||||||||||
(in thousands) |
Total |
Level 1 |
Level 2 |
Level 3 |
||||||||||||
Assets |
||||||||||||||||
Cash equivalents: |
||||||||||||||||
Money market funds |
$ | $ | $ | $ | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total assets |
$ | $ | $ | $ | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Liabilities |
||||||||||||||||
Private placement warrant liability |
$ | $ | — | $ | — | $ | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total Liabilities |
$ | $ | $ | $ | ||||||||||||
|
|
|
|
|
|
|
|
December 31, 2020 |
||||||||||||||||
(in thousands) |
Total |
Level 1 |
Level 2 |
Level 3 |
||||||||||||
Assets |
||||||||||||||||
Cash equivalents: |
||||||||||||||||
Money market funds |
$ | $ | $ | $ | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total assets |
$ | $ | $ | $ | ||||||||||||
|
|
|
|
|
|
|
|
Fair value of underlying instrument |
$ | |||
Risk-free interest rate |
% | |||
Expected term (in years) |
||||
Expected volatility |
% | |||
Expected dividend yield |
% |
Beginning warrant liability balance |
$ | |||
Private placement warrant liability assumed |
||||
Change in fair value of warrant liability |
( |
) | ||
|
|
|||
Balance at December 31, 2021 |
$ | |||
|
|
December 31, 2021 |
December 31, 2020 |
|||||||
Raw material |
$ | $ | ||||||
Work-in-process |
||||||||
Finished goods |
||||||||
|
|
|
|
|||||
Total inventory |
||||||||
Inventory reserve |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Total inventory, net of reserve |
$ | $ | ||||||
|
|
|
|
December 31, 2021 |
December 31, 2020 |
|||||||
Office equipment and computer hardware |
$ | $ | ||||||
Furniture and fixtures |
||||||||
|
|
|
|
|||||
Total property and equipment |
||||||||
Less accumulated depreciation |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Property and equipment, net |
||||||||
|
|
|
|
December 31, 2021 |
December 31, 2020 |
|||||||
Selling and marketing costs |
$ | $ | ||||||
Employee compensation and related benefits |
||||||||
Professional fees |
||||||||
|
|
|
|
|||||
|
|
|
|
|||||
Total |
$ | $ | ||||||
|
|
|
|
December 31, 2020 |
||||
Principal amount |
$ | |||
Accrued and unpaid interest |
||||
Unamortized debt discount |
( |
) | ||
|
|
|||
Total |
$ | |||
|
|
December 31, 2021 |
December 31, 2020 |
|||||||
Principal amount |
$ | $ | ||||||
Accrued and unpaid interest |
||||||||
Unamortized debt discount |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Total |
$ | $ | ||||||
|
|
|
|
Years ended December 31, |
Amount |
|||
2022 |
$ | |||
2023 |
||||
2024 |
||||
2025 |
||||
|
|
|||
Total |
$ | |||
|
|
December 31, 2020 |
||||||||||||||||||||
Preferred Stock Authorized |
Preferred Stock Issued and Outstanding |
Carrying Value |
Liquidation Value |
Common Stock Issuable Upon Conversion |
||||||||||||||||
Series A Preferred Stock |
$ | $ | ||||||||||||||||||
Series B Preferred Stock |
||||||||||||||||||||
Series C Preferred Stock |
||||||||||||||||||||
Series D Preferred Stock |
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total |
$ | $ | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, |
||||
2021 |
||||
Risk free interest rate |
% | |||
Expected term (in years) |
||||
Expected dividend yield |
% | |||
Expected volatility of underlying common stock |
% |
Stock Options |
Weighted Average Exercise Price |
Weighted Average Remaining Contractual Life (in Years) |
Intrinsic Value (in thousands) |
|||||||||||||
Outstanding January 1, 2021 |
$ | — | $ | — | ||||||||||||
Granted |
||||||||||||||||
Exercised |
||||||||||||||||
Canceled |
||||||||||||||||
|
|
|||||||||||||||
Outstanding December 31, 2021 |
$ | $ | — | |||||||||||||
|
|
|||||||||||||||
Options vested or expected to vest as of December 31, 2021 |
$ | — | $ | — | ||||||||||||
|
|
|||||||||||||||
Stock options unvested as of December 31, 2021 |
$ | $ | — | |||||||||||||
|
|
Number of Shares |
Weighted Average Grant Date Fair Value |
|||||||
Unvested restricted stock as of January 1, 2021 |
$ | |||||||
Granted |
$ | |||||||
|
|
|||||||
Unvested restricted stock as of December 31, 2021 |
$ | |||||||
|
|
Years Ended December 31, |
||||||||
2021 |
2020 |
|||||||
Selling and marketing |
$ | $ | ||||||
Research and development |
||||||||
General and administrative |
||||||||
Total stock-based compensation expense |
$ | $ | ||||||
Year Ended December 31, |
||||||||||||||||
2021 |
2020 |
|||||||||||||||
Income at U.S. statutory rate |
$ | ( |
) | % | $ | |
% | |||||||||
State taxes, net of federal benefit |
( |
) | % | ( |
) | - |
% | |||||||||
Change in fair value |
( |
) | % | ( |
) | - |
% | |||||||||
Interest Expense |
- |
% | % | |||||||||||||
Stock compensation |
- |
% | % | |||||||||||||
Transaction costs |
( |
) | % | % | ||||||||||||
Permanent differences and other |
% | % | ||||||||||||||
Valuation allowance |
- |
% | % | |||||||||||||
% | % | |||||||||||||||
Years Ended December 31, |
||||||||
2021 |
2020 |
|||||||
Deferred tax assets |
||||||||
Stock compensation |
$ | $ | ||||||
Accruals and other |
||||||||
Debt discount |
||||||||
Royalty liability |
||||||||
Net operating loss carryforwards |
||||||||
Tax credits |
||||||||
Total deferred tax assets |
||||||||
Less: valuation allowance |
( |
) | ( |
) | ||||
Deferred tax assets, net |
$ | $ | ||||||
Years Ended December 31, |
||||||||
2021 |
2020 |
|||||||
Valuation allowance at beginning of year |
$ | $ | ||||||
Increases recorded due to income tax provisions |
||||||||
Decreases recorded to equity |
( |
) | — | |||||
Valuation allowance at end of year |
$ | $ | ||||||
Years Ended December 31, |
||||||||
2021 |
2020 |
|||||||
Numerator: |
||||||||
Net (loss) income |
$ | ( |
) | $ | ||||
Accretion of preferred stock (3) |
( |
) | ||||||
Gain on extinguishment of convertible notes (1) |
||||||||
Net (loss) income attributable to common stockholders, basic |
( |
) | ( | ) | ||||
Effect of convertible notes (2) |
( |
) | ||||||
Net loss attributable to common stockholders, diluted |
$ | ( |
) | $ | ( |
) | ||
Denominator: |
||||||||
Weighted-average common shares attributable to common stockholders, basic |
||||||||
Effect of convertible notes (2) |
||||||||
Weighted average number of common shares—diluted |
||||||||
Net loss per common share attributable to common stockholders, basic |
$ | ( |
) | $ | ||||
Effect of convertible notes |
( |
) | ||||||
Net loss per common share attributable to common stockholders, diluted |
$ | ( |
) | $ | ( |
) | ||
(1) | The gain on extinguishment of convertible notes relates to the difference between the carrying value of the convertible notes upon conversion to shares and the fair value of the shares exchanged which requires adjustment to the numerator when calculating basic EPS. |
(2) | The effect of the convertible notes on the numerator for the year ended December 31, 2020 relates to the impact that the convertible notes had on net income during the period and are removed from net income when calculating net income (loss) attributable to common stockholders diluted using the if-converted method. The effect of the convertible notes on the shares in the denominator for the year ended December 31, 2020 was calculated based on the carrying value of the convertible notes balance at December 31, 2020, converted at the series D price of $ |
Years Ended December 31, |
||||||||
2021 |
2020 |
|||||||
Redeemable convertible preferred stock |
||||||||
Legacy Clarus warrants |
||||||||
IPO warrants |
||||||||
Private Placement warrants |
||||||||
PIPE warrants |
||||||||
Stock options and unvested restricted stock awards |
Amount |
||||
SEC registration fee |
$ | 3,724 | ||
FINRA filing fee |
6,526 | |||
Accountant’s fees and expenses |
75,000 | |||
Legal fees and expenses |
300,000 | |||
Printing and engraving expenses |
30,000 | |||
Transfer agent and registrar fees and expenses |
5,000 | |||
Miscellaneous fees and expenses |
9,750 | |||
|
|
|||
Total |
$ | 430,000 | ||
|
|
† | Certain of the exhibits and schedules to this Exhibit have been omitted pursuant to Item 601(a)(5) of Regulation S-K. A copy of any omitted schedule and/or exhibit will be furnished to the SEC upon request. |
+ | The schedules and exhibits to this agreement have been omitted pursuant to Item 601(b)(2) of Regulation S-K. A copy of any omitted schedule and/or exhibit will be furnished to the SEC upon request. |
# | Portions of this exhibit (indicated by brackets and asterisks) have been omitted because the registrant has determined that the information is both not material and is the type that the registrant treats as private or confidential. |
(a) | The undersigned registrant hereby undertakes: |
(1) | To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: |
(i) | to include any prospectus required by Section 10(a)(3) of the Securities Act; |
(ii) | to reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or |
decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the SEC pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20 percent change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and |
(iii) | to include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement; |
(2) | That, for the purpose of determining any liability under the Securities Act, each such post- effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. |
(3) | To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. |
(4) | That, for the purpose of determining liability under the Securities Act to any purchaser, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use. |
(5) | That, for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities, the undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser: |
(i) | Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424; |
(ii) | Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant; |
(iii) | The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and |
(iv) | Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser. |
(b) | Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. |
CLARUS THERAPEUTICS HOLDINGS, INC. | ||
By: | /s/ Robert E. Dudley, Ph.D. | |
Name: Robert E. Dudley, Ph.D. Title: Chief Executive Officer |
Signature |
Title |
Date | ||
/s/ Robert E. Dudley, Ph.D. Robert E. Dudley, Ph.D. |
President, Chief Executive Officer, and Director (Principal Executive Officer) | April 11, 2022 | ||
/s/ Richard Peterson Richard Peterson |
Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) |
April 11, 2022 | ||
/s/ Kimberly Murphy Kimberly Murphy |
Chairman of the Board | April 11, 2022 | ||
/s/ John Amory John Amory |
Director | April 11, 2022 | ||
/s/ Elizabeth Cermak Elizabeth Cermak |
Director | April 11, 2022 | ||
/s/ Joseph Hernandez Joseph Hernandez |
Director | April 11, 2022 |
Signature |
Title |
Date | ||
/s/ Mark Prygocki Mark Prygocki |
Director | April 11, 2022 | ||
/s/ Alex Zisson Alex Zisson |
Director | April 11, 2022 |