tm2314694-1_s3a - block - 6.125044s
As filed with the Securities and Exchange Commission on May 9, 2023
Registration No. 333-270263
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
KALA PHARMACEUTICALS, INC.
(Exact name of registrant as specified in its charter)
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Delaware
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27-0604595
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification Number)
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1167 Massachusetts Avenue
Arlington, MA 02476
(781) 996-5252
(Address, including zip code, and telephone number, including area code, of Registrant’s principal executive offices)
Mark Iwicki
Chief Executive Officer
Kala Pharmaceuticals, Inc.
1167 Massachusetts Avenue
Arlington, MA 02476
(781) 996-5252
(Name, address, including zip code, and telephone number, including area code, of agent for service)
Copies to:
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Stuart M. Falber, Esq.
Scott N. Lunin, Esq.
Wilmer Cutler Pickering Hale and Dorr LLP
60 State Street
Boston, MA 02109
Telephone: (617) 526-6000
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Eric L. Trachtenberg
General Counsel, Chief Compliance Officer and Corporate Secretary
Kala Pharmaceuticals, Inc.
1167 Massachusetts Avenue
Arlington, MA 02476
Telephone: (781) 996-5252
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Approximate date of commencement of proposed sale to the public: From time to time after this registration statement becomes effective.
If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box: ☐
If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box: ☒
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
If this Form is a registration statement pursuant to General Instruction I.D. or a post-effective amendment thereto that shall become effective upon filing with the Commission pursuant to Rule 462(e) under the Securities Act, check the following box. ☐
If this Form is a post-effective amendment to a registration statement filed pursuant to General Instruction I.D. filed to register additional securities or additional classes of securities pursuant to Rule 413(b) under the Securities Act, check the following box. ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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Large accelerated filer
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Accelerated filer
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Non-accelerated filer
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Smaller reporting company
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Emerging growth company
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☐
The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission acting pursuant to said Section 8(a), may determine.
EXPLANATORY NOTE
The Registrant is filing this Amendment No. 1 to the Registration Statement to update the amount of unsold securities from its Registration Statement on Form S-3 (File No. 333-238087) to be included in this registration statement pursuant to Rule 415(a)(6) under the Securities Act of 1933, as amended, and to update the amount of new securities to be registered on this registration statement.
This registration statement contains two prospectuses:
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a base prospectus which covers the offering, issuance and sale by the Registrant of up to $350,000,000 of the Registrant’s debt securities, common stock, preferred stock, depositary shares, subscription rights, units and/or warrants; and
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a sales agreement prospectus covering the offering, issuance and sale by the Registrant of up to $40,000,000 of the Registrant’s common stock that may be issued and sold under a sales agreement with Jefferies LLC.
The base prospectus immediately follows this explanatory note. The specific terms of any securities to be offered pursuant to the base prospectus will be specified in a prospectus supplement to the base prospectus. The sales agreement prospectus immediately follows the base prospectus. The common stock that may be offered, issued and sold by the Registrant under the sales agreement prospectus is included in the $350,000,000 of securities that may be offered, issued and sold by the Registrant under the base prospectus.
The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and we are not soliciting offers to buy these securities in any jurisdiction where the offer or sale is not permitted.
Subject to completion, dated May 9, 2023
$350,000,000
PROSPECTUS
Debt Securities
Common Stock
Preferred Stock
Depositary Shares
Subscription Rights
Units
Warrants
We may offer and sell securities from time to time in one or more offerings of up to $350,000,000 in aggregate offering price. This prospectus describes the general terms of these securities and the general manner in which these securities will be offered. We will provide the specific terms of these securities in supplements to this prospectus. The prospectus supplements will also describe the specific manner in which these securities will be offered and may also supplement, update or amend information contained in this document. You should read this prospectus, any applicable prospectus supplement and any related free writing prospectus, as well as the documents incorporated by reference herein and therein, carefully before you invest.
We may offer these securities in amounts, at prices and on terms determined at the time of offering. The securities may be sold directly to you, through agents, or through underwriters and dealers. If agents, underwriters or dealers are used to sell the securities, we will name them and describe their compensation in a prospectus supplement.
Our common stock is listed on The Nasdaq Capital Market under the symbol “KALA”.
Investing in these securities involves significant risks. See the information included under “Risk Factors” on page 6 of this prospectus and in any accompanying prospectus supplement, and under similar headings in the documents incorporated by reference in this prospectus or any prospectus supplement, for a discussion of the factors you should carefully consider before deciding to purchase these securities.
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.
The date of this prospectus is , 2023
TABLE OF CONTENTS
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ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we filed with the Securities and Exchange Commission, which we refer to as the “SEC,” utilizing a “shelf” registration process. Under this shelf registration process, we may from time to time sell any combination of the securities described in this prospectus in one or more offerings for an aggregate initial offering price of up to $350,000,000.
This prospectus provides you with a general description of the securities we may offer. Each time we sell securities, we will provide one or more prospectus supplements that will contain specific information about the terms of the offering. The prospectus supplement may also add, update or change information contained in this prospectus or in any documents that we have incorporated by reference into this prospectus and, accordingly, to the extent inconsistent, information in this prospectus is superseded by the information in the prospectus supplement. You should read both this prospectus and the accompanying prospectus supplement together with the additional information described under the heading “Where You Can Find More Information.” You should rely only on the information contained in or incorporated by reference in this prospectus, any accompanying prospectus supplement or in any related free writing prospectus filed by us with the SEC. We have not authorized anyone to provide you with different information. This prospectus and any accompanying prospectus supplement do not constitute an offer to sell or the solicitation of an offer to buy any securities other than the securities described in this prospectus or such accompanying prospectus supplement or an offer to sell or the solicitation of an offer to buy such securities in any circumstances in which such offer or solicitation is unlawful. You should assume that the information appearing in this prospectus, any prospectus supplement, the documents incorporated by reference and any related free writing prospectus is accurate only as of their respective dates. Our business, financial condition, results of operations and prospects may have changed materially since those dates.
Unless the context otherwise indicates, references in this prospectus to the “Company,” “we,” “our” and “us” refer, collectively, to Kala Pharmaceuticals, Inc., a Delaware corporation, and its consolidated subsidiaries.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and current reports, proxy statements and other information with the SEC. Our SEC filings are available to the public over the Internet at the SEC’s website at www.sec.gov. Copies of certain information filed by us with the SEC are also available on our website at www.kalarx.com. Our website is not a part of this prospectus and is not incorporated by reference in this prospectus. This prospectus is part of a registration statement we filed with the SEC. This prospectus omits some information contained in the registration statement in accordance with SEC rules and regulations. You should review the information and exhibits in the registration statement for further information about us and our consolidated subsidiaries and the securities we are offering. Statements in this prospectus concerning any document we filed as an exhibit to the registration statement or that we otherwise filed with the SEC are not intended to be comprehensive and are qualified by reference to these filings and the exhibits attached thereto. You should review the complete document to evaluate these statements. You can obtain a copy of the registration statement from the SEC’s website.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The SEC allows us to incorporate by reference much of the information we file with the SEC, which means that we can disclose important information to you by referring you to those publicly available documents. The information that we incorporate by reference in this prospectus is considered to be part of this prospectus. Because we are incorporating by reference future filings with the SEC, this prospectus is continually updated and those future filings may modify or supersede some of the information included or incorporated in this prospectus. This means that you must look at all of the SEC filings that we incorporate by reference to determine if any of the statements in this prospectus or in any document previously incorporated by reference have been modified or superseded. This prospectus incorporates by reference the documents listed below (File No. 001-38150) and any future filings we make with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as amended, or the Exchange Act (in each case, other than those documents or the portions of those documents not deemed to be filed) between the date of the initial registration statement and the effectiveness of the registration statement and following the effectiveness of the registration statement until the offering of the securities under the registration statement is terminated or completed:
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You may request a copy of these filings, at no cost, by writing or telephoning us at the following address or telephone number:
1167 Massachusetts Avenue
Arlington, MA 02476
Attn: Investor Relations
(781)996-5252
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS AND INDUSTRY DATA
This prospectus and the information incorporated by reference in this prospectus contain certain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Exchange Act.
All statements, other than statements of historical fact, contained or incorporated by reference in this prospectus, including statements regarding our strategy, future operations, future financial position, future revenue, projected costs, prospects, plans and objectives of management, are forward-looking statements. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “would” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words.
The forward-looking statements in this prospectus and the documents incorporated by reference in this prospectus include, among other things, statements about:
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our expectations with respect to the potential impacts the sale of our commercial business to Alcon Pharmaceuticals Ltd. and Alcon Vision, LLC, which we refer collectively as Alcon, will have on our business, results of operations and financial condition;
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our expectations with respect to, and the amount of, future milestone payments we may receive from Alcon in connection with the sale of our commercial business;
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our expectations with respect to our dependency on and potential advantages of KPI-012, our product candidate for the treatment of persistent corneal epithelial defects, or PCED;
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our expectations with respect to the potential financial impact, synergies, growth prospects and benefits of our acquisition of Combangio, Inc., or Combangio, including our expectations with respect to, and the amount of, future milestone payments we may pay in connection with the acquisition;
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our development efforts for KPI-012 and our ability to discover and develop new programs and product candidates;
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the timing, progress and results of clinical trials for KPI-012, including statements regarding the timing of initiation and completion of clinical trials, dosing of subjects and the period during which the results of the trials will become available;
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the timing, scope and likelihood of regulatory filings, including the filing of any biologics license applications for KPI-012 and any other product candidate we may develop in the future;
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our ability to obtain regulatory approvals for KPI-012;
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our commercialization, marketing and manufacturing capabilities and strategy for KPI-012, if approved;
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our estimates regarding potential future revenue from sales of KPI-012, if approved;
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our ability to negotiate, secure and maintain adequate pricing, coverage and reimbursement terms and processes on a timely basis, or at all, with third-party payors for KPI-012, if approved;
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the rate and degree of market acceptance and clinical utility of KPI-012 and our estimates regarding the market opportunity for KPI-012, if approved;
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plans to pursue the development of KPI-012 for indications in addition to PCED;
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our expectations with respect to our determination to cease the development of our preclinical pipeline programs that are unrelated to our mesenchymal stem cell secretome platform;
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the timing, progress and results of preclinical studies for our KPI-014 program;
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our expectations regarding our ability to fund our operating expenses, lease and debt service obligations, and capital expenditure requirements with our cash on hand;
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our expectations regarding our ability to comply with the covenants under our loan agreement;
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our intellectual property position, including intellectual property acquired in the acquisition of Combangio;
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our ability to identify additional products, product candidates or technologies with significant commercial potential that are consistent with our commercial objectives;
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our estimates regarding expenses, future revenue, timing of any future revenue, capital requirements and needs for additional financing;
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the impact of government laws and regulations;
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our competitive position;
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developments relating to our competitors and our industry;
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our ability to maintain and establish collaborations or obtain additional funding;
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our business and business relationships, including with employees and suppliers;
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our anticipated annualized reduction in operating expenses associated with our workforce reduction announced in July 2022; and
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the impact of COVID-19 on our business and operations.
We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements we make. We have included important factors in the cautionary statements included, or incorporated by reference, in this prospectus, particularly in the “Risk Factors” section, that we believe could cause actual results or events to differ materially from the forward-looking statements that we make. You should also carefully review the risk factors and cautionary statements described in the other documents we file from time to time with the SEC, specifically our most recent Annual Report on Form 10-K, our Quarterly Reports on Form 10-Q and our Current Reports on Form 8-K. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or investments we may make.
You should read this prospectus, the documents incorporated by reference in this prospectus and the documents that we have filed as exhibits to the registration statement of which this prospectus is a part completely and with the understanding that our actual future results may be materially different from what we expect. We do not assume any obligation to update any forward-looking statements, except as required by applicable law.
This prospectus includes or incorporates by reference certain statistical and other industry and market data that we obtained from industry publications and research, surveys and studies conducted by us and third parties as well as our estimates of potential market opportunities. Industry publications and third-party research, surveys and studies generally indicate that their information has been obtained from sources believed to be reliable, although they do not guarantee the accuracy or completeness of such information. Our estimates of the potential market opportunity for KPI-012 include several key assumptions based on our industry knowledge, industry publications, third-party research and other surveys, which may be based on a small sample size and may fail to accurately reflect market opportunities. While we believe that our internal assumptions are reasonable, no independent source has verified such assumptions.
ABOUT KALA PHARMACEUTICALS, INC.
We are a clinical-stage biopharmaceutical company dedicated to the research, development and commercialization of innovative therapies for rare and severe diseases of the eye. Our product candidate, KPI-012, which we acquired from Combangio, Inc., or Combangio, on November 15, 2021, is a mesenchymal stem cell secretome, or MSC-S, and is currently in clinical development for the treatment of persistent corneal epithelial defects, or PCED, a rare disease of impaired corneal healing. Based on the positive results of a Phase 1b clinical safety and efficacy trial of KPI-012 in patients with PCED, along with favorable preclinical safety and efficacy results, we submitted an investigational new drug application to the U.S. Food and Drug Administration, or FDA, which was accepted in December 2022. In February 2023, we dosed our first patient in our CHASE (Corneal Healing After SEcretome therapy) Phase 2b clinical trial of KPI-012 for PCED in the United States.
We believe the multifactorial mechanism of action of KPI-012 also makes MSC-S a platform technology. We are evaluating the potential development of KPI-012 for additional rare front-of-the-eye diseases, such as for the treatment of Limbal Stem Cell Deficiency and other rare corneal diseases that threaten vision. In addition, we have initiated preclinical studies under our KPI-014 program to evaluate the utility of our MSC-S platform for inherited retinal degenerative diseases, such as Retinitis Pigmentosa and Stargardt Disease.
Our principal executive offices are located at 1167 Massachusetts Avenue, Arlington, MA 02476, and our telephone number is (781) 996-5252.
RISK FACTORS
Investing in our securities involves a high degree of risk. You should carefully review the risks and uncertainties described under the heading “Risk Factors” contained in the applicable prospectus supplement and any related free writing prospectus, and under similar headings in our Annual Report on Form 10-K for the year ended December 31, 2022 and our Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2023, as updated by our subsequent filings, which are incorporated by reference into this prospectus, before deciding whether to purchase any of the securities being registered pursuant to the registration statement of which this prospectus is a part. Each of the risk factors could adversely affect our business, results of operations, financial condition and cash flows, as well as adversely affect the value of an investment in our securities, and the occurrence of any of these risks might cause you to lose all or part of your investment. Additional risks not presently known to us or that we currently believe are immaterial may also significantly impair our business operations.
USE OF PROCEEDS
We intend to use the net proceeds from the sale of any securities offered under this prospectus for general corporate purposes unless otherwise indicated in the applicable prospectus supplement. General corporate purposes may include the acquisition of companies or businesses, repayment and refinancing of debt, working capital and capital expenditures. We have not determined the amount of net proceeds to be used specifically for such purposes. As a result, management will retain broad discretion over the allocation of the net proceeds of any offering.
DESCRIPTION OF DEBT SECURITIES
The following description summarizes the general terms and provisions of the debt securities that Kala Pharmaceuticals, Inc. may offer and sell from time to time. We will describe in a prospectus supplement the specific terms of the debt securities offered through that prospectus supplement, as well as any general terms and provisions described in this section that will not apply to those debt securities. As used in this “Description of Debt Securities”, the term “debt securities” means the senior and subordinated debt securities that we issue and the trustee authenticates and delivers under the applicable indenture. When we refer to “the Company,” “we,” “our,” and “us” in this section, we mean Kala Pharmaceuticals, Inc. excluding, unless the context otherwise requires or as otherwise expressly stated, its subsidiaries.
We may issue senior debt securities from time to time, in one or more series under a senior indenture to be entered into between us and a senior trustee to be named in a prospectus supplement, which we refer to as the senior trustee. We may issue subordinated debt securities from time to time, in one or more series under a subordinated indenture to be entered into between us and a subordinated trustee to be named in a prospectus supplement, which we refer to as the subordinated trustee. The forms of senior indenture and subordinated indenture are filed as exhibits to the registration statement of which this prospectus forms a part. The senior indenture and the subordinated indenture are referred to individually as an indenture and together as the indentures and the senior trustee and the subordinated trustee are referred to individually as a trustee and together as the trustees. This section summarizes some of the provisions of the indentures and is qualified in its entirety by the specific text of the indentures, including definitions of terms used in the indentures. Wherever we refer to particular sections of, or defined terms in, the indentures, those sections or defined terms are incorporated by reference in this prospectus or the applicable prospectus supplement. You should review the indentures that are filed as exhibits to the registration statement of which this prospectus forms a part for additional information.
Neither indenture will limit the amount of debt securities that we may issue. The applicable indenture will provide that debt securities may be issued up to an aggregate principal amount authorized from time to time by us and may be payable in any currency or currency unit designated by us or in amounts determined by reference to an index.
General
The senior debt securities will constitute our unsecured and unsubordinated general obligations and will rank equally in right of payment with our other unsecured and unsubordinated obligations. The subordinated debt securities will constitute our unsecured and subordinated general obligations and will be junior in right of payment to our senior indebtedness (including senior debt securities), as described under the heading “— Certain Terms of the Subordinated Debt Securities — Subordination.” The debt securities will be structurally subordinated to all existing and future indebtedness and other liabilities of our subsidiaries unless such subsidiaries expressly guarantee such debt securities.
The debt securities will be our unsecured obligations. Any secured debt or other secured obligations will be effectively senior to the debt securities to the extent of the value of the assets securing such debt or other obligations. Unless otherwise indicated in the applicable prospectus supplement, the debt securities will not be guaranteed by any of our subsidiaries.
The applicable prospectus supplement and/or free writing prospectus will include any additional or different terms of the debt securities of any series being offered, including the following terms:
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the title and type of the debt securities;
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whether the debt securities will be senior or subordinated debt securities, and, with respect to any subordinated debt securities the terms on which they are subordinated;
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the initial aggregate principal amount of the debt securities;
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the price or prices at which we will sell the debt securities;
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the maturity date or dates of the debt securities and the right, if any, to extend such date or dates;
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the rate or rates, if any, at which the debt securities will bear interest, or the method of determining such rate or rates;
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the date or dates from which such interest will accrue, the interest payment dates on which such interest will be payable or the method of determination of such dates;
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the right, if any, to extend the interest payment periods and the duration of that extension;
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the manner of paying principal and interest and the place or places where principal and interest will be payable;
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the denominations of the debt securities if other than $2,000 or multiples of $1,000;
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provisions for a sinking fund, purchase fund or other analogous fund, if any;
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any redemption dates, prices, obligations and restrictions on the debt securities;
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the currency, currencies or currency units in which the debt securities will be denominated and the currency, currencies or currency units in which principal and interest, if any, on the debt securities may be payable;
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any conversion or exchange features of the debt securities;
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whether the debt securities will be subject to the defeasance provisions in the indenture;
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whether the debt securities will be issued in definitive or global form or in definitive form only upon satisfaction of certain conditions;
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whether the debt securities will be guaranteed as to payment or performance;
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any special tax implications of the debt securities;
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any events of defaults or covenants in addition to or in lieu of those set forth in the indenture; and
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any other material terms of the debt securities.
When we refer to “principal” in this section with reference to the debt securities, we are also referring to “premium, if any.”
We may from time to time, without notice to or the consent of the holders of any series of debt securities, create and issue further debt securities of any such series ranking equally with the debt securities of such series in all respects (or in all respects other than (1) the payment of interest accruing prior to the issue date of such further debt securities or (2) the first payment of interest following the issue date of such further debt securities). Such further debt securities may be consolidated and form a single series with the debt securities of such series and have the same terms as to status, redemption or otherwise as the debt securities of such series.
You may present debt securities for exchange and you may present debt securities for transfer in the manner, at the places and subject to the restrictions set forth in the debt securities and the applicable prospectus supplement. We will provide you those services without charge, although you may have to pay any tax or other governmental charge payable in connection with any exchange or transfer, as set forth in the indenture.
Debt securities may bear interest at a fixed rate or a floating rate. Debt securities bearing no interest or interest at a rate that at the time of issuance is below the prevailing market rate (original issue discount securities) may be sold at a discount below their stated principal amount. U.S. federal income tax considerations applicable to any such discounted debt securities or to certain debt securities issued at par which are treated as having been issued at a discount for U.S. federal income tax purposes will be described in the applicable prospectus supplement.
We may issue debt securities with the principal amount payable on any principal payment date, or the amount of interest payable on any interest payment date, to be determined by reference to one or more currency exchange rates, securities or baskets of securities, commodity prices or indices. You may receive a payment of principal on any principal payment date, or a payment of interest on any interest payment date,
that is greater than or less than the amount of principal or interest otherwise payable on such dates, depending on the value on such dates of the applicable currency, security or basket of securities, commodity or index. Information as to the methods for determining the amount of principal or interest payable on any date, the currencies, securities or baskets of securities, commodities or indices to which the amount payable on such date is linked and certain related tax considerations will be set forth in the applicable prospectus supplement.
Certain Terms of the Senior Debt Securities
Covenants. Unless we indicate otherwise in a prospectus supplement with respect to a particular series of senior debt securities, the senior debt securities will not contain any financial or restrictive covenants, including covenants restricting either us or any of our subsidiaries from incurring, issuing, assuming or guaranteeing any indebtedness secured by a lien on any of our or our subsidiaries’ property or capital stock, or restricting either us or any of our subsidiaries from entering into sale and leaseback transactions.
Consolidation, Merger and Sale of Assets. Unless we indicate otherwise in a prospectus supplement with respect to a particular series of senior debt securities, we may not consolidate with or merge into any other person, in a transaction in which we are not the surviving corporation, or convey, transfer or lease our properties and assets substantially as an entirety to any person, in either case, unless:
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the successor entity, if any, is a U.S. corporation, limited liability company, partnership or trust;
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the successor entity assumes our obligations on the senior debt securities and under the senior indenture;
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immediately after giving effect to the transaction, no default or event of default shall have occurred and be continuing; and
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we have delivered to the senior trustee an officer’s certificate and an opinion of counsel, each stating that the consolidation, merger, conveyance, transfer or lease and, if a supplemental indenture is required in connection with such transaction, such supplemental indenture, comply with the senior indenture and all conditions precedent provided for in the senior indenture relating to such transaction have been complied with.
The restrictions described in the bullets above do not apply (1) to our consolidation with or merging into one of our affiliates, if our board of directors determines in good faith that the purpose of the consolidation or merger is principally to change our state of incorporation or our form of organization to another form or (2) if we merge with or into a single direct or indirect wholly-owned subsidiary of ours.
The surviving business entity will succeed to, and be substituted for, us under the senior indenture and the senior debt securities and, except in the case of a lease, we shall be released from all obligations under the senior indenture and the senior debt securities.
No Protection in the Event of a Change in Control. Unless we indicate otherwise in a prospectus supplement with respect to a particular series of senior debt securities, the senior debt securities will not contain any provisions that may afford holders of the senior debt securities protection in the event we have a change in control or in the event of a highly leveraged transaction (whether or not such transaction results in a change in control).
Events of Default. Unless we indicate otherwise in a prospectus supplement with respect to a particular series of senior debt securities, the following are events of default under the senior indenture with respect to senior debt securities of each series:
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failure to pay interest on any senior debt securities of such series when due and payable, if that default continues for a period of 30 days (or such other period as may be specified for such series);
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failure to pay principal on the senior debt securities of such series when due and payable whether at maturity, upon redemption, by declaration or otherwise (and, if specified for such series, the continuance of such failure for a specified period);
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default in the performance of or breach of any of our covenants or agreements in the senior indenture applicable to senior debt securities of such series, other than a covenant breach which is specifically dealt with elsewhere in the senior indenture, and that default or breach continues for a period of 90 days after we receive written notice from the trustee or from the holders of 25% or more in aggregate principal amount of the senior debt securities of such series;
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certain events of bankruptcy or insolvency, whether or not voluntary; and
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any other event of default provided for in such series of senior debt securities as may be specified in the applicable prospectus supplement.
Unless we indicate otherwise in a prospectus supplement with respect to a particular series of senior debt securities, the default by us under any other debt, including any other series of our debt securities, is not a default under the senior indenture.
If an event of default other than an event of default specified in the fourth bullet point above occurs with respect to a series of senior debt securities and is continuing under the senior indenture, then, and in each such case, either the trustee or the holders of not less than 25% in aggregate principal amount of such series then outstanding under the senior indenture (each such series voting as a separate class) by written notice to us and to the trustee, if such notice is given by the holders, may, and the trustee at the request of such holders shall, declare the principal amount of and accrued interest on such series of senior debt securities to be immediately due and payable, and upon this declaration, the same shall become immediately due and payable.
If an event of default specified in the fourth bullet point above occurs and is continuing, the entire principal amount of and accrued interest on each series of senior debt securities then outstanding shall automatically become immediately due and payable.
Unless otherwise specified in the prospectus supplement relating to a series of senior debt securities originally issued at a discount, the amount due upon acceleration shall include only the original issue price of the senior debt securities, the amount of original issue discount accrued to the date of acceleration and accrued interest, if any.
Upon certain conditions, declarations of acceleration may be rescinded and annulled and past defaults may be waived by the holders of a majority in aggregate principal amount of all the senior debt securities of such series affected by the default, each series voting as a separate class. Furthermore, subject to various provisions in the senior indenture, the holders of a majority in aggregate principal amount of a series of senior debt securities, by notice to the trustee, may waive a continuing default or event of default with respect to such senior debt securities and its consequences, except a default in the payment of principal of or interest on such senior debt securities (other than any such default in payment resulting solely from an acceleration of the senior debt securities) or in respect of a covenant or provision of the senior indenture which cannot be modified or amended without the consent of the holders of each such senior debt security. Upon any such waiver, such default shall cease to exist, and any event of default with respect to such senior debt securities shall be deemed to have been cured, for every purpose of the senior indenture; but no such waiver shall extend to any subsequent or other default or event of default or impair any right consequent thereto.
The holders of a majority in aggregate principal amount of a series of senior debt securities may direct the time, method and place of conducting any proceeding for any remedy available to the trustee or exercising any trust or power conferred on the trustee with respect to such senior debt securities. However, the trustee may refuse to follow any direction that conflicts with law or the senior indenture, that may involve the trustee in personal liability or that the trustee determines in good faith may be unduly prejudicial to the rights of holders of such series of senior debt securities not joining in the giving of such direction and may take any other action it deems proper that is not inconsistent with any such direction received from holders of such series of senior debt securities. A holder may not pursue any remedy with respect to the senior indenture or any series of senior debt securities unless:
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the holder gives the trustee written notice of a continuing event of default;
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the holders of at least 25% in aggregate principal amount of such series of senior debt securities make a written request to the trustee to pursue the remedy in respect of such event of default;
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the requesting holder or holders offer the trustee indemnity satisfactory to the trustee against any costs, liability or expense;
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the trustee does not comply with the request within 60 days after receipt of the request and the offer of indemnity; and
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during such 60-day period, the holders of a majority in aggregate principal amount of such series of senior debt securities do not give the trustee a direction that is inconsistent with the request.
These limitations, however, do not apply to the right of any holder of a senior debt security of any affected series to receive payment of the principal of and interest on such senior debt security in accordance with the terms of such debt security, or to bring suit for the enforcement of any such payment in accordance with the terms of such debt security, on or after the due date for the senior debt securities, which right shall not be impaired or affected without the consent of the holder.
The senior indenture requires certain of our officers to certify, on or before a fixed date in each year in which any senior debt security is outstanding, as to their knowledge of our compliance with all covenants, agreements and conditions under the senior indenture.
Satisfaction and Discharge. We can satisfy and discharge our obligations to holders of any series of debt securities if:
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we have paid or caused to be paid the principal of and interest on all senior debt securities of such series (with certain limited exceptions) when due and payable; or
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we deliver to the senior trustee for cancellation all senior debt securities of such series theretofore authenticated under the senior indenture (with certain limited exceptions); or
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all senior debt securities of such series have become due and payable or will become due and payable within one year (or are to be called for redemption within one year under arrangements satisfactory to the senior trustee) and we deposit in trust an amount of cash or a combination of cash and U.S. government or U.S. government agency obligations (or in the case of senior debt securities denominated in a foreign currency, foreign government securities or foreign government agency securities) sufficient to make interest, principal and any other payments on the debt securities of that series on their various due dates;
and if, in any such case, we also pay or cause to be paid all other sums payable under the senior indenture, as and when the same shall be due and payable and we deliver to the senior trustee an officer’s certificate and an opinion of counsel, each stating that these conditions have been satisfied.
Under current U.S. federal income tax law, the deposit and our legal release from the debt securities would be treated as though we took back your debt securities and gave you your share of the cash and debt securities or bonds deposited in trust. In that event, you could recognize gain or loss on the debt securities you give back to us. Purchasers of the debt securities should consult their own advisers with respect to the tax consequences to them of such deposit and discharge, including the applicability and effect of tax laws other than the U.S. federal income tax law.
Defeasance. Unless the applicable prospectus supplement provides otherwise, the following discussion of legal defeasance and covenant defeasance will apply to any series of debt securities issued under the indentures.
Legal Defeasance. We can legally release ourselves from any payment or other obligations on the debt securities of any series (called “legal defeasance”) if certain conditions are met, including the following:
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We deposit in trust for your benefit and the benefit of all other direct holders of the debt securities of the same series cash or a combination of cash and U.S. government or U.S. government agency obligations (or, in the case of senior debt securities denominated in a foreign currency, foreign government or foreign government agency obligations) that will generate enough cash to make interest, principal and any other payments on the debt securities of that series on their various due dates.
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There is a change in current U.S. federal income tax law or an IRS ruling that lets us make the above deposit without causing you to be taxed on the debt securities any differently than if we did not make the deposit and instead repaid the debt securities ourselves when due. Under current U.S. federal income tax law, the deposit and our legal release from the debt securities would be treated as though we took back your debt securities and gave you your share of the cash and debt securities or bonds deposited in trust. In that event, you could recognize gain or loss on the debt securities you give back to us.
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We deliver to the trustee a legal opinion of our counsel confirming the tax law change or ruling described above.
If we accomplish legal defeasance, as described above, you would have to rely solely on the trust deposit for repayment of the debt securities. You could not look to us for repayment in the event of any shortfall.
Covenant Defeasance. Without any change in current U.S. federal tax law, we can make the same type of deposit described above and be released from some of the covenants in the debt securities (called “covenant defeasance”). In that event, you would lose the protection of those covenants but would gain the protection of having money and securities set aside in trust to repay the debt securities. In order to achieve covenant defeasance, we must do the following (among other things):
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deposit in trust for your benefit and the benefit of all other direct holders of the debt securities of the same series cash or a combination of cash and U.S. government or U.S. government agency obligations (or, in the case of senior debt securities denominated in a foreign currency, foreign government or foreign government agency obligations) that will generate enough cash to make interest, principal and any other payments on the debt securities of that series on their various due dates.
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deliver to the trustee a legal opinion of our counsel confirming that under current U.S. federal income tax law we may make the above deposit without causing you to be taxed on the debt securities any differently than if we did not make the deposit and instead repaid the debt securities ourselves when due.
If we accomplish covenant defeasance, you could still look to us for repayment of the debt securities if there were a shortfall in the trust deposit. In fact, if one of the events of default occurred (such as our bankruptcy) and the debt securities become immediately due and payable, there may be such a shortfall. Depending on the events causing the default, you may not be able to obtain payment of the shortfall.
Modification and Waiver. We and the trustee may amend or supplement the senior indenture or the senior debt securities of any series without the consent of any holder:
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to convey, transfer, assign, mortgage or pledge any assets as security for the senior debt securities of one or more series;
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to evidence the succession of a corporation, limited liability company, partnership or trust to us, and the assumption by such successor of our covenants, agreements and obligations under the senior indenture or to otherwise comply with the covenant relating to mergers, consolidations and sales of assets;
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to comply with the requirements of the SEC in order to effect or maintain the qualification of the senior indenture under the Trust Indenture Act of 1939, as amended (the “Trust Indenture Act”);
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to add to our covenants such new covenants, restrictions, conditions or provisions for the protection of the holders, and to make the occurrence, or the occurrence and continuance, of a default in any such additional covenants, restrictions, conditions or provisions an event of default;
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to cure any ambiguity, defect or inconsistency in the senior indenture or in any supplemental indenture or to conform the senior indenture or the senior debt securities to the description of senior debt securities of such series set forth in this prospectus or any applicable prospectus supplement;
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to provide for or add guarantors with respect to the senior debt securities of any series;
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to establish the form or forms or terms of the senior debt securities as permitted by the senior indenture;
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to evidence and provide for the acceptance of appointment under the senior indenture by a successor trustee, or to make such changes as shall be necessary to provide for or facilitate the administration of the trusts in the senior indenture by more than one trustee;
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to add to, change or eliminate any of the provisions of the senior indenture in respect of one or more series of senior debt securities, provided that any such addition, change or elimination shall (a) neither (1) apply to any senior debt security of any series created prior to the execution of such supplemental indenture and entitled to the benefit of such provision nor (2) modify the rights of the holder of any such senior debt security with respect to such provision or (b) become effective only when there is no senior debt security described in clause (a)(1) outstanding;
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to make any change to the senior debt securities of any series so long as no senior debt securities of such series are outstanding; or
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to make any change that does not adversely affect the rights of any holder in any material respect.
Other amendments and modifications of the senior indenture or the senior debt securities issued may be made, and our compliance with any provision of the senior indenture with respect to any series of senior debt securities may be waived, with the consent of the holders of a majority of the aggregate principal amount of the outstanding senior debt securities of each series affected by the amendment or modification (voting as separate series); provided, however, that each affected holder must consent to any modification, amendment or waiver that:
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extends the final maturity of any senior debt securities of such series;
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reduces the principal amount of any senior debt securities of such series;
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reduces the rate, or extends the time for payment of, interest on any senior debt securities of such series;
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reduces the amount payable upon the redemption of any senior debt securities of such series;
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changes the currency of payment of principal of or interest on any senior debt securities of such series;
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reduces the principal amount of original issue discount securities payable upon acceleration of maturity or the amount provable in bankruptcy;
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waives a continuing default in the payment of principal of or interest on the senior debt securities (other than any such default in payment resulting solely from an acceleration of the senior debt securities);
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changes the provisions relating to the waiver of past defaults or impairs the right of holders to receive payment or to institute suit for the enforcement of any payment or conversion of any senior debt securities of such series on or after the due date therefor;
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modifies any of the provisions of these restrictions on amendments and modifications, except to increase any required percentage or to provide that certain other provisions cannot be modified or waived without the consent of the holder of each senior debt security of such series affected by the modification;
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adversely affects the right to convert or exchange senior debt securities into common stock, other securities or property in accordance with the terms of the senior debt securities; or
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reduces the above-stated percentage of outstanding senior debt securities of such series whose holders must consent to a supplemental indenture or modifies or amends or waives certain provisions of or defaults under the senior indenture.
It shall not be necessary for the holders to approve the particular form of any proposed amendment, supplement or waiver, but it shall be sufficient if the holders’ consent approves the substance thereof. After an amendment, supplement or waiver of the senior indenture in accordance with the provisions described in
this section becomes effective, the trustee must give to the holders affected thereby certain notice briefly describing the amendment, supplement or waiver. Any failure by the trustee to give such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such amendment, supplemental indenture or waiver.
Notice of Redemption. Notice of any redemption of senior debt securities will be mailed at least 10 days but not more than 60 days before the redemption date to each holder of senior debt securities of a series to be redeemed. Any notice may, at our discretion, be subject to the satisfaction or waiver of one or more conditions precedent. In that case, such notice shall state the nature of such condition precedent. If we elect to redeem a portion but not all of such senior debt securities, the trustee will select the senior debt securities to be redeemed in a manner that complies with applicable legal and stock exchange requirements, if any. Interest on such debt securities or portions of senior debt securities will cease to accrue on and after the date fixed for redemption, unless we default in the payment of such redemption price and accrued interest with respect to any such senior debt security or portion thereof.
If any date of redemption of any senior debt security is not a business day, then payment of principal and interest may be made on the next succeeding business day with the same force and effect as if made on the nominal date of redemption and no interest will accrue for the period after such nominal date.
Conversion Rights. We will describe the terms upon which senior debt securities may be convertible into our common stock or other securities in a prospectus supplement. These terms will include the type of securities the senior debt securities are convertible into, the conversion price or manner of calculation thereof, the conversion period, provisions as to whether conversion will be at our option or the option of the holders, the events requiring an adjustment of the conversion price and provisions affecting conversion in the event of the redemption of the senior debt securities and any restrictions on conversion. They may also include provisions adjusting the number of shares of our common stock or other securities issuable upon conversion.
No Personal Liability of Incorporators, Stockholders, Officers, or Directors. The senior indenture provides that no recourse shall be had under any obligation, covenant or agreement of ours in the senior indenture or any supplemental indenture, or in any of the senior debt securities or because of the creation of any indebtedness represented thereby, against any of our incorporators, stockholders, officers or directors, past, present or future, or of any predecessor or successor entity thereof under any law, statute or constitutional provision or by the enforcement of any assessment or by any legal or equitable proceeding or otherwise. Each holder, by accepting the senior debt securities, waives and releases all such liability.
Concerning the Trustee. The senior indenture provides that, except during the continuance of an event of default, the trustee will not be liable except for the performance of such duties as are specifically set forth in the senior indenture. If an event of default has occurred and is continuing, the trustee will exercise such rights and powers vested in it under the senior indenture and will use the same degree of care and skill in its exercise as a prudent person would exercise under the circumstances in the conduct of such person’s own affairs.
The senior indenture and the provisions of the Trust Indenture Act incorporated by reference therein contain limitations on the rights of the trustee thereunder, should it become a creditor of ours or any of our subsidiaries, to obtain payment of claims in certain cases or to realize on certain property received by it in respect of any such claims, as security or otherwise. The trustee is permitted to engage in other transactions, provided that if it acquires any conflicting interest (as defined in the Trust Indenture Act), it must eliminate such conflict or resign.
We may have normal banking relationships with the senior trustee in the ordinary course of business.
Unclaimed Funds. All funds deposited with the trustee or any paying agent for the payment of principal, premium, interest or additional amounts in respect of the senior debt securities that remain unclaimed for two years after the date upon which such amounts became due and payable will be repaid to us. Thereafter, any right of any holder of senior debt securities to such funds shall be enforceable only against us, and the trustee and paying agents will have no liability therefor.
Governing Law. The senior indenture and the senior debt securities will be governed by, and construed in accordance with, the internal laws of the State of New York.
Certain Terms of the Subordinated Debt Securities
Other than the terms of the subordinated indenture and subordinated debt securities relating to subordination or otherwise as described in the prospectus supplement relating to a particular series of subordinated debt securities, the terms of the subordinated indenture and subordinated debt securities are identical in all material respects to the terms of the senior indenture and senior debt securities.
Additional or different subordination terms may be specified in the prospectus supplement applicable to a particular series.
Subordination. The indebtedness evidenced by the subordinated debt securities is subordinate to the prior payment in full of all of our senior indebtedness, as defined in the subordinated indenture. During the continuance beyond any applicable grace period of any default in the payment of principal, premium, interest or any other payment due on any of our senior indebtedness, we may not make any payment of principal of or interest on the subordinated debt securities (except for certain sinking fund payments). In addition, upon any payment or distribution of our assets upon any dissolution, winding-up, liquidation or reorganization, the payment of the principal of and interest on the subordinated debt securities will be subordinated to the extent provided in the subordinated indenture in right of payment to the prior payment in full of all our senior indebtedness. Because of this subordination, if we dissolve or otherwise liquidate, holders of our subordinated debt securities may receive less, ratably, than holders of our senior indebtedness. The subordination provisions do not prevent the occurrence of an event of default under the subordinated indenture.
The term “senior indebtedness” of a person means with respect to such person the principal of, premium, if any, interest on, and any other payment due pursuant to any of the following, whether outstanding on the date of the subordinated indenture or incurred by that person in the future:
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all of the indebtedness of that person for money borrowed;
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all of the indebtedness of that person evidenced by notes, debentures, bonds or other securities sold by that person for money;
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all of the lease obligations that are capitalized on the books of that person in accordance with generally accepted accounting principles;
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all indebtedness of others of the kinds described in the first two bullet points above and all lease obligations of others of the kind described in the third bullet point above that the person, in any manner, assumes or guarantees or that the person in effect guarantees through an agreement to purchase, whether that agreement is contingent or otherwise; and
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all renewals, extensions or refundings of indebtedness of the kinds described in the first, second or fourth bullet point above and all renewals or extensions of leases of the kinds described in the third or fourth bullet point above;
unless, in the case of any particular indebtedness, renewal, extension or refunding, the instrument creating or evidencing it or the assumption or guarantee relating to it expressly provides that such indebtedness, renewal, extension or refunding is not superior in right of payment to the subordinated debt securities. Our senior debt securities constitute senior indebtedness for purposes of the subordinated indenture.
DESCRIPTION OF CAPITAL STOCK
The following description of our capital stock is intended as a summary only and therefore is not a complete description of our capital stock. This description is based upon, and is qualified by reference to, our certificate of incorporation, our by-laws and applicable provisions of Delaware corporate law. You should read our certificate of incorporation and our by-laws, which are filed as exhibits to the registration statement of which this prospectus forms a part, for the provisions that are important to you.
Our authorized capital stock consists of 120,000,000 shares of common stock, par value $0.001 per share, and 5,000,000 shares of preferred stock, par value $0.001 per share, of which 54,000 shares of preferred stock are designated the “Series E Convertible Non-Redeemable Preferred Stock”, or the Series E Preferred Stock. As of March 31, 2023, 2,309,287 shares of common stock were outstanding and 53,144 shares of Series E Preferred Stock were outstanding.
Common Stock
Annual Meeting. Annual meetings of our stockholders are held on the date designated in accordance with our by-laws. Written notice must be mailed to each stockholder entitled to vote not less than ten nor more than 60 days before the date of the meeting. The presence in person or by proxy of the holders of one third of the voting power of the shares of the capital stock of the corporation issued and outstanding and entitled to vote at such meeting constitutes a quorum for the transaction of business at meetings of the stockholders. Special meetings of the stockholders may be called for any purpose by the board of directors, the chairman of the board or the chief executive officer. Except as may be otherwise provided by applicable law, our certificate of incorporation or our by-laws, all elections of directors shall be decided by a plurality, and all other questions shall be decided by a majority, of the votes cast by stockholders entitled to vote thereon at a duly held meeting of stockholders at which a quorum is present.
Voting Rights. Holders of our common stock are entitled to one vote for each share held on all matters submitted to a vote of stockholders and do not have cumulative voting rights.
Dividends. Holders of common stock are entitled to receive proportionately any dividends as may be declared by our board of directors, subject to any preferential dividend rights of outstanding preferred stock.
Liquidation and Dissolution. In the event of our liquidation or dissolution, the holders of our common stock are entitled to receive proportionately all assets available for distribution to stockholders after the payment of all debts and other liabilities and subject to any preferential rights of any outstanding preferred stock.
Other Rights. Holders of our common stock have no preemptive, subscription, redemption or conversion rights. The rights, preferences and privileges of holders of our common stock are subject to and may be adversely affected by the rights of the holders of our Series E Preferred Stock and shares of any series of our preferred stock that we may designate and issue in the future.
Transfer Agent and Registrar. American Stock Transfer & Trust Company, LLC is transfer agent and registrar for the common stock.
Nasdaq Capital Market. Our common stock is listed on The Nasdaq Capital Market under the symbol “KALA”.
Preferred Stock
General Description
We are authorized to issue “blank check” preferred stock, which may be issued in one or more series upon authorization of our board of directors. Our board of directors is authorized to fix the designations, powers, preferences and the relative, participating, optional or other special rights and any qualifications, limitations and restrictions of the shares of each series of preferred stock. The authorized shares of our preferred stock are available for issuance without further action by our stockholders, unless such action is required by applicable law or the rules of any stock exchange on which our securities may be listed. If the
approval of our stockholders is not required for the issuance of shares of our preferred stock, our board may determine not to seek stockholder approval. The specific terms of any series of preferred stock offered pursuant to this prospectus will be described in the prospectus supplement relating to that series of preferred stock. The specific terms of series of preferred stock offered pursuant to this prospectus will be described in the prospectus supplement relating to that series of preferred stock.
A series of our preferred stock could, depending on the terms of such series, impede the completion of a merger, tender offer or other takeover attempt. Our board of directors will make any determination to issue preferred shares based upon its judgment as to the best interests of our stockholders. Our directors, in so acting, could issue preferred stock having terms that could discourage an acquisition attempt through which an acquirer may be able to change the composition of our board of directors, including a tender offer or other transaction that some, or a majority, of our stockholders might believe to be in their best interests or in which stockholders might receive a premium for their stock over the then-current market price of the stock.
The preferred stock has the terms described below unless otherwise provided in the prospectus supplement relating to a particular series of preferred stock. You should read the prospectus supplement relating to the particular series of preferred stock being offered for specific terms, including:
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the designation and stated value per share of the preferred stock and the number of shares offered;
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the amount of liquidation preference per share;
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the price at which the preferred stock will be issued;
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the dividend rate, or method of calculation of dividends, the dates on which dividends will be payable, whether dividends will be cumulative or noncumulative and, if cumulative, the dates from which dividends will commence to accumulate;
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any redemption or sinking fund provisions;
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if other than the currency of the United States, the currency or currencies including composite currencies in which the preferred stock is denominated and/or in which payments will or may be payable;
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any conversion provisions;
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whether we have elected to offer depositary shares as described under “Description of Depositary Shares;” and
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any other rights, preferences, privileges, limitations and restrictions on the preferred stock.
The preferred stock will, when issued, be fully paid and non-assessable. Unless otherwise specified in the prospectus supplement, each series of preferred stock will rank equally as to dividends and liquidation rights in all respects with each other series of preferred stock. The rights of holders of shares of each series of preferred stock will be subordinate to those of our general creditors.
As described under “Description of Depositary Shares,” we may, at our option, with respect to any series of preferred stock, elect to offer fractional interests in shares of preferred stock, and provide for the issuance of depositary receipts representing depositary shares, each of which will represent a fractional interest in a share of the series of preferred stock. The fractional interest will be specified in the prospectus supplement relating to a particular series of preferred stock.
Rank. Unless otherwise specified in the prospectus supplement, the preferred stock will, with respect to dividend rights and rights upon our liquidation, dissolution or winding up of our affairs, rank:
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senior to our common stock and to all equity securities ranking junior to such preferred stock with respect to dividend rights or rights upon our liquidation, dissolution or winding up of our affairs;
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on a parity with all equity securities issued by us, the terms of which specifically provide that such equity securities rank on a parity with the preferred stock with respect to dividend rights or rights upon our liquidation, dissolution or winding up of our affairs; and
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junior to all equity securities issued by us, the terms of which specifically provide that such equity securities rank senior to the preferred stock with respect to dividend rights or rights upon our liquidation, dissolution or winding up of our affairs.
The term “equity securities” does not include convertible debt securities.
Dividends. Holders of the preferred stock of each series will be entitled to receive, when, as and if declared by our board of directors, cash dividends at such rates and on such dates described in the prospectus supplement. Different series of preferred stock may be entitled to dividends at different rates or based on different methods of calculation. The dividend rate may be fixed or variable or both. Dividends will be payable to the holders of record as they appear on our stock books on record dates fixed by our board of directors, as specified in the applicable prospectus supplement.
Dividends on any series of preferred stock may be cumulative or noncumulative, as described in the applicable prospectus supplement. If our board of directors does not declare a dividend payable on a dividend payment date on any series of noncumulative preferred stock, then the holders of that noncumulative preferred stock will have no right to receive a dividend for that dividend payment date, and we will have no obligation to pay the dividend accrued for that period, whether or not dividends on that series are declared payable on any future dividend payment dates. Dividends on any series of cumulative preferred stock will accrue from the date we initially issue shares of such series or such other date specified in the applicable prospectus supplement.
No dividends may be declared or paid or funds set apart for the payment of any dividends on any parity securities unless full dividends have been paid or set apart for payment on the preferred stock. If full dividends are not paid, the preferred stock will share dividends pro rata with the parity securities.
No dividends may be declared or paid or funds set apart for the payment of dividends on any junior securities unless full dividends for all dividend periods terminating on or prior to the date of the declaration or payment will have been paid or declared and a sum sufficient for the payment set apart for payment on the preferred stock.
Liquidation Preference. Upon any voluntary or involuntary liquidation, dissolution or winding up of our affairs, then, before we make any distribution or payment to the holders of any common stock or any other class or series of our capital stock ranking junior to the preferred stock in the distribution of assets upon any liquidation, dissolution or winding up of our affairs, the holders of each series of preferred stock shall be entitled to receive out of assets legally available for distribution to stockholders, liquidating distributions in the amount of the liquidation preference per share set forth in the prospectus supplement, plus any accrued and unpaid dividends thereon. Such dividends will not include any accumulation in respect of unpaid noncumulative dividends for prior dividend periods. Unless otherwise specified in the prospectus supplement, after payment of the full amount of their liquidating distributions, the holders of preferred stock will have no right or claim to any of our remaining assets. Upon any such voluntary or involuntary liquidation, dissolution or winding up, if our available assets are insufficient to pay the amount of the liquidating distributions on all outstanding preferred stock and the corresponding amounts payable on all other classes or series of our capital stock ranking on parity with the preferred stock and all other such classes or series of shares of capital stock ranking on parity with the preferred stock in the distribution of assets, then the holders of the preferred stock and all other such classes or series of capital stock ranking on parity with the preferred stock will share ratably in any such distribution of assets in proportion to the full liquidating distributions to which they would otherwise be entitled.
Upon any such liquidation, dissolution or winding up and if we have made liquidating distributions in full to all holders of preferred stock, we will distribute our remaining assets among the holders of any other classes or series of capital stock ranking junior to the preferred stock according to their respective rights and preferences and, in each case, according to their respective number of shares. For such purposes, our consolidation or merger with or into any other corporation, trust or entity, or the sale, lease or conveyance of all or substantially all of our property or assets will not be deemed to constitute a liquidation, dissolution or winding up of our affairs.
Redemption. If so provided in the applicable prospectus supplement, the preferred stock will be subject to mandatory redemption or redemption at our option, as a whole or in part, in each case upon the terms, at the times and at the redemption prices set forth in such prospectus supplement.
The prospectus supplement relating to a series of preferred stock that is subject to mandatory redemption will specify the number of shares of preferred stock that shall be redeemed by us in each year commencing after a date to be specified, at a redemption price per share to be specified, together with an amount equal to all accrued and unpaid dividends thereon to the date of redemption. Unless the shares have a cumulative dividend, such accrued dividends will not include any accumulation in respect of unpaid dividends for prior dividend periods. We may pay the redemption price in cash or other property, as specified in the applicable prospectus supplement. If the redemption price for preferred stock of any series is payable only from the net proceeds of the issuance of shares of our capital stock, the terms of such preferred stock may provide that, if no such shares of our capital stock shall have been issued or to the extent the net proceeds from any issuance are insufficient to pay in full the aggregate redemption price then due, such preferred stock shall automatically and mandatorily be converted into the applicable shares of our capital stock pursuant to conversion provisions specified in the applicable prospectus supplement. Notwithstanding the foregoing, we will not redeem any preferred stock of a series unless:
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if that series of preferred stock has a cumulative dividend, we have declared and paid or contemporaneously declare and pay or set aside funds to pay full cumulative dividends on the preferred stock for all past dividend periods and the then current dividend period; or
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if such series of preferred stock does not have a cumulative dividend, we have declared and paid or contemporaneously declare and pay or set aside funds to pay full dividends for the then current dividend period.
In addition, we will not acquire any preferred stock of a series unless:
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if that series of preferred stock has a cumulative dividend, we have declared and paid or contemporaneously declare and pay or set aside funds to pay full cumulative dividends on all outstanding shares of such series of preferred stock for all past dividend periods and the then current dividend period; or
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if that series of preferred stock does not have a cumulative dividend, we have declared and paid or contemporaneously declare and pay or set aside funds to pay full dividends on the preferred stock of such series for the then current dividend period.
However, at any time we may purchase or acquire preferred stock of that series (1) pursuant to a purchase or exchange offer made on the same terms to holders of all outstanding preferred stock of such series or (2) by conversion into or exchange for shares of our capital stock ranking junior to the preferred stock of such series as to dividends and upon liquidation.
If fewer than all of the outstanding shares of preferred stock of any series are to be redeemed, we will determine the number of shares that may be redeemed pro rata from the holders of record of such shares in proportion to the number of such shares held or for which redemption is requested by such holder or by any other equitable manner that we determine. Such determination will reflect adjustments to avoid redemption of fractional shares.
Unless otherwise specified in the prospectus supplement, we will mail notice of redemption at least 10 days but not more than 60 days before the redemption date to each holder of record of preferred stock to be redeemed at the address shown on our stock transfer books. Each notice shall state:
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the redemption date;
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the number of shares and series of preferred stock to be redeemed;
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the redemption price;
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the place or places where certificates for such preferred stock are to be surrendered for payment of the redemption price;
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that dividends on the shares to be redeemed will cease to accrue on such redemption date;
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the date on which the holder’s conversion rights, if any, as to such shares shall terminate; and
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the specific number of shares to be redeemed from each such holder if fewer than all the shares of any series are to be redeemed.
If notice of redemption has been given and we have set aside the funds necessary for such redemption in trust for the benefit of the holders of any shares called for redemption, then from and after the redemption date, dividends will cease to accrue on such shares, and all rights of the holders of such shares will terminate, except the right to receive the redemption price.
Voting Rights. Holders of preferred stock will not have any voting rights, except as required by law or as indicated in the applicable prospectus supplement.
Unless otherwise provided for under the terms of any series of preferred stock, no consent or vote of the holders of shares of preferred stock or any series thereof shall be required for any amendment to our certificate of incorporation that would increase the number of authorized shares of preferred stock or the number of authorized shares of any series thereof or decrease the number of authorized shares of preferred stock or the number of authorized shares of any series thereof (but not below the number of authorized shares of preferred stock or such series, as the case may be, then outstanding).
Conversion Rights. The terms and conditions, if any, upon which any series of preferred stock is convertible into shares of our common stock will be set forth in the applicable prospectus supplement relating thereto. Such terms will include the number of shares of common stock into which the shares of preferred stock are convertible, the conversion price, rate or manner of calculation thereof, the conversion period, provisions as to whether conversion will be at our option or at the option of the holders of the preferred stock, the events requiring an adjustment of the conversion price and provisions affecting conversion in the event of the redemption.
Transfer Agent and Registrar. The transfer agent and registrar for the preferred stock will be set forth in the applicable prospectus supplement.
Series E Preferred Stock
Pursuant to our Certificate of Designations, Preferences and Rights of Series E Convertible Non-Redeemable Preferred Stock, or the Certificate of Designations, filed with the Secretary of State of the State of Delaware with respect to the Series E Preferred Stock, we designated 54,000 shares of our authorized and unissued preferred stock as Series E Preferred Stock, and established the rights, preferences and privileges of the Series E Preferred Stock, which are summarized below. As of March 31, 2023, we had 53,144 shares of Series E Preferred Stock outstanding.
Conversion. Each share of Series E Preferred Stock is initially convertible into 100 shares of our common stock (subject to adjustment as provided in our Certificate of Designations) at any time at the option of the holder, provided that the holder will be prohibited, subject to certain exceptions, from converting its Series E Preferred Stock for shares of our common stock to the extent that immediately prior to or following such conversion, the holder, together with its affiliates and other attribution parties, would own in excess of 9.99% of the total number of shares of our common stock then issued and outstanding after giving effect to such conversion, which percentage may be changed at the holder’s election to a lower percentage at any time or to a higher percentage not to exceed 19.99% upon 61 days’ notice to us, which we refer to, collectively, as the Beneficial Ownership Limitation.
Voting Rights. The shares of Series E Preferred Stock will generally have no voting rights, except to the extent provided by applicable law, and except that the consent of the holders of a majority of the outstanding Series E Preferred Stock will be required to waive any provisions of our Certificate of Designations.
Rank. The Series E Preferred Stock shall rank:
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senior to all of our common stock;
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senior to any class or series of our capital stock created after November 28, 2022 specifically ranking by its terms junior to the Series E Preferred Stock, or the Junior Securities;
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on parity with any class or series of our capital stock created after November 28, 2022 specifically ranking by its terms on parity with the Series E Preferred Stock, or the Parity Securities; and
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junior to any class or series of our capital stock created after November 28, 2022 specifically ranking by its terms senior to the Series E Preferred Stock, or the Senior Securities;
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in each case, as to distributions of assets upon our liquidation, dissolution or winding up, whether voluntarily or involuntarily, each of which we refer to as a Dissolution.
Dissolution. In the event of a Dissolution, subject to any prior or superior rights of the holders of Senior Securities, holders of the Series E Preferred Stock will be entitled to receive, before any distributions to the holders of our common stock and the holders of Junior Securities and pari passu with any distributions to the holders of Parity Securities, an amount per share of Series E Preferred Stock equal to (i) $575.00 (subject to adjustment in the event of any stock split, combination or reclassification), plus any dividends declared but unpaid thereon, or (ii) such amount per share as would have been payable had all shares of Series E Preferred Stock been converted into our common stock (without regard to any restrictions on conversion, including the Beneficial Ownership Limitation) immediately prior to such Dissolution. Shares of Series E Preferred Stock will be entitled to receive dividends equal to (on an as-if-converted-to-common stock basis), and in the same form and manner as, dividends actually paid on shares of our common stock. For the avoidance of any doubt, neither a change in control of us, the merger or consolidation of us with or into any other entity, nor the sale, lease, exchange or other disposition of all or substantially all of our assets shall, in and of itself, be deemed to constitute a Dissolution.
Warrants
As of March 31, 2023, we had outstanding warrants to purchase up to an aggregate of 4,303 shares of our common stock at a weighted average exercise price of $578.62 per share. These warrants provide for adjustments in the event of specified mergers, reorganizations, reclassifications, stock dividends, stock splits or other changes in our corporate structure.
Options
As of March 31, 2023, we had outstanding options to purchase an aggregate of 191,475 shares of our common stock at a weighted average exercise price of $250.51 per share.
Restricted Stock Units
As of March 31, 2023, 148,093 shares of our common stock were issuable upon vesting and settlement of outstanding restricted stock units.
Provisions of Our Certificate of Incorporation and By-laws and Delaware Law That May Have Anti-Takeover Effects
Delaware Law. We are subject to Section 203 of the Delaware General Corporation Law. Subject to certain exceptions, Section 203 prevents a publicly held Delaware corporation from engaging in a “business combination” with any “interested stockholder” for three years following the date that the person became an interested stockholder, unless either the interested stockholder attained such status with the approval of our board of directors, the business combination is approved by our board of directors and stockholders in a prescribed manner or the interested stockholder acquired at least 85% of our outstanding voting stock in the transaction in which it became an interested stockholder. A “business combination” includes, among other things, a merger or consolidation involving us and the “interested stockholder” and the sale of more than 10% of our assets. In general, an “interested stockholder” is any entity or person beneficially owning 15% or more of our outstanding voting stock and any entity or person affiliated with or controlling or controlled by such entity or person.
Staggered Board; Removal of Directors. Our certificate of incorporation and our bylaws divide our board of directors into three classes with staggered three-year terms. In addition, our certificate of incorporation and our bylaws provide that directors may be removed only for cause and only by the affirmative vote of the holders of 75% of our shares of capital stock present in person or by proxy and entitled to vote. Under our certificate of incorporation and bylaws, any vacancy on our board of directors, including a vacancy resulting from an enlargement of our board of directors, may be filled only by vote of a majority
of our directors then in office. Furthermore, our certificate of incorporation provides that the authorized number of directors may be changed only by the resolution of our board of directors. The classification of our board of directors and the limitations on the ability of our stockholders to remove directors, change the authorized number of directors and fill vacancies could make it more difficult for a third party to acquire, or discourage a third party from seeking to acquire, control of our company.
Stockholder Action; Special Meeting of Stockholders; Advance Notice Requirements for Stockholder Proposals and Director Nominations. Our certificate of incorporation and our bylaws provide that any action required or permitted to be taken by our stockholders at an annual meeting or special meeting of stockholders may only be taken if it is properly brought before such meeting and may not be taken by written action in lieu of a meeting. Our certificate of incorporation and our bylaws also provide that, except as otherwise required by law, special meetings of the stockholders can only be called by the chairman of our board of directors, our chief executive officer or our board of directors. In addition, our bylaws establish an advance notice procedure for stockholder proposals to be brought before an annual meeting of stockholders, including proposed nominations of candidates for election to our board of directors. Stockholders at an annual meeting may only consider proposals or nominations specified in the notice of meeting or brought before the meeting by or at the direction of our board of directors, or by a stockholder of record on the record date for the meeting who is entitled to vote at the meeting and who has delivered timely written notice in proper form to our secretary of the stockholder’s intention to bring such business before the meeting. These provisions could have the effect of delaying until the next stockholder meeting stockholder actions that are favored by the holders of a majority of our outstanding voting securities. These provisions also could discourage a third party from making a tender offer for our common stock because even if the third party acquired a majority of our outstanding voting stock, it would be able to take action as a stockholder, such as electing new directors or approving a merger, only at a duly called stockholders meeting and not by written consent.
Super-Majority Voting. The Delaware General Corporation Law provides generally that the affirmative vote of a majority of the shares entitled to vote on any matter is required to amend a corporation’s certificate of incorporation or bylaws unless a corporation’s certificate of incorporation or bylaws, as the case may be, requires a greater percentage. Our bylaws may be amended or repealed by a majority vote of our board of directors or the affirmative vote of the holders of at least 75% of the votes that all our stockholders would be entitled to cast in any annual election of directors. In addition, the affirmative vote of the holders of at least 75% of the votes that all our stockholders would be entitled to cast in any election of directors is required to amend or repeal or to adopt any provisions inconsistent with any of the provisions of our certificate of incorporation described above.
Exclusive Forum Selection. Our certificate of incorporation provides that, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware shall be the sole and exclusive forum for (1) any derivative action or proceeding brought on behalf of our company, (2) any action asserting a claim of breach of a fiduciary duty owed by any of our directors, officers or employees to our company or our stockholders, (3) any action asserting a claim arising pursuant to any provision of the General Corporation Law of the State of Delaware or as to which the General Corporation Law of the State of Delaware confers jurisdiction on the Court of Chancery of the State of Delaware, or (4) any action asserting a claim arising pursuant to any provision of our certificate of incorporation or bylaws (in each case, as they may be amended from time to time) or governed by the internal affairs doctrine. Although our certificate of incorporation contains the choice of forum provision described above, we do not expect this choice of forum provision will apply to suits brought to enforce a duty or liability created by the Securities Act, the Exchange Act or any other claim for which federal courts have exclusive jurisdiction.
DESCRIPTION OF DEPOSITARY SHARES
General
We may, at our option, elect to offer fractional shares of preferred stock, which we call depositary shares, rather than full shares of preferred stock. If we do, we will issue to the public receipts, called depositary receipts, for depositary shares, each of which will represent a fraction, to be described in the applicable prospectus supplement, of a share of a particular series of preferred stock. Unless otherwise provided in the prospectus supplement, each owner of a depositary share will be entitled, in proportion to the applicable fractional interest in a share of preferred stock represented by the depositary share, to all the rights and preferences of the preferred stock represented by the depositary share. Those rights include dividend, voting, redemption, conversion and liquidation rights.
The shares of preferred stock underlying the depositary shares will be deposited with a bank or trust company selected by us to act as depositary under a deposit agreement between us, the depositary and the holders of the depositary receipts. The depositary will be the transfer agent, registrar and dividend disbursing agent for the depositary shares.
The depositary shares will be evidenced by depositary receipts issued pursuant to the deposit agreement. Holders of depositary receipts agree to be bound by the deposit agreement, which requires holders to take certain actions such as filing proof of residence with, and paying certain charges to, the depositary.
The summary of terms of the depositary shares contained in this prospectus is not a complete description of the terms of the depositary shares. You should refer to the form of the deposit agreement, our certificate of incorporation and the certificate of designation for the applicable series of preferred stock that are, or will be, filed with the SEC.
Dividends and Other Distributions
The depositary will distribute all cash dividends or other cash distributions, if any, received in respect of the preferred stock underlying the depositary shares to the record holders of depositary shares in proportion to the numbers of depositary shares owned by those holders on the relevant record date. The relevant record date for depositary shares will be the same date as the record date for the underlying preferred stock.
If there is a distribution other than in cash, the depositary will distribute property (including securities) received by it to the record holders of depositary shares, unless the depositary determines that it is not feasible to make the distribution. If this occurs, the depositary may, with our approval, adopt another method for the distribution, including selling the property and distributing the net proceeds from the sale to the holders.
Liquidation Preference
If a series of preferred stock underlying the depositary shares has a liquidation preference, in the event of the voluntary or involuntary liquidation, dissolution or winding up of us, holders of depositary shares will be entitled to receive the fraction of the liquidation preference accorded each share of the applicable series of preferred stock, as set forth in the applicable prospectus supplement.
Withdrawal of Stock
Unless the related depositary shares have been previously called for redemption, upon surrender of the depositary receipts at the office of the depositary, the holder of the depositary shares will be entitled to delivery, at the office of the depositary to or upon his or her order, of the number of whole shares of the preferred stock and any money or other property represented by the depositary shares. If the depositary receipts delivered by the holder evidence a number of depositary shares in excess of the number of depositary shares representing the number of whole shares of preferred stock to be withdrawn, the depositary will deliver to the holder at the same time a new depositary receipt evidencing the excess number of depositary shares. In no event will the depositary deliver fractional shares of preferred stock upon surrender of depositary receipts. Holders of preferred stock thus withdrawn may not thereafter deposit those shares under the deposit agreement or receive depositary receipts evidencing depositary shares therefor.
Redemption of Depositary Shares
Whenever we redeem shares of preferred stock held by the depositary, the depositary will redeem as of the same redemption date the number of depositary shares representing shares of the preferred stock so redeemed, so long as we have paid in full to the depositary the redemption price of the preferred stock to be redeemed plus an amount equal to any accumulated and unpaid dividends on the preferred stock to the date fixed for redemption. The redemption price per depositary share will be equal to the redemption price and any other amounts per share payable on the preferred stock multiplied by the fraction of a share of preferred stock represented by one depositary share. If less than all the depositary shares are to be redeemed, the depositary shares to be redeemed will be selected by lot or pro rata or by any other equitable method as may be determined by the depositary.
After the date fixed for redemption, depositary shares called for redemption will no longer be deemed to be outstanding and all rights of the holders of depositary shares will cease, except the right to receive the monies payable upon redemption and any money or other property to which the holders of the depositary shares were entitled upon redemption upon surrender to the depositary of the depositary receipts evidencing the depositary shares.
Voting the Preferred Stock
Upon receipt of notice of any meeting at which the holders of the preferred stock are entitled to vote, the depositary will mail the information contained in the notice of meeting to the record holders of the depositary receipts relating to that preferred stock. The record date for the depositary receipts relating to the preferred stock will be the same date as the record date for the preferred stock. Each record holder of the depositary shares on the record date will be entitled to instruct the depositary as to the exercise of the voting rights pertaining to the number of shares of preferred stock represented by that holder’s depositary shares. The depositary will endeavor, insofar as practicable, to vote the number of shares of preferred stock represented by the depositary shares in accordance with those instructions, and we will agree to take all action that may be deemed necessary by the depositary in order to enable the depositary to do so. The depositary will not vote any shares of preferred stock except to the extent it receives specific instructions from the holders of depositary shares representing that number of shares of preferred stock.
Charges of Depositary
We will pay all transfer and other taxes and governmental charges arising solely from the existence of the depositary arrangements. We will pay the charges due to the depositary in connection with the initial deposit of the preferred stock and any redemption of the preferred stock. Holders of depositary receipts will pay transfer, income and other taxes and governmental charges and such other charges (including those in connection with the receipt and distribution of dividends, the sale or exercise of rights, the withdrawal of the preferred stock and the transferring, splitting or grouping of depositary receipts) as are expressly provided in the deposit agreement to be for their accounts. If these charges have not been paid by the holders of depositary receipts, the depositary may refuse to transfer depositary shares, withhold dividends and distributions and sell the depositary shares evidenced by the depositary receipt.
Amendment and Termination of the Deposit Agreement
The form of depositary receipt evidencing the depositary shares and any provision of the deposit agreement may be amended by agreement between us and the depositary. However, any amendment that materially and adversely alters the rights of the holders of depositary shares, other than fee changes, will not be effective unless the amendment has been approved by the holders of a majority of the outstanding depositary shares affected by the amendment. The deposit agreement may be terminated by the depositary or us only if:
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all outstanding depositary shares have been redeemed; or
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there has been a final distribution of the preferred stock in connection with our dissolution and such distribution has been made to all the holders of depositary shares.
Resignation and Removal of Depositary
The depositary may resign at any time by delivering to us notice of its election to do so, and we may remove the depositary at any time. Any resignation or removal of the depositary will take effect upon our appointment of a successor depositary and its acceptance of such appointment. The successor depositary must be appointed within 60 days after delivery of the notice of resignation or removal and must be a bank or trust company having its principal office in the United States and having the requisite combined capital and surplus as set forth in the applicable agreement.
Notices
The depositary will forward to holders of depositary receipts all notices, reports and other communications, including proxy solicitation materials received from us, that are delivered to the depositary and that we are required to furnish to the holders of the preferred stock. In addition, the depositary will make available for inspection by holders of depositary receipts at the principal office of the depositary, and at such other places as it may from time to time deem advisable, any reports and communications we deliver to the depositary as the holder of preferred stock.
Limitation of Liability
Neither we nor the depositary will be liable if either we or it is prevented or delayed by law or any circumstance beyond its control in performing its obligations. Our obligations and those of the depositary will be limited to performance in good faith of our and their duties thereunder. We and the depositary will not be obligated to prosecute or defend any legal proceeding in respect of any depositary shares or preferred stock unless satisfactory indemnity is furnished. We and the depositary may rely upon written advice of counsel or accountants, on information provided by persons presenting preferred stock for deposit, holders of depositary receipts or other persons believed to be competent to give such information and on documents believed to be genuine and to have been signed or presented by the proper party or parties.
DESCRIPTION OF SUBSCRIPTION RIGHTS
The following description of the subscription rights and terms of the subscription rights agreement is a summary. It summarizes only those aspects of the subscription rights and those portions of the subscription rights agreement which we believe will be most important to your decision to invest in our subscription rights. There may be other provisions in the subscription rights agreement and the subscription certificate relating to the subscription rights which are also important to you. You should read these documents for a full description of the terms of the subscription rights. The forms of the subscription rights agreement and the subscription certificate will be filed or incorporated by reference as exhibits to the registration statement of which this prospectus is a part.
Subscription rights may be issued independently or together with any other security and may or may not be transferable. As part of the rights offering, we may enter into a standby underwriting or other arrangement under which the underwriters or any other person would purchase any securities that are not purchased in such rights offering. If we issue subscription rights, they may be governed by a separate subscription rights agreement that we will sign with a bank or trust company, as rights agent, that will be named in the applicable prospectus supplement. The rights agent will act solely as our agent and will not assume any obligation to any holders of rights certificates or beneficial owners of rights.
In general, a right entitles the holder to purchase for cash a specific number of shares of equity securities at a specified exercise price. The rights are normally issued to stockholders as of a specific record date, may be exercised only for a limited period of time and become void following the expiration of such period. If we determine to issue subscription rights, we will accompany this prospectus with a prospectus supplement that will describe, among other things:
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the record date for stockholders entitled to receive the rights;
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the number of equity securities that may be purchased upon exercise of each right;
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the exercise price of the rights;
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whether the rights are transferable;
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the period during which the rights may be exercised and when they will expire;
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the steps required to exercise the rights;
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the price, if any, for the subscription rights;
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the number of subscription rights issued;
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the terms of the equity securities;
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the extent to which the subscription rights are transferable;
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if applicable, the material terms of any standby underwriting or other arrangement entered into by us in connection with the offering of subscription rights;
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the other terms of the subscription rights, including the terms, procedures and limitations relating to the exercise of the subscription rights;
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whether the rights include “oversubscription rights” so that the holder may purchase more securities if other holders do not purchase their full allotments;
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whether we intend to sell the shares of equity securities that are not purchased in the rights offering to an underwriter or other purchaser under a contractual “standby” commitment or other arrangement; and
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any applicable United States federal income tax considerations.
If fewer than all of the rights issued in any rights offering are exercised, we may offer any unsubscribed securities directly to persons other than stockholders, to or through agents, underwriters or dealers or through a combination of such methods, including pursuant to standby arrangements, as described in the applicable prospectus supplement.
DESCRIPTION OF UNITS
We may issue units consisting of one or more of the other securities described in this prospectus in any combination, as described in the applicable prospectus supplement. We may issue units in one or more series, which will be described in the applicable prospectus supplement. The applicable prospectus supplement will also describe the following terms of any units:
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the designation and the terms of the units and of the securities constituting the units, including whether and under what circumstances the securities comprising the units may be traded separately;
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the identity of any unit agent for the units, if applicable, and of any other depositaries, execution or paying agents, transfer agents, registrars or other agents;
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any additional terms of the governing unit agreement, if applicable;
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any additional provisions for the issuance, payment, settlement, transfer or exchange of the units or of the debt securities, common stock, preferred stock, depositary shares or warrants constituting the units; and
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any applicable material U.S. federal income tax consequences.
DESCRIPTION OF WARRANTS
We may issue warrants to purchase common stock, preferred stock, depositary shares or debt securities. We may offer warrants separately or together with one or more additional warrants, common stock, preferred stock, depositary shares or debt securities, or any combination of those securities in the form of units, as described in the applicable prospectus supplement. If we issue warrants as part of a unit, the accompanying prospectus supplement will specify whether those warrants may be separated from the other securities in the unit prior to the expiration date of the warrants. The applicable prospectus supplement will also describe the following terms of any warrants:
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the specific designation and aggregate number of, and the offering price at which we will issue, the warrants;
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the currency or currency units in which the offering price, if any, and the exercise price are payable;
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the date on which the right to exercise the warrants will begin and the date on which that right will expire or, if you may not continuously exercise the warrants throughout that period, the specific date or dates on which you may exercise the warrants;
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whether the warrants are to be sold separately or with other securities as parts of units;
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whether the warrants will be issued in definitive or global form or in any combination of these forms, although, in any case, the form of a warrant included in a unit will correspond to the form of the unit and of any security included in that unit;
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any applicable material U.S. federal income tax consequences;
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the identity of the warrant agent for the warrants and of any other depositaries, execution or paying agents, transfer agents, registrars or other agents;
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the proposed listing, if any, of the warrants or any securities purchasable upon exercise of the warrants on any securities exchange;
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the designation and terms of any equity securities purchasable upon exercise of the warrants;
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the designation, aggregate principal amount, currency and terms of any debt securities that may be purchased upon exercise of the warrants;
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if applicable, the designation and terms of the preferred stock or depositary shares with which the warrants are issued and the number of warrants issued with each security;
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if applicable, the date from and after which any warrants issued as part of a unit and the related debt securities, preferred stock, depositary shares or common stock will be separately transferable;
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the number of shares of common stock, preferred stock or depositary shares purchasable upon exercise of a warrant and the price at which those shares may be purchased;
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if applicable, the minimum or maximum amount of the warrants that may be exercised at any one time;
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information with respect to book-entry procedures, if any;
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the anti-dilution provisions of, and other provisions for changes to or adjustment in the exercise price of, the warrants, if any;
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any redemption or call provisions; and
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any additional terms of the warrants, including terms, procedures and limitations relating to the exchange or exercise of the warrants.
FORMS OF SECURITIES
Each debt security, depositary share, subscription right, unit and warrant will be represented either by a certificate issued in definitive form to a particular investor or by one or more global securities representing the entire issuance of securities. Unless the applicable prospectus supplement provides otherwise, certificated securities in definitive form and global securities will be issued in registered form. Definitive securities name you or your nominee as the owner of the security, and in order to transfer or exchange these securities or to receive payments other than interest or other interim payments, you or your nominee must physically deliver the securities to the trustee, registrar, paying agent or other agent, as applicable. Global securities name a depositary or its nominee as the owner of the debt securities, depositary shares, subscription rights, units or warrants represented by these global securities. The depositary maintains a computerized system that will reflect each investor’s beneficial ownership of the securities through an account maintained by the investor with its broker/dealer, bank, trust company or other representative, as we explain more fully below.
Global Securities
We may issue the debt securities of a particular series, depositary shares, subscription rights, units and warrants in the form of one or more fully registered global securities that will be deposited with a depositary or its nominee identified in the applicable prospectus supplement and registered in the name of that depositary or nominee. In those cases, one or more global securities will be issued in a denomination or aggregate denominations equal to the portion of the aggregate principal or face amount of the securities to be represented by global securities. Unless and until it is exchanged in whole for securities in definitive registered form, a global security may not be transferred except as a whole by and among the depositary for the global security, the nominees of the depositary or any successors of the depositary or those nominees.
If not described below, any specific terms of the depositary arrangement with respect to any securities to be represented by a global security will be described in the prospectus supplement relating to those securities. We anticipate that the following provisions will apply to all depositary arrangements.
Ownership of beneficial interests in a global security will be limited to persons, called participants, that have accounts with the depositary or persons that may hold interests through participants. Upon the issuance of a global security, the depositary will credit, on its book-entry registration and transfer system, the participants’ accounts with the respective principal or face amounts of the securities beneficially owned by the participants. Any dealers, underwriters or agents participating in the distribution of the securities will designate the accounts to be credited. Ownership of beneficial interests in a global security will be shown on, and the transfer of ownership interests will be effected only through, records maintained by the depositary, with respect to interests of participants, and on the records of participants, with respect to interests of persons holding through participants. The laws of some states may require that some purchasers of securities take physical delivery of these securities in definitive form. These laws may impair your ability to own, transfer or pledge beneficial interests in global securities.
So long as the depositary, or its nominee, is the registered owner of a global security, that depositary or its nominee, as the case may be, will be considered the sole owner or holder of the securities represented by the global security for all purposes under the applicable indenture, deposit agreement, subscription rights agreement, warrant agreement or unit agreement. Except as described below, owners of beneficial interests in a global security will not be entitled to have the securities represented by the global security registered in their names, will not receive or be entitled to receive physical delivery of the securities in definitive form and will not be considered the owners or holders of the securities under the applicable indenture, deposit agreement, unit agreement or warrant agreement. Accordingly, each person owning a beneficial interest in a global security must rely on the procedures of the depositary for that global security and, if that person is not a participant, on the procedures of the participant through which the person owns its interest, to exercise any rights of a holder under the applicable indenture, deposit agreement, subscription right agreement, unit agreement or warrant agreement. We understand that under existing industry practices, if we request any action of holders or if an owner of a beneficial interest in a global security desires to give or take any action that a holder is entitled to give or take under the applicable indenture, deposit agreement, subscription rights agreement, unit agreement or warrant agreement, the depositary for the global security would authorize the participants holding the relevant beneficial interests to give or take that action, and the
participants would authorize beneficial owners owning through them to give or take that action or would otherwise act upon the instructions of beneficial owners holding through them.
Principal, premium, if any, and interest payments on debt securities, and any payments to holders with respect to depositary shares, subscription rights, warrants or units, represented by a global security registered in the name of a depositary or its nominee will be made to the depositary or its nominee, as the case may be, as the registered owner of the global security. None of us, or any trustee, warrant agent, unit agent or other agent of ours, or any agent of any trustee, warrant agent or unit agent will have any responsibility or liability for any aspect of the records relating to payments made on account of beneficial ownership interests in the global security or for maintaining, supervising or reviewing any records relating to those beneficial ownership interests.
We expect that the depositary for any of the securities represented by a global security, upon receipt of any payment to holders of principal, premium, interest or other distribution of underlying securities or other property on that registered global security, will immediately credit participants’ accounts in amounts proportionate to their respective beneficial interests in that global security as shown on the records of the depositary. We also expect that payments by participants to owners of beneficial interests in a global security held through participants will be governed by standing customer instructions and customary practices, as is now the case with the securities held for the accounts of customers or registered in “street name,” and will be the responsibility of those participants.
If the depositary for any of the securities represented by a global security is at any time unwilling or unable to continue as depositary or ceases to be a clearing agency registered under the Exchange Act, and a successor depositary registered as a clearing agency under the Exchange Act is not appointed by us within 90 days, we will issue securities in definitive form in exchange for the global security that had been held by the depositary. Any securities issued in definitive form in exchange for a global security will be registered in the name or names that the depositary gives to the relevant trustee, warrant agent, unit agent or other relevant agent of ours or theirs. It is expected that the depositary’s instructions will be based upon directions received by the depositary from participants with respect to ownership of beneficial interests in the global security that had been held by the depositary.
PLAN OF DISTRIBUTION
We may sell securities:
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through underwriters;
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through dealers;
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through agents;
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directly to purchasers; or
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through a combination of any of these methods of sale.
In addition, we may issue the securities as a dividend or distribution or in a subscription rights offering to our existing security holders. This prospectus may be used in connection with any offering of our securities through any of these methods or other methods described in the applicable prospectus supplement.
We may directly solicit offers to purchase securities, or agents may be designated to solicit such offers. We will, in the prospectus supplement relating to such offering, name any agent that could be viewed as an underwriter under the Securities Act, and describe any commissions that we must pay. Any such agent will be acting on a best efforts basis for the period of its appointment or, if indicated in the applicable prospectus supplement, on a firm commitment basis.
The distribution of the securities may be effected from time to time in one or more transactions:
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at a fixed price, or prices, which may be changed from time to time;
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at market prices prevailing at the time of sale;
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at prices related to such prevailing market prices; or
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at negotiated prices.
Each prospectus supplement will describe the method of distribution of the securities and any applicable restrictions.
The prospectus supplement with respect to the securities of a particular series will describe the terms of the offering of the securities, including the following:
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the name of the agent or any underwriters;
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the public offering or purchase price and the proceeds we will receive from the sale of the securities;
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any discounts and commissions to be allowed or re-allowed or paid to the agent or underwriters;
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all other items constituting underwriting compensation;
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any discounts and commissions to be allowed or re-allowed or paid to dealers; and
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any exchanges on which the securities will be listed.
If any underwriters or agents are utilized in the sale of the securities in respect of which this prospectus is delivered, we will enter into an underwriting agreement or other agreement with them at the time of sale to them, and we will set forth in the prospectus supplement relating to such offering the names of the underwriters or agents and the terms of the related agreement with them.
If a dealer is utilized in the sale of the securities in respect of which this prospectus is delivered, we will sell such securities to the dealer, as principal. The dealer may then resell such securities to the public at varying prices to be determined by such dealer at the time of resale.
If we offer securities in a subscription rights offering to our existing security holders, we may enter into a standby underwriting agreement with dealers, acting as standby underwriters. We may pay the standby underwriters a commitment fee for the securities they commit to purchase on a standby basis. If we do not enter into a standby underwriting arrangement, we may retain a dealer-manager to manage a subscription rights offering for us.
Remarketing firms, agents, underwriters, dealers and other persons may be entitled under agreements which they may enter into with us to indemnification by us against certain civil liabilities, including liabilities under the Securities Act, and may be customers of, engage in transactions with or perform services for us in the ordinary course of business.
If so indicated in the applicable prospectus supplement, we will authorize underwriters or other persons acting as our agents to solicit offers by certain institutions to purchase securities from us pursuant to delayed delivery contracts providing for payment and delivery on the date stated in the prospectus supplement. Each contract will be for an amount not less than, and the aggregate amount of securities sold pursuant to such contracts shall not be less nor more than, the respective amounts stated in the prospectus supplement. Institutions with whom the contracts, when authorized, may be made include commercial and savings banks, insurance companies, pension funds, investment companies, educational and charitable institutions and other institutions, but shall in all cases be subject to our approval. Delayed delivery contracts will not be subject to any conditions except that:
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the purchase by an institution of the securities covered under that contract shall not at the time of delivery be prohibited under the laws of the jurisdiction to which that institution is subject; and
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if the securities are also being sold to underwriters acting as principals for their own account, the underwriters shall have purchased such securities not sold for delayed delivery. The underwriters and other persons acting as our agents will not have any responsibility in respect of the validity or performance of delayed delivery contracts.
Certain agents, underwriters and dealers, and their associates and affiliates may be customers of, have borrowing relationships with, engage in other transactions with, and/or perform services, including investment banking services, for us or one or more of our respective affiliates in the ordinary course of business.
In order to facilitate the offering of the securities, any underwriters may engage in transactions that stabilize, maintain or otherwise affect the price of the securities or any other securities the prices of which may be used to determine payments on such securities. Specifically, any underwriters may overallot in connection with the offering, creating a short position for their own accounts. In addition, to cover overallotments or to stabilize the price of the securities or of any such other securities, the underwriters may bid for, and purchase, the securities or any such other securities in the open market. Finally, in any offering of the securities through a syndicate of underwriters, the underwriting syndicate may reclaim selling concessions allowed to an underwriter or a dealer for distributing the securities in the offering if the syndicate repurchases previously distributed securities in transactions to cover syndicate short positions, in stabilization transactions or otherwise. Any of these activities may stabilize or maintain the market price of the securities above independent market levels. Any such underwriters are not required to engage in these activities and may end any of these activities at any time.
Under Rule 15c6-1 of the Exchange Act, trades in the secondary market generally are required to settle in two business days, unless the parties to any such trade expressly agree otherwise. The applicable prospectus supplement may provide that the original issue date for your securities may be more than two scheduled business days after the trade date for your securities. Accordingly, in such a case, if you wish to trade securities on any date prior to the second business day before the original issue date for your securities, you will be required, by virtue of the fact that your securities initially are expected to settle in more than two scheduled business days after the trade date for your securities, to make alternative settlement arrangements to prevent a failed settlement.
The securities may be new issues of securities and may have no established trading market. The securities may or may not be listed on a national securities exchange. We can make no assurance as to the liquidity of or the existence of trading markets for any of the securities.
LEGAL MATTERS
Unless the applicable prospectus supplement indicates otherwise, the validity of the securities in respect of which this prospectus is being delivered will be passed upon by Wilmer Cutler Pickering Hale and Dorr LLP.
EXPERTS
The financial statements of Kala Pharmaceuticals, Inc. incorporated by reference in this Prospectus, have been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their report. Such financial statements are incorporated by reference in reliance upon the report of such firm, given their authority as experts in accounting and auditing.
$350,000,000
Debt Securities
Common Stock
Preferred Stock
Depositary Shares
Subscription Rights
Units
Warrants
PROSPECTUS
, 2023
The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and we are not soliciting offers to buy these securities in any jurisdiction where the offer or sale is not permitted.
SUBJECT TO COMPLETION, DATED MAY 9, 2023
PROSPECTUS
Kala Pharmaceuticals, Inc.
Up to $40,000,000
Common Stock
We previously entered into an Open Market Sale AgreementSM, dated January 19, 2023, or the sales agreement, with Jefferies, LLC, or Jefferies, relating to the sale of shares of our common stock, $0.001 par value per share. In accordance with the terms of the sales agreement, under this prospectus we may offer and sell shares of our common stock having an aggregate offering price of up to $40,000,000 from time to time through Jefferies, acting as our sales agent. As of the date of this prospectus, we had issued and sold shares of our common stock for aggregate gross sale proceeds of $5.0 million pursuant to the sales agreement and a prior prospectus supplement dated January 19, 2023 and an accompanying prospectus dated May 19, 2020. We will not make any further offers or sales of our common stock pursuant to the prior prospectus supplement and the accompanying prospectus.
Our common stock is listed on The Nasdaq Capital Market under the trading symbol “KALA”. On May 8, 2023, the last sale price of our common stock as reported on The Nasdaq Capital Market was $15.80 per share.
Sales of our common stock, if any, under this prospectus may be made by any method permitted by law that is deemed to be an “at the market offering” as defined in Rule 415(a)(4) under the Securities Act. Jefferies is not required to sell any specific number or dollar amount of securities, but will act as our sales agent using commercially reasonable efforts, consistent with its normal trading and sales practices, on mutually agreed terms between Jefferies and us. There is no arrangement for funds to be received in an escrow, trust or similar arrangement.
Jefferies will be entitled to compensation at a commission rate of up to 3.0% of the gross proceeds of the shares of common stock sold under the sales agreement. In connection with the sale of the common stock on our behalf, Jefferies will be deemed to be an “underwriter” within the meaning of the Securities Act and the compensation of Jefferies will be deemed to be underwriting commissions or discounts. We have also agreed to provide indemnification and contribution to Jefferies with respect to certain liabilities, including civil liabilities under the Securities Act and the Securities and Exchange Act of 1934, as amended. See “Plan of Distribution” beginning on page SA-17 of this prospectus for additional information regarding the compensation to be paid to Jefferies.
Investing in our common stock involves significant risks. See “Risk Factors” beginning on page SA-7 of this prospectus and in the documents incorporated by reference in this prospectus for a discussion of the factors you should carefully consider before deciding to purchase our common stock.
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.
Jefferies
The date of this prospectus is , 2023
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we filed with the Securities and Exchange Commission, or the SEC, utilizing a “shelf” registration process. Under this shelf registration process, we may from time to time sell shares of our common stock having an aggregate offering price of up to $350,000,000. Under this prospectus, we may from time to time sell shares of our common stock having an aggregate offering price of up to $40,000,000, at prices and on terms to be determined by market conditions at the time of the offering. The $40,000,000 of shares of our common stock that may be sold under this prospectus are included in the $350,000,000 of shares of common stock that may be sold under the registration statement.
To the extent there is a conflict between the information contained in this prospectus, on the one hand, and the information contained in any document incorporated by reference in this prospectus, on the other hand, you should rely on the information in this prospectus, provided that if any statement in one of these documents is inconsistent with a statement in another document having a later date — for example, a document incorporated by reference in this prospectus — the statement in the document having the later date modifies or supersedes the earlier statement.
Before buying any of the common stock that we are offering, we urge you to carefully read this prospectus and all of the information incorporated by reference herein, as well as documents to which we have referred you in the sections entitled “Where You Can Find More Information” and “Incorporation of Certain Documents by Reference.” These documents contain important information that you should consider when making your investment decision.
We further note that the representations, warranties and covenants made by us in any agreement that is filed as an exhibit to any document that is incorporated by reference herein were made solely for the benefit of the parties to such agreement, including, in some cases, for the purpose of allocating risk among the parties to such agreements, and should not be deemed to be a representation, warranty or covenant to you. Moreover, such representations, warranties or covenants were accurate only as of the date when made. Accordingly, such representations, warranties and covenants should not be relied on as accurately representing the current state of our affairs.
We have not, and Jefferies has not, authorized anyone to provide you with any information other than that contained or incorporated by reference in this prospectus or any related prospectus supplement or related free writing prospectus to which we have referred you. We and Jefferies take no responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you. You should assume that the information appearing in this prospectus, the documents incorporated by reference and any related free writing prospectus is accurate only as of their respective dates. Our business, financial condition, results of operations and prospects may have changed materially since those dates.
We are offering to sell, and seeking offers to buy, shares of our common stock only in jurisdictions where offers and sales are permitted. The distribution of this prospectus and the offering of the common stock in certain jurisdictions may be restricted by law. Persons outside the United States who come into possession of this prospectus must inform themselves about, and observe any restrictions relating to, the offering of the common stock and the distribution of this prospectus outside the United States. This prospectus does not constitute, and may not be used in connection with, an offer to sell, or a solicitation of an offer to buy, any securities offered by this prospectus by any person in any jurisdiction in which it is unlawful for such person to make such an offer or solicitation.
Unless the context otherwise indicates, references in this prospectus to “Kala” “we,” “our,” “us” and “the Company” refer, collectively, to Kala Pharmaceuticals, Inc., a Delaware corporation, and its consolidated subsidiaries.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS AND INDUSTRY DATA
This prospectus and the documents incorporated by reference in this prospectus include “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act.
All statements, other than statements of historical fact, contained or incorporated by reference in this prospectus, including statements regarding our strategy, future operations, future financial position, future revenue, projected costs, prospects, plans and objectives of management, are forward-looking statements. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “would” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words.
The forward-looking statements in this prospectus and the documents incorporated by reference in this prospectus, among other things, include statements about:
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our expectations with respect to the potential impacts the sale of our commercial business to Alcon Pharmaceuticals Ltd. and Alcon Vision, LLC, which we refer collectively as Alcon, will have on our business, results of operations and financial condition;
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our expectations with respect to, and the amount of, future milestone payments we may receive from Alcon in connection with the sale of our commercial business;
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our expectations with respect to our dependency on and potential advantages of KPI-012, our product candidate for the treatment of persistent corneal epithelial defects, or PCED;
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our expectations with respect to the potential financial impact, synergies, growth prospects and benefits of our acquisition of Combangio, Inc., or Combangio, including our expectations with respect to, and the amount of, future milestone payments we may pay in connection with the acquisition;
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our development efforts for KPI-012 and our ability to discover and develop new programs and product candidates;
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the timing, progress and results of clinical trials for KPI-012, including statements regarding the timing of initiation and completion of clinical trials, dosing of subjects and the period during which the results of the trials will become available;
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the timing, scope and likelihood of regulatory filings, including the filing of any biologics license applications for KPI-012 and any other product candidate we may develop in the future;
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our ability to obtain regulatory approvals for KPI-012;
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our commercialization, marketing and manufacturing capabilities and strategy for KPI-012, if approved;
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our estimates regarding potential future revenue from sales of KPI-012, if approved;
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our ability to negotiate, secure and maintain adequate pricing, coverage and reimbursement terms and processes on a timely basis, or at all, with third-party payors for KPI-012, if approved;
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the rate and degree of market acceptance and clinical utility of KPI-012 and our estimates regarding the market opportunity for KPI-012, if approved;
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plans to pursue the development of KPI-012 for indications in addition to PCED;
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our expectations with respect to our determination to cease the development of our preclinical pipeline programs that are unrelated to our mesenchymal stem cell secretome platform;
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the timing, progress and results of preclinical studies for our KPI-014 program;
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our expectations regarding our ability to fund our operating expenses, lease and debt service obligations, and capital expenditure requirements with our cash on hand;
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our expectations regarding our ability to comply with the covenants under our loan agreement;
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our intellectual property position, including intellectual property acquired in the acquisition of Combangio;
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our ability to identify additional products, product candidates or technologies with significant commercial potential that are consistent with our commercial objectives;
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our estimates regarding expenses, future revenue, timing of any future revenue, capital requirements and needs for additional financing;
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the impact of government laws and regulations;
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our competitive position;
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developments relating to our competitors and our industry;
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our ability to maintain and establish collaborations or obtain additional funding;
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our business and business relationships, including with employees and suppliers;
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our anticipated annualized reduction in operating expenses associated with our workforce reduction announced in July 2022;
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the impact of COVID-19 on our business and operations; and
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our expected use of proceeds from this offering.
We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements we make. We have included important factors in the cautionary statements included, or incorporated by reference, in this prospectus, particularly in the “Risk Factors” section, that we believe could cause actual results or events to differ materially from the forward-looking statements that we make. You should also carefully review the risk factors and cautionary statements described in the other documents we file from time to time with the SEC, specifically our most recent Annual Report on Form 10-K, our Quarterly Reports on Form 10-Q and our Current Reports on Form 8-K. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or investments we may make.
You should read this prospectus, the documents incorporated by reference in this prospectus and the documents that we have filed as exhibits to the registration statement of which this prospectus is a part completely and with the understanding that our actual future results may be materially different from what we expect. We do not assume any obligation to update any forward-looking statements, except as required by applicable law.
This prospectus includes or incorporates by reference certain statistical and other industry and market data that we obtained from industry publications and research, surveys and studies conducted by us and third parties as well as our estimates of potential market opportunities. Industry publications and third-party research, surveys and studies generally indicate that their information has been obtained from sources believed to be reliable, although they do not guarantee the accuracy or completeness of such information. Our estimates of the potential market opportunity for KPI-012 include several key assumptions based on our industry knowledge, industry publications, third-party research and other surveys, which may be based on a small sample size and may fail to accurately reflect market opportunities. While we believe that our internal assumptions are reasonable, no independent source has verified such assumptions.
PROSPECTUS SUMMARY
This summary highlights selected information contained elsewhere in this prospectus and in the documents we incorporate by reference herein. This summary does not contain all of the information you should consider before making an investment decision. You should read this entire prospectus carefully, especially the risks of investing in our common stock discussed under “Risk Factors” beginning on page SA-7 of this prospectus, and the “Risk Factor Summary” and “Risk Factors” sections of our most recent Annual Report on Form 10-K and our Quarterly Reports on Form 10-Q, along with our consolidated financial statements and notes to those consolidated financial statements and the other information incorporated by reference in this prospectus.
Our Business
We are a clinical-stage biopharmaceutical company dedicated to the research, development and commercialization of innovative therapies for rare and severe diseases of the eye. Our product candidate, KPI-012, which we acquired from Combangio, Inc., or Combangio, on November 15, 2021, is a mesenchymal stem cell secretome, or MSC-S, and is currently in clinical development for the treatment of persistent corneal epithelial defects, or PCED, a rare disease of impaired corneal healing. Based on the positive results of a Phase 1b clinical safety and efficacy trial of KPI-012 in patients with PCED, along with favorable preclinical safety and efficacy results, we submitted an investigational new drug application to the U.S. Food and Drug Administration, or FDA, which was accepted in December 2022. In February 2023, we dosed our first patient in our CHASE (Corneal Healing After SEcretome therapy) Phase 2b clinical trial of KPI-012 for PCED in the United States.
We believe the multifactorial mechanism of action of KPI-012 also makes MSC-S a platform technology. We are evaluating the potential development of KPI-012 for additional rare front-of-the-eye diseases, such as for the treatment of Limbal Stem Cell Deficiency and other rare corneal diseases that threaten vision. In addition, we have initiated preclinical studies under our KPI-014 program to evaluate the utility of our MSC-S platform for inherited retinal degenerative diseases, such as Retinitis Pigmentosa and Stargardt Disease.
Corporate Information
We were incorporated under the laws of the state of Delaware on July 7, 2009 under the name Hanes Newco, Inc. We subsequently changed our name to Kala Pharmaceuticals, Inc. on December 11, 2009. Our principal executive offices are located at 1167 Massachusetts Avenue, Arlington, MA 02476, and our telephone number is (781) 996-5252. Our website address is www.kalarx.com. The information contained on, or that can be accessed through, our website is not a part of this prospectus. We have included our website address in this prospectus solely as an inactive textual reference.
Implications of Being a Smaller Reporting Company
We are a smaller reporting company as defined under Rule 405 of the Securities Act and, as such, are subject to certain reduced public company reporting requirements. We have taken advantage of some reduced reporting burdens in this prospectus. Accordingly, the information contained herein may be different than the information you receive from other public companies in which you hold stock. We may remain a smaller reporting company until we have a non-affiliate public float in excess of $250 million and annual revenues in excess of $100 million, or a non-affiliate public float in excess of $700 million, each as determined on an annual basis.
THE OFFERING
Common Stock Offered by Us
Shares of our common stock having an aggregate offering price of up to $40,000,000.
Common Stock to be Outstanding
After this Offering
Up to 4,840,932 shares, assuming sales of 2,531,645 shares of our common stock in the offering at a price of $15.80 per share, which was the last sale price of our common stock on The Nasdaq Capital Market on May 8, 2023. The actual number of shares issued will vary depending on the sales price under this offering.
“At the market offering” that may be made from time to time through our sales agent, Jefferies. See “Plan of Distribution” in this prospectus.
We intend to use the net proceeds from this offering, if any, to fund the research and development of our MSC-S platform, including KPI-012 and KPI-014, and for working capital and general corporate purposes, which may include the acquisition of companies or businesses or licensing of other products, businesses or technologies and repayment of debt. See “Use of Proceeds” in this prospectus.
You should read the “Risk Factors” section of this prospectus, the “Risk Factor Summary” and “Risk Factors” sections of our most recent Annual Report on Form 10-K and our Quarterly Reports on Form 10-Q, and the other information included in, or incorporated by reference into, this prospectus for a discussion of factors to consider carefully before deciding to invest in shares of our common stock.
Nasdaq Capital Market Symbol
“KALA”
The number of shares of common stock to be outstanding after this offering is based on 2,309,287 shares of common stock outstanding as of March 31, 2023 and excludes the following:
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191,475 shares of our common stock issuable upon the exercise of stock options outstanding as of March 31, 2023, at a weighted average exercise price of $250.51 per share;
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148,093 shares of our common stock issuable upon vesting and settlement of restricted stock units outstanding as of March 31, 2023;
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18,021 shares of our common stock reserved for future issuance under our 2017 Equity Incentive Plan, as amended, as of March 31, 2023, as well as any automatic increases in the number of shares of common stock reserved under such plan;
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32,156 shares of our common stock available for future issuance under our Amended and Restated 2017 Employee Stock Purchase Plan as of March 31, 2023, as well as any automatic increases in the number of shares of common stock reserved under such plan;
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4,303 shares of our common stock issuable upon the exercise of outstanding warrants as of March 31, 2023, at a weighted average exercise price of $578.62 per share; and
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5,314,400 shares of our common stock issuable upon conversion of 53,144 shares of Series E Convertible Non-Redeemable Preferred Stock outstanding as of March 31, 2023.
Unless otherwise indicated, the information in this prospectus:
•
gives effect to a 1-for-50 reverse stock split of our common stock effected on October 20, 2022;
•
assumes no exercise of outstanding options or warrants or vesting and settlement of restricted stock units described above; and
•
does not give effect to our stock option exchange program, under which eligible executive officers, other employees and non-employee directors are being given the opportunity to exchange options to purchase shares of our common stock held by them for an equal number of restricted stock units, which exchange period commenced on May 1, 2023 and is scheduled to expire at 11:59 p.m., Eastern Time on May 30, 2023, unless extended.
RISK FACTORS
Investing in our common stock involves a high degree of risk. You should carefully consider the risks and uncertainties described below and under the sections captioned “Risk Factor Summary” and “Risk Factors” contained in our most recent Annual Report on Form 10-K, our Quarterly Reports on Form 10-Q and other filings we make with the SEC from time to time, which are incorporated by reference herein in their entirety, together with other information in this prospectus and the information and documents incorporated by reference herein, before deciding to invest in our common stock. If any of the following risks actually occur, our business, prospects, operating results and financial condition could suffer materially. In such event, the trading price of our common stock could decline and you might lose all or part of your investment. The risks and uncertainties we have described are not the only ones facing our company. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also affect our business operations.
Risks Related to This Offering
The actual number of shares of common stock we will issue under the sales agreement and the gross proceeds resulting from those sales is uncertain.
Subject to certain limitations in the sales agreement and compliance with applicable law, we have the discretion to request Jefferies to sell on our behalf shares of common stock at any time throughout the term of the sales agreement, and Jefferies has agreed to use commercially reasonable efforts to sell the shares. The number of shares that are sold by Jefferies after we request that sales be made will fluctuate based on the market price of our common stock during the sales period and the limits we set with Jefferies. Because the price per share of the common stock sold will fluctuate based on the market price of our common stock during the sales period, it is not possible to predict the number of shares of common stock that will ultimately be issued by us under the sales agreement or the amount of gross proceeds to be raised in connection with those sales.
The common stock offered hereby will be sold in “at the market offerings,” and investors who buy shares at different times will likely pay different prices.
Investors who purchase shares in this offering at different times will likely pay different prices, and accordingly may experience different levels of dilution and different outcomes in their investment results. We will have discretion, subject to market demand and the terms of the sales agreement, to vary the timing, prices and number of shares sold in this offering. In addition, subject to the final determination by our board of directors (or any committee thereof) or any restrictions we may place in any applicable placement notice, there is no minimum or maximum sales price for shares to be sold in this offering. Investors may experience a decline in the value of the shares they purchase in this offering as a result of sales made at prices lower than the prices they paid.
Sale of a substantial number of shares of our common stock, including by us, could cause the market price of our common stock to drop significantly, even if our business is doing well.
Sales of a substantial number of shares of our common stock in the public market, or the perception in the market that the holders of a large number of shares intend to sell shares, could reduce the market price of our common stock. Shares of our common stock may be freely sold in the public market at any time to the extent permitted by Rules 144 and 701 under the Securities Act, or to the extent such shares have already been registered under the Securities Act and are held by non-affiliates of ours. If our stockholders sell, or indicate an intention to sell, substantial amounts of our common stock in the public market, the trading price of our common stock could decline. In addition, we have filed or intend to file registration statements registering all shares of common stock that we may issue under our equity compensation plans or pursuant to equity awards made to newly hired employees outside of equity compensation plans. These shares can be freely sold in the public market upon issuance, subject to volume limitations applicable to affiliates.
In December 2022, we sold to certain institutional investors shares of our common stock and shares of our Series E Convertible Non-Redeemable Preferred Stock in a private placement priced at the market under Nasdaq rules for gross proceeds of approximately $31.0 million. We have filed a registration statement on
Form S-3 covering the resale of the common stock held by such investors in the private placement and the common stock issuable upon conversion of the Series E Convertible Non-Redeemable Preferred Stock issued in the private placement, and we have agreed to keep such registration statement effective until the date the shares covered by it have been sold or can be resold without restriction under Rule 144 of the Securities Act.
While the securities issued to former Combangio equityholders in connection with the merger will be restricted as a result of securities laws, following expiration of applicable holding periods, these shares will be able to be freely sold in the public market, subject to any requirements and restrictions, including any applicable volume limitations imposed by Rule 144 under the Securities Act.
The sale or resale of these shares in the public market, or the market’s expectation of such sales, may result in an immediate and substantial decline in our stock price. Such a decline will adversely affect our investors and also might make it difficult for us to sell equity securities in the future at a time and at a price that we deem appropriate.
Our management may invest or spend the proceeds of this offering in ways with which you may not agree or in ways which may not yield a significant return, if any.
Our management will have broad discretion in the application of the net proceeds from this offering and could spend the proceeds in ways that do not improve our results of operations or enhance the value of our common stock. The failure by our management to apply these funds effectively could result in financial losses that could cause the price of our common stock to decline and delay the development of our product candidates. Pending their use, we may invest the net proceeds from this offering in a manner that does not produce income or that loses value.
In addition, the issuance from time to time of shares of our common stock in this offering, or our ability to issue these shares of common stock in this offering, could result in resales of our common stock by our current stockholders concerned about the potential dilution of their holdings. In turn, these resales could have the effect of depressing the market price for our common stock.
Purchasers will experience immediate dilution in the book value per share of the common stock purchased in the offering and may experience future dilution as a result of future equity offerings.
The shares sold in this offering, if any, will be sold from time to time at various prices. However, we expect that the offering price of our common stock will be substantially higher than the pro forma as adjusted net tangible book value per share of our outstanding common stock. After giving effect to the sale of shares of our common stock in the aggregate amount of $40,000,000 at an assumed offering price of $15.80 per share, the last sale price of our common stock on May 8, 2023 on The Nasdaq Capital Market, and after deducting estimated commissions and estimated offering expenses payable by us, our pro forma as adjusted net tangible book value as of March 31, 2023 would have been approximately $61.9 million, or approximately $6.09 per share. This represents an immediate dilution in pro forma as adjusted net tangible book value of approximately $9.71 per share to purchasers of our common stock in this offering. See “Dilution” in this prospectus for more information.
In addition to this offering, subject to market conditions and other factors, we may pursue additional equity financings in the future, including future public offerings or future private placements of equity securities or securities convertible into or exchangeable for equity securities at prices that may be higher or lower than the price per share in this offering. Further, the exercise of outstanding options or warrants and the vesting of restricted stock units could result in further dilution to investors and any additional shares issued in connection with acquisitions will result in dilution to investors. In addition, the market price of our common stock could fall as a result of resales of any of these shares of common stock due to an increased number of shares available for sale in the market.
USE OF PROCEEDS
We may issue and sell shares of our common stock having aggregate sales proceeds of up to $40,000,000 from time to time. Because there is no minimum offering amount required as a condition to close this offering, the actual total public offering amount, commissions and proceeds to us, if any, are not determinable at this time. There can be no assurance that we will sell any shares under or fully utilize the sales agreement with Jefferies as a source of financing.
We intend to use the net proceeds from this offering, if any to fund the research and development of our MSC-S platform, including KPI-012 and KPI-014, and for working capital and general corporate purposes, which may include the acquisition of companies or businesses or licensing of other products, businesses or technologies and repayment of debt. We have not determined the exact amounts we plan to spend on any of the items listed above or the timing of these expenditures. The amounts and timing of our actual expenditures may vary significantly depending on numerous factors, including the actual net proceeds from this offering, the progress of our development efforts, the status of and results from clinical trials, as well as any collaborations that we may enter into with third parties and any unforeseen cash needs. As a result, our management will retain broad discretion over the allocation of the net proceeds from this offering. We have no current understandings, agreements or commitments for any material acquisitions or licenses of any products, businesses or technologies.
Pending our use of the net proceeds from this offering, we intend to invest the net proceeds in a variety of capital preservation investments, including short-term, investment-grade, interest-bearing instruments and U.S. government securities.
DIVIDEND POLICY
We have not declared or paid cash dividends on our common stock. We currently intend to retain all available funds and any future earnings to fund the development and expansion of our business and we do not anticipate paying any cash dividends in the foreseeable future. In addition, our ability to pay cash dividends is currently restricted by the terms of our Loan and Security Agreement with Oxford Finance LLC and our Securities Purchase Agreement, dated November 28, 2022, with certain institutional investors named therein relating to our private placement, and future debt financing arrangements may contain terms prohibiting or limiting the amount of dividends that may be declared or paid on our common stock. Any future determination to declare and pay dividends will be made at the discretion of our board of directors and will depend on then-existing conditions, including our results of operations, financial condition, contractual restrictions, capital requirements, business prospects and other factors our board of directors may deem relevant.
DILUTION
If you invest in our common stock in this offering, your ownership interest will be diluted immediately to the extent of the difference between the price per share you pay in this offering and the pro forma as adjusted net tangible book value per share of our common stock immediately after this offering.
Our historical net tangible book value as of March 31, 2023 was $23.3 million, or $10.07 per share of our common stock. Our historical net tangible book value is the amount of our total tangible assets less our total liabilities. Historical net tangible book value per share represents historical net tangible book value divided by the 2,309,287 shares of our common stock outstanding as of March 31, 2023.
Our pro forma net tangible book value as of March 31, 2023 was $23.3 million, or $3.05 per share of our common stock. Pro forma net tangible book value represents the amount of our total tangible assets less our total liabilities, after giving effect to the assumed conversion of all outstanding shares of Series E Convertible Non-Redeemable Preferred Stock into 5,314,400 shares of our common stock without regard to the beneficial ownership limitations applicable to shares of our Series E Convertible Non-Redeemable Preferred Stock (as described under “Description of Capital Stock” in this prospectus). Pro forma net tangible book value per share represents pro forma net tangible book value divided by the total number of shares outstanding as of March 31, 2023, after giving effect to the pro forma adjustment described above.
After giving further effect to the assumed sale of shares of our common stock in the aggregate amount of $40.0 million in this offering at an assumed public offering price of $15.80 per share (the last sale price of our common stock on May 8, 2023 as reported on The Nasdaq Capital Market), less the estimated commissions and estimated offering expenses payable by us, our pro forma as adjusted net tangible book value as of March 31, 2023 would have been $61.9 million, or $6.09 per share. This represents an immediate increase in pro forma as adjusted net tangible book value of $3.04 per share to existing stockholders and an immediate dilution of $9.71 per share to investors in this offering. The following table illustrates this calculation on a per share basis.
| |
Assumed public offering price per share
|
|
|
|
|
|
|
|
|
|
$ |
15.80 |
|
|
| |
Historical net tangible book value per share as of March 31, 2023
|
|
|
|
$ |
10.07 |
|
|
|
|
|
|
|
|
| |
Decrease in historical net tangible book value per share attributable to the pro forma adjustments described above
|
|
|
|
$ |
(7.02) |
|
|
|
|
|
|
|
|
| |
Pro forma net tangible book value per share as March 31, 2023
|
|
|
|
$ |
3.05 |
|
|
|
|
|
|
|
|
| |
Increase in pro forma as adjusted net tangible book value per share attributable to investors purchasing shares in this offering
|
|
|
|
$ |
3.04 |
|
|
|
|
|
|
|
|
| |
Pro forma as adjusted net tangible book value per share as of March 31, 2023 after giving effect to this offering
|
|
|
|
|
|
|
|
|
|
$ |
6.09 |
|
|
| |
Dilution per share to investors purchasing shares in this offering
|
|
|
|
|
|
|
|
|
|
$ |
9.71 |
|
|
The pro forma as adjusted information set forth above is illustrative only and will adjust based on the actual price to the public, the actual number of shares sold and other terms of the offering determined at the time shares of our common stock are sold pursuant to this prospectus. The shares sold in this offering, if any, will be sold from time to time at various prices.
The table and discussion above exclude the following:
•
191,475 shares of our common stock issuable upon the exercise of stock options outstanding as of March 31, 2023, at a weighted average exercise price of $250.51 per share;
•
148,093 shares of our common stock issuable upon vesting and settlement of restricted stock units outstanding as of March 31, 2023;
•
18,021 shares of our common stock reserved for future issuance under our 2017 Equity Incentive Plan, as amended, as of March 31, 2023, as well as any automatic increases in the number of shares of common stock reserved under such plan;
•
32,156 additional shares of our common stock available for future issuance under our Amended and Restated 2017 Employee Stock Purchase Plan as of March 31, 2023, as well as any automatic increases in the number of shares of common stock reserved under such plan; and
•
4,303 shares of our common stock issuable upon the exercise of outstanding warrants as of March 31, 2023, at a weighted average exercise price of $578.62 per share.
We may choose to raise additional capital due to market conditions or strategic considerations even if we believe we have sufficient funds for our current or future operating plans. To the extent that additional capital is raised through the sale of equity or securities convertible into common stock, the issuance of these securities could result in further dilution to our stockholders.
DESCRIPTION OF CAPITAL STOCK
The following description of our capital stock is intended as a summary only and therefore is not a complete description of our capital stock. This description is based upon, and is qualified by reference to, our certificate of incorporation, our by-laws and applicable provisions of Delaware corporate law. You should read our certificate of incorporation and our by-laws, which are filed as exhibits to the registration statement of which this prospectus forms a part, for the provisions that are important to you.
Our authorized capital stock consists of 120,000,000 shares of common stock, par value $0.001 per share, and 5,000,000 shares of preferred stock, par value $0.001 per share, of which 54,000 shares of preferred stock are designated the “Series E Convertible Non-Redeemable Preferred Stock,” or the Series E Preferred Stock.
As of March 31, 2023, 2,309,287 shares of common stock were outstanding and 53,144 shares of Series E Preferred Stock were outstanding.
Common Stock
Annual Meeting. Annual meetings of our stockholders are held on the date designated in accordance with our by-laws. Written notice must be mailed to each stockholder entitled to vote not less than ten nor more than 60 days before the date of the meeting. The presence in person or by proxy of the holders of one third of the voting power of the shares of the capital stock of the corporation issued and outstanding and entitled to vote at such meeting constitutes a quorum for the transaction of business at meetings of the stockholders. Special meetings of the stockholders may be called for any purpose by the board of directors, the chairman of the board or the chief executive officer. Except as may be otherwise provided by applicable law, our certificate of incorporation or our by-laws, all elections of directors shall be decided by a plurality, and all other questions shall be decided by a majority, of the votes cast by stockholders entitled to vote thereon at a duly held meeting of stockholders at which a quorum is present.
Voting Rights. Holders of our common stock are entitled to one vote for each share held on all matters submitted to a vote of stockholders and do not have cumulative voting rights.
Dividends. Holders of common stock are entitled to receive proportionately any dividends as may be declared by our board of directors, subject to any preferential dividend rights of outstanding preferred stock.
Liquidation and Dissolution. In the event of our liquidation or dissolution, the holders of our common stock are entitled to receive proportionately all assets available for distribution to stockholders after the payment of all debts and other liabilities and subject to any preferential rights of any outstanding preferred stock.
Other Rights. Holders of our common stock have no preemptive, subscription, redemption or conversion rights. The rights, preferences and privileges of holders of our common stock are subject to and may be adversely affected by the rights of the holders of our Series E Preferred Stock and shares of any series of our preferred stock that we may designate and issue in the future.
Transfer Agent and Registrar. American Stock Transfer & Trust Company, LLC is transfer agent and registrar for the common stock.
Nasdaq Capital Market. Our common stock is listed on The Nasdaq Capital Market under the symbol “KALA”.
Preferred Stock
General Description
We are authorized to issue “blank check” preferred stock, which may be issued in one or more series upon authorization of our board of directors. Our board of directors is authorized to fix the designations, powers, preferences and the relative, participating, optional or other special rights and any qualifications, limitations and restrictions of the shares of each series of preferred stock. The authorized shares of our
preferred stock are available for issuance without further action by our stockholders, unless such action is required by applicable law or the rules of any stock exchange on which our securities may be listed. If the approval of our stockholders is not required for the issuance of shares of our preferred stock, our board may determine not to seek stockholder approval.
A series of our preferred stock could, depending on the terms of such series, impede the completion of a merger, tender offer or other takeover attempt. Our board of directors will make any determination to issue preferred shares based upon its judgment as to the best interests of our stockholders. Our directors, in so acting, could issue preferred stock having terms that could discourage an acquisition attempt through which an acquirer may be able to change the composition of our board of directors, including a tender offer or other transaction that some, or a majority, of our stockholders might believe to be in their best interests or in which stockholders might receive a premium for their stock over the then-current market price of the stock.
Series E Preferred Stock
Pursuant to our Certificate of Designations, Preferences and Rights of Series E Convertible Non-Redeemable Preferred Stock, or the Certificate of Designations, filed with the Secretary of State of the State of Delaware with respect to the Series E Preferred Stock, we designated 54,000 shares of our authorized and unissued preferred stock as Series E Preferred Stock, and established the rights, preferences and privileges of the Series E Preferred Stock, which are summarized below. As of March 31, 2023, we had 53,144 shares of Series E Preferred Stock outstanding.
Conversion. Each share of Series E Preferred Stock is initially convertible into 100 shares of our common stock (subject to adjustment as provided in our Certificate of Designations) at any time at the option of the holder, provided that the holder will be prohibited, subject to certain exceptions, from converting its Series E Preferred Stock for shares of our common stock to the extent that immediately prior to or following such conversion, the holder, together with its affiliates and other attribution parties, would own in excess of 9.99% of the total number of shares of our common stock then issued and outstanding after giving effect to such conversion, which percentage may be changed at the holder’s election to a lower percentage at any time or to a higher percentage not to exceed 19.99% upon 61 days’ notice to us, which we refer to, collectively, as the Beneficial Ownership Limitation.
Voting Rights. The shares of Series E Preferred Stock will generally have no voting rights, except to the extent provided by applicable law, and except that the consent of the holders of a majority of the outstanding Series E Preferred Stock will be required to waive any provisions of our Certificate of Designations.
Rank. The Series E Preferred Stock shall rank:
•
senior to all of our common stock;
•
senior to any class or series of our capital stock created after November 28, 2022 specifically ranking by its terms junior to the Series E Preferred Stock, or the Junior Securities;
•
on parity with any class or series of our capital stock created after November 28, 2022 specifically ranking by its terms on parity with the Series E Preferred Stock, or the Parity Securities; and
•
junior to any class or series of our capital stock created after November 28, 2022 specifically ranking by its terms senior to the Series E Preferred Stock, or the Senior Securities;
in each case, as to distributions of assets upon our liquidation, dissolution or winding up, whether voluntarily or involuntarily, each of which we refer to as a Dissolution.
Dissolution. In the event of a Dissolution, subject to any prior or superior rights of the holders of Senior Securities, holders of the Series E Preferred Stock will be entitled to receive, before any distributions to the holders of our common stock and the holders of Junior Securities and pari passu with any distributions to the holders of Parity Securities, an amount per share of Series E Preferred Stock equal to (i) $575.00 (subject to adjustment in the event of any stock split, combination or reclassification), plus any dividends declared but unpaid thereon, or (ii) such amount per share as would have been payable had all shares of Series E Preferred Stock been converted into our common stock (without regard to any restrictions
on conversion, including the Beneficial Ownership Limitation) immediately prior to such Dissolution. Shares of Series E Preferred Stock will be entitled to receive dividends equal to (on an as-if-converted-to-common stock basis), and in the same form and manner as, dividends actually paid on shares of our common stock. For the avoidance of any doubt, neither a change in control of us, the merger or consolidation of us with or into any other entity, nor the sale, lease, exchange or other disposition of all or substantially all of our assets shall, in and of itself, be deemed to constitute a Dissolution.
Warrants
As of March 31, 2023, we had outstanding warrants to purchase up to an aggregate of 4,303 shares of our common stock at a weighted average exercise price of $578.62 per share. These warrants provide for adjustments in the event of specified mergers, reorganizations, reclassifications, stock dividends, stock splits or other changes in our corporate structure.
Options
As of March 31, 2023, we had outstanding options to purchase an aggregate of 191,475 shares of our common stock at a weighted average exercise price of $250.51 per share.
Restricted Stock Units
As of March 31, 2023, 148,093 shares of our common stock were issuable upon vesting of outstanding restricted stock units.
Provisions of Our Certificate of Incorporation and By-laws and Delaware Law That May Have Anti-Takeover Effects
Delaware Law. We are subject to Section 203 of the Delaware General Corporation Law. Subject to certain exceptions, Section 203 prevents a publicly held Delaware corporation from engaging in a “business combination” with any “interested stockholder” for three years following the date that the person became an interested stockholder, unless either the interested stockholder attained such status with the approval of our board of directors, the business combination is approved by our board of directors and stockholders in a prescribed manner or the interested stockholder acquired at least 85% of our outstanding voting stock in the transaction in which it became an interested stockholder. A “business combination” includes, among other things, a merger or consolidation involving us and the “interested stockholder” and the sale of more than 10% of our assets. In general, an “interested stockholder” is any entity or person beneficially owning 15% or more of our outstanding voting stock and any entity or person affiliated with or controlling or controlled by such entity or person.
Staggered Board; Removal of Directors. Our certificate of incorporation and our bylaws divide our board of directors into three classes with staggered three-year terms. In addition, our certificate of incorporation and our bylaws provide that directors may be removed only for cause and only by the affirmative vote of the holders of 75% of our shares of capital stock present in person or by proxy and entitled to vote. Under our certificate of incorporation and bylaws, any vacancy on our board of directors, including a vacancy resulting from an enlargement of our board of directors, may be filled only by vote of a majority of our directors then in office. Furthermore, our certificate of incorporation provides that the authorized number of directors may be changed only by the resolution of our board of directors. The classification of our board of directors and the limitations on the ability of our stockholders to remove directors, change the authorized number of directors and fill vacancies could make it more difficult for a third party to acquire, or discourage a third party from seeking to acquire, control of our company.
Stockholder Action; Special Meeting of Stockholders; Advance Notice Requirements for Stockholder Proposals and Director Nominations. Our certificate of incorporation and our bylaws provide that any action required or permitted to be taken by our stockholders at an annual meeting or special meeting of stockholders may only be taken if it is properly brought before such meeting and may not be taken by written action in lieu of a meeting. Our certificate of incorporation and our bylaws also provide that, except as otherwise required by law, special meetings of the stockholders can only be called by the chairman of our board of directors, our chief executive officer or our board of directors. In addition, our bylaws establish an
advance notice procedure for stockholder proposals to be brought before an annual meeting of stockholders, including proposed nominations of candidates for election to our board of directors. Stockholders at an annual meeting may only consider proposals or nominations specified in the notice of meeting or brought before the meeting by or at the direction of our board of directors, or by a stockholder of record on the record date for the meeting who is entitled to vote at the meeting and who has delivered timely written notice in proper form to our secretary of the stockholder’s intention to bring such business before the meeting. These provisions could have the effect of delaying until the next stockholder meeting stockholder actions that are favored by the holders of a majority of our outstanding voting securities. These provisions also could discourage a third party from making a tender offer for our common stock because even if the third party acquired a majority of our outstanding voting stock, it would be able to take action as a stockholder, such as electing new directors or approving a merger, only at a duly called stockholders meeting and not by written consent.
Super-Majority Voting. The Delaware General Corporation Law provides generally that the affirmative vote of a majority of the shares entitled to vote on any matter is required to amend a corporation’s certificate of incorporation or bylaws unless a corporation’s certificate of incorporation or bylaws, as the case may be, requires a greater percentage. Our bylaws may be amended or repealed by a majority vote of our board of directors or the affirmative vote of the holders of at least 75% of the votes that all our stockholders would be entitled to cast in any annual election of directors. In addition, the affirmative vote of the holders of at least 75% of the votes that all our stockholders would be entitled to cast in any election of directors is required to amend or repeal or to adopt any provisions inconsistent with any of the provisions of our certificate of incorporation described above.
Exclusive Forum Selection. Our certificate of incorporation provides that, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware shall be the sole and exclusive forum for (1) any derivative action or proceeding brought on behalf of our company, (2) any action asserting a claim of breach of a fiduciary duty owed by any of our directors, officers or employees to our company or our stockholders, (3) any action asserting a claim arising pursuant to any provision of the General Corporation Law of the State of Delaware or as to which the General Corporation Law of the State of Delaware confers jurisdiction on the Court of Chancery of the State of Delaware, or (4) any action asserting a claim arising pursuant to any provision of our certificate of incorporation or bylaws (in each case, as they may be amended from time to time) or governed by the internal affairs doctrine. Although our certificate of incorporation contains the choice of forum provision described above, we do not expect this choice of forum provision will apply to suits brought to enforce a duty or liability created by the Securities Act, the Exchange Act or any other claim for which federal courts have exclusive jurisdiction.
PLAN OF DISTRIBUTION
We previously entered into an Open Market Sale AgreementSM, dated January 19, 2023, or the sales agreement, with Jefferies LLC, or Jefferies, relating to the sale of shares of our common stock. In accordance with the terms of the sales agreement, under this prospectus we may offer and sell shares of our common stock having an aggregate offering price of up to $40,000,000 from time to time through Jefferies, acting as our sales agent. As of the date of this prospectus, we had issued and sold shares of our common stock for aggregate gross sale proceeds of $5.0 million pursuant to the sales agreement and a prior prospectus supplement dated January 19, 2023 and an accompanying prospectus dated May 19, 2020. We will not make any further offers or sales of our common stock pursuant to the prior prospectus supplement and the accompanying prospectus.
Sales of our shares of common stock, if any, under this prospectus will be made by any method that is deemed to be an “at the market offering” as defined in Rule 415(a)(4) under the Securities Act.
Each time we wish to issue and sell shares of common stock under the sales agreement, we will notify Jefferies of the number of shares to be issued, the dates on which such sales are anticipated to be made, any limitation on the number of shares to be sold in any one day and any minimum price below which sales may not be made. Once we have so instructed Jefferies, unless Jefferies declines to accept the terms of such notice, Jefferies has agreed to use its commercially reasonable efforts consistent with its normal trading and sales practices to sell such shares up to the amount specified on such terms. The obligations of Jefferies under the sales agreement to sell our shares of common stock are subject to a number of conditions that we must meet.
The settlement of sales of shares between us and Jefferies is generally anticipated to occur on the second trading day following the date on which the sale was made. Sales of our shares of common stock as contemplated in this prospectus will be settled through the facilities of The Depository Trust Company or by such other means as we and Jefferies may agree upon. There is no arrangement for funds to be received in an escrow, trust or similar arrangement.
We will pay Jefferies a commission of up to 3.0% of the aggregate gross proceeds we receive from each sale of our shares of common stock. Because there is no minimum offering amount required as a condition to close this offering, the actual total public offering amount, commissions and proceeds to us, if any, are not determinable at this time. In addition, we have agreed to reimburse Jefferies for the fees and disbursements of its counsel, which was payable upon execution of the sales agreement, in an amount not to exceed $75,000, in addition to certain ongoing disbursements of its legal counsel, unless we and Jefferies otherwise agree. We estimate that the total expenses for the offering, excluding any commissions or expense reimbursement payable to Jefferies under the terms of the sales agreement, will be approximately $200,000. The remaining sale proceeds, after deducting any other transaction fees, will equal our net proceeds from the sale of such shares.
Jefferies will provide written confirmation to us before the open on The Nasdaq Capital Market on the day following each day on which shares of our common stock are sold under the sales agreement. Each confirmation will include the number of shares sold on that day, the aggregate gross proceeds of such sales and the proceeds to us.
In connection with the sale of the shares of common stock on our behalf, Jefferies will be deemed to be an “underwriter” within the meaning of the Securities Act, and the compensation of Jefferies will be deemed to be underwriting commissions or discounts. We have agreed to indemnify Jefferies against certain civil liabilities, including liabilities under the Securities Act. We have also agreed to contribute to payments Jefferies may be required to make in respect of such liabilities.
The offering of our shares of common stock pursuant to the sales agreement will terminate upon the earlier of (1) the sale of all shares of common stock subject to the sales agreement and (2) the termination of the sales agreement as permitted therein.
This summary of the material provisions of the sales agreement does not purport to be a complete statement of its terms and conditions. A copy of the sales agreement has been filed as Exhibit 1.1 to our
current report on Form 8-K as filed with the SEC on January 19, 2023 under the Exchange Act and is incorporated by reference in this prospectus.
Jefferies and its affiliates may in the future provide various investment banking, commercial banking, financial advisory and other financial services for us and our affiliates, for which services they may in the future receive customary fees. In the course of its business, Jefferies may actively trade our securities for its own account or for the accounts of customers, and, accordingly, Jefferies may at any time hold long or short positions in such securities.
This prospectus in electronic format may be made available on a website maintained by Jefferies, and Jefferies may distribute this prospectus electronically.
LEGAL MATTERS
The validity of the shares of common stock offered hereby will be passed upon for us by Wilmer Cutler Pickering Hale and Dorr LLP, Boston, Massachusetts. Jefferies LLC is being represented in connection with this offering by Cooley LLP, New York, New York.
EXPERTS
The financial statements of Kala Pharmaceuticals, Inc. incorporated by reference in this Prospectus, have been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their report. Such financial statements are incorporated by reference in reliance upon the report of such firm, given their authority as experts in accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and current reports, proxy statements and other information with the SEC. Our SEC filings are available to the public over the Internet at the SEC’s website at www.sec.gov. Copies of certain information filed by us with the SEC are also available on our website at www.kalarx.com. Our website is not a part of this prospectus and the information contained on, or accessible through, our website is not incorporated by reference in this prospectus.
This prospectus is part of a registration statement we filed with the SEC. This prospectus omits some information contained in the registration statement in accordance with SEC rules and regulations. You should review the information and exhibits in the registration statement for further information about us and our consolidated subsidiaries and the securities we are offering. Statements in this prospectus concerning any document we filed as an exhibit to the registration statement or that we otherwise filed with the SEC are not intended to be comprehensive and are qualified by reference to these filings and the exhibits attached thereto. You should review the complete document to evaluate these statements. You can obtain a copy of the registration statement from the SEC’s website.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The SEC allows us to incorporate by reference much of the information we file with the SEC, which means that we can disclose important information to you by referring you to those publicly available documents. The information that we incorporate by reference in this prospectus is considered to be part of this prospectus. Because we are incorporating by reference future filings with the SEC, this prospectus is continually updated and those future filings may modify or supersede some of the information included or incorporated in this prospectus. This means that you must look at all of the SEC filings that we incorporate by reference to determine if any of the statements in this prospectus or in any document previously incorporated by reference have been modified or superseded. This prospectus incorporates by reference the documents listed below (File No. 001-38150) and any future filings we make with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act (in each case, other than those documents or the portions of those documents not deemed to be filed) between the date of the initial registration statement and the effectiveness of the registration statement and following the effectiveness of the registration statement until the offering of the securities offered hereby is terminated or completed:
•
•
•
•
You may request a copy of these filings, at no cost, by writing or telephoning us at the following address or telephone number:
1167 Massachusetts Avenue
Arlington, MA 02476
Attn: Investor Relations
(781) 996-5252
Up to $40,000,000
Common Stock
PROSPECTUS
Jefferies
, 2023
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
Set forth below are estimates (except in the case of the SEC registration fee and FINRA filing fee) of the amount of fees and expenses to be incurred in connection with the issuance and distribution of the offered securities, other than underwriting discounts and commissions.
| |
SEC registration fee
|
|
|
|
$ |
8,815.91* |
|
|
| |
FINRA filing fee
|
|
|
|
$ |
12,499.87 |
|
|
| |
Printing and engraving
|
|
|
|
|
(1) |
|
|
| |
Accounting services
|
|
|
|
|
(1) |
|
|
| |
Legal fees of registrant’s counsel
|
|
|
|
|
(1) |
|
|
| |
Transfer agent’s, trustee’s and depositary’s fees and expenses
|
|
|
|
|
(1) |
|
|
| |
Miscellaneous
|
|
|
|
|
(1) |
|
|
| |
Total
|
|
|
|
$ |
(1) |
|
|
(1)
These fees and expenses are calculated based on the securities offered and the number of issuances and accordingly are not estimated at this time and will be reflected in the applicable prospectus supplement.
*
Excludes the registration fee previously paid in connection with unsold securities pursuant to Rule 415(a)(6).
Item 15. Indemnification of Directors and Officers.
Section 102 of the Delaware General Corporation Law, or the DGCL, permits a corporation to eliminate the personal liability of its directors or its stockholders for monetary damages for a breach of fiduciary duty as a director, except where the director breached his or her duty of loyalty, failed to act in good faith, engaged in intentional misconduct or knowingly violated a law, authorized the payment of a dividend or approved a stock repurchase in violation of Delaware corporate law or obtained an improper personal benefit. Our restated certificate of incorporation provides that no director shall be personally liable to us or our stockholders for monetary damages for any breach of fiduciary duty as a director, notwithstanding any provision of law imposing such liability, except to the extent that the DGCL prohibits the elimination or limitation of liability of directors for breaches of fiduciary duty.
Section 145 of the DGCL provides that a corporation has the power to indemnify a director, officer, employee or agent of the corporation and certain other persons serving at the request of the corporation in related capacities against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlements actually and reasonably incurred by the person in connection with an action, suit or proceeding to which he or she is or is threatened to be made a party by reason of such position, if such person acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the corporation, and, in any criminal action or proceeding, had no reasonable cause to believe his or her conduct was unlawful, except that, in the case of actions brought by or in the right of the corporation, no indemnification shall be made with respect to any claim, issue or matter as to which such person shall have been adjudged to be liable to the corporation unless and only to the extent that the Court of Chancery or other adjudicating court determines that, despite the adjudication of liability but in view of all of the circumstances of the case, such person is fairly and reasonably entitled to indemnification for such expenses which the Court of Chancery or such other court shall deem proper.
Our restated certificate of incorporation provides that we will indemnify each person who was or is a party or threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of us), by reason of the fact that he or she is or was, or has agreed to become, our director or officer, or is or was serving, or has agreed to serve, at our request as a director, officer, partner, employee or trustee of, or in a similar capacity with, another corporation, partnership, joint venture, trust or other enterprise (all such persons being
referred to as an Indemnitee), or by reason of any action alleged to have been taken or omitted in such capacity, against all expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred in connection with such action, suit or proceeding and any appeal therefrom if such Indemnitee acted in good faith and in a manner he or she reasonably believed to be in, or not opposed to, our best interests, and, with respect to any criminal action or proceeding, he or she had no reasonable cause to believe his or her conduct was unlawful.
Our restated certificate of incorporation also provides that we will indemnify any Indemnitee who was or is a party to an action or suit by or in the right of us to procure a judgment in our favor by reason of the fact that the Indemnitee is or was, or has agreed to become, our director or officer, or is or was serving, or has agreed to serve, at our request as a director, officer, partner, employee or trustee of, or in a similar capacity with, another corporation, partnership, joint venture, trust or other enterprise, or by reason of any action alleged to have been taken or omitted in such capacity, against all expenses (including attorneys’ fees) and, to the extent permitted by law, amounts paid in settlement actually and reasonably incurred in connection with such action, suit or proceeding, and any appeal therefrom, if the Indemnitee acted in good faith and in a manner he or she reasonably believed to be in, or not opposed to, our best interests, except that no indemnification shall be made with respect to any claim, issue or matter as to which such person shall have been adjudged to be liable to us, unless a court determines that, despite such adjudication but in view of all of the circumstances, he or she is entitled to indemnification of such expenses. Notwithstanding the foregoing, to the extent that any Indemnitee has been successful, on the merits or otherwise, he or she will be indemnified by us against all expenses (including attorneys’ fees) actually and reasonably incurred by him or her or on his or her behalf in connection therewith. If we do not assume the defense, expenses must be advanced to an Indemnitee under certain circumstances.
We have entered into indemnification agreements with all of our directors and officers. In general, these agreements provide that we will indemnify the director or officer to the fullest extent permitted by law for claims arising in his or her capacity as a director or officer of our company or in connection with their service at our request for another corporation or entity. The indemnification agreements also provide for procedures that will apply in the event that a director or officer makes a claim for indemnification and establish certain presumptions that are favorable to the director or officer.
We maintain a general liability insurance policy that covers certain liabilities of our directors and officers arising out of claims based on acts or omissions in their capacities as directors or officers.
In any underwriting agreement we enter into in connection with the offering of securities being registered hereby, the underwriters will agree to indemnify, under certain conditions, our directors and officers (as well as certain other persons) against certain liabilities arising in connection with such offering.
Item 16. Exhibits.
Exhibit Index
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Exhibit No.
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Description
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1.1*
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Form of Underwriting Agreement
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1.2
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Open Market Sale AgreementSM, dated as of January 19, 2023, by and between Kala Pharmaceuticals, Inc. and Jefferies LLC (incorporated by reference to Exhibit 1.1 to the Registrant’s current report on Form 8-K (File No. 001-38150) filed on January 19, 2023)
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2.1#
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Agreement and Plan of Merger, dated as of November 15, 2021, by and among Kala Pharmaceuticals, Inc., Ceres Merger Sub, Inc., Combangio, Inc. and, solely in its capacity as Combangio Equityholder Representative, Fortis Advisors LLC. (incorporated by reference to Exhibit 2.1 of the Registrant’s current report on Form 8-K (File No. 001-38150) filed on November 15, 2021)
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2.2#
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Asset Purchase Agreement, by and between Kala Pharmaceuticals, Inc., Alcon Pharmaceuticals Ltd. and Alcon Vision, LLC (incorporated by reference to Exhibit 2.1 to the Registrant’s current report on Form 8-K (File No. 001-38150) filed on May 23, 2022)
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Exhibit No.
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Description
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4.1
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Restated Certificate of Incorporation of the Registrant, as amended as of November 28, 2022, including Certificate of Designation of the Series D Preferred Stock of Registrant, Certificate of Elimination of Number of Shares of Preferred Stock Designated as Series D Preferred Stock of Registrant, Certificate of Designations, Preferences and Rights of Series E Convertible Non-Redeemable Preferred Stock of Registrant (incorporated by reference to Exhibit 3.1 to the Registrant’s annual report on Form 10-K (File No. 001-38150) filed on March 3, 2023)
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4.2
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4.3***
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4.4***
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4.5***
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4.6***
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4.7*
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Form of Deposit Agreement
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4.8*
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Form of Warrant Agreement
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4.9*
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Form of Subscription Rights Agreement
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4.10*
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Form of Unit Agreement
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5.1***
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23.1
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23.2***
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24.1***
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25.1**
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Statement of Eligibility on Form T-1 under the Trust Indenture Act of 1939, as amended, of the Trustee under the Senior Indenture
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25.2**
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Statement of Eligibility on Form T-1 under the Trust Indenture Act of 1939, as amended, of the Trustee under the Subordinated Indenture
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107
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*
To be filed by amendment or by a Current Report on Form 8-K.
**
To be filed pursuant to Section 305(b)(2) of the Trust Indenture Act of 1939.
***
Previously filed.
#
Portions of this exhibit have been omitted pursuant to Item 601(b)(10)(iv) of Regulation S-K.
Item 17. Undertakings.
The undersigned Registrant hereby undertakes:
(a)(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 of 1933, as amended (the “Securities Act”);
(ii)
to reflect in the prospectus any facts or events arising after the effective date of this 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 this registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 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 this registration statement or any material change to such information in this registration statement;
provided, however, that paragraphs (a)(1)(i), (a)(1)(ii) and (a)(1)(iii) do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in reports filed with or furnished to the Commission by the Registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), that are incorporated by reference in this registration statement, or is contained in a form of prospectus filed pursuant to Rule 424(b) that is part of this 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 the time shall be deemed to be the initial bona fide offering thereof.
(3)
To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.
(4)
That, for the purpose of determining liability under the Securities Act to any purchaser:
(i)
each prospectus filed by the Registrant pursuant to Rule 424(b)(3) shall be deemed to be part of the registration statement as of the date the filed prospectus was deemed part of and included in the registration statement; and
(ii)
each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as part of a registration statement in reliance on Rule 430B relating to an offering made pursuant to Rule 415(a)(1)(i), (vii) or (x) for the purpose of providing the information required by Section 10(a) of the Securities Act of 1933 shall be deemed to be part of and included in the registration statement as of the earlier of the date such form of prospectus is first used after effectiveness or the date of the first contract of sale of securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any person that is at that date an underwriter, such date shall be deemed to be a new effective date of the registration statement relating to the securities in the registration statement to which that prospectus relates, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof;. provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such effective date, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such effective date.
(5)
That, for the purpose of determining liability of the Registrant under the Securities Act to any purchaser in the initial distribution of the securities, the undersigned Registrant undertakes that in a primary offering of securities of the undersigned Registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, such 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.
(6)
That, for purposes of determining any liability under the Securities Act:
(i)
the information omitted from the form of prospectus filed as part of the registration statement in reliance upon Rule 430A and contained in the form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of the registration statement as of the time it was declared effective; and
(ii)
each post-effective amendment that contains a form of prospectus 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.
(b)
The undersigned Registrant hereby undertakes that, for purposes of determining any liability under the Securities Act, each filing of the Registrant’s annual report pursuant to Section 13(a) or 15(d) of the Exchange Act (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to Section 15(d) of the Exchange Act) that is incorporated by reference in this registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
(c)
The undersigned Registrant hereby undertakes to file an application for the purpose of determining the eligibility of the trustee to act under subsection (a) of Section 310 of the Trust Indenture Act in accordance with the rules and regulations prescribed by the Commission under Section 305(b)(2) of the Trust Indenture Act.
(d)
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 indemnification provisions described herein, or otherwise, the Registrant has been advised that in the opinion of the Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this Amendment No. 1 to the Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of Arlington, Commonwealth of Massachusetts, on May 9, 2023.
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KALA PHARMACEUTICALS, INC.
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By:
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/s/ MARK IWICKI
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Name:
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Mark Iwicki
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Title:
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Chief Executive Officer
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Pursuant to the requirements of the Securities Act of 1933, as amended, this Amendment No. 1 to the Registration Statement has been signed by the following persons in the capacities and on the dates indicated.
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Signature
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Title
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Date
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/s/ MARK IWICKI
Mark Iwicki
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Chief Executive Officer and
Chairman of Board of Directors
(Principal Executive Officer)
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May 9, 2023
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/s/ MARY REUMUTH
Mary Reumuth
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Chief Financial Officer
(Principal Financial and Accounting Officer)
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May 9, 2023
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*
Mark S. Blumenkranz, M.D.
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Director
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May 9, 2023
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*
Marjan Farid, M.D.
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Director
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May 9, 2023
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*
Andrew I. Koven
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Director
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May 9, 2023
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*
C. Daniel Myers
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Director
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May 9, 2023
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*
Robert Paull
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Director
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May 9, 2023
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*
Gregory Perry
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Director
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May 9, 2023
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*
Howard B. Rosen
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Director
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May 9, 2023
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*By:
/s/ MARK IWICKI
Mark Iwicki
Attorney-in-Fact
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Exhibit 4.2
SECOND AMENDED AND RESTATED BY-LAWS
OF
KALA PHARMACEUTICALS, INC.
TABLE OF CONTENTS
| ARTICLE I |
STOCKHOLDERS |
1 |
| 1.1 |
Place of Meetings |
1 |
| 1.2 |
Annual Meeting |
1 |
| 1.3 |
Special Meetings |
1 |
| 1.4 |
Notice of Meetings |
1 |
| 1.5 |
Voting List |
1 |
| 1.6 |
Quorum |
2 |
| 1.7 |
Adjournments |
2 |
| 1.8 |
Voting and Proxies |
2 |
| 1.9 |
Action at Meeting |
3 |
| 1.10 |
Nomination of Directors |
3 |
| 1.11 |
Notice of Business at Annual Meetings |
7 |
| 1.12 |
Conduct of Meetings |
9 |
| 1.13 |
No Action by Consent in Lieu of a Meeting |
10 |
| ARTICLE II |
DIRECTORS |
11 |
| 2.1 |
General Powers |
11 |
| 2.2 |
Number, Election and Qualification |
11 |
| 2.3 |
Chairman of the Board; Vice Chairman of the Board |
11 |
| 2.4 |
Classes of Directors |
11 |
| 2.5 |
Terms of Office |
11 |
| 2.6 |
Quorum |
11 |
| 2.7 |
Action at Meeting |
12 |
| 2.8 |
Removal |
12 |
| 2.9 |
Vacancies |
12 |
| 2.10 |
Resignation |
12 |
| 2.11 |
Regular Meetings |
12 |
| 2.12 |
Special Meetings |
12 |
| 2.13 |
Notice of Special Meetings |
12 |
| 2.14 |
Meetings by Conference Communications Equipment |
13 |
| 2.15 |
Action by Consent |
13 |
| 2.16 |
Committees |
13 |
| 2.17 |
Emergency By-laws |
13 |
| ARTICLE III |
OFFICERS |
14 |
| 3.1 |
Titles |
14 |
| 3.2 |
Election |
14 |
| 3.3 |
Qualification |
14 |
| 3.4 |
Tenure |
14 |
| 3.5 |
Resignation and Removal |
14 |
| 3.6 |
Vacancies |
15 |
| 3.7 |
President; Chief Executive Officer |
15 |
| 3.8 |
Vice Presidents |
15 |
| 3.9 |
Secretary and Assistant Secretaries |
15 |
| 3.10 |
Treasurer and Assistant Treasurers |
16 |
| 3.11 |
Salaries |
16 |
| 3.12 |
Delegation of Authority |
16 |
| ARTICLE IV |
CAPITAL STOCK |
16 |
| 4.1 |
Issuance of Stock |
16 |
| 4.2 |
Stock Certificates; Uncertificated Shares |
16 |
| 4.3 |
Transfers |
17 |
| 4.4 |
Lost, Stolen or Destroyed Certificates |
18 |
| 4.5 |
Record Date |
18 |
| 4.6 |
Regulations |
18 |
| ARTICLE V |
GENERAL PROVISIONS |
18 |
| 5.1 |
Fiscal Year |
18 |
| 5.2 |
Corporate Seal |
18 |
| 5.3 |
Waiver of Notice |
19 |
| 5.4 |
Voting of Securities |
19 |
| 5.5 |
Evidence of Authority |
19 |
| 5.6 |
Certificate of Incorporation |
19 |
| 5.7 |
Severability |
19 |
| 5.8 |
Pronouns |
19 |
| ARTICLE VI |
AMENDMENTS |
19 |
ARTICLE I
STOCKHOLDERS
1.1
Place of Meetings. All meetings of stockholders shall be held at such place, if any, as may be designated from time to time
by the Board of Directors, the Chairman of the Board, the Chief Executive Officer or the President or, if not so designated, at the principal
office of the corporation. The Board of Directors may, in its sole discretion, determine that a meeting shall not be held at any place,
but shall instead be held solely by means of remote communication in a manner consistent with the General Corporation Law of the State
of Delaware.
1.2
Annual Meeting. The annual meeting of stockholders for the election of directors to succeed those whose terms expire and
for the transaction of such other business as may properly be brought before the meeting shall be held on a date and at an hour designated
by the Board of Directors, the Chairman of the Board, the Chief Executive Officer or the President. The corporation may postpone, reschedule
or cancel any previously scheduled annual meeting of stockholders.
1.3
Special Meetings. Special meetings of stockholders for any purpose or purposes may be called at any time by only the Board
of Directors, the Chairman of the Board or the Chief Executive Officer, and may not be called by any other person or persons. Business
transacted at any special meeting of stockholders shall be limited to matters relating to the purpose or purposes stated in the notice
of meeting. The corporation may postpone, reschedule or cancel any previously scheduled special meeting of stockholders.
1.4
Notice of Meetings. Except as otherwise provided by law, the Certificate of Incorporation or these By-laws, notice of each
meeting of stockholders, whether annual or special, shall be given not less than 10 nor more than 60 days before the date of the meeting
to each stockholder entitled to vote at such meeting as of the record date for determining stockholders entitled to notice of the meeting.
Without limiting the manner by which notice otherwise may be given to stockholders, any notice shall be effective if given in accordance
with Section 232 of the General Corporation Law of the State of Delaware. The notices of all meetings shall state the place, if any, date
and hour of the meeting, the means of remote communications, if any, by which stockholders and proxy holders may be deemed to be present
in person and vote at such meeting, and the record date for determining stockholders entitled to vote at the meeting, if such date is
different from the record date for determining stockholders entitled to notice of the meeting. The notice of a special meeting shall state,
in addition, the purpose or purposes for which the meeting is called.
1.5 Voting
List. The corporation shall prepare, no later than the tenth day before each meeting of stockholders, a complete list of the
stockholders entitled to vote at the meeting (provided, however, if the record date for determining the stockholders entitled to
vote is less than 10 days before the meeting date, the list shall reflect the stockholders entitled to vote as of the tenth day
before the meeting), arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered
in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the
meeting for a period of 10 days ending on the day before the meeting date: (a) on a reasonably accessible electronic network,
provided that the information required to gain access to such list is provided with the notice of the meeting, or (b) during
ordinary business hours, at the principal place of business of the corporation. Except as otherwise provided by law, the stock
ledger shall be the only evidence as to who are the stockholders entitled to examine the list of stockholders required by this
Section 1.5 or to vote in person or by proxy at any meeting of stockholders.
1.6
Quorum. Except as otherwise provided by law, the Certificate of Incorporation or these By-laws, the holders of one third
of the voting power of the shares of the capital stock of the corporation issued and outstanding and entitled to vote at the meeting,
present in person, present by means of remote communication in a manner, if any, authorized by the Board of Directors in its sole discretion,
or represented by proxy, shall constitute a quorum for the transaction of business; provided, however, that where a separate vote by a
class or classes or series of capital stock is required by law or the Certificate of Incorporation, the holders of one third of the voting
power of the shares of such class or classes or series of the capital stock of the corporation issued and outstanding and entitled to
vote on such matter, present in person, present by means of remote communication in a manner, if any, authorized by the Board of Directors
in its sole discretion, or represented by proxy, shall constitute a quorum entitled to take action with respect to the vote on such matter.
A quorum, once established at a meeting, shall not be broken by the withdrawal of enough votes to leave less than a quorum.
1.7
Adjournments. Any meeting of stockholders may be adjourned from time to time to reconvene at any other time and to any other
place at which a meeting of stockholders may be held under these By-laws by the chairman of the meeting or by the stockholders present
or represented at the meeting and entitled to vote, although less than a quorum. When a meeting is adjourned to another time or place
(including an adjournment taken to address a technical failure to convene or continue a meeting using remote communication), notice need
not be given of the adjourned meeting if the time, place, if any, thereof, and the means of remote communications, if any, by which stockholders
and proxy holders may be deemed to be present in person and vote at such adjourned meeting are (i) announced at the meeting at which the
adjournment is taken,(ii) displayed, during the time scheduled for the meeting, on the same electronic network used to enable stockholders
and proxy holders to participate in the meeting by means of remote communication or (iii) set forth in the notice of meeting given in
accordance with Section 1.4 hereof. At the adjourned meeting, the corporation may transact any business that might have been transacted
at the original meeting. If the adjournment is for more than 30 days, a notice of the adjourned meeting shall be given to each stockholder
of record entitled to vote at the meeting. If after the adjournment a new record date for determination of stockholders entitled to vote
is fixed for the adjourned meeting, the Board of Directors shall fix a new record date for determining stockholders entitled to notice
of such adjourned meeting that is the same or an earlier date as that fixed for determination of stockholders entitled to vote at such
adjourned meeting, and shall give notice of the adjourned meeting to each stockholder of record entitled to vote at such adjourned meeting
as of the record date fixed for notice of such adjourned meeting.
1.8 Voting
and Proxies. Each stockholder shall have one vote upon the matter in question for each share of stock entitled to vote held of
record by such stockholder and a proportionate vote for each fractional share so held, unless otherwise provided by law or the
Certificate of Incorporation. Each stockholder of record entitled to vote at a meeting of stockholders may vote in person (including
by means of remote communications, if any, by which stockholders may be deemed to be present in person and vote at such meeting) or
may authorize another person or persons to vote for such stockholder by a proxy executed or transmitted in a manner permitted by the
General Corporation Law of the State of Delaware by the stockholder or such stockholder’s authorized officer, director,
employee or agent and delivered (including by electronic transmission) to the Secretary of the corporation. No such proxy shall be
voted upon after three years from the date of its execution, unless the proxy expressly provides for a longer period. Any person
directly or indirectly soliciting proxies from stockholders of the corporation must use a proxy card color other than white, the
color white being reserved for the exclusive use of the Board of Directors of the corporation.
1.9
Action at Meeting. When a quorum is present at any meeting, any matter other than the election of directors to be voted
upon by the stockholders at such meeting shall be decided by the vote of the holders of shares of stock having a majority in voting power
of the votes cast by the holders of all of the shares of stock present or represented at the meeting and voting affirmatively or negatively
on such matter (or if there are two or more classes or series of stock entitled to vote as separate classes, then in the case of each
such class or series, the holders of a majority in voting power of the shares of stock of that class or series present or represented
at the meeting and voting affirmatively or negatively on such matter), except when a different vote is required by law, the Certificate
of Incorporation or these By-laws. When a quorum is present at any meeting, any election by stockholders of directors shall be determined
by a plurality of the votes cast by the stockholders entitled to vote on the election.
1.10
Nomination of Directors.
(a)
Except for any directors entitled to be elected by the holders of preferred stock, only persons who are nominated in accordance
with the procedures in this Section 1.10 shall be eligible for election as directors at any meeting of stockholders. Nomination for election
to the Board of Directors at a meeting of stockholders may be made only (i) by or at the direction of the Board of Directors or (ii) by
any stockholder of the corporation who (x) has given timely notice thereof in writing to the Secretary in accordance with the procedures
in, and otherwise complies with, Section 1.10(b), (y) is a stockholder of record who is entitled to vote for the election of such nominee
on the date of the giving of such notice and on the record date for the determination of stockholders entitled to vote at such meeting
and (z) is entitled to vote at such meeting. Notwithstanding the foregoing or anything herein to the contrary, a stockholder of the corporation
may make nominations for election to the Board of Directors at a special meeting of stockholders pursuant to the foregoing clause (ii)
only if the Board of Directors, the Chairman of the Board or the Chief Executive Officer has determined, in accordance with Section 1.3,
that directors shall be elected at such special meeting and at such time that the stockholders are not prohibited from filling vacancies
or newly created directorships on the Board of Directors. The number of nominees a stockholder may nominate for election at a meeting
(or in the case of a stockholder giving the notice on behalf of a beneficial owner, the number of nominees a stockholder may nominate
for election at the meeting on behalf of such beneficial owner) shall not exceed the number of directors to be elected at such meeting.
(b)
To be timely, a stockholder’s notice must be received in writing by the Secretary at the principal office of the corporation
as follows: (i) in the case of an election of directors at an annual meeting of stockholders, not less than 90 days nor more than 120
days prior to the first anniversary of the preceding year’s annual meeting; provided, however, that in the event that the date of
the annual meeting is advanced by more than 30 days, or delayed by more than 60 days, from the first anniversary of the preceding year’s
annual meeting, or if no annual meeting was held in the preceding year, a stockholder’s notice must be so received not earlier than
the 120th day prior to such annual meeting and not later than the close of business on the later of (A) the 90th day prior to such annual
meeting and (B) the tenth day following the day on which notice of the date of such annual meeting was given or public disclosure of the
date of such annual meeting was made, whichever first occurs; or (ii) in the case of an election of directors at a special meeting of
stockholders, provided that the Board of Directors, the Chairman of the Board or the Chief Executive Officer has determined, in accordance
with Section 1.3, that directors shall be elected at such special meeting and the stockholders are not then prohibited from filling vacancies
or newly created directorships on the Board of Directors, and provided further that the nomination made by the stockholder is for one
of the director positions that the Board of Directors, the Chairman of the Board or the Chief Executive Officer, as the case may be, has
determined will be filled at such special meeting, not earlier than the 120th day prior to such special meeting and not later than the
close of business on the later of (x) the 90th day prior to such special meeting and (y) the tenth day following the day on which notice
of the date of such special meeting was given or public disclosure of the date of such special meeting was made, whichever first occurs.
In no event shall the adjournment or postponement of a meeting (or the public disclosure thereof) commence a new time period (or extend
any time period) for the giving of a stockholder’s notice.
The stockholder’s notice to the
Secretary shall set forth: (A) as to each proposed nominee (1) such person’s name, age, business address and, if known,
residence address, (2) such person’s principal occupation or employment, (3) the class and series and number of shares of
stock of the corporation that are, directly or indirectly, owned, beneficially or of record, by such person, (4) a description of
all direct and indirect compensation and other material monetary agreements, arrangements and understandings during the past three
years, and any other material relationships, between or among (x) the stockholder, the beneficial owner, if any, on whose behalf the
nomination is being made and the respective affiliates and associates of, or others acting in concert with, such stockholder and
such beneficial owner (each, a “Stockholder Associated Person”), on the one hand, and (y) each proposed nominee, and his
or her respective affiliates and associates, or others acting in concert with such nominee(s), on the other hand, including all
information that would be required to be disclosed pursuant to Item 404 of Regulation S-K if the stockholder making the nomination
and any beneficial owner on whose behalf the nomination is made or any Stockholder Associated Person were the
“registrant” for purposes of such Item and the proposed nominee were a director or executive officer of such registrant,
and (5) any other information concerning such person that must be disclosed as to nominees in proxy solicitations pursuant to
Regulation 14A under the Securities Exchange Act of 1934, as amended (the “Exchange Act”); and (B) as to the stockholder
giving the notice and the beneficial owner, if any, on whose behalf the nomination is being made (1) the name and address of such
stockholder, as they appear on the corporation’s books, and of such beneficial owner, (2) the class and series and number of
shares of stock of the corporation that are, directly or indirectly, owned, beneficially or of record, by such stockholder and such
beneficial owner, (3) a description of any material interest related to the nomination of such stockholder, such beneficial owner
and/or any Stockholder Associated Person, (4) a description of any agreement, arrangement or understanding between or among such
stockholder, such beneficial owner and/or any Stockholder Associated Person and each proposed nominee and any other person or
persons (including their names) pursuant to which the nomination(s) are being made or who may participate in the solicitation of
proxies or votes in favor of electing such nominee(s), (5) a description of any agreement, arrangement or understanding (including
any derivative or short positions, swaps, profit interests, options, warrants, convertible securities, stock appreciation or similar
rights, hedging transactions, and borrowed or loaned shares) that has been entered into by, or on behalf of, such stockholder, such
beneficial owner and/or any Stockholder Associated Person, the effect or intent of which is to mitigate loss to, manage risk or
benefit of share price changes for, or increase or decrease the voting power of, such stockholder, such beneficial owner and/or any
Stockholder Associated Person with respect to shares of stock of the corporation, (6) any other information relating to such
stockholder, such beneficial owner and/or any Stockholder Associated Person that would be required to be disclosed in a proxy
statement or other filings required to be made in connection with solicitations of proxies for the election of directors in a
contested election pursuant to Section 14 of the Exchange Act and the rules and regulations promulgated thereunder, (7) a
representation that such stockholder intends to appear in person or by proxy at the meeting to nominate the person(s) named in its
notice, (8) a representation that such stockholder, such beneficial owner and/or any Stockholder Associated Person has complied, and
will comply, with all applicable requirements of state law and the Exchange Act with respect to matters set forth in this Section
1.10, and (9) a representation whether such stockholder, such beneficial owner and/or any Stockholder Associated Person intends or
is part of a group that intends (x) to deliver a proxy statement and/or form of proxy to holders of at least the percentage of the
corporation’s outstanding capital stock reasonably believed by such stockholder or such beneficial owner to be sufficient to
elect the nominee (and such representation shall be included in any such proxy statement and form of proxy) and/or (y) otherwise to
solicit proxies or votes from stockholders in support of such nomination (and such representation shall be included in any such
solicitation materials). Not later than 10 days after the record date for the meeting, the information required by Items (A)(1)-(5)
and (B)(1)-(6) of the prior sentence shall be supplemented by the stockholder giving the notice to provide updated information as of
the record date. In addition, to be effective, the stockholder’s notice must also be accompanied by the written consent of the
proposed nominee to being named in the corporation’s proxy statement and accompanying proxy card as a nominee and to serve as
a director if elected. The corporation may require any proposed nominee to furnish such other information as the corporation may
reasonably require to determine, among other things, the eligibility of such proposed nominee to serve as a director of the
corporation or whether such nominee would be independent under applicable Securities and Exchange Commission and stock exchange
rules and the corporation’s publicly disclosed corporate governance guidelines. Notwithstanding anything herein to the
contrary, a stockholder shall not have complied with this Section 1.10(b) if the stockholder, beneficial owner, and/or any
Stockholder Associated Person solicits or does not solicit, as the case may be, proxies or votes in support of such
stockholder’s nominee in contravention of the representations with respect thereto required by this Section 1.10.
Such notice must also be accompanied by a representation
as to whether or not such stockholder, beneficial owner and/or any Stockholder Associated Person intends to solicit proxies in support
of any director nominees other than the corporation’s nominees in accordance with Rule 14a-19 under the Exchange Act, and, where
such stockholder, beneficial owner and/or Stockholder Associated Person intends to so solicit proxies, the notice and information required
by Rule 14a-19(b) under the Exchange Act. Notwithstanding anything to the contrary in these By-laws, unless otherwise required by law,
if any stockholder, beneficial owner and/or Stockholder Associated Person (i) provides notice pursuant to Rule 14a-19(b) under the Exchange
Act and (ii) subsequently fails to comply with the requirements of Rule 14a-19(a)(2) and Rule 14a-19(a)(3) under the Exchange Act (or
fails to timely provide reasonable evidence sufficient to satisfy the corporation that such stockholder, beneficial owner and/or Stockholder
Associated Person has met the requirements of Rule 14a-19(a)(3) promulgated under the Exchange Act in accordance with the following sentence),
then the nomination of each of the director nominees proposed by such stockholder, beneficial owner and/or Stockholder Associated Person
shall be disregarded, notwithstanding that proxies or votes in respect of the election of such proposed nominees may have been received
by the corporation (which proxies and votes shall be disregarded). Upon request by the corporation, if any stockholder, beneficial owner
and/or Stockholder Associated Person provides notice pursuant to Rule 14a-19(b) under the Exchange Act, such stockholder, beneficial owner
and/or Stockholder Associated Person shall deliver to the corporation, no later than five business days prior to the applicable meeting,
reasonable evidence that it has met the requirements of Rule 14a-19(a)(3) under the Exchange Act.
(c)
The chairman of any meeting (and, in advance of any meeting, the Board of Directors) shall have the power and duty to determine
whether a nomination was made in accordance with the provisions of this Section 1.10 (including whether the stockholder, beneficial owner
and/or any Stockholder Associated Person did or did not so solicit, as the case may be, proxies or votes in support of such stockholder’s
nominee in compliance with the representations with respect thereto required by this Section 1.10), and if the chairman (or the Board
of Directors) should determine that a nomination was not made in accordance with the provisions of this Section 1.10, the chairman shall
so declare to the meeting and such nomination shall not be brought before the meeting.
(d)
Except as otherwise required by law (including Rule 14a-19 under the Exchange Act), nothing in this Section 1.10 shall obligate
the corporation or the Board of Directors to include in any proxy statement, proxy card or other stockholder communication distributed
on behalf of the corporation or the Board of Directors the name of or other information with respect to any nominee for director submitted
by a stockholder.
(e) Notwithstanding
the foregoing provisions of this Section 1.10, unless otherwise required by law, if the stockholder (or a qualified representative
of the stockholder) does not appear at the meeting to present a nomination, such nomination shall not be brought before the meeting,
notwithstanding that proxies in respect of such nominee may have been received by the corporation. For purposes of this Section
1.10, to be considered a “qualified representative of the stockholder”, a person must be a duly authorized officer,
manager or partner of such stockholder or must be authorized by a written instrument executed by such stockholder or an electronic
transmission delivered by such stockholder to act for such stockholder as proxy at the meeting of stockholders and such person must
produce such written instrument or electronic transmission, or a reliable reproduction of the written instrument or electronic
transmission, at the meeting of stockholders.
(f)
For purposes of this Section 1.10, “public disclosure” shall include disclosure in a press release reported by the
Dow Jones News Service, Associated Press or comparable national news service or in a document publicly filed by the corporation with the
Securities and Exchange Commission pursuant to Section 13, 14 or 15(d) of the Exchange Act.
(g)
Unless the corporation elects otherwise, a stockholder’s notice to the corporation of nominations shall be in writing exclusively
(and not in an electronic transmission) and shall be delivered exclusively by hand (including, without limitation, overnight courier service)
or by certified or registered mail, return receipt requested, and the corporation shall not be required to accept delivery of any document
not in such written form or so delivered.
1.11
Notice of Business at Annual Meetings.
(a)
At any annual meeting of the stockholders, only such business shall be conducted as shall have been properly brought before the
meeting. To be properly brought before an annual meeting, business must be (1) specified in the notice of meeting (or any supplement thereto)
given by or at the direction of the Board of Directors, (2) otherwise properly brought before the meeting by or at the direction of the
Board of Directors, or (3) properly brought before the meeting by a stockholder. For business to be properly brought before an annual
meeting by a stockholder, (i) if such business relates to the nomination of a person for election as a director of the corporation, the
procedures in Section 1.10 must be complied with and (ii) if such business relates to any other matter, the business must constitute a
proper matter under Delaware law for stockholder action and the stockholder must (x) have given timely notice thereof in writing to the
Secretary in accordance with the procedures in, and otherwise complied with, Section 1.11(b), (y) be a stockholder of record who is entitled
to vote on such business on the date of the giving of such notice and on the record date for the determination of stockholders entitled
to vote at such annual meeting and (z) be entitled to vote at such annual meeting.
(b)
To be timely, a stockholder’s notice must be received in writing by the Secretary at the principal office of the corporation
not less than 90 days nor more than 120 days prior to the first anniversary of the preceding year’s annual meeting; provided, however,
that in the event that the date of the annual meeting is advanced by more than 30 days, or delayed by more than 60 days, from the first
anniversary of the preceding year’s annual meeting, or if no annual meeting was held in the preceding year, a stockholder’s
notice must be so received not earlier than the 120th day prior to such annual meeting and not later than the close of business
on the later of (A) the 90th day prior to such annual meeting and (B) the tenth day following the day on which notice of the
date of such annual meeting was given or public disclosure of the date of such annual meeting was made, whichever first occurs. In no
event shall the adjournment or postponement of an annual meeting (or the public disclosure thereof) commence a new time period (or extend
any time period) for the giving of a stockholder’s notice.
The stockholder’s notice to the Secretary shall set forth:
(A) as to each matter the stockholder proposes to bring before the annual meeting (1) a brief description of the business desired to
be brought before the annual meeting, (2) the text of the proposal (including the exact text of any resolutions proposed for
consideration and, in the event that such business includes a proposal to amend the By-laws, the exact text of the proposed
amendment), and (3) the reasons for conducting such business at the annual meeting, and (B) as to the stockholder giving the notice
and the beneficial owner, if any, on whose behalf the proposal is being made (1) the name and address of such stockholder, as they
appear on the corporation’s books, and of such beneficial owner, (2) the class and series and number of shares of stock of the
corporation that are, directly or indirectly, owned, beneficially or of record, by such stockholder and such beneficial owner, (3) a
description of any material interest of such stockholder, such beneficial owner, and/or any Stockholder Associated Person in the
business proposed to be brought before the annual meeting, (4) a description of any agreement, arrangement or understanding between
or among such stockholder, such beneficial owner, any Stockholder Associated Person and any other person or persons (including their
names) in connection with the proposal of such business or who may participate in the solicitation of proxies in favor of such
proposal, (5) a description of any agreement, arrangement or understanding (including any derivative or short positions, swaps,
profit interests, options, warrants, convertible securities, stock appreciation or similar rights, hedging transactions, and
borrowed or loaned shares) that has been entered into by, or on behalf of, such stockholder, such beneficial owner and/or any
Stockholder Associated Person, the effect or intent of which is to mitigate loss to, manage risk or benefit of share price changes
for, or increase or decrease the voting power of, such stockholder, such beneficial owner and/or any Stockholder Associated Person
with respect to shares of stock of the corporation, (6) any other information relating to such stockholder, such beneficial owner
and/or any Stockholder Associated Person that would be required to be disclosed in a proxy statement or other filings required to be
made in connection with solicitations of proxies for the business proposed pursuant to Section 14 of the Exchange Act and the rules
and regulations promulgated thereunder, (7) a representation that such stockholder intends to appear in person or by proxy at the
annual meeting to bring such business before the meeting, (8) a representation that such stockholder, such beneficial owner and/or
any Stockholder Associated Person has complied, and will comply, with all applicable requirements of state law and the Exchange Act
with respect to matters set forth in this Section 1.11, and (9) a representation whether such stockholder, such beneficial owner
and/or any Stockholder Associated Person intends or is part of a group that intends (x) to deliver a proxy statement and/or form of
proxy to holders of at least the percentage of the corporation’s outstanding capital stock required to approve or adopt the
proposal (and such representation shall be included in any such proxy statement and form of proxy) and/or (y) otherwise to solicit
proxies or votes from stockholders in support of such proposal (and such representation shall be included in any such solicitation
materials). Not later than 10 days after the record date for the meeting, the information required by Items (A)(3) and (B)(1)-(6) of
the prior sentence shall be supplemented by the stockholder giving the notice to provide updated information as of the record date.
Notwithstanding anything in these By-laws to the contrary, no business shall be conducted at any annual meeting of stockholders
except in accordance with the procedures in this Section 1.11; provided that any stockholder proposal that complies with Rule 14a-8
of the proxy rules (or any successor provision) promulgated under the Exchange Act and is to be included in the corporation’s
proxy statement for an annual meeting of stockholders shall be deemed to comply with the notice requirements of this Section 1.11.
Notwithstanding anything herein to the contrary, a stockholder shall not have complied with this Section 1.11(b) if the stockholder,
beneficial owner and/or any Stockholder Associated Person solicits or does not solicit, as the case may be, proxies or votes in
support of such stockholder’s proposal in contravention of the representations with respect thereto required by this Section
1.11.
(c)
The chairman of any annual meeting (and, in advance of any annual meeting, the Board of Directors) shall have the power and duty
to determine whether business was properly brought before the annual meeting in accordance with the provisions of this Section 1.11 (including
whether the stockholder, beneficial owner and/or any Stockholder Associated Person did or did not so solicit, as the case may be, proxies
or votes in support of such stockholder’s proposal in compliance with the representation with respect thereto required by this Section
1.11), and if the chairman (or the Board of Directors) should determine that business was not properly brought before the annual meeting
in accordance with the provisions of this Section 1.11, the chairman shall so declare to the meeting and such business shall not be brought
before the annual meeting.
(d)
Except as otherwise required by law, nothing in this Section 1.11 shall obligate the corporation or the Board of Directors to include
in any proxy statement or other stockholder communication distributed on behalf of the corporation or the Board of Directors information
with respect to any proposal submitted by a stockholder.
(e)
Notwithstanding the foregoing provisions of this Section 1.11, unless otherwise required by law, if the stockholder (or a qualified
representative of the stockholder) does not appear at the annual meeting to present business, such business shall not be considered, notwithstanding
that proxies in respect of such business may have been received by the corporation.
(f)
For purposes of this Section 1.11, the terms “qualified representative of the stockholder” and “public disclosure”
shall have the same meaning as in Section 1.10.
(g)
Unless the corporation elects otherwise, a stockholder’s notice to the corporation of other business shall be in writing
exclusively (and not in an electronic transmission) and shall be delivered exclusively by hand (including, without limitation overnight
courier service) or by certified or registered mail, return receipt requested, and the corporation shall not be required to accept delivery
of any document not in such written form or so delivered.
1.12
Conduct of Meetings.
(a)
Unless otherwise provided by the Board of Directors, meetings of stockholders shall be presided over by the Chairman of the Board,
if any, or in the Chairman’s absence by the Vice Chairman of the Board, if any, or in the Vice Chairman’s absence by the Chief
Executive Officer, or in the Chief Executive Officer’s absence, by the President, or in the President’s absence by a Vice
President, or in the absence of all of the foregoing persons by a chairman designated by the Board of Directors. The Secretary shall act
as secretary of the meeting, but in the Secretary’s absence the chairman of the meeting may appoint any person to act as secretary
of the meeting.
(b)
The Board of Directors may adopt by resolution such rules, regulations and procedures for the conduct of any meeting of stockholders
of the corporation as it shall deem appropriate including, without limitation, such guidelines and procedures as it may deem appropriate
regarding the participation by means of remote communication of stockholders and proxy holders not physically present at a meeting. Except
to the extent inconsistent with such rules, regulations and procedures as adopted by the Board of Directors, the chairman of any meeting
of stockholders shall have the right and authority to convene and (for any or no reason) to recess and/or adjourn the meeting and prescribe
such rules, regulations and procedures and to do all such acts as, in the judgment of such chairman, are appropriate for the proper conduct
of the meeting. Such rules, regulations or procedures, whether adopted by the Board of Directors or prescribed by the chairman of the
meeting, may include, without limitation, the following: (i) the establishment of an agenda or order of business for the meeting; (ii)
rules and procedures for maintaining order at the meeting and the safety of those present; (iii) limitations on attendance at or participation
in the meeting to stockholders entitled to vote at the meeting, their duly authorized and constituted proxies or such other persons as
shall be determined by the Board of Directors or the chairman of any meeting; (iv) restrictions on entry to the meeting after the time
fixed for the commencement thereof; and (v) limitations on the time allotted to questions or comments by participants. Unless and to the
extent determined by the Board of Directors or the chairman of the meeting, meetings of stockholders shall not be required to be held
in accordance with the rules of parliamentary procedure.
(c)
The chairman of the meeting shall announce at the meeting when the polls for each matter to be voted upon at the meeting will be
opened and closed. After the polls close, no ballots, proxies or votes or any revocations or changes thereto may be accepted.
(d)
In advance of any meeting of stockholders, the corporation shall appoint one or more inspectors of election to act at the meeting
and make a written report thereof. One or more other persons may be designated as alternate inspectors to replace any inspector who fails
to act. If no inspector or alternate is present, ready and willing to act at a meeting of stockholders, the chairman of the meeting shall
appoint one or more inspectors to act at the meeting. Unless otherwise required by law, inspectors may be officers, employees or agents
of the corporation. Each inspector, before entering upon the discharge of such inspector’s duties, shall take and sign an oath faithfully
to execute the duties of inspector with strict impartiality and according to the best of such inspector’s ability. The inspector
shall have the duties prescribed by law and, when the vote is completed, shall make a certificate of the result of the vote taken and
of such other facts as may be required by law. Every vote taken by ballots shall be counted by a duly appointed inspector or duly appointed
inspectors.
1.13
No Action by Consent in Lieu of a Meeting. Except as otherwise provided by the Certificate of Incorporation, stockholders
of the corporation may not take any action by consent in lieu of a meeting of stockholders.
ARTICLE II
DIRECTORS
2.1
General Powers. The business and affairs of the corporation shall be managed by or under the direction of a Board of Directors,
who may exercise all of the powers of the corporation except as otherwise provided by law or the Certificate of Incorporation.
2.2
Number, Election and Qualification. Subject to the rights of holders of any series of Preferred Stock to elect directors,
the number of directors of the corporation shall be established by the Board of Directors. Election of directors need not be by written
ballot. Directors need not be stockholders of the corporation.
2.3
Chairman of the Board; Vice Chairman of the Board. The Board of Directors may appoint from its members a Chairman of the
Board and a Vice Chairman of the Board, neither of whom need be an employee or officer of the corporation. If the Board of Directors appoints
a Chairman of the Board, such Chairman shall perform such duties and possess such powers as are assigned by the Board of Directors and,
if the Chairman of the Board is also designated as the corporation’s Chief Executive Officer, shall have the powers and duties of
the Chief Executive Officer prescribed in Section 3.7 of these By-laws. If the Board of Directors appoints a Vice Chairman of the Board,
such Vice Chairman shall perform such duties and possess such powers as are assigned by the Board of Directors or the Chairman of the
Board. Unless otherwise provided by the Board of Directors, the Chairman of the Board or, in the Chairman’s absence, the Vice Chairman
of the Board, if any, shall preside at all meetings of the Board of Directors.
2.4
Classes of Directors. Subject to the rights of holders of any series of Preferred Stock to elect directors, the Board of
Directors shall be and is divided into three classes: Class I, Class II and Class III. Each class shall consist, as nearly as may be possible,
of one-third of the total number of directors constituting the entire Board of Directors. The allocation of directors among classes shall
be determined by resolution of the Board of Directors.
2.5
Terms of Office. Subject to the rights of holders of any series of Preferred Stock to elect directors, each director shall
serve for a term ending on the date of the third annual meeting of stockholders following the annual meeting of stockholders at which
such director was elected; provided that the term of each director shall continue until the election and qualification of his or her successor
and be subject to his or her earlier death, resignation or removal.
2.6
Quorum. The greater of (a) a majority of the directors at any time in office and (b) one-third of the number of directors
established by the Board of Directors pursuant to Section 2.2 of these By-laws shall constitute a quorum of the Board of Directors. If
at any meeting of the Board of Directors there shall be less than such a quorum, a majority of the directors present may adjourn the meeting
from time to time without further notice other than announcement at the meeting, until a quorum shall be present.
2.7
Action at Meeting. Every act or decision done or made by a majority of the directors present at a meeting duly held at
which a quorum is present shall be regarded as the act of the Board of Directors, unless a greater number is required by law or by the
Certificate of Incorporation.
2.8
Removal. Subject to the rights of holders of any series of Preferred Stock, directors of the corporation may be removed
only for cause and only by the affirmative vote of the holders of at least 75% of the votes which all the stockholders would be entitled
to cast in any annual election of directors or class of directors.
2.9
Vacancies. Subject to the rights of holders of any series of Preferred Stock, any vacancy or newly-created directorship
on the Board of Directors, however occurring, shall be filled only by vote of a majority of the directors then in office, although less
than a quorum, or by a sole remaining director and shall not be filled by the stockholders. A director elected to fill a vacancy shall
hold office until the next election of the class for which such director shall have been chosen, subject to the election and qualification
of a successor or until such director’s earlier death, resignation or removal.
2.10
Resignation. Any director may resign by delivering a resignation in writing or by electronic transmission to the corporation
at its principal office or to the Chairman of the Board, the Chief Executive Officer, the President or the Secretary. Such resignation
shall be effective upon receipt unless it is specified to be effective at some later time or upon the happening of some later event.
2.11
Regular Meetings. Regular meetings of the Board of Directors may be held without notice at such time and place as shall
be determined from time to time by the Board of Directors; provided that any director who is absent when such a determination is made
shall be given notice of the determination. A regular meeting of the Board of Directors may be held without notice immediately after and
at the same place as the annual meeting of stockholders.
2.12
Special Meetings. Special meetings of the Board of Directors may be held at any time and place designated in a call by the
Chairman of the Board, the Chief Executive Officer, the President, two or more directors, or by one director in the event that there is
only a single director in office.
2.13
Notice of Special Meetings. Notice of the time and place of any special meeting of directors shall be given to each director
by the Secretary or by the officer or one of the directors calling the meeting. Notice shall be duly given to each director (a) in person,
by telephone or by electronic transmission at least 24 hours in advance of the meeting, (b) by delivering written notice by hand to such
director’s last known business or home address at least 48 hours in advance of the meeting, or (c) by sending written notice by
first-class mail to such director’s last known business or home address at least 72 hours in advance of the meeting. A notice or
waiver of notice of a meeting of the Board of Directors need not specify the purposes of the meeting.
2.14
Meetings by Conference Communications Equipment. Directors may participate in meetings of the Board of Directors or any
committee thereof by means of conference telephone or other communications equipment by means of which all persons participating in the
meeting can hear each other, and participation by such means shall constitute presence in person at such meeting.
2.15
Action by Consent. Any action required or permitted to be taken at any meeting of the Board of Directors or of any committee
thereof may be taken without a meeting, if all members of the Board of Directors or committee, as the case may be, consent to the action
in writing or by electronic transmission. After an action is taken, the consent or consents relating thereto shall be filed with the minutes
of proceedings of the Board of Directors or committee in the same paper or electronic form as the minutes are maintained.
2.16
Committees. The Board of Directors may designate one or more committees, each committee to consist of one or more of the
directors of the corporation with such lawfully delegable powers and duties as the Board of Directors thereby confers, to serve at the
pleasure of the Board of Directors. The Board of Directors may designate one or more directors as alternate members of any committee,
who may replace any absent or disqualified member at any meeting of the committee. In the absence or disqualification of a member of a
committee, the member or members of the committee present at any meeting and not disqualified from voting, whether or not such member
or members constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in the place of
any such absent or disqualified member. Any such committee, to the extent provided in the resolution of the Board of Directors and subject
to the provisions of law, shall have and may exercise all the powers and authority of the Board of Directors in the management of the
business and affairs of the corporation and may authorize the seal of the corporation to be affixed to all papers that may require it.
Each such committee shall keep minutes and make such reports as the Board of Directors may from time to time request. Except as the Board
of Directors may otherwise determine, any committee may make rules for the conduct of its business, but unless otherwise provided by the
directors or in such rules, its business shall be conducted as nearly as possible in the same manner as is provided in these By-laws for
the Board of Directors. Except as otherwise provided in the Certificate of Incorporation, these By-laws, or the resolution of the Board
of Directors designating the committee, a committee may create one or more subcommittees, each subcommittee to consist of one or more
members of the committee, and delegate to a subcommittee any or all of the powers and authority of the committee.
2.17
Emergency By-laws. In the event of any emergency, disaster, catastrophe or other similar emergency condition of a type described
in Section 110(a) of the General Corporation Law of the State of Delaware (an “Emergency”), notwithstanding any different
or conflicting provisions in the General Corporation Law of the State of Delaware, the Certificate of Incorporation or these By-laws,
during such Emergency:
(a) Notice.
A meeting of the Board of Directors or a committee thereof may be called by any director, the Chairman of the Board, the Chief
Executive Officer, the President or the Secretary by such means as, in the judgment of the person calling the meeting, may be
feasible at the time, and notice of any such meeting of the Board of Directors or any committee may be given, in the judgment of the
person calling the meeting, only to such directors as it may be feasible to reach at the time and by such means as may be feasible
at the time. Such notice shall be given at such time in advance of the meeting as, in the judgment of the person calling the
meeting, circumstances permit.
(b)
Quorum. The director or directors in attendance at a meeting called in accordance with Section 2.17(a) shall constitute
a quorum.
(c)
Liability. No officer, director or employee acting in accordance with this Section 2.17 shall be liable except for willful
misconduct. No amendment, repeal or change to this Section 2.17 shall modify the prior sentence with regard to actions taken prior to
the time of such amendment, repeal or change.
ARTICLE III
OFFICERS
3.1
Titles. The officers of the corporation shall consist of a Chief Executive Officer, a President, a Secretary, a Treasurer
and such other officers with such other titles as the Board of Directors shall determine, including one or more Vice Presidents, Assistant
Treasurers and Assistant Secretaries. The Board of Directors may appoint such other officers as it may deem appropriate.
3.2
Election. The Chief Executive Officer, President, Treasurer and Secretary shall be elected annually by the Board of Directors
at its first meeting following the annual meeting of stockholders. Other officers may be appointed by the Board of Directors at such meeting
or at any other meeting.
3.3
Qualification. No officer need be a stockholder. Any two or more offices may be held by the same person.
3.4
Tenure. Except as otherwise provided by law, the Certificate of Incorporation or these By-laws, each officer shall hold
office until such officer’s successor is elected and qualified, unless a different term is specified in the resolution electing
or appointing such officer, or until such officer’s earlier death, resignation or removal.
3.5 Resignation
and Removal. Any officer may resign by delivering a resignation in writing or by electronic transmission to the corporation at
its principal office or to the Chief Executive Officer, the President or the Secretary. Such resignation shall be effective upon
receipt unless it is specified to be effective at some later time or upon the happening of some later event. Any officer may be
removed at any time, with or without cause, by the Board of Directors. Except as the Board of Directors may otherwise determine, no
officer who resigns or is removed shall have any right to any compensation as an officer for any period following such
officer’s resignation or removal, or any right to damages on account of such removal, whether such officer’s
compensation be by the month or by the year or otherwise, unless such compensation is expressly provided for in a duly authorized
written agreement with the corporation.
3.6
Vacancies. The Board of Directors may fill any vacancy occurring in any office for any reason and may, in its discretion,
leave unfilled for such period as it may determine any offices other than those of Chief Executive Officer, President, Treasurer and Secretary.
Each such successor shall hold office for the unexpired term of such officer’s predecessor and until a successor is elected and
qualified, or until such officer’s earlier death, resignation or removal.
3.7
President; Chief Executive Officer. Unless the Board of Directors has designated another person as the corporation’s
Chief Executive Officer, the President shall be the Chief Executive Officer of the corporation. The Chief Executive Officer shall have
general charge and supervision of the business of the corporation subject to the direction of the Board of Directors, and shall perform
all duties and have all powers that are commonly incident to the office of the chief executive or that are delegated to such officer by
the Board of Directors. The President shall perform such other duties and shall have such other powers as the Board of Directors or the
Chief Executive Officer (if the President is not the Chief Executive Officer) may from time to time prescribe. In the event of the absence,
inability or refusal to act of the Chief Executive Officer or the President (if the President is not the Chief Executive Officer), the
Vice President (or if there shall be more than one, the Vice Presidents in the order determined by the Board of Directors) shall perform
the duties of the Chief Executive Officer and when so performing such duties shall have all the powers of and be subject to all the restrictions
upon the Chief Executive Officer.
3.8
Vice Presidents. Each Vice President shall perform such duties and possess such powers as the Board of Directors or the
Chief Executive Officer may from time to time prescribe. The Board of Directors may assign to any Vice President the title of Executive
Vice President, Senior Vice President or any other title selected by the Board of Directors.
3.9
Secretary and Assistant Secretaries. The Secretary shall perform such duties and shall have such powers as the Board of
Directors or the Chief Executive Officer may from time to time prescribe. In addition, the Secretary shall perform such duties and have
such powers as are incident to the office of the secretary, including without limitation the duty and power to give notices of all meetings
of stockholders and special meetings of the Board of Directors, to attend all meetings of stockholders and the Board of Directors and
keep a record of the proceedings, to maintain a stock ledger and prepare lists of stockholders and their addresses as required, to be
custodian of corporate records and the corporate seal and to affix and attest to the same on documents.
Any Assistant Secretary shall perform such duties
and possess such powers as the Board of Directors, the Chief Executive Officer or the Secretary may from time to time prescribe. In the
event of the absence, inability or refusal to act of the Secretary, the Assistant Secretary (or if there shall be more than one, the Assistant
Secretaries in the order determined by the Board of Directors) shall perform the duties and exercise the powers of the Secretary.
In the absence of the Secretary or any Assistant
Secretary at any meeting of stockholders or directors, the chairman of the meeting shall designate a temporary secretary to keep a record
of the meeting.
3.10
Treasurer and Assistant Treasurers. The Treasurer shall perform such duties and shall have such powers as may from time
to time be assigned by the Board of Directors or the Chief Executive Officer. In addition, the Treasurer shall perform such duties and
have such powers as are incident to the office of treasurer, including without limitation the duty and power to keep and be responsible
for all funds and securities of the corporation, to deposit funds of the corporation in depositories selected in accordance with these
By-laws, to disburse such funds as ordered by the Board of Directors, to make proper accounts of such funds, and to render as required
by the Board of Directors statements of all such transactions and of the financial condition of the corporation.
The Assistant Treasurers shall perform such duties
and possess such powers as the Board of Directors, the Chief Executive Officer or the Treasurer may from time to time prescribe. In the
event of the absence, inability or refusal to act of the Treasurer, the Assistant Treasurer (or if there shall be more than one, the Assistant
Treasurers in the order determined by the Board of Directors) shall perform the duties and exercise the powers of the Treasurer.
3.11
Salaries. Officers of the corporation shall be entitled to such salaries, compensation or reimbursement as shall be fixed
or allowed from time to time by the Board of Directors.
3.12
Delegation of Authority. The Board of Directors may from time to time delegate the powers or duties of any officer to any
other officer or agent, notwithstanding any provision hereof.
ARTICLE IV
CAPITAL STOCK
4.1
Issuance of Stock. Subject to the provisions of the Certificate of Incorporation, the whole or any part of any unissued
balance of the authorized capital stock of the corporation or the whole or any part of any shares of the authorized capital stock of the
corporation held in the corporation’s treasury may be issued, sold, transferred or otherwise disposed of by vote of the Board of
Directors in such manner, for such lawful consideration and on such terms as the Board of Directors may determine.
4.2 Stock
Certificates; Uncertificated Shares. The shares of the corporation shall be represented by certificates, provided that the Board
of Directors may provide by resolution or resolutions that some or all of any or all classes or series of the corporation’s
stock shall be uncertificated shares. Any such resolution shall not apply to shares represented by a certificate until such
certificate is surrendered to the corporation. Every holder of stock of the corporation represented by certificates shall be
entitled to have a certificate, in such form as may be prescribed by law and by the Board of Directors, representing the number of
shares held by such holder registered in certificate form. Each such certificate shall be signed in a manner that complies with
Section 158 of the General Corporation Law of the State of Delaware by or in the name of any two officers of the corporation, each
of whom is an authorized officer for this purpose.
Each certificate representing shares of stock that
are subject to any restriction on transfer pursuant to the Certificate of Incorporation, these By-laws, applicable securities laws or
any agreement among any number of stockholders or among such holders and the corporation shall have conspicuously noted on the face or
back of the certificate either the full text of the restriction or a statement of the existence of such restriction.
If the corporation shall be authorized to issue
more than one class of stock or more than one series of any class, the powers, designations, preferences and relative participating, optional
or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences
and/or rights shall be set forth in full or summarized on the face or back of each certificate representing shares of such class or series
of stock, provided that in lieu of the foregoing requirements there may be set forth on the face or back of each certificate representing
shares of such class or series of stock a statement that the corporation will furnish without charge to each stockholder who so requests
a copy of the full text of the powers, designations, preferences and relative, participating, optional or other special rights of each
class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights.
Within a reasonable time after the issuance or
transfer of uncertificated shares, the registered owner thereof shall be given a notice, in writing or by electronic transmission, containing
the information required to be set forth or stated on certificates pursuant to Sections 151, 156, 202(a) or 218(a) of the General Corporation
Law of the State of Delaware or, with respect to Section 151 of the General Corporation Law of the State of Delaware, a statement that
the corporation will furnish without charge to each stockholder who so requests the powers, designations, preferences and relative participating,
optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such
preferences and/or rights.
4.3 Transfers.
Shares of stock of the corporation shall be transferable in the manner prescribed by law and in these By-laws. Transfers of shares
of stock of the corporation shall be made only on the books of the corporation or by transfer agents designated to transfer shares
of stock of the corporation. Subject to applicable law, shares of stock represented by certificates shall be transferred only on the
books of the corporation by the surrender to the corporation or its transfer agent of the certificate representing such shares
properly endorsed or accompanied by a written assignment or power of attorney properly executed, and with such proof of authority or
the authenticity of signature as the corporation or its transfer agent may reasonably require. Uncertificated shares may be
transferred by delivery of a written assignment or power of attorney properly executed, and with such proof of authority or the
authenticity of signature as the corporation or its transfer agent may reasonably require. Except as may be otherwise required by
law, the Certificate of Incorporation or these By-laws, the corporation shall be entitled to treat the record holder of stock as
shown on its books as the owner of such stock for all purposes, including the payment of dividends and the right to vote with
respect to such stock, regardless of any transfer, pledge or other disposition of such stock until the shares have been transferred
on the books of the corporation in accordance with the requirements of these By-laws.
4.4
Lost, Stolen or Destroyed Certificates. The corporation may issue a new certificate of stock or uncertificated shares in
place of any previously issued certificate alleged to have been lost, stolen or destroyed, upon such terms and conditions as the corporation
may prescribe, including the presentation of reasonable evidence of such loss, theft or destruction and the giving of such indemnity and
posting of such bond as the corporation may require for the protection of the corporation or any transfer agent or registrar.
4.5
Record Date. The Board of Directors may fix in advance a date as a record date for the determination of the stockholders
entitled to notice of and/or to vote at any meeting of stockholders, or entitled to receive payment of any dividend or other distribution
or allotment of any rights in respect of any change, conversion or exchange of stock, or for the purpose of any other lawful action. Such
record date shall not precede the date on which the resolution fixing the record date is adopted, and such record date shall not be more
than 60 nor less than 10 days before the date of such meeting, nor more than 60 days prior to any other action to which such record date
relates.
If no record date is fixed, the record date for
determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day before
the day on which notice is given, or, if notice is waived, at the close of business on the day before the day on which the meeting is
held. If no record date is fixed, the record date for determining stockholders for any other purpose shall be at the close of business
on the day on which the Board of Directors adopts the resolution relating to such purpose.
A determination of stockholders of record entitled
to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board
of Directors may fix a new record date for the adjourned meeting.
4.6
Regulations. The issue, transfer, conversion and registration of shares of stock of the corporation shall be governed by
such other regulations as the Board of Directors may establish.
ARTICLE V
GENERAL PROVISIONS
5.1
Fiscal Year. Except as from time to time otherwise designated by the Board of Directors, the fiscal year of the corporation
shall begin on the first day of January of each year and end on the last day of December in each year.
5.2
Corporate Seal. The corporate seal shall be in such form as shall be approved by the Board of Directors.
5.3
Waiver of Notice. Whenever notice is required to be given by law, the Certificate of Incorporation or these By-laws, a
written waiver signed by the person entitled to notice, or a waiver by electronic transmission by the person entitled to notice, whether
before, at or after the time of the event for which notice is to be given, shall be deemed equivalent to notice required to be given to
such person. Neither the business nor the purpose of any meeting need be specified in any such waiver. Attendance of a person at a meeting
shall constitute a waiver of notice of such meeting, except when the person attends a meeting for the express purpose of objecting at
the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened.
5.4
Voting of Securities. Except as the Board of Directors may otherwise designate, the Chief Executive Officer, the President,
the Secretary or the Treasurer may waive notice of, vote, or appoint any person or persons to vote, on behalf of the corporation at, and
act as, or appoint any person or persons to act as, proxy or attorney-in-fact for this corporation (with or without power of substitution)
at, any meeting of stockholders or securityholders of any other entity, the securities of which may be held by this corporation, or with
respect to the execution of any written or electronic consent in the name of the corporation as a holder of such securities.
5.5
Evidence of Authority. A certificate by the Secretary, or an Assistant Secretary, or a temporary Secretary, as to any action
taken by the stockholders, directors, a committee or any officer or representative of the corporation shall as to all persons who rely
on the certificate in good faith be conclusive evidence of such action.
5.6
Certificate of Incorporation. All references in these By-laws to the Certificate of Incorporation shall be deemed to refer
to the Certificate of Incorporation of the corporation, as amended and/or restated and in effect from time to time, including the terms
of any certificate of designations of any series of preferred stock.
5.7
Severability. Any determination that any provision of these By-laws is for any reason inapplicable, illegal or ineffective
shall not affect or invalidate any other provision of these By-laws.
5.8
Pronouns. All pronouns used in these By-laws shall be deemed to refer to the masculine, feminine or neuter, singular or
plural, as the identity of the person or persons may require.
ARTICLE VI
AMENDMENTS
These By-laws may be altered, amended or repealed,
in whole or in part, or new By-laws may be adopted by the Board of Directors or by the stockholders as provided in the Certificate of
Incorporation.
Exhibit 23.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM
We consent to the incorporation by
reference in this Registration Statement No. 333-270263 on Form S-3 of our report dated March 3, 2023
relating to the financial statements of Kala Pharmaceuticals, Inc., appearing in the Annual Report on Form 10-K
of Kala Pharmaceuticals, Inc. for the year ended December 31, 2022. We also consent to the reference to us under the heading
"Experts" in such Registration Statement.
/s/ Deloitte & Touche LLP
Boston, Massachusetts
May 9, 2023
Exhibit 107
Calculation of Filing Fee Tables
Form S-3
(Form Type)
Kala Pharmaceuticals, Inc.
(Exact Name of Registrant as Specified in its Charter)
Table 1: Newly Registered and Carry Forward
Securities
| |
Security
Type |
Security
Class
Title |
Fee
Calculation
or Carry
Forward
Rule |
Amount
Registered |
Proposed
Maximum Offering
Price Per Unit |
Maximum
Aggregate Offering Price |
Fee
Rate |
Amount
of
Registration
Fee |
Carry
Forward
Form Type |
Carry
Forward
File Number |
Carry
Forward
Initial
Effective
Date |
Filing
Fee
Previously
Paid In
Connection
with Unsold
Securities to be
Carried Forward |
| Newly
Registered Securities |
| Fees
to Be Paid |
Debt |
Debt
Securities |
(1) |
(1) |
(1) |
(1) |
(1) |
(1) |
- |
- |
- |
- |
| Fees
to Be Paid |
Equity |
Common
Stock, $0.001 par value per share |
(1) |
(1) |
(1) |
(1) |
(1) |
(1) |
- |
- |
- |
- |
| Fees
to Be Paid |
Equity |
Preferred
Stock, $0.001 par value per share |
(1) |
(1) |
(1) |
(1) |
(1) |
(1) |
- |
- |
- |
- |
| Fees
to Be Paid |
Other |
Depositary
Shares (2) |
(1) |
(1) |
(1) |
(1) |
(1) |
(1) |
- |
- |
- |
- |
| Fees
to Be Paid |
Other |
Subscription
Rights |
(1) |
(1) |
(1) |
(1) |
(1) |
(1) |
- |
- |
- |
- |
| Fees
to Be Paid |
Other |
Units
(3) |
(1) |
(1) |
(1) |
(1) |
(1) |
(1) |
- |
- |
- |
- |
| Fees
to Be Paid |
Other |
Warrants
|
(1) |
(1) |
(1) |
(1) |
(1) |
(1) |
- |
- |
- |
- |
| Fees
to Be Paid |
Unallocated
(Universal)
Shelf |
Unallocated
(Universal)
Shelf |
457(o) |
(1) |
(1) |
$3,584,454
(1) (4) |
0.0001102 |
$395.01 |
- |
- |
- |
- |
| Fees
Previously Paid |
Unallocated
(Universal)
Shelf |
Unallocated
(Universal)
Shelf |
457(o) |
(1) |
(1) |
$76,414,659
(1) (4) |
0.0001102 |
$8,420.90 |
- |
- |
- |
- |
| Carry
Forward Securities |
| Carry
Forward Securities |
Debt |
Debt
Securities |
415(a)(6) |
(4) |
|
|
|
|
S-3 |
333-238087 |
May
19, 2020 |
|
| Carry
Forward Securities |
Equity |
Common
Stock, $0.001 par value per share |
415(a)(6) |
(4) |
|
|
|
|
S-3 |
333-238087 |
May
19, 2020 |
|
| Carry
Forward Securities |
Equity |
Preferred
Stock, $0.001 par value per share |
415(a)(6) |
(4) |
|
|
|
|
S-3 |
333-238087 |
May
19, 2020 |
|
| Carry
Forward Securities |
Other |
Depositary
Shares (2) |
415(a)(6) |
(4) |
|
|
|
|
S-3 |
333-238087 |
May
19, 2020 |
|
| Carry
Forward Securities |
Other |
Units
(3) |
415(a)(6) |
(4) |
|
|
|
|
S-3 |
333-238087 |
May
19, 2020 |
|
| Carry
Forward Securities |
Other |
Warrants |
415(a)(6) |
(4) |
|
|
|
|
S-3 |
333-238087 |
May
19, 2020 |
|
| Carry
Forward Securities |
Unallocated
(Universal) Shelf |
Unallocated
(Universal) Shelf |
415(a)(6) |
(4) |
|
$270,000,887
(4) |
|
|
S-3 |
333-238087 |
May
19, 2020 |
$35,046.12 |
| |
Total
Offering Amounts |
|
$350,000,000
(1)(4) |
|
$8,815.91 |
|
|
|
|
| |
Total
Fees Previously Paid |
|
|
|
$8,420.90(4) |
|
|
|
|
| |
Total
Fee Offsets |
|
|
|
- |
|
|
|
|
| |
Net
Fee Due |
|
|
|
$395.01 |
|
|
|
|
| (1) | Pursuant
to Instruction 2.A(iii)(b) of Item 16(b) of Form S-3, this information is not required to
be included. An indeterminate amount of the securities of each identified class is being
registered as may from time to time be offered under this registration statement at indeterminate
prices, along with an indeterminate number of securities that may be issued upon exercise,
settlement, exchange or conversion of securities offered or sold under this registration
statement, as shall have an aggregate initial offering price up to $350,000,000. Pursuant
to Rule 416 under the Securities Act of 1933, as amended (the “Securities Act”),
this registration statement also covers any additional securities that may be offered or
issued in connection with any stock split, stock dividend or pursuant to anti-dilution provisions
of any of the securities. Separate consideration may or may not be received for securities
that are issuable upon conversion, exercise or exchange of other securities. In addition,
the total amount to be registered and the proposed maximum aggregate offering price are estimated
solely for the purpose of calculating the registration fee pursuant to Rule 457(o) under
the Securities Act. |
| (2) | Each
depositary share will be issued under a deposit agreement, will represent an interest in
a fractional share or multiple shares of preferred stock and will be evidenced by a depositary
receipt. |
| (3) | Units
may be issued under a unit agreement and will represent an interest in one or more securities
registered under this registration statement including shares of common stock or preferred
stock, debt securities, depositary shares or warrants, in any combination, which may or may
not be separable from one another. |
| (4) | Pursuant
to Rule 415(a)(6) under the Securities Act, the securities registered pursuant to this registration
statement include $270,000,887 of unsold securities (the “Unsold Securities”)
previously registered pursuant to the Registration Statement on Form S-3 (File No. 333-238087),
which was declared effective on May 19, 2020 (the “Prior Registration Statement”).
In connection with the filing of the Prior Registration Statement, the registrant paid a
filing fee of $35,046.12 associated with the offering of the Unsold Securities (based on
the filing fee rate in effect at the time of the filing of the Prior Registration Statement).
The filing fee associated with the offering of the Unsold Securities is hereby carried forward
to be applied to the Unsold Securities registered hereunder, and no additional filing fee
is due with respect to the Unsold Securities in connection with the filing of this Registration
Statement. The registrant is also registering new securities on this registration statement
with an aggregate initial offering price of $79,999,113 (the “New Securities”),
which aggregate offering price is not specified as to each class of securities. The registrant
previously paid a registration fee of $8,420.90 in respect of the New Securities with a proposed
maximum aggregate offering price of $76,414,659 in connection with the initial filing of
this registration statement, and an additional filing fee of $395.01 with respect to the
New Securities is being paid concurrently with the filing of this Amendment No. 1 to the
registration statement. To the extent that, after the filing date hereof and prior to the
effectiveness of this registration statement, the registrant sells any Unsold Securities
pursuant to the Prior Registration Statement, the registrant will identify in a pre-effective
amendment to this registration statement the updated number of Unsold Securities from the
Prior Registration Statement to be included in this registration statement pursuant to Rule
415(a)(6) and the updated amount of new securities to be registered on this registration
statement. Pursuant to Rule 415(a)(6), the offering of securities under the Prior Registration
Statement will be deemed terminated as of the date of effectiveness of this registration
statement. |
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