CASI CASI Pharmaceuticals Inc

 

As filed with the Securities and Exchange Commission on December 20, 2024

Registration No. 333-    

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM F-3

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

 

 

CASI Pharmaceuticals, Inc.

(Exact Name of Registrant as Specified in Its Charter)

 

 

Cayman Islands		Not Applicable
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification Number)

 

1701-1702, China Central Office Tower 1

No. 81 Jianguo Road Chaoyang District

Beijing, 100025

People’s Republic of China

+86 (10) 6508 6063

(Address and telephone number of Registrant’s principal executive offices)

 

 

Rui Zhang

VP of Finance and Operations

CASI Pharmaceuticals, Inc.

9620 Medical Center Drive, Suite 300

Rockville, MD 20850

240-864-2600

(Name, address and telephone number of agent for service)

 

 

Copies of all communications, including communications sent to agent for service, should be sent to:

 

Copies to:

 

Alexander R. McClean, Esq.

C. Christopher Murillo, Esq.

Harter Secrest & Emery LLP

1600 Bausch & Lomb Place

Rochester, NY 14604

Tel: (585) 232-6500

Fax: (585) 232-2152

 

 

Approximate date of commencement of proposed sale to the public: From time to time after the effective date of this registration statement.

 

If 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, check the following box. x

 

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨

 

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨

 

If this Form is a registration statement pursuant to General Instruction I.C. 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.C. 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 an emerging growth company as defined in Rule 405 of the Securities Act of 1933.

 

Emerging growth company ¨

 

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, 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 term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.

 

Pursuant to the provisions of Rule 429 under the Securities Act, the prospectus contained in this registration statement also relates to the Registrant’s registration statement on Form F-3 (File No. 333-279096). Upon effectiveness, this registration statement will also act as a post-effective amendment to such earlier registration statement.

 

 

 

EXPLANATORY NOTE

 

On May 3, 2024, CASI Pharmaceuticals, Inc., or the Company filed a registration statement, or the Prior Registration Statement, on Form F-3 (File No. 333-279096) with the U.S. Securities and Exchange Commission, or the SEC, related to the offer and sale of up to an aggregate of $50.0 million of any combination of the securities described in the prospectus relating to the Prior Registration Statement, or the Prior Securities. The Prior Registration Statement was subsequently declared effective on May 10, 2024. Pursuant to Rule 429 under the Securities Act of 1933, as amended, or the Securities Act, this registration statement, which is a new registration statement, combines the Prior Securities from the Prior Registration Statement, all of which remain unissued, with the additional securities registered hereby for offer and sale by the Company, to enable the offer and sale of up to an aggregate of $200.0 million of the Company’s ordinary shares, preferred shares, warrants, subscription rights, and/or units, from time to time in one or more offerings, pursuant to a combined base prospectus. Pursuant to  Rule 429 under the Securities Act, this F-3 Registration Statement also constitutes a post-effective amendment to the Prior Registration Statement, and such post-effective amendment shall hereafter become effective concurrently with the effectiveness of this F-3 Registration Statement in accordance with Section 8(c) of the Securities Act.

 

Additionally, this registration statement contains a Sales Agreement prospectus covering the offering, issuance and sale by the Company of up to $50.0 million of the Company’s ordinary shares that may be issued and sold from time to time under an Open Market Sale Agreement^SM the Company has entered into with Jefferies LLC, as sales agent, or the Sales Agreement.

 

The combined base prospectus relating to the offer and sale of up to $200.0 million of the Company’s ordinary shares, preferred shares, warrants, subscription rights, and/or units immediately follows this explanatory note. The specific terms of any other securities to be offered pursuant to the combined base prospectus will be specified in one or more prospectus supplements to the combined base prospectus.

 

The Sales Agreement prospectus immediately follows the combined base prospectus. The $50.0 million of the Company’s ordinary shares that may be offered, issued and sold from time to time under the Sales Agreement prospectus is included in the $200.0 million of securities that may be offered, issued and sold by the Company under the combined base prospectus. Upon termination of the Sales Agreement, any portion of the $50.0 million included in the Sales Agreement prospectus that is not sold pursuant to the Sales Agreement will be available for sale in other offerings pursuant to the combined base prospectus and a corresponding prospectus supplement, and if no shares are sold under the Sales Agreement, the full $200.0 million of securities may be sold in other offerings pursuant to the combined base prospectus and a corresponding prospectus supplement.

 

 

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 it is not soliciting offers to buy these securities in any jurisdiction where such offer or sale is not permitted.

 

Subject to Completion, dated December 20, 2024

 

PROSPECTUS

 

$200,000,000

 

 

 

Ordinary Shares

Preferred Shares

Warrants

Subscription Rights

Units

 

We may offer and sell from time to time, in one or more offerings, up to an aggregate of $200.0 million of any combination of the securities described in this prospectus, which are referred to as the securities. We may also offer securities as may be issuable upon conversion, redemption, repurchase, exchange or exercise of the securities, including any applicable anti-dilution provisions.

 

We may offer and sell any of the securities described in this prospectus in different series, at times, in amounts, at prices and on terms to be determined at or prior to the time of each offering. 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 and the specific manner in which these securities will be offered in supplements to this prospectus. You should read this prospectus, the applicable prospectus supplement and any related free writing prospectus, as well as any documents incorporated by reference, before you invest.

 

Our ordinary shares are traded on The Nasdaq Capital Market under the symbol “CASI.” On December 18, 2024, the last sale price of our ordinary shares as reported by The Nasdaq Capital Market was $2.86 per share. The applicable prospectus supplement will contain information, where applicable, as to other listings, if any, on The Nasdaq Capital Market or other securities exchange of the securities covered by the applicable prospectus supplement. Prospective purchasers of the securities are urged to obtain current information as to the market prices of the securities, where applicable.

  

Investing in our securities involves a high degree of risk. We may be subject to various legal and operational risks as a result of doing business in the PRC, risks relating to our auditor, risks relating to cash and asset transfers among CASI and its subsidiaries, and risks relating to permission and filing procedures required from the governmental authorities of the PRC with respect to the operation of our PRC subsidiaries and future offerings in the United States. You should carefully review the risks and uncertainties described under the section titled “Risk Factors” on page 8 of this prospectus and, if applicable, any risk factors described in any applicable prospectus supplement and in our filings with the U.S. Securities and Exchange Commission, or SEC, that are incorporated by reference in this prospectus.

 

This prospectus may not be used to consummate a sale of securities unless it is accompanied by a prospectus supplement.

 

The securities may be sold directly by us to investors, through agents designated from time to time or to or through underwriters or dealers, on a continuous or delayed basis. For additional information on the methods of sale, you should refer to the section titled “Plan of Distribution” in this prospectus. If any agents or underwriters are involved in the sale of the securities with respect to which this prospectus is being delivered, the names of such agents or underwriters will be set forth in a prospectus supplement. The price to the public of such securities and the net proceeds we expect to receive from such sale will also be set forth in a prospectus supplement.

 

We are a “foreign private issuer” as defined in Rule 405 under the Securities Act of 1933, as amended, and, as such, we have elected to comply with certain reduced public company reporting requirements for this prospectus and future filings. Please see the section titled “Implications of Being a Foreign Private Issuer” in this prospectus.

 

Neither the SEC nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

 

The date of this prospectus is          , 2024.

 

 

INTRODUCTORY COMMENTS

 

We are not a Chinese operating company but a Cayman Islands holding company with business operations primarily conducted by our Chinese subsidiaries. This holding company structure and our operation in China may involve risks. We currently conduct our business through the following consolidated subsidiaries: CASI Pharmaceuticals (China) Co., Ltd., referred to as CASI China; CASI Pharmaceuticals (Wuxi) Co., Ltd., referred to as CASI Wuxi; CASI Biopharmaceuticals (WUXI) Co., Ltd, referred to as CASI Biopharmaceuticals; and CASI Pharmaceuticals Co., Limited, referred to as CASI Hong Kong.

 

Risks and Uncertainties Relating to Doing Business in China

 

We face various risks and uncertainties related to doing business in China. Our business operations are primarily conducted in China, and we are subject to complex and evolving PRC laws and regulations. The PRC government’s significant authority in regulating our operations and its oversight and control over offerings conducted overseas by, and foreign investment in, China-based issuers could significantly limit or completely hinder our ability to offer or continue to offer securities to investors and cause the value of our securities to significantly decline or become worthless. Implementation of industry-wide regulations, including data security or anti-monopoly related regulations, could result in a material change in our operations and may cause the value of our securities to significantly decline or become worthless. Risks and uncertainties arising from the legal system in China, including risks and uncertainties regarding the enforcement of laws and quickly evolving rules and regulations in China, could result in a material adverse change in our operations and the value of our ordinary shares. For example, China’s government has in recent years issued statements and regulatory actions to regulate certain market players or to improve its supervision of the market in general, such as those related to data security or anti-monopoly concerns. While we currently do not believe such regulatory actions have materially impacted our business operations, our ability to accept foreign investments, or our ability to maintain listing with the Nasdaq Stock Market, there is no assurance that any new rules or regulations promulgated in the future will not impose additional requirements on us. If any such rules or regulations are adopted, we may be subject to more stringent regulatory scrutiny for our operation and financing efforts, which may in turn result in us incurring additional compliance costs and expenses, delay our investment and financing activities, or otherwise impact our ability to conduct our business, accept foreign investments, or list on a U.S. or other foreign exchange.

 

In addition to our existing operations in China, we conduct clinical development of certain of our product candidates outside of China. In connection with these efforts we have licensed the exclusive worldwide rights to certain product candidates, including CID-103, which rights are held by us outside of China.

 

Risks Relating to Our Auditor

 

Our auditor, the independent registered public accounting firm that issues the audit report contained in our annual report, as an auditor of companies that are traded publicly in the United States and a firm registered with the Public Company Accounting Oversight Board, or PCAOB, is subject to laws in the United States pursuant to which the PCAOB conducts regular inspections to assess its compliance with applicable professional standards. Our auditor is located in mainland China, a jurisdiction where the PCAOB was historically unable to conduct inspections and investigations completely before 2022. As a result, we and investors in CASI Pharmaceuticals, Inc., a Delaware corporation, our predecessor prior to the redomicile merger, referred to as CASI Delaware were deprived of the benefits of such PCAOB inspections. Pursuant to the Holding Foreign Companies Accountable Act, or the HFCAA, if the SEC determines that we have filed audit reports issued by a registered public accounting firm that has not been subject to inspections by the PCAOB for two consecutive years, the SEC will prohibit our securities from being traded on a national securities exchange or in the over-the-counter trading market in the United States.

 

On December 16, 2021, the PCAOB issued a report to notify the SEC of its determination that the PCAOB was unable to inspect or investigate completely registered public accounting firms headquartered in mainland China and Hong Kong and CASI Delaware’s auditor was subject to that determination. In April 2022, the SEC conclusively listed CASI Delaware as a Commission-Identified Issuer under the HFCAA following the filing of its annual report on Form 10-K for the fiscal year ended December 31, 2021. On December 15, 2022, the PCAOB issued a report that vacated its December 16, 2021 determination and removed mainland China and Hong Kong from the list of jurisdictions where it is unable to inspect or investigate completely registered public accounting firms. For this reason, we do not expect we will be identified as a Commission-Identified Issuer under the HFCAA for the fiscal year ended December 31, 2024.

 

 

Each year in the future, the PCAOB will determine whether it can inspect and investigate completely audit firms in mainland China and Hong Kong, among other jurisdictions. If the PCAOB determines in the future that it no longer has full access to inspect and investigate completely accounting firms in mainland China and Hong Kong and we use an accounting firm headquartered in one of these jurisdictions to issue an audit report on our financial statements filed with the SEC, we would be identified as a Commission-Identified Issuer following the filing of the annual report for the relevant fiscal year. In accordance with the HFCAA, our ordinary shares would be prohibited from being traded on a national securities exchange or in the over-the-counter trading market in the United States if we are identified as a Commission-Identified Issuer for two consecutive years in the future. If our ordinary shares are prohibited from trading in the United States, there is no certainty that we will be able to list on a non-U.S. exchange or that a market for our ordinary shares will develop outside of the United States. A prohibition of being able to trade in the United States would substantially impair your ability to sell or purchase our ordinary shares when you wish to do so, and the risk and uncertainty associated with delisting would have a negative impact on the price of such shares. Also, such a prohibition would significantly affect our ability to raise capital on terms acceptable to us, or at all, which would have a material adverse impact on our business, financial condition, and prospects.

 

Cash and Asset Transfer among CASI and its Subsidiaries

 

We provide funding to our subsidiaries from time to time through capital contributions or loans, subject to satisfaction of applicable government registration and approval requirements. For the year ended December 31, 2023, we provided funding of US$1.0 million through capital contributions to CASI Hong Kong, our newly incorporated Hong Kong subsidiary.

 

Our subsidiaries may pay dividends and make other distributions to us subject to satisfaction of applicable government filing and approval requirements. Such dividend or other distributions may be subject to limitations and certain tax consequences, a discussion on which is set forth below. For the year ended December 31, 2023, no dividends or other distributions were made by our subsidiaries.

 

We also pay service fees to our PRC subsidiaries pursuant to certain sales support service agreements and research and development support service agreements. For the year ended December 31 2023, we paid service fees of US$1.1 million to CASI China, one of our PRC subsidiaries. Under PRC tax laws and regulations, the earnings of our subsidiaries under such agreements are subject to a statutory tax rate of 25%.

 

In the year ended December 31, 2023, no assets other than cash were transferred through our organization.

 

All cash transfers among us and our subsidiaries have been eliminated in our consolidated statement of cash flows.

 

The existing PRC foreign exchange regulations may limit our ability to initiate and complete cash transfers within our group. Approval from the State Administration of Foreign Exchange, or SAFE, and the People’s Bank of China, or PBOC, may be required where RMB are to be converted into foreign currencies, including U.S. dollars, and approval from SAFE and PBOC or their branches may be required where RMB are to be remitted out of China.

 

We have never declared or paid dividends on our ordinary shares or any other securities and we do not anticipate paying any dividends on our ordinary shares in the foreseeable future. We may rely on dividends from our subsidiaries in China to pay dividend and other distributions on our ordinary shares. PRC regulations may restrict the ability of our PRC subsidiaries to pay dividends to us. In addition to applicable foreign exchange limitations, under the current regulatory regime in China, a PRC company may pay dividends only out of its accumulated profit, if any, determined in accordance with PRC accounting standards and regulations, and is required to set aside as general reserves at least 10% of its after-tax profit, until the cumulative amount of such reserves reaches 50% of its registered capital, prior to any dividend distribution. In addition, a PRC company shall not distribute any profits in a given year until any losses from prior fiscal years have been offset.

 

Permission and Filing Procedures Required from the PRC Authorities with respect to the Operations of Our PRC Subsidiaries and Future offering in the US

 

 

As the date hereof, our PRC subsidiaries have obtained the requisite licenses and permits from the PRC government authorities that are material for our business operations, including, among others, the Business License, the Drug Distribution License, the Drug Manufacturing Permit, the Clinical Trial Application with the PRC National Medical Products Administration, or NMPA, and the notification filing for international collaborative clinical trial or the application for international collaborative scientific research with the China Human Genetic Resources Administrative Office, or HGRAO. We also work with our business partners which have obtained the requisite licenses and permits for their business collaboration with us, including, among others, the Import Drug Registration for product(s) we promote and distribute in China. Given the uncertainties of interpretation and implementation of relevant laws and regulations and the enforcement practices of the relevant government authorities, we may be required to obtain additional permissions or approvals for our business operations.

 

As the date hereof, we and our PRC subsidiaries (i) except for the requisite CSRC Filing(s) (as defined below), are not required to obtain permissions from the China Securities Regulatory Commission, or the CSRC, (ii) are not required to go through cybersecurity review by the Cyberspace Administration of China, or the CAC, and (iii) have not been asked to obtain or were denied such permissions by applicable PRC authority. On July 7, 2022, the CAC published the Guidelines for Data Export Security Assessment (《数据出境安全评估办法》), or the Guidelines, which took effect on September 1, 2022. Pursuant to the Guidelines, the data processor who intends to transfer certain important data or large volumes of personal information outside of China shall complete a prior CAC-led data outbound transfer security assessment. For the data we accessed through or obtained from clinical trials, we have complied with the laws and regulations then-in-effect, and completed the registration with HGRAO, but it is unclear if we will be required to go through the CAC-led or CAC-involved security assessment or if the current HGRAO registration procedure will be changed in the future. We will closely monitor and review any regulatory developments and comply with any new approval or license requirement when necessary. If (i) we have erroneously concluded that such permissions or approvals are not required, or (ii) applicable laws, regulations, or interpretations change and we are required to obtain such permissions or approvals in the future, we may have to expend significant time and costs to procure them. If we are unable to do so, on commercially reasonable terms, in a timely manner or otherwise, we may become subject to sanctions imposed by the PRC regulatory authorities, which could include fines and penalties, proceedings against us, and other forms of sanctions, and our ability to conduct our business, invest into China as foreign investments or accept foreign investments, or be listed on a U.S. or other overseas exchange may be restricted, and our business, reputation, financial condition, and results of operations may be materially and adversely affected.

 

On February 17, 2023, the CSRC released the Trial Administrative Measures of the Overseas Securities Offering and Listing by Domestic Companies (《境内企业境外发行证券和上市管理试行办法》) and five ancillary interpretive guidelines, collectively, the Overseas Listing Trial Measures, as amended, supplemented or otherwise modified from time to time, which apply to overseas offerings and listing by PRC-based companies, or domestic companies, of equity shares, depository receipts, corporate bonds convertible to equity shares, and other equity securities, and came into effect on March 31, 2023. According to the Overseas Listing Trial Measures, (1) domestic companies that seek to offer or list securities overseas, both directly and indirectly, should fulfill the filing procedure and report relevant information to the CSRC, and if an overseas-listed PRC-based issuer issues new securities in the same overseas market after the overseas offering and listing, it is also required to file with the CSRC within three business days after the completion of the issuance, or the CSRC Filing; if a domestic company fails to complete the filing procedure or conceals any material fact or falsifies any major content in its filing documents, such domestic company may be subject to administrative penalties, such as order to rectify, warnings, fines, and its controlling shareholders, actual controllers, the person directly in charge and other directly liable persons may also be subject to administrative penalties, such as warnings and fines; (2) if a foreign-incorporated issuer meets both of the following conditions, its overseas offering and listing shall be determined as an indirect overseas offering and listing by a domestic company of the PRC: (i) any of the total assets, net assets, revenues or profits of the domestic operating entities of the issuer in the most recent accounting year accounts for more than 50% of the corresponding line items in the issuer’s audited consolidated financial statements for the same period; and (ii) its major operational activities are carried out in China or its main places of business are located in China, or the senior managers in charge of operation and management of the issuer are mostly Chinese citizens or are domiciled in China; in addition to the aforementioned conditions, the determination of an indirect overseas offering and listing by a domestic enterprise adheres to the principle of substance over form; and (3) where a domestic company seeks to indirectly offer and list securities in an overseas market (including issuance of new securities after its overseas offering and listing), the issuer shall designate a major domestic operating entity responsible for all filing procedures with the CSRC.

 

 

Furthermore, in case any of the following major events occurs after the overseas offering and listing, the issuer is also required to report the relevant information to the CSRC within three business days of the occurrence and the announcement of the relevant events: (1) change of control; (2) the foreign securities regulatory body or the relevant competent authority has taken such measures as investigation and punishment; (3) conversion of listing status or listing board; and (4) voluntary of compulsory termination of listing. Where there is any material change in the major business and operation of the issuer after overseas offering and listing, and such change does not fall within the scope of filing, the issuer shall, within three business days of the occurrence of such change, submit a special report and a legal opinion issued by a domestic law firm to the CSRC to explain the relevant situation.

 

As substantially all of our operations are currently based in the PRC, our future offerings and major changes shall be subject to the filing procedures under the Overseas Listing Trial Measures. We cannot assure you that we can meet such requirements, obtain the requisite permits from the relevant government authorities, or complete such filing in a timely manner or at all. Any failure may significantly limit or completely hinder our ability to continue to offer securities to investors and cause the value of our securities to significantly decline or be worthless.

 

 

TABLE OF CONTENTS

 

ABOUT THIS PROSPECTUS	ii
INDUSTRY AND MARKET DATA	iv
TRADEMARKS AND TRADENAMES	iv
PROSPECTUS SUMMARY	1
RISK FACTORS	8
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS	9
OFFER STATISTICS AND EXPECTED TIMETABLE	11
CAPITALIZATION	11
USE OF PROCEEDS	11
DESCRIPTION OF SECURITIES	12
DESCRIPTION OF CAPITAL STOCK	12
DESCRIPTION OF WARRANTS	16
DESCRIPTION OF SUBSCRIPTION RIGHTS	17
DESCRIPTION OF UNITS	17
FORMS OF SECURITIES	18
PLAN OF DISTRIBUTION	20
ENFORCEABILITY OF CIVIL LIABILITIES	24
EXPENSES	25
TAXATION	26
LEGAL MATTERS	26
EXPERTS	26
WHERE YOU CAN FIND MORE INFORMATION	27
INCORPORATION BY REFERENCE	28
INDEX TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS	F-1

 

 

ABOUT THIS PROSPECTUS

 

This prospectus is a part of a registration statement that we filed with the U.S. Securities and Exchange Commission, or the SEC, using a “shelf” registration process under the Securities Act of 1933, as amended, or the Securities Act. Under this shelf registration process, we may, from time to time, sell up to an aggregate of $200.0 million of the securities described in this prospectus, either individually or in combination with the other securities. This prospectus provides you with a general description of the securities that may be offered by us. Each time we sell any type or series of securities, we will provide you a prospectus supplement accompanied by this prospectus. The prospectus supplement will contain more specific information about the nature of the persons offering securities and the terms the securities being offered at that time. We may also authorize one or more free writing prospectuses to be provided to you that may contain material information relating to these offerings. The prospectus supplement and any related free writing prospectus that we may authorize to be provided to you may also add, update or change any of the information contained in this prospectus or in the documents we have incorporated by reference into this prospectus. To the extent that any statement that we make in a prospectus supplement is inconsistent with statements made in this prospectus, the statements made in this prospectus will be deemed modified or superseded by those made in a prospectus supplement. You should carefully read both this prospectus and the applicable prospectus supplement and any related free writing prospectus, together with the additional information described under “Where You Can Find More Information” and “Information Incorporated by Reference,” before buying any of the securities being offered.

 

To the extent there is a conflict between the information contained in this prospectus, on the one hand, and the information contained in any prospectus supplement, any free writing prospectus or 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 prospectus supplement or a document incorporated by reference in this prospectus—the statement in the document having the later date modifies or supersedes the earlier statement.

 

The information contained in this prospectus, the applicable prospectus supplement, any applicable free writing prospectus or any document incorporated by reference herein or therein is accurate only as of such documents’ respective dates, regardless of the time of delivery of this prospectus, the applicable prospectus supplement, any applicable free writing prospectus or the documents incorporated by reference in this prospectus or the sale of any securities. Our business, financial condition, results of operations and prospects may have changed materially since those dates.

 

This prospectus may not be used to consummate a sale of securities unless it is accompanied by a prospectus supplement.

 

Neither we, nor any agent, underwriter or dealer has authorized any person to give any information or to make any representation other than those contained or incorporated by reference in this prospectus, any applicable prospectus supplement or any related free writing prospectus prepared by or on behalf of us or to which we have referred you. If anyone provides you with different or inconsistent information, you should not rely on it. This prospectus, any applicable supplement to this prospectus or any related free writing prospectus does not constitute an offer to sell or the solicitation of an offer to buy any securities other than the registered securities to which they relate, nor does this prospectus, any applicable supplement to this prospectus or any related free writing prospectus constitute an offer to sell or the solicitation of an offer to buy securities in any jurisdiction to any person to whom it is unlawful to make such offer or solicitation in such jurisdiction.

 

You should not assume that the information contained in this prospectus, any applicable prospectus supplement or any related free writing prospectus is accurate on any date subsequent to the date set forth on the front of the document or that any information we have incorporated by reference is correct on any date subsequent to the date of the document incorporated by reference, even though this prospectus, any applicable prospectus supplement or any related free writing prospectus is delivered, or securities are sold, on a later date.

 

This prospectus contains summaries of certain provisions contained in some of the documents described herein, but reference is made to the actual documents for complete information. All of the summaries are qualified in their entirety by the actual documents. Copies of some of the documents referred to herein have been filed, will be filed or will be incorporated by reference as exhibits to the registration statement of which this prospectus is a part, and you may obtain copies of those documents as described below under the section entitled “Where You Can Find More Information.”

 

 

For investors outside the United States, neither we nor any underwriters, dealers or agents have taken any action that would permit the offering or possession or distribution of this prospectus in any jurisdiction where action for that purpose is required, other than in the United States. 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 securities described herein and the distribution of this prospectus outside the United States.

 

Throughout this prospectus, references to the “Company,” “we,” “our,” “us,” “registrant,” “CASI” or similar terms used in this prospectus refer to CASI Pharmaceuticals, Inc., an exempted company with limited liability under the laws of the Cayman Islands, including its consolidated subsidiaries, unless the context otherwise indicates.

 

“PRC” or “China” refers to the People’s Republic of China, excluding, for the purpose of this prospectus, Taiwan, Hong Kong and Macau, “RMB” or “Renminbi” refers to the legal currency of China, and “$”, “US$” or “U.S. Dollars” refers to the legal currency of the United States.

 

This prospectus may contain translations of Renminbi amounts into U.S. dollars at specified rates solely for the convenience of the reader. We make no representation that the Renminbi or U.S. dollar amounts referred to in this prospectus could have been or could be converted into U.S. dollars or Renminbi, as the case may be, at any particular rate or at all.

 

 

INDUSTRY AND MARKET DATA

 

In this prospectus and the documents incorporated by reference in this prospectus, we present industry data, information and statistics regarding the markets in which the Company and its subsidiaries compete as well as publicly available information, industry and general publications and research and studies conducted by third parties. This information is supplemented where necessary with the Company’s own internal estimates and information obtained from discussions with its customers, taking into account publicly available information about other industry participants and the Company’s management’s judgment where information is not publicly available.

 

Industry publications, research, studies and forecasts generally state that the information they contain has been obtained from sources believed to be reliable, but that the accuracy and completeness of such information is not guaranteed. Forecasts and other forward-looking information obtained from these sources are subject to the same qualifications and uncertainties as the other forward-looking statements in this prospectus or any document incorporated by reference into this prospectus. These forecasts and forward-looking information are subject to uncertainty and risk due to a variety of factors, including those described under the section entitled “Risk Factors.” These and other factors could cause results to differ materially from those expressed in any forecasts or estimates.

 

TRADEMARKS AND TRADENAMES

 

This prospectus and the information incorporated herein by reference include trademarks, service marks and trade names owned by us or other companies. All trademarks, service marks and trade names included or incorporated by reference into this prospectus, any applicable prospectus supplement or any related free writing prospectus are the property of their respective owners.

 

 

 

 

RISK FACTORS

 

Investing in our securities involves a high degree of risk. Before deciding whether to invest in our securities, you should consider carefully the risks and uncertainties described under the section titled “Risk Factors” contained in the applicable prospectus supplement and any related free writing prospectus, and discussed under the section titled “Risk Factors” contained in our most recent annual report on Form 20-F and in our current reports on Form 6-K, as well as any amendments thereto reflected in subsequent filings with the SEC, which are incorporated by reference into this prospectus in their entirety, together with other information in this prospectus, the documents incorporated by reference and any free writing prospectus that we may authorize for use in connection with a specific offering. See “Where You Can Find More Information.”

 

The risks described in these documents are not the only ones we face, but those that we consider to be material. There may be other unknown or unpredictable economic, business, competitive, regulatory or other factors that could have material adverse effects on our future results. Past financial performance may not be a reliable indicator of future performance, and historical trends should not be used to anticipate results or trends in future periods. If any of these risks actually occur, our business, financial condition, results of operations or cash flow could be harmed. This could cause the trading price of our securities to decline, resulting in a loss of all or part of your investment. Please also read carefully the section below titled “Special Note Regarding Forward-Looking Statements.”

 

 

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

 

This prospectus and the documents we have filed with the SEC that are incorporated by reference contain 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. The statements contained in this prospectus or incorporated by reference herein that are not purely historical are forward-looking statements. Our forward-looking statements include, but are not limited to, statements regarding our or our management’s expectations, hopes, beliefs, intentions or strategies regarding the future. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements.

 

You can identify some of these forward-looking statements by words or phrases such as “may,” “will,” “expect,” “anticipate,” “aim,” “estimate,” “intend,” “plan,” “believe,” “is/are likely to,” “potential,” “continue” or other similar expressions. These forward-looking statements include, among others, statements regarding the timing of our commercial launch of products, clinical trials, our cash position and future expenses, and our future revenues. We have based these forward-looking statements largely on our current expectations and projections about future events that we believe may affect our financial condition, results of operations, business strategy and financial needs.

 

Actual results could differ materially from those currently anticipated due to a number of factors, including: uncertainties related to the Proposal Letter to acquire the Company’s business operations in China; the risk that we may be unable to continue as a going concern as a result of our inability to raise sufficient capital for our operational needs; the possibility that we may be delisted from trading on The Nasdaq Capital Market if we fail to satisfy applicable continued listing standards; the volatility in the market price of our ordinary shares; the risk of substantial dilution of existing shareholders in future share issuances; the difficulty of executing our business strategy on a global basis including China; our inability to enter into strategic partnerships for the development, commercialization, manufacturing and distribution of our proposed product candidates or future candidates; legal or regulatory developments in China that adversely affect our ability to operate in China; our lack of experience in manufacturing products and uncertainty about our resources and capabilities to do so on a clinical or commercial scale; risks relating to the commercialization, if any, of our products and proposed products (such as marketing, safety, regulatory, patent, product liability, supply, competition and other risks); our inability to predict when or if our product candidates will be approved for marketing by the U.S. FDA, EMA, NMPA, or other regulatory authorities; our inability to receive approval for renewal of license of our existing products; the risks relating to the need for additional capital and the uncertainty of securing additional funding on favorable terms; the risks associated with our product candidates, and the risks associated with our other early-stage products under development; the risk that result in preclinical and clinical models are not necessarily indicative of clinical results; uncertainties relating to preclinical and clinical trials, including delays to the commencement of such trials; our ability to protect our intellectual property rights; the lack of success in the clinical development of any of our products and our dependence on third parties; the risks related to our dependence on Juventas to partner with us to co-market CNCT19; risks related to the uncertainty in connection with the ongoing arbitration proceedings between us and Juventas with respect to Juventas’ purported termination of certain CNCT19 license agreements; risks related to our dependence on Juventas to ensure the patent protection and prosecution for CNCT19; risks related to the Company’s ongoing development of and regulatory application for CID-103 with respect to the treatment of antibody-mediated rejection for organ transplant and autoimmune diseases and the license arrangements of CID-103; risks relating to the interests of our largest shareholder and our Chairman and Chief Executive Officer that differ from our other shareholders; and risks related to the success of a new manufacturing facility operated by CASI Wuxi. Such factors, among others, could have a material adverse effect upon our business, results of operations and financial condition.

 

 

The forward-looking statements contained in this prospectus are based on our current expectations and beliefs concerning future developments and their potential effects on us. There can be no assurance that future developments affecting us will be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, those described in the section titled “Risk Factors” and elsewhere in this prospectus. Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. We discuss in greater detail many of these risks under the section titled “Risk Factors” contained in the applicable prospectus supplement, in any free writing prospectuses we may authorize for use in connection with a specific offering, and in our most recent annual report on Form 20-F, as well as any amendments thereto reflected in subsequent filings with the SEC, as well as our reports on 6-F, which are incorporated by reference into this prospectus in their entirety. Also, these forward-looking statements represent our estimates and assumptions only as of the date of the document containing the applicable statement. Unless required by law, we undertake no obligation to update or revise any forward-looking statements to reflect new information or future events or developments. You should read this prospectus, any applicable prospectus supplement, together with the documents we have filed with the SEC that are incorporated by reference and any free writing prospectus that we may authorize for use in connection with a specific offering completely and with the understanding that our actual future results may be materially different from what we expect. We qualify all of the forward-looking statements in the foregoing documents by these cautionary statements.

 

In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this prospectus, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and you are cautioned not to unduly rely upon these statements.

 

 

OFFER STATISTICS AND EXPECTED TIMETABLE

 

We may offer and sell ordinary shares, preferred shares, warrants, subscription rights, and/or units, either individually or in combination with other securities, in one or more offerings from time to time, with a total aggregate offering price of up to $200.0 million. The actual price of the securities that we will offer pursuant to this prospectus will depend on a number of factors that may be relevant as of the time of offer. See “Plan of Distribution.”

 

CAPITALIZATION

 

We intend to include information about our capitalization and indebtedness in prospectus supplements.

 

USE OF PROCEEDS

 

Unless otherwise specified in an applicable prospectus supplement, we intend to use the proceeds we receive from the sale of securities offered hereunder for general corporate purposes, which may include working capital, capital expenditures, investments and the financing of possible acquisitions. Additional information relating thereto may be set forth in any applicable prospectus supplement.

 

 

DESCRIPTION OF SECURITIES

 

The descriptions of the securities contained in this prospectus, together with the applicable prospectus supplements, summarize the material terms and provisions of the various types of securities that we may offer. We will describe in the applicable prospectus supplement the particular terms of any securities offered by such prospectus supplement. If we so indicate in the applicable prospectus supplement, the terms of the securities may differ from the terms we have summarized below.

 

We may sell from time to time, in one or more offerings, ordinary shares, preferred shares, warrants, and units comprising any combination of these securities. The total dollar amount of all securities that we may issue under this prospectus will not exceed $200.0 million.

 

DESCRIPTION OF CAPITAL STOCK

 

The following is a summary of the material terms of the ordinary shares of CASI. This summary is qualified by reference to the Amended and Restated Memorandum and Articles of Association that is attached as Exhibit 1.1 to the Form 20-F filed with the SEC on March 28, 2024 and incorporated herein by reference, referred to as the CASI Articles. You are encouraged to read the relevant provisions of the Companies Act (As Revised) of the Cayman Islands, or the Companies Act, and the CASI Articles as they relate to the following summary.

 

CASI is authorized to issue 500,000,000 shares of a par value of US$0.0001 each. The directors of CASI are authorized to issue shares in one or more classes and series and, with respect to each class or series, to determine the designations, powers, preferences, privileges and other rights, including dividend rights, voting rights, conversion rights, terms of redemption and liquidation preferences, any or all of which may be greater than the powers and rights associated with the ordinary shares, at such times and on such other terms as they think proper.

 

As of the close of business on December 18, 2024, CASI had 15,904,533 shares issued, among which 15,492,581 were outstanding shares, and 411,952 were treasury shares.  CASI has no preferred shares issued and outstanding.

 

General

 

All of CASI’s issued and outstanding ordinary shares have been issued and credited as fully paid and non-assessable. CASI’s ordinary shares are issued in registered form, and are issued when registered in CASI’s register of members. CASI’s shareholders who are non-residents of the Cayman Islands may freely hold and transfer their ordinary shares.

 

Dividends

 

The holders of CASI’s ordinary shares are entitled to such dividends as may be declared by CASI’s board of directors, subject to the Companies Act and the CASI Articles, as amended and restated from time to time. In addition, CASI’s shareholders may declare dividends by ordinary resolution, but no dividend shall exceed the amount recommended by CASI’s board of directors. Under Cayman Islands law, dividends may be declared and paid only out of funds legally available therefor, namely out of either profit or share premium account, provided that in no circumstances may CASI pay a dividend if this would result in CASI being unable to pay its debts as they fall due in the ordinary course of business.

 

Register of Members

 

Under the Companies Act, CASI must keep a register of members and there shall be entered therein:

 

·

the names and addresses of the members, together with a statement of the shares held by each member, and such statement shall confirm (i) the amount paid or agreed to be considered as paid, on the shares of each member, (ii) the number and category of shares held by each member, and (iii) whether each relevant category of shares held by a member carries voting rights under the CASI Articles, and if so, whether such voting rights are conditional;

 

 

·

the date on which the name of any person was entered on the register as a member; and

 

·

the date on which any person ceased to be a member.

 

Under Cayman Islands law, the register of members of CASI is prima facie evidence of the matters set out therein (i.e., the register of members will raise a presumption of fact on the matters referred to above unless rebutted) and a member registered in the register of members shall be deemed as a matter of Cayman Islands law to have legal title to the shares as set against its name in the register of members.

 

Voting Rights

 

Each holder of ordinary shares is entitled to one vote for each share registered in his name on the register of members on all matters upon which the ordinary shares are entitled to vote on a poll. Voting on any resolution put to the vote at any meeting of shareholders is required to be by way of a poll and not on a show of hands. A poll shall be taken in such manner as the chairperson of the meeting directs, and the result of the poll shall be deemed to be the resolution of the meeting.

 

A quorum required for a general meeting of shareholders consists of one or more shareholders who hold shares which carry in aggregate not less than one-third of the paid up voting share capital of CASI, present at the meeting. Although not required by the Companies Act or the CASI Articles, CASI expects to hold shareholders’ meetings from time to time and such meetings may be convened by CASI’s board of directors on its own initiative or upon a request to the directors by shareholders holding shares which carry in aggregate not less than one-third of all votes attaching to CASI’s issued shares that carry the right to vote at general meetings. A general meeting may also be called by the chairperson of the board of directors of CASI. Advance notice of at least seven calendar days is required for the convening of CASI’s annual general meeting and other shareholders meetings.

 

An ordinary resolution to be passed by the shareholders requires the affirmative vote of a simple majority of the votes which are cast by those shareholders who, being entitled to do so, vote at a general meeting, while a special resolution requires the affirmative vote of not less than two-thirds of the votes which are cast by those shareholders who, being entitled to do so, vote at a general meeting. Both ordinary resolutions and special resolutions may also be passed by a unanimous written resolution signed by all the shareholders of CASI, as permitted by the Companies Act and the CASI Articles. A special resolution will be required for important matters such as change of name or making changes to the CASI Articles.

 

Transfer of Ordinary Shares

 

Subject to the restrictions of CASI Articles, as applicable, any of CASI’s shareholders may transfer all or any of his or her ordinary shares by an instrument of transfer in the usual or common form or any other form approved by CASI’s board of directors.

 

Subject to the Nasdaq listing rules, CASI’s board of directors may, in its absolute discretion, decline to register any transfer of any ordinary share which is not fully paid up or on which CASI has a lien. CASI’s directors may also decline to register any transfer of any ordinary share unless:

 

·

the instrument of transfer is lodged with CASI, accompanied by the certificate for the ordinary shares to which it relates and such other evidence as CASI’s board of directors may reasonably require to show the right of the transferor to make the transfer;

 

·

the instrument of transfer is in respect of only one class of ordinary shares;

 

·

the instrument of transfer is properly stamped, if required;

 

·

in the case of a transfer to joint holders, the number of joint holders to whom the ordinary share is to be transferred does not exceed four; or

 

 

·

a fee of such maximum sum as Nasdaq may determine to be payable, or such lesser sum as the CASI’s board of directors may from time to time require, is paid to CASI in respect thereof.

 

If CASI’s directors refuse to register a transfer they shall, within two calendar months after the date on which the instrument of transfer was lodged, send to each of the transferor and the transferee notice of such refusal, including the relevant reason for such refusal. The registration of transfers may, on 14 days’ notice being given by advertisement in such one or more newspapers or by electronic means, be suspended and the register closed at such times and for such periods as CASI’s board of directors may from time to time determine; provided, however, that the registration of transfers shall not be suspended and the register shall not be closed for more than 30 days in any calendar year.

 

Liquidation

 

On a winding up of CASI, if the assets available for distribution among its shareholders shall be more than sufficient to repay the whole of the share capital at the commencement of the winding up, the surplus will be distributed among its shareholders in proportion to the par value of the shares held by them at the commencement of the winding up, subject to a deduction from those shares in respect of which there are monies due, of all monies payable to CASI for unpaid calls or otherwise. If CASI’s assets available for distribution are insufficient to repay all of the paid-up capital, the assets will be distributed so that the losses are borne by its shareholders in proportion to the par value of the shares held by them.

 

Calls on Ordinary Shares and Forfeiture of Ordinary Shares

 

CASI’s board of directors may from time to time make calls upon shareholders for any amounts unpaid on their ordinary shares in a notice served to such shareholders at least 14 days prior to the specified time of payment. The ordinary shares that have been called upon and remain unpaid are subject to forfeiture.

 

Redemption, Repurchase and Surrender of Ordinary Shares

 

CASI may issue shares on terms that are subject to redemption, at CASI’s option or at the option of the holders, on such terms and in such manner as may be determined before the issue of such shares, by CASI’s board of directors or by an ordinary resolution of CASI’s shareholders. CASI may also repurchase any of its shares provided that the manner and terms of such purchase have been approved by its board of directors or by CASI’s shareholders by ordinary resolution or are otherwise authorized by the CASI Articles. Under the Companies Act, the redemption or repurchase of any share may be paid out of CASI’s profits or out of the proceeds of a fresh issue of shares made for the purpose of such redemption or repurchase, or out of capital (including share premium account and capital redemption reserve) if CASI can, immediately following such payment, pay its debts as they fall due in the ordinary course of business. In addition, under the Companies Act no such share may be redeemed or repurchased (a) unless it is fully paid up, (b) if such redemption or repurchase would result in there being no shares outstanding, or (c) if the company has commenced liquidation. In addition, CASI may accept the surrender of any fully paid share for no consideration.

 

Variations of Rights of Shares

 

Whenever the capital of CASI is divided into different classes, the rights attached to any such class of shares may, subject to any rights or restrictions for the time being attached to any class, be materially and adversely varied either with the written consent of the holders of at least two-thirds of the issued shares of that class or with the sanction of a special resolution passed at a separate meeting of the holders of the shares of that class. The rights conferred upon the holders of the shares of any class issued with preferred or other rights shall not, subject to any rights or restrictions for the time being attached to the shares of that class, be deemed to be materially and adversely varied by the creation or issue of further shares ranking pari passu with or subsequent to such existing class of shares or the redemption or purchase of any shares of any class by CASI. The rights of the holders of shares shall not be deemed to be materially and adversely varied by the creation or issue of shares with preferred or other rights including, without limitation, the creation of shares with enhanced or weighted voting rights.

 

 

Inspection of Books and Records

 

Holders of CASI’s ordinary shares have no general right under Cayman Islands law to inspect or obtain copies of CASI’s list of shareholders or its corporate records (save for the CASI Articles, special resolutions and the register of mortgages and charges). However, CASI will provide its shareholders with annual audited financial statements. See “Where You Can Find Additional Information.”

 

Changes in Capital

 

CASI may from time to time by ordinary resolution:

 

·

increase its share capital by new shares of such amount as it thinks expedient;

 

·

consolidate and divide all or any of its share capital into shares of a larger amount than its existing shares;

 

·

sub-divide its existing shares, or any of them into shares of a smaller amount that is fixed by the CASI Articles; and

 

·

cancel any shares which, at the date of the passing of the resolution, have not been taken or agreed to be taken by any person and diminish the amount of its share capital by the amount of the shares so cancelled.

 

Subject to the Companies Act and confirmation by the Grand Court of the Cayman Islands on an application by CASI for an order confirming such reduction, CASI may by special resolution reduce its share capital and any capital redemption reserve in any manner authorized by the Companies Act.

 

Issuance of Additional Shares

 

The CASI Articles authorize CASI’s board of directors to issue additional ordinary shares from time to time as its board of directors shall determine, to the extent of available authorized but unissued shares.

 

The CASI Articles authorize CASI’s board of directors to establish from time to time one or more series of preferred shares and to determine, with respect to any series of preferred shares, the terms and rights of that series, including:

 

·

the designation of the series;

 

·

the number of shares of the series;

 

·

the dividend rights, dividend rates, conversion rights, voting rights; and

 

·

the rights and terms of redemption and liquidation preferences.

 

CASI’s board of directors may issue preferred shares without action by its shareholders to the extent authorized but unissued. In addition, the issuance of preferred shares may be used as an anti-takeover device without further action on the part of the shareholders. Issuance of these shares may dilute the voting power of holders of ordinary shares.

 

Exempted Company

 

CASI is an exempted company duly incorporated with limited liability under the Companies Act. The Companies Act distinguishes between ordinary resident companies and exempted companies. Any company that is registered in the Cayman Islands but conducts business mainly outside of the Cayman Islands, may apply to be registered as an exempted company. The requirements for an exempted company are essentially the same as for an ordinary company except for certain exemptions and privileges, including (a) an exempted company does not have to file an annual return of its shareholders with the Registrar of Companies, (b) an exempted company is not required to open its register of members for inspection, (c) an exempted company does not have to hold an annual general meeting, (d) an exempted company may register by way of continuation in another jurisdiction and be deregistered in the Cayman Islands, (e) an exempted company may obtain an undertaking against the imposition of any future taxation (such undertakings are usually given for 30 years in the first instance), (f) an exempted company may register as a limited duration company and (g) an exempted company may register as a segregated portfolio company.

 

 

“Limited liability” means that the liability of each shareholder is limited to the amount unpaid by the shareholder on that shareholder’s shares of the company (except in exceptional circumstances, such as fraud, the establishment of an agency relationship or an illegal or improper purpose or other circumstances in which a court may be prepared to pierce or lift the corporate veil).

 

DESCRIPTION OF WARRANTS

 

We may issue warrants to purchase ordinary shares. Warrants may be issued independently or together with any other securities and may be attached to, or separate from, such securities. Each series of warrants will be issued under a separate warrant agreement to be entered into between us and a warrant agent. The warrant agent will act solely as our agent and will not assume any obligation or relationship of agency for or with holders or beneficial owners of warrants. The terms of any warrants to be issued and a description of the material provisions of the applicable warrant agreement will be set forth in the applicable prospectus supplement.

 

The applicable prospectus supplement will describe the following terms of any warrants in respect of which this prospectus is being delivered:

 

·

the title of such warrants;

 

·

the aggregate number of such warrants;

 

·

the price or prices at which such warrants will be issued and exercised;

 

·

the currency or currencies in which the price of such warrants will be payable;

 

·

the securities purchasable upon exercise of such warrants;

 

·

the date on which the right to exercise such warrants shall commence and the date on which such right shall expire;

 

·

if applicable, the minimum or maximum amount of such warrants which may be exercised at any one time;

 

·

if applicable, the designation and terms of the securities with which such warrants are issued and the number of such warrants issued with each such security;

 

·

if applicable, the date on and after which such warrants and the related securities will be separately transferable;

 

·

information with respect to book-entry procedures, if any;

 

·

any material Cayman Islands and U.S. federal income tax consequences;

 

·

the anti-dilution provisions of the warrants, if any; and

 

·

any other terms of such warrants, including terms, procedures and limitations relating to the exchange and exercise of such warrants.

 

 

We and the warrant agent may amend or supplement the warrant agreement for a series of warrants without the consent of the holders of the warrants issued thereunder to effect changes that are not inconsistent with the provisions of the warrants and that do not materially and adversely affect the interests of the holders of the warrants.

 

DESCRIPTION OF SUBSCRIPTION RIGHTS

 

We may issue subscription rights to purchase our ordinary shares or preferred shares. These subscription rights may be offered independently or together with any other security offered hereby and may or may not be transferable by the shareholder receiving the subscription rights in such offering. In connection with any offering of subscription rights, we may enter into a standby arrangement with one or more underwriters or other purchasers pursuant to which the underwriters or other purchasers may be required to purchase any securities remaining unsubscribed for after such offering.

 

The prospectus supplement relating to any subscription rights we offer, if any, will, to the extent applicable, include specific terms relating to the offering, including some or all of the following:

 

·

the price, if any, for the subscription rights;

 

·

the exercise price payable for our ordinary shares or preferred shares upon the exercise of the subscription rights;

 

·

the number of subscription rights to be issued to each shareholder;

 

·

the number and terms of our ordinary shares or preferred shares which may be purchased per each subscription right;

 

·

the extent to which the subscription rights are transferable;

 

·

any other terms of the subscription rights, including the terms, procedures and limitations relating to the exchange and exercise of the subscription rights;

 

·

the date on which the right to exercise the subscription rights shall commence, and the date on which the subscription rights shall expire;

 

·

the extent to which the subscription rights may include an over-subscription privilege with respect to unsubscribed securities or an over-allotment privilege to the extent the securities are fully subscribed; and

 

·

if applicable, the material terms of any standby underwriting or purchase arrangement which may be entered into by us in connection with the offering of subscription rights.

 

The description in the applicable prospectus supplement of any subscription rights we offer will not necessarily be complete and will be qualified in its entirety by reference to the applicable subscription rights certificate, which will be filed with the SEC if we offer subscription rights. We urge you to read the applicable subscription rights certificate and any applicable prospectus supplement in their entirety.

 

DESCRIPTION OF UNITS

 

We may issue units consisting of some or all of the securities described above, in any combination, including ordinary shares, preferred shares and/or warrants. The terms of these units will be set forth in a prospectus supplement. The description of the terms of these units in the related prospectus supplement will not be complete. You should refer to the applicable form of unit and unit agreement for complete information with respect to these units.

 

 

FORMS OF SECURITIES

 

Each warrant, subscription right and unit 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. Certificated securities in definitive form and global securities will be issued in registered form. Definitive securities name the investor or the investor’s 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, investor or the investor’s 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, warrants or units 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.

 

Registered Global Securities

 

We may issue the registered warrants, subscription rights and units 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 registered 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 registered global securities. Unless and until it is exchanged in whole for securities in definitive registered form, a registered global security may not be transferred except as a whole by and among the depositary for the registered 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 registered 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 registered 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 registered 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 registered 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 such purchaser’s ability to own, transfer or pledge beneficial interests in registered global securities.

 

So long as the depositary, or its nominee, is the registered owner of a registered 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 registered global security for all purposes under the applicable warrant agreement subscription right agreement or unit agreement. Except as described below, owners of beneficial interests in a registered global security will not be entitled to have the securities represented by the registered 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 warrant agreement, subscription right agreement or unit agreement. Accordingly, each person owning a beneficial interest in a registered global security must rely on the procedures of the depositary for that registered 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 warrant agreement subscription right agreement or unit 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 registered global security desires to give or take any action that a holder is entitled to give or take under the applicable warrant agreement subscription right agreement or unit agreement, the depositary for the registered 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.

 

 

Any payments to holders with respect to warrants, subscription rights or units, represented by a registered 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 registered global security. None of CASI, its affiliates, the warrant agents, the rights agents, the unit agents or any other agent of CASI, agent of the warrant agents, rights agents or unit agents will have any responsibility or liability for any aspect of the records relating to payments made on account of beneficial ownership interests in the registered 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 registered global security, upon receipt of any payment of principal, premium, interest or other distribution of underlying securities or other property to holders on that registered global security, will immediately credit participants' accounts in amounts proportionate to their respective beneficial interests in that registered global security as shown on the records of the depositary. We also expect that payments by participants to owners of beneficial interests in a registered 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 in bearer form or registered in "street name," and will be the responsibility of those participants.

 

If the depositary for any of these securities represented by a registered 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 registered global security that had been held by the depositary. Any securities issued in definitive form in exchange for a registered 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 registered global security that had been held by the depositary.

 

 

PLAN OF DISTRIBUTION

 

We may sell the securities offered by this prospectus from time to time in one or more transactions, including without limitation:

 

·

through underwriters, acting as an underwriting syndicate represented by managing underwriters or by underwriters without a syndicate;

 

·

through dealers;

 

·

directly to purchasers;

 

·

in a rights offering;

 

·

in “at the market” offerings, within the meaning of Rule 415(a)(4) of the Securities Act or into an existing trading market on an exchange or otherwise;

 

·

through agents;

 

·

through a combination of any of these methods; or

 

·

through any other method permitted by applicable law and described in the applicable prospectus supplement.

 

In addition, we may enter into derivative or hedging transactions with third parties, or sell securities not covered by this prospectus to third parties in privately negotiated transactions. In connection with such a transaction, the third parties may sell securities covered by and pursuant to this prospectus and any accompanying prospectus supplement. If so, the third party may use securities borrowed from us or others to settle such sales and may use securities received from us to close out any related short positions. We may also loan or pledge securities covered by this prospectus and any accompanying prospectus supplement to third parties, who may sell the loaned securities or, in an event of default in the case of a pledge, sell the pledged securities pursuant to this prospectus and any accompanying prospectus supplement.

 

The prospectus supplement with respect to any offering of securities will include the following information:

 

·

the type and number or amount of securities being offered;

 

·

the terms of the offering;

 

·

the name or names of any underwriters, dealers, agents or direct purchasers;

 

·

the name or names of any managing underwriter or underwriters;

 

·

the purchase price or initial public offering price of the securities;

 

·

the net proceeds from the sale of the securities;

 

·

any delayed delivery arrangements;

 

·

any underwriting discounts, commissions or agency fees and other items constituting underwriters’ or agents’ compensation;

 

·

any options under which underwriters may purchase additional securities from us;

 

 

·

the specific plan of distribution;

 

·

any discounts or concessions allowed or reallowed or paid to dealers;

 

·

any commissions paid to agents; and

 

·

any securities exchange on which the securities may be listed.

 

Any public offering price and any discounts or concessions allowed or reallowed or paid to dealers may be changed from time to time.

 

Sale through Underwriters or Dealers

 

If underwriters are used in the sale, the underwriters will acquire the securities for their own account. The underwriters may resell the securities from time to time in one or more transactions, including:

 

·

negotiated transactions;

 

·

at a fixed public offering price or prices, which may be changed;

 

·

at market prices prevailing at the time of sale;

 

·

at prices related to prevailing market prices; or

 

·

at negotiated prices.

 

Unless we inform you otherwise in the applicable prospectus supplement, the obligations of the underwriters to purchase the securities will be subject to certain conditions, and the underwriters will be obligated to purchase all of the offered securities if they purchase any of them. The underwriters may change from time to time any initial public offering price and any discounts or concessions allowed or reallowed or paid to dealers.

 

During and after an offering through underwriters, the underwriters may purchase and sell the securities in the open market. These transactions may include overallotment and stabilizing transactions and purchases to cover syndicate short positions created in connection with the offering. The underwriters may also impose a penalty bid, which means that selling concessions allowed to syndicate members or other broker-dealers for the offered securities sold for their account may be reclaimed by the syndicate if the offered securities are repurchased by the syndicate in stabilizing or covering transactions. These activities may stabilize, maintain or otherwise affect the market price of the offered securities, which may be higher than the price that might otherwise prevail in the open market. If commenced, the underwriters may discontinue these activities at any time.

 

Some or all of the securities that we offer through this prospectus may be new issues of securities with no established trading market. Any underwriters to whom we sell our securities for public offering and sale may make a market in those securities, but they will not be obligated to do so and they may discontinue any market making at any time without notice. Accordingly, we cannot assure you of the liquidity of, or continued trading markets for, any securities that we offer.

 

If dealers are used in the sale of securities, we will sell the securities to them as principals. They may then resell those securities to the public at fixed prices or at varying prices determined by the dealers at the time of resale. We will include in the applicable prospectus supplement the names of the dealers and the terms of the transaction.

 

If agents are used in an offering, the names of the agents and the terms of the agency will be specified in a prospectus supplement. Unless otherwise indicated in a prospectus supplement, the agents will act on a best-efforts basis for the period of their appointment.

 

 

Dealers and agents named in a prospectus supplement may be underwriters as defined in the Securities Act and any discounts or commissions they receive from us and any profit on their resale of the securities may be treated as underwriting discounts and commissions under the Securities Act. We will identify in the applicable prospectus supplement any underwriters, dealers or agents and will describe their compensation. We may have agreements with the underwriters, dealers and agents to indemnify them against specified civil liabilities, including liabilities under the Securities Act.

 

Underwriters, dealers or agents and their associates may engage in other transactions with and perform other services for us in the ordinary course of business.

 

If so indicated in a prospectus supplement, we will authorize underwriters or other persons acting as our agents to solicit offers by institutional investors to purchase securities pursuant to contracts providing for payment and delivery on a future date. We may enter contracts with commercial and savings banks, insurance companies, pension funds, investment companies, educational and charitable institutions and other institutional investors. The obligations of any institutional investor will be subject to the condition that its purchase of the offered securities will not be illegal at the time of delivery. The underwriters and other agents will not be responsible for the validity or performance of contracts.

 

Direct Sales and Sales through Agents

 

We may sell the securities directly. In this case, no underwriters or agents would be involved. We may also sell the securities through agents designated by us from time to time. In the applicable prospectus supplement, we will name any agent involved in the offer or sale of the offered securities, and we will describe any commissions payable to the agent. Unless we inform you otherwise in the applicable prospectus supplement, any agent will agree to use its reasonable best efforts to solicit purchases for the period of its appointment.

 

We may sell the securities directly to institutional investors or others who may be deemed to be underwriters within the meaning of the Securities Act with respect to any sale of those securities. We will describe the terms of any sales of these securities in the applicable prospectus supplement.

 

At the Market Offerings

 

We may also sell the securities offered by any applicable prospectus supplement in “at the market offerings” within the meaning of Rule 415(a)(4) of the Securities Act or into an existing trading market, on an exchange or otherwise.

 

Remarketing Arrangements

 

Securities may also be offered and sold, if so indicated in the applicable prospectus supplement, in connection with a remarketing upon their purchase, in accordance with a redemption or repayment pursuant to their terms, or otherwise, by one or more remarketing firms, acting as principals for their own accounts or as agents for us. Any remarketing firm will be identified and the terms of its agreements, if any, with us and its compensation will be described in the applicable prospectus supplement.

 

Delayed Delivery Contracts

 

If we so indicate in the applicable prospectus supplement, we may authorize agents, underwriters or dealers to solicit offers from certain types of institutions to purchase securities from us at the public offering price under delayed delivery contracts. These contracts would provide for payment and delivery on a specified date in the future.

 

The contracts would be subject only to those conditions described in the applicable prospectus supplement. The applicable prospectus supplement will describe the commission payable for solicitation of those contracts.

 

 

General Information

 

We may have agreements with the underwriters, dealers, agents and remarketing firms to indemnify them against certain civil liabilities, including liabilities under the Securities Act, or to contribute with respect to payments that the underwriters, dealers, agents or remarketing firms may be required to make. Underwriters, dealers, agents and remarketing firms may be customers of, engage in transactions with or perform services for us in the ordinary course of their businesses.

 

 

ENFORCEABILITY OF CIVIL LIABILITIES

 

CASI is incorporated in the Cayman Islands because of certain benefits associated with being a Cayman Islands company, such as political and economic stability, an effective judicial system, a favorable tax system, the absence of foreign exchange control or currency restrictions and the availability of professional and support services. However, the Cayman Islands has a less developed body of securities laws as compared to the United States and provides less protection for investors. In addition, Cayman Islands companies do not have standing to sue before the federal courts of the United States.

 

A majority portion of CASI’s assets are located outside the United States. In addition, a majority of CASI’s directors and officers are nationals or residents of jurisdictions other than the United States and all or a majority portion of their assets are located outside the United States. As a result, it may be difficult for investors to effect service of process within the United States upon CASI or these persons, or to bring an action against CASI or against these persons in the United States, in the event that you believe that your rights have been infringed under the securities laws of the United States or any state in the United States. It may also be difficult for you to enforce in U.S. courts judgments obtained in U.S. courts based on the civil liability provisions of the U.S. federal securities laws against CASI and its officers and directors.

 

Maples and Calder (Hong Kong) LLP, our counsel as to Cayman Islands law, has advised us that there is uncertainty as to whether the courts of the Cayman Islands would (1) recognize or enforce judgments of U.S. courts obtained against CASI or its directors or officers, predicated upon the civil liability provisions of the securities laws of the United States or any state in the United States, or (2) entertain original actions brought in the Cayman Islands against CASI or its directors or officers, predicated upon the securities laws of the United States or any state in the United States.

 

Maples and Calder (Hong Kong) LLP has informed us that although there is no statutory enforcement in the Cayman Islands of judgments obtained in the federal or state courts of the United States (and the Cayman Islands are not a party to any treaties for the reciprocal enforcement or recognition of such judgments), a judgment obtained in such jurisdiction will be recognized and enforced in the courts of the Cayman Islands at common law, without any re-examination of the merits of the underlying dispute, by an action commenced on the foreign judgment debt in the Grand Court of the Cayman Islands, provided such judgment (a) is given by a foreign court of competent jurisdiction, (b) imposes on the judgment debtor a liability to pay a liquidated sum for which the judgment has been given, (c) is final, (d) is not in respect of taxes, a fine or a penalty, and (e) was not obtained in a manner and is not of a kind the enforcement of which is contrary to natural justice or the public policy of the Cayman Islands. However, the Cayman Islands courts are unlikely to enforce a judgment obtained from the U.S. courts under civil liability provisions of the U.S. federal securities law if such judgment is determined by the courts of the Cayman Islands to give rise to obligations to make payments that are penal or punitive in nature. Because such a determination has not yet been made by a court of the Cayman Islands, it is uncertain whether such civil liability judgments from U.S. courts would be enforceable in the Cayman Islands.

 

It is our understanding that the PRC does not have treaties with the United States and many other countries providing for the reciprocal recognition and enforcement of judgments of courts and that there is uncertainty as to whether the courts of the PRC would recognize or enforce judgments of United States courts against CASI or the directors or officers of CASI predicated upon the civil liability provisions of the securities laws of the United States or any state in the United States.

 

Additionally, it is our understanding that it may be difficult for you to bring an original action against CASI or against its directors and officers who are nationals or residents of countries other than the United States in a PRC court in the event that you believe that your rights have been infringed under the U.S. federal securities laws, PRC laws, Cayman Islands laws or otherwise because we are incorporated under the laws of the Cayman Islands and it may be difficult for U.S. shareholders, by virtue only of holding CASI ordinary shares, to establish a connection to the PRC as required by the PRC Civil Procedures Law in order for a PRC court to have jurisdiction.

 

 

EXPENSES

 

The following is a statement of expenses in connection with the distribution of the securities registered. All amounts shown are estimates except the SEC registration fee. The estimates do not include expenses related to offerings of particular securities. Each prospectus supplement describing an offering of securities will reflect the estimated expenses related to the offering of securities under that prospectus supplement.

 

Expense		Estimated Amount
SEC registration fee		$	30,345	(1)
FINRA filing fee			30,500
Printing expenses				(2)
Legal fees and expenses				(2)
Accounting fees and expenses				(2)
Miscellaneous costs				(2)
Total		$		(2)

 

	(1)	Includes $7,380 that was previously paid with respect to the offer and sale of up to an aggregate of $50.0 million in securities described in the prospectus to the Prior Registration Statement on Form F-3 (Registration No. 333-279096), which was declared effective by the SEC on May 10, 2024.
	(2)	These fees are calculated based on the number of issuances and amount of securities offered and accordingly cannot be estimated at this time.

 

 

TAXATION

 

Material income tax consequences relating to the purchase, ownership and disposition of any of the securities offered by this prospectus will be set forth in the applicable prospectus supplement relating to the offering of those securities.

 

LEGAL MATTERS

 

Maples and Calder (Hong Kong) LLP will pass upon the validity of the securities being registered hereby and certain other legal matters of Cayman Islands law in connection with the registration of such securities. Harter Secrest & Emery LLP will pass upon certain matters of U.S. federal and New York law for us in connection with the registration of certain securities being registered hereby. Additional legal matters may be passed upon for us and any underwriter that we will name in the applicable prospectus supplement.

 

EXPERTS

 

The consolidated financial statements of CASI Pharmaceuticals, Inc. as of December 31, 2023 and 2022, and for each of the years in the three-year period ended December 31, 2023, have been incorporated by reference herein in reliance upon the report of KPMG Huazhen LLP, independent registered public accounting firm, incorporated by reference herein, and upon the authority of said firm as experts in accounting and auditing.

 

 

WHERE YOU CAN FIND MORE INFORMATION

 

We are subject to the information requirements of the Exchange Act that are applicable to foreign private issuers. Accordingly, we are required to file reports and other information with the SEC, including annual reports on Form 20-F and disclosure furnished under cover of Form 6-K. The SEC maintains a website (www.sec.gov) that contains reports and other information regarding issuers, such as us, that file electronically with the SEC. We also maintain a website (www.casipharmaceuticals.com) from which you can access such reports and other information free of charge as soon as reasonably practicable after such material is electronically filed with, or furnished to, the SEC. The information contained on our website does not form a part of this prospectus.

 

As a foreign private issuer, we are exempt under the Exchange Act from rules prescribing the furnishing and content of proxy statements, and our officers, directors and principal shareholders are exempt from the reporting and short-swing profit recovery provisions contained in Section 16 of the Exchange Act. In addition, we are not required under the Exchange Act to file periodic financial statements with the SEC as frequently or as promptly as U.S. companies whose securities are registered under the Exchange Act.

 

We have filed with the SEC a “shelf” registration statement (including amendments and exhibits to the registration statement) on Form F-3 under the Securities Act. This prospectus, which is part of such registration statement, does not contain all of the information set forth in the Registration Statement and the exhibits and schedules to the Registration Statement. We have omitted parts of the registration statement in accordance with the rules and regulations of the SEC. For more detail about us and the securities offered by this prospectus, you may examine the registration statement and the exhibits filed with it at the website provided in the previous paragraph. You should rely only on the information contained in this prospectus, any applicable prospectus supplement, any free writing prospectus and the documents incorporated by reference herein and therein. We have not authorized anyone else to provide you with different information. We are not making an offer of these securities in any state where the offer is not permitted.

 

 

INCORPORATION BY REFERENCE

 

The SEC allows us to incorporate by reference much of the information that 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 by reference 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 and any accompanying prospectus supplement incorporate by reference the documents set forth below that have previously been filed with the SEC (other than those documents or the portions of those documents that are “furnished” unless otherwise specified below):

 

·

our Annual Report on Form 20-F for the year ended December 31, 2023, filed with the SEC on March 28, 2024;

 

·

our reports on Form 6-K furnished with the SEC on April 8, 2024, June 27, 2024 (Film No. 241075375), June 27, 2024 (Film No. 241075377), July 8, 2024, July 19, 2024, September 12, 2024, November 15, 2024, and December 16, 2024; and

  

·

the description of the Company’s ordinary shares contained in the Company’s Registration Statement on Form 8A-12B (File No. 001-41666) filed with the SEC on March 27, 2023, pursuant to Section 12(b) of the Exchange Act, including any amendment or report filed for the purpose of updating such description.

 

All reports and other documents we subsequently file pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act, prior to the termination of this offering, including all such documents we may file with the SEC after the date of the initial registration statement and prior to the effectiveness of the registration statement, but excluding any information furnished to, rather than filed with, the SEC, will also be incorporated by reference into this prospectus and deemed to be part of this prospectus from the date of the filing of such reports and documents. We may incorporate by reference any reports on Form 6-K that we furnish to the SEC that we specifically identify in such form as being incorporated by reference into this prospectus after the date hereof and prior to the completion or termination of the offering of securities under this prospectus.

 

Any statement contained herein or in a document, all or a portion of which is incorporated or deemed to be incorporated by reference herein, shall be deemed to be modified or superseded for purposes of this prospectus to the extent that a statement contained herein or in any other subsequently filed document which also is or is deemed to be incorporated by reference herein modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this prospectus. Notwithstanding the foregoing, no information is incorporated by reference in this prospectus or any prospectus supplement hereto where such information under applicable forms and regulations of the SEC is not deemed to be “filed” under Section 18 of the Exchange Act or otherwise subject to the liabilities of that section, unless the report or filing containing such information indicates that the information therein is to be considered “filed” under the Exchange Act or is to be incorporated by reference in this prospectus or any prospectus supplement hereto.

 

We will provide to each person, including any beneficial owner, to whom a prospectus is delivered, without charge upon written or oral request, a copy of any or all of the documents that are incorporated by reference into this prospectus but not delivered with the prospectus, including exhibits that are specifically incorporated by reference into such documents. You may request a copy of such documents at no cost, by writing or telephoning us at the following address or telephone number:

 

CASI Pharmaceuticals, Inc.

9620 Medical Center Drive, Suite 300

Rockville, MD 20850

240-864-2600

 

 

CASI PHARMACEUTICALS, INC.

Table of Contents

 

			PAGE
Unaudited Condensed Consolidated Balance Sheets as of June 30, 2024 and December 31, 2023			F-2
Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss for the six months ended June 30, 2024 and 2023			F-3
Unaudited Condensed Consolidated Statements of Shareholders’ Equity for the six months ended June 30, 2024 and 2023			F-4
Unaudited Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2024 and 2023			F-5
Notes to Unaudited Condensed Consolidated Financial Statements			F-6

 

 

CASI Pharmaceuticals, Inc.

Unaudited Condensed Consolidated Balance Sheets

(In thousands, except share and per share data)

 

		June 30, 2024				December 31,2023
ASSETS
Current assets:
Cash and cash equivalents		$	9,533			$	17,083
Investment in equity securities, at fair value			3,194				1,675
Short term investments			-				12,011
Accounts receivable			6,781				9,551
Amounts due from related parties			963				587
Inventories			14,614				15,877
Prepaid expenses and other			2,111				2,560
Total current assets			37,196				59,344
Long-term investments			1,773				1,686
Property, plant and equipment, net			8,496				9,241
Intangible assets, net			1,358				1,839
Right of use assets			1,756				2,392
Other assets			692				766
Total assets		$	51,271			$	75,268
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable		$	792			$	4,438
Accrued and other current liabilities			8,791				12,288
Total current liabilities			9,583				16,726
Long term borrowing			18,465				18,895
Other liabilities			14,202				15,482
Total liabilities			42,250				51,103
Commitments and contingencies
Shareholders’ equity:
Ordinary shares			1				1
Treasury shares			(9,604	)			(9,604	)
Subscription receivable			(2,019	)			—
Additional paid-in capital			699,373				695,785
Accumulated other comprehensive loss			(1,420	)			(1,200	)
Accumulated deficit			(677,310	)			(660,817	)
Total shareholders’ equity			9,021				24,165
Total liabilities and shareholders’ equity		$	51,271			$	75,268

 

The accompanying notes are an integral part of these consolidated financial statements.

 

 

CASI Pharmaceuticals, Inc.

Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss

(In thousands, except share and per share data)

 

		Six Months Ended June 30
		2024				2023
Revenues		$	7,388				18,167
Costs of revenues			3,515				7,364
Gross profit			3,873				10,803
Operating expenses:
Research and development			3,730				5,148
General and administrative			10,755				13,446
Selling and marketing			8,161				8,782
Gain on disposal of intangible assets			(500	)			—
Other operating income			—				(1,306	)
Foreign exchange gain			(30	)			(15	)
Total operating expenses			22,116				26,055
Loss from operations			(18,243	)			(15,252	)
Non-operating income (expense):
Interest expense			(382	)
Interest income			266				341
Other income			176				40
Change in fair value of investments			1,690				(1,078	)
Loss before income tax expense and share of net loss in an equity investee			(16,493	)			(15,949	)
Income tax benefit			—				80
Net loss before share of net loss in an equity investee			(16,493	)			(15,869	)
Share of net loss in an equity investee			—				(32	)
Net loss			(16,493	)			(15,901	)
Less: Loss attributable to redeemable noncontrolling interest			—				(1,260	)
Accretion to redeemable noncontrolling interest redemption value			—				1,607
Net loss attributable to CASI Pharmaceuticals, Inc.		$	(16,493	)			(16,248	)
Net loss per share (basic and diluted)		$	(1.23	)			(1.22	)
Weighted average number of ordinary shares outstanding (basic and diluted)			13,450,694				13,341,897
Comprehensive loss:
Net loss		$	(16,493	)			(15,901	)
Foreign currency translation adjustment			(220	)			(1,979	)
Total comprehensive loss		$	(16,713	)			(17,880	)
Less: Comprehensive loss attributable to redeemable noncontrolling interest			—				(2,348	)
Comprehensive loss attributable to ordinary shareholders		$	(16,713	)			(15,532	)

 

The accompanying notes are an integral part of these consolidated financial statements.

 

 

CASI Pharmaceuticals, Inc.

Unaudited Condensed Consolidated Statements of Shareholders’ Equity

(In thousands, except share data)

 

																						Accumulated
																		Additional				Other
		Ordinary Share								Treasury				Subscription				Paid-in				Comprehensive				Accumulated
		Shares				Amount				Share				Receivable				Capital				Loss				Deficit				Total
Balance at December 31, 2023			13,378,175			$	1			$	(9,604	)		$	—			$	695,785			$	(1,200	)		$	(660,817	)		$	24,165
Issuance of ordinary share for options exercised			1,060,949				—				—				(2,019	)			2,048				—				—				29
Share-based compensation expense, net of forfeitures			—				—				—				—				1,540				—				—				1,540
Foreign currency translation adjustment			—				—				—				—				—				(220	)			—				(220	)
Net loss attributable to CASI Pharmaceuticals, Inc.			—				—				—				—				—				—				(16,493	)			(16,493	)
Balance at June 30, 2024			14,439,124				1				(9,604	)			(2,019	)			699,373				(1,420	)			(677,310	)			9,021

 

																						Accumulated
																		Additional				Other
		Ordinary Share								Treasury				Subscription				Paid-in				Comprehensive				Accumulated
		Shares				Amount				Share				Receivable				Capital				Loss				Deficit				Total
Balance at December 31, 2022			13,457,625			$	1			$	(9,330	)		$	—			$	691,766			$	(703	)		$	(637,160	)		$	44,574
Repurchase of ordinary share			(136,118	)							(274	)			—				(4	)			—				—				(278	)
Issuance of ordinary share for options exercised			56,668				—				—				—				109								—				109
Share-based compensation expense, net of forfeitures			—				—				—				—				4,960				—				—				4,960
Foreign currency translation adjustment			—				—				—				—				—				(891	)			—				(891	)
Net loss attributable to CASI Pharmaceuticals, Inc.			—				—				—				—				(1,607	)			—				(14,641	)			(16,248	)
Balance at June 30, 2023			13,378,175				1				(9,604	)			—				695,224				(1,594	)			(651,801	)			32,226

 

The accompanying notes are an integral part of these consolidated financial statements.

 

 

CASI Pharmaceuticals, Inc.

Unaudited Condensed Consolidated Statements of Cash Flows

(In thousands)

 

		Six Months Ended
		June 30, 2024				June 30, 2023
CASH FLOWS FROM OPERATING ACTIVITIES
Net cash used in operating activities		$	(18,090	)			(13,199	)
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of an intangible asset			500				—
Purchases of property, plant and equipment			(42	)			(53	)
Purchases of intangible assets			—				(36	)
Purchase of short term investments			(1,407	)			(23,580	)
Proceeds from sales or maturity of short term investments			13,294				7,077
Payments to taxing authorities in connection with cash withheld from a related person			(632	)			—
Net cash provided by (used in) investing activities		$	11,713				(16,592	)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from exercise of share options			—				109
Repurchase of ordinary shares			—				(278	)
Dividend payment to Wuxi Huicheng Yuanda Investment Partnership (Limited Partnership) (“Wuxi LP”)			(721	)			—
Net cash used in financing activities		$	(721	)			(169	)
Effect of exchange rate change on cash and cash equivalents			(452	)			(237	)
Net decrease in cash and cash equivalents		$	(7,550	)			(30,197	)
Cash and cash equivalents at beginning of period		$	17,083				47,112
Cash and cash equivalents at end of period		$	9,533				16,915
Supplemental disclosure of cash flow information:
Income taxes paid			—				1,807
Non-cash investing and financing activities:
Payables related to property, plant and equipment		$	90				91
Settlement of subscription receivable by deducting payroll payable from a related person		$	29				—
Prepayment related to intangible asset		$	90				9

 

The accompanying notes are an integral part of these consolidated financial statements.

 

 

CASI Pharmaceuticals, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

 

1.	DESCRIPTION OF BUSINESS

 

Business Overview

 

On April 12, 2024, CASI Pharmaceuticals, Inc. and its subsidiaries (“CASI” or “the Company”) submitted an Investigational New Drug (“IND”) application to the Food and Drug Administration (“FDA”) for CID-103 to support a phase 1/2 study of CID-103 in adults with chronic Immune Thrombocytopenia (“ITP”). On May 13, 2024, the Company received a letter from FDA indicating that study may proceed. CID-103 is a fully human IgG1 anti-CD38 monoclonal antibody recognizing a unique epitope that has demonstrated encouraging preclinical efficacy and safety profile compared to other anti-CD38 monoclonal antibodies.

 

2.	LICENSE AND DISTRIBUTION AGREEMENTS

 

China Resources Pharmaceutical Commercial Group International Trading Co., Ltd. (“CRPCGIT”, previously known as China Resources Guokang Pharmaceuticals Co., Ltd.)

 

In February 2024, the Company further extended the exclusive distribution agreement with CRPCGIT for an additional three years, the key terms of the agreement remains unchanged.

 

Juventas Cell Therapy Ltd. (“Juventas”)

 

On March 2, 2024, CASI received a notice from Juventas, which purported to terminate the CNCT19 Agreements. CASI responded to Juventas’ purported termination notice, noting that Juventas was not entitled to unilaterally terminate the CNCT19 Agreements and further demanding that Juventas cease any conduct that may constitute further breach of the CNCT19 Agreements and execute a written undertaking regarding compliance with the CNCT19 Agreements by March 13, 2024. Juventas did not comply with CASI’s demands. On March 20, 2024, CASI submitted a Notice of Arbitration at the Hong Kong International Arbitration Centre (“HKIAC”) against Juventas pursuant to the CNCT19 Agreements’ dispute resolution clauses, claiming that Juventas’ purported termination was invalid and that Juventas breached the CNCT19 Agreements and seeking, among other things, damages and injunctive reliefs. Together with the Notice of Arbitration, CASI also submitted an application for the appointment of an emergency arbitrator, seeking emergency injunctive reliefs. On the same day, Juventas also submitted a Notice of Arbitration at the HKIAC against CASI, alleging, among other things, that the CNCT19 Agreements were validly terminated and that CASI breached the CNCT19 Agreements. The HKIAC has appointed an emergency arbitrator in accordance with CASI’s application.

 

In an order dated July 15, 2024, and received by CASI on July 18, 2024, the First Intermediate People’s Court of Tianjin Municipality, where Juventas is headquartered, granted CASI’s application to freeze Juventas’s assets while the Arbitration Proceeding is ongoing and decided to freeze up to RMB 190 million in Juventas’s bank accounts or seize and freeze Juventas’s other assets of equivalent value (the “Asset Freezing Order”). The Asset Freezing Order took effect upon issuance and the court has taken steps to enforce the Asset Freezing Order.

 

The arbitration proceedings are in their early stages and the Company cannot predict right now the outcome of either of these proceedings. If we do not prevail in either of these proceedings completely or in part, or fail to reach a favorable settlement with Juventas, our plan with respect to the commercialization of CNCT 19 may be delayed or otherwise adversely impacted, which may in turn result in adverse impacts on our results of operations, financial condition and prospects.

 

3.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Basis of Presentation

 

The accompanying unaudited interim condensed consolidated financial statements were prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial information. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for annual financial statements. The interim financial statements should be read in conjunction with the consolidated financial statements and related footnotes included in the Company’s annual report on Form 20-F for the year ended December 31, 2023.

 

 

In the opinion of management, all adjustments (which include normal recurring adjustments) necessary to present a fair statement of the financial position as of June 30, 2024, the results of operations and cash flows for the six months ended June 30, 2024 and 2023, have been made.

 

Liquidity and Capital Resources

 

The unaudited interim condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. However, substantial doubt about the Company’s ability to continue as a going concern exists.

 

Since its inception in 1991, the Company has incurred significant losses from operations and, as of June 30, 2024, had incurred an accumulated deficit of $677.3 million. For the six months ended June 30, 2024, the Company had a net loss of $16.5 million and a cash outflow for operating activities of $18.1 million. As of June 30, 2024, the Company had a net current asset of $27.6 million. In addition, the Company has long term borrowing and non-current dividends payable in total amount of $19.5 million which may become payable on demand if certain events of default occur (including with respect to a certain revenue threshold to be met by CASI Wuxi in 2024, see Note 9). The Company also subsequently paid RMB 10.0 million in August 2024, with two remaining installments to be paid by March 31, 2025 and December 31, 2025, respectively, for total consideration of RMB 28.4 million plus interest related to investment in PAT (see Note 16). Therefore, the Company will require additional liquidity to continue its operations over the next 12 months.

 

Historically, the Company had relied principally on proceeds from equity financing and bank borrowings to finance its operations and business expansion. The Company has evaluated plans to continue as a going concern which include, but are not limited to, (i) exploring opportunities for further equity financing (ii) reducing discretionary capital and operating expenses (iii) negotiate with creditor to ease the credit terms (iv) obtaining additional facilities from banks or other financial institutions. Notwithstanding this, the Company may be unable to access further equity or debt financing when needed. As such, there can be no assurance that the Company will be able to obtain additional liquidity when needed or under acceptable terms, if at all.

 

The unaudited interim condensed consolidated financial statements do not include any adjustments to the carrying amounts and classification of assets, liabilities, and reported expenses that may be necessary if the Company were unable to continue as a going concern.

 

Use of Estimates

 

The preparation of financial statements and related disclosures in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses reported in those financial statements. Descriptions of the Company’s significant accounting policies are discussed in the notes to consolidated financial statements in the Company’s Annual Report on Form 20-F for the fiscal year ended December 31, 2023. Management evaluates the related estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment, and makes adjustments when facts and circumstances dictate. As future events and their effects cannot be determined with precision, actual results could differ significantly from those estimates and assumptions. Significant changes, if any, in those estimates and assumptions resulting from continuing changes in the economic environment will be reflected in the consolidated financial statements in future periods.

 

Recent Accounting Pronouncements

 

There were no accounting pronouncements that the Company adopted beginning January 1, 2024 that had a material impact on the Company’s financial position, results of operations or cash flows.

 

4.	REVENUE AND ACCOUNTS RECEIVABLE

 

The Company’s revenue is primarily consisted of sales of EVOMELA^® and FOLOTYN^®. As of June 30, 2024, the Company had not incurred, and therefore did not defer, any material costs to obtain or fulfill contracts. The Company did not have any contract assets or contract liabilities as of June 30, 2024 and December 31, 2023.

 

CRPCGIT is the sole customer of the Company's EVOMELA^® product sales in China, and China National Medicines Corporation Ltd. (“CNMC”) is the sole customer of the Company's FOLOTYN^® product sales in China. As of June 30, 2024, and December 31, 2023, accounts receivable from CRPCGIT represented approximately 93% and 100% of accounts receivable of the Company.

 

 

5.	INVESTMENT IN EQUITY SECURITIES, AT FAIR VALUE, SHORT -TERM INVESTMENTS AND LONG-TERM INVESTMENTS

 

Investment in Equity Securities, at Fair Value

 

BioInvent International AB – ordinary shares

 

In October 2020, in conjunction with its license agreement entered into with BioInvent International AB (“BioInvent”), a publicly traded company, CASI made a $6.3 million investment (equivalent to SEK 53.8 million) to acquire 1.2 million new shares (after 25:1 reverse stock split) of BioInvent, and 588,000 warrants, each warrant with a right to subscribe for 1 share (after 25:1 reverse stock split) in BioInvent within a period of five years. In the second quarter of 2022, the Company sold 275,000 ordinary shares of BioInvent.

 

The fair value of the ordinary shares was measured using its quoted market price, a Level 1 input (see Note 13). The Company recognized gains of $1.5 million and losses of $1.3 million for the ordinary shares of BioInvent, respectively, for the six months ended June 30, 2024 and 2023. Gains (losses) on the Company’s investments in equity securities are recognized as changes in fair value of investments in the consolidated statements of operations and comprehensive loss.

 

The following table summarizes the Company’s investments in equity securities with readily determinable fair value as of June 30, 2024, and December 31, 2023:

 

						Gross
(In thousands)						unrealized				Aggregate fair
As of June 30, 2024		Cost				losses				value
BioInvent - ordinary shares		$	4,337			$	(1,143	)		$	3,194

 

						Gross
(In thousands)						unrealized				Aggregate fair
As of December 31, 2023		Cost				losses				value
BioInvent - ordinary shares		$	4,337			$	(2,662	)		$	1,675

 

Short-term Investments

 

The Company’s short-term investments represent investments in financial instruments with a variable interest rate and term deposits with original maturities of more than 90 days that are readily convertible to known amounts of cash. The Company elected the fair value method at the date of initial recognition and carried these short-term investments subsequently at fair value. Changes in fair values are reflected in the consolidated statements of operations and comprehensive loss.

 

(In thousands)		June 30,				December 31,
		2024				2023
Aggregate cost basis			—				11,698
Gross unrealized gain			—				313
Aggregate fair value		$	—			$	12,011

 

 

Long-term Investments

 

Long-term investments include long term investments measured at fair value or measurement alternative, and an equity method investment.

 

Long-term investments measured at fair value or measurement alternative

 

Long-term investments measured at fair value or measurement alternative as of June 30, 2024, and December 31, 2023 consisted of the following:

 

										Gross
						Gross				unrealized
As of June 30, 2024						unrealized				losses (including				Carrying
(In thousands)		Cost				gains				impairment)				amount
Investments measured at fair value
Alesta Therapeutics B.V. - convertible loan		$	261			$	41			$	—			$	302
BioInvent International AB - warrants			656				—				(570	)			86
Investments in equity securities using measurement alternative
Alesta Therapeutics B.V. - equity interests			2,250				—				(865	)			1,385
Total		$	3,167			$	41			$	(1435	)		$	1,773

 

										Gross
						Gross				unrealized
As of December 31, 2023						unrealized				losses (including				Carrying
(In thousands)		Cost				gains				impairment)				amount
Investments measured at fair value
Alesta Therapeutics B.V. - convertible loan		$	261			$	35			$	—			$	296
BioInvent International AB - warrants			656				—				(651	)			5
Investments in equity securities using measurement alternative
Alesta Therapeutics B.V. - equity interests			2,250				—				(865	)			1,385
Total		$	3,167			$	35			$	(1,516	)		$	1,686

 

Equity method investment

 

Investment in Precision Autoimmune Therapeutics Co., Ltd., (“PAT”)

 

In May 2022, CASI China entered into an agreement for the investment in PAT in the amount of RMB 20.0 million (approximately $3.0 million) in cash during PAT’s first equity financing. CASI China paid all the consideration in June 2022. Upon consummation of such equity financing, CASI China will hold 15% equity interests of PAT and will hold one of the three board seats. According to the agreement, CASI China assumes profit or loss of PAT from the date when agreement was signed.

 

The investment is accounted for under the equity method as CASI China does not control the investee but has the ability to exercise significant influence over the operating and financial policies of the investee through its board representation. In 2023, due to PAT’s slow business progress and delay of financing, the Company recognized an impairment of this investment of $2.0 million, and the balance of this investment is zero as of June 30, 2024.

 

In July 2024, the Company, a third-party shareholder of PAT, and PAT entered into a tri-party agreement, pursuant to which the Company will purchase all of the third-party shareholder’s equity interest in PAT. The total consideration for this purchase consists of (i) a principal of RMB 28.4 million (approximately $3.9 million) which equals to the original total consideration paid by this shareholder, and (ii) interests calculated at a 6% non-compounding annual interest rate for the period between PAT’s receipt of the investment principal and the Company’s return of the investment principal. The consideration will be paid by three installments. The transaction is expected to complete by December 31, 2025, and upon the completion of the transaction, the Company will hold 40% equity interests of PAT.

 

 

6.	INVENTORIES

 

The Company’s inventories consist of finished goods of EVOMELA^® and FOLOTYN^®. As of June 30, 2024 and December 31, 2023, the Company had balance of inventories in the aggregate of $14.6 million and $15.9 million, respectively. No write down to the carrying amount of inventory have been recorded in the six months ended June 30, 2024 and 2023.

 

7.	PROPERTY, PLANT AND EQUIPMENT

 

Property, plant and equipment consist of the following:

 

(In thousands)		June 30,				December 31,
		2024				2023
Leasehold improvements		$	7,026			$	7,190
Machinery and equipment			5,959				5,997
Office equipment and furniture			646				682
Construction in progress			—				23
Property, plant and equipment, gross			13,631				13,892
Accumulated depreciation			(5,135	)			(4,651	)
Property, plant and equipment, net		$	8,496			$	9,241

 

8.	ACCRUED AND OTHER CURRENT LIABILITIES, AND OTHER LIABILITIES

 

		June 30,				December 31,
(In thousands)		2024				2023
Accrued and other current liabilities:
Payroll and welfare payable		$	2,396			$	3,124
Grants related to land use right			2,485				2,543
Payable to sales and marketing services			559				1,985
Payable to professional consulting service			421				1,023
Payable to clinical study service			551				1,014
Dividends and interest payable to Wuxi LP, current			1,475				753
Lease liabilities-current			429				728
Value-added tax and other tax payable			184				481
Payables related to property, plant and equipment			90				99
Other			201				538
		$	8,791			$	12,288
Other Liabilities
Profit-sharing liability to Juventas			11,821				11,821
Dividends payable to Wuxi LP, non current		$	1,000			$	2,045
Lease liabilities-noncurrent			1,381				1,616
		$	14,202			$	15,482

 

 

9.	REDEEMABLE NONCONTROLLING INTEREST AND LONG TERM BORROWING

 

Changes in redeemable noncontrolling interest during the six months periods ended June 30, 2024 and 2023 are as follows:

 

		Six Months Ended June 30,
(In thousands)		2024				2023
Balance at beginning of period		$	—			$	22,358
Share of CASI Wuxi net loss			—				(1,260	)
Accretion of redeemable noncontrolling interest			—				1,607
Foreign currency translation adjustment			—				(1,088	)
Balance at end of period		$	—			$	21,617

 

In December 2023, the Company entered into a series of agreements, including a capital reduction agreement, a long term borrowing agreement, and four guarantee agreements, with Wuxi LP, CASI China and CASI Wuxi, pursuant to which, (i) CASI Wuxi will reduce its registered capital and return to Wuxi LP the investment principal made by Wuxi LP in CASI Wuxi in the amount of RMB134.2 million (equivalent to its original investment of US$20 million, the “Investment Principal”), together with certain investment return in the amount of RMB26.2 million to be paid in instalments (the “Dividends Payable”), and Wuxi LP shall cease to be a shareholder of CASI Wuxi, (ii) Wuxi LP shall reinvest the Investment Principal into a three-year long term borrowing to CASI Wuxi (the “Long term borrowing”, together with the Dividends Payable, the “Exchanged Liabilities”), which shall have a non-compounding annual interest rate of 4.05% and can, from the beginning date of the Long term borrowing term till the six month anniversary after the maturity of the Long term borrowing, be partially or fully converted into the equity interest of any subsidiaries of the Company at the conversion date fair value, solely at Wuxi LP’s discretion, and (iii) each of the Company and CASI China will provide irrevocable joint and several liability guarantees on the above-mentioned payment obligations. The term of the Long term borrowing will start on December 25, 2023 and end on December 31, 2026. The Dividends Payable shall be paid in four instalments in the amount of RMB 5.2 million, RMB 5.2 million, RMB 7.9 million, and RMB 7.9 million in December 2023, June 2024, June 2025 and June 2026, respectively. As of June 30, 2024, the balance of the principal of the Long term borrowing is presented in “Long term borrowing” on the consolidated balance sheet, the balance of remaining Dividends Payable and interests accrued for the Long term borrowing is included in “Accrued and other current liabilities” and “Other liabilities” on the consolidated balance sheet. The provision related to the Long term borrowing includes certain financial and non-financial covenants, including certain revenue threshold generated by CASI Wuxi for each of the years from 2024 to 2028. If CASI Wuxi were to breach the covenants, the remaining balance of Dividends Payable and Long term borrowing become payable on demand.

 

10.	SHAREHOLDERS’ EQUITY

 

In June 2024, the Company entered into securities purchase agreements with certain investors for a private investment in public equity financing (the “PIPE Transaction”). The PIPE Transaction was led by Venrock Healthcare Capital Partners and Foresite Capital, with participation by Panacea Venture and Dr. Wei-Wu He, the Chairman of the board of directors and Chief Executive Officer of the Company and his family trust.

 

In the PIPE Transaction, the Company sold an aggregate of 1,020,000 ordinary shares, at a price of $5.00 per ordinary share, and in the case of two investors, pre-funded warrants to purchase up to an aggregate of 1,980,000 ordinary shares at a per-share pre-funded exercise price of $4.9999. Each pre-funded warrant has an exercise price of $0.0001 per share, and is exercisable immediately and remains exercisable until exercised in full. The pre-funded warrants are not refundable and are subject to other terms and conditions, including certain ordinary share ownership limitations. On July 15, 2024, the Company received the gross proceeds of $15.0 million, and paid the agents fees of $0.9 million separately afterwards.

 

11.	NET LOSS PER SHARE

 

Net loss per share (basic and diluted) was computed by dividing net loss attributable to ordinary shareholders, considering the accretions to redemption value of the redeemable noncontrolling interest, by the weighted average number of shares of ordinary shares outstanding. As of June 30, 2024 and 2023, outstanding share options totaling 2,703,136 and 4,010,592, respectively, were anti-dilutive, and therefore, were not included in the computation of weighted average shares used in computing diluted loss per share.

 

 

The following table sets forth the basic and diluted net loss per share computation and provides a reconciliation of the numerator and denominator for the periods presented:

 

		Six Months Ended June 30,
(In thousands, except share and per share data)		2024				2023
Numerator:
Net loss attributable to CASI Pharmaceuticals, Inc.		$	(16,493	)		$	(16,248	)
Denominator:
Weighted average number of ordinary share			13,450,694				13,341,897
Denominator for basic and diluted net loss per share calculation			13,450,694				13,341,897
Net loss per share
— Basic and diluted		$	(1.23	)		$	(1.22	)

 

12.	SHARE-BASED COMPENSATION

 

The Company has adopted various share compensation plans for executive, management and staff of the Company, as well as outside directors and consultants.

 

The share-based compensation expenses are recorded as components of research and development expense, sales and marketing expense, and general and administrative expense, as follows:

 

		Six Months Ended June 30,
(In thousands)		2024				2023
Research and development		$	82			$	218
Sales and Marketing			134				143
General and administrative			1,324				4,599
Share-based compensation expense		$	1,540			$	4,960

 

In July 2024, the 2024 Long-Term Incentive Plan (the “2024 Plan”) was approved by the Company’s board of directors. The maximum number of share options that are available for grants shall not exceed 2,000,000 shares.

 

13.	FAIR VALUE MEASUREMENTS

 

Financial instruments of the Company primarily consist of cash and cash equivalents, investment in equity securities, short-term investments, accounts receivable, receivable from a related party, term deposit, prepaid expenses and other, long-term investments, accounts payable, accrued and other current liabilities, and long-term borrowing. As of June 30, 2024 and December 31, 2023, the carrying amount of cash and cash equivalents, accounts receivable, amounts due from related parties, prepaid expenses and other, accounts payable and accrued and other current liabilities are carried at cost which approximates their fair values due to the short-term nature of the instruments, the carrying amount of long term borrowing approximates its fair value as interest rate is comparable to the prevailing interest rate in the market.

 

Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis

 

The Company evaluates financial assets and liabilities subject to fair value measurements on a recurring basis to determine the appropriate level at which to classify them each reporting period. This determination requires the Company to make subjective judgments as to the significance of inputs used in determining fair value and where such inputs lie within the hierarchy.

 

The Company has an equity investment in the common stock of a publicly traded company. The Company’s investments in these equity securities are carried at their estimated fair value, with changes in fair value reported in the consolidated statement of operations and comprehensive loss each reporting period (see Note 5). The fair value of the common stock is based on quoted market price for the investees’ common stock, a Level 1 input.

 

The Company has an equity investment in the warrants of a publicly traded company. The Company’s investment is carried at its estimated fair value, with changes in fair value reported in the consolidated statement of operations and comprehensive loss each reporting period (see Note 5). The fair value of the warrants was measured using observable market-based inputs other than quoted prices in active markets for identical assets, level 2 inputs. The Company uses the Black-Scholes-Merton valuation model to estimate the fair value of warrants. Option valuation models, including Black-Scholes-Merton, require the input of highly subjective assumptions, and changes in the assumptions used can materially affect the fair value determination of a warrant.

 

 

The Company has investments in the convertible debt of a private company. The Company’s investment is carried at its estimated fair value, with changes in fair value reported in the consolidated statement of operations and comprehensive loss each reporting period (see Note 5) using Level 3 input.

 

The following tables present the Company’s financial assets accounted for at fair value on a recurring basis as of June 30, 2024 and December 31, 2023, by level within the fair value hierarchy:

 

(In thousands)		Fair Value at
Description		June 30, 2024				Level 1				Level 2				Level 3
Investment in equity securities, at fair value:		$	3,194			$	3,194			$	—			$	—
Long term investments:
Investment in warrants - Designated as investment measured at FVTPL		$	86			$	—			$	86			$	—
Investment in convertible loan - AFS		$	302			$	—			$	—			$	302

 

(In thousands)		Fair Value at
Description		December 31, 2023				Level 1				Level 2				Level 3
Investment in equity securities, at fair value:		$	1,675			$	1,675			$	—			$	—
Short term investments:		$	12,011			$	—			$	12,011			$	—
Long term investments:
Investment in warrants - Designated as investment measured at FVTPL		$	5			$	—			$	5			$	—
Investment in convertible loan - AFS		$	296			$	—			$	—			$	296

 

Financial Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis

 

The Company measures equity investments without readily determinable fair values at its cost, minus impairment, if any, plus or minus changes resulting from observable transactions of identical or similar securities of the same issuer.

 

Non-Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis

 

The Company has no non-financial assets and liabilities that are measured at fair value on a recurring basis.

 

Non-Financial Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis

 

The Company had no non-financial assets and liabilities that are measured at fair value on a non-recurring basis.

 

14.	RELATED PARTY TRANSACTIONS

 

In June 2024, Dr. Wei-Wu He, the Company’s Chairman of the board of directors and CEO, exercised 1,023,499 share options, the exercise price was $2.0 million. In addition, the Company paid $0.6 million payroll tax resulting from this exercise gain on behalf of him. As of June 30, 2024, total receivable due from Dr. Wei-Wu He was $2.6 million, which was subsequently paid off in December 2024.

 

In July 2024, the Company closed the PIPE Transaction, in which Dr. Wei-Wu He and his family trust participated in this transaction. Dr. Wei-Wu He and his family trust purchased 300,000 shares at the price of $5.0 per share for a total of $1.5 million.

 

15.	COMMITMENTS AND CONTINGENCIES

 

In conjunction with the Cleave assignment agreement entered into on July 18, 2023, the Company is responsible for certain milestone and royalty payments. As of June 30, 2024, no milestones have been achieved.

 

 

In conjunction with the BioInvent agreement entered into during 2020, the Company is responsible for certain milestone and royalty payments. As of June 30, 2024, no milestones had been achieved.

 

In conjunction with the Black Belt agreement entered into during 2019, the Company is responsible for certain milestone and royalty payments. In June 2021, the Company achieved the First-Patient-In in the Phase 1 dose escalation and expansion study of CID-103, and made $750,000 milestone payment in June 2021 and EUR250,000 ($305,000) in August 2021. As of June 30, 2024, no other milestones had been achieved.

 

In conjunction with the FOLOTYN^® Assignment Agreement and Payment Agreement entered into in July 2023, in addition to the $2 million upfront payment already paid in 2023, the Company is responsible for certain contingent Deferred Payments up to $10.0 million to licensor and certain contingent payment up to $750,000 to Acrotech. As of June 30, 2024, none of these contingent payments are considered probable based on the uncertainties of the successful renewal of the drug license in China.

 

The Company is subject in the normal course of business to various legal proceedings in which claims for monetary or other damages may be asserted. Management does not believe such legal proceedings, unless otherwise disclosed herein, are material.

 

16.	SUBSEQUENT EVENT

 

In July 2024, with respect to the Company’s previously announced dispute with Juventas, a PRC court issued an asset freezing order against Juventas in aid of the arbitration proceedings CASI initiated at the Hong Kong International Arbitration Centre in connection to Juventas’s purported termination of the parties’ agreements with respect to the commercialization of CNCT19 (the “Arbitration Proceeding”). In an order dated July 15, 2024 and received by CASI on July 18, 2024, the First Intermediate People’s Court of Tianjin Municipality, where Juventas is headquartered, granted CASI’s application to freeze Juventas’s assets while the Arbitration Proceeding is ongoing and decided to freeze up to RMB 190 million in Juventas’s bank accounts or seize and freeze Juventas’s other assets of equivalent value (the “Asset Freezing Order”). The Asset Freezing Order took effect upon issuance and the court has taken steps to enforce the Asset Freezing Order.

 

In July 2024, the Company entered into an agreement with PAT and one of the investors of PAT, to purchase 19.8876% equity interest of PAT from the investor. The total consideration is RMB 28.4 million plus interest and will be paid in three installments. The Company has paid RMB 10.0 million in August 2024. The remaining two installments will be paid by March 31, 2025 and December 31, 2025, respectively.

 

In December 2024, the Company received a Termination Process Letter from Acrotech of certain License Agreement (the “License Agreement”), dated September 17, 2014, between Spectrum Pharmaceuticals, Inc. and the Company granting the exclusive rights to the Company to commercialize Evomela^® in China, which was later assigned to Acrotech on March 1, 2019. Acrotech alleged in such letter that the Company materially breached the License Agreement and failed to cure such breach, and the License Agreement was therefore terminated. Pursuant to the License Agreement, the Company can continue to distribute and sell Evomela^® for a reasonable wind-down period not to exceed 24 months, so the Company does not expect any disruption to its current distribution plan for Evomela^® during such period.

 

 

 

$200,000,000

 

 

Ordinary Shares

Preferred Shares

Warrants

Subscription Rights

Units

 

 

PROSPECTUS

 

 

           , 2024

 

 

The information in this prospectus is not complete and may be changed. We may not sell these securities or accept an offer to buy 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 it is not soliciting offers to buy these securities in any jurisdiction where such offer or sale is not permitted.

 

Subject to Completion, dated December 20, 2024

 

PROSPECTUS

 

 

Up to $50,000,000

 

Ordinary Shares

 

We have entered into an Open Market Sale Agreement^SM, or Sales Agreement, with Jefferies LLC, or Jefferies, dated December 20, 2024, relating to our ordinary shares offered by this prospectus. In accordance with the terms of the Sales Agreement, under this prospectus, we may offer and sell our ordinary shares having an aggregate offering price of up to $50.0 million from time to time through Jefferies acting as our sales agent.

 

Our ordinary shares are traded on The Nasdaq Capital Market under the symbol “CASI.” The last reported sale price of our ordinary shares on December 18, 2024 was $2.86 per share.

 

Sales of our ordinary shares, if any, under this prospectus will be made by any method permitted that is deemed an “at the market offering” as defined in Rule 415(a)(4) under the Securities Act of 1933, as amended, or the Securities Act, including sales made directly on or through The Nasdaq Capital Market or any other existing trading market in the United States for our ordinary shares. 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. There is no arrangement for funds to be received in any escrow, trust or similar arrangement.

 

Jefferies will be entitled to compensation at a commission rate of up to 3.0% of the gross sales price per ordinary share sold. In connection with the sale of the ordinary shares on our behalf, Jefferies will be deemed to be an “underwriter” within the meaning of the Securities Act and the compensation of Jefferies will be deemed to be underwriting commissions or discounts. We have also agreed to provide indemnification and contribution to Jefferies with respect to certain liabilities, including liabilities under the Securities Act and the Exchange Act of 1934, as amended, or the Exchange Act.

 

Investing in our securities involves a high degree of risk. We may be subject to various legal and operational risks as a result of doing business in the PRC, risks relating to our auditor, risks relating to cash and asset transfers among the Company and its subsidiaries, and risks relating to permission and filing procedures required from the governmental authorities of the PRC with respect to the operation of our PRC subsidiaries and future offerings in the United States. You should carefully review the risks and uncertainties described under the section titled “Risk Factors” on page P-8 of this prospectus and, if applicable, any risk factors described in any applicable prospectus supplement and in our filings with the U.S. Securities and Exchange Commission, or SEC, that are incorporated by reference in this prospectus.

 

 

Neither the SEC nor any state securities commission has approved or disapproved of these securities, or determined if this prospectus is accurate or complete. Any representation to the contrary is a criminal offense.

 

Jefferies

 

The date of this prospectus is            , 2024

 

 

TABLE OF CONTENTS

 

ABOUT THIS PROSPECTUS	ii
INDUSTRY AND MARKET DATA	iv
TRADEMARKS AND TRADENAMES	iv
PROSPECTUS SUMMARY	P-1
THE OFFERING	P-7
RISK FACTORS	P-8
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS	P-10
USE OF PROCEEDS	P-12
CAPITALIZATION	P-13
DIVIDEND POLICY	P-14
DILUTION	P-15
PLAN OF DISTRIBUTION	P-16
ENFORCEABILITY OF CIVIL LIABILITIES	P-17
TAXATION	P-18
LEGAL MATTERS	P-18
EXPERTS	P-18
WHERE YOU CAN FIND MORE INFORMATION	P-19
INCORPORATION BY REFERENCE	P-20
EXPENSES	P-21

 

 

ABOUT THIS PROSPECTUS

 

This prospectus relates to the registration statement that we filed with the U.S. Securities and Exchange Commission, or SEC, using a “shelf” registration process under the Securities Act of 1933, as amended, or the Securities Act. Under this shelf registration process, we may use this prospectus to, from time to time, sell ordinary shares having an aggregate gross sales price of up to $50.0 million.

 

Before buying any of the ordinary shares that we are offering, you should carefully read this prospectus and the documents incorporated by reference herein, as well as the additional information described under the headings “Where You Can Find More Information” and “Information Incorporated by Reference.” These documents contain important information that you should consider when making your investment decision.

 

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 prospectus supplement or a document incorporated by reference in this prospectus—the statement in the document having the later date modifies or supersedes the earlier statement.

 

We further note that the representations, warranties and covenants made by us in any agreement that is filed as an exhibit to any document that is incorporated by reference in this prospectus or any accompanying prospectus supplement were made solely for the benefit of the parties to such agreement, including, in some cases, for the purpose of allocating risk among the parties to such agreements, and should not be deemed to be a representation, warranty or covenant to you. Moreover, such representations, warranties or covenants were accurate only as of the date when made. Accordingly, such representations, warranties and covenants should not be relied on as accurately representing the current state of our affairs.

 

The information contained in this prospectus or any document incorporated by reference herein is accurate only as of such documents’ respective dates, regardless of the time of delivery of this prospectus, any applicable free writing prospectus or the documents incorporated by reference in this prospectus or the sale of any securities. Our business, financial condition, results of operations and prospects may have changed materially since those dates.

 

Neither we nor Jefferies have authorized anyone to provide you with information that is different from that contained in this prospectus, any amendment or supplement to this prospectus, or any free writing prospectus we may authorize to be delivered or made available to you. Neither we nor Jefferies take responsibility for, or provide assurance as to the reliability of, any other information that others may give you. This prospectus does 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 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.

 

For investors outside the United States, neither we nor Jefferies have taken any action that would permit the offering or possession or distribution of this prospectus in any jurisdiction where action for that purpose is required, other than in the United States. 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 securities described herein and the distribution of this prospectus outside the United States.

 

Throughout this prospectus, references to the “Company,” “we,” “our,” “us,” “registrant,” “CASI” or similar terms used in this prospectus refer to CASI Pharmaceuticals, Inc., an exempted company with limited liability under the laws of the Cayman Islands, including its consolidated subsidiaries, unless the context otherwise indicates.

 

“PRC” or “China” refers to the People’s Republic of China, excluding, for the purpose of this prospectus, Taiwan, Hong Kong and Macau, “RMB” or “Renminbi” refers to the legal currency of China, and “$”, “US$” or “U.S. Dollars” refers to the legal currency of the United States.

 

 

This prospectus may contain translations of Renminbi amounts into U.S. dollars at specified rates solely for the convenience of the reader. We make no representation that the Renminbi or U.S. dollar amounts referred to in this prospectus could have been or could be converted into U.S. dollars or Renminbi, as the case may be, at any particular rate or at all.

 

This prospectus and the information incorporated herein by reference include trademarks, service marks and trade names owned by us or other companies. All trademarks, service marks and trade names included or incorporated by reference into this prospectus, any applicable prospectus supplement or any related free writing prospectus are the property of their respective owners.

 

 

INDUSTRY AND MARKET DATA

 

In this prospectus and the documents incorporated by reference in this prospectus, we present industry data, information and statistics regarding the markets in which the Company and its subsidiaries compete as well as publicly available information, industry and general publications and research and studies conducted by third parties. This information is supplemented where necessary with the Company’s own internal estimates and information obtained from discussions with its customers, taking into account publicly available information about other industry participants and the Company’s management’s judgment where information is not publicly available.

 

Industry publications, research, studies and forecasts generally state that the information they contain has been obtained from sources believed to be reliable, but that the accuracy and completeness of such information is not guaranteed. Forecasts and other forward-looking information obtained from these sources are subject to the same qualifications and uncertainties as the other forward-looking statements in this prospectus or any document incorporated by reference into this prospectus. These forecasts and forward-looking information are subject to uncertainty and risk due to a variety of factors, including those described under the section entitled “Risk Factors.” These and other factors could cause results to differ materially from those expressed in any forecasts or estimates.

 

TRADEMARKS AND TRADENAMES

 

This prospectus and the information incorporated herein by reference include trademarks, service marks and trade names owned by us or other companies. All trademarks, service marks and trade names included or incorporated by reference into this prospectus, any applicable prospectus supplement or any related free writing prospectus are the property of their respective owners.

 

 

RISK FACTORS

 

Investing in our securities involves a high degree of risk. Before deciding whether to invest in our securities, you should consider carefully the risks and uncertainties described under the section titled “Risk Factors” contained in the applicable prospectus supplement and any related free writing prospectus, and discussed under the section titled “Risk Factors” contained in our most recent annual report on Form 20-F for the year ended December 31, 2023, as filed with the SEC on March 28, 2024 and in our current reports on Form 6-K, as well as any amendments thereto reflected in subsequent filings with the SEC, which are incorporated by reference into this prospectus in their entirety, together with other information in this prospectus, the documents incorporated by reference and any free writing prospectus that we may authorize for use in connection with a specific offering. See “Where You Can Find More Information.”

 

The risks described in these documents are not the only ones we face, but those that we consider to be material. There may be other unknown or unpredictable economic, business, competitive, regulatory or other factors that could have material adverse effects on our future results. Past financial performance may not be a reliable indicator of future performance, and historical trends should not be used to anticipate results or trends in future periods. If any of these risks actually occur, our business, financial condition, results of operations or cash flow could be harmed. This could cause the trading price of our securities to decline, resulting in a loss of all or part of your investment. Please also read carefully the section below titled “Special Note Regarding Forward-Looking Statements.”

 

Risks Related to This Offering

 

Our Recurring Operating Losses have Raised Substantial Doubt Regarding Our Ability to Continue as a Going Concern.

 

Our recurring operating losses raise substantial doubt about our ability to continue as a going concern. Since our inception in 1991, we have incurred significant losses from operations and, as of June 30, 2024, had incurred an accumulated deficit of $677.3 million. For the six months ended June 30, 2024, we had a net loss of $16.5 million and a cash outflow for operating activities of $18.1 million. As of June 30, 2024, we had net current assets of $27.6 million. In addition, we had long term borrowing and non-current dividends payable in a total amount of $19.5 million, which may become payable on demand if certain events of default occur (including with respect to a certain revenue threshold to be met by CASI Wuxi in 2024, see Note 9 to our unaudited condensed consolidated financial statements for the six months ended June 30, 2024 included elsewhere in this prospectus (the “Financial Statements”)). We also entered into an agreement with Precision Autoimmune Therapeutics Co., Ltd., (“PAT”) and one of the investors of PAT, to purchase 19.8876% equity interest of PAT from the investor. The total consideration is RMB 28.4 million plus interest and will be paid in three installments. We paid RMB 10.0 million in August 2024. The remaining two installments will be paid by March 31, 2025 and December 31, 2025, respectively. Therefore, we will require additional liquidity to continue our operations over the next 12 months. These factors raise substantial doubt about our ability to continue as a going concern within a reasonable period of time, which is considered to be one year from the issuance date of the unaudited condensed consolidated financial statements for the six months ended June 30, 2024. Our financial statements included into this prospectus do not include any adjustments that might result if we are unable to continue as a going concern and, therefore, be required to realize our assets and discharge our liabilities other than in the normal course of business, which could cause investors to suffer the loss of all or a substantial portion of their investment. In order to have sufficient cash and cash equivalents to fund our operations in the future, we will need to raise additional equity or debt capital and cannot provide any assurance that we will be successful in doing so. The perception of our ability to continue as a going concern may make it more difficult for us to obtain financing for the continuation of our operations and could result in the loss of confidence by investors, suppliers and employees.

 

If you purchase our ordinary shares sold in this offering, you may experience immediate and substantial dilution in the net tangible book value of your shares. In addition, we may issue additional equity or convertible debt securities in the future, which may result in additional dilution to investors.

 

The price per ordinary share being offered may be higher than the net tangible book value per share of our outstanding ordinary shares prior to this offering. Assuming that an aggregate of 17,482,517 ordinary shares are sold at a price of $2.86 per share, the last reported sale price of our ordinary shares on the Nasdaq Capital Select Market on December 18, 2024, for aggregate gross proceeds of approximately $50.0 million and after deducting commissions and estimated offering expenses payable by us, new investors in this offering would incur immediate dilution of $1.02 per share. For a more detailed discussion of the foregoing, see the section entitled “Dilution” below. To the extent outstanding stock options or warrants are exercised, there will be further dilution to new investors. In addition, to the extent we need to raise additional capital in the future and we issue additional ordinary shares or securities convertible or exchangeable for our ordinary shares, our then existing stockholders may experience dilution and the new securities may have rights senior to those of our ordinary shares offered in this offering.

 

We have broad discretion in the use of the net proceeds from this offering and may not use them effectively.

 

Our management will have broad discretion in the application of the net proceeds from this offering, including for any of the purposes described in the section entitled “Use of Proceeds,” and you will not have the opportunity as part of your investment decision to assess whether the net proceeds are being used appropriately. Because of the number and variability of factors that will determine our use of the net proceeds from this offering, their ultimate use may vary substantially from their currently intended use. Our management might not apply our net proceeds in ways that ultimately increase the value of your investment. We currently intend to use the net proceeds from the sale of the ordinary shares offered hereby to fund the continued development and commercialization of our drug candidates and current products, including development of CID-103, and for working capital, capital expenditures and general corporate purposes. The failure by our management to apply these funds effectively could harm our business. Pending their use, we may invest the net proceeds from this offering in short-term, investment-grade, interest-bearing securities. These investments may not yield a favorable return to our stockholders. If we do not invest or apply the net proceeds from this offering in ways that enhance stockholder value, we may fail to achieve expected financial results, which could cause our stock price to decline.

 

Sales of a substantial number of our ordinary shares in the public market, or the perception that such sales could occur, could depress the market price of our ordinary shares.

 

 

Sales of a substantial number of our ordinary shares in the public market, or the perception that such sales could occur, could depress the market price of our ordinary shares and impair our ability to raise capital through the sale of additional equity securities. We cannot predict the effect that future sales of our ordinary shares, including under the Sales Agreement, would have on the market price of our ordinary shares.

 

The actual number of ordinary shares we will sell under the Sales Agreement and the resulting gross proceeds are uncertain.

 

Subject to certain limitations in the Sales Agreement and compliance with applicable law, we have the discretion to deliver a placement notice to Jefferies at any time throughout the term of the Sales Agreement. The number of ordinary shares that are sold through Jefferies after we deliver a placement notice will fluctuate based on the market price of our ordinary shares during the sales period and limits we set in the placement notice. Because the price per share sold will fluctuate based on the market price of our ordinary shares during the sales period, it is not possible to predict the number of our ordinary shares that will be ultimately sold or the resulting gross proceeds.

 

The ordinary shares offered in this offering will be sold in “at the market offerings.” Investors who purchase our ordinary shares in this offering at different times will likely pay different prices.

 

Investors who purchase our ordinary shares in this offering at different times will likely pay different prices, and so may experience different outcomes in their investment results. We will have discretion, subject to market demand, to vary the timing, prices and numbers of our ordinary shares sold, and subject to certain limitations in the Sales Agreement, there is no minimum or maximum sales price. Investors may experience a decline in the value of their ordinary shares and dilution as a result of sales made at prices lower than the prices they paid.

 

The price of our ordinary shares is and may continue to be volatile and you may not be able to resell our securities at or above the price you paid.

 

The market price for our ordinary shares is volatile and may fluctuate significantly in response to a number of factors, most of which we cannot control, such as fluctuations in financial results, our ability to advance the development and commercialization of our drug candidates or changes in securities analysts’ recommendations. In addition, our ordinary shares have been and may continue to be affected by limited trading volume. Each of these factors, among others, could harm your investment in our ordinary shares and could result in you being unable to resell the shares that you purchased at a price equal to or above the price you paid.

 

 

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

 

This prospectus and the documents we have filed with the SEC that are incorporated by reference contain 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. The statements contained in this prospectus or incorporated by reference herein that are not purely historical are forward-looking statements. Our forward-looking statements include, but are not limited to, statements regarding our or our management’s expectations, hopes, beliefs, intentions or strategies regarding the future. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements.

 

You can identify some of these forward-looking statements by words or phrases such as “may,” “will,” “expect,” “anticipate,” “aim,” “estimate,” “intend,” “plan,” “believe,” “is/are likely to,” “potential,” “continue” or other similar expressions. These forward-looking statements include, among others, statements regarding the timing of our commercial launch of products, clinical trials, our cash position and future expenses, our future revenues, and future financings, including any sale of our ordinary shares under the “at-the-market” program described herein. We have based these forward-looking statements largely on our current expectations and projections about future events that we believe may affect our financial condition, results of operations, business strategy and financial needs.

 

Actual results could differ materially from those currently anticipated due to a number of factors, including: uncertainties related to the Proposal Letter to acquire the Company’s business operations in China; the risk that we may be unable to continue as a going concern as a result of our inability to raise sufficient capital for our operational needs; the possibility that we may be delisted from trading on The Nasdaq Capital Market if we fail to satisfy applicable continued listing standards; the volatility in the market price of our ordinary shares; the risk of substantial dilution of existing shareholders in future share issuances; the difficulty of executing our business strategy on a global basis including China; our inability to enter into strategic partnerships for the development, commercialization, manufacturing and distribution of our proposed product candidates or future candidates; legal or regulatory developments in China that adversely affect our ability to operate in China; our lack of experience in manufacturing products and uncertainty about our resources and capabilities to do so on a clinical or commercial scale; risks relating to the commercialization, if any, of our products and proposed products (such as marketing, safety, regulatory, patent, product liability, supply, competition and other risks); our inability to predict when or if our product candidates will be approved for marketing by the U.S. FDA, EMA, NMPA, or other regulatory authorities; our inability to receive approval for renewal of license of our existing products; the risks relating to the need for additional capital and the uncertainty of securing additional funding on favorable terms; the risks associated with our product candidates, and the risks associated with our other early-stage products under development; the risk that preclinical and clinical models are not necessarily indicative of clinical results; uncertainties relating to preclinical and clinical trials, including delays to the commencement of such trials; our ability to protect our intellectual property rights; the lack of success in the clinical development of any of our products and our dependence on third parties; the risks related to our dependence on Juventas to partner with us to co-market CNCT19; risks related to the uncertainty in connection with the ongoing arbitration proceedings between us and Juventas with respect to Juventas’ purported termination of certain CNCT19 license agreements; risks related to our dependence on Juventas to ensure the patent protection and prosecution for CNCT19; risks related to the Company’s ongoing development of and regulatory application for CID-103 with respect to the treatment of antibody-mediated rejection for organ transplant and autoimmune diseases and the license arrangements of CID-103; risks relating to the interests of our largest shareholder and our Chairman and Chief Executive Officer that differ from our other shareholders; and risks related to the success of a new manufacturing facility operated by CASI Wuxi. Such factors, among others, could have a material adverse effect upon our business, results of operations and financial condition.

 

 

The forward-looking statements contained in this prospectus are based on our current expectations and beliefs concerning future developments and their potential effects on us. There can be no assurance that future developments affecting us will be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, those described in the section titled “Risk Factors” and elsewhere in this prospectus. Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. We discuss in greater detail many of these risks under the section titled “Risk Factors” contained in the applicable prospectus supplement, in any free writing prospectuses we may authorize for use in connection with a specific offering, and in our most recent annual report on Form 20-F, as well as any amendments thereto reflected in subsequent filings with the SEC, as well as our reports on Form 6-K, which are incorporated by reference into this prospectus in their entirety. Also, these forward-looking statements represent our estimates and assumptions only as of the date of the document containing the applicable statement. Unless required by law, we undertake no obligation to update or revise any forward-looking statements to reflect new information or future events or developments. You should read this prospectus, any applicable prospectus supplement, together with the documents we have filed with the SEC that are incorporated by reference and any free writing prospectus that we may authorize for use in connection with a specific offering completely and with the understanding that our actual future results may be materially different from what we expect. We qualify all of the forward-looking statements in the foregoing documents by these cautionary statements.

 

In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this prospectus, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and you are cautioned not to unduly rely upon these statements.

 

 

USE OF PROCEEDS

 

We may offer and sell our ordinary shares having an aggregate offering price of up to $50.0 million from time to time through Jefferies. The amount of proceeds from this offering will depend upon the number of ordinary shares sold and the market price at which they are sold and will be reduced by commissions and other expenses of this offering. There can be no assurance that we will be able to sell any shares under or fully utilize the Sales Agreement as a source of financing. Because there is no minimum offering amount required as a condition to close this offering, the actual total public offering amount, commissions and proceeds to us, if any, are not determinable at this time.

 

We currently intend to use the net proceeds from this offering, if any, together with our cash and cash equivalents, primarily to fund the continued development and commercialization of our drug candidates, including development of CID-103,and for working capital, capital expenditures and general corporate purposes. Our expected use of the net proceeds from this offering represents our current intentions based on our present plans and business condition, which could change as our plans and business conditions evolve. The amounts and timing of our actual use of the net proceeds from this offering will vary depending on numerous factors, including our ability or desire to sell our ordinary shares under the Sales Agreement. As a result, we cannot predict with certainty all of the particular uses for any net proceeds to be received or the amounts that we will actually spend on the uses set forth above. Our board of directors and our management retain broad discretion in the application of the net proceeds from this offering.

 

Pending these uses, we intend to invest additional net proceeds, if any, in short- and intermediate-term interest-bearing financial instruments.

 

 

CAPITALIZATION

 

The following table sets forth the capitalization of the Company as of September 30, 2024:

 

·

on an actual basis; and

 

·

on an as adjusted basis to give effect to the sale of our ordinary shares in the aggregate amount of $50.0 million at an assumed public offering price of $2.86 per share, which was the last reported sale price of our ordinary shares on The Nasdaq Capital Market on December 18, 2024, and after deducting estimated commissions equal to 3% and estimated offering expenses in an amount equal to $503,500 payable by us.

 

The information below should be read in conjunction with, and is qualified in its entirety by, the audited consolidated financial statements and schedules and notes thereto included in our annual report on Form 20-F for the financial year ended December 31, 2023, as incorporated by reference into this prospectus.

 

		As of September 30, 2024
(In USD thousands, except share and per share data)		Actual				As Adjusted
Long term borrowing:		$	19,123			$	19,123
Shareholder’s equity:
Ordinary shares, $0.0001 par value, 500,000,000 shares authorized, 15,461,057 shares issued and outstanding on an actual basis, and 28,151,412 shares issued and outstanding on an adjusted basis.		$	2			$	3
Treasury shares, at cost, 411,952 shares		$	(9,604	)		$	(9,604	)
Subscription receivable		$	(1,975	)		$	(1,975	)
Additional paid-in capital		$	712,597			$	760,593
Accumulated other comprehensive loss		$	(1,468	)		$	(1,468	)
Accumulated deficit		$	(685,705	)		$	(685,705	)
Total shareholders’ equity		$	13,847			$	61,844
Long term borrowing and total shareholders’ equity		$	32,970			$	80,967

 

The information in the table above is based on 15,461,057 ordinary shares outstanding as of September 30, 2024 and excludes:

 

·

3,390,727 ordinary shares issuable upon the exercise of options outstanding as of September 30, 2024 having a weighted-average exercise price of approximately $3.12 per share;

 

·

1,980,000 ordinary shares issuable upon the exercise of warrants outstanding as of September 30, 2024 having a weighted-average exercise price of approximately $0.0001 per share;

 

·

1,540,000 ordinary shares reserved for issuance pursuant to future awards under CASI’s 2024 Long-Term Incentive Plan; and

 

·

27,064 ordinary shares reserved for issuance pursuant to future awards under CASI Delaware’s 2021 Long-Term Incentive Plan.

 

In addition, unless we specifically state otherwise, all information in this prospectus assumes no exercise of outstanding options to purchase ordinary shares subsequent to September 30, 2024.

 

 

DIVIDEND POLICY

 

We have never declared or paid any cash dividends on our ordinary shares. We have no present plan to declare and pay any dividends on our ordinary shares in the near future. We currently intend to retain most, if not all, of our available funds and any future earnings to operate and expand our business. Any future determination to pay dividends will be at the discretion of our board of directors, subject to applicable laws, and will depend on our financial condition, results of operations, capital requirements, general business conditions and other factors that our board of directors considers relevant.

 

 

DILUTION

 

If you purchase any of our ordinary shares, you will experience dilution to the extent of the difference between the offering price per ordinary share you pay in this offering and the net tangible book value per ordinary share immediately after this offering.

 

Our net tangible book value as of September 30, 2024 was $12.7 million, or $0.82 per ordinary share based on 15,461,057 shares issued and outstanding. Net tangible book value per share represents our total assets of $63.6 million, less our intangible assets, net of $1.1 million, less our total liabilities of $49.8 million, divided by the aggregate number of our ordinary shares outstanding as of September 30, 2024. Dilution in net tangible book value per ordinary share represents the difference between the amount per ordinary share paid by purchasers of ordinary shares in this offering and the as adjusted net tangible book value per ordinary share of our ordinary shares immediately after giving effect to this offering.

 

After giving effect to the sale of our ordinary shares in the aggregate amount of $50.0 million at an assumed offering price of $2.86 per ordinary share, the last reported sale price of our ordinary shares on The Nasdaq Capital Market on December 18, 2024, and after deducting estimated offering commissions and other estimated offering expenses payable by us, our as adjusted net tangible book value as of September 30, 2024 would have been $60.7 million, or approximately $1.84 per ordinary share based on an aggregate of 32,943,574 ordinary shares issued and outstanding. This amount represents an immediate increase in net tangible book value of $1.02 per ordinary share to existing shareholders as a result of this offering and immediate dilution of approximately $1.02 per ordinary share to new investors purchasing our ordinary shares in this offering.

 

The following table illustrates this dilution on a per ordinary share basis. The as adjusted information below 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 our ordinary shares are sold pursuant to this prospectus. The ordinary shares sold in this offering, if any, will be sold from time to time at various prices.

 

Assumed public offering price per ordinary share						$	2.86
Net tangible book value per ordinary share as of September 30, 2024		$	0.82
Increase in net tangible book value per ordinary share attributable to this offering		$	1.02
As-adjusted net tangible book value per ordinary share after giving effect to this offering						$	1.84
Dilution per ordinary share to new investors participating in this offering						$	1.02

 

The ordinary shares sold in this offering, if any, will be sold from time to time at various prices. Assuming all of the ordinary shares in an aggregate amount of $50.0 million are sold in this offering at the assumed public offering price of $2.86 per share, a $1.00 increase in such offering price would increase our as adjusted net tangible book value per share after this offering to $2.14 per share and dilution to new investors to $1.72 per share, after deducting commissions and estimated offering expenses payable by us. A $1.00 decrease in the assumed public offering price of $2.86 per share would decrease our as adjusted net tangible book value per share after this offering to $1.43 per share and dilution to new investors to $0.43 per share, after deducting commissions and estimated offering expenses payable by us. The information discussed above is illustrative only and will adjust based on the actual public offering price, the actual number of shares that we offer in this offering, and other terms of this offering determined at the time of each offer and sale.

 

The above discussion and table are based on 15,461,057 ordinary shares outstanding as of September 30, 2024 and excludes:

 

·

3,390,727 ordinary shares issuable upon the exercise of options outstanding as of September 30, 2024 having a weighted-average exercise price of approximately $3.12 per share;

 

·

1,980,000 ordinary shares issuable upon the exercise of warrants outstanding as of September 30, 2024 having a weighted-average exercise price of approximately $0.0001 per share;

 

·

1,540,000 ordinary shares reserved for issuance pursuant to future awards under CASI’s 2024 Long-Term Incentive Plan; and

 

 

·

27,064 ordinary shares reserved for issuance pursuant to future awards under CASI Delaware’s 2021 Long-Term Incentive Plan.

 

 

PLAN OF DISTRIBUTION

 

We have entered into a Sales Agreement with Jefferies, under which we may offer and sell our ordinary shares from time to time through Jefferies acting as agent. Pursuant to this prospectus, we may offer and sell up to $50.0 million of our ordinary shares. Sales of our ordinary shares, 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 ordinary shares 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 ordinary shares 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 first trading day following the date on which the sale was made. Sales of our ordinary shares 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 up to 3.0% of the aggregate gross proceeds we receive from each sale of our ordinary shares. 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, payable upon execution of the Sales Agreement, in an amount not to exceed $250,000, 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 $253,500. 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 ordinary shares 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 ordinary shares 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 ordinary shares pursuant to the Sales Agreement will terminate 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 is filed as an exhibit to the registration statement of which this prospectus forms a part.

 

Jefferies and its affiliates may in the future provide various investment banking, commercial banking, financial advisory and other financial services for us and our affiliates, for which services they may in the future receive customary fees. In the course of its business, Jefferies may actively trade our securities for its own account or for the accounts of customers, and, accordingly, Jefferies may at any time hold long or short positions in such securities.

 

A prospectus supplement and the accompanying prospectus in electronic format may be made available on a website maintained by Jefferies, and Jefferies may distribute the prospectus supplement and the accompanying prospectus electronically.

 

Jefferies LLC’s address is 520 Madison Avenue, New York, New York 10022.

 

 

ENFORCEABILITY OF CIVIL LIABILITIES

 

CASI is incorporated in the Cayman Islands because of certain benefits associated with being a Cayman Islands company, such as political and economic stability, an effective judicial system, a favorable tax system, the absence of foreign exchange control or currency restrictions and the availability of professional and support services. However, the Cayman Islands has a less developed body of securities laws as compared to the United States and provides less protection for investors. In addition, Cayman Islands companies do not have standing to sue before the federal courts of the United States.

 

A majority portion of CASI’s assets are located outside the United States. In addition, a majority of CASI’s directors and officers are nationals or residents of jurisdictions other than the United States and all or a majority portion of their assets are located outside the United States. As a result, it may be difficult for investors to effect service of process within the United States upon CASI or these persons, or to bring an action against CASI or against these persons in the United States, in the event that you believe that your rights have been infringed under the securities laws of the United States or any state in the United States. It may also be difficult for you to enforce in U.S. courts judgments obtained in U.S. courts based on the civil liability provisions of the U.S. federal securities laws against CASI and its officers and directors.

 

Maples and Calder (Hong Kong) LLP, our counsel as to Cayman Islands law, has advised us that there is uncertainty as to whether the courts of the Cayman Islands would (1) recognize or enforce judgments of U.S. courts obtained against CASI or its directors or officers, predicated upon the civil liability provisions of the securities laws of the United States or any state in the United States, or (2) entertain original actions brought in the Cayman Islands against CASI or its directors or officers, predicated upon the securities laws of the United States or any state in the United States.

 

Maples and Calder (Hong Kong) LLP has informed us that although there is no statutory enforcement in the Cayman Islands of judgments obtained in the federal or state courts of the United States (and the Cayman Islands are not a party to any treaties for the reciprocal enforcement or recognition of such judgments), a judgment obtained in such jurisdiction will be recognized and enforced in the courts of the Cayman Islands at common law, without any re-examination of the merits of the underlying dispute, by an action commenced on the foreign judgment debt in the Grand Court of the Cayman Islands, provided such judgment (a) is given by a foreign court of competent jurisdiction, (b) imposes on the judgment debtor a liability to pay a liquidated sum for which the judgment has been given, (c) is final, (d) is not in respect of taxes, a fine or a penalty, and (e) was not obtained in a manner and is not of a kind the enforcement of which is contrary to natural justice or the public policy of the Cayman Islands. However, the Cayman Islands courts are unlikely to enforce a judgment obtained from the U.S. courts under civil liability provisions of the U.S. federal securities law if such judgment is determined by the courts of the Cayman Islands to give rise to obligations to make payments that are penal or punitive in nature. Because such a determination has not yet been made by a court of the Cayman Islands, it is uncertain whether such civil liability judgments from U.S. courts would be enforceable in the Cayman Islands.

 

It is our understanding that the PRC does not have treaties with the United States and many other countries providing for the reciprocal recognition and enforcement of judgments of courts and that there is uncertainty as to whether the courts of the PRC would recognize or enforce judgments of United States courts against CASI or the directors or officers of CASI predicated upon the civil liability provisions of the securities laws of the United States or any state in the United States.

 

Additionally, it is our understanding that it may be difficult for you to bring an original action against CASI or against its directors and officers who are nationals or residents of countries other than the United States in a PRC court in the event that you believe that your rights have been infringed under the U.S. federal securities laws, PRC laws, Cayman Islands laws or otherwise because we are incorporated under the laws of the Cayman Islands and it may be difficult for U.S. shareholders, by virtue only of holding CASI ordinary shares, to establish a connection to the PRC as required by the PRC Civil Procedures Law in order for a PRC court to have jurisdiction.

 

 

TAXATION

 

Information regarding taxation is set forth under the heading “Item 10.E. Taxation” in our annual report on Form 20-F for the financial year ended December 31, 2023, which is incorporated in this prospectus by reference, as updated by our subsequent filings under the Exchange Act.

 

LEGAL MATTERS

 

Maples and Calder (Hong Kong) LLP will pass upon the validity of the securities being registered hereby and certain other legal matters of Cayman Islands law in connection with the registration of such securities. Harter Secrest & Emery LLP will pass upon certain matters of U.S. federal and New York law for us in connection with the registration of certain securities being registered hereby. Jefferies LLC is represented in connection with this offering by Cooley LLP, New York, New York.

 

EXPERTS

 

The consolidated financial statements of CASI Pharmaceuticals, Inc. as of December 31, 2023 and 2022, and for each of the years in the three-year period ended December 31, 2023, have been incorporated by reference herein in reliance upon the report of KPMG Huazhen LLP, independent registered public accounting firm, incorporated by reference herein, and upon the authority of said firm as experts in accounting and auditing.

 

 

WHERE YOU CAN FIND MORE INFORMATION

 

We are subject to the information requirements of the Exchange Act that are applicable to foreign private issuers. Accordingly, we are required to file reports and other information with the SEC, including annual reports on Form 20-F and disclosure furnished under cover of Form 6-K. The SEC maintains a website (www.sec.gov) that contains reports and other information regarding issuers, such as us, that file electronically with the SEC. We also maintain a website (www.casipharmaceuticals.com) from which you can access such reports and other information free of charge as soon as reasonably practicable after such material is electronically filed with, or furnished to, the SEC. The information contained on our website does not form a part of this prospectus.

 

As a foreign private issuer, we are exempt under the Exchange Act from rules prescribing the furnishing and content of proxy statements, and our officers, directors and principal shareholders are exempt from the reporting and short-swing profit recovery provisions contained in Section 16 of the Exchange Act. In addition, we are not required under the Exchange Act to file periodic financial statements with the SEC as frequently or as promptly as U.S. companies whose securities are registered under the Exchange Act.

 

We have filed with the SEC a “shelf” registration statement (including amendments and exhibits to the registration statement) on Form F-3 under the Securities Act. This prospectus, which is part of such registration statement, does not contain all of the information set forth in the Registration Statement and the exhibits and schedules to the Registration Statement. We have omitted parts of the registration statement in accordance with the rules and regulations of the SEC. For more detail about us and the securities offered by this prospectus, you may examine the registration statement and the exhibits filed with it at the website provided in the previous paragraph. You should rely only on the information contained in this prospectus, any applicable prospectus supplement, any free writing prospectus and the documents incorporated by reference herein and therein. We have not authorized anyone else to provide you with different information. We are not making an offer of these securities in any state where the offer is not permitted.

 

 

INCORPORATION BY REFERENCE

 

The SEC allows us to incorporate by reference much of the information that 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 by reference 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 and any accompanying prospectus supplement incorporate by reference the documents set forth below that have previously been filed with the SEC (other than those documents or the portions of those documents that are “furnished” unless otherwise specified below):

 

·

our Annual Report on Form 20-F for the year ended December 31, 2023, filed with the SEC on March 28, 2024;

 

·

our reports on Form 6-K furnished with the SEC on April 8, 2024, June 27, 2024 (Film No. 241075375), June 27, 2024 (Film No. 241075377), July 8, 2024, July 19, 2024, September 12, 2024, November 15, 2024, and December 16, 2024; and

 

·

the description of the Company’s ordinary shares contained in the Company’s Registration Statement on Form 8A-12B (File No. 001-41666) filed with the SEC on March 27, 2023, pursuant to Section 12(b) of the Exchange Act, including any amendment or report filed for the purpose of updating such description.

 

All reports and other documents we subsequently file pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act, prior to the termination of this offering, including all such documents we may file with the SEC after the date of the initial registration statement and prior to the effectiveness of the registration statement, but excluding any information furnished to, rather than filed with, the SEC, will also be incorporated by reference into this prospectus and deemed to be part of this prospectus from the date of the filing of such reports and documents. We may incorporate by reference any reports on Form 6-K that we furnish to the SEC that we specifically identify in such form as being incorporated by reference into this prospectus after the date hereof and prior to the completion or termination of the offering of securities under this prospectus.

 

Any statement contained herein or in a document, all or a portion of which is incorporated or deemed to be incorporated by reference herein, shall be deemed to be modified or superseded for purposes of this prospectus to the extent that a statement contained herein or in any other subsequently filed document which also is or is deemed to be incorporated by reference herein modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this prospectus. Notwithstanding the foregoing, no information is incorporated by reference in this prospectus or any prospectus supplement hereto where such information under applicable forms and regulations of the SEC is not deemed to be “filed” under Section 18 of the Exchange Act or otherwise subject to the liabilities of that section, unless the report or filing containing such information indicates that the information therein is to be considered “filed” under the Exchange Act or is to be incorporated by reference in this prospectus or any prospectus supplement hereto.

 

We will provide to each person, including any beneficial owner, to whom a prospectus is delivered, without charge upon written or oral request, a copy of any or all of the documents that are incorporated by reference into this prospectus but not delivered with the prospectus, including exhibits that are specifically incorporated by reference into such documents. You may request a copy of such documents at no cost, by writing or telephoning us at the following address or telephone number:

 

CASI Pharmaceuticals, Inc.

9620 Medical Center Drive, Suite 300

Rockville, MD 20850

240-864-2600

 

 

EXPENSES

 

The following is a statement of estimated expenses in connection with the issuance and distribution of the securities offered by this Sales Agreement prospectus, all of which will be paid by us.

 

Expense		Estimated Amount
Printing expenses			7,500
Legal fees and expenses			395,000
Accounting fees and expenses			100,000
Miscellaneous costs			1,000
Total		$	503,500

 

 

 

 

Up to $50,000,000

 

Ordinary Shares

 

 

PROSPECTUS

 

 

Jefferies

 

          , 2024

 

 

 

PART II
INFORMATION NOT REQUIRED IN PROSPECTUS

 

Item 8. Indemnification of Directors and Officers

 

The laws of the Cayman Islands do not limit the extent to which a company’s memorandum and articles of association may provide for indemnification of officers and directors, except to the extent any such provision may be held by the Cayman Islands courts to be contrary to public policy, such as to provide indemnification against willful default, willful neglect, civil fraud or the consequences of committing a crime.

 

The CASI Articles provide that every director (including alternate director), secretary, assistant secretary, or other officer for the time being and from time to time of CASI (but not including CASI’s auditors) and the personal representatives of the same (each an “Indemnified Person”) shall be indemnified and secured harmless against all actions, proceedings, costs, charges, expenses, losses, damages or liabilities incurred or sustained by such Indemnified Person, other than by reason of such Indemnified Person’s own dishonesty, willful default or fraud, in or about the conduct of CASI’s business or affairs (including as a result of any mistake of judgment) or in the execution or discharge of his or her duties, powers, authorities or discretions, including without prejudice to the generality of the foregoing, any costs, expenses, losses or liabilities incurred by such Indemnified Person in defending (whether successfully or otherwise) any civil proceedings concerning CASI or its affairs in any court whether in the Cayman Islands or elsewhere.

 

CASI will also enter into indemnification agreements with its directors and officers under the laws of the Cayman Islands, pursuant to which we have agreed to indemnify each such person and hold him or her harmless against expenses, judgments, fines and amounts payable under settlement agreements in connection with any threatened, pending or completed action, suit or proceeding to which he has been made a party or in which he became involved by reason of the fact that he or she is or was our director or officer. Except with respect to expenses to be reimbursed by CASI in the event that the indemnified person has been successful on the merits or otherwise in defense of the action, suit or proceeding, CASI’s obligations under the indemnification agreements are subject to certain customary restrictions and exceptions.

 

In addition, CASI will maintain standard policies of insurance under which coverage is provided to its directors and officers against loss rising from claims made by reason of breach of duty or other wrongful act, and to CASI with respect to payments which may be made by CASI to such directors and officers pursuant to the above indemnification provision or otherwise as a matter of law.

 

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers or persons controlling CASI pursuant to the foregoing provisions, we have been informed that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is theretofore unenforceable.

 

 

Item 9. Exhibits and Financial Statement Schedules

 

Exhibit Number
1.1**		Form of Underwriting Agreement.
1.2*		Open Market Sale AgreementSM dated December 20, 2024 between CASI Pharmaceuticals, Inc. and Jefferies LLC.
3.1		Updated Amended and Restated Memorandum and Articles of Association of the Registrant (incorporated by reference to Exhibit 1.1 to the Annual Report on Form 20-F (File No. 001-41666), filed with the SEC on March 28, 2024).
4.1		Registrant’s Updated Specimen Ordinary Share Certificate (incorporated by reference to Exhibit 2.1 to the Annual Report on Form 20-F (File No. 001-41666), filed with the SEC on March 28, 2024).
4.2**		Form of Warrant Agreement.
4.3**		Form of Subscription Rights Agreement.
4.4**		Form of Unit Agreement.
5.1*		Opinion of Maples and Calder (Hong Kong) LLP relating to the base prospectus.
5.2*		Opinion of Harter Secrest & Emery LLP relating to the base prospectus.
5.3*		Opinion of Maples and Calder (Hong Kong) LLP relating to the Sales Agreement prospectus.
23.1*		Consent of KPMG Huazhen LLP
23.2*		Consent of Maples and Calder (Hong Kong) LLP (included in Exhibit 5.1 to this Registration Statement).
23.3*		Consent of Harter Secrest & Emery LLP (included in Exhibit 5.2 to this Registration Statement).
23.4*		Consent of Maples and Calder (Hong Kong) LLP (included in Exhibit 5.3 to this Registration Statement).
24.1*		Power of Attorney (included on signature page to the registration statement).
107*		Filing Fee Exhibit.

 

*	Filed herewith.
**	To be filed, if necessary, by amendment.

 

 

Item 10. Undertakings

 

(a) The undersigned registrant hereby undertakes:

 

(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:

 

(i) To include any prospectus required by Section 10(a)(3) of the Securities Act;

 

(ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Securities and Exchange Commission, or the Commission, pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and

 

(iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement;

 

provided, however, that paragraphs (a)(1)(i), (a)(1)(ii) and (a)(1)(iii) of this section do not apply if the registration statement is on Form S-3 or Form F-3 and the information required to be included in a post-effective amendment by those paragraphs is contained in reports filed with or furnished to the Commission by the registrant pursuant to Section 13 or Section 15(d) of the Exchange Act that are incorporated by reference in the registration statement, or, as to a registration statement on Form F–3, is contained in a form of prospectus filed pursuant to Rule 424(b) that is part of the registration statement.

 

(2) That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

 

(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

 

(4) To file a post-effective amendment to the registration statement to include any financial statements required by Item 8.A of Form 20-F at the start of any delayed offering or throughout a continuous offering. Financial statements and information otherwise required by Section 10(a)(3) of the Securities Act need not be furnished, provided that the registrant includes in the prospectus, by means of a post-effective amendment, financial statements required pursuant to this paragraph (a)(4) and other information necessary to ensure that all other information in the prospectus is at least as current as the date of those financial statements. Notwithstanding the foregoing, with respect to registration statements on Form F-3, a post-effective amendment need not be filed to include financial statements and information required by Section 10(a)(3) of the Securities Act or Item 8.A of Form 20-F if such financial statements and information are contained in periodic reports filed with or furnished to the Commission by the registrant pursuant to Section 13 or Section 15(d) of the Exchange Act that are incorporated by reference in the Form F-3.

 

(5) That, for the purpose of determining liability under the Securities Act to any purchaser:

 

(A) Each prospectus filed by the registrant pursuant to Rule 424(b)(3) shall be deemed to be part of the registration statement as of the date the filed prospectus was deemed part of and included in the registration statement; and

 

 

(B) Each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as part of a registration statement in reliance on Rule 430B relating to an offering made pursuant to Rule 415(a)(1)(i), (vii), or (x) for the purpose of providing the information required by Section 10(a) of the Securities Act shall be deemed to be part of and included in the registration statement as of the earlier of the date such form of prospectus is first used after effectiveness or the date of the first contract of sale of securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any person that is at that date an underwriter, such date shall be deemed to be a new effective date of the registration statement relating to the securities in the registration statement to which that prospectus relates, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such effective date, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such effective date.

 

(6) That, for the purpose of determining liability of the registrant under the Securities Act to any purchaser in the initial distribution of the securities, the undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:

 

(A) Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424;

 

(B) 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;

 

(C) 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

 

(D) Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.

 

(b) The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act, each filing of the registrant’s annual report pursuant to Section 13(a) or Section 15(d) of the 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 the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

 

(c) Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form F-3 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of Beijing, the Peoples Republic of China, on the 20th day of December, 2024.

 

	CASI Pharmaceuticals, Inc.
By:	/s/ Dr. Wei-Wu He
	Name:	Dr. Wei-Wu He
	Title:	Chief Executive Officer and Chairman of the Board of Directors

 

Power of Attorney

 

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below hereby constitutes and appoints Wei-Wu He and Daniel Lang, each acting alone, as his or her true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for such person and in his or her name, place and stead in any and all capacities, in connection with this registration statement, including to sign in the name and on behalf of the undersigned, this registration statement and any and all amendments thereto, including post-effective amendments and registrations filed pursuant to Rule 462 under the Securities Act of 1933, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto such attorneys-in-fact and agents, each acting alone, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent, or her substitute, may lawfully do or cause to be done by virtue hereof.

 

Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated:

 

Name	Title	Date
/s/ Dr. Wei-Wu He	Chief Executive Officer and Chairman of the Board	December 20, 2024
Dr. Wei-Wu He	(Principal Executive Officer)
/s/ Daniel Lang	Chief Financial Officer	December 20, 2024
Daniel Lang	(Principal Financial and Accounting Officer)
/s/ Y. Alexander Wu	Independent Director	December 20, 2024
Y. Alexander Wu
/s/ Zhenbo Su	Independent Director	December 20, 2024
Zhenbo Su
/s/ Thomas Folinsbee	Independent Director	December 20, 2024
Thomas Folinsbee
/s/ Xuebo Zeng	Independent Director	December 20, 2024
Xuebo Zeng

 

 

AUTHORIZED REPRESENTATIVE

 

Pursuant to the requirement of the Securities Act, the undersigned, the duly undersigned representative in the United States of CASI Pharmaceuticals, Inc., has signed this registration statement in the United States, on the 20th day of December, 2024.

 

CASI Pharmaceuticals, Inc.
By:	/s/ Daniel Lang
	Name: Daniel Lang
	Title: Chief Financial Officer

 

 

Exhibit 1.2

 

OPEN MARKET SALE AGREEMENT^SM

 

December 20, 2024

 

JEFFERIES LLC

520 Madison Avenue

New York, New York 10022

 

Ladies and Gentlemen:

 

CASI Pharmaceuticals, Inc., an exempted company incorporated under the laws of the Cayman Islands (the “Company”), proposes, subject to the terms and conditions stated herein, to issue and sell from time to time through Jefferies LLC, as sales agent and/or principal (the “Agent”), ordinary shares of the Company, par value $0.0001 per share (the “Common Shares”), on the terms set forth in this agreement (this “Agreement”).

 

Section 1.              DEFINITIONS

 

(a)            Certain Definitions. For purposes of this Agreement, capitalized terms used herein and not otherwise defined shall have the following respective meanings:

 

“Affiliate” of a Person means another Person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such first- mentioned Person. The term “control” (including the terms “controlling,” “controlled by” and “under common control with”) means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise.

 

“Agency Period” means the period commencing on the date of this Agreement and expiring on the earliest to occur of (x) the date on which the Agent shall have placed the Maximum Program Amount pursuant to this Agreement and (y) the date this Agreement is terminated pursuant to ‎Section 7.

 

“Commission” means the U.S. Securities and Exchange Commission.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission thereunder.

 

“Floor Price” means the minimum price set by the Company in the Issuance Notice below which the Agent shall not sell Shares during the applicable period set forth in the Issuance Notice, which may be adjusted by the Company at any time during the period set forth in the Issuance Notice by delivering written notice of such change to the Agent and which in no event shall be less than $1.00 without the prior written consent of the Agent, which may be withheld in the Agent’s sole discretion.

 

 

^SM “Open Market Sale Agreement” is a service mark of Jefferies LLC

 

 

 

“Issuance Amount” means the aggregate Sales Price of the Shares to be sold by the Agent pursuant to any Issuance Notice.

 

“Issuance Notice” means a written notice delivered to the Agent by the Company in accordance with this Agreement in the form attached hereto as Exhibit A that is executed by its Chief Executive Officer, President or Chief Financial Officer.

 

“Issuance Notice Date” means any Trading Day during the Agency Period that an Issuance Notice is delivered pursuant to ‎Section 3(b)(i).

 

“Issuance Price” means the Sales Price less the Selling Commission.

 

“Maximum Program Amount” means Common Shares with an aggregate Sales Price of the lesser of (a) the number or dollar amount of Common Shares registered under the effective Registration Statement (defined below) pursuant to which the offering is being made, (b) the number of authorized but unissued Common Shares (less Common Shares issuable upon exercise, conversion or exchange of any outstanding securities of the Company or otherwise reserved from the Company’s authorized capital stock), (c) the number or dollar amount of Common Shares permitted to be sold under Form F-3 (including General Instruction I.B.5 thereof, if applicable), or (d) the number or dollar amount of Common Shares for which the Company has filed a Prospectus (defined below).

 

“Person” means an individual or a corporation, partnership, limited liability company, trust, incorporated or unincorporated association, joint venture, joint stock company, governmental authority or other entity of any kind.

 

“Principal Market” means the Nasdaq Capital Market, or such other national securities exchange on which the Common Shares, including any Shares, are then listed.

 

“PRC” means the People’s Republic of China, which only for purposes hereof excludes Hong Kong, Macao and Taiwan.

 

“PRC Business Day” means a day on which China Securities Regulatory Commission is open for general business in the PRC.

 

“Sales Price” means the actual sale execution price of each Share placed by the Agent pursuant to this Agreement.

 

“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations of the Commission thereunder.

 

“Selling Commission” means three percent (3.0%) of the gross proceeds of Shares sold pursuant to this Agreement, or as otherwise agreed between the Company and the Agent with respect to any Shares sold pursuant to this Agreement.

 

“Settlement Date” means the first business day following each Trading Day during the period set forth in the Issuance Notice on which Shares are sold pursuant to this Agreement, when the Company shall deliver to the Agent the amount of Shares sold on such Trading Day and the Agent shall deliver to the Company the Issuance Price received on such sales.

 

 

“Shares” means the Company’s Common Shares issued or issuable pursuant to this Agreement.

 

“Trading Day” means any day on which the Principal Market is open for trading.

 

Section 2.              REPRESENTATIONS AND WARRANTIES OF THE COMPANY

 

The Company represents and warrants to, and agrees with, the Agent that as of (1) the date of this Agreement, (2) each Issuance Notice Date, (3) each Settlement Date, (4) each Triggering Event Date and (5) as of each Time of Sale (each of the times referenced above is referred to herein as a “Representation Date”), except as may be disclosed in the Prospectus (including any documents incorporated by reference therein and any supplements thereto) on or before a Representation Date:

 

(a)            Registration Statement. The Company has prepared and filed, or concurrently with the execution of this Agreement will file, with the Commission a shelf registration statement on Form F-3 that contains a base prospectus (the “Base Prospectus”). Such registration statement registers the issuance and sale by the Company of the Shares under the Securities Act. The Company may file one or more additional registration statements from time to time that will contain a base prospectus and related prospectus or prospectus supplement, if applicable, with respect to the Shares. Except where the context otherwise requires, such registration statement(s), including any information deemed to be a part thereof pursuant to Rule 430B under the Securities Act, including all financial statements, exhibits and schedules thereto and all documents incorporated or deemed to be incorporated therein by reference pursuant to Item 6 of Form F-3 under the Securities Act as from time to time amended or supplemented, is herein referred to as the “Registration Statement,” and the prospectus constituting a part of such registration statement(s), together with any prospectus supplement filed with the Commission pursuant to Rule 424(b) under the Securities Act relating to a particular issuance of the Shares, including all documents incorporated or deemed to be incorporated therein by reference pursuant to Item 6 of Form F-3 under the Securities Act, in each case, as from time to time amended or supplemented, is referred to herein as the “Prospectus,” except that if any revised prospectus is provided to the Agent by the Company for use in connection with the offering of the Shares that is not required to be filed by the Company pursuant to Rule 424(b) under the Securities Act, the term “Prospectus” shall refer to such revised prospectus from and after the time it is first provided to the Agent for such use. The Registration Statement at the time it originally became effective is herein called the “Original Registration Statement.” As used in this Agreement, the terms “amendment” or “supplement” when applied to the Registration Statement or the Prospectus shall be deemed to include the filing by the Company with the Commission of any document under the Exchange Act after the date hereof that is or is deemed to be incorporated therein by reference.

 

 

All references in this Agreement to financial statements and schedules and other information which is “contained,” “included” or “stated” in the Registration Statement or the Prospectus (and all other references of like import) shall be deemed to mean and include all such financial statements and schedules and other information which is or is deemed to be incorporated by reference in or otherwise deemed under the Securities Act to be a part of or included in the Registration Statement or the Prospectus, as the case may be, as of any specified date; and all references in this Agreement to amendments or supplements to the Registration Statement or the Prospectus shall be deemed to mean and include, without limitation, the filing of any document under the Exchange Act which is or is deemed to be incorporated by reference in or otherwise deemed under the Securities Act to be a part of or included in the Registration Statement or the Prospectus, as the case may be, as of any specified date. The Company’s obligations under this Agreement to furnish, provide, deliver or make available (and all other references of like import) copies of any report or statement shall be deemed satisfied if the same is filed with the Commission through its Electronic Data Gathering, Analysis and Retrieval system (“EDGAR”).

 

At the time the Original Registration Statement was or will be declared effective and at the time the Company’s most recent annual report on Form 20-F was filed with the Commission, if later, the Company met the then-applicable requirements for use of Form F-3 under the Securities Act. During the Agency Period, each time the Company files an annual report on Form 20-F the Company will meet the then-applicable requirements for use of Form F-3 under the Securities Act.

 

(b)            Compliance with Registration Requirements. The Original Registration Statement and any Rule 462(b) Registration Statement have been or will be declared effective by the Commission under the Securities Act. The Company has complied to the Commission’s satisfaction with all requests of the Commission for additional or supplemental information, if any, with respect to the Registration Statement. No stop order suspending the effectiveness of the Registration Statement or any Rule 462(b) Registration Statement is in effect and no proceedings for such purpose have been instituted or are pending or, to the knowledge of the Company, are contemplated or threatened by the Commission.

 

The Prospectus when filed complied or will comply in all material respects with the Securities Act and, if filed with the Commission through EDGAR (except as may be permitted by Regulation S-T under the Securities Act), was identical to the copy thereof delivered to the Agent for use in connection with the issuance and sale of the Shares. Each of the Registration Statement, any Rule 462(b) Registration Statement and any post-effective amendment thereto, at the time it became or becomes effective and at each Representation Date, complied and will comply in all material respects with the Securities Act and did not and will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading. As of the date of this Agreement, the Prospectus and any Free Writing Prospectus (as defined below) considered together (collectively, the “Time of Sale Information”) did not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. The Prospectus, as amended or supplemented, as of its date and at each Representation Date, did not and will not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. The representations and warranties set forth in the three immediately preceding sentences do not apply to statements in or omissions from the Registration Statement, any Rule 462(b) Registration Statement, or any post-effective amendment thereto, or the Prospectus, or any amendments or supplements thereto, made in reliance upon and in conformity with information relating to the Agent furnished to the Company in writing by the Agent expressly for use therein, it being understood and agreed that the only such information furnished by the Agent to the Company consists of the information described in Section 6 below. There are no contracts or other documents required to be described in the Prospectus or to be filed as exhibits to the Registration Statement which have not been described or filed as required. The Registration Statement and the offer and sale of the Shares as contemplated hereby meet the requirements of Rule 415 under the Securities Act and comply in all material respects with said rule.

 

 

(c)            Ineligible Issuer Status. The Company is not an “ineligible issuer” in connection with the offering of the Shares pursuant to Rules 164, 405 and 433 under the Securities Act. Any Free Writing Prospectus that the Company is required to file pursuant to Rule 433(d) under the Securities Act has been, or will be, filed with the Commission in accordance with the requirements of the Securities Act. Each Free Writing Prospectus that the Company has filed, or is required to file, pursuant to Rule 433(d) under the Securities Act or that was prepared by or on behalf of or used or referred to by the Company complies or will comply in all material respects with the requirements of Rule 433 under the Securities Act including timely filing with the Commission or retention where required and legending, and each such Free Writing Prospectus, as of its issue date and at all subsequent times through the completion of the issuance and sale of the Shares did not, does not and will not include any information that conflicted, conflicts with or will conflict with the information contained in the Registration Statement or the Prospectus, including any document incorporated by reference therein. Except for the Free Writing Prospectuses, if any, and electronic road shows, if any, furnished to the Agent before first use, the Company has not prepared, used or referred to, and will not, without the Agent’s prior consent, prepare, use or refer to, any Free Writing Prospectus.

 

(d)            Incorporated Documents. The documents incorporated or deemed to be incorporated by reference in the Registration Statement and the Prospectus, at the time they were filed with the Commission, complied in all material respects with the requirements of the Exchange Act, as applicable, and, when read together with the other information in the Prospectus, do not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading.

 

(e)            Exchange Act Compliance. The documents incorporated or deemed to be incorporated by reference in the Prospectus, at the time they were or hereafter are filed with the Commission, and any Free Writing Prospectus or amendment or supplement thereto complied and will comply in all material respects with the requirements of the Exchange Act, and, when read together with the other information in the Prospectus, at the time the Registration Statement and any amendments thereto become effective and at each Time of Sale (as defined below), as the case may be, will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.

 

(f)             Foreign Private Issuer. The Company is a “foreign private issuer” within the meaning of Rule 405 under the Securities Act.

 

 

(g)            Statistical and Market-Related Data. All statistical, demographic and market-related data included in the Registration Statement or the Prospectus are based on or derived from sources that the Company believes, after reasonable inquiry, to be reliable and accurate. To the extent required, the Company has obtained the written consent for the use of such data from such sources.

 

(h)            Disclosure Controls and Procedures; Deficiencies in or Changes to Internal Control Over Financial Reporting. The Company has established and maintains disclosure controls and procedures (as defined in Rules 13a-15 and 15d-15 under the Exchange Act), which (i) are designed to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to the Company’s principal executive officer and its principal financial officer by others within those entities, particularly during the periods in which the periodic reports required under the Exchange Act are being prepared; (ii) have been evaluated by management of the Company for effectiveness as of the end of the Company’s most recent fiscal quarter; and (iii) are effective in all material respects to perform the functions for which they were established. The Company’s internal controls over financial reporting were effective as of the completion of the Company’s most recent fiscal year. Since the completion of the Company’s most recent fiscal year, there have been no significant deficiencies or material weaknesses in the Company’s internal control over financial reporting (whether or not remediated) and no change in the Company’s internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting. The Company is not aware of any change in its internal control over financial reporting that has occurred during its most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting, and is not aware of any fraud that involves management or other employees of the Company who have a significant role in the Company’s internal reporting.

 

(i)             This Agreement. This Agreement has been duly authorized, executed and delivered by, and is a valid and binding agreement of, the Company, enforceable in accordance with its terms, except as rights to indemnification hereunder may be limited by applicable law and except as the enforcement hereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to or affecting the rights and remedies of creditors or by general equitable principles.

 

(j)             Authorization of the Shares. The Shares have been duly authorized for issuance and sale pursuant to this Agreement and, when issued and delivered by the Company against payment therefor pursuant to this Agreement, will be validly issued, fully paid and nonassessable, and the issuance and sale of the Shares is not subject to any preemptive rights, rights of first refusal or other similar rights to subscribe for or purchase the Shares.

 

(k)            No Applicable Registration or Other Similar Rights. There are no persons with registration or other similar rights to have any equity or debt securities registered for sale under the Registration Statement or included in the offering contemplated by this Agreement, except for such rights as have been duly waived.

 

 

(l)             No Material Adverse Change. Except as otherwise disclosed in the Registration Statement and the Prospectus, subsequent to the respective dates as of which information is given in the Registration Statement and the Prospectus: (i) there has been no material adverse change, or any development that could reasonably be expected to result in a material adverse change, in (A) the condition, financial or otherwise, or in the earnings, business, properties, operations, operating results, assets, liabilities or prospects, whether or not arising from transactions in the ordinary course of business, of the Company and its subsidiaries, considered as one entity or (B) the ability of the Company to consummate the transactions contemplated by this Agreement or perform its obligations hereunder (any such change being referred to herein as a “Material Adverse Change”); (ii) the Company and its subsidiaries, considered as one entity, have not incurred any material liability or obligation, indirect, direct or contingent, including without limitation any losses or interference with their business from fire, explosion, flood, earthquakes, accident or other calamity, whether or not covered by insurance, or from any strike, labor dispute or court or governmental action, order or decree, that are material, individually or in the aggregate, to the Company and its subsidiaries, considered as one entity, and have not entered into any material transactions not in the ordinary course of business; and (iii) there has not been any material decrease in the capital stock or any material increase in any short-term or long-term indebtedness of the Company or its subsidiaries and there has been no dividend or distribution of any kind declared, paid or made by the Company or, except for dividends paid to the Company or other subsidiaries, by any of the Company’s subsidiaries on any class of capital stock, or any repurchase or redemption by the Company or any of its subsidiaries of any class of capital stock.

 

(m)           Independent Accountants. KPMG Huazhen LLP, or such other accountants, which has (y) expressed its opinion with respect to the financial statements (which term as used in this Agreement includes the related notes thereto) or (z) reviewed the financial statements, each as filed with the Commission as a part of the Registration Statement and the Prospectus, is (i) an independent registered public accounting firm as required by the Securities Act, the Exchange Act, and the rules of the Public Company Accounting Oversight Board (“PCAOB”), (ii) in compliance with the applicable requirements relating to the qualification of accountants under Rule 2-01 of Regulation S-X under the Securities Act and (iii) a registered public accounting firm as defined by the PCAOB whose registration has not been suspended or revoked and who has not requested such registration to be withdrawn.

 

(n)            Financial Statements. The financial statements filed with the Commission as a part of the Registration Statement and included in the Prospectus present fairly, in all material respects, the consolidated financial position of the Company and its subsidiaries as of the dates indicated and the results of their operations, changes in shareholders’ equity and cash flows for the periods specified. Such financial statements and supporting schedules have been prepared in conformity with generally accepted accounting principles as applied in the United States applied on a consistent basis throughout the periods involved, except as may be expressly stated in the related notes thereto. The interactive data in eXtensible Business Reporting Language included or incorporated by reference in the Registration Statement fairly presents the information called for in all material respects and has been prepared in accordance with the Commission’s rules and guidelines applicable thereto. No other financial statements or supporting schedules are required to be included in the Registration Statement or the Prospectus. The financial data set forth in each of the Registration Statement and the Prospectus fairly present, in all material respects, the information set forth therein on a basis consistent with that of the audited financial statements contained in the Registration Statement and the Prospectus. All disclosures contained in the Registration Statement and the Prospectus that constitute non GAAP financial measures (as defined by the rules and regulations under the Securities Act and the Exchange Act) comply with Regulation G under the Exchange Act and Item 10 of Regulation S-K under the Securities Act, as applicable. To the Company’s knowledge, no person who has been suspended or barred from being associated with a registered public accounting firm, or who has failed to comply with any sanction pursuant to Rule 5300 promulgated by the PCAOB, has participated in or otherwise aided the preparation of, or audited, the financial statements, supporting schedules or other financial data filed with or furnished to the Commission as a part of the Registration Statement and the Prospectus.

 

 

(o)            Company’s Accounting System. The Company and each of its subsidiaries make and keep accurate books and records and maintain a system of internal accounting controls sufficient to provide reasonable assurance that: (i) transactions are executed in accordance with management’s general or specific authorization; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles as applied in the United States and to maintain accountability for assets; (iii) access to assets is permitted only in accordance with management’s general or specific authorization; (iv) the recorded accountability for assets is compared with existing assets at reasonable intervals and appropriate action is taken with respect to any differences; and (v) the interactive data in eXtensible Business Reporting Language included or incorporated by reference in the Registration Statement and the Prospectus fairly presents the information called for in all material respects and is prepared in accordance with the Commission’s rules and guidelines applicable thereto.

 

(p)            Incorporation and Good Standing of the Company. The Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of the jurisdiction of its incorporation and has the corporate power and authority to own, lease and operate its properties and to conduct its business as described in the Registration Statement and the Prospectus and to enter into and perform its obligations under this Agreement. The Company is duly qualified as a foreign corporation to transact business and is in good standing in each jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except where the failure to so qualify or be in good standing, individually or in the aggregate, would not reasonably be expected to result in a Material Adverse Change.

 

(q)            Subsidiaries. Each of the Company’s “subsidiaries” (for purposes of this Agreement, as defined in Rule 405 under the Securities Act) has been duly incorporated or organized, as the case may be, and is validly existing as a corporation, partnership or limited liability company, as applicable, in good standing under the laws of the jurisdiction of its incorporation or organization and has the power and authority (corporate or other) to own, lease and operate its properties and to conduct its business as described in the Registration Statement and the Prospectus. Each of the Company’s subsidiaries is duly qualified as a foreign corporation, partnership or limited liability company, as applicable, to transact business and is in good standing in each jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except where the failure to so qualify or be in good standing, individually or in the aggregate, would not reasonably be expected to result in a Material Adverse Change. All of the issued and outstanding capital stock or other equity or ownership interests of each of the Company’s subsidiaries have been duly authorized and validly issued, are fully paid and nonassessable and are owned by the Company, directly or through subsidiaries, free and clear of any security interest, mortgage, pledge, lien, encumbrance or adverse claim. None of the outstanding capital stock or equity interest in any subsidiary was issued in violation of preemptive or similar rights of any security holder of such subsidiary. The constitutive or organizational documents of each of the subsidiaries comply in all material respects with the requirements of applicable laws of its jurisdiction of incorporation or organization and are in full force and effect. The Company does not own or control, directly or indirectly, any corporation, association or other entity other than the subsidiaries listed in Exhibit 8.1 to the Company’s most recent Annual Report on Form 20-F.

 

 

(r)             Capitalization and Other Capital Stock Matters. The authorized, issued and outstanding capital stock of the Company is as set forth in the Registration Statement and the Prospectus (other than for subsequent issuances, if any, pursuant to employee benefit plans or upon the exercise of outstanding options or warrants, in each case described in the Registration Statement and the Prospectus). The Common Shares (including the Shares) conform in all material respects to the description thereof contained in the Prospectus. All of the issued and outstanding Common Shares have been duly authorized and validly issued, are fully paid and nonassessable and have been issued in compliance with all federal and state securities laws. None of the outstanding Common Shares was issued in violation of any preemptive rights, rights of first refusal or other similar rights to subscribe for or purchase securities of the Company. There are no authorized or outstanding options, warrants, preemptive rights, rights of first refusal or other rights to purchase, or equity or debt securities convertible into or exchangeable or exercisable for, any capital stock or other equity or ownership interests of the Company or any of its subsidiaries other than those described in the Registration Statement and the Prospectus. The descriptions of the Company’s stock option, stock bonus and other stock plans or arrangements, and the options or other rights granted thereunder, set forth in the Registration Statement and the Prospectus accurately and fairly presents, in all material respects, the information required to be shown with respect to such plans, arrangements, options and rights.

 

(s)            Stock Exchange Listing. The Common Shares are registered pursuant to Section 12(b) or 12(g) of the Exchange Act and are listed on the Principal Market, and the Company has taken no action designed to, or which to its knowledge is likely to have the effect of, terminating the registration of the Common Shares under the Exchange Act or delisting the Common Shares from the Principal Market, nor has the Company received any notification that the Commission or the Principal Market is contemplating terminating such registration or listing. To the Company’s knowledge, it is in compliance with all applicable listing requirements of the Principal Market.

 

 

(t)             Non-Contravention of Existing Instruments; No Further Authorizations or Approvals Required. Neither the Company nor any of its subsidiaries is in violation of its charter or bylaws, partnership agreement or operating agreement or similar organizational documents, as applicable, or is in default (or, with the giving of notice or lapse of time, would be in default) (“Default”) under any indenture, loan, credit agreement, note, lease, license agreement, contract, franchise or other instrument (including, without limitation, any pledge agreement, security agreement, mortgage or other instrument or agreement evidencing, guaranteeing, securing or relating to indebtedness) to which the Company or any of its subsidiaries is a party or by which it or any of them may be bound, or to which any of their respective properties or assets are subject (each, an “Existing Instrument”), except for such Defaults as would not reasonably be expected, individually or in the aggregate, to result in a Material Adverse Change. The Company’s execution, delivery and performance of this Agreement, consummation of the transactions contemplated hereby and by the Registration Statement and the Prospectus and the issuance and sale of the Shares (including the use of proceeds from the sale of the Shares as described in the Registration Statement and the Prospectus under the caption “Use of Proceeds”) (i) have been duly authorized by all necessary corporate action and will not result in any violation of the provisions of the charter or bylaws, partnership agreement or operating agreement or similar organizational documents, as applicable, of the Company or any subsidiary (ii) will not conflict with or constitute a breach of, or Default or a Debt Repayment Triggering Event (as defined below) under, or result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Company or any of its subsidiaries pursuant to, or require the consent of any other party to, any Existing Instrument and (iii) will not result in any violation of any law, administrative regulation or administrative or court decree applicable to the Company or any of its subsidiaries, except in the case of (ii) and (iii), for any such conflict, breach, violation, Default, Debt Repayment Triggering Event, lien, charge or encumbrance that would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Change. No consent, approval, authorization or other order of, or registration or filing with, any court or other governmental or regulatory authority or agency, is required for the Company’s execution, delivery and performance of this Agreement and consummation of the transactions contemplated hereby and by the Registration Statement and the Prospectus, except such as have been obtained or made by the Company and are in full force and effect under the Securities Act and such as may be required under applicable state securities or blue sky laws or FINRA (as defined below). As used herein, a “Debt Repayment Triggering Event” means any event or condition which gives, or with the giving of notice or lapse of time would give, the holder of any note, debenture or other evidence of indebtedness (or any person acting on such holder’s behalf) the right to require the repurchase, redemption or repayment of all or a portion of such indebtedness by the Company or any of its subsidiaries.

 

(u)            No Material Actions or Proceedings. Except as otherwise disclosed in the Prospectus, there is no action, suit, proceeding, inquiry or investigation brought by or before any legal or governmental entity now pending or, to the knowledge of the Company, threatened, against or affecting the Company or any of its subsidiaries, which could be expected, individually or in the aggregate, to result in a Material Adverse Change or adversely affect the consummation of the transactions contemplated by this Agreement or any such action, suit or proceeding is or would be material in the context of the sale of Shares. No material labor dispute with the employees of the Company or any of its subsidiaries, or with the employees of any principal supplier, manufacturer, customer or contractor of the Company, exists or, to the knowledge of the Company, is threatened or imminent.

 

 

(v)            Intellectual Property Rights. Except as otherwise disclosed in the Registration Statement or the Prospectus, the Company and its subsidiaries own, or have obtained valid and enforceable non-exclusive licenses for, the inventions, patent applications, patents, trademarks, trade names, service names, copyrights, trade secrets and other intellectual property described in the Registration Statement and the Prospectus as being owned or licensed by them or which are necessary for the conduct of their respective businesses as currently conducted or as currently proposed to be conducted (collectively, “Intellectual Property”) and to the Company’s knowledge, the conduct of their respective businesses does not and will not infringe, misappropriate or otherwise conflict in any material respect with any such rights of others. The Intellectual Property of the Company has not been adjudged by a court of competent jurisdiction to be invalid or unenforceable, in whole or in part, and the Company is unaware of any facts which would form a reasonable basis for any such adjudication. To the Company’s knowledge: (i) there are no third parties who have rights to any Intellectual Property, except for customary reversionary rights of third-party licensors with respect to Intellectual Property that is disclosed in the Registration Statement and the Prospectus as licensed to the Company or one or more of its subsidiaries; and (ii) there is no infringement by third parties of any Intellectual Property. There is no pending or, to the Company’s knowledge, threatened action, suit, proceeding or claim by others: (A) challenging the Company’s rights in or to any Intellectual Property, and the Company is unaware of any facts which would form a reasonable basis for any such action, suit, proceeding or claim; (B) challenging the validity, enforceability or scope of any Intellectual Property, and the Company is unaware of any facts which would form a reasonable basis for any such action, suit, proceeding or claim; or (C) asserting that the Company or any of its subsidiaries infringes or otherwise violates, or would, upon the commercialization of any product or service described in the Registration Statement or the Prospectus as under development, infringe or violate, any patent, trademark, trade name, service name, copyright, trade secret or other proprietary rights of others, and the Company is unaware of any facts which would form a reasonable basis for any such action, suit, proceeding or claim. The Company and its subsidiaries have complied with the terms of each agreement pursuant to which Intellectual Property has been licensed to the Company or any subsidiary, and all such agreements are in full force and effect, except in such cases as would not reasonably be expected, individually or in the aggregate, to result in a Material Adverse Change. To the Company’s knowledge, there are no material defects in any of the patents or patent applications included in the Intellectual Property. The Company and its subsidiaries have taken all reasonable steps to protect, maintain and safeguard their Intellectual Property, except in such cases as would not reasonably be expected, individually or in the aggregate, to result in a Material Adverse Change, including the execution of appropriate nondisclosure, confidentiality agreements and invention assignment agreements and invention assignments with their employees, and no employee of the Company is in or has been in violation of any term of any employment contract, patent disclosure agreement, invention assignment agreement, non-competition agreement, non-solicitation agreement, nondisclosure agreement, or any restrictive covenant to or with a former employer where the basis of such violation relates to such employee’s employment with the Company. To the Company’s knowledge, the duty of candor and good faith as required by the United States Patent and Trademark Office during the prosecution of the United States patents and patent applications included in the Intellectual Property have been complied with; and in all foreign offices having similar requirements, all such requirements have been complied with. To the Company’s knowledge, none of the Company owned Intellectual Property or technology (including information technology and outsourced arrangements) employed by the Company or its subsidiaries has been obtained or is being used by the Company or its subsidiary in violation of any contractual obligation binding on the Company or its subsidiaries or any of their respective officers, directors or employees or otherwise in violation of the rights of any persons. The product candidates described in the Registration Statement and the Prospectus as under development by the Company or any subsidiary fall within the scope of the claims of one or more patents owned by, or exclusively licensed to, the Company or any subsidiary.

 

 

(w)            All Necessary Permits, etc. Except as otherwise disclosed in the Prospectus, the Company and each subsidiary possess such valid and current certificates, authorizations or permits required by state, federal or foreign regulatory agencies or bodies necessary for the ownership or lease of its properties or to conduct their respective businesses as currently conducted and as described in the Registration Statement or the Prospectus (“Permits”), or to permit all clinical studies and trials conducted by or on behalf of the Company and its subsidiaries, including, without limitation, all necessary Food and Drug Administration of the U.S. Department of Health and Human Services (the “FDA”) and applicable foreign regulatory agency approvals and registrations; and neither the Company nor any of its subsidiaries is in violation of, or in default under, any of the Permits or has received, or has any reason to believe that it will receive, any notice of proceedings relating to the revocation or modification of, or noncompliance with, any such Permit that, if the subject of an unfavorable decision, ruling or finding, would reasonably be expected, individually or in the aggregate, to result in a Material Adverse Change.

 

(x)             Title to Properties. The Company and each of its subsidiaries own no real property. Except as otherwise disclosed in the Prospectus, the Company and its subsidiaries have good and marketable title to all of the personal property and other assets reflected as owned in the financial statements referred to in ‎Section 2(n) above or elsewhere in the Registration Statement or the Prospectus, in each case free and clear of any security interests, mortgages, liens, encumbrances, equities, adverse claims and other defects, except as would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Change. The real property, improvements, equipment and personal property held under lease by the Company or any of its subsidiaries are held under valid and enforceable leases, with such exceptions as are not material and do not materially interfere with the use made or proposed to be made of such real property, improvements, equipment or personal property by the Company or such subsidiary.

 

(y)            Tax Law Compliance. The Company and its subsidiaries have filed all necessary federal, state and foreign income and franchise tax returns or have properly requested extensions thereof and have paid all taxes required to be paid by any of them and, if due and payable, any related or similar assessment, fine or penalty levied against any of them except as may be being contested in good faith and by appropriate proceedings. The Company has made adequate charges, accruals and reserves in the applicable financial statements referred to in ‎Section 2(n) above in respect of all federal, state and foreign income and franchise taxes for all periods as to which the tax liability of the Company or any of its subsidiaries has not been finally determined.

 

(z)            Company Not an “Investment Company.” The Company is not, and will not be, either after receipt of payment for the Shares or after the application of the proceeds therefrom as described under “Use of Proceeds” in the Registration Statement or the Prospectus, required to register as an “investment company” under the Investment Company Act of 1940, as amended (the “Investment Company Act”).

 

(aa)          Insurance. Except as otherwise disclosed in the Prospectus, each of the Company and its subsidiaries are insured by recognized, financially sound and reputable institutions with policies in such amounts and with such deductibles and covering such risks as are generally deemed adequate by the Company and customary for the Company’s and its subsidiaries’ businesses including, but not limited to, policies covering real and personal property owned or leased by the Company and its subsidiaries against theft, damage, destruction, acts of vandalism and earthquakes and policies covering the Company and its subsidiaries for product liability claims and clinical trial liability claims. The Company has no reason to believe that it or any of its subsidiaries will not be able (i) to renew its existing insurance coverage as and when such policies expire or (ii) to obtain comparable coverage from similar institutions as may be necessary or appropriate to conduct its business as now conducted and at a cost that would not reasonably be expected to result in a Material Adverse Change. Neither the Company nor any of its subsidiaries has been denied any insurance coverage which it has sought or for which it has applied.

 

 

(bb)         No Price Stabilization or Manipulation; Compliance with Regulation M. Neither the Company nor any of its subsidiaries has taken, directly or indirectly, any action designed to or that might cause or result in stabilization or manipulation of the price of the Common Shares or of any “reference security” (as defined in Rule 100 of Regulation M under the Exchange Act (“Regulation M”)) with respect to the Common Shares, whether to facilitate the sale or resale of the Shares or otherwise, and has taken no action which would directly or indirectly violate Regulation M.

 

(cc)          Related Party Transactions. There are no business relationships or related-party transactions involving the Company or any of its subsidiaries or any other person required to be described in the Registration Statement or the Prospectus which have not been described as required.

 

(dd)         FINRA Matters. All of the information provided to the Agent or to counsel for the Agent by the Company, its counsel, its officers and directors and the holders of any securities (debt or equity) or options to acquire any securities of the Company in connection with the offering of the Shares is true, complete, correct and compliant with Financial Industry Regulatory Authority, Inc.’s (“FINRA”) rules and any letters, filings or other supplemental information provided to FINRA pursuant to FINRA Rules or NASD Conduct Rules is true, complete and correct. Neither the Company nor any of its Affiliates directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, or is a person associated with any member firm of FINRA.

 

(ee)          No Unlawful Contributions or Other Payments. Except as otherwise disclosed in the Prospectus, neither the Company nor any of its subsidiaries nor, to the Company’s knowledge, any employee or agent of the Company or any subsidiary, has made any contribution or other payment to any official of, or candidate for, any federal, state or foreign office in violation of any applicable law or of the character required to be disclosed in the Registration Statement and the Prospectus.

 

(ff)           Compliance with Environmental Laws. Except as described in the Prospectus and except as would not reasonably be expected, individually or in the aggregate, to result in a Material Adverse Change; (i) neither the Company nor any of its subsidiaries is in violation of any federal, state, local or foreign statute, law, rule, regulation, ordinance, code, policy or rule of common law or any judicial or administrative interpretation thereof, including any judicial or administrative order, consent, decree or judgment, relating to pollution or protection of human health, the environment (including, without limitation, ambient air, surface water, groundwater, land surface or subsurface strata) or wildlife, including, without limitation, laws and regulations relating to the release or threatened release of chemicals, pollutants, contaminants, wastes, toxic substances, hazardous substances, petroleum or petroleum products (collectively, “Hazardous Materials”) or to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials (collectively, “Environmental Laws”), (ii) the Company and its subsidiaries have all permits, authorizations and approvals required under any applicable Environmental Laws and are each in compliance with their requirements, (iii) there are no pending or threatened administrative, regulatory or judicial actions, suits, demands, demand letters, claims, liens, notices of noncompliance or violation, investigation or proceedings relating to any Environmental Law against the Company or any of its subsidiaries and (iv) to the knowledge of the Company, there are no events or circumstances that might reasonably be expected to form the basis of an order for clean-up or remediation, or an action, suit or proceeding by any private party or governmental body or agency, against or affecting the Company or any of its subsidiaries relating to Hazardous Materials or any Environmental Laws.

 

 

(gg)         ERISA Compliance. Except as otherwise disclosed in the Prospectus, the Company and its subsidiaries and any “employee benefit plan” (as defined under the Employee Retirement Income Security Act of 1974, as amended, and the regulations and published interpretations thereunder (collectively, “ERISA”)) established or maintained by the Company, its subsidiaries or their “ERISA Affiliates” (as defined below) are in compliance in all material respects with ERISA. “ERISA Affiliate” means, with respect to the Company or any of its subsidiaries, any member of any group of organizations described in Sections 414(b), (c), (m) or (o) of the Internal Revenue Code of 1986, as amended, and the regulations and published interpretations thereunder (the “Code”) of which the Company or such subsidiary is a member. No “reportable event” (as defined under ERISA) has occurred or is reasonably expected to occur with respect to any “employee benefit plan” established or maintained by the Company, its subsidiaries or any of their ERISA Affiliates. Except as would not reasonably be expected, individually or in the aggregate, to result in a Material Adverse Change, no “employee benefit plan” established or maintained by the Company, its subsidiaries or any of their ERISA Affiliates, if such “employee benefit plan” were terminated, would have any “amount of unfunded benefit liabilities” (as defined under ERISA). Neither the Company, its subsidiaries nor any of their ERISA Affiliates has incurred or reasonably expects to incur any liability under (i) Title IV of ERISA with respect to termination of, or withdrawal from, any “employee benefit plan” or (ii) Sections 412, 4971, 4975 or 4980B of the Code. Each “employee benefit plan” established or maintained by the Company, its subsidiaries or any of their ERISA Affiliates that is intended to be qualified under Section 401(a) of the Code is so qualified and nothing has occurred, whether by action or failure to act, which would cause the loss of such qualification.

 

(hh)         Brokers. Except as otherwise disclosed in the Prospectus, there is no broker, finder or other party that is entitled to receive from the Company any brokerage or finder’s fee or other fee or commission as a result of any transactions contemplated by this Agreement.

 

(ii)            No Outstanding Loans or Other Extensions of Credit. The Company does not have any outstanding extension of credit, in the form of a personal loan, to or for any director or executive officer (or equivalent thereof) of the Company except for such extensions of credit as are expressly permitted by Section 13(k) of the Exchange Act.

 

(jj)            Compliance with Laws. The Company and its subsidiaries have been and are in compliance with all applicable laws, rules and regulations, except where failure to be so in compliance would not be expected, individually or in the aggregate, to result in a Material Adverse Change.

 

 

(kk)          Dividend Restrictions. Except as disclosed in the Prospectus, no subsidiary of the Company is prohibited or restricted, directly or indirectly, from paying dividends to the Company, or from making any other distribution with respect to such subsidiary’s equity securities or from repaying to the Company or any other subsidiary of the Company any amounts that may from time to time become due under any loans or advances to such subsidiary from the Company or from transferring any property or assets to the Company or to any other subsidiary.

 

(ll)            Anti-Corruption and Anti-Bribery Laws. Neither the Company nor any of its subsidiaries nor to the knowledge of the Company, any director, officer, employee, agent, Affiliate or other person acting on behalf of the Company or any of its subsidiaries has, in the course of its actions for, or on behalf of, the Company or any of its subsidiaries (i) used any corporate funds for any unlawful contribution, gift, entertainment or other unlawful expenses relating to political activity; (ii) made or taken any act in furtherance of an offer, promise, or authorization of any direct or indirect unlawful payment or benefit to any foreign or domestic government official or employee, including of any government-owned or controlled entity or public international organization, or any political party, party official, or candidate for political office; (iii) violated or is in violation of any provision of the U.S. Foreign Corrupt Practices Act of 1977, as amended (the “FCPA”), the UK Bribery Act 2010, or any other applicable anti-bribery or anti-corruption law; or (iv) made, offered, authorized, requested, or taken an act in furtherance of any unlawful bribe, rebate, payoff, influence payment, kickback or other unlawful payment or benefit. The Company and its subsidiaries and, to the knowledge of the Company, the Company’s Affiliates have conducted their respective businesses in compliance with the FCPA and other applicable anti-bribery or anti-corruption laws, and have instituted and maintain policies and procedures designed to ensure, and which are reasonably expected to continue to ensure, continued compliance therewith.

 

(mm)        Money Laundering Laws. The operations of the Company and its subsidiaries are, and have been conducted at all times, in compliance with applicable financial recordkeeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, the money laundering statutes of all applicable jurisdictions, the rules and regulations thereunder and any related or similar applicable rules, regulations or guidelines, issued, administered or enforced by any governmental agency (collectively, the “Money Laundering Laws”) and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company or any of its subsidiaries with respect to the Money Laundering Laws is pending or, to the best knowledge of the Company, threatened.

 

(nn)         Clinical Data and Regulatory Compliance. The preclinical tests and clinical trials, and other studies (collectively, “studies”) that are described in, or the results of which are referred to in, the Registration Statement or the Prospectus were and, if still pending, are being conducted in all material respects in accordance with the protocols, procedures and controls designed and approved for such studies and with standard medical and scientific research procedures; each description of the results of such studies is accurate and complete in all material respects and fairly presents the data derived from such studies, and the Company and its subsidiaries have no knowledge of any other studies the results of which are inconsistent with, or otherwise call into question, the results described or referred to in the Registration Statement or the Prospectus; the Company and its subsidiaries have made all necessary filings and obtained all such approvals as may be required by the FDA or any committee thereof or from any other U.S. or foreign government or drug or medical device regulatory agency, or health care facility Institutional Review Board (collectively, the “Regulatory Agencies”); neither the Company nor any of its subsidiaries has received any notice of, or correspondence from, any Regulatory Agency requiring the termination, suspension or modification of any clinical trials that are described or referred to in the Registration Statement or the Prospectus; and the Company and its subsidiaries have each operated and currently are in compliance in all material respects with all applicable rules, regulations and policies of the Regulatory Agencies.

 

 

(oo)         Sanctions. Neither the Company nor any of its subsidiaries, directors or officers, nor to the knowledge of the Company, after due inquiry, any employee, agent, Affiliate or other person acting on behalf of the Company or any of its subsidiaries is currently the subject or the target of any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Department of the Treasury (“OFAC”) or the U.S. Department of State, the United Nations Security Council, the European Union, His Majesty’s Treasury of the United Kingdom, or other relevant sanctions authority (collectively, “Sanctions”); nor is the Company or any of its subsidiaries located, organized or resident in a country or territory that is the subject or the target of Sanctions, including, without limitation, the Crimea Region of Ukraine, the so-called Donetsk People’s Republic, the so-called Luhansk People’s Republic, Cuba, Iran, North Korea, and Syria; and the Company will not directly or indirectly use the proceeds of this offering, or lend, contribute or otherwise make available such proceeds to any subsidiary, or any joint venture partner or other person or entity, for the purpose of financing the activities of or business with any person, or in any country or territory, that at the time of such financing, is the subject or the target of Sanctions or in any other manner that will result in a violation by any person (including any person participating in the transaction whether as underwriter, advisor, investor or otherwise) of applicable Sanctions. Since April 24, 2019, the Company and its subsidiaries have not knowingly engaged in and are not now knowingly engaged in any dealings or transactions with any person, country, or territory that at the time of the dealing or transaction is or was the subject or the target of Sanctions.

 

(pp)         Sarbanes-Oxley. The Company is in compliance, in all material respects, with all applicable provisions of the Sarbanes-Oxley Act of 2002 and the rules and regulations promulgated thereunder.

 

(qq)         Duties, Transfer Taxes, Etc. No stamp or other issuance or transfer taxes or duties and no capital gains, income, withholding or other taxes are payable by the Agent in the United States or any political subdivision or taxing authority thereof or therein in connection with the execution, delivery or performance of this Agreement by the Company or the sale and delivery by the Company of the Shares. No transaction, stamp, capital or other issuance, registration, transaction, transfer or withholding taxes or duties are payable in the PRC by or on behalf of the Agent to any PRC taxing authority in connection with (i) the execution and delivery of this Agreement or (ii) the consummation of the transactions contemplated hereunder, given that all of the above activities mentioned in clauses (i) and (ii) above shall take place outside of the PRC.

 

 

(rr)           Cybersecurity. To its knowledge, the Company’s and its subsidiaries’ information technology assets and equipment, computers, systems, networks, hardware, software, websites, applications, and databases (collectively, “IT Systems”) are adequate for, and operate and perform in all material respects as required in connection with the operation of the business of the Company and its subsidiaries as currently conducted, free and clear of all material bugs, errors, defects, Trojan horses, time bombs, malware and other corruptants. The Company and its subsidiaries have implemented and maintained commercially reasonable physical, technical and administrative controls, policies, procedures, and safeguards to maintain and protect their material confidential information and the integrity, continuous operation, redundancy and security of all IT Systems and data, including “Personal Data,” used in connection with their businesses. “Personal Data” means (i) a natural person’s name, street address, telephone number, e-mail address, photograph, social security number or tax identification number, driver’s license number, passport number, credit card number, bank information, or customer or account number; (ii) any information which would qualify as “personally identifying information” under the Federal Trade Commission Act, as amended; (iii) “personal data” as defined by GDPR (as defined below); (iv) any information which would qualify as “protected health information” under the Health Insurance Portability and Accountability Act of 1996, as amended by the Health Information Technology for Economic and Clinical Health Act (collectively, “HIPAA”); (v) any “personal information” as defined by the Cyber Security Law of the PRC and any laws, rules and regulations promulgated by regulatory authorities of PRC concerning data protection (collectively, “Cyber Security Law”); and (vi) any other piece of information that allows the identification of such natural person, or his or her family, or permits the collection or analysis of any data related to an identified person’s health or sexual orientation. To the knowledge of the Company, there have been no breaches, violations, outages or unauthorized uses of or accesses to same, except for those that have been remedied without material cost or liability or the duty to notify any other person, nor any incidents under internal review or investigations relating to the same, that, in each case, would reasonably be likely to result in a Material Adverse Change. The Company and its subsidiaries are presently in material compliance with all applicable laws or statutes and all judgments, orders, rules and regulations of any court or arbitrator or governmental or regulatory authority, internal policies and contractual obligations relating to the privacy and security of IT Systems and Personal Data and to the protection of such IT Systems and Personal Data from unauthorized use, access, misappropriation or modification.

 

(ss)          Compliance with Data Privacy Laws. The Company and its subsidiaries are, and to the Company’s knowledge, at all prior times were, in material compliance with all applicable state and federal data privacy and security laws and regulations, including without limitation HIPAA and Cyber Security Law, and the Company and its subsidiaries have taken commercially reasonable actions to prepare to comply with, and since May 25, 2018, have been and currently are in compliance with, the European Union General Data Protection Regulation (“GDPR”) (EU 2016/679) (collectively, the “Privacy Laws”) in all material respects. To ensure compliance with the Privacy Laws, the Company and its subsidiaries have in place, comply with, and take appropriate steps reasonably designed to ensure compliance in all material respects with their policies and procedures relating to data privacy and security and the collection, storage, use, disclosure, handling, and analysis of Personal Data (the “Policies”). The Company and its subsidiaries have at all times made all disclosures to users or customers required by applicable laws and regulatory rules or requirements, and none of such disclosures made or contained in any Policy have, to the knowledge of the Company, been inaccurate or in violation of any applicable laws and regulatory rules or requirements in any material respect. The Company further certifies that neither it nor any subsidiary: (i) has received notice of any actual or potential liability under or relating to, or actual or potential violation of, any of the Privacy Laws, and has no knowledge of any event or condition that would reasonably be expected to result in any such notice; (ii) is currently conducting or paying for, in whole or in part, any investigation, remediation, or other corrective action pursuant to any Privacy Law; or (iii) is a party to any order, decree, or agreement that imposes any obligation or liability under any Privacy Law.

 

 

(tt)           Forward-Looking Statements. Each forward-looking statement (within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act) contained in the Registration Statement or the Prospectus was so included by the Company in good faith and with reasonable basis after due consideration by the Company of the underlying assumptions, estimates and other applicable facts and circumstances.

 

(uu)         Other Underwriting Agreements. The Company is not a party to any agreement with an agent or underwriter for any other “at the market” or continuous equity transaction.

 

(vv)         Compliance with Health Care Laws. The Company and its subsidiaries are, and at all times have been, in material compliance with all Health Care Laws applicable to the Company. For purposes of this Agreement, “Health Care Laws” means: (i) the Federal Food, Drug, and Cosmetic Act (21 U.S.C. Section 301 et seq.), the Public Health Service Act (42 U.S.C. Section 201 et seq.), and the regulations promulgated thereunder; (ii) all applicable federal, state, local and foreign health care fraud and abuse laws, including, without limitation, the Anti-Kickback Statute (42 U.S.C. Section 1320a-7b(b)), the Civil False Claims Act (31 U.S.C. Section 3729 et seq.), the criminal false statements law (42 U.S.C. Section 1320a-7b(a)), 18 U.S.C. Sections 286 and 287, the health care fraud criminal provisions under HIPAA (42 U.S.C. Section 1320d et seq.), the Stark Law (42 U.S.C. Section 1395nn), the civil monetary penalties law (42 U.S.C. Section 1320a-7a), the exclusion law (42 U.S.C. Section 1320a-7), the Physician Payments Sunshine Act (42 U.S.C. Section 1320-7h), and applicable laws governing government funded or sponsored healthcare programs; (iii) HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act (42 U.S.C. Section 17921 et seq.); (iv) the Patient Protection and Affordable Care Act of 2010, as amended by the Health Care and Education Reconciliation Act of 2010; (v) licensure, quality, safety and accreditation requirements under applicable federal, state, local or foreign laws or regulatory bodies; (vi) the PRC Drug Administration Law and the regulations promulgated thereunder, as well as all other local, state, federal, national, supranational and foreign laws, relating to the regulation of the Company or its subsidiaries, and (vii) the directives and regulations promulgated pursuant to such statutes and any state or non-U.S. counterpart thereof. Neither the Company nor any of its subsidiaries has received written notice of any claim, action, suit, proceeding, hearing, enforcement, investigation, arbitration or other action from any court or arbitrator or governmental or regulatory authority or third party alleging that any product operation or activity is in violation of any Health Care Laws nor, to the Company’s knowledge, is any such claim, action, suit, proceeding, hearing, enforcement, investigation, arbitration or other action threatened. The Company and its subsidiaries have filed, maintained or submitted all material reports, documents, forms, notices, applications, records, claims, submissions and supplements or amendments as required by any Health Care Laws, and all such reports, documents, forms, notices, applications, records, claims, submissions and supplements or amendments were complete and accurate on the date filed in all material respects (or were corrected or supplemented by a subsequent submission). Neither the Company nor any of its subsidiaries is a party to any corporate integrity agreements, monitoring agreements, consent decrees, settlement orders, or similar agreements with or imposed by any governmental or regulatory authority. Additionally, neither the Company, any of its subsidiaries nor any of their respective employees, officers, directors, or agents has been excluded, suspended or debarred from participation in any U.S. federal health care program or human clinical research or, to the knowledge of the Company, is subject to a governmental inquiry, investigation, proceeding, or other similar action that could reasonably be expected to result in debarment, suspension, or exclusion.

 

 

(ww)        Payments in Foreign Currency. Except as disclosed in the Registration Statement and the Prospectus, under current laws and regulations of the Cayman Islands, Hong Kong and any political subdivision thereof, all dividends and other distributions declared and payable on the Shares may be paid by the Company to the holder thereof in United States dollars that may be converted into foreign currency and may be freely transferred out of the Cayman Islands and Hong Kong and all such payments made to holders thereof or therein who are non-residents of the Cayman Islands or Hong Kong will not be subject to income, withholding or other taxes under laws and regulations of the Cayman Islands or Hong Kong or any political subdivision or taxing authority thereof or therein and without the necessity of obtaining any governmental authorization in the Cayman Islands and Hong Kong or any political subdivision or taxing authority thereof or therein. Except as disclosed in the Registration Statement and the Prospectus, all dividends and other distributions declared and payable on the share capital of the subsidiaries of the Company that are organized in the PRC may, under the current laws and regulations of the PRC and after full payment of withholding tax, as applicable, be freely transferred out of the PRC and may be paid in United States dollars, provided that the remittance of such dividends and other distributions outside of the PRC complies with the procedures required under the PRC laws and by the relevant governmental agencies relating to foreign exchange, without other consent, approval, authorization or order of, or qualification with, any court or governmental agency or body in such entity’s jurisdiction of incorporation or tax residence, and all such dividends and other distributions will not be subject to other taxes under the laws and regulations of the PRC and are otherwise free and clear of any other tax, withholding or deduction in the PRC, and without the necessity of obtaining any governmental authorization in the PRC.

 

(xx)           CSRC Filings. The Company is aware of and has been advised as to, the content of the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies (境内企业境外发行证券和上市管理试行办法) promulgated by the China Securities Regulatory Commission (the “CSRC”) on February 17, 2023 and any official clarifications, guidance, interpretations or implementation rules in connection with or related thereto (as amended, supplemented or otherwise modified from time to time, the “CSRC Filing Rules”), including the relevant provisions thereof which purport to require that the follow-on offering of shares of an issuer in the same overseas market where it has previously issued and listed securities shall be filed with and reported to the CSRC within the prescribed timeframe. The issuance and sale of the Shares do not require the prior filing with or approval of the CSRC, but will require filing with the CSRC within three (3) PRC Business Days after the completion of the first sale of Shares hereunder and stating in the CSRC Filing Report (as defined below) the total number of securities to be issued under the Registration Statement (“Aggregated Securities”), and reporting the overall offering information to the CSRC in a consolidated manner after the completion of the sale of the Aggregated Securities

 

 

(yy)         Compliance with PRC Regulations on PRC Overseas Investment. The Company has taken all reasonable steps to comply with, and has made reasonable efforts to ensure compliance by each of its shareholders, option holders, directors, officers and employees that is, or is directly or indirectly owned or controlled by, a PRC resident or citizen with any applicable rules and regulations of the relevant PRC government agencies (including but not limited to the Ministry of Commerce, the National Development and Reform Commission, the CSRC and the State Administration of Foreign Exchange) relating to overseas investment by PRC residents and citizens (the “PRC Overseas Investment Regulations”), including requesting each shareholder, option holder, director, officer and employee that is, or is directly or indirectly owned or controlled by, a PRC resident or citizen to complete any registration and other procedures required under applicable PRC Overseas Investment Regulations.

 

Any certificate signed by any officer or representative of the Company or any of its subsidiaries and delivered to the Agent or counsel for the Agent in connection with an issuance of Shares shall be deemed a representation and warranty by the Company to the Agent as to the matters covered thereby on the date of such certificate.

 

The Company acknowledges that the Agent and, for purposes of the opinions to be delivered pursuant to Section 4(o) hereof, counsel to the Company and counsel to the Agent, will rely upon the accuracy and truthfulness of the foregoing representations and hereby consents to such reliance.

 

Section 3.              ISSUANCE AND SALE OF COMMON SHARES

 

(a)            Sale of Securities. On the basis of the representations, warranties and agreements herein contained, but subject to the terms and conditions herein set forth, the Company and the Agent agree that the Company may from time to time seek to sell Shares through the Agent, acting as sales agent, or directly to the Agent, acting as principal, as follows, with an aggregate Sales Price of up to the Maximum Program Amount, based on and in accordance with Issuance Notices as the Company may deliver, during the Agency Period.

 

(b)            Mechanics of Issuances.

 

(i)             Issuance Notice. Upon the terms and subject to the conditions set forth herein, on any Trading Day during the Agency Period on which the conditions set forth in ‎Section 5(a) and Section 5(b) shall have been satisfied, the Company may exercise its right to request an issuance of Shares by delivering to the Agent an Issuance Notice; provided, however, that (A) in no event may the Company deliver an Issuance Notice to the extent that the sum of (x) the aggregate Sales Price of the requested Issuance Amount, plus (y) the aggregate Sales Price of all Shares issued under all previous Issuance Notices effected pursuant to this Agreement, would exceed the Maximum Program Amount; and (B) prior to delivery of any Issuance Notice, the period set forth for any previous Issuance Notice shall have expired or been terminated. An Issuance Notice shall be considered delivered on the Trading Day that it is received by email to the persons set forth in Schedule A hereto and confirmed by the Company by telephone (including a voicemail message to the persons so identified), with the understanding that, with adequate prior written notice, the Agent may modify the list of such persons from time to time.

 

 

(ii)            Agent Efforts. Upon the terms and subject to the conditions set forth in this Agreement, upon the receipt of an Issuance Notice, the Agent will use its commercially reasonable efforts consistent with its normal sales and trading practices to place the Shares with respect to which the Agent has agreed to act as sales agent, subject to, and in accordance with the information specified in, the Issuance Notice, unless the sale of the Shares described therein has been suspended, cancelled or otherwise terminated in accordance with the terms of this Agreement. For the avoidance of doubt, the parties to this Agreement may modify an Issuance Notice at any time provided they both agree in writing to any such modification.

 

(iii)            Method of Offer and Sale. The Shares may be offered and sold (A) in negotiated transactions with the consent of the Company or (B) by any other method permitted by law deemed to be an “at the market offering” as defined in Rule 415(a)(4) under the Securities Act, including block transactions, sales made directly on the Principal Market or sales made into any other existing trading market of the Common Shares. Nothing in this Agreement shall be deemed to require either party to agree to the method of offer and sale specified in the preceding sentence, and (except as specified in clause (A) above) the method of placement of any Shares by the Agent shall be at the Agent’s discretion.

 

(iv)            Confirmation to the Company. If acting as sales agent hereunder, the Agent will provide written confirmation to the Company no later than the opening of the Trading Day next following the Trading Day on which it has placed Shares hereunder setting forth the number of shares sold on such Trading Day, the corresponding Sales Price and the Issuance Price payable to the Company in respect thereof.

 

(v)            Settlement. Each issuance of Shares will be settled on the applicable Settlement Date for such issuance of Shares and, subject to the provisions of ‎Section 5, on or before each Settlement Date, the Company will, or will cause its transfer agent to, electronically transfer the Shares being sold by crediting the Agent or its designee’s account at The Depository Trust Company through its Deposit/Withdrawal At Custodian (DWAC) System, or by such other means of delivery as may be mutually agreed upon by the parties hereto and, upon receipt of such Shares, which in all cases shall be freely tradable, transferable, registered shares in good deliverable form, the Agent will deliver, by wire transfer of immediately available funds, the related Issuance Price in same day funds delivered to an account designated by the Company prior to the Settlement Date. The Company may sell Shares to the Agent as principal at a price agreed upon at each relevant time Shares are sold pursuant to this Agreement (each, a “Time of Sale”).

 

(vi)            Suspension or Termination of Sales. Consistent with standard market settlement practices, the Company or the Agent may, upon notice to the other party hereto in writing or by telephone (confirmed immediately by verifiable email), suspend any sale of Shares, and the period set forth in an Issuance Notice shall immediately terminate; provided, however, that (A) such suspension and termination shall not affect or impair either party’s obligations with respect to any Shares placed or sold hereunder prior to the receipt of such notice; (B) if the Company suspends or terminates any sale of Shares after the Agent confirms such sale to the Company, the Company shall still be obligated to comply with ‎Section 3(b)(v) with respect to such Shares; and (C) if the Company defaults in its obligation to deliver Shares on a Settlement Date, the Company agrees that it will hold the Agent harmless against any loss, claim, damage or expense (including, without limitation, penalties, interest and reasonable legal fees and expenses), as incurred, arising out of or in connection with such default by the Company. The parties hereto acknowledge and agree that, in performing its obligations under this Agreement, the Agent may borrow Common Shares from stock lenders in the event that the Company has not delivered Shares to settle sales as required by subsection (v) above, and may use the Shares to settle or close out such borrowings. The Company agrees that no such notice shall be effective against the Agent unless it is made to the persons identified in writing by the Agent pursuant to Section 3(b)(i).

 

 

(vii)            No Guarantee of Placement, Etc. The Company acknowledges and agrees that (A) there can be no assurance that the Agent will be successful in placing Shares; (B) the Agent will incur no liability or obligation to the Company or any other Person if it does not sell Shares; and (C) the Agent shall be under no obligation to purchase Shares on a principal basis pursuant to this Agreement, except as otherwise specifically agreed by the Agent and the Company.

 

(viii)            Material Non-Public Information. Notwithstanding any other provision of this Agreement, the Company and the Agent agree that the Company shall not deliver any Issuance Notice to the Agent, and the Agent shall not be obligated to place any Shares, during any period in which the Company is in possession of material non-public information.

 

(c)            Fees. As compensation for services rendered, the Company shall pay to the Agent, on the applicable Settlement Date, the Selling Commission for the applicable Issuance Amount (including with respect to any suspended or terminated sale pursuant to Section 3(b)(vi)) by the Agent deducting the Selling Commission from the applicable Issuance Amount.

 

(d)            Expenses. The Company agrees to pay all costs, fees and expenses incurred in connection with the performance of its obligations hereunder and in connection with the transactions contemplated hereby, including without limitation (i) all expenses incident to the issuance and delivery of the Shares (including all printing and engraving costs); (ii) all fees and expenses of the registrar and transfer agent of the Shares; (iii) all necessary issue, transfer and other stamp taxes in connection with the issuance and sale of the Shares; (iv) all fees and expenses of the Company’s counsel, independent public or certified public accountants and other advisors; (v) all costs and expenses incurred in connection with the preparation, printing, filing, shipping and distribution of the Registration Statement (including financial statements, exhibits, schedules, consents and certificates of experts), the Prospectus, any Free Writing Prospectus (as defined below) prepared by or on behalf of, used by, or referred to by the Company, and all amendments and supplements thereto, and this Agreement; (vi) all filing fees, attorneys’ fees and expenses incurred by the Company or the Agent in connection with qualifying or registering (or obtaining exemptions from the qualification or registration of) all or any part of the Shares for offer and sale under the state securities or blue sky laws or the provincial securities laws of Canada, and, if requested by the Agent, preparing and printing a “Blue Sky Survey” or memorandum and a “Canadian wrapper”, and any supplements thereto, advising the Agent of such qualifications, registrations, determinations and exemptions; (vii) the reasonable fees and disbursements of the Agent’s counsel, including the reasonable fees and expenses of counsel for the Agent in connection with, FINRA review, if any, and approval of the Agent’s participation in the offering and distribution of the Shares; (viii) the filing fees incident to FINRA review, if any; (ix) the costs and expenses of the Company relating to investor presentations on any “road show” undertaken in connection with the marketing of the offering of the Shares, including, without limitation, expenses associated with the preparation or dissemination of any electronic road show, expenses associated with the production of road show slides and graphics, fees and expenses of any consultants engaged in connection with the road show presentations with the prior approval of the Company, travel and lodging expenses of the representatives, employees and officers of the Company and of the Agent and any such consultants, and the cost of any aircraft chartered in connection with the road show; and (x) the fees and expenses associated with listing the Shares on the Principal Market. The fees and disbursements of Agent’s counsel pursuant to subsections (vi) and (vii) above shall not exceed (A) $200,000 for its U.S. counsel in connection with the first Issuance Notice, provided such notice is delivered within thirty (30) days of the effectiveness of the Original Registration Statement, and execution of this Agreement, (B) $50,000 for its PRC counsel in connection with the first Issuance Notice, provided such notice is delivered within thirty (30) days of the effectiveness of the Original Registration Statement, and execution of this Agreement, (C) $30,000 in connection with each Triggering Event Date (as defined below) involving the filing of a Form 20-F on which the Company is required to provide a certificate pursuant to Section 4(o), and (D) $20,000 in connection with each other Triggering Event Date on which the Company is required to provide a certificate pursuant to Section 4(o).

 

 

Section 4.              ADDITIONAL COVENANTS

 

The Company covenants and agrees with the Agent as follows, in addition to any other covenants and agreements made elsewhere in this Agreement:

 

(a)            Exchange Act Compliance. During the Agency Period, the Company shall (i) file, on a timely basis, with the Commission all reports and documents required to be filed under Section 13, 14 or 15 of the Exchange Act in the manner and within the time periods required by the Exchange Act; and (ii) in the Company’s sole discretion, either (A) include in its quarterly reports or six-month reports on Form 6-K and its annual reports on Form 20-F, a summary detailing, for the relevant reporting period, (1) the number of Shares sold through the Agent pursuant to this Agreement and (2) the net proceeds received by the Company from such sales or (B) prepare a prospectus supplement containing, or include in such other filing permitted by the Securities Act or Exchange Act (each an “Interim Prospectus Supplement”), such summary information and, at least once a quarter and subject to this Section 4, file such Interim Prospectus Supplement pursuant to Rule 424(b) under the Securities Act (and within the time periods required by Rule 424(b) and Rule 430B under the Securities Act).

 

(b)            Securities Act Compliance. After the date of this Agreement, the Company shall promptly advise the Agent in writing (i) of the receipt of any comments of, or requests for additional or supplemental information from, the Commission; (ii) of the time and date of any filing of any post-effective amendment to the Registration Statement, any Rule 462(b) Registration Statement or any amendment or supplement to the Prospectus, or any Free Writing Prospectus; (iii) of the time and date that any post-effective amendment to the Registration Statement or any Rule 462(b) Registration Statement becomes effective; and (iv) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or any post-effective amendment thereto, any Rule 462(b) Registration Statement or any amendment or supplement to the Prospectus or of any order preventing or suspending the use of any Free Writing Prospectus or the Prospectus, or of any proceedings to remove, suspend or terminate from listing or quotation the Common Shares from any securities exchange upon which they are listed for trading or included or designated for quotation, or of the threatening or initiation of any proceedings for any of such purposes. If the Commission shall enter any such stop order at any time, the Company will use its reasonable best efforts to obtain the lifting of such order as soon as practicable. Additionally, the Company agrees that it shall comply with the provisions of Rule 424(b) and Rule 433, as applicable, under the Securities Act and will use its reasonable efforts to confirm that any filings made by the Company under such Rule 424(b) or Rule 433 were received in a timely manner by the Commission.

 

 

(c)            Amendments and Supplements to the Prospectus and Other Securities Act Matters. If any event shall occur or condition exist as a result of which it is necessary to amend or supplement the Prospectus so that the Prospectus does not include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances when the Prospectus is delivered to a purchaser, not misleading, or if in the opinion of the Agent or counsel for the Agent it is otherwise necessary to amend or supplement the Prospectus to comply with applicable law, including the Securities Act, the Company agrees (subject to Section 4(d) and Section 4(f)) to promptly prepare, file with the Commission and furnish at its own expense to the Agent, amendments or supplements to the Prospectus so that the statements in the Prospectus as so amended or supplemented will not include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances when the Prospectus is delivered to a purchaser, to not be misleading or so that the Prospectus, as amended or supplemented, will comply with applicable law including the Securities Act. Neither the Agent’s consent to, or delivery of, any such amendment or supplement shall constitute a waiver of any of the Company’s obligations under Section 4(d) and Section 4(f). Notwithstanding the foregoing, the Company shall not be required to file such amendment or supplement if there is no pending Issuance Notice and the Company believes that it is in its best interests not to file such amendment or supplement.

 

(d)            Agent’s Review of Proposed Amendments and Supplements. Prior to amending or supplementing the Registration Statement (including any registration statement filed under Rule 462(b) under the Securities Act) or the Prospectus (excluding any amendment or supplement through incorporation of any report filed under the Exchange Act), the Company shall furnish to the Agent for review, a reasonable amount of time prior to the proposed time of filing or use thereof, a copy of each such proposed amendment or supplement, insofar as such proposed amendment or supplement relates to the transactions contemplated hereby, and the Company shall not file or use any such proposed amendment or supplement without the Agent’s prior consent, and to file with the Commission within the applicable period specified in Rule 424(b) under the Securities Act any prospectus required to be filed pursuant to such Rule.

 

(e)            Use of Free Writing Prospectus. Neither the Company nor the Agent has prepared, used, referred to or distributed, or will prepare, use, refer to or distribute, without the other party’s prior written consent, any “written communication” that constitutes a “free writing prospectus” as such terms are defined in Rule 405 under the Securities Act with respect to the offering contemplated by this Agreement (any such free writing prospectus being referred to herein as a “Free Writing Prospectus”).

 

 

(f)            Free Writing Prospectuses. The Company shall furnish to the Agent for review, a reasonable amount of time prior to the proposed time of filing or use thereof, a copy of each proposed free writing prospectus or any amendment or supplement thereto to be prepared by or on behalf of, used by, or referred to by the Company and the Company shall not file, use or refer to any proposed free writing prospectus or any amendment or supplement thereto without the Agent’s consent. The Company shall furnish to the Agent, without charge, as many copies of any free writing prospectus prepared by or on behalf of, or used by the Company, as the Agent may reasonably request. If at any time when a prospectus is required by the Securities Act (including, without limitation, pursuant to Rule 173(d)) to be delivered in connection with sales of the Shares (but in any event if at any time through and including the date of this Agreement) there occurred or occurs an event or development as a result of which any free writing prospectus prepared by or on behalf of, used by, or referred to by the Company conflicted or would conflict with the information contained in the Registration Statement or included or would include an untrue statement of a material fact or omitted or would omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances prevailing at that subsequent time, not misleading, the Company shall promptly amend or supplement such free writing prospectus to eliminate or correct such conflict or so that the statements in such free writing prospectus as so amended or supplemented will not include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances prevailing at such subsequent time, not misleading, as the case may be; provided, however, that prior to amending or supplementing any such free writing prospectus, the Company shall furnish to the Agent for review, a reasonable amount of time prior to the proposed time of filing or use thereof, a copy of such proposed amended or supplemented free writing prospectus and the Company shall not file, use or refer to any such amended or supplemented free writing prospectus without the Agent’s consent, not to be unreasonably withheld, conditioned or delayed.

 

(g)            Filing of Agent Free Writing Prospectuses. The Company shall not take any action that would result in the Agent or the Company being required to file with the Commission pursuant to Rule 433(d) under the Securities Act a free writing prospectus prepared by or on behalf of the Agent that the Agent otherwise would not have been required to file thereunder.

 

(h)            Copies of Registration Statement and Prospectus. After the date of this Agreement through the last time that a prospectus is required by the Securities Act (including, without limitation, pursuant to Rule 173(d)) to be delivered in connection with sales of the Shares, the Company agrees to furnish the Agent with copies (which may be electronic copies) of the Registration Statement and each amendment thereto, and with copies of the Prospectus and each amendment or supplement thereto in the form in which it is filed with the Commission pursuant to the Securities Act or Rule 424(b) under the Securities Act, both in such quantities as the Agent may reasonably request from time to time; and, if the delivery of a prospectus is required under the Securities Act or under the blue sky or securities laws of any jurisdiction at any time on or prior to the applicable Settlement Date for any period set forth in an Issuance Notice in connection with the offering or sale of the Shares and if at such time any event has occurred as a result of which the Prospectus as then amended or supplemented would include an untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made when such Prospectus is delivered, not misleading, or, if for any other reason it is necessary during such same period to amend or supplement the Prospectus or to file under the Exchange Act any document incorporated by reference in the Prospectus in order to comply with the Securities Act or the Exchange Act, to notify the Agent and to request that the Agent suspend offers to sell Shares (and, if so notified, the Agent shall cease such offers as soon as practicable); and if the Company decides to amend or supplement the Registration Statement or the Prospectus as then amended or supplemented, to advise the Agent promptly by telephone (with confirmation in writing) and to prepare and cause to be filed promptly with the Commission an amendment or supplement to the Registration Statement or the Prospectus as then amended or supplemented that will correct such statement or omission or effect such compliance; provided, however, that if during such same period the Agent is required to deliver a prospectus in respect of transactions in the Shares, the Company shall promptly prepare and file with the Commission such an amendment or supplement.

 

 

(i)             Blue Sky Compliance. The Company shall cooperate with the Agent and counsel for the Agent to qualify or register the Shares for sale under (or obtain exemptions from the application of) the state securities or blue sky laws or Canadian provincial securities laws of those jurisdictions designated by the Agent, shall comply with such laws and shall continue such qualifications, registrations and exemptions in effect so long as required for the distribution of the Shares. The Company shall not be required to qualify as a foreign corporation or to take any action that would subject it to general service of process in any such jurisdiction where it is not presently qualified or where it would be subject to taxation as a foreign corporation. The Company will advise the Agent promptly of the suspension of the qualification or registration of (or any such exemption relating to) the Shares for offering, sale or trading in any jurisdiction or any initiation or threat of any proceeding for any such purpose, and in the event of the issuance of any order suspending such qualification, registration or exemption, the Company shall use its reasonable best efforts to obtain the withdrawal thereof as soon as practicable.

 

(j)             Earnings Statement. As soon as practicable, the Company will make generally available to its security holders and to the Agent an earnings statement (which need not be audited) covering a period of at least twelve months beginning with the first fiscal quarter of the Company occurring after the date of this Agreement which shall satisfy the provisions of Section 11(a) of the Securities Act and Rule 158 under the Securities Act.

 

(k)            Listing; Reservation of Shares. (a)  The Company will use its reasonable best efforts to maintain the listing of the Shares on the Principal Market; and (b) the Company will reserve and keep available at all times, free of preemptive rights, Shares for the purpose of enabling the Company to satisfy its obligations under this Agreement.

 

(l)             Transfer Agent. The Company shall engage and maintain, at its expense, a registrar and transfer agent for the Shares.

 

(m)           Due Diligence. During the term of this Agreement, subject to the requirements and restrictions of the Provisions on Strengthening Confidentiality and Archives Administration of Overseas Securities Offering and Listing by Domestic Companies (关于加强境内企业境外发行证券和上市相关保密和档案管理工作的规定), the Company will reasonably cooperate with any reasonable due diligence review conducted by the Agent in connection with the transactions contemplated hereby, including, without limitation, providing information and making available documents and senior corporate officers, during normal business hours and at the Company’s principal offices, as the Agent may reasonably request from time to time.

 

(n)            Representations and Warranties. The Company acknowledges that each delivery of an Issuance Notice and each delivery of Shares on a Settlement Date shall be deemed to be (i) an affirmation to the Agent that the representations and warranties of the Company contained in or made pursuant to this Agreement are true and correct as of the date of such Issuance Notice or of such Settlement Date, as the case may be, as though made at and as of each such date, except as may be disclosed in the Prospectus (including any documents incorporated by reference therein and any supplements thereto); and (ii) an undertaking that the Company will advise the Agent if any of such representations and warranties will not be true and correct as of the Settlement Date for the Shares relating to such Issuance Notice, as though made at and as of each such date (except that such representations and warranties shall be deemed to relate to the Registration Statement and the Prospectus as amended and supplemented relating to such Shares).

 

 

(o)            Deliverables at Triggering Event Dates; Certificates. The Company agrees that on or prior to the date of the first Issuance Notice and, during the term of this Agreement after the date of the first Issuance Notice, upon:

 

(i)            the filing of the Prospectus or the amendment or supplement of any Registration Statement or Prospectus (other than a prospectus supplement relating solely to an offering of securities other than the Shares or a prospectus filed pursuant to Section 4(a)(ii)(B)), by means of a post-effective amendment, sticker or supplement, but not by means of incorporation of documents by reference into the Registration Statement or Prospectus;

 

(ii)            the filing with the Commission of:

 

(A)            an annual report on Form 20-F; or

 

(B)            a report on Form 6-K containing quarterly or half-year consolidated financial information of the Company that is incorporated by reference into the Registration Statement (including any Form 20-F/A or Form 6-K/A containing amended financial statements or a material amendment to the previously filed annual report on Form 20-F or quarterly report or six-month report on Form 6-K incorporated by reference into the Registration Statement), in each case, of the Company; or

 

(C)            the filing with the Commission of any other report on Form 6-K of the Company containing financial information incorporated by reference into the Registration Statement that is material to the offering of securities of the Company in the Agent’s reasonable discretion;

 

(any such event, a “Triggering Event Date”), the Company shall furnish the Agent (but in the case of clause (C) above only if the Agent reasonably determines that the information contained in such report on Form 6-K of the Company that is incorporated by reference into the Registration Statement is material) with a certificate as of the Triggering Event Date, in the form and substance satisfactory to the Agent and its counsel, substantially similar to the form previously provided to the Agent and its counsel, modified, as necessary, to relate to the Registration Statement and the Prospectus as amended or supplemented, (A) confirming that the representations and warranties of the Company contained in this Agreement are true and correct, (B) confirming that the Company has performed all of its obligations hereunder to be performed on or prior to the date of such certificate and as to the matters set forth in Section 5(a)(iii) hereof, and (C) containing any other certification that the Agent shall reasonably request. The requirement to provide a certificate under this Section 4(o) shall be waived for any Triggering Event Date occurring at a time when no Issuance Notice is pending or a suspension is in effect, which waiver shall continue until the earlier to occur of the date the Company delivers instructions for the sale of Shares hereunder (which for such calendar quarter shall be considered a Triggering Event Date) and the next occurring Triggering Event Date. Notwithstanding the foregoing, if the Company subsequently decides to sell Shares following a Triggering Event Date when a suspension was in effect and did not provide the Agent with a certificate under this Section 4(o), then before the Company delivers the instructions for the sale of Shares or the Agent sells any Shares pursuant to such instructions, the Company shall provide the Agent with a certificate in conformity with this Section 4(o) dated as of the date that the instructions for the sale of Shares are issued.

 

 

(p)            Legal Opinions. On or prior to the date of the first Issuance Notice and on or prior to each Triggering Event Date with respect to which the Company is obligated to deliver a certificate pursuant to Section 4(o) for which no waiver is applicable and excluding the date of this Agreement, the Company shall cause to be delivered a negative assurances letter and the written legal opinion of Harter Secrest & Emery LLP, U.S. counsel to the Company, the written legal opinion of Maples Group, Cayman Islands counsel to the Company, Duan & Duan, PRC counsel to the Company, and Kilburn & Strode LLP, intellectual property counsel to the Company, each dated the date of delivery, in form and substance reasonably satisfactory to Agent and its counsel, substantially similar to the form previously provided to the Agent and its counsel, modified, as necessary, to relate to the Registration Statement and the Prospectus as then amended or supplemented. In lieu of such opinions for subsequent periodic filings, in the discretion of the Agent, the Company may furnish a reliance letter from such counsel to the Agent, permitting the Agent to rely on a previously delivered opinion letter, modified as appropriate for any passage of time or Triggering Event Date (except that statements in such prior opinion shall be deemed to relate to the Registration Statement and the Prospectus as amended or supplemented as of such Triggering Event Date). Notwithstanding the foregoing, the Company shall be required to cause the delivery of such negative assurances letter and written legal opinions, or reliance letters in lieu thereof, no more than once with each Form 20-F or Form 6-K that reports the Company’s quarterly financial information, in each case, as filed by the Company with the SEC.

 

(q)            Comfort Letter. On or prior to the date of the first Issuance Notice and on or prior to each Triggering Event Date with respect to which the Company is obligated to deliver a certificate pursuant to Section 4(o) for which no waiver is applicable and excluding the date of this Agreement, the Company shall cause KPMG Huazhen LLP, the independent registered public accounting firm who has audited the financial statements included or incorporated by reference in the Registration Statement, to furnish the Agent a comfort letter, dated the date of delivery, in form and substance reasonably satisfactory to the Agent and its counsel, substantially similar to the form previously provided to the Agent and its counsel; provided, however, that any such comfort letter will only be required on the Triggering Event Date specified to the extent that it contains financial statements filed with the Commission under the Exchange Act and incorporated or deemed to be incorporated by reference into a Prospectus. If requested by the Agent, the Company shall also cause a comfort letter to be promptly furnished to the Agent in connection with any material transaction or event requiring the filing of a report on Form 6-K containing material amended financial information of the Company, including the restatement of the Company’s financial statements ; provided, that, such comfort letter shall not be required to be delivered to the Agent unless and until the Company delivers an Issuance Notice that is effective on or after the date of occurrence of such material transaction or event. The Company shall be required to furnish no more than one comfort letter hereunder per each filing of an annual report on Form 20-F or a report filed on Form 6-K containing quarterly or half-year financial information.

 

(r)            Secretary’s Certificate. On or prior to the date of the first Issuance Notice and on or prior to each Triggering Event Date, the Company shall furnish the Agent a certificate executed by the Secretary of the Company, signing in such capacity, dated the date of delivery (i) certifying that attached thereto are true and complete copies of the resolutions duly adopted by the Board of Directors of the Company authorizing the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby (including, without limitation, the issuance of the Shares pursuant to this Agreement), which authorization shall be in full force and effect on and as of the date of such certificate, (ii) certifying and attesting to the office, incumbency, due authority and specimen signatures of each Person who executed this Agreement for or on behalf of the Company, and (iii) containing any other certification that the Agent shall reasonably request.

 

 

(s)            Agent’s Own Account; Clients’ Account. The Company consents to the Agent trading, in compliance with applicable law, in the Common Shares for the Agent’s own account and for the account of its clients at the same time as sales of the Shares occur pursuant to this Agreement.

 

(t)             Investment Limitation. The Company shall not invest, or otherwise use the proceeds received by the Company from its sale of the Shares in such a manner as would require the Company or any of its subsidiaries to register as an investment company under the Investment Company Act.

 

(u)            Market Activities. The Company will not take, directly or indirectly, any action designed to or that might be reasonably expected to cause or result in stabilization or manipulation of the price of the Shares or any other reference security, whether to facilitate the sale or resale of the Shares or otherwise, and the Company will, and shall cause each of its Affiliates to, comply with all applicable provisions of Regulation M. If the limitations of Rule 102 of Regulation M (“Rule 102”) do not apply with respect to the Shares or any other reference security pursuant to any exception set forth in Section (d) of Rule 102, then promptly upon notice from the Agent (or, if later, at the time stated in the notice), the Company will, and shall cause each of its Affiliates to, comply with Rule 102 as though such exception were not available but the other provisions of Rule 102 (as interpreted by the Commission) did apply. The Company shall promptly notify the Agent if it no longer meets the requirements set forth in Section (d) of Rule 102.

 

(v)            Notice of Other Sale. Without the written consent of the Agent, the Company will not, directly or indirectly, offer to sell, sell, contract to sell, grant any option to sell or otherwise dispose of any Common Shares or securities convertible into or exchangeable for Common Shares (other than Shares hereunder), warrants or any rights to purchase or acquire Common Shares, or effect a reverse stock split, recapitalization, share consolidation, reclassification or similar transaction affecting the outstanding Common Shares, during the period beginning on the third Trading Day immediately prior to the date on which any Issuance Notice is delivered to the Agent hereunder and ending on the third Trading Day immediately following the Settlement Date with respect to Shares sold pursuant to such Issuance Notice; and will not directly or indirectly enter into any other “at the market” or continuous equity transaction offer to sell, sell, contract to sell, grant any option to sell or otherwise dispose of any Common Shares (other than the Shares offered pursuant to this Agreement) or securities convertible into or exchangeable for Common Shares, warrants or any rights to purchase or acquire, Common Shares prior to the termination of this Agreement; provided, however, that such restrictions will not be required in connection with the Company’s (i) issuance or sale of Common Shares, options to purchase Common Shares or Common Shares issuable upon the exercise of options or other equity awards pursuant to any employee or director share option, incentive or benefit plan, share purchase or ownership plan, long-term incentive plan, dividend reinvestment plan, inducement award under Nasdaq rules or other compensation plan of the Company or its subsidiaries, as in effect on the date of this Agreement, (ii) issuance or sale of Common Shares issuable upon exchange, conversion or redemption of securities or the exercise or vesting of warrants, options or other equity awards outstanding at the date of this Agreement, (iii) issuance or sale of securities pursuant to acquisitions, joint ventures, strategic alliances, or other strategic transactions, including without limitation a preliminary non-binding proposal with respect to the acquisition of certain of the Company’s business operations in China, the receipt of which was announced by the Company on June 26, 2024, and collaborations or arrangements involving research and development or the sale or licensing of intellectual property, approved by a majority of the disinterested directors of the Company, except for a transaction in which the Company is issuing securities primarily for the purpose of raising capital or to an entity whose primary business is investing in securities (for avoidance of doubt, securities issued to a venture arm of a strategic investor shall not be deemed issued to an entity whose primary business is investing in securities), provided, however, that the aggregate number of shares of Common Shares, or securities convertible into or exercisable or exchangeable for shares of Common Shares, that the Company may issue or agree to issue pursuant to this clause (iii) shall not exceed 10% of the total outstanding Common Shares of the Company immediately following the issuance of Shares pursuant to this Agreement, and (iv) modification of any outstanding options, warrants of any rights to purchase or acquire Common Shares.

 

 

(w)            CSRC Filings.

 

(i)             The Company undertakes to file or cause to be filed with the CSRC the requisite information and documents within three (3) PRC Business Days after the completion of the first sale of Shares hereunder (the “CSRC Filing Report”) and provide or cause to be provided to the CSRC any subsequent updates (together with the CSRC Filing Report and including any amendments, supplements and/or modifications thereof, the “CSRC Filings”) in accordance with the CSRC Filing Rules. The Agent agrees to provide the Company with reasonable and requisite assistance it may require in connection with the CSRC Filings, including without limitation to provide such information relating to the Agent as may be necessary for the purposes of submitting such filings (including but not limited to a letter of affirmation as stipulated in Appendix 2 of Regulatory Guidelines for the Application of Rules—Category 2 for Overseas Issuance and Listing: Guidelines on the Content and Format of Filing Materials (《监管规则适用指引——境外发行上市类第 2 号: 备案材料内容和格式指引》)), or may otherwise be required in order for the Company to satisfy the regulatory requirements in respect of the CSRC Filings.

 

(ii)            The Company acknowledges and undertakes that in connection with the CSRC Filings to be made to the CSRC for the offering of the Shares, it and its directors shall:

 

(A)            comply with the requirements under the CSRC Filing Rules in the preparation and submission of the CSRC Filings;

 

(B)            ensure that all information and statements included in the CSRC Filings (including the CSRC Filing Report) are and will remain true, accurate and complete, free from any false records or misleading statements, and that no material information or facts have been omitted or withheld;

 

 

(C)            ensure that (i) there are not and will not be any conflicting, inconsistent or materially different descriptions of facts contained in the CSRC Filings, (ii) the CSRC Filings will not be difficult to understand due to any lack of clarity or logic in writing; (iii) the CSRC Filings contain and will contain descriptions of all material events as required to be reported pursuant to the CSRC Filing Rules or other applicable laws, regulations and rules; and (iv) the CSRC Filings and all other documents filed with the CSRC or issued by or on behalf of the Company in connection with the offering of the Shares contemplated by this Agreement do not and will not contain any statement or commentary that in any manner misrepresents or disparages laws, policies, business environment and judicial system of the PRC;

 

(D)            to the extent the Agent is required to provide a letter of affirmation to the CSRC in connection with CSRC Filings under applicable laws, provide the Agent with a written confirmation, in form and substance reasonably satisfactory to the Agent, duly signed by a director or authorized representative of the Company, immediately before submission of the CSRC Filings, to confirm, among others, that (i) the Company has complied with all relevant requirements under the applicable laws, regulations and regulatory requirements, including, without limitation, the CSRC Filing Rules and the Provisions on Strengthening Confidentiality and Archives Administration of Overseas Securities Offering and Listing by Domestic Companies (关于加强境内企业境外发行证券和上市相关保密和档案管理工作的规定) issued by the CSRC, Ministry of Finance of the PRC, National Administration of State Secrets Protection of the PRC, and National Archives Administration of the PRC on February 24, 2023, which became effective from March 31, 2023 (as amended, supplemented or otherwise modified from time to time, the “CSRC Archive Rules”, together with the CSRC Filing Rules, the “CSRC Rules”), and all relevant disclosure requirements in respect of the CSRC Filings pursuant to the CSRC Filing Rules; (ii) all information and statements included in the CSRC Filings are and will remain true, accurate and complete, free from any false records or misleading statements, and that no material information or facts have been omitted or withheld therefrom; (iii) the CSRC Filings and all other documents filed with the CSRC or issued by or on behalf of the Company in connection with the offering of the Shares do not contain any statement or commentary that in any manner misrepresents or disparages laws, policies, business environment and judicial system of the PRC; and (iv) the Company is not aware that any of the circumstances in connection of the CSRC Filings set forth in Article 8 and 20 of the CSRC Filing Rules has occurred, and undertake to promptly notify the Agent if any of such circumstances occurs or is expected to occur;

 

(E)            to the extent the Agent is required to provide a letter of affirmation to the CSRC in connection with CSRC Filings under applicable laws, provide the Agent and its counsel with draft CSRC Filings (along with all relevant supporting documents in relation to the CSRC Filings) in a timely manner for review and shall not make any amendment, supplement or modification to the final draft or substantially complete draft of the CSRC Filings and (where applicable) the related PRC legal opinion unless prior approval from the Agent of any such amendment, supplement or modification is obtained, and ensure that the Company has not submitted, any undertakings in connection with the Company or the offering of the Shares to CSRC or other PRC regulators for the purposes of the offering of the Shares that the Agent is not aware of; and

 

 

other than the circumstance provided for in Sub-Section (v) above, to the extent any information in the CSRC Filings and, where applicable, the related PRC legal opinion is related to the offering of the Shares contemplated by this Agreement, or the Agent, provide the Agent with the draft that relates to the offering of the Shares contemplated by this Agreement, or the Agent, and any amendment, supplement or modification thereto.

 

Section 5.              CONDITIONS TO DELIVERY OF ISSUANCE NOTICES AND TO SETTLEMENT

 

(a)            Conditions Precedent to the Right of the Company to Deliver an Issuance Notice and the Obligation of the Agent to Sell Shares. The right of the Company to deliver an Issuance Notice hereunder is subject to the satisfaction, on the date of delivery of such Issuance Notice, and the obligation of the Agent to use its commercially reasonable efforts to place Shares during the applicable period set forth in the Issuance Notice is subject to the satisfaction, on each Trading Day during the applicable period set forth in the Issuance Notice, of each of the following conditions:

 

(i)             Accuracy of the Company’s Representations and Warranties; Performance by the Company. The Company shall have delivered the certificate required to be delivered pursuant to Section 4(o) on or before the date on which delivery of such certificate is required pursuant to Section 4(o). The Company shall have performed, satisfied and complied with all covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by the Company at or prior to such date, including, but not limited to, the covenants contained in ‎Section 4(p), Section 4(q) and Section 4(r).

 

(ii)            No Injunction. No statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by any court or governmental authority of competent jurisdiction or any self-regulatory organization having authority over the matters contemplated hereby that prohibits or directly and materially adversely affects any of the transactions contemplated by this Agreement, and no proceeding shall have been commenced that may have the effect of prohibiting or materially adversely affecting any of the transactions contemplated by this Agreement.

 

(iii)           Material Adverse Changes. Except as disclosed in the Prospectus and the Time of Sale Information, (a) in the judgment of the Agent there shall not have occurred any Material Adverse Change; and (b) there shall not have occurred any downgrading, nor shall any notice have been given of any intended or potential downgrading or of any review for a possible change that does not indicate the direction of the possible change, in the rating accorded any securities of the Company or any of its subsidiaries by any “nationally recognized statistical rating organization” as such term is defined for purposes of Section 3(a)(62) of the Exchange Act.

 

 

(iv)          No Suspension of Trading in or Delisting of Common Shares; Other Events. The trading of the Common Shares (including without limitation the Shares) shall not have been suspended by the Commission, the Principal Market or FINRA and the Common Shares (including without limitation the Shares) shall have been approved for listing or quotation on and shall not have been delisted from the Principal Market or any of its constituent markets. There shall not have occurred (and be continuing in the case of occurrences under clauses (i) and (ii) below) any of the following: (i) trading or quotation in any of the Company’s securities shall have been suspended or limited by the Commission or by the Principal Market or trading in securities generally on the Principal Market shall have been suspended or limited, or minimum or maximum prices shall have been generally established on any of such stock exchanges by the Commission or the FINRA; (ii) a general banking moratorium shall have been declared by any of federal or New York, authorities; or (iii) there shall have occurred any outbreak or escalation of national or international hostilities or any crisis or calamity, or any change in the United States or international financial markets, or any substantial change or development involving a prospective substantial change in United States’ or international political, financial or economic conditions, as in the judgment of the Agent is material and adverse and makes it impracticable to market the Shares in the manner and on the terms described in the Prospectus or to enforce contracts for the sale of securities.

 

(b)            Documents Required to be Delivered on each Issuance Notice Date. The Agent’s obligation to use its commercially reasonable efforts to place Shares hereunder shall additionally be conditioned upon the delivery to the Agent on or before the Issuance Notice Date of a certificate in form and substance reasonably satisfactory to the Agent, executed by the Chief Executive Officer, President or Chief Financial Officer of the Company, to the effect that all conditions to the delivery of such Issuance Notice shall have been satisfied as at the date of such certificate (which certificate shall not be required if the foregoing representations shall be set forth in the Issuance Notice).

 

(c)            No Misstatement or Material Omission. Agent shall not have advised the Company that the Registration Statement, the Prospectus or the Time of Sale Information, or any amendment or supplement thereto, contains an untrue statement of fact that in the Agent’s reasonable opinion is material, or omits to state a fact that in the Agent’s reasonable opinion is material and is required to be stated therein or is necessary to make the statements therein not misleading.

 

(d)            Agent Counsel Legal Opinion. Agent shall have received from Cooley LLP, counsel for Agent, such opinion or opinions, on or before the date on which the delivery of the Company counsel legal opinion is required pursuant to Section 4(p), with respect to such matters as Agent may reasonably require, and the Company shall have furnished to such counsel such documents as they request for enabling them to pass upon such matters.

 

 

Section 6.              INDEMNIFICATION AND CONTRIBUTION

 

(a)            Indemnification of the Agent. The Company agrees to indemnify and hold harmless the Agent, its officers and employees, and each person, if any, who controls the Agent within the meaning of the Securities Act or the Exchange Act against any loss, claim, damage, liability or expense, as incurred, to which the Agent or such officer, employee or controlling person may become subject, under the Securities Act, the Exchange Act, other federal or state statutory law or regulation, the CSRC Rules, or the laws or regulations of foreign jurisdictions where Shares have been offered or sold or at common law or otherwise (including in settlement of any litigation), insofar as such loss, claim, damage, liability or expense (or actions in respect thereof as contemplated below) arises out of or is based upon (i) any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement, or any amendment thereto, including any information deemed to be a part thereof pursuant to Rule 430B under the Securities Act, or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary to make the statements therein not misleading; (ii) any untrue statement or alleged untrue statement of a material fact contained in any Free Writing Prospectus that the Company has used, referred to or filed, or is required to file, pursuant to Rule 433(d) of the Securities Act or the Prospectus (or any amendment or supplement thereto), or the omission or alleged omission therefrom of a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; or (iii) any activities undertaken by the Agent in connection with the offering of the Shares contemplated by this Agreement pursuant to all applicable laws, regulations and rules, including, without limitation, the CSRC Rules, and to reimburse the Agent and each such officer, employee and controlling person for any and all expenses (including the fees and disbursements of one counsel chosen by the Agent for each applicable jurisdiction) as such expenses are documented and reasonably incurred by the Agent or such officer, employee or controlling person in connection with investigating, defending, settling, compromising or paying any such loss, claim, damage, liability, expense or action; provided, however, that the foregoing indemnity agreement shall not apply to any loss, claim, damage, liability or expense to the extent, but only to the extent, arising out of or based upon any untrue statement or alleged untrue statement or omission or alleged omission made in reliance upon and in conformity with written information furnished to the Company by the Agent expressly for use in the Registration Statement, any such Free Writing Prospectus or the Prospectus (or any amendment or supplement thereto), it being understood and agreed that the only such information furnished by the Agent to the Company consists of the information described in subsection (b) below. The indemnity agreement set forth in this ‎Section 6(a) shall be in addition to any liabilities that the Company may otherwise have.

 

(b)            Indemnification of the Company, its Directors and Officers. The Agent agrees to indemnify and hold harmless the Company, each of its directors, each of its officers who signed the Registration Statement and each person, if any, who controls the Company within the meaning of the Securities Act or the Exchange Act against any loss, claim, damage, liability or expense, as incurred, to which the Company or any such director, officer or controlling person may become subject, under the Securities Act, the Exchange Act, or other federal or state statutory law or regulation, or the laws or regulations of foreign jurisdictions where Shares have been offered or sold or at common law or otherwise (including in settlement of any litigation), arising out of or based upon (i) any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement, or any amendment thereto, including any information deemed to be a part thereof pursuant to Rule 430B under the Securities Act, or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary to make the statements therein not misleading; or (ii) any untrue statement or alleged untrue statement of a material fact contained in any Free Writing Prospectus that the Company has used, referred to or filed, or is required to file, pursuant to Rule 433(d) of the Securities Act or the Prospectus (or any amendment or supplement thereto), or the omission or alleged omission therefrom of a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; but, for each of (i) and (ii) above, only to the extent arising out of or based upon any untrue statement or alleged untrue statement or omission or alleged omission made in reliance upon and in conformity with written information furnished to the Company by the Agent expressly for use in the Registration Statement, any such Free Writing Prospectus or the Prospectus (or any amendment or supplement thereto), it being understood and agreed that the only such information furnished by the Agent to the Company consists of the information about the Agent set forth in the first sentence of the ninth paragraph under the caption “Plan of Distribution” in the Prospectus, and to reimburse the Company and each such director, officer and controlling person for any and all expenses (including the fees and disbursements of one counsel chosen by the Company) as such expenses are reasonably incurred by the Company or such officer, director or controlling person in connection with investigating, defending, settling, compromising or paying any such loss, claim, damage, liability, expense or action. The indemnity agreement set forth in this Section 6(b) shall be in addition to any liabilities that the Agent or the Company may otherwise have.

 

 

(c)            Notifications and Other Indemnification Procedures. Promptly after receipt by an indemnified party under this ‎Section 6 of notice of the commencement of any action, such indemnified party will, if a claim in respect thereof is to be made against an indemnifying party under this ‎Section 6, notify the indemnifying party in writing of the commencement thereof, but the omission so to notify the indemnifying party will not relieve it from any liability which it may have to any indemnified party for contribution or otherwise than under the indemnity agreement contained in this ‎Section 6 or to the extent it is not prejudiced as a proximate result of such failure. In case any such action is brought against any indemnified party and such indemnified party seeks or intends to seek indemnity from an indemnifying party, the indemnifying party will be entitled to participate in, and, to the extent that it shall elect, jointly with all other indemnifying parties similarly notified, by written notice delivered to the indemnified party promptly after receiving the aforesaid notice from such indemnified party, to assume the defense thereof with counsel reasonably satisfactory to such indemnified party; provided, however, if the defendants in any such action include both the indemnified party and the indemnifying party and the indemnified party shall have reasonably concluded that a conflict may arise between the positions of the indemnifying party and the indemnified party in conducting the defense of any such action or that there may be legal defenses available to it and/or other indemnified parties which are different from or additional to those available to the indemnifying party, the indemnified party or parties shall have the right to select separate counsel to assume such legal defenses and to otherwise participate in the defense of such action on behalf of such indemnified party or parties. Upon receipt of notice from the indemnifying party to such indemnified party of such indemnifying party’s election so to assume the defense of such action and approval by the indemnified party of counsel, the indemnifying party will not be liable to such indemnified party under this Section 6 for any legal or other expenses subsequently incurred by such indemnified party in connection with the defense thereof unless (i) the indemnified party shall have employed separate counsel in accordance with the proviso to the preceding sentence (it being understood, however, that the indemnifying party shall not be liable for the fees and expenses of more than one separate counsel (together with local counsel), representing the indemnified parties who are parties to such action), which counsel (together with any local counsel) for the indemnified parties shall be selected by the indemnified party (in the case of counsel for the indemnified parties referred to in ‎Section 6(a) and Section 6(b) above), (ii) the indemnifying party shall not have employed counsel reasonably satisfactory to the indemnified party to represent the indemnified party within a reasonable time after notice of commencement of the action or (iii) the indemnifying party has authorized in writing the employment of counsel for the indemnified party at the expense of the indemnifying party, in each of which cases the fees and expenses of counsel shall be at the expense of the indemnifying party and shall be paid as they are incurred.

 

 

(d)            Settlements. The indemnifying party under this ‎Section 6 shall not be liable for any settlement of any proceeding effected without its written consent, but if settled with such consent or if there be a final judgment for the plaintiff, the indemnifying party agrees to indemnify the indemnified party against any loss, claim, damage, liability or expense by reason of such settlement or judgment. Notwithstanding the foregoing sentence, if at any time an indemnified party shall have requested an indemnifying party to reimburse the indemnified party for fees and expenses of counsel as contemplated by Section 6(c) hereof, the indemnifying party agrees that it shall be liable for any settlement of any proceeding effected without its written consent if (i) such settlement is entered into more than 30 days after receipt by such indemnifying party of the aforesaid request; and (ii) such indemnifying party shall not have reimbursed the indemnified party in accordance with such request prior to the date of such settlement. No indemnifying party shall, without the prior written consent of the indemnified party, effect any settlement, compromise or consent to the entry of judgment in any pending or threatened action, suit or proceeding in respect of which any indemnified party is or could have been a party and indemnity was or could have been sought hereunder by such indemnified party, unless such settlement, compromise or consent includes an unconditional release of such indemnified party from all liability on claims that are the subject matter of such action, suit or proceeding.

 

(e)            Contribution. If the indemnification provided for in this ‎Section 6 is for any reason held to be unavailable to or otherwise insufficient to hold harmless an indemnified party in respect of any losses, claims, damages, liabilities or expenses referred to therein, then each indemnifying party shall contribute to the aggregate amount paid or payable by such indemnified party, as incurred, as a result of any losses, claims, damages, liabilities or expenses referred to therein (i) in such proportion as is appropriate to reflect the relative benefits received by the Company, on the one hand, and the Agent, on the other hand, from the offering of the Shares pursuant to this Agreement; or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Company, on the one hand, and the Agent, on the other hand, in connection with the statements or omissions which resulted in such losses, claims, damages, liabilities or expenses, as well as any other relevant equitable considerations. The relative benefits received by the Company, on the one hand, and the Agent, on the other hand, in connection with the offering of the Shares pursuant to this Agreement shall be deemed to be in the same respective proportions as the total gross proceeds from the offering of the Shares (before deducting expenses) received by the Company bear to the total commissions received by the Agent. The relative fault of the Company, on the one hand, and the Agent, on the other hand, shall be determined by reference to, among other things, whether any such untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact relates to information supplied by the Company, on the one hand, or the Agent, on the other hand, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.

 

 

The amount paid or payable by a party as a result of the losses, claims, damages, liabilities and expenses referred to above shall be deemed to include, subject to the limitations set forth in ‎Section 6(c), any reasonable and documented legal or other fees or expenses reasonably incurred by such party in connection with investigating or defending any action or claim. The provisions set forth in ‎Section 6(c) with respect to notice of commencement of any action shall apply if a claim for contribution is to be made under this ‎Section 6(e); provided, however, that no additional notice shall be required with respect to any action for which notice has been given under ‎Section 6(c) for purposes of indemnification.

 

The Company and the Agent agree that it would not be just and equitable if contribution pursuant to this ‎Section 6(e) were determined by pro rata allocation or by any other method of allocation which does not take account of the equitable considerations referred to in this ‎‎Section 6(e).

 

Notwithstanding the provisions of this ‎‎Section 6(e), the Agent shall not be required to contribute any amount in excess of the Selling Commission received by the Agent in connection with the offering contemplated hereby. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. For purposes of this ‎‎Section 6(e), each officer and employee of the Agent and each person, if any, who controls the Agent within the meaning of the Securities Act or the Exchange Act shall have the same rights to contribution as the Agent, and each director of the Company, each officer of the Company who signed the Registration Statement, and each person, if any, who controls the Company within the meaning of the Securities Act and the Exchange Act shall have the same rights to contribution as the Company.

 

Section 7.              TERMINATION & SURVIVAL

 

(a)            Term. Subject to the provisions of this ‎Section 7, the term of this Agreement shall continue from the date of this Agreement until the end of the Agency Period, unless earlier terminated by the parties to this Agreement pursuant to this ‎Section 7.

 

(b)            Termination; Survival Following Termination.

 

(i)             Either party may terminate this Agreement prior to the end of the Agency Period, by giving written notice as required by this Agreement, upon ten (10) Trading Days’ notice to the other party; provided that, (A) if the Company terminates this Agreement after the Agent confirms to the Company any sale of Shares, the Company shall remain obligated to comply with ‎Section 3(b)(v) with respect to such Shares and (B) ‎Section 2, ‎Section 3(d) (solely to the extent any costs, fees and expenses payable by the Company are owed but unpaid as of the termination of this Agreement), Section 6, Section 7 and Section 8 shall survive termination of this Agreement. If termination shall occur prior to the Settlement Date for any sale of Shares, such sale shall nevertheless settle in accordance with the terms of this Agreement.

 

(ii)            In addition to the survival provision of ‎Section 7(b)(i), the respective indemnities, agreements, representations, warranties and other statements of the Company, of its officers and of the Agent set forth in or made pursuant to this Agreement will remain in full force and effect, regardless of any investigation made by or on behalf of the Agent or the Company or any of its or their partners, officers or directors or any controlling person, as the case may be, and, anything herein to the contrary notwithstanding, will survive delivery of and payment for the Shares sold hereunder and any termination of this Agreement.

 

 

Section 8.              MISCELLANEOUS

 

(a)            Press Releases and Disclosure. The Company may issue a press release describing the material terms of the transactions contemplated hereby as soon as practicable following the date of this Agreement, and may file with the Commission a Report on Form 6-K, with this Agreement attached as an exhibit thereto, describing the material terms of the transactions contemplated hereby, and the Company shall consult with the Agent prior to making such disclosures, and the parties hereto shall use all commercially reasonable efforts, acting in good faith, to agree upon a text for such disclosures that is reasonably satisfactory to all parties hereto. No party hereto shall issue thereafter any press release or like public statement (including, without limitation, any disclosure required in reports filed with the Commission pursuant to the Exchange Act) related to this Agreement or any of the transactions contemplated hereby without the prior written approval of the other party hereto, except as may be necessary or appropriate in the reasonable opinion of the party seeking to make disclosure to comply with the requirements of applicable law or stock exchange rules. If any such press release or like public statement is so required (other than disclosures regarding sales of Shares pursuant to this Agreement on Form 6-K or Annual Reports on Form 20-F), the party making such disclosure shall consult with the other party prior to making such disclosure, and the parties shall use all commercially reasonable efforts, acting in good faith, to agree upon a text for such disclosure that is reasonably satisfactory to all parties hereto.

 

(b)            No Advisory or Fiduciary Relationship. The Company acknowledges and agrees that (i) the transactions contemplated by this Agreement, including the determination of any fees, are arm’s-length commercial transactions between the Company and the Agent, (ii) when acting as a principal under this Agreement, the Agent is and has been acting solely as a principal is not the agent or fiduciary of the Company, or its stockholders, creditors, employees or any other party, (iii) the Agent has not assumed nor will assume an advisory or fiduciary responsibility in favor of the Company with respect to the transactions contemplated hereby or the process leading thereto (irrespective of whether the Agent has advised or is currently advising the Company on other matters) and the Agent does not have any obligation to the Company with respect to the transactions contemplated hereby except the obligations expressly set forth in this Agreement, (iv) the Agent and its Affiliates may be engaged in a broad range of transactions that involve interests that differ from those of the Company, and (v) the Agent has not provided any legal, accounting, regulatory or tax advice with respect to the transactions contemplated hereby and the Company has consulted its own legal, accounting, regulatory and tax advisors to the extent it deemed appropriate.

 

(c)            Research Analyst Independence. The Company acknowledges that the Agent’s research analysts and research departments are required to and should be independent from their respective investment banking divisions and are subject to certain regulations and internal policies, and as such the Agent’s research analysts may hold views and make statements or investment recommendations and/or publish research reports with respect to the Company or the offering that differ from the views of their respective investment banking divisions. The Company understands that the Agent is a full service securities firm and as such from time to time, subject to applicable securities laws, may effect transactions for its own account or the account of its customers and hold long or short positions in debt or equity securities of the companies that may be the subject of the transactions contemplated by this Agreement.

 

 

(d)            Notices. All communications hereunder shall be in writing and shall be mailed, hand delivered, sent via email (if applicable) or telecopied and confirmed to the parties hereto as follows:

 

If to the Agent:

 

Jefferies LLC

520 Madison Avenue

New York, NY 10022

Facsimile: (646) 786-5719

Attention: General Counsel

 

with a copy (which shall not constitute notice) to:

 

Cooley LLP

55 Hudson Yards

New York, NY 10001

Attention: Daniel I. Goldberg, Esq.

Email: *

 

If to the Company:

 

CASI Pharmaceuticals, Inc.

9620 Medical Center Drive, Suite 300

Rockville, Maryland 20850

Attention: Daniel Lang, M.D., Chief Financial Officer

Email: *

 

with a copy (which shall not constitute notice) to:

 

Harter Secrest & Emery LLP

Attention: C. Christopher Murillo

1600 Bausch & Lomb Pl

Rochester, New York 14604

Email: *

 

Any party hereto may change the address for receipt of communications by giving written notice to the others in accordance with this Section 8(d).

 

(e)            Successors. This Agreement will inure to the benefit of and be binding upon the parties hereto, and to the benefit of the employees, officers and directors and controlling persons referred to in Section 6, and in each case their respective successors, and no other person will have any right or obligation hereunder. The term “successors” shall not include any purchaser of the Shares as such from the Agent merely by reason of such purchase.

 

 

(f)             Partial Unenforceability. The invalidity or unenforceability of any Article, Section, paragraph or provision of this Agreement shall not affect the validity or enforceability of any other Article, Section, paragraph or provision hereof. If any Article, Section, paragraph or provision of this Agreement is for any reason determined to be invalid or unenforceable, there shall be deemed to be made such minor changes (and only such minor changes) as are necessary to make it valid and enforceable.

 

(g)            Governing Law Provisions. This Agreement shall be governed by and construed in accordance with the internal laws of the State of New York applicable to agreements made and to be performed in such state. Any legal suit, action or proceeding arising out of or based upon this Agreement or the transactions contemplated hereby may be instituted in the federal courts of the United States of America located in the Borough of Manhattan in the City of New York or the courts of the State of New York in each case located in the Borough of Manhattan in the City of New York (collectively, the “Specified Courts”), and each party irrevocably submits to the exclusive jurisdiction (except for proceedings instituted in regard to the enforcement of a judgment of any such court, as to which such jurisdiction is non-exclusive) of such courts in any such suit, action or proceeding. Service of any process, summons, notice or document by mail to such party’s address set forth above shall be effective service of process for any suit, action or other proceeding brought in any such court. The parties irrevocably and unconditionally waive any objection to the laying of venue of any suit, action or other proceeding in the Specified Courts and irrevocably and unconditionally waive and agree not to plead or claim in any such court that any such suit, action or other proceeding brought in any such court has been brought in an inconvenient forum.

 

(h)            Appointment of Agents for Service. The Company hereby irrevocably appoints Rui Zhang as its agent for service of process in any legal suit, action or proceeding arising out of or based upon this Agreement or the transactions contemplated hereby (each, a “Related Proceeding”) and agrees that service of process in any such Related Proceeding may be made upon it at the office of such agent. The Company waives, to the fullest extent permitted by law, any other requirements of or objections to personal jurisdiction with respect thereto. The Company represents and warrants that such agent has agreed to act as the Company’s agent for service of process, and the Company agrees to take any and all action, including the filing of any and all documents and instruments, that may be necessary to continue such appointment in full force and effect.

 

(i)             Judgment Currency. If for the purposes of obtaining judgment in any court it is necessary to convert a sum due hereunder into any currency other than United States dollars, the parties hereto agree, to the fullest extent permitted by law, that the rate of exchange used shall be the rate at which in accordance with normal banking procedures the Agent could purchase United States dollars with such other currency in The City of New York on the business day preceding that on which final judgment is given. The obligation of the Company with respect to any sum due from it to the Agent or any person controlling the Agent shall, notwithstanding any judgment in a currency other than United States dollars, not be discharged until the first business day following receipt by the Agent or controlling person of any sum in such other currency, and only to the extent that the Agent or controlling person may in accordance with normal banking procedures purchase United States dollars with such other currency. If the United States dollars so purchased are less than the sum originally due to the Agent or controlling person hereunder, the Company agrees as a separate obligation and notwithstanding any such judgment, to indemnify the Agent or controlling person against such loss. If the United States dollars so purchased are greater than the sum originally due to the Agent or controlling person hereunder, the Agent or controlling person agrees to pay to the Company an amount equal to the excess of the dollars so purchased over the sum originally due to the Agent or controlling person hereunder.

 

 

(j)             General Provisions. This Agreement constitutes the entire agreement of the parties to this Agreement and supersedes all prior written or oral and all contemporaneous oral agreements, understandings and negotiations with respect to the subject matter hereof. This Agreement may be executed in two or more counterparts, each one of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument, and may be delivered by facsimile transmission or by electronic delivery of a portable document format (PDF) file (including any electronic signature covered by the U.S. federal ESIGN Act of 2000, Uniform Electronic Transactions Act, the Electronic Signatures and Records Act or other applicable law, e.g., www.docusign.com). This Agreement may not be amended or modified unless in writing by all of the parties hereto, and no condition herein (express or implied) may be waived unless waived in writing by each party whom the condition is meant to benefit. The Article and Section headings herein are for the convenience of the parties only and shall not affect the construction or interpretation of this Agreement.

 

[Signature Page Immediately Follows]

 

 

If the foregoing is in accordance with your understanding of our agreement, kindly sign and return to the Company the enclosed copies hereof, whereupon this instrument, along with all counterparts hereof, shall become a binding agreement in accordance with its terms.

 

	Very truly yours,
	CASI PHARMACEUTICALS, INC.
	By:	/s/ Dan Lang
		Name: Dan Lang
		Title: Chief Financial Officer

 

The foregoing Agreement is hereby confirmed and accepted by the Agent in New York, New York as of the date first above written.

 

JEFFERIES LLC

 

By:	/s/ Michael Brinkman
	Name: Michael Brinkman
	Title: Managing Director

 

 

EXHIBIT A

 

ISSUANCE NOTICE

 

[Date]

 

Jefferies LLC

520 Madison Avenue

New York, New York 10022

 

Attn: [__________]

 

Reference is made to the Open Market Sale Agreement^SM between CASI Pharmaceuticals, Inc.(the “Company”) and Jefferies LLC (the “Agent”) dated as of ________ ___, 20__. The Company confirms that all conditions to the delivery of this Issuance Notice are satisfied as of the date hereof.

 

Date of Delivery of Issuance Notice (determined pursuant to Section 3(b)(i)):

_______________________

 

Issuance Amount (equal to the total Sales Price for such Shares):

 

	$
Number of days in selling period:
First date of selling period:
Last date of selling period:

 

Settlement Date(s) if other than standard T+1 settlement:

 

 

 

Floor Price Limitation (in no event less than $1.00 without the prior written consent of the Agent, which consent may be withheld in the Agent’s sole discretion): $ ____ per share

 

Comments:

 

	By:
		Name:
		Title:

 

 

Schedule A

 

Notice Parties

 

The Company

 

The Agent

 

 

Form of Officer’s Certificate Pursuant to Section 4(o)

 

 

Form of Company’s Confirmation and Undertaking Pursuant to Section 4(w)

 

 

 

Exhibit 5.1

 

Our ref

RDS/815438-000001/30983982v2

 

CASI Pharmaceuticals, Inc.

PO Box 309

Ugland House

Grand Cayman, KY1-1104

Cayman Islands

 

20 December 2024

 

Dear Sir or Madam

 

CASI Pharmaceuticals, Inc.

 

We have acted as counsel as to Cayman Islands law to CASI Pharmaceuticals, Inc., an exempted company incorporated in the Cayman Islands with limited liability (the "Company"), in connection with the filing with the Securities and Exchange Commission under the U.S. Securities Act of 1933, as amended, of the Company's registration statement on Form F-3 dated 20 December 2024 (the "Registration Statement") relating to the following securities to be issued and sold by the Company on a delayed or continuous basis from time to time in one or more offerings (the "Securities"):

 

(a)

ordinary shares of the Company of par value US$0.0001 per share (the "Ordinary Shares");

 

(b)

preferred shares of the Company of par value US$0.0001 per share (the "Preferred Shares");

 

(c)

warrants (the "Warrants") to purchase Ordinary Shares ("Warrant Shares"), to be issued under warrant agreements to be entered into between the Company and the warrant agent for such Warrants thereunder (the "Warrant Agreements");

 

(d)

subscription rights (the "Rights") to purchase Ordinary Shares or Preferred Shares (the "Rights Shares"), to be issued under subscription rights agreements to be entered into among the Company and one or more underwriters or other purchasers for such Rights (the "Subscription Rights Agreements"); and

 

(e)

units consisting of one or more of the Securities in any combination (the "Units"), to be issued under unit agreements to be entered into between the Company and a unit agent for such Units (the "Unit Agreements").

 

We are furnishing this opinion as Exhibits 5.1 and 23.2 to the Registration Statement.

 

1

Documents Reviewed

 

We have reviewed originals, copies, drafts or conformed copies of the following documents:

 

1.1

The Certificate of Incorporation dated 10 January 2023 and the Certificate of Incorporation on Change of Name dated 21 March 2023.

 

1.2

The Amended and Restated Memorandum and Articles of Association of the Company as adopted by a special resolution of the Company dated 20 March 2023 and effective on 21 March 2023 (the "Memorandum and Articles").

 

 

1.3

The written resolutions of the directors of the Company dated 13 December 2024 (the "Directors' Resolutions").

 

1.4

A certificate of good standing with respect to the Company issued by the Registrar of Companies in the Cayman Islands dated 7 November 2024 (the "Certificate of Good Standing").

 

1.5

The Registration Statement.

 

2

Assumptions

 

The following opinions are given only as to, and based on, circumstances and matters of fact existing and known to us on the date of this opinion letter. These opinions only relate to the laws of the Cayman Islands which are in force on the date of this opinion letter. In giving the following opinions, we have relied (without further verification) upon the completeness and accuracy, as of the date of this opinion letter, of the Certificate of Good Standing. We have also relied upon the following assumptions, which we have not independently verified:

 

2.1

The Warrant Agreements, Subscription Rights Agreements and Unit Agreements (together, the "Transaction Documents"), and the Securities (other than the Ordinary Shares and Preferred Shares), have been, or will be, authorised and duly executed and unconditionally delivered by or on behalf of all relevant parties in accordance with all relevant laws (other than, with respect to the Company, the laws of the Cayman Islands).

 

2.2

The Transaction Documents and the Securities (other than the Ordinary Shares and Preferred Shares) are, or will be, legal, valid, binding and enforceable against all relevant parties in accordance with their terms under the laws of the State of New York and all other relevant laws (other than, with respect to the Company, the laws of the Cayman Islands).

 

2.3

The choice of the laws of the State of New York as the governing law of the Transaction Documents and the Securities (other than the Ordinary Shares and Preferred Shares) has been, or will be, made in good faith and would be regarded as a valid and binding selection which will be upheld by the courts of the State of New York and any other relevant jurisdiction (other than the Cayman Islands) as a matter of the laws of the State of New York and all other relevant laws (other than the laws of the Cayman Islands).

 

2.4

Copies of documents, conformed copies or drafts of documents provided to us are true and complete copies of, or in the final forms of, the originals, and translations of documents provided to us are complete and accurate.

 

2.5

All signatures, initials and seals are genuine.

 

2.6

The capacity, power, authority and legal right of all parties under all relevant laws and regulations (other than, with respect to the Company, the laws and regulations of the Cayman Islands) to enter into, execute, unconditionally deliver and perform their respective obligations under the Transaction Documents and the Securities.

 

2.7

There is no contractual or other prohibition or restriction (other than as arising under Cayman Islands law) binding on the Company prohibiting or restricting it from issuing the Ordinary Shares or the Preferred Shares or entering into and performing its obligations under the Transaction Documents and the Securities.

 

2.8

No monies paid to or for the account of any party under the Transaction Documents or the Securities or any property received or disposed of by any party to the Transaction Documents or the Securities in each case in connection with the Transaction Documents or the Securities, or the consummation of the transactions contemplated thereby, represent or will represent proceeds of criminal conduct or criminal property or terrorist property (as defined in the Proceeds of Crime Act (As Revised) and the Terrorism Act (As Revised), respectively).

 

 

2.9

There is nothing contained in the minute book or corporate records of the Company (which, other than the records set out in section 1 of this opinion letter, we have not inspected) which would or might affect the opinions set out below.

 

2.10

There is nothing under any law (other than the laws of the Cayman Islands) which would or might affect the opinions set out below. Specifically, we have made no independent investigation of the laws of the State of New York.

 

2.11

The Company will receive money or money's worth in consideration for the issue of the Ordinary Shares and the Preferred Shares, and none of the Ordinary Shares or the Preferred Shares will be issued for less than their par value.

 

2.12

There will be sufficient Ordinary Shares and Preferred Shares authorised for issue under the Memorandum and Articles at the time of issuance.

 

2.13

The Memorandum and Articles remain in full force and effect and are unamended.

 

2.14

The Directors' Resolutions were duly passed in the manner prescribed in the Memorandum and Articles (including, without limitation, with respect to the disclosure of interests (if any) by directors of the Company) and have not been amended, varied or revoked in any respect.

 

2.15

The shareholders of the Company have not restricted or limited the powers of the directors of the Company in any way.

 

2.16

The authorised share capital of the Company is US$50,000 divided into 500,000,000 shares of a par value of US$0.0001 each.

 

2.17

Each director of the Company considers the transactions contemplated by the Registration Statement, the execution and delivery of the Transaction Documents and the issue of the Securities will be of commercial benefit to the Company and has acted bona fide in the best interests of the Company, and for a proper purpose of the Company in relation to the transactions the subject of the Opinion.

 

2.18

The Warrants, Rights, and Units will respectively be issued and authenticated or duly authorised, executed and delivered as required in accordance with the provisions of the Warrant Agreement, Subscription Rights Agreement, and Unit Agreement (as the case may be).

 

2.19

The Transaction Documents and the Securities (other than the Ordinary Shares and Preferred Shares) will be, or have been, duly executed and delivered by an authorised person of the parties thereto.

 

2.20

No invitation has been or will be made by or on behalf of the Company to the public in the Cayman Islands to subscribe for any of the Securities.

 

 

3

Opinions

 

Based upon, and subject to, the foregoing assumptions and the qualifications set out below, and having regard to such legal considerations as we deem relevant, we are of the opinion that:

 

3.1

The Company has been duly incorporated as an exempted company with limited liability and is validly existing and in good standing with the Registrar of Companies under the laws of the Cayman Islands.

 

3.2

With respect to the Ordinary Shares, when (i) the board of directors of the Company (the "Board") has taken all necessary corporate action to approve the issue thereof, the terms of the offering thereof and related matters; (ii) the issue of such Ordinary Shares has been recorded in the Company's register of members (shareholders); and (iii) the subscription price of such Ordinary Shares (being not less than the par value of the Ordinary Shares) has been fully paid in cash or other consideration approved by the Board, the Ordinary Shares will be duly authorised, validly issued, fully paid and non-assessable.

 

3.3

With respect to the Preferred Shares, when (i) the Board has taken all necessary corporate action to approve the issue thereof, the terms of the offering thereof and related matters; (ii) the issue of such Preferred Shares has been recorded in the Company's register of members (shareholders); and (iii) the subscription price of such Preferred Shares (being not less than the par value of the Preferred Shares) has been fully paid in cash or other consideration approved by the Board, the Preferred Shares will be duly authorised, validly issued, fully paid and non-assessable.

 

3.4

With respect to each issue of the Warrants, when (i) the Board has taken all necessary corporate action to approve the creation and terms of the Warrants and to approve the issue thereof, the terms of the offering thereof and related matters; (ii) a Warrant Agreement relating to the Warrants shall have been duly authorised and validly executed and delivered by the Company and the warrant agent thereunder; and (iii) the certificates representing the Warrants have been duly executed, countersigned, registered and delivered in accordance with the Warrant Agreement relating to the Warrants and the applicable definitive purchase, underwriting or similar agreement approved by the Board upon payment of the consideration therefor provided therein, (A) such Warrants will be duly authorised, legal and binding obligations of the Company, and (B) the issue and allotment of the Warrant Shares upon exercise of the Warrants will be duly authorised and when allotted, issued and paid for in accordance with the relevant Warrants, such Warrant Shares will be legally issued and allotted, fully paid and non-assessable. As a matter of Cayman law, a share is only issued when it has been entered in the register of members (shareholders).

 

3.5

With respect to each issue of the Rights, when (i) the Board has taken all necessary corporate action to approve the creation and terms of the Rights and to approve the issue thereof, the terms of the offering thereof and related matters; (ii) a Subscription Rights Agreement relating to the Rights shall have been duly authorised and duly executed and delivered by the Company and all the relevant parties thereunder; and (iii) the certificates representing the Rights have been duly executed, countersigned, registered and delivered in accordance with the Subscription Rights Agreement relating to the Rights and the applicable definitive purchase, underwriting or similar agreement approved by the Board upon payment of the consideration therefor provided therein, (A) such Rights will be duly authorised, legal and binding obligations of the Company, and (B) the issue and allotment of the Rights Shares upon exercise of the Rights will be duly authorised and when allotted, issued and paid for in accordance with the relevant Subscription Rights Agreements, such Rights Shares will be legally issued and allotted, fully paid and non-assessable. As a matter of Cayman law, a share is only issued when it has been entered in the register of members (shareholders).

 

 

3.6

With respect to each issue of the Units, when (i) the Board has taken all necessary corporate action to approve the creation and terms of the Units and to approve the issue thereof and the Securities comprised in such Units, the terms of the offering thereof and related matters; (ii) a Unit Agreement relating to the Units shall have been duly authorised and duly executed and delivered by and on behalf of the Company and all the relevant parties thereunder; (iii) in respect of any Ordinary Shares which are components of the Units, the issue of such Ordinary Shares has been recorded in the Company’s register of members (shareholders); (iv) in respect of any Preferred Shares which are components of the Units, the issue of such Preferred Shares has been recorded in the Company’s register of members (shareholders); (v) in respect of any Warrants which are components of the Units, a Warrant Agreement relating to the Warrants shall have been duly authorised and validly executed and delivered by and on behalf of the Company and the warrant agent thereunder in accordance with all relevant laws; (vi) in respect of any Rights which are components of the Units, a Subscription Rights Agreement relating to the Rights shall have been duly authorised and validly executed and delivered by and on behalf of the Company and all the relevant parties thereunder in accordance with all relevant laws; and (vii) the certificates representing the Units, the Units and any Securities which are components of the Units shall have been duly executed, countersigned, registered, authenticated, issued and delivered (in each case, as and when applicable), in accordance with (A) the applicable Unit Agreement relating to the Units, (B) the applicable Warrant Agreement relating to any Warrants which are components of the Units, (C) the applicable Subscription Rights Agreement relating to any Rights which are components of the Units and (D) the applicable definitive purchase, underwriting or similar agreement approved by the Board and any relevant prospectus supplement, and upon payment of the consideration therefor provided therein, (AA) such Units will be duly authorised, legal and binding obligations of the Company and (BB) the issue and allotment of any Ordinary Shares or Preferred Shares which are components of the Units will be duly authorised and when allotted, issued and paid for in accordance with the relevant Unit Agreements, such Ordinary Shares or Preferred Shares will be legally issued and allotted, fully paid and non-assessable. As a matter of Cayman law, a share is only issued when it has been entered in the register of members (shareholders).

 

4

Qualifications

 

The opinions expressed above are subject to the following qualifications:

 

4.1

To maintain the Company in good standing under the laws of the Cayman Islands, annual filing fees must be paid and returns made to the Registrar of Companies within the time frame prescribed by law.

 

4.2

The obligations assumed by the Company under the Transaction Documents and the Securities (other than the Ordinary Shares and Preferred Shares) will not necessarily be enforceable in all circumstances in accordance with their terms. In particular:

 

(a)

enforcement may be limited by bankruptcy, insolvency, liquidation, reorganisation, readjustment of debts or moratorium or other laws of general application relating to, protecting or affecting the rights of creditors and/or contributories;

 

(b)

enforcement may be limited by general principles of equity. For example, equitable remedies such as specific performance may not be available, inter alia, where damages are considered to be an adequate remedy;

 

(c)

some claims may become barred under relevant statutes of limitation or may be or become subject to defences of set off, counterclaim, estoppel and similar defences;

 

(d)

where obligations are to be performed in a jurisdiction outside the Cayman Islands, they may not be enforceable in the Cayman Islands to the extent that performance would be illegal under the laws of that jurisdiction;

 

 

(e)

the courts of the Cayman Islands have jurisdiction to give judgment in the currency of the relevant obligation and statutory rates of interest payable upon judgments will vary according to the currency of the judgment. If the Company becomes insolvent and is made subject to a liquidation proceeding, the courts of the Cayman Islands will require all debts to be proved in a common currency, which is likely to be the "functional currency" of the Company determined in accordance with applicable accounting principles. Currency indemnity provisions have not been tested, so far as we are aware, in the courts of the Cayman Islands;

 

(f)

arrangements that constitute penalties will not be enforceable;

 

(g)

enforcement may be prevented by reason of fraud, coercion, duress, undue influence, misrepresentation, public policy or mistake or limited by the doctrine of frustration of contracts;

 

(h)

provisions imposing confidentiality obligations may be overridden by compulsion of applicable law or the requirements of legal and/or regulatory process;

 

(i)

the courts of the Cayman Islands may decline to exercise jurisdiction in relation to substantive proceedings brought under or in relation to the Transaction Documents or Securities (other than Ordinary Shares and Preferred Shares) in matters where they determine that such proceedings may be tried in a more appropriate forum;

 

(j)

we reserve our opinion as to the enforceability of the relevant provisions of the Transaction Documents or Securities (other than the Ordinary Shares and Preferred Shares) to the extent that they purport to grant exclusive jurisdiction as there may be circumstances in which the courts of the Cayman Islands would accept jurisdiction notwithstanding such provisions; and

 

(k)

a company cannot, by agreement or in its articles of association, restrict the exercise of a statutory power and there is doubt as to the enforceability of any provision in the Transaction Documents or Securities (other than the Ordinary Shares and Preferred Shares) whereby the Company covenants to restrict the exercise of powers specifically given to it under the Companies Act (As Revised) of the Cayman Islands (the "Companies Act"), including, without limitation, the power to increase its authorised share capital, amend its memorandum and articles of association or present a petition to a Cayman Islands court for an order to wind up the Company.

 

4.3

We express no opinion as to the meaning, validity or effect of any references to foreign (i.e. non-Cayman Islands) statutes, rules, regulations, codes, judicial authority or any other promulgations and any references to them in the Transaction Documents or Securities (other than the Ordinary Shares and Preferred Shares).

 

4.4

We have not reviewed the final form of any of the Warrant Agreements or the Warrants to be issued thereunder, the Subscription Rights Agreements or the Rights to be issued thereunder, or the Unit Agreements or the Units to be issued thereunder, and our opinions are qualified accordingly.

 

4.5

We reserve our opinion as to the extent to which the courts of the Cayman Islands would, in the event of any relevant illegality or invalidity, sever the relevant provisions of the Transaction Documents or Securities (other than the Ordinary Shares and Preferred Shares) and enforce the remainder of the Transaction Documents or Securities (other than the Ordinary Shares and Preferred Shares), or the transaction of which such provisions form a part, notwithstanding any express provisions in this regard.

 

 

4.6

Under the Companies Act, the register of members of a Cayman Islands company is by statute regarded as prima facie evidence of any matters which the Companies Act directs or authorises to be inserted therein. A third party interest in the shares in question would not appear. An entry in the register of members may yield to a court order for rectification (for example, in the event of fraud or manifest error).

 

4.7

In this opinion the phrase "non-assessable" means, with respect to the issuance of shares in the Company, that a shareholder shall not, in respect of the relevant shares and in the absence of a contractual arrangement, or an obligation pursuant to the memorandum and articles of association, to the contrary, have any obligation to make further contributions to the Company's assets (except in exceptional circumstances, such as involving fraud, the establishment of an agency relationship or an illegal or improper purpose or other circumstances in which a court may be prepared to pierce or lift the corporate veil).

 

We hereby consent to the filing of this opinion as an exhibit to the Registration Statement and to the references to our name under the headings "Enforceability of Civil Liabilities" and "Legal Matters" and elsewhere included in the Registration Statement. In giving such consent, we do not thereby admit that we come within the category of persons whose consent is required under Section 7 of the U.S. Securities Act of 1933, as amended, or the Rules and Regulations of the Commission thereunder.

 

We express no view as to the commercial terms of the Transaction Documents or the Securities or whether such terms represent the intentions of the parties and make no comment with regard to warranties or representations that may be made by the Company.

 

The opinions in this opinion letter are strictly limited to the matters contained in the opinions section above and do not extend to any other matters. We have not been asked to review and we therefore have not reviewed any of the ancillary documents relating to the Transaction Documents or Securities and express no opinion or observation upon the terms of any such document.

 

This opinion letter may be relied upon by US counsel to the Company for the purposes solely of any legal opinion that they may be required to give with respect to the Registration Statement.

 

Yours faithfully

 

Maples and Calder (Hong Kong) LLP

 

/s/ Maples and Calder (Hong Kong) LLP

 

 

 

Exhibit 5.2

 

 

December 20, 2024

 

CASI Pharmaceuticals, Inc.

1701-1702, China Central Office Tower 1

No. 81 Jianguo Road Chaoyang District

Beijing, 100025

People’s Republic of China

 

Re:

Registration Statement on Form F-3

 

Ladies and Gentlemen:

 

We have acted as special United States counsel to CASI Pharmaceuticals, Inc., an exempted company incorporated under the laws of the Cayman Islands (the “Company”), in connection with its filing of a Registration Statement on Form F-3 (the “Registration Statement”) with the Securities and Exchange Commission (the “SEC”) pursuant to the Securities Act of 1933, as amended (the “Securities Act”). The Registration Statement includes a prospectus (the "Base Prospectus"), that provides it will be supplemented in the future by one or more prospectus supplements (each, a "Prospectus Supplement"). The Registration Statement including the Base Prospectus (as supplemented from time to time by one or more Prospectus Supplements), will provide for the registration and public offering by the Company, from time to time, of up to $200,000,000 in the aggregate amount of any combination of the following:

 

(i)

ordinary shares of common stock, par value $0.0001 per share, of the Company (“Ordinary Shares”);

 

(ii)

preferred shares, par value $0.0001 per share, of the Company (“Preferred Shares”), which may be issued in one or more series;

 

(iii)

warrants to purchase Ordinary Shares of the Company (“Warrants”);

 

(iv)

subscription rights to purchase Ordinary Shares or Preferred Shares (the “Subscription Rights”); and

 

(v)

units comprised of one or more of the securities described above in any combination (the “Units”).

 

The Ordinary Shares and Preferred Shares are collectively referred to herein as the “Shares”. The Warrants, Subscription Rights and Units are collectively referred to herein as the “Securities.”

 

1600 BAUSCH & LOMB PLACE  ROCHESTER, NY 14604-2711 PHONE: 585.232.6500 FAX: 585.232.2152

rochester, ny  •  buffalo, ny  •  albany, ny  •  corning, ny  •  new york, ny

 

 

 

 

CASI Pharmaceuticals, Inc.

December 20, 2024

Page 2

 

As such counsel, and for purposes of our opinion set forth below, we have reviewed such documents and made such examination of law as we have deemed appropriate to give the opinions set forth below. We have relied, without independent verification, on certificates of public officials and, as to matters of fact material to the opinions set forth below, on certificates of officers of the Company.

  

We are not hereby rendering any opinion with respect to any Shares issuable in combination with or upon the conversion or exercise, as applicable, of any of the Securities or any Securities that are components of Units. For purposes of the opinion set forth below, without limiting and other exceptions or qualifications set forth herein, we have assumed that (i) at the time the Securities are issued the Company is validly existing under the laws of the Cayman Islands and in good standing, has the corporate power to enter into and perform its obligations under the Securities in accordance with their respective terms, (ii) upon issuance, the Company will have duly authorized, executed and delivered the Securities in accordance with its organizational documents and the laws of the Cayman Islands, (iii) any Shares issued in combination with or upon conversion of the Securities will be duly authorized, validly issued, fully paid and non-assessable, and (iv) the execution, delivery and performance by the Company of its obligations under the Securities will not violate the laws of the Cayman Islands or any other applicable laws (excepting from such assumption the laws of the State of New York).

 

For purposes of the opinions set forth below, the “Future Authorization and Issuance” means (a) the Registration Statement and any required post-effective amendment thereto have become effective under the Securities Act and the Base Prospectus and any and all Prospectus Supplement(s) required by applicable laws have been delivered and filed as required by such laws; (b) the Securities have been duly authorized by the Company by all necessary corporate action; (c) the terms of the Securities and their issuance and sale, including as to any Shares to be issued in combination therewith or upon the conversion thereof, have been duly authorized by the Company by all necessary corporate action (together with (b) above the “Authorization”); (d) any securities issuable upon conversion, exchange, redemption or exercise of such Securities being offered will be duly authorized, created and, if appropriate, reserved for issuance upon such conversion, exchange, redemption, or exercise; (e) the terms of the Securities and of their issuance and sale have been duly established in conformity with the applicable definitive purchase, underwriting, subscription rights, warrant or similar agreement under which such Securities are to be issued (the “Applicable Agreements”), and as described in the Registration Statement, the Base Prospectus and the related Prospectus Supplement(s), so as not to violate any applicable law or result in a default under or breach of any agreement or instrument binding upon the Company, so as to be in conformity with the Company’s Amended and Restated Memorandum of Association, and so as to comply with any requirement or restriction imposed by any court or governmental body having jurisdiction over the Company; (f) the Applicable Agreements with respect to any Securities offered will have been validly executed and delivered by the Company and the other party or parties thereto, in conformity with the Applicable Agreement and applicable law; (g) if applicable, certificates representing such Securities have been duly executed, countersigned, registered and delivered either (i) in accordance with the Applicable Agreements, or (ii) upon conversion or exercise of any other Security, in accordance with the terms of such Security or the instrument governing such Security providing for such conversion or exercise; (h) any such Securities and any such Applicable Agreements will be governed by New York law and will not include any provision that is unenforceable; and (i) the Securities have been duly executed and delivered by the Company pursuant to the Applicable Agreement and delivered against payment therefor in accordance with the Authorization.

 

Based upon the foregoing, and subject to the additional qualifications set forth below, we are of the opinion that:

 

1.

Upon the Future Authorization and Issuance of Warrants, such Warrants will be valid and binding obligations of the Company.

 

 

 

CASI Pharmaceuticals, Inc.

December 20, 2024

Page 3

 

2.

Upon the Future Authorization and Issuance of Subscription Rights, such Subscription Rights will be valid and binding obligations of the Company.

 

3.

Upon the Future Authorization and Issuance of Units, such Units will be valid and binding obligations of the Company.

 

The opinions expressed above are subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and other similar laws of general application affecting the rights and remedies of creditors and to general principles of equity.

 

We express no opinion as to the law of any jurisdiction other than the law of the State of New York. Our opinion is based on these laws as in effect on the date hereof. We express no opinion to the extent that any other laws are applicable to the subject matter hereof and express no opinion and provide no assurance as to compliance with any federal or state securities law, rule or regulation.

 

This opinion letter has been prepared in accordance with the customary practice of lawyers who regularly give, and lawyers who regularly advise opinion recipients concerning, opinions of the type contained herein.

 

This opinion letter deals only with the specified legal issues expressly addressed herein, and you should not infer any opinion that is not explicitly addressed herein from any matter stated in this letter.

 

We consent to the use of this opinion as an exhibit to the Registration Statement. In giving such consent, we do not hereby admit that we are within the category of persons whose consent is required under Section 7 of the Securities Act and the rules and regulations thereunder. This opinion is rendered to you as of the date hereof and we assume no obligation to advise you or any other person hereafter with regard to any change after the date hereof in the circumstances or the law that may bear on the matters set forth herein even though the changes may affect the legal analysis or legal conclusion or other matters in this letter.

 

	Very truly yours,
	/s/ Harter Secrest & Emery LLP

 

 

 

Exhibit 5.3

 

Our ref

JLH/815438-000001/31050658v1

 

CASI Pharmaceuticals, Inc.

PO Box 309

Ugland House

Grand Cayman, KY1-1104

Cayman Islands

 

20 December 2024

 

Dear Sirs and/or Madams

 

CASI Pharmaceuticals, Inc.

 

We have acted as Cayman Islands legal advisers to CASI Pharmaceuticals, Inc. (the "Company") in connection with the Company’s registration statement on Form F-3, including all amendments or supplements thereto (the "Registration Statement"), filed with the Securities and Exchange Commission (the "SEC") under the U.S. Securities Act of 1933, as amended to date, on 20 December 2024 and the prospectus supplement dated 20 December 2024 (the "Prospectus Supplement"), relating to the Company's at-the-market offering (the "Offering") to issue and sell by the Company of certain ordinary shares of par value US$0.0001 each (the "Shares") in accordance with the open market sale agreement dated 20 December 2024 (the "Sales Agreement") entered into between the Company and Jefferies LLC.

 

We are furnishing this opinion as Exhibits 5.3 and 23.4 to the Registration Statement.

 

1

Documents Reviewed

 

For the purposes of this opinion, we have reviewed only originals, copies or final drafts of the following documents:

 

1.1

The Certificate of Incorporation dated 10 January 2023 and the Certificate of Incorporation on Change of Name dated 21 March 2023.

 

1.2

The Amended and Restated Memorandum and Articles of Association of the Company as adopted by a special resolution of the Company dated 20 March 2023 and effective on 21 March 2023 (the "Memorandum and Articles").

 

1.3

The written resolutions of the directors of the Company dated 13 December 2024 (the "Directors' Resolutions").

 

1.4

A certificate from a director of the Company, a copy of which is attached hereto (the "Director's Certificate").

 

1.5

A certificate of good standing with respect to the Company issued by the Registrar of Companies in the Cayman Islands dated 7 November 2024 (the "Certificate of Good Standing").

 

 

1.6

The Registration Statement.

 

1.7

The Prospectus Supplement.

 

1.8

The Sales Agreement.

 

2

Assumptions

 

The following opinions are given only as to, and based on, circumstances and matters of fact existing and known to us on the date of this opinion letter. These opinions only relate to the laws of the Cayman Islands which are in force on the date of this opinion letter. In giving these opinions we have relied (without further verification) upon the completeness and accuracy, as at the date of this opinion letter, of the Director's Certificate and the Certificate of Good Standing. We have also relied upon the following assumptions, which we have not independently verified:

 

2.1

Copies of documents, conformed copies or drafts of documents provided to us are true and complete copies of, or in the final forms of, the originals, and translations of documents provided to us are complete and accurate.

 

2.2

All signatures, initials and seals are genuine.

 

2.3

There is nothing under any law (other than the law of the Cayman Islands), which would or might affect the opinions set out below.

 

2.4

There is nothing contained in the minute book or corporate records of the Company (which, other than the records set out in paragraph 1 of this opinion letter, we have not inspected) which would or might affect the opinions set out below.

 

2.5

The Company will receive money or money's worth in consideration for the issue of the Shares and none of the Shares will be issued for less than par value.

 

2.6

The issue of the Shares will be of commercial benefit to the Company.

 

2.7

No invitation has been or will be made by or on behalf of the Company to the public in the Cayman Islands to subscribe for any of the Shares.

 

3

Opinion

 

Based upon the foregoing and subject to the qualifications set out below and having regard to such legal considerations as we deem relevant, we are of the opinion that:

 

3.1

The Company has been duly incorporated as an exempted company with limited liability and is validly existing and in good standing with the Registrar of Companies under the laws of the Cayman Islands.

 

3.2

The authorised share capital of the Company is US$50,000 divided into 500,000,000 ordinary shares of a par value of US$0.0001 each.

 

 

3.3

The issue and allotment of the Shares have been duly authorised and when allotted, issued and paid for as contemplated in the Registration Statement, the Prospectus Supplement and the Sales Agreement, the Shares will be legally issued and allotted, fully paid and non-assessable. As a matter of Cayman Islands law, a share is only issued when it has been entered in the register of members (shareholders).

 

4

Qualifications

 

The opinions expressed above are subject to the following qualifications:

 

4.1

To maintain the Company in good standing with the Registrar of Companies under the laws of the Cayman Islands, annual filing fees must be paid and returns made to the Registrar of Companies within the time frame prescribed by law.

 

4.2

In this opinion the phrase "non-assessable" means, with respect to shares in the Company, that a shareholder shall not, solely by virtue of its status as a shareholder and in absence of a contractual arrangement, or an obligation pursuant to the memorandum and articles of association, to the contrary, have any obligation to make further contributions to the Company's assets (except in exceptional circumstances, such as involving fraud, the establishment of an agency relationship or an illegal or improper purpose or other circumstances in which a court may be prepared to pierce or lift the corporate veil).

 

4.3            The obligations of the Company may be subject to restrictions pursuant to:

 

(a)

United Nations and United Kingdom sanctions extended to the Cayman Islands by Orders in Council; and

 

(b)

sanctions imposed by Cayman Islands authorities under Cayman Islands legislation.

 

4.4

We express no opinion as to the meaning, validity or effect of any references to foreign (i.e. non-Cayman Islands) statutes, rules, regulations, codes, judicial authority or any other promulgations and any references to them in the Sales Agreement.

 

Except as specifically stated herein, we make no comment with respect to any representations and warranties which may be made by or with respect to the Company in any of the documents or instruments cited in this opinion or otherwise with respect to the commercial terms of the transactions, which are the subject of this opinion.

 

We hereby consent to the filing of this opinion as an exhibit to the Registration Statement and to the reference to our name under the headings "Enforceability of Civil Liabilities" and "Legal Matters" and elsewhere in the Registration Statement and the Prospectus Supplement. In giving such consent, we do not thereby admit that we come within the category of persons whose consent is required under Section 7 of the U.S. Securities Act of 1933, as amended, or the Rules and Regulations of the SEC thereunder.

 

Yours faithfully

 

Maples and Calder (Hong Kong) LLP

 

/s/ Maples and Calder (Hong Kong) LLP

 

 

 

Exhibit 23.1

 

Consent of Independent Registered Public Accounting Firm

 

We consent to the use of our report dated March 28, 2024, with respect to the consolidated financial statements of CASI Pharmaceuticals, Inc., incorporated herein by reference and to the reference to our firm under the heading “Experts” in the prospectus.

 

/s/ KPMG Huazhen LLP

 

Beijing, China

December 20, 2024

 

 

 

Exhibit 107

 

Calculation of Filing Fee Table

 

Form F-3

(Form Type)

 

CASI Pharmaceuticals, Inc.

 

(Exact Name of Registrant as Specified in its Charter)

 

Table 1: Newly Registered Securities

 

	Security Type	Security Class Title	Fee Calculation Rule	Amount Registered (1) (2)	Proposed Maximum Offering Price Per Unit (3)	Maximum Aggregate Offering Price(3)	Fee Rate	Amount of Registration Fee
Fees to be Paid	Equity	Ordinary Shares	457(o)	—	—	—	—	—
	Equity	Preferred Shares	457(o)	—	—	—	—	—
	Other	Warrants	457(o)	—	—	—	—	—
	Other	Subscription Rights	457(o)	—	—	—	—	—
	Other	Units	457(o)	—	—	—	—	—
	Unallocated (Universal) Shelf	Unallocated (Universal) Shelf	457(o)	—	—	$150,000,000(4)	0.00015310	$22,965
	Total Offering Amounts					$150,000,000		$22,965
	Total Fees Previously Paid							—
	Total Fee Offsets							—
	Net Fee Due							$22,965

 

(1)

On May 3, 2024, CASI Pharmaceuticals, Inc. (the “Company”) filed a registration statement (the “Prior Registration Statement”) on Form F-3 (File No. 333-279096) with the U.S. Securities and Exchange Commission related to the offer and sale of up to an aggregate of $50.0 million of any combination of the securities described in the prospectus relating to the Prior Registration Statement (the “Prior Securities”). The Prior Registration Statement was subsequently declared effective on May 10, 2024. Pursuant to Rule 429 under the Securities Act of 1933, as amended (the “Securities Act”), the registration statement with which this Calculation of Filing Fee Table is being filed, (the “New Registration Statement” and together with the Prior Registration Statement, the “Combined Registration Statement”), combines the Prior Securities from the Prior Registration Statement, all of which remain unissued as of the date hereof, with the additional securities registered by the New Registration Statement for offer and sale by the Company, to enable the offer and sale of up to an aggregate of $200.0 million of the Company’s ordinary shares, preferred shares, warrants, subscription rights, and/or units, from time to time in one or more offerings, pursuant to a combined base prospectus.

 

 

(2)

There are being registered under the New Registration Statement such indeterminate number of ordinary shares, preferred shares, warrants, subscription rights, and units as shall have an aggregate initial offering price not to exceed $150 million. Any securities registered under the New Registration Statement may be sold separately or in combination with other securities registered under the Combined Registration Statement. In addition, pursuant to Rule 416 under the Securities Act, the shares being registered under the New Registration Statement also include such indeterminate number of shares as may be issuable with respect to the shares being registered hereunder as a result of stock splits, stock dividends or similar transactions.

 

(3)

The Proposed Maximum Offering Price Per Unit and Maximum Aggregate Offering Price per class of securities will be determined from time to time by the registrant in connection with the issuance by the registrant of the securities registered under the Combined Registration Statement and is not specified as to each class of security pursuant to General Instruction II.C. of Form F-3 under the Securities Act. Separate consideration may or may not be received for securities that are issuable on exercise, conversion or exchange of other securities, or that are issued in units.

 

(4)

Estimated solely for the purpose of calculating the registration fee of the New Registration Statement. Subject to Rule 462(b) under the Securities Act, the aggregate maximum offering price of all securities sold by the registrant from time to time pursuant to the New Registration Statement will not exceed $150 million. The aggregate maximum offering price of all securities sold by the registrant from time to time pursuant to the Combined Registration Statement will not exceed $200.0 million.

 

Table 3: Combined Prospectuses

 

Security Type	Security Class Title	Amount of Securities Previously Registered (1) (2)	Maximum Aggregate Offering Price of Securities Previously Registered (3)	Form Type	File Number	Initial Effective Date
Equity	Ordinary Shares	—	—	F-3	333-279096	May 10, 2024
Equity	Preferred Shares	—	—	F-3	333-279096	May 10, 2024
Other	Warrants	—	—	F-3	333-279096	May 10, 2024
Other	Subscription Rights	—	—	F-3	333-279096	May 10, 2024
Other	Units	—	—	F-3	333-279096	May 10, 2024
Unallocated (Universal) Shelf	Unallocated (Universal) Shelf	—	$50,000,000 (4)	F-3	333-279096	May 10, 2024

 

(1)

See Note 1 to Table 1 above.

 

(2)

The Prior Registration Statement includes such indeterminate number of ordinary shares, preferred shares, warrants, subscription rights, and units as shall have an aggregate initial offering price not to exceed $50 million. Any securities registered thereunder may be sold separately or in combination with other securities registered under the Combined Registration Statement, pursuant to Rule 429 of the Securities Act. In addition, pursuant to Rule 416 under the Securities Act, the shares registered under the Prior Registration Statement also include such indeterminate number of shares as may be issuable with respect to the shares being registered thereunder as a result of stock splits, stock dividends or similar transactions.

 

(3)

The Proposed Maximum Offering Price Per Unit and Maximum Aggregate Offering Price per class of securities will be determined from time to time by the registrant in connection with the issuance by the registrant of the securities registered under the Combined Registration Statement and is not specified as to each class of security pursuant to General Instruction II.C. of Form F-3 under the Securities Act. Separate consideration may or may not be received for securities that are issuable on exercise, conversion or exchange of other securities, or that are issued in units.

 

(4)

Estimated in the Prior Registration Statement solely for the purpose of calculating the registration fee previously paid in connection therewith. Subject to Rule 462(b) under the Securities Act, the aggregate maximum offering price of all securities sold by the registrant from time to time pursuant to the Prior Registration Statement will not exceed $50 million. The aggregate maximum offering price of all securities sold by the registrant from time to time pursuant to the Combined Registration Statement will not exceed $200.0 million.

 

 

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