Filed Pursuant to Rule 424(b)(3)

Registration No. 333-259065

 

PROXY STATEMENT/PROSPECTUS OF ADVAXIS INC.

 

YOUR VOTE IS VERY IMPORTANT

 

 

 

To the Stockholders of Advaxis, Inc. and the Shareholders of Biosight Ltd.,

 

Advaxis, Inc., a Delaware corporation, or Advaxis, and Biosight Ltd., a company organized under the laws of the State of Israel, or Biosight, entered into an Agreement and Plan of Merger and Reorganization, or the Merger Agreement, on July 4, 2021, pursuant to which a direct, wholly owned subsidiary of Advaxis, Advaxis Ltd., or Merger Sub, will merge with and into Biosight, with Biosight surviving as a wholly owned subsidiary of Advaxis, and the surviving company of the merger, which transaction is referred to herein as the merger. Advaxis following the merger is referred to herein as the combined company.

 

At the effective time of the merger each of Biosight’s ordinary and preferred shares, par or nominal value NIS 0.01 per share, collectively referred to herein as the Biosight shares, will be converted into the right to receive a number of shares of Advaxis common stock, par value $0.001 per share, referred to herein as the Advaxis common stock, equal to the exchange ratio, 118.2009 shares of Advaxis common stock per Biosight share (subject to adjustment to account for the proposed Advaxis reverse stock split), described in more detail in the section titled “The Merger Agreement—Merger Consideration” beginning on page 109 of the accompanying proxy statement/prospectus/information statement.

 

Prior to the merger, each of Biosight and Advaxis shall take all actions necessary to provide that each option for Biosight shares, or Biosight option, outstanding and unexercised immediately before the effective time of the merger, automatically and without any action on the part of the holder thereof, be assumed by Advaxis and converted into an option for Advaxis common stock, or Advaxis option, with the number of shares subject to and per share exercise price of the option adjusted to reflect the exchange ratio. Each such substituted Advaxis option shall continue to have, and shall be subject to, the same terms and conditions (including the applicable time-vesting and/or performance-vesting conditions) as applied to the corresponding Biosight option immediately prior to the effective time of the merger. All other securities of Biosight shall be cancelled and shall be of no further force and effect from the effective time of the merger and shall not be assumed or converted into a right to receive any shares of Advaxis common stock.

 

Each share of Advaxis common stock and option to purchase Advaxis common stock that is issued and outstanding at the effective time of the merger will remain issued and outstanding, and such shares will be unaffected by the merger. Immediately after the merger, Advaxis stockholders as of immediately prior to the merger are expected to own approximately 25% of the outstanding shares of the combined company and former Biosight shareholders are expected to own approximately 75% of the outstanding shares of the combined company.

 

Shares of Advaxis common stock are currently listed on The Nasdaq Capital Market under the symbol “ADXS.” Advaxis will file an initial listing application for the combined company with The Nasdaq Stock Market Inc., or Nasdaq. After completion of the merger, Advaxis will be renamed “Biosight Therapeutics Inc.” and it is expected that the common stock of the combined company will trade on The Nasdaq Capital Market under the symbol “BSTX.” On August 24, 2021, the last trading day before the date of the accompanying proxy statement/prospectus/information statement, the closing sale price of Advaxis common stock was $0.42 per share.

 

Advaxis stockholders are cordially invited to attend the special meeting of Advaxis stockholders. Advaxis is holding its special meeting of stockholders, or the Advaxis special meeting, on November 16, 2021, at 10:00 a.m. Eastern Time, unless postponed or adjourned to a later date, in order to obtain the stockholder approvals necessary to complete the merger and related matters. The Advaxis special meeting will be held entirely online. Advaxis stockholders will be able to attend and participate in the Advaxis special meeting online by visiting www.virtualshareholdermeeting.com/ADXS2021SM where they will be able to listen to the meeting live, submit questions and vote. At the Advaxis special meeting, Advaxis will ask its stockholders to:

 

1. Approve the issuance of shares of common stock of Advaxis to shareholders of Biosight, pursuant to the terms of the Merger Agreement, a copy of which is attached as Annex A to the accompanying proxy statement/prospectus/information statement, and the change of control resulting from the merger;

 

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2. Approve an amendment to the amended and restated certificate of incorporation of Advaxis to effect a reverse stock split of Advaxis’ issued and outstanding common stock within a range, as determined by the Advaxis board of directors and agreed to by Biosight, of one new share of Advaxis common stock for every 10 to 30 shares (or any number in between) of outstanding Advaxis common stock in the form attached as Annex E to the accompanying proxy statement/prospectus/information statement;
   
3. Approve an amendment to the amended and restated certificate of incorporation of Advaxis to change the corporate name from Advaxis, Inc. to “Biosight Therapeutics Inc.” in the form attached as Annex F to the accompanying proxy statement/prospectus/information statement;
   
4. Approve, on a non-binding, advisory basis, the compensation that will or may become payable by Advaxis to its named executive officers in connection with the merger;
   
5. Consider and vote upon an adjournment of the Advaxis special meeting, if necessary, to solicit additional proxies if there are not sufficient votes in favor of Proposal Nos. 1, 2 and 3; and
   
6. Transact such other business as may properly come before the stockholders at the Advaxis special meeting or any adjournment or postponement thereof.

 

As described in the accompanying proxy statement/prospectus/information statement, certain Advaxis stockholders who in the aggregate own less than 1% of the outstanding shares of Advaxis as of July 31, 2021, and certain Biosight shareholders who in the aggregate own approximately 25.9% of the ordinary shares of Biosight as of August 24, 2021, are parties to support agreements with Advaxis and Biosight, respectively, whereby such stockholders and shareholders have agreed to vote in favor of, and to adopt and approve, the merger, the Merger Agreement and the related transactions at any meeting of Advaxis’ stockholders or Biosight’s shareholders, as applicable (or any adjournment or postponement thereof), subject to the terms of the support agreements. Following the effectiveness of the registration statement on Form S-4 of which the accompanying proxy statement/prospectus/information statement is a part and pursuant to the Merger Agreement, Biosight shall either hold, as promptly as practicable, a special meeting of Biosight shareholders to approve, or seek approval by written consent of its shareholders of, the Merger Agreement and the transactions contemplated therein.

 

After careful consideration, each of the Advaxis and Biosight boards of directors have approved the Merger Agreement and have determined that it is advisable to consummate the merger. Advaxis’ board of directors has approved the proposals described in the accompanying proxy statement/prospectus/information statement and unanimously recommends that its stockholders vote “FOR” the proposals described in the accompanying proxy statement/prospectus/information statement.

 

 

 

More information about Advaxis, Biosight, the Merger Agreement and transactions contemplated thereby and the foregoing proposals is contained in the accompanying proxy statement/prospectus/information statement. Advaxis urges you to read the accompanying proxy statement/prospectus/information statement carefully and in its entirety. IN PARTICULAR, YOU SHOULD CAREFULLY CONSIDER THE MATTERS DISCUSSED UNDER “RISK FACTORS” BEGINNING ON PAGE 19 OF THE ACCOMPANYING PROXY STATEMENT/PROSPECTUS/INFORMATION STATEMENT.

 

Advaxis and Biosight are excited about the opportunities the merger brings to Advaxis’ stockholders and Biosight’s shareholders and thank you for your consideration and continued support.

Sincerely,

 

     
Kenneth A. Berlin   Dr. Ruth Ben Yakar

President and Chief Executive Officer

Interim Chief Financial Officer

 

Chief Executive Officer

Biosight Ltd.

Advaxis, Inc.    

 

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of the accompanying proxy statement/prospectus/information statement. Any representation to the contrary is a criminal offense.

 

The accompanying proxy statement/prospectus/information statement is dated October 21, 2021 and is first being mailed to Advaxis stockholders on or about October 21, 2021.

 

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ADVAXIS, INC.
9 Deer Park Drive, Suite K-1
Monmouth Junction, New Jersey 08852
(609) 452-9813

 

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS

 

To the stockholders of Advaxis, Inc.:

 

NOTICE IS HEREBY GIVEN that a virtual special meeting of stockholders, or the Advaxis special meeting, will be held on November 16, 2021, at 10:00 a.m. Eastern Time, unless postponed or adjourned to a later date. The Advaxis special meeting will be held entirely online. You will be able to attend and participate in the Advaxis special meeting online by visiting www.virtualshareholdermeeting.com/ADXS2021SM, where you will be able to listen to the meeting live, submit questions and vote.

 

The Advaxis special meeting will be held for the following purposes:

 

1. To approve the issuance of shares of common stock of Advaxis, Inc., or Advaxis, to stockholders of Biosight Ltd., or Biosight, pursuant to the terms of the Agreement and Plan of Merger and Reorganization among Advaxis, Biosight and Advaxis Ltd., or Merger Sub, dated as of July 4, 2021, a copy of which is attached as Annex A to the accompanying proxy statement/prospectus/information statement, which is referred to in this Notice as the Merger Agreement, and the change of control resulting from the merger;
   
2. To approve an amendment to the amended and restated certificate of incorporation of Advaxis to effect a reverse stock split of Advaxis’ issued and outstanding common stock within a range, as determined by the Advaxis board of directors and agreed to by Biosight, of one new share of Advaxis common stock for every 10 to 30 shares (or any number in between) of outstanding Advaxis common stock in the form attached as Annex E to the accompanying proxy statement/prospectus/information statement;
   
3. To approve an amendment to the amended and restated certificate of incorporation of Advaxis to change the corporate name from Advaxis, Inc. to “Biosight Therapeutics Inc.,” in the form attached as Annex F to the accompanying proxy statement/prospectus/information statement;
   
4. To approve, on a non-binding, advisory basis, the compensation that will or may become payable by Advaxis to its named executive officers in connection with the merger;
   
5. To consider and vote upon an adjournment of the Advaxis special meeting, if necessary, to solicit additional proxies if there are not sufficient votes in favor of Proposal Nos. 1, 2 and 3; and
   
6. To transact such other business as may properly come before the stockholders at the Advaxis special meeting or any adjournment or postponement thereof.

 

Record

Date:

Advaxis’ board of directors has fixed September 17, 2021 as the record date for the determination of stockholders entitled to notice of, and to vote at, the Advaxis special meeting and any adjournment or postponement thereof. Only holders of record of shares of Advaxis common stock at the close of business on the record date are entitled to notice of, and to vote at, the Advaxis special meeting. At the close of business on the record date, Advaxis had 145,638,459 shares of common stock outstanding and entitled to vote.

 

Your vote is important. The affirmative vote of the holders of a majority of the outstanding shares of Advaxis common stock entitled to vote at the special meeting is required for approval of Proposal Nos. 1, 2 and 3. The affirmative vote of the holders of a majority of shares virtually present in person or represented by proxy at the Advaxis special meeting and entitled to vote on the subject matter, assuming a quorum is present, is required for approval of Proposal Nos. 4 and 5. Approval of each of Proposal No. 1, referred to as the merger proposal, Proposal No. 2, referred to as the reverse stock split proposal, Proposal No. 3, referred to as the certificate of incorporation amendment proposal, is a condition to the completion of the merger. Therefore, the merger cannot be consummated without the approval of Proposal Nos. 1, 2 and 3.

 

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Even if you plan to virtually attend the Advaxis special meeting, Advaxis requests that you sign and return the enclosed proxy or vote by mail or online to ensure that your shares will be represented at the Advaxis special meeting if you are unable to virtually attend. You may change or revoke your proxy at any time before it is voted at the Advaxis special meeting.

 

ADVAXIS’ BOARD OF DIRECTORS HAS DETERMINED AND BELIEVES THAT EACH OF THE PROPOSALS OUTLINED ABOVE IS FAIR TO, IN THE BEST INTERESTS OF, AND ADVISABLE TO ADVAXIS AND ITS STOCKHOLDERS AND HAS APPROVED EACH SUCH PROPOSAL. ADVAXIS’ BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT ADVAXIS STOCKHOLDERS VOTE “FOR” EACH SUCH PROPOSAL.

 

Important Notice Regarding the Availability of Proxy Materials for the Stockholders’ Meeting to

Be Held on November 16, 2021 at 10:00 a.m. Eastern Time, Via the Internet

The proxy statement/prospectus/information statement and annual report to stockholders are available at www.virtualshareholdermeeting.com/ADXS2021SM

 

By Order of Advaxis’ Board of Directors,

 

Kenneth A. Berlin

President and Chief Executive Officer, Interim Chief Financial Officer

Monmouth Junction, New Jersey

October 21, 2021

 

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TABLE OF CONTENTS

 

    Page
     
 

QUESTIONS AND ANSWERS ABOUT THE MERGER

1
PROSPECTUS SUMMARY 9
  The Companies 9
  The Merger (see page 73) 10
  Reasons for the Merger (see pages 85 and 88) 11
  Opinion of the Advaxis Financial Advisor (see page 90) 12
  Interests of Certain Directors, Officers and Affiliates of Advaxis and Biosight (see pages 98 and 102) 12
  Management Following the Merger (see page 202) 13
  Overview of the Merger Agreement and Agreements Related to the Merger Agreement 14
  Material U.S. Federal Income Tax Consequences of the Merger (see page 103) 15
  Nasdaq Stock Market Listing (see page 108) 16
  Anticipated Accounting Treatment (see page 107) 16
  Appraisal Rights and Dissenters’ Rights (see page 108) 16
  Comparison of Rights of Holders of Shares (see page 226) 16
  Risk Factors (see page 19) 17
MARKET PRICE AND DIVIDEND INFORMATION 18
  Dividends 18
RISK FACTORS 19
  Risks Related to the Merger 19
  Risks Related to the Proposed Reverse Stock Split 19
CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS 67
THE SPECIAL MEETING OF ADVAXIS STOCKHOLDERS 69
  Date, Time and Place 69
  Purposes of the Advaxis Special Meeting 69
  Recommendation of Advaxis’ Board of Directors 70
  Record Date and Voting Power 70
  Voting and Revocation of Proxies 70
  Required Vote 72
  Solicitation of Proxies 72
  Other Matters 72
THE MERGER 73
  Background of the Merger 73
  Advaxis Reasons for the Merger 85
  Biosight Reasons for the Merger 88

 

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  Opinion of Advaxis’ Financial Advisor 90
  Interests of Advaxis Directors and Executive Officers in the Merger 98
  Interests of Biosight Directors and Executive Officers in the Merger 102
  Effective Time of the Merger 103
  Regulatory Approvals 103
  Material U.S. Federal Income Tax Consequences of the Merger 103
THE MERGER AGREEMENT 109
AGREEMENTS RELATED TO THE MERGER 124
ADVAXIS DIRECTORS, OFFICERS AND CORPORATE GOVERNANCE 125
ADVAXIS EXECUTIVE COMPENSATION 126
ADVAXIS DIRECTOR COMPENSATION 130
BIOSIGHT EXECUTIVE COMPENSATION 131
MATTERS BEING SUBMITTED TO A VOTE OF ADVAXIS STOCKHOLDERS 132
ADVAXIS’ BUSINESS 142
BIOSIGHT’S BUSINESS 162
ADVAXIS MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 177
BIOSIGHT MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 189
MANAGEMENT FOLLOWING THE MERGER 202
CERTAIN RELATIONSHIPS AND RELATED-PARTY TRANSACTIONS OF THE COMBINED COMPANY 206
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS 208
MARKET PRICE AND DIVIDEND INFORMATION 218
DESCRIPTION OF ADVAXIS CAPITAL STOCK 219
COMPARISON OF RIGHTS OF HOLDERS OF ADVAXIS CAPITAL STOCK AND BIOSIGHT SHARE CAPITAL 226
PRINCIPAL STOCKHOLDERS OF ADVAXIS 236
PRINCIPAL STOCKHOLDERS OF BIOSIGHT 237
PRINCIPAL STOCKHOLDERS OF PROPOSED COMBINED COMPANY 240
LEGAL MATTERS 241
EXPERTS 241
WHERE YOU CAN FIND MORE INFORMATION 241
TRADEMARK NOTICE 242
OTHER MATTERS 242
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA INDEX TO FINANCIAL STATEMENTS OF ADVAXIS, INC. F-1

 

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QUESTIONS AND ANSWERS ABOUT THE MERGER

 

Except where specifically noted, the following information and all other information contained in this proxy statement/prospectus/information statement does not give effect to the proposed reverse stock split described in Proposal No. 2 of this proxy statement/prospectus/information statement.

 

The following section provides answers to frequently asked questions about the merger. This section, however, provides only summary information. For a more complete response to these questions and for additional information, please refer to the cross-referenced sections.

 

Q: What is the merger?
   
A: Advaxis, Inc., or Advaxis, also referred to herein as “we,” “us,” “our,” and the “Company,” and Biosight Ltd., or Biosight, have entered into an Agreement and Plan of Merger, or the Agreement, dated as of July 4, 2021, a copy of which is attached as Annex A to this proxy statement/prospectus/information statement. The Merger Agreement contains the terms and conditions of the proposed business combination of Advaxis and Biosight. Pursuant to the Merger Agreement, Advaxis Ltd., or Merger Sub, a direct, wholly owned subsidiary of Advaxis, will merge with and into Biosight, with Biosight surviving as a wholly owned subsidiary of Advaxis. This transaction is referred to in this proxy statement/prospectus/information statement as the merger. Advaxis following the merger is referred to herein as the combined company. After the completion of the merger, the combined company will change its corporate name to “Biosight Therapeutics Inc.”
   
  Immediately prior to the effective time of the merger, the outstanding Biosight shares will be converted into the right to receive a number of shares of Advaxis common stock equal to the exchange ratio described in more detail in the section titled “The Merger Agreement—Merger Consideration” beginning on page 109 of this proxy statement/prospectus/information statement.
   
  In connection with the merger, each outstanding and unexercised option to purchase Biosight’s ordinary shares will be assumed by Advaxis and will be converted into an option to purchase shares of Advaxis’ common stock, with necessary adjustments to reflect the exchange ratio.
   
  Each share of Advaxis common stock and warrant or option to purchase Advaxis common stock that is issued and outstanding at the effective time of the merger will remain issued and outstanding and such shares, warrants and options will be unaffected by the merger. If any holder of a warrant to purchase Advaxis common stock issued in connection with Advaxis’ September 2018 offering properly exercises such holder’s right to receive a cash payment in connection with the merger pursuant to the terms and conditions of the underlying agreement governing such warrant, Advaxis shall promptly pay such cash payment to such holder, in each case in such amount as determined in accordance with, and pursuant to the procedures set forth in, such agreement governing such warrant.
   
Q: What will happen to Advaxis if, for any reason, the merger does not close?
   
A: Advaxis has invested significant time and incurred, and expects to continue to incur, significant expenses related to the merger. In the event the merger does not close, the Advaxis board of directors may elect, among other things, to attempt to complete another strategic transaction or the Advaxis board of directors may instead divest all or a portion of Advaxis’ business or assets if a viable alternative strategic transaction is not available. Under certain circumstances, Biosight and Advaxis may be obligated to pay the other party a termination fee of $7,500,000 or reimburse certain expenses of the other party, as more fully described in the section titled “The Merger Agreement—Termination” beginning on page 123 and the section titled “The Merger Agreement—Termination Fee” beginning on page 123 of this proxy statement/prospectus/information statement.

 

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Q: Why are the two companies proposing to merge?
   
A: Advaxis and Biosight believe that combining the two companies will result in a company with a robust pipeline, strong leadership team and substantial capital resources, which will better position it to advance the research, development and commercialization of therapies for cancer. For a more complete description of the reasons for the merger, please see the sections titled “The Merger—Advaxis Reasons for the Merger” and “The Merger—Biosight Reasons for the Merger” beginning on pages 85 and 88, respectively, of this proxy statement/prospectus/information statement.
   
Q: Why am I receiving this proxy statement/prospectus/information statement?
   
A: You are receiving this proxy statement/prospectus/information statement because you have been identified as a stockholder of Advaxis as of September 17, 2021, the record date for the special meeting, and you are entitled to vote at the Advaxis special meeting to approve the matters set forth herein. This document serves as:

 

  a proxy statement of Advaxis used to solicit proxies for the Advaxis special meeting to vote on the matters set forth herein and an information statement for the shareholders of Biosight for their special meeting or written consent; and
     
  a prospectus of Advaxis used to offer shares of Advaxis common stock in exchange for ordinary shares and preferred shares of Biosight in the merger.

 

Q: What proposals will be voted on at the Advaxis special meeting, the approval of which are conditions to the closing of the merger?
   
A: Pursuant to the terms of the Merger Agreement, the following proposals must be approved by the requisite stockholder vote at the Advaxis special meeting in order for the merger to close:

 

  Proposal No. 1 to approve the issuance of shares of Advaxis common stock to Biosight shareholders pursuant to the Merger Agreement and the change of control resulting from the merger;
     
  Proposal No. 2 to approve an amendment to the amended and restated certificate of incorporation of Advaxis to effect a reverse stock split of Advaxis’ issued and outstanding common stock within a range, as determined by the Advaxis board of directors and agreed to by Biosight, of one new share of Advaxis common stock for every 10 to 30 shares (or any number in between) of outstanding Advaxis common stock, which is referred to herein as the reverse stock split, in the form attached as Annex E to this proxy statement/prospectus/information statement; and
     
  Proposal No. 3 to approve an amendment to the amended and restated certificate of incorporation of Advaxis to change the corporate name from Advaxis, Inc. to “Biosight Therapeutics Inc.” in the form attached as Annex F to the accompanying proxy statement/prospectus/information statement.

 

  Proposal No. 1 is referred to herein as the merger proposal. Proposal No. 2 is referred to herein as the reverse stock split proposal. Proposal No. 3 is referred to herein as the certificate of incorporation amendment proposal. The approval of the merger proposal, the reverse stock split proposal and the certificate of incorporation amendment proposal are all conditions to the completion of the merger. The issuance of Advaxis common stock in connection with the merger and the change of control resulting from the merger, or Proposal No. 1, and the amendment to the amended and restated certificate of incorporation of Advaxis, as amended, to change the corporate name from Advaxis, Inc. to “Biosight Therapeutics Inc.,” or Proposal No. 3, will not take place unless they are approved by Advaxis stockholders and the merger is consummated.
   
  In addition to the requirement of obtaining Advaxis stockholder approval, each of the other closing conditions set forth in the Merger Agreement must be satisfied or waived. For a more complete description of the closing conditions under the Merger Agreement, please see the section titled “The Merger Agreement—Conditions to the Completion of the Merger” beginning on page 112 of this proxy statement/prospectus/information statement.

 

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Q: What proposals are to be voted on at the Advaxis special meeting, other than the merger proposal, the reverse stock split proposal and the certificate of incorporation amendment proposal?
   
A: At the Advaxis special meeting, the holders of Advaxis common stock will also be asked to consider the following proposals:

 

  Proposal No. 4 to approve, on a non-binding advisory vote basis, compensation that will or may become payable by Advaxis to its named executive officers in connection with the merger; and
     
  Proposal No. 5 to approve an adjournment of the Advaxis special meeting, if necessary, to solicit additional proxies if there are not sufficient votes in favor of Proposal Nos. 1, 2 and 3.

 

  The approvals of Proposal Nos. 4 and 5 are not conditions to the merger. Such proposals, together with the merger proposal, the reverse stock split proposal, and the certificate of incorporation amendment proposal, are referred to collectively in this proxy statement/prospectus/information statement as the proposals.

 

Q: What stockholder presence is required for quorum at the Advaxis special meeting?
   
A: The presence, by accessing online or being represented by proxy, at the Advaxis special meeting of the holders of a one-third of the shares of Advaxis common stock outstanding, or equal to 48,546,153 shares, is necessary to constitute a quorum at the meeting for the purpose of approving the proposals.
   
Q: What stockholder votes are required to approve the proposals at the Advaxis special meeting?
   
A: The affirmative vote of the holders of a majority of the outstanding shares of Advaxis common stock entitled to vote thereon is required for approval of Proposal Nos.1, 2 and 3. The affirmative vote of the holders of a majority of shares present in person or represented by proxy at the Advaxis special meeting and entitled to vote on the subject matter, assuming a quorum is present, is required for approval of Proposal Nos. 4 and 5.
   
  Votes will be counted by the inspector of election appointed for the meeting, who will separately count “FOR” and “AGAINST” votes, abstentions and any broker non-votes. Abstentions and broker non-votes will be treated as shares present for the purpose of determining the presence of a quorum for the transaction of business at the special meeting. Abstentions will be counted toward the vote totals for each proposal and will have the same effect as “AGAINST” votes. Broker non-votes will have no effect on Proposals Nos. 1, 4 and 5, but will have the same effect as votes “AGAINST” Proposal Nos. 2 and 3.
   
  As of July 31, 2021, the directors and certain executive officers of Advaxis owned or controlled less than 1% of the outstanding shares of Advaxis common stock entitled to vote at the Advaxis special meeting. As of July 31, 2021, the Advaxis stockholders that are party to support agreements, including the directors and certain executive officers of Advaxis, owned an aggregate of 70,715 shares of Advaxis common stock representing approximately less than 1% of the outstanding shares of Advaxis common stock. Pursuant to the support agreements, these stockholders, including the directors and certain executive officers of Advaxis, have agreed to vote all shares of Advaxis common stock owned by them as of the record date in favor of all the proposals.
   
Q: Other than the approval by Advaxis’ stockholders of Proposal Nos. 1, 2 and 3, what else is required to consummate the merger?
   
A: The consummation of the merger requires, among other things, the satisfaction or waiver of certain conditions on or prior to the closing pursuant to the terms set forth in the Merger Agreement, including the following:

 

  the approval by the Biosight shareholders of the merger, the Merger Agreement, and the other transactions contemplated thereby;

 

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  the registration statement, of which this proxy statement/prospectus/information statement is a part, must have become effective in accordance with the provisions of the Securities Act and must not be subject to any stop order or proceeding, or any proceeding threatened by the SEC, seeking a stop order with respect to the registration statement that has not been withdrawn;
     
  each of Advaxis and Biosight must have performed or complied in all material respects with all covenants and obligations in the Merger Agreement required to be performed or complied with by it on or before the consummation of the merger;
     
  there shall not have occurred any material adverse effect on Biosight (as it relates to Advaxis’ obligations to consummate the merger) or material adverse effect on Advaxis (as it relates to Biosight’s obligations to consummate the merger), in each case, that is continuing;
     
  Advaxis must have delivered a duly executed copy of the IIA Undertaking (as defined in the Merger Agreement); and
     
  Nasdaq shall not have rejected Advaxis’ appeal to its determination by the Listing Qualifications Department of The Nasdaq Stock Market LLC that Advaxis is not in compliance with Nasdaq Listing Rule 5550(a)(2), and the shares of Advaxis common stock to be issued in the merger shall be approved for listing (subject to official notice of issuance) on the Nasdaq Capital Market as of the effective time of the merger.

 

Q: What will Biosight shareholders and optionholders receive in the merger?
   
A: Biosight shareholders holding issued and outstanding Biosight shares immediately prior to the effective time of the merger will receive shares of Advaxis common stock, and Biosight optionholders holding Biosight options that are outstanding and unexercised immediately prior to the effective time of the merger will receive options to purchase Advaxis common stock. Applying the exchange ratio, the former Biosight shareholders immediately before the merger are expected to own approximately 75% of the aggregate number of shares of the combined company’s common stock immediately following the merger and pre-merger Advaxis stockholders are expected to own approximately 25% of the aggregate number of shares of the combined company common stock immediately following the merger.
   
  In connection with the merger, each outstanding and unexercised option to purchase Biosight’s ordinary shares will be converted into an option to purchase Advaxis common stock, with the number of shares and exercise price being appropriately adjusted to reflect the exchange ratio between Biosight’s shares and Advaxis’ common stock as determined in accordance with the Merger Agreement. Unvested options held by service providers shall become fully vested at the effective time of the merger.
   
  For a more complete description of what Biosight shareholders and optionholders will receive in the merger, please see the sections titled “The Merger Agreement—Merger Consideration” and “The Merger Agreement—Treatment of Biosight Options” beginning on pages 109 and 110, respectively, of this proxy statement/prospectus/information statement.
   
Q: Will the common stock of the combined company trade on an exchange?
   
A: Shares of Advaxis common stock are currently listed on The Nasdaq Capital Market under the symbol “ADXS.” Advaxis will file an initial listing application for the combined company with Nasdaq. After completion of the merger, Advaxis will be renamed “Biosight Therapeutics Inc.” and it is expected that the common stock of the combined company will trade on The Nasdaq Capital Market under the symbol “BSTX.” On August 24, 2021, the last trading day before the date of this proxy statement/prospectus/information statement, the closing sale price of Advaxis common stock was $0.42 per share.

 

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Q: Who will be the directors of the combined company following the merger?
   
A: Immediately following the merger, the combined company’s board of directors will be composed of nine members: six designated by Biosight (Pini Orbach, Aaron Sasson, Briggs Morrison, Gary Gordon, Gary Titus and Yuval Cabilly), and three by Advaxis (Kenneth A. Berlin, David Sidransky and Dr. Samir Khleif), with David Sidransky to be nominated as Chairman of the board of directors.
   
Q: Who will be the executive officers of the combined company immediately following the merger?
   
A: Immediately following the merger, the executive management team of the combined company is expected to consist of members of both of the Advaxis and Biosight executive management teams prior to the merger. Advaxis’ Chief Executive Officer, Kenneth A. Berlin, will lead the combined company, with Andres Gutierrez, M.D., Ph.D. (of Advaxis) serving as Chief Medical Officer and Roy Golan, CPA, LLM (of Biosight), serving as Chief Financial Officer.
   
Q: As an Advaxis stockholder, how does Advaxis’ board of directors recommend that I vote?
   
A: After careful consideration, Advaxis’ board of directors unanimously recommends that Advaxis stockholders vote “FOR” all of the proposals.

 

Q: Do persons involved in the merger have interests that may conflict with mine as an Advaxis stockholder?
   
A: Yes. In considering the recommendation of the Advaxis special committee with respect to issuing shares of Advaxis common stock pursuant to the Merger Agreement and the other matters to be acted upon by Advaxis stockholders at the special meeting, Advaxis stockholders should be aware that certain members of the Advaxis board of directors and executive officers of Advaxis have interests in the merger that may be different from, or in addition to, interests they have as Advaxis stockholders.
   
  Advaxis’ executive officers, including Kenneth Berlin, its Chief Executive Officer, who also serves on Advaxis’ board of directors, and Andres Gutierrez, Advaxis’ Chief Medical Officer, are contractually entitled to severance payments, including a cash severance payment equal to a multiple of each person’s base salary (1.75 and 1.0 times the base salary for Mr. Berlin and Mr. Gutierrez, respectively). Mr. Gutierrez, would receive his cash severance in equal monthly installments (12 months) and would also receive a target bonus for the fiscal year in which the termination occurs, and health benefit continuation (up to 12 months) if terminated after the merger. Mr. Berlin would receive his cash severance in a single lump sum within 60 days of the termination. Mr. Berlin would also be entitled to a bonus payment for the year in which the employment is terminated equal to the target bonus percentage, multiplied by the base salary in effect at the time of termination, multiplied by a fraction, the numerator of which is the number of calendar days Mr. Berlin was employed during such year and the denominator of which is 365, continued health and welfare benefits for 21 months, and full vesting and exercisability of all stock options and stock awards.
   
  In addition, Mr. Berlin is also entitled to full accelerated vesting of all outstanding equity awards upon a change in control, as defined in his employment agreements, regardless of whether he is terminated.
 
  Based on the terms of their respective employment agreements, Advaxis’ current executive officers would be entitled to receive a total value of approximately $2.5 million (collectively, not individually) in connection with the consummation of the merger under certain conditions (i.e., termination), which includes the value associated with the acceleration of outstanding equity awards. Such compensation is the subject of Proposal No. 4.
   
  Additionally, pursuant to the terms of the Merger Agreement, David Sidransky, Mr. Berlin and Dr. Samir Khleif, who are currently directors of Advaxis, will continue as directors of the combined organization after the closing of the merger and Dr. Sidransky and Dr. Samir Khleif will be due certain compensation as non-employee directors.
   
  As of July 31, 2021, the directors and executive officers of Advaxis owned, in the aggregate, less than 1% of the outstanding voting shares of Advaxis common stock and have agreed to vote in favor of the merger and related transactions. The voting agreements are discussed in greater detail in the section titled “Agreements Related to the Merger” in this proxy statement/prospectus/information statement.
   
  The Advaxis board of directors was aware of these interests and considered them, among other matters, in the decision to approve the Merger Agreement. For more information, please see the section titled “The Merger — Interests of the Advaxis Directors and Executive Officers in the Merger” in this proxy statement/prospectus/information statement.

 

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Q: Why am I being asked to cast a non-binding, advisory vote regarding compensation that will or may become payable by Advaxis to its named executive officers in connection with the merger?
   
A: SEC rules require Advaxis to seek a non-binding, advisory vote regarding compensation that will or may become payable by Advaxis to its named executive officers in connection with the merger.
   
Q: What will happen if stockholders do not approve the compensation that will or may become payable by Advaxis to its named executive officers in connection with the merger at the special meeting?
   
A: Approval of the compensation that will or may become payable by Advaxis to its named executive officers in connection with the merger (and any associated termination from the combined company) is not a condition to completion of the merger. The vote with respect to the compensation that will or may become payable by Advaxis to its named executive officers in connection with the merger is an advisory vote and will not be binding on Advaxis. Accordingly, regardless of the outcome of the advisory vote, if the Merger Agreement is adopted by the stockholders and the merger is completed, Advaxis’ named executive officers will be eligible to receive their respective compensation that is based on or otherwise relates to the merger.
   
Q: What risks should I consider in deciding whether to vote in favor of the merger?
   
A: You should carefully review the section titled “Risk Factors” beginning on page 19 of this proxy statement/prospectus/information statement and the annexes attached hereto, which set forth certain risks and uncertainties related to the merger, risks and uncertainties to which the combined company’s business will be subject, and risks and uncertainties to which each of Advaxis and Biosight, as independent companies, are subject.
   
Q: When do you expect the merger to be consummated?
   
A: The merger is anticipated to close promptly after the Advaxis special meeting scheduled to be held on November 16, 2021, but the exact timing cannot be predicted. For more information, please see the section titled “The Merger Agreement—Conditions to the Completion of the Merger” beginning on page 112 of this proxy statement/prospectus/information statement.
   
Q: What do I need to do now?
   
A: Advaxis urges you to read this proxy statement/prospectus/information statement carefully, including the annexes attached hereto, and to consider how the merger affects you.
   
  If you are an Advaxis stockholder of record, you may provide your proxy instructions in one of four different ways:

 

  You can attend the Advaxis special meeting online and vote online during the special meeting.
     
  You can mail your signed proxy card in the enclosed return envelope.
     
  You can provide your proxy instructions via telephone by following the instructions on your proxy card.
     
  You can provide your proxy instructions via the internet by following the instructions on your proxy card.

 

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  Your signed proxy card, telephonic proxy instructions, or internet proxy instructions must be received by November 15, 2021, 11:59 p.m. Eastern Time, to be counted.
   
  If you hold your shares in “street name” (as described below), you may provide your proxy instructions via telephone or the internet by following the instructions on your vote instruction form. Please provide your proxy instructions only once, unless you are revoking a previously delivered proxy instruction, and as soon as possible so that your shares can be voted at the Advaxis special meeting.

 

Q: What happens if I do not return a proxy card or otherwise vote or provide proxy instructions, as applicable?
   
A: If you are an Advaxis stockholder, the failure to return your proxy card or otherwise vote or provide proxy instructions will reduce the aggregate number of votes required to approve any of the proposals. Also, your shares will not be counted for purposes of determining whether a quorum is present at the Advaxis special meeting unless your broker has discretionary authority to vote on certain matters.
   
Q: May I attend the Advaxis special meeting and vote in person?
   
A: In light of the coronavirus, or COVID-19, outbreak, and in the best interests of public health and the health and safety of Advaxis’ board of directors and stockholders, the Advaxis special meeting will be held entirely online. Stockholders of record as of September 17, 2021, will be able to attend and participate in the Advaxis special meeting online by accessing www.virtualshareholdermeeting.com/ADXS2021SM. To join the Advaxis special meeting, you will need to have your 16-digit control number that is included on your Notice of Internet Availability of Proxy Materials and your proxy card. If your shares are held in “street name,” you should contact your bank, broker or other nominee to obtain your 16-digit control number or otherwise vote through your bank, broker or other nominee.
   
Q: Who counts the votes?
   
A: Broadridge Financial Solutions, or Broadridge, will be engaged as Advaxis’ independent agent to tabulate stockholder votes, which Advaxis refers to as the inspector of election. If you are a stockholder of record, your executed proxy card is returned directly to Broadridge for tabulation. If you hold your shares through a broker, your broker returns one proxy card to Broadridge on behalf of all its clients.
   
Q: If my Advaxis shares are held in “street name” by my broker, will my broker vote my shares for me?
   
A: Unless your broker has discretionary authority to vote on certain matters, your broker will not be able to vote your shares of Advaxis common stock on matters requiring discretionary authority without instructions from you. If you do not give instructions to your broker, your broker can vote your Advaxis shares with respect to “discretionary,” routine items but not with respect to “non-discretionary,” non-routine items. Discretionary items are proposals considered routine under Rule 452 of the New York Stock Exchange on which your broker may vote shares held in “street name” in the absence of your voting instructions. Proposal Nos. 2 and 3 will be routine matters. With respect to non-routine items for which you do not give your broker instructions, your Advaxis shares will be treated as broker non-votes. To make sure that your vote is counted, you should instruct your broker to vote your shares, following the procedures provided by your broker.
   
Q: What are broker non-votes and do they count for determining a quorum?
   
A: Generally, broker non-votes occur when shares held by a broker in “street name” for a beneficial owner are not voted with respect to a particular proposal because the broker (i) has not received voting instructions from the beneficial owner and (ii) lacks discretionary voting power to vote those shares. A broker is entitled to vote shares held for a beneficial owner on routine matters without instructions from the beneficial owner of those shares. On the other hand, absent instructions from the beneficial owner of such shares, a broker is not entitled to vote shares held for a beneficial owner on non-routine matters.
   
  Broker non-votes will be treated as shares present for the purpose of determining the presence of a quorum for the transaction of business at the Advaxis special meeting. Broker non-votes will not be treated as votes cast for or against a proposal and accordingly will not have any effect with respect to the outcome of Proposal Nos. 4, 5 and 6 and will have the same effect as “AGAINST” votes for Proposal Nos. 1, 2 and 3.

 

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Q: May I change my vote after I have submitted a proxy or provided proxy instructions?
   
A: Advaxis stockholders of record, unless such stockholder’s vote is subject to a support agreement, may change their vote at any time before their proxy is voted at the Advaxis special meeting in one of four ways:

 

  You may submit another properly completed proxy with a later date by mail or via the internet.
     
  You can provide your proxy instructions via telephone at a later date.
     
  You may send a written notice that you are revoking your proxy to Advaxis, Inc., 9 Deer Park Drive, Suite K-1, Monmouth Junction, NJ 08852, Attention: Igor Gitelman, VP of Finance and Chief Accounting Officer.
     
  You may attend the Advaxis special meeting online and vote by following the instructions at www.virtualshareholdermeeting.com/ADXS2021SM. Simply attending the Advaxis special meeting will not, by itself, revoke your proxy.

 

  Your signed proxy card, telephonic proxy instructions, internet proxy instructions, or written notice must be received by November 15, 2021, 11:59 p.m. Eastern Time, to be counted.
   
  If an Advaxis stockholder that owns Advaxis shares in “street name” has instructed a broker to vote its shares of Advaxis common stock, the stockholder must follow directions received from its broker to change those instructions.

 

Q: Who is paying for this proxy solicitation?
   
A: Advaxis and Biosight will share equally the cost of printing and filing of this proxy statement/prospectus/information statement and the proxy card. Arrangements will also be made with brokerage firms and other custodians, nominees and fiduciaries who are record holders of Advaxis common stock for the forwarding of solicitation materials to the beneficial owners of Advaxis common stock. Advaxis will reimburse these brokers, custodians, nominees and fiduciaries for the reasonable out-of-pocket expenses they incur in connection with the forwarding of solicitation materials. Advaxis will retain Kingsdale Advisors to assist it in soliciting proxies using the means referred to above. Advaxis will pay the fees of Kingsdale Advisors, which Advaxis expects to be approximately $250,000, plus reimbursement of out-of-pocket expenses.
   
Q: Who can help answer my questions?
   
A: If you are an Advaxis stockholder and would like additional copies of this proxy statement/prospectus/information statement without charge or if you have questions about the merger, including the procedures for voting your shares, you should contact:

 

Advaxis, Inc.

9 Deer Park Drive, Suite K-1

Monmouth Junction, New Jersey 08852

Attention: Igor Gitelman, VP of Finance and Chief Accounting Officer

Telephone: (609) 452-9813

 

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PROSPECTUS SUMMARY

 

This summary highlights selected information from this proxy statement/prospectus/information statement and may not contain all of the information that is important to you. To better understand the merger and the proposals being considered at the Advaxis special meeting, you should read this entire proxy statement/prospectus/information statement carefully, including the Merger Agreement and the other annexes to which you are referred in this proxy statement/prospectus/information statement. For more information, please see the section titled “Where You Can Find More Information” beginning on page 241 of this proxy statement/prospectus/information statement. Except where specifically noted, the following information and all other information contained in this proxy statement/prospectus/information statement does not give effect to the proposed reverse stock split described in Proposal No. 2 of this proxy statement/prospectus/information statement.

 

The Companies

 

Advaxis, Inc.

 

9 Deer Park Drive, Suite K-1

Monmouth Junction, New Jersey 08852

Telephone: (609) 452-9813

 

Advaxis is a clinical-stage biotechnology company focused on the development and commercialization of proprietary Lm Technology antigen delivery products based on a platform technology that utilizes live attenuated Listeria monocytogenes, or Lm, bioengineered to secrete antigen/adjuvant fusion proteins. These Lm-based strains are believed to be a significant advancement in immunotherapy as they integrate multiple functions into a single immunotherapy by accessing and directing antigen-presenting cells, or APCs, to stimulate anti-tumor T cell immunity, stimulate and activate the innate immune system with the equivalent of multiple adjuvants, and simultaneously reduce tumor protection in the tumor micro-environment, or TME, to enable the T cells to attack tumor cells.

 

The Company believes that its current pipeline evaluating off-the shelf, neoantigen-directed immunotherapies (i.e., our HOT program) can address significant unmet needs in the current oncology treatment landscape. Specifically, our first drug construct from the HOT program is ADXS-503 (HOT Lung), which has been designed to treat non-small cell lung cancer (NSCLC), and has the potential to optimize checkpoint inhibitors’ performance in NSCLC, while having a generally well-tolerated safety profile. On July 15, 2021, the Company announced the initiation of a Phase 1 clinical study evaluating the second drug construct from our HOT program, ADXS-504 (HOT Prostate), in patients with biochemically recurrent prostate cancer. The study, being conducted at Columbia University Irving Medical Center, is the first clinical evaluation of ADXS-504 for the treatment of early prostate cancer.

 

Advaxis has completed and closed out clinical studies of Lm Technology immunotherapies in several program areas including the following:

 

  Human Papilloma Virus (“HPV”) associated cancers
     
  Personalized neoantigen-directed therapies
     
  Prostate-specific antigen (“PSA”) directed therapy

 

While we have been winding down clinical studies of Lm Technology immunotherapies in these program areas, our license agreements continue with OS Therapies, LLC for ADXS-HER2 and with Global BioPharma, or GBP, for the exclusive license for the development and commercialization of ADXS-HPV or AXAL in Asia, Africa, and the former USSR territory, exclusive of India and certain other countries.

 

During the period of 2020-2021, Advaxis undertook a confidential, strategic review process, which was intended to result in an actionable plan that leverages its assets, capital and capabilities to maximize stockholder value. Following an extensive process of evaluating strategic alternatives and identifying and reviewing potential candidates for a strategic acquisition or other transaction, on July 4, 2021, Advaxis entered into the Merger Agreement with Biosight, under which a wholly owned subsidiary of Advaxis will merge with and into the privately held Biosight. If the merger is completed, the business of Biosight will continue as the business of the combined organization.

 

 

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Biosight Ltd.

 

3 Hayarden St., Airport City

P.O.B. 1083

Lod 7019802

Israel

Telephone: +972 (3) 656 8669

 

Biosight is a private Phase 2 clinical-stage biotechnology company developing an innovative therapeutic for hematological malignancies and disorders. Biosight’s investigational product, aspacytarabine (BST-236), is an innovative, proprietary anti-metabolite that seeks to address unmet medical needs by enabling high-dose chemotherapy with reduced systemic toxicity. BST-236 is currently being evaluated as a single agent in a Phase 2b clinical trial, which recently completed enrollment, for the first-line treatment of acute myeloid leukemia (“AML”). Interim results demonstrate tolerability with promising efficacy among the challenging population of AML patients who are unfit for intensive standard-of-care chemotherapy. An additional Phase 2 study in patients with relapsed/refractory AML and myelodysplastic syndrome (“MDS”) in collaboration with the European Myelodysplastic Syndrome Cooperative Group was recently launched. A similar Phase 2 study is to be initiated in the US in 2021.

 

Advaxis Ltd.

9 Deer Park Drive, Suite K-1

Monmouth Junction, New Jersey 08852

(609) 452-9813

Merger Sub is a direct, wholly owned subsidiary of Advaxis and was formed solely for the purpose of carrying out the merger.

 

The Merger (see page 73)

 

If the merger is completed, Merger Sub will merge with and into Biosight, with Biosight surviving the merger as a wholly owned subsidiary of Advaxis.

 

Subject to the terms and conditions of the Merger Agreement, at the closing of the merger, (a) each then issued and outstanding share of Biosight’s share capital will be converted into the right to receive a number of shares of Advaxis common stock, after giving effect to a reverse stock split of Advaxis common stock described below, calculated in accordance with the exchange ratio set forth in the Merger Agreement; and (b) each then outstanding and unexercised Biosight option to purchase Biosight ordinary shares will be assumed by Advaxis with the number of shares subject to such option and its exercise price being adjusted as set forth in the Merger Agreement.

 

Under the exchange ratio formula in the Merger Agreement, upon the closing of the merger, on a pro forma basis and based upon the number of shares of Advaxis common stock expected to be issued in the merger, pre-merger Advaxis stockholders will own approximately 25% of the combined company and pre-merger Biosight shareholders will own approximately 75% of the combined company.

 

Each share of Advaxis common stock issued and outstanding at the time of the merger will remain issued and outstanding and such shares will be appropriately adjusted to reflect the proposed reverse stock split of Advaxis common stock. In addition, each option and warrant to purchase shares of Advaxis common stock that is outstanding immediately prior to the effective time of the merger, whether vested or unvested, will survive the closing and remain outstanding in accordance with its terms. The number of shares of Advaxis common stock underlying such options and warrants, and the exercise prices for such stock options, will be appropriately adjusted to reflect the proposed reverse stock split of Advaxis common stock. If any holder of a warrant to purchase Advaxis common stock issued in connection with Advaxis’ September 2018 offering properly exercises such holder’s right to receive a cash payment in connection with the merger pursuant to the terms and conditions of the underlying agreement governing such warrant, Advaxis shall promptly pay such cash payment to such holder, in each case in such amount as determined in accordance with, and pursuant to the procedures set forth in, such agreement governing such warrant.

 

 

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For a more complete description of the merger and the exchange ratio, please see the section titled “The Merger Agreement” in this proxy statement/prospectus/information statement.

 

The merger will be completed as promptly as practicable, but in no event later than the second (2nd) business day after all of the conditions to consummation of the merger set forth in the Merger Agreement are satisfied or waived (save and except for those conditions that by their nature are to be satisfied at the closing, but subject to the satisfaction or waiver of each of such conditions), including the adoption of the Merger Agreement by the Biosight shareholders and the approval by the Advaxis stockholders of the issuance of Advaxis common stock in the merger and the reverse stock split of Advaxis common stock. The merger is anticipated to close promptly after the Advaxis special meeting scheduled to be held on November 16, 2021. However, Advaxis and Biosight cannot predict the exact timing of the completion of the merger because it is subject to the satisfaction or waiver of various conditions. After completion of the merger, assuming that Advaxis receives the required stockholder approval, Advaxis will be renamed “Biosight Therapeutics Inc.”

 

Reasons for the Merger (see pages 85 and 88)

 

After consideration and consultation with its senior management and its financial and legal advisors, the Advaxis board of directors unanimously determined that the Merger Agreement, the merger and other transactions contemplated thereby are advisable, fair to and in the best interests of Advaxis and its stockholders. The Advaxis board of directors considered various reasons to reach its determination. For example:

 

  During its evaluation of the Merger Agreement and the transactions contemplated by the Merger Agreement, the Advaxis board of directors considered several factors in its decision to approve the Merger Agreement with Biosight.
     
  The Advaxis board of directors assessed the financial condition and prospects of Advaxis and risks associated with continued operations; considered the expected cash resources of the combined company and the likelihood the combined company would possess sufficient cash resources to fund future product development; and analyzed the potential strategic alternatives of other merger partner candidates. Further, Advaxis management conducted scientific, regulatory, and technical due diligence of the regulatory pathway for, and market opportunity of, Biosight’s product candidates. The current financial market conditions and historical market prices, volatility, and trading information for Advaxis common stock was considered by the Advaxis board of directors as well.
     
  The Advaxis board of directors considered the experience of the senior management team and board of directors of the combined company, which will consist of experienced representatives from both the current Advaxis and Biosight management team and board of directors.
     
  The Advaxis board of directors reviewed the terms of the Merger Agreement and related transaction documents, concluding the terms, in the aggregate, were reasonable. The Advaxis board of directors considered the fairness opinion provided by LifeSci Capital LLC, which included its financial analysis, from a financial point of view, of the exchange ratio to be paid by Advaxis pursuant to the Merger Agreement terms.
     
  The Advaxis board of directors also considered, in its deliberations, the variety of risks and other countervailing factors related to entering into the Merger Agreement, including the potential effect of the termination fee; substantial expense incurred in connection with the merger; the scientific, technical, regulatory and other risks and uncertainties associated with the development and commercialization of Biosight’s product candidates; the risk of a lack of available sources of financing necessary to fund product development; and various other risks.
     
  The Advaxis board of directors consider the factors overall to be favorable to, and to support, its determination of approval of the Merger Agreement.

 

 

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The Biosight board of directors has unanimously approved the Merger Agreement, the merger and the transactions contemplated thereby. The Biosight board of directors reviewed several factors in reaching its decision and believes that the Merger Agreement, the merger and the transactions contemplated thereby are in the best interests of Biosight and its stockholders. Several factors considered by the Biosight board of directors included:

 

  the potential increased access to sources of capital and a broader range of investors to support the clinical development of its product candidates following consummation of the transaction compared to if Biosight continued to operate as a privately held company;
     
  the cash resources of the combined organization, with $78.3 million of cash and cash equivalents on a pro forma basis as of April 30, 2021 after giving effect to the merger, which Biosight believes is sufficient to enable Biosight to pursue its near term clinical trials and business plans; and
     
  the expectation that the merger with Advaxis would be a more time- and cost-effective means to access capital than other options considered by the Biosight board, including additional private financings or an initial public offering.

 

For a more complete description of the reasons for the merger, please see the sections titled “The Merger—Advaxis Reasons for the Merger” and “The Merger—Biosight Reasons for the Merger” beginning on pages 85 and 88, respectively, of this proxy statement/prospectus/information statement.

 

Opinion of the Advaxis Financial Advisor (see page 90)

 

LifeSci Capital rendered its opinion to the Advaxis board of directors that, as of July 2, 2021, based on and subject to the factors and assumptions set forth in the opinion, the exchange ratio was fair, from a financial point of view, to the holders of shares of Advaxis. For a more complete description of the opinion of the Advaxis financial advisor, please see the section titled “The Merger—Opinion of the Advaxis Financial Advisor” beginning on page 90.

 

Interests of Certain Directors, Officers and Affiliates of Advaxis and Biosight (see pages 98 and 102)

 

In considering the recommendation of the Advaxis board of directors with respect to issuing shares of Advaxis common stock pursuant to the Merger Agreement and the other matters to be acted upon by Advaxis stockholders at the Advaxis special meeting, Advaxis stockholders should be aware that certain members of the Advaxis board of directors and executive officers of Advaxis have interests in the merger that may be different from, or in addition to, interests they have as Advaxis stockholders. Advaxis’ executive officers, including Kenneth Berlin, its Chief Executive Officer, who also serves on Advaxis’ board of directors, and Andres Gutierrez, Advaxis’ Chief Medical Officer, are contractually entitled to severance payments, including a cash severance payment equal to a multiple of each person’s base salary (1.75 and 1.0 times the base salary for Mr. Berlin and Mr. Gutierrez, respectively) paid in equal monthly installments (21 and 12 months for Mr. Berlin and Mr. Gutierrez, respectively), plus a target bonus for the fiscal year in which the termination occurs, and health benefit continuation (up to 21 and 12 months for Mr. Berlin and Mr. Gutierrez, respectively) if terminated after the merger.

 

In addition, Mr. Berlin is also entitled to full accelerated vesting of all outstanding equity awards upon a change in control, as defined in his employment agreements, regardless of whether he is terminated.

 

Based on the terms of their respective employment agreements, Advaxis’ current executive officers would be entitled to receive a total value of approximately $2.5 million (collectively, not individually) in connection with the consummation of the merger (under certain conditions) which includes the value associated with the acceleration of outstanding equity awards. Such compensation is the subject of Proposal No. 4.

Additionally:

 

  Kenneth A. Berlin, Dr. David Sidransky and Dr. Samir Khleif, members of the Advaxis board of directors, will continue as directors after the merger, and, following the closing of the merger, Dr. Sidransky and Dr. Samir Khleif will be eligible to be compensated as directors of Advaxis pursuant to the Advaxis compensation policy that is expected to remain in place following the merger. Under the Merger Agreement, Advaxis’ directors and executive officers are entitled to continued indemnification, expense advancement and insurance coverage.

 

 

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  Dr. David Sidransky, a member of the Advaxis board of directors, is a co-founder and owner of Israeli Biotech Fund. Israeli Biotech Fund is an owner of shares of share capital (or options to purchase capital stock) of Biosight. Israeli Biotech Fund I, L.P. and Israeli Biotech Fund II, L.P. collectively own an aggregate of 371,608 of Biosight’s preferred C shares and warrants to purchase up to 48,774 of Biosight’s preferred C shares, which represent, in the aggregate, ownership of approximately 10% of Biosight calculated on a fully diluted basis.
     
  The vesting of approximately 73,777 options granted to Kenneth A. Berlin will accelerate in connection with the closing of the merger.

 

As of July 31, 2021, the directors and executive officers of Advaxis owned, in the aggregate, less than 1% of the outstanding voting shares of Advaxis common stock. Each of the Advaxis’ officers and directors has entered into support agreements in connection with the merger. The support agreements are discussed in greater detail in the section titled “Agreements Related to the Merger” in this proxy statement/prospectus/information statement. The Advaxis board of directors was aware of these interests and considered them, among other matters, in the decision to approve the Merger Agreement. For more information, please see the section titled “The Merger — Interests of the Advaxis Directors and Executive Officers in the Merger” of this proxy statement/prospectus/information statement.

 

In considering the recommendation of the Biosight board with respect to the merger proposal, Biosight shareholders should be aware that the executive officers and directors of Biosight have certain interests in the merger that may be different from, or in addition to, the interests of Biosight shareholders generally. The Biosight board was aware of these interests and considered them, among other matters, in approving the merger agreement and the transactions contemplated thereby and making its recommendation that Biosight shareholders vote in favor of the merger proposal.

These interests include, among others:

 

  as of August 24, 2021, all current directors and executive officers of Biosight, together with their affiliates, owned approximately 25.9% of Biosight’s outstanding share capital which will, at the effective time of the merger, be automatically converted into the right to receive an amount of registered shares of Advaxis common stock equal to the Exchange Ratio; certain Biosight officers and directors, and their affiliates, have also entered into support agreements in connection with the merger. The support agreements are discussed in greater detail in the section titled “Agreements Related to the Merger — Support Agreements” in this proxy statement/prospectus/information statement;
     
  certain of Biosight’s current executive officers and directors hold options to purchase Biosight shares that are outstanding and unexercised immediately prior to the effective time of the merger, which will, at the effective time of the merger, be automatically converted into options to purchase Advaxis common stock. Unvested options held by service providers shall become fully vested at the effective time of the merger;
     
  as of August 24, 2021, certain of Biosight’s directors and executive officers hold 243,296 warrants;
     
  certain of Biosight’s current executive officers and directors are expected to become executive officers and directors of Advaxis upon the closing of the merger; and
     
  Biosight’s current executive officers and directors are entitled to certain liability insurance coverage pursuant to the terms of the Directors and Officers Insurance Policy of Biosight.

 

Management Following the Merger (see page 202)

 

Effective as of the closing of the merger, the combined company’s executive officers are expected to be certain members of the Advaxis and Biosight executive management teams prior to the merger, including:

 

Name   Title
Kenneth Berlin   President and Chief Executive Officer
Roy Golan, CPA, LLM   Chief Financial Officer
Andres Gutierrez, M.D., Ph.D.   Co-Chief Medical Officer

 

Potential PIPE Financing

 

In connection with the merger, Advaxis may seek investments from sources to provide capital for the combined company. Advaxis began fundraising efforts in September 2021 and is seeking to raise at least an aggregate of $25 million in capital to close concurrently with the merger.

 

 

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Overview of the Merger Agreement and Agreements Related to the Merger Agreement

 

Merger Consideration and Adjustment (see page 109)

 

At the effective time of the merger, each share of share capital of Biosight that is issued and outstanding immediately prior to the effective time of the merger will be converted into the right to receive a number of shares of Advaxis common stock.

 

The Merger Agreement does not provide for any adjustment (other than an adjustment as a result of the proposed reverse stock split of Advaxis common stock) to the total number of shares of Advaxis common stock that Biosight shareholders will be entitled to receive as part of the merger, including for changes in the market price of Advaxis common stock. Accordingly, the market value of the shares of Advaxis common stock issued pursuant to the merger will depend on the market value of the shares of Advaxis common stock at the time the merger closes, and could vary significantly from the market value of the shares of Advaxis common stock on the date of this proxy statement/prospectus/information statement.

 

At the effective time of the merger:

 

  each issued and outstanding share of share capital of Biosight (excluding certain Biosight shares that may be cancelled pursuant to the terms and conditions of the Merger Agreement) shall, by virtue of the merger and without any action on the part of the holder thereof, be deemed to have been transferred to Biosight in exchange for the right to receive 118.2009 shares of Advaxis common stock (the “Exchange Ratio”) (subject to adjustment to account for the proposed Advaxis reverse stock split) and, with respect to 102 Biosight Shares (as defined in the Merger Agreement), in exchange for the right to receive 102 Advaxis Shares (as defined in the Merger Agreement);
     
  each ordinary share, par value one Israeli Agora (NIS 0.01) per share, of Merger Sub issued and outstanding immediately prior to the effective time of the merger shall be automatically and without further action converted into and become one validly issued, fully paid and nonassessable ordinary share, par value one Israeli Agora (NIS 0.01) per share, of the surviving company of the merger; and
     
  each option to purchase Biosight shares of share capital outstanding and unexercised immediately prior to the effective time of the merger will be assumed by Advaxis and will become an option to purchase (A) that number of shares of Advaxis common stock (rounded down to the nearest whole share) equal to the product obtained by multiplying (i) the total number of Biosight shares subject to such Biosight option immediately prior to the effective time of the merger by (ii) the Exchange Ratio, (B) at a per share exercise price (rounded up to the nearest whole cent) equal to the quotient obtained by dividing (i) the exercise price per share of a Biosight share at which such Biosight option was exercisable immediately prior to the effective time of the merger by (ii) the Exchange Ratio (rounding the resulting exercise price up to the nearest whole cent), with the Exchange Ratio, in each case, subject to adjustment to account for the proposed Advaxis reverse stock split.

 

Conditions to the Completion of the Merger (see page 112)

 

To consummate the merger, Advaxis stockholders must approve the issuance of shares of Advaxis common stock in the merger to the Biosight shareholders and approve the amendment to the amended and restated certificate of incorporation of Advaxis increasing the number of authorized shares of common stock, if necessary, and effecting the Advaxis reverse stock split. Additionally, the Biosight shareholders must approve the merger and adopt the Merger Agreement and the related transactions. In addition to obtaining such securityholder approvals and appropriate regulatory approvals, each of the other closing conditions set forth in the Merger Agreement must be satisfied or waived, including, among other things:

 

  the registration statement, of which this proxy statement/prospectus/information statement is a part, must have become effective in accordance with the provisions of the Securities Act and must not be subject to any stop order or proceeding, or any proceeding threatened by the SEC, seeking a stop order with respect to the registration statement that has not been withdrawn; and
     
  Nasdaq shall not have rejected Advaxis’ appeal to its determination by the Listing Qualifications Department of The Nasdaq Stock Market LLC that Advaxis is not in compliance with Nasdaq Listing Rule 5550(a)(2), and the shares of Advaxis common stock to be issued in the merger shall be approved for listing (subject to official notice of issuance) on the Nasdaq Capital Market as of the effective time of the merger.

 

 

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No Solicitation (see page 116)

 

Each of Advaxis and Biosight agreed that, subject to limited exceptions, Advaxis and Biosight and any of their respective subsidiaries will not, and each party will not authorize or permit any of its officers, directors, employees, investment bankers, attorneys, accountants, representatives, consultants or other agents retained by it or any of its subsidiaries to, directly or indirectly:

 

  solicit, initiate, encourage, induce or knowingly facilitate the communication, making, submission or announcement of, any “acquisition proposal,” as defined in the Merger Agreement, or take any action that could reasonably be expected to lead to an acquisition proposal;
     
  furnish to any person any non-public information or data with respect to, or cooperate in any way that would otherwise reasonably be expected to lead to, any proposal or inquiry that constitutes, or would reasonably be expected to lead to any acquisition proposal;
     
  enter into, continue or otherwise engage in any discussions or negotiations with any person with respect to any acquisition proposal or any proposal or inquiry that would reasonably be expected to lead to any acquisition proposal;
     
  submit to the stockholders of Advaxis or the shareholders of Biosight, as applicable, for their approval or adoption any acquisition proposal;
     
  approve, declare advisable, adopt or recommend, or publicly propose to approve, declare advisable, adopt or recommend, or allow Advaxis or Biosight, as applicable, or any of their respective subsidiaries, to execute or enter into any binding or non-binding letter of intent, agreement in principle, memorandum of understanding, merger agreement, acquisition agreement, option agreement, joint venture agreement, partnership agreement or other agreement contemplating or otherwise in connection with, or that is intended to or would reasonably be expected to lead to any acquisition proposal;
     
  grant any waiver or release under any confidentiality, standstill or similar agreement, other than to either Advaxis or Biosight, as applicable; or
     
  agree or publicly announce an intention to take any of the foregoing actions.

 

Termination (see page 123)

 

Either Advaxis or Biosight can terminate the Merger Agreement under certain circumstances, which would prevent the merger from being consummated.

 

Termination Fee (see page 123)

 

If the Merger Agreement is terminated under certain circumstances, Advaxis or Biosight, as applicable, will be required to pay the other party a termination fee equal to $7,500,000. In addition, upon termination of the Merger Agreement under certain circumstances, and provided that Advaxis has not paid the $7,500,000 termination fee, Advaxis will be required to pay up to $2,000,000 to Biosight for reimbursement of expenses.

 

Material U.S. Federal Income Tax Consequences of the Merger (see page 103)

 

Morgan Lewis & Bockius LLP has provided to the Company an opinion, attached as Exhibit 8.1 hereto, and subject to customary assumptions, caveats, exceptions and exclusions, that the merger will qualify as a “reorganization” within the meaning of Section 368(a) of the Code and the Treasury Regulations promulgated thereunder. In general, and subject to the exceptions, qualifications and limitations set forth in the sections titled “The Merger—Material U.S. Federal Income Tax Consequences of the Merger,” and “—PFIC Considerations”, assuming the merger qualifies as a “reorganization” within the meaning of Section 368(a) of the Code and the Treasury Regulations promulgated thereunder, the material U.S. federal income tax consequences to a U.S. Holder (as defined in the section titled “The Merger—Material U.S. Federal Income Tax Consequences of the Merger”) of Biosight share capital will be as follows:

 

  each such Biosight shareholder will not recognize gain or loss upon the exchange of Biosight share capital for Advaxis common stock pursuant to the merger;

 

 

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  such Biosight shareholder’s aggregate tax basis for the shares of Advaxis common stock received in the merger will equal the stockholder’s aggregate tax basis in the shares of Biosight share capital surrendered in the merger; and
     
  the holding period of the shares of Advaxis common stock received by such Biosight shareholder in the merger will include the holding period of the shares of Biosight share capital surrendered in exchange therefor.

 

Even if the merger qualifies as a “reorganization”, however, as set forth under “The Merger—Material U.S. Federal Income Tax Consequences of the Merger —PFIC Considerations” below, if Biosight constitutes a “passive foreign investment company” for U.S. federal income tax purposes, which Biosight believes is likely the case for the taxable year that includes the merger and the preceding two years, a U.S. Holder of Biosight share capital may be required to recognize gain (but not loss), and not be eligible for favorable capital gains rates, upon a disposition of Biosight share capital unless such U.S. Holder has made one of several elections with respect to Biosight, at least one of which we generally do not anticipate will have been available. The opinion of Morgan Lewis & Bockius LLP described above expresses no opinion as to the potential impact of the PFIC rules on a U.S. Holder’s treatment in the merger.

 

Determining the actual U.S. federal income tax consequences of the merger to you may be complex and will depend on the facts of your own situation. You should consult your tax advisors to fully understand the tax consequences to you of the merger, including the estate, gift, state, local or non-U.S. tax consequences of the merger.

 

Nasdaq Stock Market Listing (see page 108)

 

Advaxis will file an initial listing application for the combined company common stock with Nasdaq. If such application is accepted, Advaxis anticipates that the common stock of the combined company will be listed on The Nasdaq Capital Market following the closing of the merger under the trading symbol “BSTX.”

 

Anticipated Accounting Treatment (see page 107)

 

The merger will be accounted for as a reverse recapitalization in accordance with U.S. generally accepted accounting principles, or U.S. GAAP. Under this method of accounting, Biosight will be deemed to be the accounting acquirer for financial reporting purposes. As a result of the merger, the net assets of Advaxis will be recorded at their acquisition-date fair value in the financial statements of Biosight and the reported operating results prior to the merger will be those of Biosight.

 

Appraisal Rights and Dissenters’ Rights (see page 108)

 

Under the Delaware General Corporation Law (“DGCL”), Advaxis stockholders are not entitled to appraisal rights in connection with the merger.

 

Comparison of Rights of Holders of Shares (see page 226)

 

Advaxis is incorporated under the laws of the State of Delaware and Biosight is a company organized under the laws of Israel. If the merger is completed, Biosight shareholders will become holders of Advaxis common stock and will have different rights as holders of Advaxis common stock than they had as holders of Biosight ordinary shares or preferred shares. The differences between the rights of these respective holders result from the differences between (1) Israeli and Delaware law and (2) the respective governing documents of Biosight and Advaxis, as the same may be amended in connection with the merger. For additional information, see the section titled “Comparison of Rights of Holders of Advaxis Capital Stock and Biosight Share Capital” beginning on page 226 of this proxy statement/prospectus/information statement.

 

 

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Risk Factors (see page 19)

 

Both Advaxis and Biosight are subject to various risks associated with their businesses and their industries. In addition, the merger, including the possibility that the merger may not be completed, poses a number of risks to each company and its respective securityholders, including, without limitation, the following risks:

 

  The exchange ratio will not be adjusted based on the market price of Advaxis common stock, so the merger consideration at the closing may have a greater or lesser value than at the time the Merger Agreement was signed;
     
  Failure to complete the merger may result in Advaxis or Biosight paying a termination fee or Advaxis reimbursing expenses of Biosight, which could harm the common stock price of Advaxis and the future business and operations of each company;
     
  If the conditions to the merger are not satisfied or waived, the merger will not occur;
     
  The merger may be completed even though material adverse effects may result from the announcement of the merger, changes in or affecting the industries in which Advaxis or Biosight operate and other causes;
     
  If Advaxis and Biosight complete the merger, the combined company will need to raise additional capital by issuing equity securities or incurring additional debt or by entering into licensing arrangements, which may cause significant dilution to the combined company’s stockholders or restrict the combined company’s operations;
     
  Some Advaxis and Biosight executive officers and directors have interests in the merger that are different from yours and that may influence them to support or approve the merger without regard to your interests;
     
  Advaxis’ stockholders may not realize a benefit from the merger commensurate with the ownership dilution they will experience in connection with the merger; and
     
  If the merger is not completed, Advaxis’ stock price may fluctuate significantly.

 

These risks and other risks are discussed in greater detail under the section titled “Risk Factors” beginning on page 19 of this proxy statement/prospectus/information statement. Advaxis and Biosight both encourage you to read and consider all of these risks carefully.

 

 

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MARKET PRICE AND DIVIDEND INFORMATION

 

The closing price of Advaxis common stock on July 2, 2021, the last trading day prior to the public announcement of the merger, was $0.47 per share, and the closing price of Advaxis common stock on August 24, 2021 was $0.42 per share, in each case as reported on The Nasdaq Capital Market. As of September 17, 2021, there were approximately 95 holders of record of Advaxis’ common stock.

 

Because the market price of Advaxis common stock is subject to fluctuation, the market value of the shares of Advaxis common stock that Biosight shareholders will be entitled to receive in the merger may increase or decrease.

 

Biosight is a private company and its shares of ordinary shares and preferred shares are not publicly traded.

 

Dividends

 

Advaxis has never declared or paid cash dividends on its capital stock and does not anticipate paying any cash dividends in the foreseeable future. Biosight has never paid or declared any cash dividends on its share capital. Biosight intends to retain all available funds and any future earnings for use in the operation of its business and does not anticipate paying any cash dividends on its share capital in the foreseeable future. Notwithstanding the foregoing, any determination to pay cash dividends subsequent to the merger will be at the discretion of the combined company’s board of directors and will depend upon a number of factors, including the combined company’s results of operations, financial condition, future prospects, contractual restrictions, restrictions imposed by applicable law and other factors the combined company’s board of directors deems relevant.

 

 

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RISK FACTORS

 

The combined company (for the purpose of this “Risk Factors” section, “we,” “us” and “our”) will be faced with a market environment that cannot be predicted and that involves significant risks and uncertainties, many of which will be beyond our control. You should carefully consider all of the information set forth in this proxy statement/prospectus/information statement. The combined company’s business, financial condition and results of operations could be materially and adversely affected by any of these risks. In that event, the trading price of our ordinary shares would likely decline and you might lose all or part of your investment. In addition to the other information contained in this proxy statement/prospectus/information statement, you should carefully consider the material risks described below before deciding how to vote your shares of Advaxis common stock. You should also read and consider the other information in this proxy statement/prospectus/information statement and additional information about Advaxis set forth in its Annual Report on Form 10-K for the fiscal year ended October 31, 2020, which is filed with the Securities and Exchange Commission, or the SEC, as updated by its Quarterly Reports on Form 10-Q. Please see the section titled “Where You Can Find More Information” beginning on page 241 of this proxy statement/prospectus/information statement for further information. This proxy statement/prospectus/information statement also contains forward-looking statements that involve risks and uncertainties. Our results could materially differ from those anticipated in these forward-looking statements, as a result of certain factors including the risks described below and elsewhere in this report and our other SEC filings. See also “Special Note Regarding Forward-Looking Statements” on page 67 of this proxy statement/prospectus/information statement.

 

Summary of Risk Factors

 

The summary below provides a high-level overview of the risks that the combined company faces, as well as those faced by our industry, and is intended to enhance the readability and accessibility of our disclosures. These risks include, but are not limited to:

 

Risks Related to the Merger

 

  The exchange ratio will not be adjusted based on the market price of Advaxis common stock, so the merger consideration at the closing may have a greater or lesser value than at the time the Merger Agreement was signed.
     
  Failure to complete the merger may result in either Advaxis or Biosight paying a termination fee or reimbursing expenses to the other party, which could harm the common stock price of Advaxis and future business and operations of each company.
     
  If the conditions to the merger are not satisfied or waived, the merger may not occur.
     
  The merger may be completed even though a material adverse effect may result from the announcement of the merger, industry wide changes or other causes.

 

Risks Related to the Proposed Reverse Stock Split

 

  The reverse stock split may not increase the combined company’s stock price over the long term.
     
  The reverse stock split may decrease the liquidity of the combined company’s common stock.
     
  The reverse stock split may lead to a decrease in the combined company’s overall market capitalization.

 

Risks Related to the Combined Company

 

  The combined company (for the purpose of this “Risk Factors” section, “we,” “us” and “our”) will need substantial additional funding before we can complete the development of our product candidates. If we are unable to obtain such additional capital on favorable terms, or at all, we would be forced to delay, reduce or eliminate our product development and clinical programs and may not have the capital required to otherwise operate our business.

 

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  We may be exposed to increased litigation, including stockholder litigation, which could have an adverse effect on our business and operations.

 

Risks Relating to Our Business and Capital Requirements

 

  Our limited operating history and lack of any product revenue;
     
  Impacts of the COVID-19 pandemic;
     
  Our recurring losses from operations that raise substantial doubt about our ability to continue as a going concern;
     
  Our ability to establish sales, marketing and distribution capabilities on our own or in collaboration with third parties;
     
  Our need for substantial additional capital to fund our development and commercialization efforts;

 

Risks Related to the Discovery and Clinical Development of Our Product Candidates

 

  Our dependence on the success of our investigational product candidate, BST-236;
     
  Substantial costs and difficult implementation of the clinical studies required for our product candidates;
     
  Our ability to successfully enroll and retain patients in our clinical trials;
     
  Outcomes of our preclinical studies as compared to the success of our later clinical studies;
     
  Our success in identifying patients and achieving a significant market share for our product candidates despite a small target patient population;
     
  The extent to which our product candidates receive broad market acceptance by the medical community, patients and third-party payors;
     
  Our failure to capitalize on successful product candidates;
     
  The extent to which we can successfully identify, discover or maintain rights to new or additional product candidates;

 

Risks Related to the Marketing and Other Regulatory Approval of Our Product Candidates

 

  Maintaining compliance with the requisite regulatory requirements on an ongoing basis;
     
  Obtaining marketing approval in every jurisdiction where we seek to market and commercialize our product candidates;
     
  Exposure to fraud and abuse and other healthcare law violations as a result of our relationships with collaborators and customers;

 

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  Our ability to maintain and benefit from the regulatory fast track and orphan drug designations for our product candidates;
     
  Effects of our product candidates on pricing regulations, reimbursement practices or healthcare reform initiatives;

 

Risks Related to Our Dependence on Third Parties

 

  Our dependence on third-party collaborators with respect to clinical trials and the manufacturing of our product candidates;

 

Risks Related to Legal and Compliance Requirements

 

  Compliance with government regulations in the United States and abroad, including extensive environmental, health and safety requirements;
     
  Exposure to product liability claims;

 

Risks Related to Our Intellectual Property

 

  Obtaining and maintaining sufficient protection of our proprietary rights, including our patents and other intellectual property for our product candidates;
     
  Protection of our intellectual property rights in the United States and abroad; and
     
  Successfully enforcing our patent and intellectual property rights against competitors, as well as defending ourselves in potential infringement litigation.

 

Risks Related to the Merger

 

The exchange ratio will not be adjusted based on the market price of Advaxis common stock, so the merger consideration at the closing may have a greater or lesser value than at the time the Merger Agreement was signed.

 

At the effective time of the merger, outstanding Biosight share capital will be converted into shares of the combined company’s common stock. Applying the exchange ratio, the former Biosight shareholders immediately before the merger are expected to own approximately 75% of the aggregate number of shares of the combined company’s common stock following the merger, and Advaxis stockholders immediately before the merger are expected to own approximately 25% of the aggregate number of shares of the combined company’s common stock following the merger, subject to certain assumptions.

 

Any changes in the market price of Advaxis stock before the completion of the merger will not affect the number of shares Biosight shareholders will be entitled to receive pursuant to the Merger Agreement. Therefore, if before the completion of the merger, the market price of Advaxis common stock increases from the market price on the date of the Merger Agreement, then Biosight shareholders could receive merger consideration with substantially more value for their Biosight shares than the parties had negotiated when they established the exchange ratio. Similarly, if before the completion of the merger the market price of Advaxis common stock declines from the market price on the date of the Merger Agreement, then Biosight shareholders could receive merger consideration with substantially lower value. The Merger Agreement does not include a price-based termination right.

 

If the conditions to the merger are not satisfied or waived, the merger may not occur.

 

Even if the Merger Agreement is adopted by the stockholders of Biosight and Proposal Nos. 1, 2 and 3 as described in this proxy statement/prospectus/information statement are approved by the Advaxis stockholders, specified conditions must be satisfied or waived to complete the merger. These conditions are set forth in the Merger Agreement and described in the section titled “The Merger Agreement—Conditions to the Completion of the Merger” beginning on page 112 of this proxy statement/prospectus/information statement. Advaxis and Biosight cannot assure you that all of the conditions to the consummation of the merger will be satisfied or waived. If the conditions are not satisfied or waived, the merger may not occur or the closing may be delayed, and Advaxis and Biosight each may lose some or all of the intended benefits of the merger.

 

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The merger may be completed even though a material adverse effect may result from the announcement of the merger, industry wide changes or other causes.

 

In general, neither Advaxis nor Biosight is obligated to complete the merger if there is a material adverse effect affecting the other party between July 4, 2021, the date of the Merger Agreement, and the closing of the merger. However, certain types of changes are excluded from the concept of a “material adverse effect.” Such exclusions include but are not limited to changes in general economic or market conditions, industry wide changes, changes in U.S. GAAP, changes in laws, rules or regulations of general applicability or interpretations thereof, natural disasters, pandemics (including the COVID-19 pandemic), outbreaks of hostilities or acts of terrorism, changes resulting from the announcement, performance or pendency of the merger, changes in the price or trading volume of Advaxis common stock, and failures to meet internal or third-party guidance or forecasts. Therefore, if any of these events were to occur, impacting Advaxis or Biosight, the other party would still be obliged to consummate the closing of the merger. If any such adverse changes occur and Advaxis and Biosight consummate the closing of the merger, the stock price of the combined company may suffer. This in turn may reduce the value of the merger to the stockholders of Advaxis, Biosight or both. For a more complete discussion of what constitutes a material adverse effect on Advaxis or Biosight, see the section titled “The Merger Agreement—Representations and Warranties” beginning on page 115 of this proxy statement/prospectus/information statement.

 

If Advaxis and Biosight complete the merger, the combined company will need to raise additional capital by issuing equity securities or additional debt or through licensing arrangements, which may cause significant dilution to the combined company’s stockholders or restrict the combined company’s operations.

 

Additional financing may not be available to the combined company when it is needed or may not be available on favorable terms. To the extent that the combined company raises additional capital by issuing equity securities, such financing will cause additional dilution to all securityholders of the combined company, including Advaxis’ pre-merger stockholders and Biosight’s former shareholders. It is also possible that the terms of any new equity securities may have preferences over the combined company’s common stock. Any debt financing the combined company enters into may involve covenants that restrict its operations. These restrictive covenants may include limitations on additional borrowing and specific restrictions on the use of the combined company’s assets, as well as prohibitions on its ability to create liens, pay dividends, redeem its stock or make investments. In addition, if the combined company raises additional funds through licensing arrangements, it may be necessary to grant licenses on terms that are not favorable to the combined company. Alternatively, in connection with the Merger, Advaxis may seek investments from outside sources to provide capital for the combined company.

 

Advaxis and Biosight directors and executive officers have interests in the merger that are different from yours and that may influence them to support or approve the merger without regard to your interests.

 

Directors and executive officers of Advaxis and Biosight have interests in the merger that are different from, or in addition to, the interests of other Advaxis stockholders generally. These interests with respect to Advaxis’ directors and executive officers may include, among others, acceleration of equity award vesting and severance payments if employment is terminated in a qualifying termination in connection with the merger. Three current member of the Advaxis board of directors will continue as directors of the combined company after the effective time of the merger, and, following the closing of the merger, two will be eligible to be compensated as non-employee directors of the combined company pursuant to the Advaxis non-employee director compensation policy that is expected to remain in place following the effective time of the merger, and current members of the Advaxis executive management team will continue with the combined company. These interests with respect to Biosight’s directors and executive officers may include, among others, that certain of Biosight’s directors and executive officers have options, subject to vesting, to purchase shares of Biosight ordinary shares which, at the effective time of the merger, will be converted into and become fully vested options to purchase shares of the common stock of the combined company; Biosight’s executive officers are expected to continue as executive officers of the combined company after the effective time of the merger; and all of Biosight’s directors and executive officers are entitled to certain indemnification and liability insurance coverage pursuant to the terms of the Merger Agreement. Further, certain current members of Biosight’s board of directors will continue as directors of the combined company after the effective time of the merger, and, following the closing of the merger, will be eligible to be compensated as non-employee directors of the combined company pursuant to the Advaxis non-employee director compensation policy that is expected to remain in place following the effective time of the merger. Certain directors and executive officers own options to purchase the shares of their respective companies.

 

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The Advaxis and Biosight boards of directors were aware of and considered those interests, among other matters, in reaching their decisions to approve and adopt the Merger Agreement, approve the merger, and recommend the approval of the Merger Agreement to Advaxis and Biosight shareholders. These interests, among other factors, may have influenced the directors and executive officers of Advaxis and Biosight to support or approve the merger.

 

For more information regarding the interests of Advaxis and Biosight directors and executive officers in the merger, please see the sections titled “The Merger—Interests of Advaxis Directors and Executive Officers in the Merger” beginning on page 97 and “The Merger—Interests of Biosight Directors and Executive Officers in the Merger” beginning on page 101 of this proxy statement/prospectus/information statement.

 

Advaxis stockholders may not realize a benefit from the merger commensurate with the ownership dilution they will experience in connection with the merger.

 

During the period of 2020-2021, Advaxis undertook a confidential, strategic review process, which was intended to result in an actionable plan that leverages its assets, capital and capabilities to maximize stockholder value. Following an extensive process of evaluating strategic alternatives and identifying and reviewing potential candidates for a strategic acquisition or other transaction, on July 4, 2021, Advaxis entered into a Merger Agreement with Biosight, under which the privately held Biosight will merge with a wholly-owned subsidiary of Advaxis. Pre-merger Advaxis shareholders will own approximately 25% of the combined company and pre-merger Biosight shareholders will own approximately 75% of the combined company. Advaxis is devoting substantially all of its time and resources to consummating this transaction; however, there can be no assurance that such activities will result in the consummation of this transaction or that such transaction will deliver the anticipated benefits or enhance stockholder value. If the combined company is unable to realize the full strategic and financial benefits currently anticipated from the merger, Advaxis stockholders will have experienced substantial dilution of their ownership interests without receiving any commensurate benefit, or only receiving part of the commensurate benefit to the extent the combined company is able to realize only part of the strategic and financial benefits currently anticipated from the merger.

 

If the merger is not completed, Advaxis’ stock price may fluctuate significantly.

 

The market price of Advaxis’ common stock is subject to significant fluctuations. During the 12-month period ended August 24, 2021, the closing sales price of Advaxis’ common stock on The Nasdaq Capital Market ranged from a high of $1.41 on February 17, 2021, to a low of $0.28 on November 24, 2020. Market prices for securities of pharmaceutical, biotechnology and other life science companies have historically been particularly volatile. In addition, the market price of Advaxis common stock will likely be volatile based on whether stockholders and other investors believe that Advaxis can complete the merger or otherwise raise additional capital to support Advaxis’ operations if the merger is not consummated and another strategic transaction cannot be identified, negotiated and consummated in a timely manner, if at all. The volatility of the market price of Advaxis common stock is exacerbated by low trading volume. Additional factors that may cause the market price of Advaxis common stock to fluctuate include:

 

  the initiation of, material developments in, or conclusion of litigation to enforce or defend its intellectual property rights or defend against claims involving the intellectual property rights of others;
     
  the entry into, or termination of, key agreements, including commercial partner agreements;
     
  announcements by commercial partners or competitors of new commercial products, clinical progress or lack thereof, significant contracts, commercial relationships or capital commitments;
     
  the introduction of technological innovations or new therapies that compete with its future products;

 

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  the loss of key employees;
     
  future sales of its common stock;
     
  general and industry-specific economic conditions that may affect its research and development expenditures;
     
  the failure to meet industry analyst expectations; and
     
  period-to-period fluctuations in financial results.

 

Moreover, the stock markets in general have at times experienced substantial volatility that has often been unrelated to the operating performance of individual companies. These broad market fluctuations may also adversely affect the trading price of Advaxis common stock. In the past, following periods of volatility in the market price of a company’s securities, stockholders have often instituted class action securities litigation against such companies.

 

Advaxis stockholders and Biosight shareholders will have a reduced ownership and voting interest in, and will exercise less influence over the management of, the combined company following the completion of the merger as compared to their current ownership and voting interests in the respective companies.

 

After the completion of the merger, the current stockholders of Advaxis and shareholders of Biosight will own a smaller percentage of the combined company than their ownership of their respective companies prior to the merger. Immediately after the merger, Advaxis stockholders as of immediately prior to the merger are expected to own approximately 25% of the outstanding shares of the combined company and former Biosight shareholders are expected to own approximately 75% of the outstanding shares of the combined company.

 

During the pendency of the merger, Advaxis and Biosight may not be able to enter into a business combination with another party on more favorable terms because of restrictions in the Merger Agreement, which could adversely affect their respective business prospects.

 

Covenants in the Merger Agreement impede the ability of Advaxis and Biosight to make acquisitions during the pendency of the merger, subject to specified exceptions. As a result, if the merger is not completed, the parties may be at a disadvantage to their competitors during that period. In addition, while the Merger Agreement is in effect, each party is generally prohibited from soliciting, proposing, seeking or knowingly encouraging, facilitating or supporting any inquiries, indications of interest, proposals or offers that constitute or may reasonably be expected to lead to certain transactions involving a third party, including a merger, sale of assets or other business combination, subject to specified exceptions. Any such transactions could be favorable to such party’s stockholders, but the parties may be unable to pursue them. For more information, see the section titled “The Merger Agreement—Non-Solicitation.”

 

Certain provisions of the Merger Agreement may discourage third parties from submitting competing proposals, including proposals that may be superior to the transactions contemplated by the Merger Agreement.

 

The terms of the Merger Agreement prohibit each of Advaxis and Biosight from soliciting or engaging in discussions with third parties regarding alternative acquisition proposals, except in limited circumstances when such party’s board of directors determines in good faith that an unsolicited acquisition proposal constitutes or could reasonably be expected to lead to a superior proposal and that failure to take such action would reasonably be expected to be inconsistent with its fiduciary duties under applicable law, as described in further detail in the section titled “The Merger Agreement—Non-Solicitation.” In addition, if the Merger Agreement is terminated by Advaxis or Biosight under certain circumstances, including because of a decision of Advaxis’ board of directors to accept a superior proposal, Advaxis would be required to pay Biosight a termination fee of $7.5 million or reimburse Biosight’s expenses up to a maximum of $2.0 million. This termination fee may discourage third parties from submitting alternative takeover proposals to Advaxis or its stockholders, and may cause Advaxis’ board of directors to be less inclined to recommend an alternative proposal.

 

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Because the lack of a public market for Biosight’s shares makes it difficult to evaluate the fair market value of Biosight’s share capital, Advaxis may pay more than the fair market value of Biosight’s share capital and/or the shareholders of Biosight may receive consideration in the merger that is less than the fair market value of Biosight’s share capital.

 

The outstanding share capital of Biosight is privately held and is not traded in any public market. The lack of a public market makes it difficult to determine the fair market value of Biosight’s share capital. Because the percentage of Advaxis equity to be issued to Biosight shareholders was determined based on negotiations between the parties, it is possible that the value of the Advaxis common stock to be received by Biosight shareholders will be less than the fair market value of Biosight’s capital stock, or Advaxis may pay more than the aggregate fair market value for Biosight’s share capital.

 

Because Biosight believes it is likely a PFIC in the taxable year that includes the merger, even if the merger qualifies as a “reorganization” for U.S. federal income tax purposes, the merger may not be tax-free to certain U.S. shareholders of Biosight, resulting in recognition of taxable gain or loss by Biosight shareholders in respect of their Biosight capital stock.

 

As noted above, Morgan Lewis & Bockius LLP has provided an opinion attached hereto as Exhibit 8.1, subject to customary assumptions, exclusions, exceptions and caveats, to the effect that under the U.S. federal income tax laws in effect as of the date of the opinion, and subject to the caveats and qualifications set forth therein, the merger will qualify as a “reorganization” within the meaning of Section 368(a) of the Code and the Treasury Regulations promulgated thereunder. Even assuming the merger qualifies as a “reorganization”, however, if Biosight qualifies as a PFIC for U.S. federal income tax purposes, which Biosight believes is likely the case for the taxable year that includes the merger and the preceding two years, a U.S. Holder (as defined in the section titled “The Merger—Material U.S. Federal Income Tax Consequences of the Merger”) of Biosight share capital may recognize gain (but not loss), and not be eligible for favorable capital gains rates, upon consummation of the merger as described more fully in the section titled “The Merger – Material U.S. Federal Income Tax Consequences of the Merger – PFIC Considerations” unless the U.S. Holder has made one of several elections with respect to Biosight, at least one of which we do not generally believe will have been available. The opinion of Morgan Lewis & Bockius LLP described above expresses no opinion as to the potential impact of the PFIC rules on a U.S. Holder’s treatment in the merger.

 

Each holder of Biosight capital stock is urged to consult with his, her or its own tax advisor with respect to the tax consequences of the merger.

 

The announcement and pendency of the merger, whether or not consummated, may adversely affect the trading price of Advaxis’ common stock and its business prospects.

 

The announcement and pendency of the merger, whether or not consummated, may adversely affect the trading price of Advaxis’ common stock and its business prospects. In the event that the merger is not completed, the announcement of the termination of the Merger Agreement may also adversely affect the trading price of Advaxis’ common stock and its business prospects.

 

Biosight received a letter from counsel to an Israeli company, claiming that such company is entitled to an amount equal to 4.8% of the share capital to be allocated and/or issued to Biosight shareholders in connection with the merger pursuant to a purported agreement between Biosight and such company allegedly entered into in 2011.

 

On or about October 5, 2021, Biosight received a letter from counsel to Foodronix Ltd., an Israeli company (“Foodronix”), claiming that Foodronix is entitled to an amount equal to 4.8% of the share capital to be allocated and/or issued to Biosight shareholders in connection with the merger. The asserted entitlement is alleged to arise pursuant to a purported agreement between Biosight and Foodronix, which Foodronix claims was entered into in 2011.

 

Biosight believes that during March 2011, meetings were held by Biosight’s former chief executive officer with several companies in an effort to identify a shell company listed on the Tel Aviv Stock Exchange to merge with Biosight in order for Biosight to become public. While no such transaction occurred, and Foodronix has had no involvement with the merger, if Foodronix is found to have some entitlement to compensation as a result of its alleged claims, the combined company could be subject to damages, which could have an adverse effect on the combined company’s operating results and financial condition, or the combined company’s shareholders could be subject to substantial dilution without receiving any commensurate benefit. The combined company’s management may also be distracted from operations in addressing the claims of the letter.

 

For additional information regarding the claim from Foodronix, please see the section titled “Biosight’s Business—Legal Proceedings” beginning on page 176 of this proxy statement/prospectus/information statement.

 

Failure to consummate the merger may result in Advaxis paying a termination fee to Biosight and could harm Advaxis’ common stock price and its future business and operations.

 

The merger will not be consummated if the conditions precedent to the consummation of the transaction are not satisfied or waived, or if the Merger Agreement is terminated in accordance with its terms. If the merger is not consummated, Advaxis is subject to the following risks:

 

  if the Merger Agreement is terminated under certain circumstances, Advaxis will be required to pay Biosight a termination fee of $7.5 million or reimburse Biosight’s expenses up to a maximum of $2.0 million; and
     
  the price of Advaxis’ common stock may decline and remain volatile.

 

If the merger does not close for any reason, Advaxis’ board of directors may elect to, among other things, attempt to complete another strategic transaction, attempt to sell or otherwise dispose of Advaxis’ various assets, dissolve or liquidate its assets, declare bankruptcy or seek to continue to operate its business. If Advaxis seeks another strategic transaction or attempts to sell or otherwise dispose of its various assets, there is no assurance that it will be able to do so, that the terms would be equal to or superior to the terms of the merger or as to the timing of such transaction. If Advaxis decides to dissolve and liquidates its assets, Advaxis would be required to pay all of its debts and contractual obligations, and to set aside certain reserves for potential future claims, and there can be no assurance as to the amount or timing of available cash left to distribute to stockholders after paying its debts and other obligations and setting aside funds for reserves.

 

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If Advaxis was to seek to continue its business, it would need to determine whether to acquire one or more other product candidates. Advaxis would also need to raise funds to support continued operations and re-assess its workforce requirements in consideration of its reduced workforce.

 

If the merger is not consummated, Advaxis may be unable to retain the services of key remaining members of its management team and, as a result, may be unable to seek or consummate another strategic transaction, properly dissolve and liquidate its assets or continue its business.

 

If Advaxis does not successfully consummate the transaction with Biosight, Advaxis’ board of directors may dissolve or liquidate its assets to pursue a dissolution and liquidation. In such an event, the amount of cash available for distribution to Advaxis’ stockholders will depend heavily on the timing of such transaction or liquidation.

 

If the merger does not close for any reason, Advaxis’ board of directors may elect to, among other things, dissolve or liquidate its assets, which may include seeking protection from creditors in a bankruptcy proceeding. If Advaxis decides to dissolve and liquidate its assets, Advaxis would be required to pay all of its debts and contractual obligations, and to set aside certain reserves for potential future claims, and there can be no assurances as to the amount or timing of available cash left to distribute to stockholders after paying its debts and other obligations and setting aside funds for reserves.

 

In the event of a dissolution and liquidation, the amount of cash available for distribution to Advaxis’ stockholders will depend heavily on the timing of such decision and, ultimately, such liquidation, since the amount of cash available for distribution continues to decrease as Advaxis funds its operations in preparation for the consummation of the merger. Further, the Merger Agreement contains certain termination rights for each party, and provides that, upon termination under specified circumstances, Advaxis may be required to pay Biosight a termination fee of $7.5 million or reimburse Biosight’s expenses up to a maximum of $2.0 million, which would further decrease Advaxis’ available cash resources. If Advaxis’ board of directors were to approve and recommend, and its stockholders were to approve, a dissolution and liquidation, Advaxis would be required under Delaware corporate law to pay its outstanding obligations, as well as to make reasonable provision for contingent and unknown obligations, prior to making any distributions in liquidation to its stockholders. Advaxis’ commitments and contingent liabilities may include (i) regulatory and clinical obligations remaining under its clinical trials; (ii) obligations under its employment, separation and retention agreements with certain employees that provide for severance and other payments following a termination of employment occurring for various reasons, including a change in control of Advaxis; and (iii) potential litigation against Advaxis, and other various claims and legal actions arising in the ordinary course of business. As a result of this requirement, a portion of Advaxis’ assets may need to be reserved pending the resolution of such obligations. In addition, Advaxis may be subject to litigation or other claims related to a dissolution and liquidation of Advaxis. If a dissolution and liquidation were pursued, Advaxis’ board of directors, in consultation with its advisors, would need to evaluate these matters and make a determination about a reasonable amount to reserve. Accordingly, holders of Advaxis common stock could lose all or a significant portion of their investment in the event of its liquidation, dissolution or winding up.

 

Risks Related to the Proposed Reverse Stock Split

 

Advaxis is seeking stockholder approval of a reverse stock split of Advaxis common stock for the purpose of maintaining the listing of Advaxis common stock on Nasdaq and as a condition of the merger, but Advaxis may not obtain stockholder approval or it may not have the desired result.

 

Advaxis is seeking stockholder approval of a reverse stock split of Advaxis common stock for the purpose of raising the per share trading price of the Advaxis common stock and maintaining the listing of Advaxis common stock on Nasdaq and as a condition of the merger. However, there is no assurance that Advaxis’ stockholders will approve the reverse stock split proposal, or even if they do, that it will have the desired result and that Advaxis will be able to maintain its listing on Nasdaq. Even if Advaxis effects the reverse stock split and maintains its listing, shares of Advaxis common stock may still have a relatively low trading price, which could hinder Advaxis’ ability to attract institutional or other potential investors. Furthermore, the price per share of Advaxis common stock after the reverse stock split, if approved and implemented, may not reflect the reverse stock split and the price per share following the effective time of the reverse stock split may not be maintained for any period following the reverse stock split. In many cases, the market price of a company’s shares declines after a reverse stock split. Accordingly, the total market capitalization of Advaxis common stock following the contemplated reverse stock split may be lower than before the reverse stock split. Similarly, the trading liquidity of the Advaxis common stock could be adversely affected by the reduced number of shares outstanding after the reverse stock split. If Advaxis does not maintain compliance with the Nasdaq minimum bid price prior to the merger and this reverse stock split proposal is not approved by Advaxis’ stockholders and the parties waive this closing condition, the combined company resulting from the merger will likely not be able to obtain compliance with the minimum bid price requirement for an initial listing on The Nasdaq Capital Market and, as a consequence, Nasdaq will immediately provide the combined company with written notification that the common stock will be delisted.

 

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If Advaxis’ common stock is delisted, Advaxis would expect Advaxis’ common stock to be traded in the over-the-counter market, which could adversely affect the liquidity of Advaxis’ common stock. Additionally, Advaxis could face significant material adverse consequences, including:

 

  a limited availability of market quotations for Advaxis’ common stock;
     
  a reduced amount of news and analyst coverage for Advaxis;
     
  a decreased ability to issue additional securities and a concomitant substantial impairment in Advaxis’ ability to obtain sufficient additional capital to fund Advaxis’ operations and to continue as a going concern;
     
  reduced liquidity for Advaxis’ stockholders;
     
  potential loss of confidence by employees and potential future partners or collaborators; and
     
  loss of institutional investor interest and fewer business development opportunities.

 

The reverse stock split may not increase the combined company’s stock price over the long term.

 

The principal purpose of the reverse stock split is to increase the per share market price of Advaxis’ common stock above the minimum bid price requirement under the Nasdaq rules so that the listing of Advaxis and the shares of Advaxis common stock being issued in the merger on Nasdaq will be approved. It cannot be assured, however, that the reverse stock split will accomplish this objective for any meaningful period. While it is expected that the reduction in the number of outstanding shares of common stock will proportionally increase the market price of Advaxis’ common stock, it cannot be assured that the reverse stock split will increase the market price of its common stock by a multiple of the reverse stock split ratio mutually agreed by Advaxis and Biosight, or result in any permanent or sustained increase in the market price of Advaxis’ common stock, which is dependent upon many factors, including Advaxis’ business and financial performance, general market conditions and prospects for future success. Thus, while the stock price of Advaxis might meet the listing requirements for Nasdaq initially, it cannot be assured that it will continue to do so.

 

The reverse stock split may decrease the liquidity of the combined company’s common stock.

 

Although the Advaxis board of directors believes that the anticipated increase in the market price of the combined company’s common stock resulting from the proposed reverse stock split could encourage interest in its common stock and possibly promote greater liquidity for its stockholders, such liquidity could also be adversely affected by the reduced number of shares outstanding after the reverse stock split. The reduction in the number of outstanding shares may lead to reduced trading and a smaller number of market makers for the combined company’s common stock. In addition, the reverse stock split may not result in an increase in the combined company’s stock price necessary to satisfy Nasdaq’s initial listing requirements for the combined company.

 

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The reverse stock split may lead to a decrease in the combined company’s overall market capitalization.

 

Should the market price of the combined company’s common stock decline after the reverse stock split, the percentage decline may be greater, due to the smaller number of shares outstanding, than it would have been prior to the reverse stock split. A reverse stock split is often viewed negatively by the market and, consequently, can lead to a decrease in the combined company’s overall market capitalization. If the per share market price does not increase in proportion to the reverse stock split ratio, then the value of the combined company, as measured by its stock capitalization, will be reduced. In some cases, the per share stock price of companies that have effected reverse stock splits subsequently declined back to pre-reverse split levels, and accordingly, it cannot be assured that the total market value of the combined company’s common stock will remain the same after the reverse stock split is effected, or that the reverse stock split will not have an adverse effect on the combined company’s stock price due to the reduced number of shares outstanding after the reverse stock split.

 

Risks Related to Ownership of Advaxis’ Common Stock and Its Status as a Public Company

 

Sales of additional equity securities may adversely affect the market price of Advaxis’ common stock and your rights may be reduced.

 

Advaxis expects to continue to incur drug development and selling, general and administrative costs, and to satisfy its funding requirements, it will need to sell additional equity securities, which may be subject to registration rights and warrants with anti-dilutive protective provisions. The sale or the proposed sale of substantial amounts of Advaxis common stock or other equity securities in the public markets may adversely affect the market price of Advaxis common stock and Advaxis’ stock price may decline substantially. Advaxis’ shareholders may experience substantial dilution and a reduction in the price that they are able to obtain upon sale of their shares. Also, new equity securities issued may have greater rights, preferences or privileges than Advaxis’ existing common stock.

 

The price of Advaxis’ common stock and warrants may be volatile.

 

The trading price of Advaxis’ common stock and warrants may fluctuate substantially. The price of Advaxis’ common stock and warrants that will prevail in the market may be higher or lower than the price you have paid, depending on many factors, some of which are beyond Advaxis’ control and may not be related to its operating performance. These fluctuations could cause you to lose part or all of your investment in Advaxis’ common stock and warrants. Those factors that could cause fluctuations include, but are not limited to, the following:

 

  price and volume fluctuations in the overall stock market from time to time;
     
  fluctuations in stock market prices and trading volumes of similar companies;
     
  actual or anticipated changes in Advaxis’ net loss or fluctuations in its operating results or in the expectations of securities analysts;
     
  the issuance of new equity securities pursuant to a future offering, including issuances of preferred stock;
     
  general economic conditions and trends;
     
  positive and negative events relating to healthcare and the overall pharmaceutical and biotech sector;
     
  major catastrophic events;
     
  sales of large blocks of Advaxis’ stock;
     
  significant dilution caused by the anti-dilutive clauses in Advaxis’ financial agreements;
     
  departures of key personnel;
     
  changes in the regulatory status of Advaxis’ immunotherapies, including results of its clinical trials;
     
  events affecting University of Pennsylvania (“Penn”) or any current or future collaborators;

 

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  announcements of new products or technologies, commercial relationships or other events by Advaxis or its competitors;
     
  regulatory developments in the United States and other countries;
     
  failure of Advaxis’ common stock or warrants to be listed or quoted on The Nasdaq Stock Market, NYSE Amex Equities or other national market system;
     
  changes in accounting principles; and
     
  discussion of Advaxis or its stock price by the financial and scientific press and in online investor communities.

 

In the past, following periods of volatility in the market price of a company’s securities, securities class action litigation has often been brought against that company. Due to the potential volatility of Advaxis’ stock price, it may therefore be the target of securities litigation in the future. Securities litigation could result in substantial costs and divert management’s attention and resources from Advaxis’ business.

 

A limited public trading market may cause volatility in the price of Advaxis’ common stock.

 

The quotation of Advaxis’ common stock on Nasdaq does not assure that a meaningful, consistent and liquid trading market currently exists, and in recent years such market has experienced extreme price and volume fluctuations that have particularly affected the market prices of many smaller companies like Advaxis. Advaxis’ common stock is thus subject to this volatility. Sales of substantial amounts of common stock, or the perception that such sales might occur, could adversely affect prevailing market prices of Advaxis’ common stock and its stock price may decline substantially in a short time and its shareholders could suffer losses or be unable to liquidate their holdings.

 

The market prices for Advaxis’ common stock may be adversely impacted by future events.

 

Advaxis’ common stock began trading on the over-the-counter-markets on July 28, 2005 and is currently quoted on the Nasdaq Capital Market under the symbol ADXS. Market prices for Advaxis’ common stock and warrants will be influenced by a number of factors, including:

 

  the issuance of new equity securities pursuant to a future offering, including issuances of preferred stock;
     
  changes in interest rates;
     
  significant dilution caused by the anti-dilutive clauses in Advaxis’ financial agreements;
     
  competitive developments, including announcements by competitors of new products or services or significant contracts, acquisitions, strategic partnerships, joint ventures or capital commitments;
     
  variations in quarterly operating results;
     
  change in financial estimates by securities analysts;
     
  the depth and liquidity of the market for Advaxis’ common stock and warrants;
     
  investor perceptions of Advaxis and the pharmaceutical and biotech industries generally; and
     
  general economic and other national conditions.

 

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Advaxis is not currently in compliance with the continued listing requirements for Nasdaq. If the price of Advaxis’ common stock continues to trade below $1.00 per share for a sustained period or it does not meet other continued listing requirements, its common stock may be delisted from the Nasdaq Capital Market, which could affect the market price and liquidity for its common stock and reduce its ability to raise additional capital.

 

In order to maintain listing on the Nasdaq Capital Market, Advaxis must satisfy minimum financial and other requirements including, without limitation, a requirement that its closing bid price be at least $1.00 per share. On April 8, 2020, Advaxis received written notice from Nasdaq indicating that Advaxis was not in compliance with this minimum bid price requirement because its common stock had closed below $1.00 per share for the previous 30 consecutive business days. On April 17, 2020, Advaxis received an additional notice from Nasdaq indicating that, due to extraordinary market conditions, Nasdaq had tolled the compliance period for the bid-price requirement through June 30, 2020 (the “tolling period”) and that on April 16, 2020, Nasdaq filed an immediately effective rule change with the SEC to implement the tolling period. In accordance with the April 17, 2020 notice from Nasdaq, Advaxis had until December 21, 2020 to regain compliance with the minimum bid price requirement.

 

As of December 21, 2020, Advaxis was yet to be in compliance with the minimum bid requirement as discussed above. On December 22, 2020, Advaxis received notification from Nasdaq that its application to transfer the listing of its common stock from the Nasdaq Global Select Market to the Nasdaq Capital Market had been approved. Advaxis’ securities were transferred to the Nasdaq Capital Market at the opening of business on December 24, 2020 and it had an additional 180 days, or until June 21, 2021, to regain compliance with the minimum bid price per share requirement.

 

On June 22, 2021, Advaxis received notification from Nasdaq that the Company had not regained compliance with the minimum bid price per share requirement. The notification indicated that the Company’s common stock would be subject to delisting unless the Company timely requested a hearing before a Nasdaq Hearing Panel (the “Panel”). The Company timely requested a hearing and the hearing was scheduled for July 29, 2021. The hearing request stayed any suspension or delisting action pending the hearing and the expiration of any additional extension period granted by the Panel following the hearing. On August 11, 2021, Advaxis issued a press release announcing that it has received a letter indicating that following the Company’s hearing before the Panel, the Panel determined to grant the Company an extension through November 22, 2021, to evidence compliance with Nasdaq’s $1.00 Minimum Bid Price Rule and complete its previously announced merger transaction with Biosight. Pursuant to the Nasdaq Listing Rules, the combined company will be required to meet all applicable initial listing requirements upon the closing of the merger, including the $4 per share price requirement.

 

Unless Advaxis’ common stock continues to be listed on a national securities exchange it will become subject to the so-called “penny stock” rules that impose restrictive sales practice requirements.

 

If Advaxis is unable to maintain the listing of its common stock on The Nasdaq Capital Market or another national securities exchange, its common stock could become subject to the so-called “penny stock” rules if the shares have a market value of less than $5.00 per share. The SEC has adopted regulations that define a penny stock to include any stock that has a market price of less than $5.00 per share, subject to certain exceptions, including an exception for stock traded on a national securities exchange. The SEC regulations impose restrictive sales practice requirements on broker-dealers who sell penny stocks to persons other than established customers and accredited investors. An accredited investor generally is a person whose individual annual income exceeded $200,000, or whose joint annual income with a spouse exceeded $300,000 during the past two years and who expects their annual income to exceed the applicable level during the current year, or a person with net worth in excess of $1.0 million, not including the value of the investor’s principal residence and excluding mortgage debt secured by the investor’s principal residence up to the estimated fair market value of the home, except that any mortgage debt incurred by the investor within 60 days prior to the date of the transaction shall not be excluded from the determination of the investor’s net worth unless the mortgage debt was incurred to acquire the residence. For transactions covered by this rule, the broker-dealer must make a special suitability determination for the purchaser and must have received the purchaser’s written consent to the transaction prior to sale. This means that if Advaxis is unable maintain the listing of its common stock on a national securities exchange, the ability of stockholders to sell their common stock in the secondary market could be adversely affected.

 

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If a transaction involving a penny stock is not exempt from the SEC’s rule, a broker-dealer must deliver a disclosure schedule relating to the penny stock market to each investor prior to a transaction. The broker-dealer also must disclose the commissions payable to both the broker-dealer and its registered representative, current quotations for the penny stock, and, if the broker-dealer is the sole market-maker, the broker-dealer must disclose this fact and the broker-dealer’s presumed control over the market. Finally, monthly statements must be sent disclosing recent price information for the penny stock held in the customer’s account and information on the limited market in penny stocks.

 

If Advaxis fails to remain current with its listing requirements, it could be removed from the Nasdaq Capital Market, which would limit the ability of broker-dealers to sell its securities and the ability of shareholders to sell their securities in the secondary market.

 

Companies trading on the Nasdaq Marketplace, such as Advaxis, must be reporting issuers under Section 12 of the Exchange Act, as amended, and Advaxis must meet the listing requirements in order to maintain the listing of its common stock on the Nasdaq Capital Market. If Advaxis does not meet these requirements, the market liquidity for its securities could be severely adversely affected by limiting the ability of broker-dealers to sell its securities and the ability of shareholders to sell their securities in the secondary market.

 

Advaxis may be at an increased risk of securities litigation, which is expensive and could divert management attention.

 

The market price of Advaxis’ common stock may be volatile, and in the past companies that have experienced volatility in the market price of their stock have been subject to securities class action litigation. Advaxis may be the target of this type of litigation in the future. Securities litigation against Advaxis could result in substantial costs and divert its management’s attention from other business concerns, which could seriously harm its business.

 

Advaxis does not intend to pay cash dividends.

 

Advaxis has not declared or paid any cash dividends on its common stock, and it does not anticipate declaring or paying cash dividends for the foreseeable future. Any future determination as to the payment of cash dividends on Advaxis’ common stock will be at its board of directors’ discretion and will depend on its financial condition, operating results, capital requirements and other factors that its board of directors considers to be relevant.

 

Risks Related to the Combined Company

 

In determining whether you should approve the issuance of shares of Advaxis common stock, the change of control resulting from the merger and other matters related to the merger, as applicable, you should carefully read the following risk factors in addition to the risks described above.

 

The market price of our common stock is expected to be volatile, and the market price of the common stock may drop following the merger.

 

The market price of our common stock following the merger could be subject to significant fluctuations. Some of the factors that may cause the market price of our common stock to fluctuate include:

 

  results of clinical trials and preclinical studies of our product candidates, or those of our competitors or our existing or future collaborators;
     
  failure to meet or exceed financial and development projections we may provide to the public;
     
  failure to meet or exceed the financial and development projections of the investment community;
     
  if we do not achieve the perceived benefits of the merger as rapidly or to the extent anticipated by financial or industry analysts;

 

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  announcements of significant acquisitions, strategic collaborations, joint ventures or capital commitments by us or our competitors;
     
  actions taken by regulatory agencies with respect to our product candidates, clinical studies, manufacturing process or sales and marketing terms;
     
  disputes or other developments relating to proprietary rights, including patents, litigation matters, and our ability to obtain patent protection for our technologies;
     
  additions or departures of key personnel;
     
  significant lawsuits, including patent or stockholder litigation;
     
  if securities or industry analysts do not publish research or reports about our business, or if they issue adverse or misleading opinions regarding our business and stock;
     
  changes in the market valuations of similar companies;
     
  general market or macroeconomic conditions or market conditions in the pharmaceutical and biotechnology sectors;
     
  sales of securities by us or our securityholders in the future;
     
  if we fail to raise an adequate amount of capital to fund our operations and continued development of our product candidates;
     
  trading volume of our common stock;
     
  announcements by competitors of new commercial products, clinical progress or lack thereof, significant contracts, commercial relationships or capital commitments;
     
  adverse publicity relating to precision medicine product candidates, including with respect to other products in such markets;
     
  the introduction of technological innovations or new therapies that compete with our products and services; and
     
  period-to-period fluctuations in our financial results.

 

Moreover, the stock markets in general have at times experienced substantial volatility that has often been unrelated to the operating performance of individual companies. These broad market fluctuations may also adversely affect the trading price of our common stock. In addition, a recession, depression or other sustained adverse market event resulting from the spread of COVID-19 or otherwise could materially and adversely affect our business and the value of our common stock. In the past, following periods of volatility in the market price of a company’s securities, stockholders have often instituted class action securities litigation against such companies. Furthermore, market volatility may lead to increased shareholder activism if we experience a market valuation that activists believe is not reflective of our intrinsic value. Activist campaigns that contest or conflict with our strategic direction or seek changes in the composition of our board of directors could have an adverse effect on our operating results and financial condition.

 

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Following the merger, we may be unable to integrate successfully and realize the anticipated benefits of the merger.

 

The merger involves the combination of two companies that currently operate as independent companies. We may fail to realize some or all of the anticipated benefits of the merger if the integration process takes longer than expected or is more costly than expected. In addition, Advaxis and Biosight have operated and, until the completion of the merger, will continue to operate, independently. It is possible that the integration process also could result in the diversion of each company’s management’s attention, the disruption or interruption of, or the loss of momentum in, each company’s ongoing businesses or inconsistencies in standards, controls, procedures and policies, any of which could adversely affect our ability to maintain relationships with customers, suppliers and employees or the ability to achieve the anticipated benefits of the merger, or could otherwise adversely affect our business and financial results.

 

We will need substantial additional funding before we can complete the development of our product candidates. If we are unable to obtain such additional capital on favorable terms, on a timely basis or at all, we would be forced to delay, reduce or eliminate our product development and clinical programs and may not have the capital required to otherwise operate our business.

 

Developing therapies, including conducting pre-clinical studies and clinical trials and establishing manufacturing capabilities, is expensive. We have not generated any revenues from the commercial sale of products and will not be able to generate any product revenues until, and only if, we receive approval to sell our product candidates from the Federal Drug Administration (“FDA”) or other regulatory authorities. The cash expected from both Advaxis and Biosight at closing is expected to fund the further development of our programs. However, we may need to raise substantial additional capital in order to fund our general corporate activities and to fund our research and development, including our currently planned clinical trials and plans for new clinical trials and product development.

 

We may seek to raise additional funds through various potential sources, such as equity and debt financings, or through strategic collaborations and license agreements. We can give no assurances that we will be able to secure such additional sources of funds to support our operations or, if such funds are available, that such additional financing will be sufficient to meet our needs. Moreover, to the extent that we raise additional funds by issuing equity securities, our stockholders may experience additional significant dilution, and debt financing, if available, may involve restrictive covenants. To the extent that we raise additional funds through collaboration and licensing arrangements, it may be necessary to relinquish some rights to our technologies or product candidates, or grant licenses on terms that may not be favorable.

 

Given our capital constraints, we will need to prioritize spending on our clinical and pre-clinical programs. If we are unable to raise sufficient funds to support our current and planned operations, we may elect to discontinue certain of our ongoing activities or programs. Our inability to raise additional funds could also prevent us from taking advantage of opportunities to pursue existing or promising new programs in the future.

 

Our forecasts regarding our beliefs in the sufficiency of our financial resources to support our current and planned operations are forward-looking statements and involve significant risks and uncertainties, and actual results could vary as a result of a number of factors, including the factors discussed elsewhere in this “Risk Factors” section. These estimates are based on assumptions that may prove to be wrong, and we could utilize our available capital resources sooner than currently expected.

 

We will incur additional costs and increased demands upon management as a result of complying with the laws and regulations affecting public companies.

 

We will incur significant legal, accounting and other expenses as a public company that Biosight did not incur as a private company, including costs associated with public company reporting obligations under the Securities Exchange Act of 1934, as amended, (the “Exchange Act”). Our management team will consist of certain executive officers of both Advaxis and Biosight prior to the merger. At least some of these executive officers and other personnel will need to devote substantial time to gaining expertise related to public company reporting requirements and compliance with applicable laws and regulations to ensure that we comply with all of these requirements. Any changes we make to comply with these obligations may not be sufficient to allow us to satisfy our obligations as a public company on a timely basis, or at all. These reporting requirements, rules and regulations, coupled with the increase in potential litigation exposure associated with being a public company, could also make it more difficult for us to attract and retain qualified persons to serve on the board of directors or on board committees or to serve as executive officers, or to obtain certain types of insurance, including directors’ and officers’ insurance, on acceptable terms.

 

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Once we are no longer a smaller reporting company or otherwise no longer qualify for applicable exemptions, we will be subject to additional laws and regulations affecting public companies that will increase our costs and the demands on management and could harm our operating results.

 

We will be subject to the reporting requirements of the Exchange Act, which requires, among other things, that we file with the SEC, annual, quarterly and current reports with respect to our business and financial condition as well as other disclosure and corporate governance requirements. However, as a “smaller reporting company” we may take advantage of certain exemptions from disclosure requirements including not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act and reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements. Once we are no longer a smaller reporting company or otherwise qualify for these exemptions, we will be required to comply with these additional legal and regulatory requirements applicable to public companies and will incur significant legal, accounting and other expenses to do so. If we are not able to comply with the requirements in a timely manner or at all, our financial condition or the market price of our common stock may be harmed. For example, if we or our independent auditor identifies deficiencies in our internal control over financial reporting that are deemed to be material weaknesses, we could face additional costs to remedy those deficiencies, the market price of our stock could decline or we could be subject to sanctions or investigations by the SEC or other regulatory authorities, which would require additional financial and management resources.

 

The unaudited pro forma condensed combined financial data for Advaxis and Biosight included in this proxy statement/prospectus/information statement is preliminary, and our actual financial position and operations after the merger may differ materially from the unaudited pro forma financial data included in this proxy statement/prospectus/information statement.

 

The unaudited pro forma financial data for Advaxis and Biosight included in this proxy statement/prospectus/information statement is presented for illustrative purposes only and is not necessarily indicative of our actual financial condition or results of operations of future periods, or the financial condition or results of operations that would have been realized had the entities been combined during the periods presented. The unaudited pro forma financial statements have been derived from the historical financial statements of Advaxis and Biosight and adjustments and assumptions have been made regarding the combined company after giving effect to the transaction. The information upon which these adjustments and assumptions have been made is preliminary, and these kinds of adjustments and assumptions are difficult to make with accuracy. Moreover, the unaudited pro forma financial statements do not reflect all costs that are expected to be incurred by us in connection with the transactions or that have been incurred since the date of such unaudited pro forma financial statements. The assumptions used in preparing the unaudited pro forma financial information may not prove to be accurate, and other factors may affect our financial condition following the transaction. For more information see the section titled “Unaudited Pro Forma Condensed Combined Financial Information” beginning on page 208.

 

Advaxis’ certificate of incorporation, bylaws and Delaware law have anti-takeover provisions that could discourage, delay or prevent a change in control of the combined company, which may cause our stock price to decline.

 

Advaxis’ amended and restated certificate of incorporation, second amended and restated bylaws and Delaware law contain provisions which could make it more difficult for a third party to acquire Advaxis, even if closing such a transaction would be beneficial to Advaxis’ shareholders, which provisions will remain in place for the combined company. To date, Advaxis has not issued shares of preferred stock; however, Advaxis is authorized to issue up to 5,000,000 shares of preferred stock. This preferred stock may be issued in one or more series, the terms of which may be determined at the time of issuance by our board of directors without further action by shareholders. The terms of any series of preferred stock may include voting rights (including the right to vote as a series on particular matters), preferences as to dividend, liquidation, conversion and redemption rights and sinking fund provisions. The issuance of any preferred stock could materially adversely affect the rights of the holders of our common stock, and therefore, reduce the value of our common stock. In particular, specific rights granted to future holders of preferred stock could be used to restrict our ability to merge with, or sell our assets to, a third party and thereby preserve control by then-present management.

 

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Provisions of Advaxis’ certificate of incorporation, bylaws and Delaware law also could have the effect of discouraging potential acquisition proposals or making a tender offer or delaying or preventing a change in control, including changes a shareholder might consider favorable. Such provisions may also prevent or frustrate attempts by our shareholders to replace or remove our management. In particular, the amended and restated certificate of incorporation, second amended and restated bylaws and Delaware law, as applicable, among other things; provide the board of directors with the ability to alter the second amended and restated bylaws without shareholder approval and provide that vacancies on the board of directors may be filled by a majority of directors in office, and less than a quorum.

 

Advaxis is also subject to Section 203 of the Delaware General Corporation Law, which, subject to certain exceptions, prohibits “business combinations” between a publicly-held Delaware corporation and an “interested shareholder,” which is generally defined as a shareholder who becomes a beneficial owner of 15% or more of a Delaware corporation’s voting stock for a three-year period following the date that such shareholder became an interested shareholder.

 

These provisions are expected to discourage certain types of coercive takeover practices and inadequate takeover bids and to encourage persons seeking to acquire control of Advaxis to first negotiate with Advaxis’ board. These provisions may delay or prevent someone from acquiring or merging with us, which may cause the market price of our common stock to decline.

 

Our ability to utilize our respective net operating loss carryforwards and tax credit carryforwards may be subject to limitations.

 

Our ability to use our respective federal and state net operating losses (“NOLs”) to offset potential future taxable income and related income taxes that would otherwise be due is dependent upon our generation of future taxable income, and neither Advaxis nor Biosight can predict with certainty when, or whether, we will generate sufficient taxable income to use all of our NOLs.

 

Under Section 382 and Section 383 of the Code and corresponding provisions of state law, if a corporation undergoes an “ownership change,” its ability to use its pre-change NOL carryforwards and other pre-change tax attributes (such as research tax credits) to offset its post-change income may be limited. A Section 382 “ownership change” is generally defined as a greater than 50 percentage point change (by value) in its equity ownership by certain stockholders over a three-year period. Advaxis believes that it has experienced an ownership change in the past, and may experience subsequent ownership changes in the future due to subsequent shifts in our stock ownership (some of which are outside of our control). Biosight may have experienced ownership changes in the past, may experience an ownership change as a result of the merger, and may experience ownership changes in the future due to subsequent shifts in our stock ownership (some of which are outside of our control). Furthermore, the merger, if consummated, will constitute an ownership change (within the meaning of Section 382 of the Code) of Advaxis which could eliminate or otherwise substantially limit Advaxis’ ability to use its federal and state NOLs to offset its future taxable income. Consequently, even if we achieve profitability, we may not be able to utilize a material portion of Biosight’s or Advaxis’ NOL carryforwards and other tax attributes, which could have a material adverse effect on cash flow and results of operations. Similar provisions of state tax law may also apply to limit the use of accumulated state tax attributes. There is also a risk that due to regulatory changes, such as suspensions on the use of NOLs, or other unforeseen reasons, existing NOLs could expire or otherwise be unavailable to offset future income tax liabilities.

 

Changes in tax laws or regulations could materially adversely affect us.

 

New tax laws or regulations could be enacted at any time, and existing tax laws or regulations could be interpreted, modified or applied in a manner that is adverse to us, which could adversely affect our business and financial condition.

 

Advaxis and Biosight do not anticipate that we will pay any cash dividends in the foreseeable future.

 

The current expectation is that we will retain our future earnings, if any, to fund the growth of our business as opposed to paying dividends. As a result, capital appreciation, if any, of our common stock will be your sole source of gain, if any, for the foreseeable future.

 

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An active trading market for our common stock may not develop and our stockholders may not be able to resell their shares of common stock for a profit, if at all.

 

Prior to the merger, there had been no public market for Biosight’s share capital. An active trading market for our shares of common stock may never develop or be sustained. If an active market for our common stock does not develop or is not sustained, it may be difficult for our stockholders to sell their shares at an attractive price or at all.

 

Future sales of shares by existing stockholders could cause our stock price to decline.

 

If existing securityholders of Advaxis and Biosight sell, or indicate an intention to sell, substantial amounts of our common stock in the public market, the trading price of our common stock could decline. Based on shares outstanding as of September 17, 2021, and the shares expected to be issued upon completion of the merger, we are expected to have outstanding a total of approximately 145,638,459 shares of common stock immediately following the completion of the merger. Shares of common stock that are subject to outstanding options of Biosight will become eligible for sale in the public market to the extent permitted by the provisions of various vesting agreements and Rules 144 and 701 under the Securities Act. If these shares are sold, the trading price of our common stock could decline.

 

After completion of the merger, our executive officers, directors and principal stockholders will have the ability to control or significantly influence all matters submitted to our stockholders for approval.

 

Upon the completion of the merger, it is anticipated that our executive officers, directors and principal stockholders will, in the aggregate, beneficially own less than 1% of our outstanding shares of common stock. As a result, if these stockholders were to choose to act together, they would be able to control or significantly influence all matters submitted to our stockholders for approval, as well as our management and affairs. For example, these persons, if they choose to act together, would control or significantly influence the election of directors and approval of any merger, consolidation or sale of all or substantially all of our assets. This concentration of voting power could delay or prevent an acquisition of the combined company on terms that other stockholders may desire.

 

We may be exposed to increased litigation, including stockholder litigation, which could have an adverse effect on our business and operations.

 

We may be exposed to increased litigation from stockholders, customers, suppliers, consumers and other third parties due to the combination of Advaxis’ business and Biosight’s business following the merger. Such litigation may have an adverse impact on our business and results of operations or may cause disruptions to our operations. In addition, in the past, stockholders have initiated class action lawsuits against biotechnology companies following periods of volatility in the market prices of these companies’ stock. Such litigation, if instituted against us, could cause us to incur substantial costs and divert management’s attention and resources, which could have a material adverse effect on our business, financial condition and results of operations.

 

We may be exposed to litigation resulting from the transactions contemplated herein. Such lawsuits could cause us to incur substantial costs and divert management’s attention and resources, which could have a material adverse effect on our business, financial condition and results of operations.

 

If equity research analysts do not publish research or reports, or publish unfavorable research or reports, about us, our business or our market, our stock price and trading volume could decline.

 

The trading market for our common stock will be influenced by the research and reports that equity research analysts publish about us and our business. Equity research analysts may elect not to provide research coverage of our common stock after the completion of the merger, and such lack of research coverage may adversely affect the market price of our common stock. In the event we have equity research analyst coverage, we will not have any control over the analysts or the content and opinions included in their reports. The price of our common stock could decline if one or more equity research analysts downgrade our stock or issue other unfavorable commentary or research. If one or more equity research analysts ceases coverage of us or fails to publish reports on us regularly, demand for our common stock could decrease, which in turn could cause our stock price or trading volume to decline.

 

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We will have broad discretion in the use of our cash and cash equivalents and may invest or spend the proceeds in ways with which you do not agree and in ways that may not increase the value of your investment.

 

We will have broad discretion over the use of our cash and cash equivalents. You may not agree with our decisions, and our use of the proceeds may not yield any return on your investment. Our failure to apply these resources effectively could compromise our ability to pursue our growth strategy and, we might not be able to yield a significant return, if any, on our investment of these net proceeds. You will not have the opportunity to influence our decisions on how to use our cash resources.

 

Our internal control over financial reporting may not meet the standards required by Section 404 of the Sarbanes-Oxley Act, and failure to achieve and maintain effective internal control over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act could have a material adverse effect on our business and share price.

 

As a privately held company, Biosight was not required to evaluate its internal control over financial reporting in a manner that meets the standards of publicly traded companies required by Section 404 of the Sarbanes-Oxley Act, or Section 404. Following the merger, our management will be required to report on the effectiveness of our internal control over financial reporting. The rules governing the standards that must be met for our management to assess our internal control over financial reporting are complex and require significant documentation, testing and possible remediation.

 

We cannot assure you that any material weaknesses identified at the combined company will be remediated by us and/or that there will not be additional material weaknesses or significant deficiencies in our internal control over financial reporting in the future. Any failure to maintain effective internal control over financial reporting could severely inhibit our ability to accurately report our financial condition, results of operations or cash flows. If we are unable to conclude that our internal control over financial reporting is effective, or if our independent registered public accounting firm determines we have a material weakness or significant deficiency in our internal control over financial reporting, investors may lose confidence in the accuracy and completeness of our financial reports, the market price of our common stock could decline, and we could be subject to sanctions or investigations by Nasdaq, the SEC or other regulatory authorities. Failure to remedy any material weakness in our internal control over financial reporting, or to implement or maintain other effective control systems required of public companies, could also restrict our future access to the capital markets.

 

Risks Relating to Our Combined Businesses and Capital Requirements

 

We have a limited operating history and have never generated any product revenue.

 

Both Advaxis and Biosight are clinical-stage biotechnology companies with limited operating history. Biosight was formed on November 10, 1999, and since inception, has incurred significant net losses and has financed its operations with $68.5 million through capital contributions. As of June 30, 2021, Biosight had an accumulated deficit of $45.0 million. Similarly, Advaxis has not generated any revenue from product sales. As of July 31, 2021, Advaxis had cash and cash equivalents of $45.3 million.

 

To date, both Advaxis and Biosight’s operations have been limited to organizing and staffing the respective companies, raising capital, developing therapeutic product candidates and advancing those candidates through clinical development and trials. Neither Advaxis nor Biosight has demonstrated the ability to successfully complete a registration-enabling clinical pivotal trial, obtain marketing approval, manufacture a clinical-stage or commercial-scale product (or arrange for a third party to do so on either company’s behalf), or conduct sales and marketing activities necessary for successful, full-scale product commercialization. Therefore, we have no meaningful operations upon which to evaluate our business, and any predictions about our future success, viability or profitability would not be as accurate as they could be if we had a longer operating history or a history of successfully developing and commercializing therapeutic pharmaceutical products.

 

Our ability to generate product revenue and become profitable depends on our ability to successfully complete the development of, and obtain regulatory approvals for, our product candidates, including BST-236. We have never been profitable, have no products currently approved for commercial sale, and have not generated any revenue from product sales. Even if we receive regulatory approval for our product candidates, we do not know when or if such candidates will generate product revenue. Our ability to generate product revenue depends on a number of factors, including, but not limited to, our ability to:

 

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  successfully complete pre-clinical studies and clinical trials;
     
  obtain and maintain regulatory approval for the marketing of our product candidates;
     
  add operational, financial and management information systems personnel, including support for our clinical, manufacturing and planned future commercialization efforts;
     
  establish or maintain collaborations, licensing or other arrangements;
     
  initiate and continue relationships with third-party suppliers and manufacturers and have commercial quantities of our product candidates manufactured at acceptable cost and quality levels and in compliance with FDA and other regulatory requirements;
     
  launch commercial sales of our products, whether alone or in collaboration with others;
     
  set an acceptable price for approved product candidates, obtain coverage and obtain adequate reimbursement;
     
  compete with other biotechnology products that target oncology and hematological malignancies;
     
  achieve broad market acceptance in the medical community, with third-party payors and consumers; and
     
  maintain, expand and protect our intellectual property portfolio.

 

Because of the numerous risks and uncertainties associated with biotechnology product development, we are unable to predict the timing or amount of increased expenses, or the extent to which we will be able to achieve or maintain profitability. Our expenses could increase beyond expectations if we are required by the FDA, European Medicines Agency (“EMA”) or comparable regulatory authorities in other countries to perform studies or clinical trials in addition to those that we currently anticipate. Even if our product candidates are approved for commercial sale, we anticipate incurring significant costs associated with their commercial launch. If we cannot successfully execute any one of the foregoing, our business may be unsuccessful, and your investment will be adversely affected.

 

Our combined business, operations and clinical development plans and timelines could be adversely impacted by the effects of health epidemics, including the recent COVID-19 pandemic.

 

Our combined business could be harmed by health epidemics wherever we have clinical trial sites or conduct operations performed by us or by third parties with whom we conduct business, including contract manufacturers, CROs, shippers and others. In December 2019, a novel strain of coronavirus, SARS-CoV-2, causing a disease referred to as COVID-19, surfaced in Wuhan, China and has since spread to multiple countries worldwide, including the United States, Israel and Europe. In March 2020, the World Health Organization declared the COVID-19 outbreak a pandemic.

 

Our combined company will have business operations in Israel, the United States and Europe. Certain of our contract manufacturers are located in the United States and Europe. The Israeli, United States and European governments have imposed a variety of continuing aggressive orders, health directives and recommendations to reduce the spread of the disease, including shelter-in-place directives and executive orders directing that all non-essential businesses close their physical operations and implement work-from-home schedules. The effects of these orders and our work-from-home policies could negatively impact productivity, disrupt our business and delay our clinical programs and timelines, the magnitude of which will depend, in part, on the length and severity of the restrictions and other limitations on our ability to conduct our business in the ordinary course. These and similar, and perhaps more severe, disruptions in our operations could negatively impact our business, operating results and financial condition. In addition, COVID-19 infection of any members of our workforce could result in a temporary disruption in our business activities, including manufacturing and other functions. Further, while the potential economic impact brought by, and the duration of, the COVID-19 pandemic is difficult to assess or predict, the impact of the COVID-19 pandemic on the global financial markets may reduce our ability to access capital, which could negatively affect our short-term and long-term liquidity. Additionally, the stock market has been unusually volatile during the COVID-19 outbreak and such volatility may continue. The ultimate impact of the COVID-19 pandemic is highly uncertain and subject to change. We do not yet know the full extent of potential delays or impacts on our business, financing or clinical trial activities, or on healthcare systems or the global economy as a whole. However, these effects could have a material impact on our liquidity, capital resources, operations and business and those of the third parties on which we rely.

 

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We are dependent on an international supply chain for products to be used in our clinical trials and, if approved by the regulatory authorities, for commercialization. Quarantines, shelter-in-place and similar government orders, or the expectation that such orders, shutdowns or other restrictions could occur, whether related to COVID-19 or other infectious diseases, could impact personnel at third-party manufacturing facilities or the availability or cost of materials. Any manufacturing supply interruption of our product candidates could harm our ability to conduct ongoing and future clinical trials of our product candidates. In addition, closures of transportation carriers and modal hubs could materially impact our clinical development and any future commercialization timelines.

 

If our relationships with our third-party manufacturers, suppliers or other vendors are terminated or scaled back as a result of the COVID-19 pandemic or other health epidemics, we may be unable to enter into arrangements with alternative suppliers or vendors or do so on commercially reasonable terms or in a timely manner. There is a natural transition period when a new supplier or vendor commences work. As a result, delays occur, which could adversely impact our ability to meet our desired clinical development and any future commercialization timelines.

 

In addition, our clinical trials have been affected by the COVID-19 pandemic and could continue to be affected in the future. Clinical trial progression, dosing, patient enrollment and related activities have been delayed, and could continue to be delayed, due to prioritization of hospital resources toward the COVID-19 pandemic or concerns among patients about participating in clinical trials during a pandemic, and reporting of some clinical data could be incomplete or delayed if patients enrolled in our clinical trials are unable to fully participate as a result of any such hospital resource prioritization, patient participation concerns or other factors. Federal, state, and local guidelines for reopening in Israel, the United States and Europe, where our clinical trials are being run, could negatively impact our ability to enroll additional patients in any of our clinical programs. Some patients could have difficulty following certain aspects of clinical trial protocols if quarantines impede patient movement or interrupt healthcare services. For example, patients in our clinical trials for BST-236 are elderly adults, often with advanced disease who could not be able to safely participate in clinical trials for this product candidate during the COVID-19 pandemic. Similarly, our inability to successfully recruit and retain patients and principal investigators and site staff who, as healthcare providers, could have heightened exposure to COVID-19 or experience additional restrictions by their institutions or local, state or national governments, could adversely impact our clinical trial operations. In addition, the COVID-19 pandemic has affected the operations of the FDA and other health authorities, which can result in delays of reviews and approvals, including with respect to our product candidates.

 

The spread of COVID-19, which has caused a broad impact globally, could materially affect us economically. While the potential economic impact brought by, and the duration of, COVID-19 could be difficult to assess or predict, a widespread pandemic could result in significant disruption of global financial markets, reducing our ability to access capital, which could in the future negatively affect our liquidity. In addition, a recession or market correction resulting from the spread of COVID-19 could harm our business and the value of our common shares.

 

We expect to incur significant losses for the foreseeable future and could never achieve or maintain profitability. Biosight’s independent registered public accounting firm has expressed substantial doubt about its ability to continue as a going concern.

 

Investment in biopharmaceutical product development is highly speculative because it entails substantial upfront capital expenditures and significant risk that a product candidate will fail to gain regulatory approval or fail to become commercially viable. Both Advaxis and Biosight have never generated any product revenue, and we cannot estimate with precision the extent of our future losses. We do not currently have any products that are available for commercial sale and could never generate product revenue or achieve profitability. As of June 30, 2021, Biosight had an accumulated deficit of $45.0 million.

 

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We expect to continue to incur substantial and increasing losses through the commercialization of any current or future candidates if they receive approval. Our product candidates, including BST-236, the investigational product candidate, have not been approved for marketing anywhere in the world, and it is likely that they could never receive such approval. As a result, we are uncertain when or if we will achieve profitability and, if so, whether we will be able to sustain profitability. Our ability to generate product revenue and achieve profitability is dependent on our ability to complete the development of BST-236, continue developing new product candidates, obtain necessary regulatory approvals for such product candidates and manufacture and successfully market our product candidates. There can be no assurance that we will be profitable even if we successfully commercialize BST-236 or any current and future product candidates we develop. If we do obtain regulatory approval to market any of our product candidates, our revenue will be dependent upon, in part and among other things, the size of the markets in the territories for which we gain regulatory approval, the number of competitors in those markets, the accepted price for any such product candidate and whether we own the commercial rights for those territories. If the indication approved by regulatory authorities is narrower than we expect, or the treatment population is narrowed by competition, physician choice or treatment guidelines, we would not generate significant revenue from sales of any of our product candidates, even if they receive approval. Even if we achieve profitability, we may not be able to sustain or increase profitability on a quarterly or annual basis. Any failure to become and remain profitable could adversely impact the market price of our ordinary shares and our ability to raise capital and continue operations. A decline in the shares’ value also could cause the stockholders to lose all or part of their investment.

 

We expect our research and development expenses in connection with development programs for BST-236 and any current and future product candidates to be significant. In addition, if we obtain regulatory approval for our product candidates, we expect to incur increased sales, marketing and manufacturing expenses. As a result, we expect to continue to incur significant and increasing operating losses and negative cash flows for the foreseeable future. These losses have harmed and will continue to harm our results of operations, financial position and working capital.

 

Biosight’s independent registered public accounting firm has issued a going concern opinion on Biosight’s financial statements as of December 31, 2020, expressing substantial doubt as to Biosight’s ability to continue as a going concern. Biosight’s consolidated financial statements do not include any adjustments that could result from the outcome of this uncertainty.

 

Management believes that, after completion of the merger, with the receipt of the cash available to Advaxis, the combined company’s cash will be sufficient to fund the combined company’s project operations through the 4th quarter of 2022. We continually assess multiple options to obtain additional funding to support our operations, including proceeds from offerings of our equity securities or debt, or transactions involving product development, technology licensing or collaboration arrangements or other sources of capital to complete our currently planned development programs. Additional capital may not be available in sufficient amounts or on reasonable terms, if at all, and our ability to raise additional capital could be adversely impacted by potentially worsening global economic conditions and the recent disruptions to and volatility in the credit and financial markets in the United States and worldwide resulting from the ongoing COVID-19 pandemic.

 

We face significant competition, and our commercial opportunities will be negatively affected if our competitors develop and market products that are more effective, safer or less expensive than the products we develop.

 

The biotechnology and pharmaceutical industry is highly competitive. We are currently developing advanced therapeutical products to treat oncology and hematological malignancies and life-threatening diseases in patients who are elderly or are medically unfit to undergo standard chemotherapy treatments. As a significant unmet medical need exists in this market, there are several large and small pharmaceutical companies that may be focused on developing therapeutics for the treatment of these life-threatening diseases. Therefore, the product candidates that we develop, if they receive regulatory approval, will compete with those products currently available, in development, or that will be developed in the future.

 

We have competitors both in the United States and internationally, including major multinational pharmaceutical companies, established biotechnology companies, specialty pharmaceutical companies, universities and other research institutions. In particular, there are a number of companies that are developing or marketing treatments for oncology and hematological malignancies. A number of biotechnology companies are developing treatments for our target markets. Many of our competitors have significantly greater financial, manufacturing, marketing, product development, technical and human resources than we do, and may also use more effective or advanced technology to develop their product candidates, which could render our products obsolete, less competitive or not economical.

 

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Large pharmaceutical companies have many capabilities that exceed our own, such as extensive experience in clinical testing, obtaining marketing approvals, recruiting patients and manufacturing pharmaceutical products. These companies also have significantly greater research and marketing capabilities than we do, with products in the late stages of development or which are already approved, as well as collaborative development arrangements with leading organizations. Large pharmaceutical companies also have greater resources and can invest heavily to accelerate discovery and development. Smaller and other early-stage companies could also compete with us in recruiting and retaining qualified scientific and management personnel, establishing clinical trial sites and patient registration for clinical trials, as well as in acquiring technologies complementary to, or necessary for, our programs. Finally, mergers and acquisitions in the biotechnology and pharmaceutical industries may result in even more resources being concentrated among a smaller number of our competitors. As a result of all of these factors, our competitors and particularly, larger pharmaceutical companies, could succeed in discovering, developing, receiving marketing approval for and commercializing product candidates in our target markets before we are able.

 

We could lose or have reduced commercial opportunities if any competitors successfully develop and commercialize products that are safer, more effective, have fewer or less-severe effects, are more convenient, have a broader label, are marketed more effectively, are reimbursed or are less expensive than any product candidate that we develop. Our competitors also may obtain marketing approval for their products more rapidly than we may obtain approval for ours, which could result in our competitors establishing a strong market position before we can enter the market. Even if the product candidates we develop receive marketing approval, they may be priced at a significant premium over competitive products that have already received approval, which will further reduce our competitive position.

 

If we are unable to establish sales, marketing and distribution capabilities either on our own or in collaboration with third parties, we could be unsuccessful in commercializing our product candidates and generating product revenues.

 

We do not have an infrastructure for the sales, marketing or distribution of our product candidates if they receive regulatory approval for marketing and commercialization, and the cost of establishing and maintaining such capabilities could exceed the cost-effectiveness of doing so. In order to market any product for which we receive approval, we must build our sales, distribution, marketing, managerial and other non-technical capabilities, or alternatively make arrangements with third parties to obtain the requisite licenses and perform these services on our behalf.

 

We currently plan to commercialize our product candidates initially in the United States, Israel and Europe. If we receive regulatory approval in those jurisdictions to market our products, including the investigational product candidate, BST-236, we may build a focused sales, distribution and marketing infrastructure to market them. There are significant expenses and risks involved with establishing our own sales, marketing and distribution capabilities, including the ability to hire, retain and appropriately incentivize qualified individuals, generate sufficient sales leads, provide adequate training to sales and marketing personnel, and effectively manage a geographically dispersed sales and marketing team. Any failure or delay in the development of our internal sales, marketing and distribution capabilities, or to obtain and maintain the requisite licenses, could delay product launches and adversely impact the commercialization of our product candidates.

 

In lieu of establishing our own sales, marketing and distribution capabilities ourselves, we could enter into arrangements with collaborative partners or other third parties. Any terms of these arrangements could be unfavorable to us, and we could be unable to enter into any arrangements at all. If we are unable to build our own sales force or negotiate a collaborative relationship with a third party, we could be forced to delay the potential commercialization of such products or reduce the scope of our sales or marketing activities. If we increase our expenditures to fund commercialization activities ourselves, we will need to obtain additional capital, which may not be available to us on acceptable terms or at all. If we do not have sufficient funds, we will not be able to bring our product candidates to market or generate product revenue.

 

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We will require substantial additional capital to fund our operations. If we are unable to raise sufficient capital, we could be forced to delay, reduce or eliminate our product discovery, development programs or commercialization efforts.

 

The development, marketing and commercialization of pharmaceutical products require a substantial amount of capital. We expect our expenses to increase in connection with our ongoing activities, particularly as we continue ongoing Phase 2b clinical trials, seek marketing approval for our investigational product candidate, BST-236, as well as initiate new research and preclinical development efforts for any current and future product candidates. If we obtain marketing approval for BST-236, we could incur significant commercialization expenses related to product sales, marketing, manufacturing and distribution to the extent that such capabilities are not the responsibility of a third party collaborator. In addition, after completion of the merger, we expect to incur substantial additional costs associated with operating as a public company. Accordingly, we will need to obtain substantial additional funding to continue our operations, and any failure to receive a sufficient amount of funding will hinder our ability to effectively market and commercialize BST-236, as well as develop any new product candidates in the future.

 

We will be required to expend significant funds in order to advance the development of the product candidates in our pipeline, as well as other product candidates we may seek to develop. Biosight expects that its existing cash will be sufficient to fund our operating expenses and capital expenditure requirements through the middle of 2022. However, existing cash will not be sufficient to fund all of the efforts that we plan to undertake or to fund the completion of development of any of our product candidates. Even if we seek to enter into, and are successful in securing, collaborative agreements for development of product candidates, we do not expect to enter into agreements for every product. Accordingly, we will need to obtain further funding through public or private equity offerings, debt financings, collaborations and licensing arrangements, among other sources. Adequate additional funding may not be available to us on acceptable terms or at all. If we are unable to raise additional capital in sufficient amounts or on terms acceptable to us, we may have to significantly delay, scale back or discontinue the development or commercialization of one or more of our products or product candidates or one or more of our other research and development initiatives. Our failure to raise any necessary capital could have a negative impact on our financial condition and our ability to develop product candidates in line with our business strategy and product pipeline.

 

Because the length of time and the activities associated with our product candidates are highly uncertain, we cannot estimate the actual funds we will require for developing and the extent and costs of our marketing and commercialization efforts, if any. The estimates of what activities our existing cash will cover could prove to be inaccurate, and we could use our available capital resources sooner than we currently expect. We could also need additional funding sooner than we expect as a result of changing circumstances, some of which are beyond our control, which could cause us to consume capital significantly faster than we anticipate. Our future funding requirements, both short-term and long-term, will depend on many factors, including:

 

  the timing, progress, costs and results of clinical trials of our product candidates, including phase 3 clinical trials of BST-236;
     
  future clinical development plans we establish for our product candidates;
     
  the number and characteristics of product candidates that we develop or may in-license;
     
  the outcome, timing and cost of meeting regulatory requirements established by the FDA and other comparable foreign regulatory authorities;
     
  the cost of filing, prosecuting, defending and enforcing our intellectual property rights;
     
  the cost of defending potential intellectual property disputes, including patent infringement actions brought by third parties against us or any of our current or future product candidates;
     
  the effect of competing market developments;
     
  the cost and timing of completion of commercial-scale manufacturing activities;

 

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  the cost of establishing sales, marketing and distribution capabilities for our products in regions where we choose to commercialize our products on our own; and
     
  the initiation, progress, timing and results of the commercialization of our product candidates, if approved for commercial sale.

 

We have received and may receive in the future Israeli governmental grants to assist in the funding of our research and development activities.

 

Through the date hereof, we had received an aggregate of $2.4 million in the form of grants from the Israel Innovation Authority, previously known as the Office of the Chief Scientist (the “IIA”). The requirements and restrictions for such grants are found in the Law for Encouragement of Industrial Research and Development—1984 (the “Research Law”). Under the Research Law, royalties of 3% to 3.5% on the revenues derived from sales of products or services developed in whole or in part using these IIA grants are payable to the Israeli government. We developed our investigational product candidate, BST-236, at least in part, with funds from these grants, and accordingly we would be obligated to pay these royalties on sales of any of our product candidates that achieve regulatory approval. The maximum aggregate royalties paid generally cannot exceed 100% of the grants made to us, plus annual interest equal to the 12-month LIBOR applicable to dollar deposits, as published on the first business day of each calendar year. As of June 30, 2021, we had not paid any royalties to the IIA.

 

The Israeli government grants we have received for research and development expenditures restrict our ability to manufacture products and transfer technologies outside of Israel and require us to satisfy specified conditions. If we fail to satisfy these conditions, we may be required to refund grants previously received together with interest and penalties.

 

Our research and development efforts have been financed, in part, through the grants that we have received from the IIA. Therefore, we must comply with the requirements of the Research Law. Under the Research Law, we are prohibited from manufacturing products developed using these grants outside of the State of Israel without special approvals. We may not receive the required approvals for any proposed transfer of manufacturing activities. Even if we do receive approval to manufacture products developed with government grants outside of Israel, the royalty rate may increase, and we may be required to pay up to 300% of the grant amounts plus interest, depending on the manufacturing volume that is performed outside of Israel. This restriction may impair our ability to outsource manufacturing or engage in our own manufacturing operations for those products or technologies.

 

Additionally, under the Research Law, we are prohibited from transferring, including by way of license, the IIA-financed technologies and related intellectual property rights and know-how outside of the State of Israel, except under limited circumstances and only with the approval of the IIA Research Committee. We may not receive the required approvals for any proposed transfer and, even if received, we may be required to pay the IIA a portion of the consideration that we receive upon any sale of such technology to a non-Israeli entity, up to 600% of the grant amounts plus interest. The scope of the support received, the royalties that we have already paid to the IIA, the amount of time that has elapsed between the date on which the know-how or the related intellectual property rights were transferred and the date on which the IIA grants were received, the sale price and the form of transaction will be taken into account in order to calculate the amount of the payment to the IIA. Approval of the transfer of technology to residents of the State of Israel is required, and may be granted only if the recipient abides by the provisions of applicable laws, including the restrictions on the transfer of know-how and the obligation to pay royalties. There is no assurance that approval of any such transfer, if requested, will be granted.

 

These restrictions may impair our ability to sell our technology assets, to perform or outsource manufacturing outside of Israel, to engage in change of control transactions or to otherwise transfer our know-how outside of Israel and may require us to obtain the approval of the IIA for certain actions and transactions and to pay additional royalties and other amounts to the IIA. In addition, any change of control and any change of ownership of our shares that would make a non-Israeli citizen or resident an “interested party,” as defined in the Research Law (such as the change of ownership which will take place as a result of the merger contemplated herein) requires prior written notice to the IIA, and our failure to comply with this requirement could result in criminal liability. These restrictions will continue to apply even after we have repaid the full amount of royalties on the grants. If we fail to satisfy the conditions of the Research Law, we may be required to repay certain grants previously received together with interest and penalties, and may become subject to criminal charges.

 

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Our future success depends on our ability to retain key employees, consultants and advisors and to attract, retain and motivate qualified personnel.

 

We are highly dependent on principal members of our executive team listed under “Management” herein, including Dr. Ruth Ben Yakar, Biosight’s current chief executive officer and a member of Biosight’s Board until the closing of the merger completed herein, the loss of whose services may adversely impact the achievement of our objectives. Biosight and Dr. Ben Yakar have negotiated a separation agreement pursuant to which Dr. Ben Yakar shall resign from her position in Biosight and, effective as of the closing of the merger, Dr. Ben Yakar shall not act as a Board member or officer of Biosight. Biosight and Dr. Ben Yakar have agreed to the principal terms of the separation agreement, which have also been approved by Biosight’s board of directors, subject to the approval of Biosight’s shareholders, but the parties have not executed the separation agreement yet.

 

While we have entered into employment agreements with each of our executive officers, any of them could leave our employment at any time, as all of our employees are “at will” employees. Recruiting and retaining other qualified employees, consultants and advisors for our business, including scientific and technical personnel, will also be critical to our success. There is currently a shortage of skilled executives in our industry, which is likely to continue. As a result, competition for skilled personnel is intense, and the turnover rate can be high. We may not be able to attract and retain personnel on acceptable terms given the competition among numerous pharmaceutical and biotechnology companies for individuals with similar skill sets. In addition, failure to succeed in pre-clinical studies or clinical trials may make it more challenging to recruit and retain qualified personnel. The inability to recruit or loss of the services of any executive, key employee, consultant or advisor may impede the progress of our research, development and commercialization objectives.

 

Our employees, independent contractors, consultants, commercial partners, principal investigators, or CROs may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements, which could have a material adverse effect on our business.

 

We are exposed to the risk of employee and third party fraud or other misconduct. Misconduct by employees, independent contractors, consultants, commercial partners, manufacturers, investigators, or contract research organizations (“CROs”) could include intentional, reckless, negligent, or unintentional failures to comply with FDA regulations, comply with applicable fraud and abuse laws, provide accurate information to the FDA, properly calculate pricing information required by federal programs, comply with federal procurement rules or contract terms, report financial information or data accurately or disclose unauthorized activities to us. This misconduct could also involve the improper use or misrepresentation of information obtained in the course of clinical trials, which could result in regulatory sanctions and serious harm to our reputation. It is not always possible to identify and deter this type of misconduct, and the precautions we take to detect and prevent this activity may not be effective in controlling unknown or unmanaged risks or losses or in protecting us from governmental investigations or other actions or lawsuits stemming from a failure to be in compliance with such laws or regulations. Moreover, it is possible for a whistleblower to pursue a False Claims Act case against us even if the government considers the claim unmeritorious and declines to intervene, which could require us to incur costs defending against such a claim. Further, due to the risk that a judgment in an FCA case could result in exclusion from federal health programs or debarment from government contracts, whistleblower cases often result in large settlements. If any such actions are instituted against us, and we are not successful in defending ourselves or asserting our rights, those actions could have a significant impact on our business, financial condition, and results of operations, including the imposition of significant fines or other sanctions.

 

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Our internal computer systems, or those of our collaborators or other contractors or consultants, may fail or suffer security breaches, which could result in a material disruption of our product development programs.

 

Our internal computer systems and those of our current and any future collaborators and other contractors or consultants are vulnerable to damage from computer viruses, unauthorized access, natural disasters, terrorism, war and telecommunication and electrical failures. While we are not aware of any such material system failure, accident or security breach to date, if such an event were to occur and cause interruptions in our operations, it could result in a material disruption of our development programs and business operations, whether due to a loss of our trade secrets or other proprietary information or other similar disruptions. For example, the loss of clinical trial data from completed or future clinical trials could result in delays in our regulatory approval efforts and significantly increase our costs to recover or reproduce the data. To the extent that any disruption or security breach were to result in a loss of, or damage to, our data or applications, or inappropriate disclosure of confidential or proprietary information, we could incur liability, our competitive position could be harmed and the further development and commercialization of our product candidates could be delayed.

 

We may be exposed to significant foreign exchange risk.

 

We incur significant portions of our expenses, and may in the future derive revenue, in currencies other than the U.S. dollar, in particular, the euro and the Israeli Shekel. As a result, we are exposed to foreign currency exchange risk as our results of operations and cash flows are subject to fluctuations in foreign currency exchange rates. Any fluctuation in the exchange rate of these foreign currencies may negatively impact our business, financial condition and operating results. Global economic events, such as the COVID-19 pandemic, have and may continue to significantly impact local economies and the foreign exchange markets, which may increase the risks associated with sales denominated in foreign currencies. We currently do not engage in hedging transactions to protect against uncertainty in future exchange rates. Therefore, for example, an increase in the value of the euro against the U.S. dollar could be expected to have a negative impact on our operating expenses as euro denominated expenses, if any, would be translated into U.S. dollars at an increased value. We cannot predict the impact of foreign currency fluctuations, and foreign currency fluctuations in the future may adversely affect our financial condition, results of operations and cash flows.

 

Risks Related to the Discovery and Clinical Development of Our Product Candidates

 

Our business is heavily dependent on the successful development, regulatory approval and commercialization of our investigational product candidates, BST-236, ADXS-503 and ADXS-504.

 

Currently, none of our product candidates has received approval for commercial sale. As a result, we were not able to develop a marketable product. We expect a substantial portion of our efforts and expenditures to be devoted to the continued clinical evaluation of BST-236 and its commercialization following regulatory approval, if received, as well as the development, manufacture, preclinical and clinical evaluation of any other product candidates. Therefore, our business depends significantly on the successful completion of clinical trials, regulatory approval and commercialization for BST-236, as well as any product candidates that we seek to develop in the future.

 

We cannot be certain that BST-236 or any of our future product candidates will receive regulatory approval or will be successfully commercialized even if they receive approval. The research, testing, manufacturing, labeling, approval, sale, marketing and distribution of our product candidates are, and will remain, subject to extensive regulation by the FDA and other regulatory authorities in the United States and other countries, each of which has different regulations. We have not completed Phase 2b or any later-stage clinical trials for BST-236 and will not be permitted to market BST-236 or any other product candidate in the United States until we receive approval of a new drug application (“NDA”), or in any foreign country until we receive the requisite marketing approval or authorization. Even if we do receive regulatory approval to market BST-236 or any other product candidate, such approval could be subject to limitations on the indicated uses or patient for which we are able to market the product.

 

We have not submitted an NDA to the FDA or any comparable application to another regulatory authority in any other country. Obtaining approval of an NDA or similar regulatory approval is an extensive, lengthy, expensive and inherently uncertain process. The FDA or relevant foreign regulatory authority may delay, limit or deny approval of BST-236 or our Lm-LLO immunotherapies product candidates, including axalimogene filolisbac (“AXAL”), ADXS-PSA, ADXS-503, ADXS-504, ADXS-HER2 or any of our future product candidates for many reasons, including, but not limited to:

 

  our failure to demonstrate that our product candidates are safe or effective as a treatment for any of our currently targeted indications to the satisfaction of the relevant regulatory authority;
     
  requirements by the relevant regulatory authority for additional pre-approval studies or clinical trials;

 

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  the results of our clinical trials do not meet the requisite level of statistical or clinical significance;
     
  disagreement by the relevant regulatory authority with the way we conduct our clinical trials;
     
  actions taken, or errors or breaches of protocols committed by, the CROs we retain to conduct clinical trials which are outside of our control and adversely impact our clinical trials and ability to obtain market approvals;
     
  findings by the relevant regulatory authority that the data from nonclinical studies or clinical trials is not sufficient to demonstrate that the benefits of our products outweigh any safety risks;
     
  disagreement by the relevant regulatory authority with our interpretation of data or significance of results from the nonclinical studies and clinical trials of any product candidate;
     
  refusal by the relevant regulatory authority to accept data generated from our clinical trial sites;
     
  if our NDA or other application is being reviewed by an advisory committee, any difficulties that may arise from scheduling an advisory committee meeting in a timely manner, as well the advisory committee’s recommendations against approval or that the FDA or relevant regulatory authority require, as a condition for approval, additional nonclinical studies or clinical trials, limitations on approved labeling or distribution and use restrictions;
     
  requirement to develop a risk evaluation and mitigation strategy (“REMS”), or its equivalent;
     
  requirements for additional post-marketing studies or a patient registry;
     
  findings that the chemistry, manufacturing and controls are insufficient to support the quality of our products;
     
  findings of deficiencies in the manufacturing processes or facilities of our manufacturers; or
     
  changes to the policies of, or the adoption of new regulations by, the relevant regulatory authority.

 

Clinical studies required for our product candidates are expensive, time-consuming, difficult to design and implement and involve uncertain outcomes.

 

Obtaining marketing approvals, both in the United States and abroad, is lengthy, time-consuming and expensive. It may take many years or more per study, if approval is obtained at all, and can vary substantially based upon a variety of factors, including the type, complexity and novelty of our product candidates. To secure marketing approval, we must conduct preclinical and clinical trials and submit extensive data to the relevant regulatory authorities in order to establish the product candidate’s safety and efficacy. We could experience delays in the commencement and rate of completion of clinical studies due to a number of factors, including, for example: the inability to manufacture sufficient quantities of stable and qualified materials under the relevant regulatory standards for use in clinical studies; slower than expected rates of patient recruitment and enrollment; modification of clinical study protocols; changes in regulatory requirements for clinical studies; the lack of effectiveness during clinical studies; the emergence of unforeseen safety issues; and government or regulatory delays which could require us to suspend or terminate the studies. For example, in June 2019, Advaxis announced that it was closing its AIM2CERV Phase 3 clinical trial with AXAL in cervical cancer due to the delays it incurred as a result of the recent FDA partial clinical hold on the trial, as well as the estimated cost and time to completion of the trial. This Phase 3 clinical trial with ADXS-HPV (AXAL) in cervical cancer was closed on June 11, 2021. Furthermore, Advaxis has completed the clinical study report from Part A of the ADXS-NEO study and closed the study and IND closure has been requested.

 

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The results of any clinical studies we conduct are uncertain. In particular, the results we obtain from early clinical studies are not predictive of the results we will obtain in later clinical studies. It is also possible that clinical studies will fail to demonstrate the safety and effectiveness required to obtain the relevant regulatory approvals to market and commercialize our product candidates. Any failure to demonstrate safety and effectiveness could harm the development of that product candidate and others that we may develop in the future, particularly because it may cause us to abandon the development of that product candidate or significantly delay plans to develop other product candidates. Delaying or terminating our clinical studies will delay the filing of our NDAs, or their foreign equivalents, and will also hinder our ability to commercialize our product candidates and generate product revenues. In addition to the foregoing, approval policies, regulations, or the type and amount of clinical data necessary to gain approval may change during the course of a product candidate’s clinical development and may vary among jurisdictions.

 

Enrollment and retention of patients in clinical trials could be made more difficult or rendered impossible by multiple factors that are outside our control.

 

We have completed enrollment into our Phase 2b clinical trial for our investigational product candidate, BST-236, as a first-line, single-agent treatment for patients with AML, are currently enrolling patients into the Phase 2 trial sponsored by the Groupe Francophone des Myélodysplasies (“GFM”), and expect to enroll patients into additional clinical trials by the end of 2021. We could encounter delays in enrolling, or be unable to enroll, a sufficient number of patients to complete any of our clinical trials. Even once we enroll patients, we could be unable to retain the number of patients necessary to complete any of our trials.

 

Our ability to enroll and retain patients in clinical trials depends on many factors, including: the size of the patient population; the nature of the trial protocol; the effectiveness of our patient recruitment efforts; delays in enrollment due to travel or quarantine policies, or other factors, related to COVID-19; the existing body of safety and efficacy data with respect to the study candidate; the perceived risks and benefits of cytarabine for the treatment of hematological diseases; the number and nature of competing existing treatments for our target indications, the number and nature of ongoing trials for other product candidates in development for our target markets; any pre-existing conditions in patients that preclude participation; the proximity of patients to clinical sites; and the eligibility criteria for the study.

 

Delays or failures in planned patient enrollment or retention may result in increased costs and program delays, which could have an adverse effect on our ability to develop our product candidates or could render further development impossible. In addition, we expect to rely on CROs and clinical trial sites to ensure that clinical trials are conducted under proper conditions, and, while we have entered into agreements governing their services, we will be limited in our ability to control their actual performance.

 

Results of preclinical studies and early clinical trials may not be predictive of results of future clinical trials.

 

The outcome of preclinical studies and early clinical trials are not always predictive of the success of later clinical trials, and interim results of clinical trials do not necessarily predict success in the results of completed clinical trials. For example, even though our Phase 1/2a and Phase 2 clinical trials provided promising data that our investigational product candidate, BST-236, has safe and effective qualities in the treatment of AML, these results may not be indicative of any results we achieve in future randomized Phase 3 clinical trials that may be conducted with a different patient pool.

 

Preclinical and clinical data are susceptible to varying interpretations and analyses. Even if we, or any collaborators, believe that the results of clinical trials for our product candidates warrant marketing approval, the FDA or comparable foreign regulatory authorities could disagree and reject marketing approval. In some instances, there can be significant variability in safety or efficacy results between different clinical trials of the same product candidate due to numerous factors, including changes in trial procedures, differences in the size and type of the patient populations, changes in and adherence to the dosing regimen and the rate of dropout among clinical trial participants. If we fail to receive positive results in clinical trials, the development timeline and regulatory approval and commercialization prospects for our product candidates, and, correspondingly, our business and financial prospects would be negatively impacted.

 

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The results of clinical trials conducted at clinical trial sites outside the United States might not be accepted by the FDA, and data developed outside of a foreign jurisdiction similarly might not be accepted by such foreign regulatory authority.

 

Some of the clinical trials for our product candidates that are being or will be conducted through our partnerships and collaborations may be conducted outside the United States, and we intend in the future to conduct additional clinical trials outside the United States. Although the FDA, EMA or comparable foreign regulatory authorities may accept data from clinical trials conducted outside the relevant jurisdiction, acceptance of these data is subject to certain conditions. For example, the FDA requires that the clinical trial must be well designed and conducted and performed by qualified investigators in accordance with ethical principles such as institutional review board (“IRB”) or ethics committee approval and informed consent, the trial population must adequately represent the U.S. population, and the data must be applicable to the U.S. population and U.S. medical practice in ways that the FDA deems clinically meaningful. In addition, while these clinical trials are subject to the applicable local laws, acceptance of the data by the FDA will be dependent upon its determination that the trials were conducted consistent with all applicable U.S. laws and regulations. There can be no assurance that the FDA will accept data from trials conducted outside of the United States as adequate support of a marketing application. Similarly, we must also ensure that any data submitted to foreign regulatory authorities adheres to their standards and requirements for clinical trials and there can be no assurance a comparable foreign regulatory authority would accept data from trials conducted outside of its jurisdiction.

 

Because the target patient populations for many of the product candidates we may develop are small, we must be able to successfully identify patients and achieve a significant market share to achieve and maintain profitability and growth.

 

BST-236 seeks to address a highly unmet need by developing therapeutic products for rare, oncology and hematological illnesses among a small subset of affected patients. We focus our research and product development on treatments for diseases such as, but not limited to, AML, acute lymphoblastic leukemia (“ALL”), and MDS. We have also conducted clinical studies of Lm Technology immunotherapies in non-small cell lung cancer and other solid tumor types, prostate cancer and HPV-associated cancers.

 

Our investigational product candidate, BST-236, targets elderly patients, who are more likely to develop these diseases, or patients who cannot tolerate the high levels of toxicity associated with standard chemotherapy commonly used to treat these conditions. Our projections of both the number of people who have these diseases, as well as the subset of people with these diseases who have the potential to benefit from treatment with the product candidates we may develop, are based on estimates. These estimates may prove to be incorrect and new studies may change the estimated incidence or prevalence of these diseases. The number of patients in the United States, Israel, Europe and elsewhere may turn out to be lower than expected. In addition, patients may not be amenable to treatment with our products, or may become increasingly difficult to identify or gain access to. If the market opportunities for any product candidates we may develop are smaller than we believe they are, our revenues, if any, may be adversely affected, and our ability to locate and enroll eligible patients, conduct clinical trials and perform other necessary requirements needed for marketing and commercialization approval may suffer.

 

In addition, cancer therapies are sometimes characterized as first-line, second-line, or third-line, and the FDA often approves new therapies initially only for third-line use. When cancer is detected early enough, first-line therapy, usually chemotherapy, hormone therapy, surgery, radiation therapy, immunotherapy or a combination of these, is sometimes adequate to cure the cancer or prolong life without a cure. Second- and third-line therapies are administered to patients when prior therapy is not effective. We are seeking approval of our investigational product candidate, BST-236, for patients who have received one or more prior treatments. If BST-236 proves to be sufficiently beneficial, we would expect to seek approval potentially as a first-line therapy, but there is no guarantee that product candidates we develop, even if approved, would be approved for first-line therapy, and, prior to any such approvals, we may have to conduct additional clinical trials. Even if we obtain a significant market share for BST-236, or any other product candidate and the potential target populations are small, we could fail to achieve profitability without obtaining marketing approval for additional indications, including use as first- or second-line therapy.

 

We may not be successful in our efforts to identify, discover or maintain certain rights to additional product candidates.

 

Although we intend to explore other therapeutic opportunities in addition to our investigational product candidate, BST-236, as well as our other current product candidates such as AXAL, ADXS-PSA, ADXS-503 and ADXS-504, we could fail to identify additional product candidates for clinical development for several reasons. For example, our research methodology could be unsuccessful in identifying potential product candidates. In addition, any product candidates we identify could have harmful side effects that make them unmarketable or unlikely to receive regulatory approval. Additional product candidates will require additional, time-consuming development efforts prior to commercialization, including preclinical studies, clinical trials and approval by the relevant regulatory authorities. Moreover, all product candidates are prone to risks of failure that are inherent in therapeutic product development, and our failure to successfully identify, develop, market and commercialize product candidates in the future will adversely affect our ability to grow our business and generate product revenue.

 

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Additionally, we could be required to relinquish valuable or beneficial rights to product candidates in connection with collaborative agreements we enter into with third parties to develop and commercialize our product candidates in the United States, Israel, Europe or other countries or territories of the world. For instance, since July 2020 we have been working with the French Study Group of the European Myelodysplastic Syndrome Cooperative Group, led by GFM, to continue our research and development efforts of BST-236. In our collaboration with GFM and any future collaboration with another third party in the future, we can expect to lose some or all of the control over the future success of that product candidate to the third party.

 

The commercial success of any current or future product candidate will depend upon the degree of market acceptance by physicians, patients, third-party payors and others in the medical community.

 

We are currently investigating BST-236 as a single-agent, first-line treatment in a Phase 2b clinical study, and aim to launch a Phase 3 trial and submit our NDA application to the FDA and seek marketing approval from other regulatory authorities by 2024. In addition, we closed the Phase 1/2 study with ADXS-PSA ± pembrolizumab in metastatic castration resistant prostate cancer patients on January 25, 2021. The MEDI Phase 2 combo study (AZ) with AXAL ± durvalumab in Cervical and Head and Neck Cancer and the AIM2CERV Phase 3 clinical trial with ADXS-HPV (AXAL) in cervical cancer were closed August 22, 2019 and June 11, 2021, respectively. The study with personalized neoantigen-directed therapies (ADXS-NEO) was closed on May 22, 2020 and the NEO program-IND inactivation request was submitted to FDA on May 10, 2021.

 

Accordingly, we have never commercialized a product, and even if we obtain any regulatory approval for BST-236 or other product candidates, their commercial success will depend in part on the medical community, patients and third-party payors accepting them as effective, safe and cost-effective. Any product that we bring to the market could fail to gain market acceptance by those in the medical community. For instance, physicians are often reluctant to switch their patients from existing therapies even when new and potentially more effective or convenient treatments enter the market. Patients could acclimate to the therapies that they are currently taking and do not want to switch unless their physicians recommend doing so or they are required to switch therapies due to lack of reimbursement for existing therapies. If approved for commercial sale by the FDA and other relevant regulatory authorities, the degree to which the medical community and other stakeholders accept BST-236 and other product candidates we develop will depend on, among other factors:

 

  the potential efficacy and potential advantages over alternative treatments;
     
  the frequency and severity of any side effects, including limitations or warnings contained in the product’s approved labeling, or side effects resulting from follow-up requirements for the administration of our products;
     
  the relative convenience and ease of administration;
     
  the willingness of the target patient population to try new therapies and of physicians to prescribe them;
     
  the strength of marketing and distribution support and timing of market introduction of competitive products;
     
  publicity concerning our products or competing products and treatments; and
     
  sufficient third-party insurance coverage and adequate reimbursement.

 

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Even if a product candidate displays a favorable efficacy and safety profile in preclinical studies and clinical trials, market acceptance of the product, if approved for commercial sale, will not be known until after it is launched. For example, initial Phase 1/2a clinical trials for BST-236 indicate that the treatment is safe and well-tolerated amongst the patients in our target population who are older adults or those not fit for intensive chemotherapy. Our efforts to educate the medical community and third-party payors on these benefits of BST-236, or any of the product candidates we may develop in the future, will likely require significant resources and their success is uncertain. If we are unable to receive an adequate level of acceptability for BST-236 and any other product candidates, we could be unable to generate significant product revenue and become profitable.

 

We could expend our limited resources to pursue a product candidate and fail to capitalize on other product candidates that are more profitable or for which there is a greater likelihood of success.

 

We have limited financial and managerial resources and intend to focus on developing product candidates for specific indications that we identify as most likely to succeed, in terms of both their potential for marketing approval and commercialization. Currently, we are prioritizing the development of BST-236, our investigational product candidate that seeks to treat patients with AML and other related hematological malignancies and who are older and susceptible to experiencing severe side effects associated with standard chemotherapy, or who have already responded poorly to prior chemotherapy treatments. In prioritizing our efforts on BST-236, we could forego or delay pursuing opportunities with other product candidates or for other indications that could prove to have greater potential for commercialization. Additionally, our resource allocation decisions could cause us to fail to capitalize on viable commercial products or profitable market opportunities. The spending decisions we do choose to make with respect to research and development programs could fail to yield any commercially viable product candidates. If we do not accurately evaluate the commercial potential or target market for a particular product candidate, we could relinquish valuable rights to that product candidate through collaboration, licensing or other royalty arrangements.

 

Obtaining and maintaining regulatory approval of our product candidates in one jurisdiction does not mean that we will be successful in obtaining regulatory approval of its product candidates in other jurisdictions.

 

Obtaining and maintaining regulatory approval of our product candidates in one jurisdiction does not guarantee that we will be able to obtain or maintain regulatory approval in any other jurisdiction, while a failure or delay in obtaining regulatory approval in one jurisdiction may have a negative effect on the regulatory approval process in others. For example, even if the FDA grants marketing approval of a product candidate, the EMA or comparable foreign regulatory authorities must also approve the manufacturing, marketing and promotion of the product candidate in those countries. Approval procedures vary among jurisdictions and can involve requirements and administrative review periods different from, and greater than, those in the United States, including additional preclinical studies or clinical trials, as clinical trials conducted in one jurisdiction may not be accepted by regulatory authorities in other jurisdictions. In many jurisdictions outside the United States, a product candidate must be approved for reimbursement before it can be approved for sale in that jurisdiction. In some cases, the price that we intend to charge for our products is also subject to approval.

 

Risks Related to the Marketing and Other Regulatory Approval of Our Product Candidates

 

If we are not able to obtain required regulatory approvals, or if we or our third-party collaborators fail to comply with the requisite regulatory requirements, we will not be able to commercialize our product candidates and generate product revenue.

 

We have not received approval from any regulatory authority to market our product candidates in any jurisdiction. We are currently conducting Phase 2b clinical trials in the United States and Israel for our investigational product candidate, BST-236, and plan to launch a Phase 3 study in 2022, and expect to submit an NDA to the FDA for accelerated market approval by 2024, provided we can demonstrate that BST-236 provides a clinical benefit at the time of submission. We cannot make the necessary submissions to seek regulatory approvals unless and until we successfully complete pivotal clinical trials that indicate the safety and efficacy of the treatment. It is possible that BST-236, or any other product candidates we may develop in the future, will never obtain the appropriate regulatory approvals necessary for us to commence product sales as anticipated.

 

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Our activities in connection with developing and commercializing our product candidates, such as the design, research, testing, manufacture, recordkeeping, labeling, packaging, storage, approval, advertising, promotion, sale and distribution, are subject to comprehensive regulation in the United States and abroad, including the FDA, the EMA and similar foreign regulatory authorities. We, or the third-party CROs with whom we expect to rely on and collaborate, cannot successfully commercialize our product candidates if we do not obtain marketing approval from these regulators or fail to comply with the requisite regulatory requirements on an ongoing basis. Securing marketing approval requires that we submit extensive nonclinical and clinical data and supporting information for our product candidates for each therapeutic indication to establish safety and efficacy of the product candidate for that indication. We must also submit information about the product manufacturing process to, and arrange for the inspection of manufacturing facilities by, the relevant regulatory authorities. Delays or errors in the submission of applications for marketing approval or issues, including those related to gathering the appropriate data and the inspection process, will ultimately delay or affect our ability to obtain regulatory approval, commercialize our product candidates and generate product revenue.

 

Even if we obtain marketing approval for our product candidates in one jurisdiction, we may never obtain marketing approval for them in any other jurisdiction, which would limit our ability to realize their full market potential.

 

We may also submit marketing applications in other countries. Regulatory authorities in jurisdictions outside of the United States have requirements for approval of product candidates with which we must comply prior to marketing in those jurisdictions. Obtaining foreign regulatory approvals and compliance with foreign regulatory requirements could result in significant delays, difficulties and costs for us and could delay or prevent the introduction of our products in certain countries. If we fail to comply with the regulatory requirements in international markets and/or receive applicable marketing approvals, our target market will be reduced and our ability to realize the full market potential of our product candidates will be harmed.

 

We and any third-party collaborators, our CROs and contract manufacturers must establish and comply with numerous and varying regulatory requirements on a country-by-country basis in order to market our product candidates in any particular jurisdiction. Regulatory approval in one country does not guarantee regulatory approval in any other country. As part of the regulatory approval process in certain jurisdictions, we must conduct preclinical and clinical trials of our product candidates to prove their safety and efficacy. However, the preclinical or clinical trials that we conduct in one country will not necessarily be accepted by regulatory authorities in other countries. In addition, the approval processes vary by country and can involve additional product testing and validation, as well as prolonged administrative review periods. Seeking foreign regulatory approval could result in difficulties and extraneous costs, such as, for example, requirements to conduct additional nonclinical or clinical trials above and beyond the studies we have already performed. The variation of regulatory approval requirements in different countries could delay or prevent us from introducing our product candidates in those countries. We are currently conducting Phase 2b clinical trials in the United States and Israel for our investigational product candidate, BST-236 and plan to launch a Phase 3 study in 2022, and expect to submit an NDA to the FDA for accelerated market approval by 2024, provided we can demonstrate that BST-236 provides a clinical benefit at the time of submission. If the FDA approves our NDA and permits us to market BST-236 in the United States, any such approval will not ensure that regulatory authorities in other countries or jurisdictions will provide similar approval.

 

We do not currently have any product candidates approved for sale in any jurisdiction, including in international markets, and we do not have experience in obtaining regulatory approval in international markets. If we fail to comply with regulatory requirements in international markets or to obtain and maintain required approvals, or if regulatory approvals in international markets are delayed, our target market will be reduced and our ability to realize the full market potential of any product we develop will be unrealized.

 

Our current and future relationships with healthcare providers, customers and third-party payors could be subject to fraud and abuse and other healthcare laws and regulations, which could expose us to criminal sanctions, civil penalties, contractual damages, reputational harm and diminished profits and future earnings.

 

Members of the medical community, such as healthcare providers and physicians, as well as patients and third-party payors, will play a primary role in recommending BST-236 or any other product candidates for which we obtain marketing approval, if any. Any relationships that we enter into with healthcare providers, patients and third-party payors could expose us to fraud and abuse and other healthcare laws and regulations. These requirements could constrain the arrangements and relationships that we use to market, sell and distribute BST-236 or any product candidates for which we obtain marketing approval. In the United States, where we intend to seek marketing approval of BST-236, we will face restrictions under applicable federal and state healthcare laws and regulations, including the following:

 

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  the Anti-Kickback Statute, which prohibits persons from knowingly and willfully soliciting, offering, receiving or providing remuneration, directly or indirectly, in cash or in kind, to induce or reward, or in return for, either the referral of an individual for, or the purchase, order or recommendation of, any good or service, for which payment may be made under a federal healthcare program such as Medicare and Medicaid;
     
  the federal civil and criminal false claims laws (including the False Claims Act, which is enforceable by civil whistleblower or qui tam actions on behalf of the government), and the civil monetary penalties law, which prohibit individuals or entities from knowingly presenting, or causing to be presented false or fraudulent claims for payment by a federal government program, or making a false statement or record material to payment of a false claim or avoiding, decreasing or concealing a money obligation to the federal government;
     
  the federal Health Insurance Portability and Accountability Act of 1996, as amended by the Health Information Technology for Economic and Clinical Health Act, and their implementing regulations, which impose criminal and civil liability for executing schemes to defraud any healthcare benefit program and impose obligations with respect to safeguarding the privacy, security and transmission of individually identifiable health information;
     
  the federal false statements statute, which prohibits knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false statement in connection with the delivery of or payment for healthcare benefits, items or services;
     
  the federal transparency requirements under the Affordable Care Act, (the “ACA”), as amended by the Health Care and Education Reconciliation Act of 2010, which requires manufacturers of drugs, devices, biologics and medical supplies to report information related to physician payments and other transfers of value and ownership and investment interests held by physicians and their immediate family members; and
     
  analogous state laws and regulations, which apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third-party payors, including private insurers. Some state laws require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance regulations promulgated by the federal government and may require drug manufacturers to report information relating to payments and other transfers of value to physicians and other healthcare providers, marketing expenditures, or drug pricing. State and local laws require the registration of pharmaceutical sales and medical representatives. State and non-United States laws also govern the privacy and security of health information in some circumstances, and can differ from each other in significant ways and complicate compliance efforts.

 

We will likely incur substantial costs by taking efforts to ensure that our arrangements with healthcare providers, patients and third-party payors will comply with applicable healthcare laws and regulations so that we can ensure that we obtain and maintain marketing approval. It is possible that governmental authorities, both in the United States or in any foreign country or territory where we conduct business, will conclude that our business practices do not comply with current or future fraud and abuse or other healthcare laws and regulations. If government authorities determine that our operations violate any of the requirements that apply to us, we could lose or fail to obtain marketing approval for our product candidate.

 

We could also be subject to significant civil, criminal and administrative penalties, damages, fines, disgorgement, imprisonment, exclusion from government funded healthcare programs (such as, in the United States, Medicare and Medicaid and other federal healthcare programs), contractual damages, reputational harm, diminished profits and future earnings, additional integrity reporting and oversight obligations, and the curtailment or restructuring of our operations, any of which could adversely affect our business and results of operations. If any of the healthcare providers, physicians or entities with whom we expect to do business is found to be not in compliance with applicable laws, they could be subject to significant criminal, civil or administrative sanctions, including exclusions from government funded healthcare programs, which could have a material adverse effect on our business and results of operations. Even the mere issuance of a subpoena or the fact of an investigation alone, regardless of the merit, may lead to negative publicity, a drop in our share price, and other harms to our business.

 

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Recently enacted and future legislation may increase the difficulty and cost for us to obtain marketing approval of and commercialize our product candidates and affect the prices we may obtain.

 

In the United States and some foreign jurisdictions, there have been a number of legislative and regulatory changes and proposed changes regarding the healthcare system that could, among other things, prevent or delay marketing approval of our product candidates, restrict or regulate post-approval activities and affect our ability to profitably sell any products for which we obtain marketing approval.

 

For example, in March 2010, the ACA was enacted to broaden access to health insurance, reduce or constrain the growth of healthcare spending, enhance remedies against fraud and abuse, add new transparency requirements for health care and health insurance industries, impose new taxes and fees on the health industry and impose additional health policy reforms. The law has continued the downward pressure on pharmaceutical pricing, especially under the Medicare program, and increased the industry’s regulatory burdens and operating costs. Among the provisions of the ACA of importance to our product candidates are the following:

 

  an annual, nondeductible fee payable by any entity that manufactures or imports specified branded prescription drugs and biologic agents;
     
  an increase in the statutory minimum rebates a manufacturer must pay under the Medicaid Drug Rebate Program;
     
  a new methodology by which rebates owed by manufacturers under the Medicaid Drug Rebate Program are calculated for drugs that are inhaled, infused, instilled, implanted or injected;
     
  a new Medicare Part D coverage gap discount program, in which manufacturers must now agree to offer point-of-sale discounts of 70% off negotiated prices of applicable brand drugs to eligible beneficiaries under their coverage gap period, as a condition for the manufacturer’s outpatient drugs to be covered under Medicare Part D;
     
  extension of manufacturers’ Medicaid rebate liability to individuals enrolled in Medicaid managed care organizations;
     
  expansion of eligibility criteria for Medicaid programs in certain states;
     
  expansion of the entities eligible for discounts under the Public Health Service pharmaceutical pricing program;
     
  a licensure framework for follow on biologic products;
     
  a new requirement to annually report drug samples that manufacturers and distributors provide to physicians; and
     
  a new Patient-Centered Outcomes Research Institute to oversee, identify priorities in, and conduct comparative clinical effectiveness research, along with funding for such research.

 

There remain judicial, Congressional, and other challenges to certain aspects of the ACA. In January 2017, the former President of the United States signed Executive Orders and other directives designed to delay the implementation of certain provisions of the ACA or otherwise circumvent some of the requirements for health insurance mandated by the ACA. Legislation enacted in 2017, informally titled the Tax Cuts and Jobs Act of 2017 includes a provision repealing, effective January 1, 2019, the tax-based shared responsibility payment imposed by the ACA on certain individuals who fail to maintain qualifying health coverage for all or part of a year that is commonly referred to as the “individual mandate.” Additionally, the 2020 federal spending package permanently eliminated, effective January 1, 2020, the ACA’s “Cadillac” tax on high-cost employer-sponsored health coverage and medical device tax and, effective January 1, 2021, also eliminates the health insurer tax.

 

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Further, the Bipartisan Budget Act of 2018, among other things, amended the ACA, effective January 1, 2019, to increase from 50% to 70% the point-of-sale discount that is owed by pharmaceutical manufacturers who participate in Medicare Part D and to close the coverage gap in most Medicare drug plans, commonly referred to as the “donut hole.” In addition, the federal government eliminated federal cost-sharing reduction (“CSR”) payments to insurance companies. The loss of such federal CSR payments has resulted in increased premiums on certain policies issued by qualified health plans under the ACA. Moreover, in December 2018, the U.S. Centers for Medicare and Medicaid Services, or CMS, published a new final rule permitting further collections and payments to and from certain ACA qualified health plans and health insurance issuers under the ACA risk adjustment program in response to the outcome of federal district court litigation regarding the method CMS uses to determine this risk adjustment. On April 27, 2020, the United States Supreme Court reversed a Federal Circuit decision that previously upheld Congress’ denial of $12 billion in “risk corridor” funding. On December 14, 2018, a United States District Court Judge in the Northern District of Texas ruled that the individual mandate is a critical and inseverable feature of the ACA, and therefore, because it was repealed as part of the Tax Cuts and Jobs Act of 2017, the remaining provisions of the ACA are invalid as well. In December 2019, the U.S. Court of Appeals for the Fifth Circuit upheld the District Court ruling that the individual mandate was unconstitutional and remanded the case back to the District Court to determine whether the remaining provisions of the ACA are invalid as well. On March 2, 2020, the United States Supreme Court granted the petitions for writs of certiorari to review this case. It is unclear how such litigation and other efforts to repeal and replace the ACA will impact the ACA and our business. The ACA is likely to continue the downward pressure on pharmaceutical pricing and may also increase our regulatory burdens and operating costs. We continue to evaluate the effect that the ACA and its possible repeal and replacement has on our business.

 

Other legislative changes have been proposed and adopted since the ACA was enacted. For example, in August 2011, President Obama signed into law the Budget Control Act of 2011, which, among other things, created the Joint Select Committee on Deficit Reduction to recommend to Congress proposals in spending reductions. The Joint Select Committee did not achieve a targeted deficit reduction of at least $1.2 trillion for the years 2013 through 2021, triggering the legislation’s automatic reduction to several government programs. This included further reductions to Medicare payments to providers of 2% per fiscal year, which went into effect in April 2013 and, due to subsequent legislative amendments to the statute, will stay in effect through 2030 unless additional Congressional action is taken. The Coronavirus Aid, Relief and Economic Security Act (“CARES Act”), which was signed into law in March 2020 and is designed to provide financial support and resources to individuals and businesses affected by the COVID-19 pandemic, suspended the 2% Medicare sequester from May 1, 2020 through December 31, 2020, and extended the sequester by one year, through 2030. Additionally, in January 2013, the American Taxpayer Relief Act of 2012 was signed into law, which, among other things, reduced Medicare payments to several providers and increased the statute of limitations period in which the government may recover overpayments to providers from three to five years.

 

Further, there have been several recent United States Congressional inquiries and proposed federal and state legislation designed to, among other things, bring more transparency to drug pricing, review the relationship between pricing and manufacturer patient programs, reduce the out-of-pocket cost of prescription drugs and reform government program reimbursement methodologies for drugs. Such scrutiny has resulted in several recent Congressional inquiries and proposed and enacted federal and state legislation designed to, among other things, bring more transparency to pharmaceutical product pricing, review the relationship between pricing and manufacturer patient programs, and reform government program reimbursement methodologies for products. At the federal level, the current administration’s budget proposal for fiscal year 2021 includes a $135 billion allowance to support legislative proposals seeking to reduce drug prices, increase competition, lower out-of-pocket drug costs for patients, and increase patient access to lower-cost generic and biosimilar drugs. On March 10, 2020, the United States presidential administration sent “principles” for drug pricing to Congress, calling for legislation that would, among other things, cap Medicare Part D beneficiary out-of-pocket pharmacy expenses, provide an option to cap Medicare Part D beneficiary monthly out-of-pocket expenses, and place limits on pharmaceutical price increases.

 

Additionally, on May 11, 2018, the then President of the United States laid out his administration’s “Blueprint to Lower Drug Prices and Reduce Out-of-Pocket Costs” to reduce the cost of prescription drugs while preserving innovation and cures. The Department of Health and Human Services has solicited feedback on some of these measures and has implemented others under its existing authority. For example, in May 2019, CMS issued a final rule to allow Medicare Advantage Plans the option of using step therapy for Part B drugs beginning January 1, 2020. This final rule codified CMS’s policy change that was effective January 1, 2019. Congress and the United States presidential administration under President Trump each indicated that they would continue to seek new legislative and/or administrative measures to control drug costs. At the state level, legislatures have become increasingly aggressive in passing legislation and implementing regulations designed to control pharmaceutical and biological product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing.

 

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Additionally, on July 24, 2020, then President Trump announced four executive orders related to prescription drug pricing that attempt to implement several of the Trump administration proposals, including (i) a policy that would tie certain Medicare Part B drug prices to international drug prices, or the “most favored nation price,” the details of which were released on September 13, 2020 and also expanded the policy to cover certain Part D drugs; (ii) an order that directs HHS to finalize the Canadian drug importation proposed rule previously issued by HHS and makes other changes allowing for personal importation of drugs from Canada; (iii) an order that directs HHS to finalize the rulemaking process on modifying the Anti-Kickback Statute safe harbors for discounts for plans, pharmacies, and pharmaceutical benefit managers; and (iv) a policy that reduces costs of insulin and EpiPen’s to patients of federally qualified health centers. The FDA also recently released a final rule, effective November 30, 2020, implementing a portion of the importation executive order providing guidance for states to build and submit importation plans for drugs from Canada.

 

Legislative and regulatory proposals have been made to expand post-approval requirements and restrict sales and promotional activities for pharmaceutical products. We are not sure whether additional legislative changes will be enacted, whether the current regulations, guidance or interpretations will be changed, or what the impact of such changes on our business, if any, may be. In addition, increased scrutiny by the United States Congress of the FDA’s approval process may significantly delay or prevent marketing approval, as well as subject us to more stringent product labeling and post-marketing testing and other requirements

 

We expect that additional state and federal healthcare reform measures will be adopted in the future, any of which could limit the amounts that federal and state governments will pay for healthcare products and services, which could result in reduced demand for our product candidates or additional pricing pressures. In addition, it is possible that additional governmental action is taken in response to the COVID-19 pandemic.

 

The FDA has granted BST-236, AXAL and ADXS-HER2 fast track designations. Any such designation or grant of priority review status by the FDA or comparable foreign regulatory authority does not guarantee a faster development, regulatory review or approval process and will not assure approval of our product candidates.

 

Fast track designation by the FDA, or an equivalent designation by a comparable foreign authority, will not always lead to accelerated approval of a product candidate, or approval at all. The FDA will grant a product candidate with fast track designation, or designate it for priority review, if it determines that the product candidate offers a treatment for a serious condition and, if approved, the product would provide a significant improvement in safety or effectiveness. Such designation means that the goal for the FDA to review an application is six months, rather than the standard review period of ten months. The FDA has broad discretion with respect to whether or not to grant priority review status to a product candidate, so even if we believe a particular product candidate is eligible for such designation or status, the FDA may decide not to grant it. Additionally, even if we do receive a priority review designation, it does not result in expedited development and does not necessarily result in an expedited regulatory review or approval process. Moreover, such designation does not necessarily confer any advantage with respect to approval compared to conventional FDA procedures. The FDA may also withdraw the designation if it believes that the designation is no longer supported by data from our clinical development program.

 

In July 2020, the FDA granted our investigational product candidate, BST-236, with fast track designation for the treatment of patients with AML who are unfit for standard chemotherapy. As a result, we intend to submit an NDA to the FDA for marketing approval of BST-236 on an accelerated timeline, following the completion of our Phase 2b clinical trials in 2022. The FDA has also granted Fast Track Designation for AXAL for adjuvant therapy for high-risk locally advanced cervical cancer patients, and has granted Fast Track Designation for ADXS-HER2 for patients with newly-diagnosed, non-metastatic, surgically-respectable osteosarcoma. We could request priority review for any other product candidates we are developing or that we will develop in the future. Even though we have received fast track designation for BST-236, there is no guarantee that the FDA will approve our NDA at all, or within the six-month review cycle after we submit the NDA.

 

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BST-236, AXAL and ADXS-HER2 have received orphan drug designations by the FDA and orphan medicinal product designation by the EMA. There is no guarantee that we will be able to maintain these designations, receive these designations for any of our other product candidates, or receive or maintain any corresponding benefits, including periods of exclusivity.

 

Product candidates that receive orphan drug designations by the FDA or orphan drug medicinal product designations by the EMA are entitled to certain benefits, including, for example, tax credits, reduced fees and clinical trial assistance. Additionally, if a product candidate with either designation subsequently receives marketing approval before another product that the FDA or the EMA considers to be the same product for the same indication, the product candidate can receive a period of marketing exclusivity. The marketing exclusivity period precludes the FDA or the EMA from approving another marketing application for the same product for the same indication for a specified time period. The applicable periods are seven years in the United States and ten years in Europe. The European exclusivity period can be reduced to six years if a product candidate no longer meets the criteria for orphan drug medicinal product designation, or if the product is sufficiently profitable such that market exclusivity is no longer justified.

 

We received orphan drug designation from the FDA in May 2019, and orphan medicinal product designation from the EMA in November 2020 for our investigational product candidate, BST-236. In addition, the FDA has granted orphan drug designation for AXAL for use in the treatment of anal cancer, HPV-associated head and neck cancer, Stage II-IV invasive cervical cancer and for ADXS-HER2 for the treatment of osteosarcoma in the United States, as well as EMA orphan drug designation for AXAL for the treatment of anal cancer and for ADXS-HER2 for the treatment of osteosarcoma in the EU. However, we cannot guarantee that we will obtain any orphan drug designations or orphan drug medicinal product designations for any future product candidates. In addition, orphan drug designation and orphan drug medicinal product designation by the FDA and the EMA, respectively, neither shorten the development time or regulatory review time of a product candidate, nor provide a product candidate with any advantage in the regulatory review or approval process. Therefore, even with these designations, we cannot guarantee that we will be able to successfully develop BST-236 or any other product candidates, or that we will be able to maintain any orphan drug or orphan drug medicinal product designations we have already received. For instance, the FDA may revoke its orphan drug designation if the FDA finds that the request for designation contained an untrue statement of material fact or omitted material information, or if the FDA finds that the product candidate was not eligible for designation at the time of the submission of the request.

 

Even if we maintain our orphan drug and orphan drug medicinal product designations, we may not receive any period of regulatory exclusivity if BST-236 or any other product candidate is approved. Any exclusivity period that we receive for BST-236, or any other product candidates, could not effectively protect us from competition. Even if we obtain exclusivity, the FDA could subsequently approve another product containing the same principal molecular features for the same condition if the FDA concludes that the later drug is clinically superior to ours in that it is shown to be safer, more effective or makes a major contribution to patient care. A competitor also may receive approval of different products for the same indication for which our orphan product has exclusivity or obtain approval for the same product but for a different indication for which the orphan product has exclusivity. Moreover, we may not be able to maintain our orphan drug designation or exclusivity and our product candidates would not be eligible for exclusivity if the approved indication is broader than the orphan drug designation. For example, it is possible that product candidates will still be approved either for the same condition that BST-236 seeks to treat, such as AML, or which are the same products as BST-236 but seek to treat different conditions.

 

In addition, the European exclusivity period is ten years but can be reduced to six years if the drug no longer meets the criteria for orphan drug designation or if the drug is sufficiently profitable so that market exclusivity is no longer justified. Orphan drug exclusivity may be lost if the FDA or EMA determines that the request for designation was materially defective or if the manufacturer is unable to assure sufficient quantity of the drug to meet the needs of patients with the rare disease or condition.

 

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Our product candidates could become subject to unfavorable pricing regulations, third-party payor reimbursement practices or healthcare reform initiatives that could harm our ability to successfully commercialize our product candidates.

 

Our ability to commercialize our investigational product candidate, BST-236, or any other product candidates, will depend substantially on the extent to which the costs of our product candidates will be paid by health maintenance, managed care, pharmacy benefit and similar healthcare management organizations, or reimbursed by government health administration authorities (such as, in the United States, Medicare and Medicaid), private health coverage insurers and other third-party payors. If reimbursement is not available, or is available only to limited levels, we may not be able to successfully commercialize our products. Even if coverage is provided, the approved reimbursement amount may not be high enough to allow us to establish and maintain pricing sufficient to realize meaningful revenue.

 

Government authorities and third-party payors decide which medications they will cover and establish reimbursement levels. Coverage and reimbursement by a third-party payor may depend upon a number of factors, including the third-party payor’s determination that use of a product is:

 

  a covered benefit under its health plan;
     
  safe, effective and medically necessary;
     
  appropriate for the specific patient;
     
  cost-effective; and
     
  neither experimental nor investigational.

 

The healthcare industry is acutely focused on cost containment, both in the United States and elsewhere. Government authorities and third-party payors have attempted to control costs by limiting coverage and the amount of reimbursement for particular medications, and could view our products as not being cost-effective. As a result, coverage and reimbursement could be unavailable to our customers, or be insufficient to allow our products to be competitively marketed. If the prices for our products, if any, decrease or if governmental and other third-party payors do not provide adequate coverage or reimbursement, our prospects for revenue and profitability will suffer.

 

There is also significant uncertainty related to third-party payor coverage and reimbursement of newly-approved product candidates because pricing and reimbursement for new product candidates vary widely by country. Some countries require approval of the sale price of a product candidate before it can be marketed. In many countries, the pricing review period begins after marketing or product licensing approval is granted. In some foreign markets, prescription pharmaceutical pricing remains subject to continuing governmental control even after initial approval is granted. In addition, increasingly, third-party payors are requiring higher levels of evidence of the benefits and clinical outcomes of new technologies and are challenging the prices charged. We cannot be sure that coverage will be available for any product candidate that we may commercialize and, if available, that the reimbursement rates will be adequate.

 

In the United States, no uniform policy of coverage and reimbursement for products exists among third-party payors. As a result, obtaining coverage and reimbursement approval of a product from a government or other third-party payor is a time-consuming and costly process that could require us to provide to each payor supporting scientific, clinical and cost-effectiveness data for the use of our products on a payor-by-payor basis, with no assurance that coverage and adequate reimbursement will be obtained. Even if we obtain coverage for a given product, the resulting reimbursement payment rates might not be adequate for us to achieve or sustain profitability or may require co-payments that patients find unacceptably high. Additionally, third-party payors may not cover, or provide adequate reimbursement for, long-term follow-up evaluations required following the use of product candidates, once approved. Patients are unlikely to use our product candidates, once approved, unless coverage is provided and reimbursement is adequate

 

There could also be delays in obtaining coverage and reimbursement for newly approved drugs, and coverage can be more limited than the indications for which the drug is approved by the FDA or comparable foreign regulatory authorities. Even if our products are eligible for reimbursement, such eligibility does not imply that they will be paid for in all cases or at a rate that covers our costs, including research, development, manufacture, sale and distribution. Reimbursement rates can vary, for example, according to the use of the drug and the clinical setting in which it is used, or can in some cases be based on reimbursement levels that have already been set for lower-cost drugs. As a result, we could obtain marketing approval for a product in a particular country, but then be subject to reimbursement delays that prolong the commercial launch of the product, possibly for lengthy time periods, which can negatively impact product revenues we are able to generate from sales in that country.

 

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Risks Related to Our Dependence on Third Parties

 

We depend on third-party collaborators to develop and conduct clinical trials with, obtain regulatory approvals for, and if approved, market and sell product candidates.

 

For our current investigational product candidate, BST-236, we depend on our third-party collaborator, GFM, to conduct a clinical trial in Europe. We may in the future form additional collaborations and may depend on other third-parties to develop, conduct clinical trials of, and, if approved, commercialize that product candidate. Our current and any future collaborations that we enter into are subject to numerous risks, including the following:

 

  collaborators have significant discretion in determining the efforts and resources they apply to collaborations;
     
  collaborators could fail to perform their obligations or fulfill their responsibilities in a timely manner;
     
  collaborators could fail to develop or commercialize our product candidates that achieve regulatory approval or may elect not to continue or renew such programs based on trial results, changes in the collaborators’ strategic focus or available funding or external factors, such as an acquisition;
     
  collaborators could delay preclinical studies or clinical trials, provide insufficient funding for clinical trials, stop a preclinical study or clinical trial or abandon a product candidate, repeat or conduct new clinical trials or require a new formulation of a product candidate for clinical testing;
     
  we do not always have access to, or could be restricted from disclosing, certain information about our product candidates under a collaboration and, in such cases, would have limited information to relay to our shareholders about the status of such product candidates;
     
  collaborators could independently develop, or develop with third parties, products that compete directly or indirectly with our product candidates if the collaborators believe that competitive products are more likely to be successfully developed or can be commercialized under more economically attractive terms than ours;
     
  collaborations do not always result in product candidates that we can develop or market, and preclinical studies or clinical trials that we conduct as part of the collaborations will not always be successful;
     
  collaborators stop commercializing our product candidates if they view the product candidates we develop with them as competing with their own product candidates;
     
  collaborators with marketing and distribution rights to any of our product candidates that achieve regulatory approval could refuse to commit sufficient resources to the marketing and distribution of that product; and
     
  collaborators could fail to properly maintain or defend our patent and intellectual property rights and could use such information in a way that exposes us to litigation or jeopardizes or invalidates our intellectual property.

 

In addition, certain collaboration agreements provide our collaborators with rights to terminate such agreements, which rights may or may not be subject to conditions, and, if exercised, would adversely affect our product development efforts and make it difficult for us to attract new collaborators. Our rights to recover tangible and intangible assets and intellectual property rights needed to advance a product candidate or product after termination of a collaboration are, in some cases, limited by contract, in those cases we would not be able to advance a program post-termination. If a collaborator terminates its agreement with us, we would likely be required to limit the size and scope of efforts for the development and commercialization of such product candidates or products or be required to seek additional financing to fund further development or identify alternative strategic collaborations. Moreover, our potential to generate future revenue from such product candidates would be significantly reduced.

 

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We intend to rely on third parties to manufacture product candidates, which increases the risk that we will not have sufficient quantities of such product candidates or products or such quantities at an acceptable cost, which could delay, prevent or impair our development or commercialization efforts.

 

We will depend on third-party manufacturers to supply our clinical materials. We do not own or operate manufacturing facilities for the production of clinical or commercial supplies of our investigational product candidate, BST-236. We have limited personnel with experience in drug manufacturing and lack the resources and the capabilities to manufacture any of our product candidates on a clinical or commercial scale. We rely on third parties for the supply of our product candidates, and our strategy is to outsource all manufacturing of our product candidates to third parties. We use contract manufacturing operations in the United States and Europe to supply the requisite doses of BST-236 for our ongoing, Phase 2b clinical studies in the United States, Israel and Europe.

 

In order to conduct clinical trials of product candidates, including for BST-236, we need to have them manufactured in potentially large quantities. Our contract manufacturing organizations may be unable to successfully increase the manufacturing capacity for BST-236 or any of our current and future product candidates in a timely or cost-effective manner, or at all. In addition, quality issues may arise during scale-up activities and at any other time. For example, ongoing data on the stability of our product candidates may shorten the expiry of our product candidates and lead to clinical trial material supply shortages, and potentially clinical trial delays. In addition, there could be solubility and stability issues in the manufacturing of BST-236. We had issues in the past relating to the solubility and stability of BST-236, which led to modification in the manufacturing of the active pharmaceutical ingredient (“API”), drug product, and the formulation. These issues may occur again. If these contract manufacturers are unable to successfully scale up the manufacture of our product candidates in sufficient quality and quantity, the development, testing and clinical trials of that product candidate may be delayed or infeasible, and regulatory approval or commercial launch of that product candidate may be delayed or not obtained, which could significantly harm our business and results of operations.

 

If we hire new contract manufacturers, we increase the risk that we will experience delays in production or receive insufficient supplies of our product candidates, because we will be required to transfer our manufacturing technology to these manufacturers and allow them to gain experience manufacturing our product candidates. Even after gaining such experience, there can be no assurance that a contract manufacturer will produce sufficient quantities of our product candidates in a timely manner or continuously over time, or at all. In addition, if any of our contract manufacturers should cease to continue producing our product candidates, we will likely experience delays in advancing our preclinical and clinical studies while we seek replacement manufacturers. We may be unable to obtain replacement supplies on terms that are favorable to us, or else be unable to obtain adequate supplies of our product candidates.

 

We contract with licensed pharmaceutical manufacturers which are compliant with the FDA’s current good manufacturing practices (“cGMP”). While we have engaged several third-party vendors to provide clinical and non-clinical supplies and fill-finish services, we do not currently have any agreements with third-party manufacturers for long-term commercial supplies. In the future, we may fail to enter into agreements with third-party manufacturers for commercial supplies of any product candidate that we develop, or may be unable to do so on acceptable terms. Even if we are able to establish and maintain arrangements with third-party manufacturers, our reliance on them entails risks, including:

 

  reliance on third parties for manufacturing process development, regulatory compliance and quality assurance;
     
  limitations on supply availability resulting from capacity and scheduling constraints of third parties;
     
  breach of manufacturing agreements by third parties due to factors beyond our control; and
     
  termination or non-renewal of the manufacturing agreements by the third party, at a time that is costly or inconvenient to us.

 

Contract manufacturers may not be able to comply with cGMP requirements or similar regulatory requirements outside of the United States. Our failure, or the failure of our contract manufacturers, to comply with applicable requirements could result in sanctions being imposed on us, including fines, injunctions, civil penalties, delays, suspension or withdrawal of approvals, license revocation, seizures or recalls of product candidates or products, operating restrictions and/or criminal prosecutions, any of which could significantly and adversely affect supplies of our product candidates.

 

In addition to the cGMP requirements, the production and manufacturing of BST-236 require our contract manufacturers to handle toxic or hazardous substances. In order to handle toxic or hazardous substances, our contract manufacturers may need to obtain certifications and meet other regulatory requirements.

 

BST-236 and any current or future product candidates that we develop will likely compete with other product candidates and products for access to manufacturing facilities. There are a limited number of manufacturers that operate under cGMP requirements that are capable of manufacturing for us and our products. Our current and anticipated future dependence upon third parties for the manufacture of our product candidates may adversely affect our future profit margins, our ability to develop product candidates and our success in commercializing product candidates that receive marketing approval.

 

Risks Related to Legal and Compliance Requirements

 

Our operations and product candidates are subject to extensive and costly government regulation in the United States and abroad.

 

We and our third party collaborators, including our CROs and contract manufacturing organizations, are subject to extensive government regulation in the United States, Israel, Europe and various other countries or territories. In the United States, we and our third-party collaborators are subject to regulatory oversight by federal authorities, such the FDA, CMS, other divisions of the United States Department of Health and Human Services, the United States Department of Justice, as well as state and local governments. In Europe, we are subject to regulatory oversight by the EMA and its various regulatory networks, including the European Commission through the Centralized Procedure, the National Competent Authority. We are also subject to the respective equivalents of these authorities in any foreign country or territory where we or our third-party collaborators research and develop product candidates, conduct clinical trials and seek to market and commercialize our products. Such foreign regulation may be equally or more demanding than corresponding United States regulation.

 

Government regulation substantially increases the cost and risk of researching, developing, manufacturing, marketing and commercializing of our product candidates. The regulatory review and approval process, which includes preclinical and nonclinical testing and clinical studies of each product candidate, is lengthy, expensive and uncertain. We and our collaborators, if any, must obtain and maintain regulatory authorization to conduct clinical studies and must obtain regulatory approval for each product that we intend to market. In addition, the facilities that we or our collaborators use to manufacture our product candidates must be inspected and meet legal requirements. In order to secure regulatory approval, we must submit extensive preclinical, nonclinical and clinical data and other supporting information for each proposed therapeutic indication in order to establish the product’s safety and efficacy. The development and approval process takes many years, requires substantial resources and may never lead to the approval of a product.

 

If we, our collaborators, or the contract manufacturers upon which we rely fail to comply with applicable regulatory requirements at any stage during the regulatory oversight or approval process, such noncompliance could result in various penalties or consequences, including: delays in, or refusal by the relevant regulatory agency to review, the approval of applications or supplements to approved applications; warning letters; fines; import or export restrictions; product recalls or seizures; injunctions or suspensions of manufacturing; withdrawals of previously-approved marketing applications or licenses; recommendations by the relevant regulatory authorities against our ability to enter into governmental contracts; civil penalties; and criminal prosecutions.

 

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In addition, any product candidate for which we obtain marketing approval, along with the manufacturing processes, post-approval clinical data, labeling, packaging, distribution, adverse event reporting, storage, recordkeeping, export, import, advertising and promotional activities for such product, among other things, will be subject to extensive and ongoing requirements of and review by the FDA and comparable foreign regulatory authorities. These requirements include submissions of safety and other post-marketing information and reports, establishment registration and drug listing requirements, continued compliance with cGMP requirements relating to manufacturing, quality control, quality assurance and corresponding maintenance of records and documents, requirements regarding the distribution of samples to physicians and recordkeeping and good clinical practice requirements for any clinical trials that we conduct post-approval.

 

Even if we successfully obtain regulatory approval for a particular product candidate, such approval could limit the indicated medical uses for the product, otherwise limit our ability to promote, sell and distribute the product, require that we conduct costly post-marketing surveillance, and require that we conduct ongoing, post-marketing studies. We could be required to undergo additional regulatory review and approval if we make changes to an approved product, such as, for example, by making formulation or manufacturing changes or revising our labeling of the product. Even if we receive regulatory approval for our product candidate, the relevant regulatory authority can withdraw its approval, such as, for example, if there is a later discovery of previously unknown problems or safety issues with the product.

 

The FDA may impose consent decrees or withdraw approval if compliance with regulatory requirements and standards is not maintained or if problems occur after the product reaches the market. Later discovery of previously unknown problems with our product candidates, including adverse events of unanticipated severity or frequency, or with our third-party manufacturers or manufacturing processes, or failure to comply with regulatory requirements, may result in revisions to the approved labeling to add new safety information, imposition of post-market studies or clinical trials to assess new safety risks or imposition of distribution restrictions or other restrictions under a REMS program. Other potential consequences include, among other things:

 

  restrictions on the marketing or manufacturing of our products, withdrawal of the product from the market or voluntary or mandatory product recalls;
     
  fines, warning letters or holds on clinical trials;
     
  refusal by the FDA to approve pending applications or supplements to approved applications filed by the FDA or suspension or revocation of license approvals;
     
  product seizure or detention or refusal to permit the import or export of our product candidates; and
     
  injunctions or the imposition of civil or criminal penalties.

 

The FDA strictly regulates marketing, labeling, advertising and promotion of products that are placed on the market. Products may be promoted only for the approved indications and in accordance with the provisions of the approved label. The policies of the FDA, EMA and comparable foreign regulatory authorities may change and additional government regulations may be enacted that could prevent, limit or delay regulatory approval of our product candidates. We cannot predict the likelihood, nature or extent of government regulation that may arise from future legislation or administrative action, either in the United States or abroad. If we are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies, or if we are not able to maintain regulatory compliance, we may lose any marketing approval that we have obtained and we may not achieve or sustain profitability.

 

We are subject to extensive environmental, health and safety laws and regulations and our failure to comply with these requirements could subject us to substantial fines, penalties, or costs.

 

We and the CROs, contract manufacturers and other third parties with which we collaborate are subject to numerous environmental, health and safety laws and regulations in the United States, Israel, Europe and the jurisdictions where we operate. These requirements include, but are not limited to, those governing laboratory procedures and the handling, use, storage, treatment and disposal of hazardous materials and wastes. Our operations, particularly the development, formulation and testing of our product candidates, involve the use of hazardous and flammable materials, including chemicals and biological materials. Our operations also produce hazardous waste products. We cannot eliminate the risk of contamination or injury from these materials. In the event of contamination or injury resulting from our use of hazardous materials, we could be held liable for any resulting damages, and any liability could exceed our resources. We also could incur significant costs associated with civil or criminal fines and penalties. Furthermore, environmental laws and regulations are complex, change frequently and have tended to become more stringent over time. We cannot predict how and the extent to which such changes will impact our ability to operate, develop product candidates and conduct clinical trials, and cannot be certain of our future compliance.

 

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In addition, we could incur substantial costs in order to comply with current or future environmental, health and safety laws and regulations. These current or future laws and regulations may impair our research, development or production efforts. Failure to comply with these laws and regulations also may result in substantial fines, penalties or other sanctions or liabilities, which could materially adversely affect our business, financial condition, results of operations and prospects.

 

We face potential product liability claims that, if successful, would subject us to substantial liability and costs, as well as potential revocation or other negative impacts to any regulatory approvals we receive.

 

The use of our product candidates in clinical trials and the sale of any product candidate for which we obtain marketing approval expose us to the inherent risk of product liability claims, and we will face an even greater risk if the approved products are sold commercially. We may receive product liability claims from patients, healthcare providers, pharmaceutical companies or other third parties that sell or otherwise come into contact with our products. In addition, our investigational product candidate, BST-236, or any other product candidates we are developing now or in the future, may induce adverse events. If we cannot successfully defend against product liability claims, we could incur substantial liability and costs. Product liability claims, regardless of their merit or eventual outcome, may result in the following:

 

  decreased demand for our products;
     
  impairment to our business reputation;
     
  withdrawal of clinical trial participants;
     
  substantial monetary awards to patients or other claimants;
     
  costs due to related litigation;
     
  distraction of management’s attention from our primary business;
     
  loss of revenues;
     
  the inability to commercialize our product candidates, in particular, BST-236; and
     
  decreased demand for BST-236 or any other product candidates we develop, if approved for commercial sale.

 

Patients with the diseases that our investigational product candidate, BST-236, targets, including AML, ALL and MDS, are often already in severe and advanced stages of their disease and have both known and unknown significant pre-existing and potentially life-threatening health risks. For example, our target population for BST-236 includes older adults who are more susceptible to extreme side effects, including bone marrow suppression and infections, as well as adults whose medical conditions preclude their ability to handle the highly toxic effects of standard chemotherapy. During the course of treatment, patients may suffer adverse events, including death, for reasons that may be related to BST-236 or any other product candidates we are developing now or may develop in the future. Such events could subject us to costly litigation, require us to pay substantial amounts of money to injured patients, delay, negatively impact or end our opportunity to receive or maintain regulatory approval to market our products, or require us to suspend or abandon our commercialization efforts. Even in a circumstance in which we do not believe that an adverse event is related to our product candidates, the investigation into the circumstances may be expensive, time-consuming or inconclusive. These investigations may interrupt our sales efforts, delay our regulatory approval process or impact and limit the type of regulatory approvals our product candidates receive or maintain. A product liability claim, even if successfully defended, could have a material adverse effect on our business, financial condition or results of operations.

 

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We have acquired product liability insurance coverage, which includes coverage for human clinical trials, in Israel and in the US for our Phase 1/2a and Phase 2b studies, for BST-236; however, we may not be able to maintain insurance coverage at a reasonable cost or in sufficient amounts to protect us against losses due to liability. We intend to expand our insurance coverage each time we commercialize an additional product; however, we may be unable to obtain product liability insurance on commercially reasonable terms or in adequate amounts. A successful product liability claim or series of claims brought against us could cause our share price to decline and, if judgments exceed our insurance coverage, could adversely affect our results of operations and business. Further, we may not be able to obtain insurance coverage that will be adequate to satisfy any liability that may arise.

 

Risks Related to Our Intellectual Property

 

If we are unable to obtain and maintain patent and other intellectual property protection for our product candidates, or if the scope of protection obtained is not sufficiently broad, we could be unable to compete effectively in our markets.

 

Our ability to compete effectively will depend, in part, on our ability to maintain the proprietary nature of the formulations, technology and manufacturing processes of the product candidates we are currently developing and will develop in the future. We rely on patents to establish our intellectual property rights and protect our product candidates. These legal means, however, afford only limited protection and may not adequately protect our rights. In certain situations, and as considered appropriate, we have sought, and we intend to continue to seek to protect our proprietary position by filing patent applications in the United States and one or more countries outside the United States relating to current and future product candidates that are important to our business.

 

As of July 30, 2021, Biosight’s intellectual property portfolio consisted of 49 Patents/Patent Applications. Biosight currently owns all of its intellectual property. Biosight has filed patent applications in Australia, Brazil, Canada, China, Europe, France, Germany, India, Israel, Italy, Japan, Korea, Netherlands, Russia, Switzerland, United Kingdom, and the United States for Biosight’s investigational product candidate, BST-236. Biosight has filed patent applications in the US, EU, Israel, Australia, Brazil, Russia, India, Canada, China, Japan and Korea and intends to file additional applications in the US, EU, Israel, Australia, Brazil, Russia, India, Canada, China, Japan and Korea. Biosight’s patents in Australia, Europe, France, Germany, India, Israel, Italy, Netherlands, Russia, Switzerland, United Kingdom, and the United States have been granted, and Biosight’s patents in Australia, Brazil, Canada, China, Europe, Israel, Japan, Korea, and the United States remain pending. In addition, Advaxis owns or has the rights to several hundred patents and applications, which are owned, licensed from, or co-owned with Penn and Merck. Advaxis has obtained the rights to all future patent applications in this field originating in the laboratories of Dr. Yvonne Paterson and Dr. Fred Frankel, at Penn. However, we cannot predict whether these applications and others we pursue will issue as patents, or whether the claims of any resulting patents will give us a competitive advantage or whether we will be able to successfully pursue patent applications in the future.

 

The patent application and approval process is expensive and time-consuming. We could fail to file and prosecute all necessary or desirable patent applications at a reasonable cost or in a timely manner. We or any of our current and future third-party collaborators could fail to identify patentable aspects of inventions before it is too late to obtain patent protection on them. In such cases, we will miss potential opportunities to seek additional patent protection. It is possible that defects of form in the preparation or filing of patent applications could exist, such as, for example, with respect to proper priority claims, inventorship, claim scope, or requests for patent term adjustments. If we fail to establish, maintain or protect patents and other intellectual property rights, they could be reduced or eliminated. If there are material defects in the form, preparation, prosecution or enforcement of our patents or patent applications, they could be invalid or unenforceable. Even if unchallenged, our patents and patent applications, if issued, may not provide us with any meaningful protection or prevent competitors from designing around our patent claims. For example, a third party could develop a competitive therapy that provides benefits similar to BST-236 but that falls outside the scope of our patent protection. If the patent protection provided by the patents and patent applications we hold or pursue are not sufficiently broad to impede such competition, our ability to successfully commercialize our product candidates could be negatively affected.

 

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Other parties and competitors, many of whom have greater resources and have made significant investments in advanced technologies, have developed or plan to develop product candidates that are competitive with ours. These parties could file patent applications with claims that overlap or conflict with our applications, such as by claiming the same compositions, formulations or methods or by claiming subject matter. Our competitors could also seek to market generic versions of any approved products by submitting NDAs to the FDA in which they claim that our patents are invalid, unenforceable or not infringed. In these circumstances, we could be required to defend or assert our patents by filing lawsuits alleging patent infringement. A court or other agency with jurisdiction may find our patents invalid or unenforceable, or that our competitors are competing in a non-infringing manner. Thus, even if we have valid and enforceable patents, these patents still may not protect us from competitive product candidates.

 

The patent position of biotechnology companies is highly uncertain. In the United States and many foreign jurisdictions, there is no consistent policy regarding the breadth of claims allowed for biotechnology patents. In addition, determining patent rights for biotechnology and pharmaceutical compounds commonly involves complex legal and factual questions, which have, in recent years, been the subject of much litigation. In addition, the laws of foreign countries may not protect our rights to the same extent as the laws of the United States. As a result, any patents we obtain may not provide us with patent protection sufficient to exclude others from commercializing product candidates similar to ours.

 

In the future, we and third parties may collaborate to in-license one or more of our product candidates. In some cases, the availability and scope of potential patent protection is limited based on prior decisions by our licensors or the inventors, such as decisions on when or whether to file patent applications. Our failure to obtain, maintain, enforce or defend such intellectual property rights, for any reason, could allow third parties to make competing products or impact our ability to develop, manufacture and market our products and product candidates, even if approved, on a commercially viable basis, if at all, which could have a material adverse effect on our business.

 

In addition to patent protection, we expect to rely on research, manufacturing and other know-how, trade secrets, license agreements and contractual provisions, many of which are difficult to protect. We seek protection in part by entering into confidentiality agreements with third parties who have access to proprietary information, but we cannot be certain that these agreements will not be breached, adequate remedies for any breach would be available, or our information will not otherwise become known to or be independently developed by our competitors. If we cannot protect our intellectual property rights, our product sales could suffer and we could fail to generate sufficient product revenue.

 

We may be unable to adequately prevent disclosure of trade secrets and other proprietary information.

 

We also rely on trade secrets to protect our proprietary technologies, especially where we do not believe patent protection is appropriate or obtainable. However, trade secrets are difficult to protect. We rely in part on confidentiality agreements with our employees, consultants, outside scientific collaborators, sponsored researchers, and other advisors to protect our trade secrets and other proprietary information. These agreements may not effectively prevent disclosure of confidential information and may not provide an adequate remedy in the event of unauthorized disclosure of confidential information. In addition, others may independently discover our trade secrets and proprietary information. Costly and time-consuming litigation could be necessary to enforce and determine the scope of our proprietary rights, and failure to obtain or maintain trade secret protection could adversely affect our competitive business position.

 

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Some of the products developed by Advaxis are dependent upon a license agreement with Penn; if we breach the license agreement and/or fail to make payments due and owing to Penn under the license agreement, our development may be materially and adversely affected.

 

Pursuant to the terms of Advaxis’ license agreement with Penn, which has been amended from time to time, Advaxis has acquired exclusive worldwide licenses for patents and patent applications related to its proprietary Listeria vaccine technology. The license provides Advaxis with the exclusive commercial rights to the patent portfolio developed at Penn as of the effective date of the license, in connection with Dr. Paterson and requires Advaxis to pay various milestone, legal, filing and licensing payments to commercialize the technology. As of October 31, 2020, Advaxis did not have outstanding payables to Penn. We can provide no assurance that we will be able to make all future payments due and owing thereunder, that such licenses will not be terminated or expire during critical periods, that we will be able to obtain licenses from Penn for other rights that may be important to us, or, if obtained, that such licenses will be obtained on commercially reasonable terms. The loss of any current or future licenses from Penn or the exclusivity rights provided therein could materially harm our business, financial condition and operating results.

 

If we are unable to obtain licenses needed for product candidates developed by Advaxis, or if we breach any of the agreements under which Advaxis has licensed rights to patents or other intellectual property from third parties, we could lose license rights that are important to our business.

 

If we are unable to maintain and/or obtain licenses needed for the development of product candidates developed by Advaxis in the future, we may have to develop alternatives to avoid infringing on the patents of others, potentially causing increased costs and delays in drug development and introduction or precluding the development, manufacture, or sale of planned products. Some of the licenses that Advaxis has obtained provide for limited periods of exclusivity that require minimum license fees and payments and/or may be extended only with the consent of the licensor. We can provide no assurance that we will be able to meet these minimum license fees in the future or that these third parties will grant extensions on any or all such licenses. This same restriction may be contained in licenses obtained in the future.

 

Additionally, we can provide no assurance that the patents underlying any licenses will be valid and enforceable. To the extent any products developed by Advaxis are based on licensed technology, royalty payments on the licenses will reduce our gross profit from such product sales and may render the sales of such products uneconomical. In addition, the loss of any current or future licenses or the exclusivity rights provided therein could materially harm our business, financial condition and its operations.

 

Obtaining and maintaining patent protection depends on our ability to comply with various requirements of governmental patent agencies and, in some cases, receiving patent term extensions.

 

We are required to comply with a number of procedural, documentary, fee payment and other similar provisions during the patent application process and after a patent has issued in the United States and the foreign jurisdictions where we seek patent rights. For example, we are required to pay periodic maintenance fees, renewal fees, annuity fees and various other governmental fees to the United States Patent and Trademark Office (the “USPTO”) in the United States, as well as foreign governmental patent agencies, in several stages over the lifetime of the patents and applications. Our failure to comply can result in abandonment or lapse of the patent or patent application, which will result in partial or complete loss of patent rights in the relevant jurisdiction. In addition, the terms of any licenses we may enter into in the future may not give us the ability to maintain or prosecute patents in the portfolio, and in such cases, we will have to rely on third parties to prosecute on our behalf.

 

In some cases, we will seek to maintain our patent protection by extending the term of our issued patents. Patents and the protection they afford have a limited lifespan. For example, in the United States, if we timely pay all maintenance fees, the natural expiration of a patent is generally 20 years from its earliest United States non-provisional filing date. Once the life of any patent issued for a product candidate expires, that product candidate will become susceptible to competition from similar products, or products that seek to treat the same conditions. Given the amount of time required for the development, testing and regulatory review of new product candidates, patents could expire before or shortly after we begin to commercialize those products, and in such cases, we will be unable to exclude our competitors from commercializing products similar or identical to ours.

 

Any issued patents covering BST-236 or our current and future product candidates could be eligible for limited patent extension in the United States under the Drug Price Competition and Patent Term Restoration Act of 1984, or Hatch-Waxman Amendments. The Hatch-Waxman Amendments permit a patent extension term of up to five years as compensation for patent term lost during the FDA regulatory review process. The remaining term of a patent cannot be extended beyond a total of 14 years from the date of product approval, and can only be extended once and based on a single approved product. We could fail to receive an extension if we do not satisfy applicable requirements, including, for example, if we fail to: obtain a granted patent before approval of a product candidate; exercise due diligence during the testing phase or regulatory review process; apply within applicable deadlines; or apply prior to expiration of relevant patents. Moreover, the time period or the scope of patent protection we are afforded, if any, could be less than we request. If we do not obtain patent term extension or the term is less than we request, our competitors could obtain approval of competing product candidates following our patent expiration, and the competitiveness of our products could be significantly reduced. The expiration of our owned or licensed patents before completing the research and development of our product candidates and receiving all required approvals in order to sell and distribute the products on a commercial scale can adversely affect our business and results of operations.

 

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We may not be able to protect our intellectual property rights throughout the world.

 

Biosight has filed patent applications in multiple jurisdictions, including Australia, Brazil, Canada, China, Europe, India, Japan, Israel, Russia and the United States, as well as under the Patent Cooperation Treaty. Biosight has been issued five patents in United States, two in Europe and one in each of Australia, India, Israel and Russia. The requirements for patentability differ in certain countries, thus, even in countries where we do pursue patent protection, there can be no assurance that any patents will issue with claims that cover our products or protect our patent rights to the same extent as other countries where we seek protection. Consequently, we may not be able to prevent third parties, including competitors from producing our products in all countries or from selling or importing products made using our formulations in and into the United States or foreign jurisdictions. These products may compete with our product candidates and our intellectual property rights may not be effective or sufficient to prevent them from competing.

 

We could also encounter problems protecting and defending our intellectual property rights in foreign jurisdictions. The legal systems of certain countries do not favor the enforcement of patents, trade secrets and other intellectual property protection, particularly those relating to biotechnology products, which could make it difficult for us to stop infringement or violation of our intellectual property rights. For example, many foreign countries have compulsory licensing laws under which a patent owner must grant licenses to third parties. We could be unsuccessful in proceedings to enforce our intellectual property rights. Even if obtained, protection of such rights could result in substantial costs, divert our management’s efforts and attention from other aspects of our business or development of other product candidates, put our patents at risk of being invalidated or interpreted narrowly, put our patent applications at risk of not issuing and could provoke third parties to assert claims against us. Accordingly, our efforts to enforce our intellectual property rights around the world may be inadequate to obtain a significant commercial advantage.

 

We could be required to protect or enforce our patents and other intellectual property rights, which could be expensive, time-consuming and, if unsuccessful, put our products at a competitive disadvantage.

 

Competitors may infringe on the patents or other intellectual property we hold in connection with our product candidates. To protect or enforce our proprietary rights, we may file infringement claims, which can be expensive, time-consuming and divert the time and attention of our management and scientific personnel. Our patents could also become involved in inventorship, priority or validity disputes. To counter or defend against such claims is also expensive and time-consuming, and our adversaries could be able to dedicate substantially greater resources to prosecuting these legal actions than we can. Any claims we assert against perceived infringers could provoke these parties to assert counterclaims against us, alleging that we infringe their patents and that our patents are invalid, unenforceable or both.

 

If a court in an infringement proceeding decides that our patent is invalid or unenforceable, or refuses to stop the other party from using the product at issue, we would be unable to prevent that party or others from infringing on or misappropriating the proprietary rights we own or control. An adverse result in any proceeding could put one or more of our patents at risk of being invalidated or interpreted narrowly. Intellectual property litigation also requires a substantial amount of discovery, which increases the risk that some of our confidential information could be disclosed and compromised. Even if intellectual property litigation is resolved in our favor, a court could decide not to grant an injunction against further infringing activity and instead award only monetary damages, which is not always an adequate remedy. We could incur substantial expenses from defending our intellectual property rights in litigation or related proceedings. In addition, there could be public announcements of the results of such proceedings, which could lead to a decline in the price of our ordinary shares if securities analysts or investors perceive the results to be negative, could substantially increase our operating losses, reduce the resources available for development, future sales, marketing or distribution of our product candidates and negatively impact our ability to successfully compete in our target market. In addition, proceedings involving our patents or patent applications or those of others could result in adverse decisions regarding:

 

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  the patentability of our inventions relating to our product candidates; and/or
     
  the enforceability, validity or scope of protection offered by our patents relating to our product candidates.

 

We could be sued for infringing the intellectual property rights of third parties, which could be costly and disrupt our efforts to develop or commercialize our product candidates.

 

Third parties could have issued United States and foreign patents and pending patent applications relating to compounds, methods of manufacturing compounds or methods of use for the treatment of the diseases for which we are developing our own product candidates. While we aim to develop, manufacture, market and sell our product candidates without infringing the intellectual property and other proprietary rights of third parties, we may become party to, or threatened with, such claims by way of litigation or other adversarial proceedings, including interference and post-grant proceedings before the USPTO.

 

There is a substantial amount of intellectual property litigation in the biotechnology and pharmaceutical industries, the outcome of which is subject to uncertainties that cannot be adequately quantified in advance. The scope of protection afforded by a patent is subject to interpretation by the courts, which is not always uniform. Moreover, in defending ourselves in a patent infringement claim, we would have to demonstrate that our product candidates, products or methods either do not infringe the patent claims of the relevant patent or that the patent claims are invalid or unenforceable, which would be very difficult. Even if we are successful in these proceedings, we could incur substantial costs and may not have sufficient resources to bring these actions to a successful conclusion. Any involvement in infringement proceedings could cause management and scientific personnel to divert their time and resources away from other, critical business and the development of our product candidates.

 

If we are found to infringe a third party’s intellectual property rights, we could be forced, including by court order, to cease developing, manufacturing or commercializing the infringing product candidate. We could also be required to obtain a license from such third party in order to use the infringing technology and continue developing, manufacturing or marketing the infringing product candidate. We cannot guarantee that a license will be available on commercially reasonable terms, or at all. A license could be non-exclusive, giving our competitors access to the same technologies licensed to us, or could include terms that impede or destroy our ability to compete successfully in our target markets. Finally, we could be found liable for substantial monetary damages, including treble damages and attorneys’ fees, if we are found to have willfully infringed a patent. A finding of liability for infringement or misappropriating confidential information or trade secrets could prevent us from commercializing our product candidates or force us to cease some of our business operations.

 

Conditions in Israel could materially and adversely affect our business.

 

Most of Biosight’s employees operate from our offices that are located in near Tel Aviv, Israel. Accordingly, political, economic, and military conditions in Israel and the surrounding region may directly affect our business and operations. In recent years, Israel has been engaged in sporadic armed conflicts with Hamas, an Islamist terrorist group that controls the Gaza Strip, with Hezbollah, an Islamist terrorist group that controls large portions of southern Lebanon, and with Iranian-backed military forces in Syria. In addition, Iran has threatened to attack Israel and may be developing nuclear weapons. Some of these hostilities were accompanied by missiles being fired from the Gaza Strip against civilian targets in various parts of Israel, including areas in which our employees are located, and negatively affected business conditions in Israel. Any hostilities involving Israel or the interruption or curtailment of trade between Israel and its trading partners could adversely affect the development of our business.

 

Biosight’s commercial insurance does not cover losses that may occur as a result of events associated with war and terrorism. Although the Israeli government currently covers the reinstatement value of direct damages that are caused by terrorist attacks or acts of war, we cannot assure you that this government coverage will be maintained or that it will sufficiently cover our potential damages. Any losses or damages incurred by us could have a material adverse effect on our business. Any armed conflicts or political instability in the region would likely negatively affect business conditions and could harm our results of operations.

 

Further, in the past, the State of Israel and Israeli companies have been subjected to economic boycotts. Several countries still restrict business with the State of Israel and with Israeli companies. These restrictive laws and policies may have an adverse impact on our results of operations, financial condition or the expansion of our business. A campaign of boycotts, divestment, and sanctions has been undertaken against Israel, which could also adversely affect our business. Actual or perceived political instability in Israel or any negative changes in the political environment, may individually or in the aggregate adversely affect the Israeli economy and, in turn, our business, financial condition, results of operations, and prospects.

 

In addition, many Israeli citizens are obligated to perform several weeks of annual military reserve duty each year until they reach the age of 40 (or older, for reservists who are military officers or who have certain occupations) and, in the event of a military conflict, may be called to active duty. In response to increases in terrorist activity, there have been periods of significant call-ups of military reservists. It is possible that there will be military reserve duty call-ups in the future. Our operations could be disrupted by such call-ups, which may include the call-up of members of our management. Such disruption could materially adversely affect our business, prospects, financial condition, and results of operations.

 

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CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS

 

This proxy statement/prospectus/information statement contains forward-looking statements that involve substantial risks and uncertainties. All statements other than statements of historical facts contained in this prospectus, including statements regarding future financial condition, business strategy and plans and objectives of management for future operations, are forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “anticipate,” “believe,” “continue,” “could,” “design,” “estimate,” “expect,” “intend,” “may,” “plan,” “potentially,” “predict,” “seek,” “should,” “will” or the negative of these terms or other similar expressions.

 

All statements other than statements of historical fact are statements that could be deemed forward-looking statements. For example, forward-looking statements include any statements of the plans, strategies and objectives of management for future operations, including the execution of integration and restructuring plans and the anticipated timing of filings; any statements concerning proposed new products, services or developments; any statements regarding future economic conditions or performance; statements of belief and any statement of assumptions underlying any of the foregoing. Forward-looking statements may also include any statements of the plans, strategies and objectives of management with respect to the approval and consummation of the merger, Advaxis’ ability to solicit a sufficient number of proxies to approve the merger and other matters related to the consummation of the merger.

 

For a discussion of the factors that may cause Advaxis, Biosight or the combined organization’s actual results, performance or achievements to differ materially from any future results, performance or achievements expressed or implied in such forward-looking statements, or for a discussion of risk associated with the ability of Advaxis and Biosight to complete the merger and the effect of the merger on the business of Advaxis, Biosight and the combined organization, see the section titled “Risk Factors” in this proxy statement/prospectus/information statement.

 

These forward-looking statements include, but are not limited to, statements concerning the following:

 

  the expected benefits of and potential value created by the merger for the stockholders of Advaxis and Biosight;
     
  likelihood of the satisfaction of certain conditions to the completion of the merger and whether and when the merger will be consummated;
     
  Advaxis’ ability to control and correctly estimate its operating expenses and its expenses associated with the merger;
     
  any statements of the plans, strategies and objectives of management for future operations, including the execution of integration plans and the anticipated timing of filings;
     
  any statements of plans to develop and commercialize products;
     
  any statements concerning the attraction and retention of highly qualified personnel;
     
  any statements concerning the ability to protect and enhance the combined organization’s products, product candidates and intellectual property;
     
  any statements regarding expectations concerning Biosight’s relationships and actions with third parties; and
     
  future regulatory, judicial and legislative changes in Biosight’s industry.

 

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You should not rely upon forward-looking statements as predictions of future events. Neither Advaxis nor Biosight can assure you that the events and circumstances reflected in the forward-looking statements will be achieved or occur. In addition, statements that “we believe” and similar statements reflect the beliefs and opinions on the relevant subject of Advaxis, Biosight or the combined organization, as applicable. These statements are based upon information available as of the date of this prospectus, and while Advaxis, Biosight or the combined organization, as applicable, believes such information forms a reasonable basis for such statements, such information may be limited or incomplete.

 

Actual results could differ materially from those contained in any forward-looking statement as a result of various factors, including, without limitation, the risk that the conditions to the closing are not satisfied, including the failure to timely, or at all, obtain stockholder approval for the merger; uncertainties as to the timing of the consummation of the merger; risks related to Advaxis’ ability to correctly estimate its operating expenses and its expenses associated with the merger; the ability of Advaxis, Biosight or the combined organization to protect its intellectual property rights; competitive responses to the merger; unexpected costs, charges or expenses resulting from the merger; potential adverse reactions or changes to business relationships resulting from the announcement or completion of the merger; and legislative, regulatory, political and economic developments. The foregoing review of important factors that could cause actual events to differ from expectations should not be construed as exhaustive and should be read in conjunction with statements that are included herein and elsewhere.

 

If any of these risks or uncertainties materializes or any of these assumptions proves incorrect, the results of Advaxis, Biosight or the combined organization could differ materially from the forward-looking statements. All forward-looking statements in this proxy statement/prospectus/information statement are current only as of the date on which the statements were made. Advaxis and Biosight do not undertake any obligation to publicly update any forward-looking statement to reflect events or circumstances after the date on which any statement is made or to reflect the occurrence of unanticipated events, except as otherwise required by the federal securities laws.

 

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THE SPECIAL MEETING OF ADVAXIS STOCKHOLDERS

 

Date, Time and Place

 

The Advaxis special meeting will be held on November 16, 2021, commencing at 10:00 a.m. Eastern Time, unless postponed or adjourned to a later date. The Advaxis special meeting will be held entirely online. Advaxis is sending this proxy statement/prospectus/information statement to its stockholders in connection with the solicitation of proxies by Advaxis’ board of directors for use at the Advaxis special meeting and any adjournments or postponements of the Advaxis special meeting. This proxy statement/prospectus/information statement is first being furnished to Advaxis stockholders on or about ______, 2021.

 

Purposes of the Advaxis Special Meeting

 

The purposes of the Advaxis special meeting are:

 

  1. To approve the issuance of shares of common stock of Advaxis, Inc., or Advaxis, to stockholders of Biosight Ltd., or Biosight, pursuant to the terms of the Agreement and Plan of Merger and Reorganization among Advaxis, Biosight and Advaxis Ltd., or Merger Sub, dated as of July 4, 2021, a copy of which is attached as Annex A to this proxy statement/prospectus/information statement, and the change of control resulting from the merger;
     
  2. To approve an amendment to the amended and restated certificate of incorporation, as amended, of Advaxis to effect a reverse stock split of Advaxis’ issued and outstanding common stock within a range, as determined by the Advaxis board of directors and agreed to by Biosight, of one new share of Advaxis common stock for every 10 to 30 shares (or any number in between) of outstanding Advaxis common stock in the form attached as Annex E to this proxy statement/prospectus/information statement;
     
  3. To approve an amendment to the amended and restated certificate of incorporation of Advaxis to change the corporate name from Advaxis, Inc. to “Biosight Therapeutics Inc.” in the form attached as Annex F to this proxy statement/prospectus/information statement;
     
  4. To approve, on a nonbinding, advisory basis, the compensation that will or may become payable by Advaxis to its named executive officers in connection with the merger;
     
  5. To consider and vote upon an adjournment of the Advaxis special meeting, if necessary, to solicit additional proxies if there are not sufficient votes in favor of Proposal Nos. 1, 2 and 3; and
     
  6. To transact such other business as may properly come before the stockholders at the Advaxis special meeting or any adjournment or postponement thereof.

 

Proposal No. 1 is referred to herein as the merger proposal. Proposal No. 2 is referred to herein as the reverse stock split proposal. Proposal No. 3 is referred to herein as the certificate of incorporation amendment proposal. The approval of the merger proposal, the reverse stock split proposal and the certificate of incorporation amendment proposal are all conditions to the completion of the merger. The issuance of Advaxis common stock in connection with the merger and the change of control resulting from the merger, or Proposal No. 1, and the amendment to the amended and restated certificate of incorporation of Advaxis, as amended, to change the corporate name from Advaxis, Inc. to “Biosight Therapeutics Inc.,” or Proposal No. 3, will not take place unless they are approved by Advaxis stockholders and the merger is consummated.

 

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Recommendation of Advaxis’ Board of Directors

 

  Advaxis’ board of directors has determined and believes that the issuance of shares of Advaxis’ common stock pursuant to the Merger Agreement is fair to, in the best interests of, and advisable to, Advaxis and its stockholders and has approved such issuance. Advaxis’ board of directors unanimously recommends that Advaxis stockholders vote “FOR” Proposal No. 1 to approve the issuance of shares of Advaxis common stock pursuant to the Merger Agreement and the change of control resulting from the merger.
     
  Advaxis’ board of directors has determined and believes that it is fair to, in the best interests of, and advisable to, Advaxis and its stockholders to approve the amendment to the amended and restated certificate of incorporation of Advaxis to effect the reverse stock split of Advaxis common stock, as described in this proxy statement/prospectus/information statement. Advaxis’ board of directors unanimously recommends that Advaxis stockholders vote “FOR” Proposal No. 2 to approve the reverse stock split of Advaxis common stock.
     
  Advaxis’ board of directors has determined and believes that it is fair to, in the best interests of, and advisable to, Advaxis and its stockholders to approve the amendment to the amended and restated certificate of incorporation of Advaxis as amended to change the corporate name from Advaxis, Inc. to “Biosight Therapeutics Inc.,” as described in this proxy statement/prospectus/information statement. Advaxis’ board of directors unanimously recommends that Advaxis stockholders vote “FOR” Proposal No. 3 to change the corporate name from Advaxis, Inc. to “Biosight Therapeutics Inc.”
     
  Advaxis’ board of directors has determined and believes that it is fair to, in the best interests of, and advisable to, Advaxis and its stockholders to approve, on a nonbinding advisory vote basis, compensation that will or may become payable by Advaxis to its named executive officers in connection with the merger. Advaxis’ board of directors unanimously recommends that Advaxis stockholders vote “FOR” Proposal No. 4.
     
  Advaxis’ board of directors has determined and believes that adjourning the Advaxis special meeting, if necessary, to solicit additional proxies if there are not sufficient votes in favor of Proposal Nos. 1, 2 and 3 is fair to, in the best interests of, and advisable to, Advaxis and its stockholders and has approved and adopted the proposal. Advaxis’ board of directors unanimously recommends that Advaxis stockholders vote “FOR” Proposal No. 5 to adjourn the Advaxis special meeting, if necessary, to solicit additional proxies if there are not sufficient votes in favor of Proposal Nos. 1, 2 and 3.

 

Record Date and Voting Power

 

Only holders of record of Advaxis common stock at the close of business on the record date September 17, 2021, are entitled to notice of, and to vote at, the Advaxis special meeting. At the close of business on the record date, there were registered holders of record of Advaxis common stock and there were ______ shares of Advaxis common stock issued and outstanding. Each share of Advaxis common stock entitles the holder thereof to one vote on each matter submitted for stockholder approval.

 

Voting and Revocation of Proxies

 

The proxy accompanying this proxy statement/prospectus/information statement is solicited on behalf of Advaxis’ board of directors for use at the Advaxis special meeting.

 

If, as of the record date referred to above, your shares were registered directly in your name with the transfer agent for Advaxis common stock, Continental Stock Transfer and Trust Company, then you are a stockholder of record. Whether or not you plan to attend the Advaxis special meeting online, Advaxis urges you to fill out and return the proxy card or vote by proxy over the telephone or on the internet as instructed below to ensure your vote is counted.

 

The procedures for voting are as follows:

 

If you are a stockholder of record, you may vote at the Advaxis special meeting. Alternatively, you may vote by proxy by using the accompanying proxy card, over the internet or by telephone. Whether or not you plan to attend the Advaxis special meeting, Advaxis encourages you to vote by proxy to ensure your vote is counted. Even if you have submitted a proxy before the Advaxis special meeting, you may still attend the Advaxis special meeting and vote during the virtual meeting. In such case, your previously submitted proxy will be disregarded.

 

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  To vote at the Advaxis special meeting, attend the Advaxis special meeting online and follow the instructions posted at www.virtualshareholdermeeting.com/ADXS2021SM.
     
  To vote using the proxy card, simply complete, sign and date the accompanying proxy card and return it promptly in the envelope provided. If you return your signed proxy card before the Advaxis special meeting, Advaxis will vote your shares in accordance with the proxy card.
     
  To vote by proxy over the internet, follow the instructions provided on the Notice of Internet Availability.
     
  To vote by telephone, you may vote by proxy by calling the toll-free number found on the Notice of Internet Availability.

 

If you are a beneficial owner of shares registered in the name of your broker, bank or other agent, you should have received a voting instruction card and voting instructions with these proxy materials from that organization rather than from us. Simply complete and mail the voting instruction card to ensure that your vote is counted. To vote in person at the Advaxis special meeting, you must obtain a valid proxy from your broker, bank or other agent. Follow the instructions from your broker, bank or other agent included with these proxy materials, or contact your broker, bank or other agent to request a proxy.

 

Advaxis provides internet proxy voting to allow you to vote your shares online, with procedures designed to ensure the authenticity and correctness of your proxy vote instructions. However, please be aware that you must bear any costs associated with your internet access, such as usage charges from internet access providers and telephone companies.

 

If you do not give instructions to your broker, your broker can not vote your Advaxis shares during the Special Meeting for anything besides Proposal Nos. 2 and 3 because all the other proposals are considered “non-discretionary,” non-routine items.

 

All properly executed proxies that are not revoked will be voted at the Advaxis special meeting and at any adjournments or postponements of the Advaxis special meeting in accordance with the instructions contained in the proxy. If a holder of Advaxis common stock executes and returns a proxy and does not specify otherwise, the shares represented by that proxy will be voted “FOR” all of the proposals in accordance with the recommendation of Advaxis’ board of directors.

 

If you are a stockholder of record of Advaxis and you have not executed a support agreement, you may change your vote at any time before your proxy is voted at the Advaxis special meeting in any one of the following ways:

 

  You may submit another properly completed proxy with a later date by mail or via the internet.
     
  You can provide your proxy instructions via telephone at a later date.
     
  You may send a written notice that you are revoking your proxy to Advaxis, Inc., 9 Deer Park Drive, Suite K-1, Monmouth Junction, New Jersey 08852, Attention: Igor Gitelman, VP of Finance and Chief Accounting Officer.
     
  You may attend the Advaxis special meeting online and vote by following the instructions at www.virtualshareholdermeeting.com/ADXS2021SM. Simply attending the Advaxis special meeting will not, by itself, revoke your proxy.

 

If your shares are held by your broker, bank or other agent, you should follow the instructions provided by them.

 

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Required Vote

 

The affirmative vote of the holders of a majority of shares present in person or represented by proxy at the Advaxis special meeting and entitled to vote on the subject matter, assuming a quorum is present, is required for approval of Proposal Nos. 4 and 5. The affirmative vote of the holders of a majority of the outstanding shares of Advaxis common stock entitled to vote thereon is required for approval of Proposal Nos. 1, 2 and 3. Proposal No. 1 is referred to herein as the merger proposal. Proposal No. 2 is referred to herein as the reverse stock split proposal. Proposal No. 3 is referred to herein as the certificate of incorporation amendment proposal. The approval of the merger proposal, the reverse stock split proposal and the certificate of incorporation amendment proposal are all conditions to the completion of the merger. The issuance of Advaxis common stock in connection with the merger and the change of control resulting from the merger, or Proposal No. 1, and the amendment to the amended and restated certificate of incorporation of Advaxis, as amended, to change the corporate name from Advaxis, Inc. to “Biosight Therapeutics Inc.,” or Proposal No. 3, will not take place unless they are approved by Advaxis stockholders and the merger is consummated.

 

Votes will be counted by the inspector of election appointed for the meeting, who will separately count “FOR” and “AGAINST” votes, abstentions and broker non-votes. Abstentions and broker non-votes will also be treated as shares present for the purpose of determining the presence of a quorum for the transaction of business at the special meeting. Abstentions will be counted toward the vote totals for each proposal, and will have the same effect as “AGAINST” votes. Broker non-votes will not be treated as votes cast for or against a proposal and accordingly will not have any effect with respect to the outcome of Proposal Nos. 1, 4 and 5, and will have the same effect as “AGAINST” votes for Proposal Nos. 2 and 3.

 

As of July 31, 2021, the directors and certain executive officers of Advaxis owned or controlled less than 1% of the outstanding shares of Advaxis common stock entitled to vote at the Advaxis special meeting. As of July 31, 2021, the Advaxis stockholders that are party to a support agreement, including the directors and certain executive officers of Advaxis, owned an aggregate of 70,715 shares of Advaxis common stock representing less than 1% of the outstanding shares of Advaxis common stock. Each stockholder that entered into a support agreement, including the directors and certain executive officers of Advaxis, has agreed to vote all shares of Advaxis common stock owned by him or her as of the record date in favor of Proposal Nos. 1, 2, and 3, and against any competing “Acquisition Proposal” (as defined in the Merger Agreement).

 

Solicitation of Proxies

 

In addition to solicitation by mail, the directors, officers, employees and agents of Advaxis may solicit proxies from Advaxis stockholders by personal interview, telephone, email, fax or otherwise. Advaxis and Biosight will share equally the costs of printing and filing this proxy statement/prospectus/information statement and proxy card. Arrangements will also be made with brokerage firms and other custodians, nominees and fiduciaries who are record holders of Advaxis common stock for the forwarding of solicitation materials to the beneficial owners of Advaxis common stock. Advaxis will reimburse these brokers, custodians, nominees and fiduciaries for the reasonable out-of-pocket expenses they incur in connection with the forwarding of solicitation materials. Advaxis has retained Kingsdale Advisors to assist it in soliciting proxies using the means referred to above. Advaxis will pay the fees of Kingsdale Advisors, which Advaxis expects to be approximately $250,000, plus reimbursement of out-of-pocket expenses.

 

Other Matters

 

As of the date of this proxy statement/prospectus/information statement, Advaxis’ board of directors does not know of any business to be presented at the Advaxis special meeting other than as set forth in the notice accompanying this proxy statement/prospectus/information statement. If any other matters should properly come before the Advaxis special meeting, it is intended that the shares represented by proxies will be voted with respect to such matters in accordance with the judgment of the persons voting the proxies.

 

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THE MERGER

 

This section and the section titled “The Merger Agreement” beginning on page 109 of this proxy statement/prospectus/information statement describe the material aspects of the merger and the Merger Agreement. While Advaxis and Biosight believe that this description covers the material terms of the merger and the Merger Agreement, it may not contain all of the information that is important to you. You should read carefully this entire proxy statement/prospectus/information statement for a more complete understanding of the merger and the Merger Agreement and the other documents to which you are referred in this proxy statement/prospectus/information statement. See the section titled “Where You Can Find More Information” beginning on page 241 of this proxy statement/prospectus/information statement.

 

Background of the Merger

 

Advaxis’ board of directors and executive management regularly review Advaxis’ operating and strategic plans, both near-term and long-term, as well as potential partnerships in an effort to enhance stockholder value. These reviews and discussions focus, among other things, on the opportunities and risks associated with Advaxis’ business and financial condition and strategic relationships, and due to the capital-intensive nature of its business of developing and commercializing products, also on methods to increase capital in order to advance and strengthen its business and mitigate risks, and, consequently, enhance stockholder value. In furtherance of this endeavor, Advaxis has periodically considered various strategic alternatives, which have included licensing or acquiring rights to product candidates, divesting certain product candidates, equity financings (including potential PIPE transactions), debt financings, and acquisitions of, or mergers with, other companies with other technologies, products, or product candidates.

 

In 2018, the Advaxis board of directors conducted a review of strategic options and its product pipeline. In connection with such review, Advaxis streamlined its pipeline to focus on the highest value opportunities and continued its pursuit of opportunities to monetize its drug candidates that target human papilloma virus and prostate specific antigens.

 

In early January 2019, Advaxis entered into a Finder’s Agreement with a financial advisor to facilitate introductions between Advaxis and potential investors and strategic partners. In February 2019, Advaxis engaged another financial advisor (“Financial Advisor A”) with experience in the biotech field, knowledge of the life sciences industry, and familiarity with Advaxis, to initiate a formal strategic process and provide transaction advisory services, with broad direction to find ways to enhance Advaxis’ product portfolio through in-licensing and potential M&A transactions.

 

Over the next 12 months, Advaxis management and Financial Advisor A corresponded with more than 200 potential transaction counterparties on a broad variety of transaction types, including potential M&A, in-licensing and out-licensing transactions. Various strategic alternatives were discussed, over 20 nondisclosure agreements were entered into, and certain due diligence information was exchanged with certain of the potential counterparties.

 

On June 27, 2019, Advaxis announced by press release the increased focus on neoantigen-directed immunotherapies and closure of the AIM2CERV Phase 3 clinical trial with axalimogene filolisbac (AXAL) in high-risk locally advanced cervical cancer. The study was terminated early due to resource and funding constraints, and Advaxis would continue to pursue monetization opportunities for AXAL.

 

On October 11, 2019, management notified the Advaxis board of directors that discussions were progressing regarding a potential PIPE transaction with a potential strategic counterparty (“Party A”), which had been previously discussed with the board, and was expected to lead to a proposal.

 

On October 28, 2019 a letter of intent was provided by Party A contemplating an initial PIPE investment followed by a subsequent stock based business combination transaction between Advaxis and Party A with an ownership ratio to be discussed as part of future discussions. The draft letter of intent was not executed by Party A and Advaxis, and in furtherance of its need for additional capital, Advaxis continued to advance discussions regarding the PIPE investment.

 

On November 11, 2019, Party A provided Advaxis with an initial draft of a Securities Purchase Agreement relating to the potential PIPE investment for review while discussions continued between Party A and Advaxis regarding a potential business combination transaction.

 

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From December 13 to December 15, 2019, members of Advaxis management met socially with members of management of Party A in Luxembourg. On the last day of the meetings, a potential business combination transaction was discussed generally by members of management of each of Party A and Advaxis, although the parties did not discuss any specific terms.

 

On December 18, 2019, following additional discussions between Party A and Advaxis, a revised draft of the Securities Purchase Agreement was received from Party A.

 

At the December 19, 2019 meeting of the Advaxis board of directors, the board discussed recent strategic activities, including the potential PIPE investment by Party A, and the board received updates about recent discussions with multiple potential transaction counterparties, all of which were preliminary in nature. The board authorized Advaxis management to execute a revised letter of intent with Party A, providing for a merger between Advaxis and Party A, or a subsidiary of Party A, with Party A’s stockholders owning 90% of the combined company and Advaxis’ stockholders owning 10% of the combined company. The letter of intent also provided that upon signing of the definitive agreement, Party A would make, or cause to be made, a $10 million or $15 million investment in Advaxis in the form of a PIPE, a debt investment or other mutually agreeable form.

 

On December 25, 2019, Advaxis received a final, signed letter of intent from Party A, and on December 26, 2019 Advaxis signed and returned the fully executed letter of intent to Party A, which provided for Party A’s stockholders owning 90% of the combined company, Advaxis’ stockholders owning 10% of the combined company, and Party A making a $10 million or $15 million investment in Advaxis in the form of a PIPE, a debt investment or other mutually agreeable form upon signing of a definitive agreement. Over the following weeks, the parties began exchanging due diligence information.

 

At the January 17, 2020 meeting of the Advaxis board of directors, the board decided to terminate the letter of intent with Party A and authorized Advaxis to consummate a registered offering and private placement of up to $11 million in shares of its common stock and a private placement of warrants to purchase shares of common stock in an amount of up to half of the number of shares issued in the registered offering.

 

On January 16, 2020, a potential counterparty (“Party B”) tendered a letter of intent for the license of ADXS-504 (HOT Prostate) and ADVAXIS-PSA. A nondisclosure agreement was signed on January 21, 2020 and access was provided to Advaxis’ due diligence information. Advaxis and Party B conducted a few in person meetings among members of management but no additional definitive transaction terms were agreed to between Advaxis and Party B and the letter of intent was not executed by Advaxis.

 

On January 19, 2020, Advaxis terminated the letter of intent with Party A in order to proceed with an alternative financing transaction (further described below) as instructed by the board.

 

On January 21, 2020, Advaxis announced the pricing of a $10.5 million registered direct offering and that Advaxis had entered into a definitive agreement with two institutional investors for the purchase and sale of 10,000,000 shares of common stock at an offering price of $1.05 per share, for gross proceeds of $10.5 million before expenses. The net proceeds were intended to fund research and development initiatives in the product pipeline, including the Advaxis HOT program and potential new studies for Advaxis-PSA, and for general corporate purposes.

 

From February 2019 to February 2020, in accordance with its engagement, Financial Advisor A conducted a broad search and initiated outreach to identify and evaluate prospects for potential strategic alliances, mergers and acquisitions, and other business combinations. Many prospects were responsive to the outreach and engaged by expressing various levels of interest, including meetings with Advaxis management. In addition to the other letters of intent described herein, one other potential counterparty submitted a non-binding proposal for a merger with Advaxis. Ultimately, however, the Advaxis board of directors did not believe such non-binding proposal would enhance stockholder value. No other definitive proposals were received that the Advaxis board of directors believed would be a viable transaction option for such enhancement of value, and Advaxis terminated Financial Advisor A’s engagement.

 

On February 25, 2020, Advaxis management was contacted by Party A with an interest to resume discussions regarding a potential business combination. Party A proposed a transaction structure on substantially the same terms as the executed letter of intent in which Party A’s stockholders would own 90% of a combined company, with Advaxis’ stockholders owning 10% with a concurrent PIPE investment.

 

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At the March 3, 2020 Advaxis board of directors meeting, the board discussed and evaluated potential transaction counterparties, including Party A, Party B and four others.

 

During March and April 2020, Advaxis continued to engage in discussions with multiple potential counterparties, and due diligence information was shared with Advaxis and certain of such counterparties.

 

On April 8, 2020, Advaxis received a letter from Nasdaq indicating that Advaxis no longer met its requirement to maintain a minimum bid price of $1 per share and that, according to its Listing Rules, Advaxis would have a period of 180 days in which to regain compliance. On April 20, 2020, in response to the unprecedented turmoil in U.S. and world financial markets, Nasdaq informed Advaxis that it had determined to toll compliance periods through June 30, 2020, and, therefore, Advaxis would have until December 21, 2020 to regain compliance.

 

At the April 21, 2020 Advaxis board of directors meeting, the board authorized the entry into a Sales Agreement with A.G.P./Alliance Global Partners, as sales agent (“A.G.P.”), for the issuance and sale to the public by Advaxis of up to $40,000,000 of shares of Advaxis’ common stock in an at-the-market transaction. A.G.P. had a previous relationship with Advaxis and was not introduced to Advaxis in connection with LifeSci Capital’s engagement. On May 8, 2020, Advaxis announced its entry into the Sales Agreement with A.G.P.

 

At the May 4, 2020 Advaxis board of directors meeting, the board discussed engaging LifeSci Capital LLC (“LifeSci Capital”), a financial advisor with experience in the life sciences industry, to serve as financial advisor in connection with potential M&A and in-licensing transactions and management provided an update on continued discussions regarding strategic alternatives. The board authorized management to continue ongoing due diligence efforts and review of certain potential partners or acquirors. Following the board meeting, LifeSci Capital was engaged by Advaxis to serve as financial advisor.

 

During May 2020, members of Advaxis management continued to engage in discussions with multiple potential counterparties, and due diligence information was shared with Advaxis and certain of such counterparties.

 

At the June 1, 2020 Advaxis board of directors meeting, the board discussed a potential merger transaction with one potential counterparty (“Party C”). Management reported to the board that significant scientific and clinical due diligence had been completed in connection with such potential merger transaction, and legal and financial due diligence remained outstanding. Management described for the board the proposed contemplated transaction, which could include a financing component. The Board discussed that such financing could foster greater interest from larger, fundamental biotechnology institutional funds in the near- or medium-term and add capital to the combined company.

 

The board discussed the potential lead investor, which was also an investor in Party C. Director Dr. Sidransky, who is also a principal of the potential investor, discussed anticipated plans for financing. Current valuation of Party C was discussed in the context of a valuation split for the merger transaction that involved Advaxis stockholders owning between 40% and 60% of a combined company. In view of his relationship with the potential investor, following this discussion, Dr. Sidransky recused himself from decisions regarding Party C and left the meeting.

 

Based on the relative valuations of Advaxis and Party C, the Board authorized Advaxis management to negotiate a letter of intent with Party C with a valuation split involving Advaxis stockholders owning between 40% and 50% of a combined company.

 

On June 11, 2020, Advaxis released financial results for the second quarter ended April 30, 2020 and hosted a conference call to provide a business update.

 

On June 25, 2020, Party C notified Advaxis that it declined to continue transaction discussions and would put its consideration of strategic options aside in favor of focusing on obtaining financing.

 

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At the July 16, 2020 Advaxis board of directors meeting, the board authorized management to expand the ongoing search for M&A opportunities to also include potential transactions in which Advaxis might be acquired, as opposed to mergers of equals. The board also authorized management, with the assistance of counsel, to negotiate terms of principal documentation for an equity line with Lincoln Park Capital Fund LLC (“Lincoln Park”), pursuant to which Advaxis would be able to require Lincoln Park to purchase shares of Advaxis’ common stock during a specified term, up to a maximum commitment amount, all in accordance with the specific terms to be set forth in an Equity Commitment Purchase Agreement.

 

On August 3, 2020, Advaxis announced that it had entered into a common stock purchase agreement for up to $20 million with Lincoln Park. Lincoln Park made an initial purchase of $2 million of Advaxis common stock at $0.57 per share. Under the terms, Advaxis had the right, at its sole discretion, to sell to Lincoln Park up to $20 million worth of shares over the 36-month term of the agreement, subject to certain conditions. The purchase price of the shares would be based on prevailing market prices at the time of each sale, with no upper limits to the price per share. Advaxis controlled the timing and amount of any future sales of its stock to Lincoln Park. There were no warrants, derivatives, financial or business covenants associated with the agreement, and Lincoln Park agreed not to cause or engage in any direct or indirect short selling or hedging of Advaxis’ common stock. Advaxis had the right to terminate the purchase agreement at any time without cost or penalty. In consideration for Lincoln Park entering into the purchase agreement, Advaxis issued 1,084,266 shares of its common stock to Lincoln Park as a fee for Lincoln Park’s obligation to purchase shares at Advaxis’ discretion.

 

Party A contacted Advaxis regarding re-engaging in connection with negotiating and consummating a business combination transaction, and on August 4, 2020, a draft letter of intent was received from Party A regarding a potential merger. The letter of intent proposed relative valuations of Advaxis and Party A that would have resulted in Party A’s stockholders owning at least 80% of the combined entity.

 

At the August 4, 2020 Advaxis board of directors meeting, management updated the Board regarding the letter of intent received from Party A with respect to a potential merger transaction. The board authorized management to negotiate the terms of a letter of intent between Party A and Advaxis regarding a potential strategic transaction on a non-exclusive basis. Management updated the board with respect to the ongoing activities of LifeSci Capital and that the availability of other options for M&A transactions was limited. The board instructed management to continue exploring strategic transactions with the support of LifeSci Capital in parallel with negotiating the letter of intent with Party A.

 

On August 4, 2020, Director Sidransky provided an introduction to Biosight, the parties thereafter entered into a customary nondisclosure agreement prohibiting each party from disclosing material nonpublic information obtained from the other, with no standstill provisions with customary standstill provisions and don’t ask-don’t waive terms.

 

On August 5, 2020, the letter of intent with Party A was executed providing for a merger transaction in which Party A’s stockholders would own at least 80% of the combined entity as well as the consummation of a concurrent $80 to $100 million investment in the combined entity in the form of a PIPE, a debt investment or other mutually agreeable form. The letter of intent with Party A did not contain any exclusivity provisions so that Advaxis could continue to work with LifeSci Capital on exploring other strategic alternatives as directed by the board.

 

On August 6, 2020, the nondisclosure agreement with Biosight was executed, and Biosight provided a confidential corporate presentation.

 

From August 6 through August 23, 2020, Advaxis continued to engage in discussions with Party A and Biosight.

 

On August 23, 2020, Advaxis received a draft proposal from Biosight with proposed terms for a merger transaction, including exclusivity provisions that would require termination of discussions with Party A. The proposal provided that Biosight would be prepared to enter a merger transaction that valued Biosight at $120 million and Advaxis at $35 million, which would imply Biosight shareholders owning 77.5% and Advaxis stockholders owning 22.5% of the combined company and requiring that Advaxis have at least $15 million in “net cash” at closing of a transaction.

 

On August 24, 2020, management notified the board that a draft letter of intent was received from Biosight and scheduled a meeting with the board to review. Additional information for the Biosight and Party A opportunities with preliminary evaluation of each of the opportunities was provided to the board.

 

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At the August 25, 2020 Advaxis board of directors meeting, management described Biosight to the board as a potential new M&A partner. It was disclosed that Israeli Biotech Fund, an investment fund co-founded by Director Sidransky, had an investment in Biosight. Dr. Sidransky provided insight and his opinion on Biosight, explaining that following a merger between Advaxis and Biosight, the combined company would have three product candidates. Dr. Sidransky then recused himself from further discussion regarding the strategic process and left the meeting.

 

Management provided an update on the status of the potential strategic transaction with Party A, which was conducting additional scientific due diligence.

 

Advantages and disadvantages of both potential opportunities involving Biosight and Party A were discussed by the Board. The Board then instructed management to proceed with the process and authorized management to begin negotiation of a potential transaction with Biosight, without committing to exclusivity.

 

Following the board of directors meeting, management discussed with Biosight key issues in the draft proposal, including valuation and exclusivity.

 

On August 27, 2020, Advaxis provided to Biosight a counterproposal to the letter of intent. From August 27, 2020 through September 16, 2020, Advaxis and Biosight continued to exchange due diligence information and negotiate the letter of intent.

 

On August 28, 2020, management updated the board that discussions were progressing with Biosight towards key terms of the letter of intent, and discussions with Party A were progressing towards a first draft of a merger agreement.

 

On August 29, 2020, Morgan, Lewis & Bockius LLP (“Morgan Lewis”), counsel to Advaxis, received the initial draft of a merger agreement from Party A.

 

On September 3, 2020, one of the members of the board proposed another potential merger counterparty (“Party D”) to management.

 

In parallel, Advaxis continued to exchange due diligence information with Biosight and Party A.

 

On September 8, 2020, Biosight requested the ability to disclose the identity of Advaxis for evaluation by two potential venture capital firms interested in investing in Biosight, which request was approved by Advaxis. Additionally, Biosight sent an updated letter of intent to Advaxis that proposed relative valuations of Advaxis and Biosight that would have resulted in Advaxis’ stockholders owning 20% of the combined company, and Biosight’s shareholders owning 80%.

 

On September 10, 2020, a nondisclosure agreement with Party D was executed and Party D was provided access to due diligence materials regarding Advaxis. From September 10 to September 24, 2020, Advaxis engaged in discussions with and provided due diligence information to Party D.

 

On September 11, 2020, management updated the board that cash at closing was a focal point in strategic discussions with both Biosight and Party A, and suggested utilizing the at the market program to raise additional funds. All of the members of the board confirmed their approval of this approach by email.

 

On September 15, 2020, management updated the board as to the status of the strategic discussions.

 

At the September 17, 2020 Advaxis board of directors meeting, Advaxis’ financing needs were discussed, including the at the market offering program with A.G.P. and the equity line with Lincoln Park. The board approved an offer and sale under the at the market program of shares of Advaxis’ common stock with a maximum aggregate offering price of up to $5,000,000, for an offering price per share of no less than $0.40 during the period commencing on September 11, 2020 and terminating on November 13, 2020. The board further approved an offer and sale under the equity line to Lincoln Park of offered shares having a maximum aggregate offering price of up to $6,000,000, for an offering price per share of greater than or equal to $0.40, during the period commencing on September 16, 2020 and terminating on November 13, 2020.

 

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Management provided an update on strategic alternatives, noting continued interest from various third parties, including continued engagement with Biosight and Party A. The board discussed concerns about the ability of Party A to consummate a transaction successfully, and that, in comparison to Party A, Biosight’s products had more promise of a successful development and commercialization, Biosight appeared to have greater potential to raise capital, and the respective businesses of Advaxis and Biosight were more aligned in nature and scope. Following this discussion, the board authorized management, on behalf of Advaxis, to execute a letter of intent with Biosight, setting forth certain preliminary terms of a potential merger transaction between Advaxis and Biosight which would have resulted in Advaxis’ stockholders owning 20% of the combined company and Biosight’s shareholders owning 80% of the combined company, as adjusted for the amount of cash held by Advaxis.

 

The board also discussed the susceptibility of Advaxis under current conditions to a hostile takeover. The risks and benefits associated with implementing a stockholder rights plan were reviewed. Advaxis counsel reviewed the fiduciary duties of directors applicable to adoption of a stockholder rights plan and the board authorized management, on behalf of Advaxis, to take all actions necessary to effect implementation of a stockholder rights plan in order to allow the board to make informed decisions in the best long term interests of Advaxis and its stockholders.

 

On September 21, 2020, Biosight notified Advaxis that it did not envision proceeding towards a potential merger transaction and instead, based on recent data, intended to pursue an initial public offering. Management of Advaxis updated the board as to Biosight’s plans and the status of other ongoing opportunities with Party A and Party D.

 

On September 23, 2020, Biosight contacted Advaxis and indicated that, notwithstanding recent communications, it remained interested in pursuing a potential transaction with Advaxis. Biosight and Advaxis management spoke to discuss Biosight’s ongoing interest and current clinical summary. A revised draft of the letter of intent was submitted to Advaxis, which was shared with the Advaxis board. The letter of intent proposed relative valuations of Advaxis and Biosight that would have resulted in Advaxis’ stockholders owning 10% of the combined company and Biosight’s shareholders owning 90%, which ratio would be adjusted downwards depending on the amount of cash Advaxis held at the closing of the potential transaction.

 

On September 23, 2020, a proposal was received from Party D regarding a potential license to the HOT program with stock consideration and shared with the Advaxis board.

 

At the September 24, 2020 Advaxis board of directors meeting, the board was updated as to financing activities with sales made under the Lincoln Park equity line of 4 million shares, for a total capital raise of approximately $2 million, in accordance with the board’s prior authorization to sell up to $6 million of shares at a price per share of no less than $0.40. Sales under the at the market program with A.G.P. had not been conducted.

 

The board authorized the offer and sale to Lincoln Park under the equity line of up to 15,000,000 shares of Advaxis’ common stock, for an offering price per share of greater than or equal to $0.40, during the period commencing September 24, 2020 and terminating on November 13, 2020.

 

The board authorized the sale under the at the market program of additional offered shares having a maximum aggregate offering price of up to $10,000,000, for an offering price per share of no less than $0.40, during the period commencing September 24, 2020 and terminating on November 13, 2020.

 

The Advaxis board was updated with respect to strategic alternatives, and Party D’s interest, technology and product pipeline were discussed. An update was provided on continuing discussions with Biosight. Director Sidransky recused himself from further discussions regarding the strategic process and temporarily left the meeting, and both Director Sidransky and Director Appel abstained from the matter. Director Appel did not give a reason for his abstention. The board authorized management, for and on behalf of Advaxis, to pursue the execution of a letter of intent for a potential transaction with Biosight, optimizing the terms of the potential deal to include a carveout to out-license material assets of Advaxis and ensure the Advaxis stockholders receive the value of such carveout, and further authorized management to pursue an out-license opportunity with Party D. The letter of intent contemplated exclusivity for a period of 45 days.

 

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Representatives of Morgan Lewis led a discussion regarding potential adoption of a stockholder rights plan, potential amendments to Advaxis’ bylaws, and the fiduciary duties of directors applicable to the adoption of a stockholder rights plan and bylaw amendments. Following discussion, the board authorized management to engage an investment bank for assistance with preparation and implementation of a stockholder rights plan. The board agreed to reconvene on September 29, 2020 to discuss the stockholder rights plan further. Thereafter, LifeSci Capital was engaged to assist Advaxis with the stockholder rights plan and prepare a presentation for the September 29, 2020 board meeting.

 

On September 24, 2020, Advaxis announced that the U.S. Food and Drug Administration (FDA) had cleared a new Investigational New Drug (IND) application for the initiation of an Investigator Sponsored Phase 1 clinical study of ADXS-504, Advaxis’ off-the-shelf neoantigen Advaxis HOT candidate for prostate cancer.

 

From September 24, 2020 until September 30, 2020, Advaxis and Biosight continued to exchange due diligence information and negotiate the letter of intent. Advaxis and Party D also continued to discuss the out-license opportunity.

 

At the September 29, 2020 Advaxis board of directors meeting, in response to the general view of the Advaxis position in the market and its resulting vulnerability to a hostile takeover, the board approved the form, terms and provisions of the Rights Agreement respecting the stockholder rights plan, and also approved and adopted the Amended and Restated By-laws of Advaxis. The adoption of the rights plan was announced in a press release later that day.

 

On September 30, 2020, Advaxis requested, and Biosight confirmed, that Advaxis could continue certain other monetization discussions of the HOT platform during the exclusivity period under the letter of intent. On September 30, 2020, the letter of intent between Advaxis and Biosight was executed, which included exclusivity for a period of 30 days. Thereafter, access to Advaxis’ due diligence information continued to be provided to Biosight, and the respective legal teams were introduced.

 

On October 2, 2020, Advaxis notified Party A that Advaxis had entered into exclusive discussions with another party, and that the letter of intent between Advaxis and Party A was terminated.

 

From September 30 until late December, Advaxis and Biosight exchanged due diligence information.

 

On October 5, 2020, a draft letter of intent was received from Party D for an out-licensing deal to purchase the HOT platform. Director Sidransky was updated by management. From October 5, 2020 until November 19, 2020, Advaxis and Party D negotiated the letter of intent with respect to the sale of the HOT program.

 

On October 7, 2020, after receiving authorization by the board, Advaxis re-engaged LifeSci Capital to advise with respect to a potential transaction with Party D in addition to the financial advisory services already being provided.

 

On October 9, 2020, Advaxis and Party D management discussed structure and financial terms.

 

On October 13, 2020, a revised draft of the letter of intent was sent to Party D.

 

On October 15, 2020, Advaxis entered into private exchange agreements with two warrant holders from the January 2020 public offering, pursuant to which such holders sold 3 million shares in exchange for 5 million warrants.

 

On October 18, 2020, management updated the Advaxis board on the status of each of the Biosight and Party D discussions.

 

On October 26, 2020, Advaxis announced updated clinical results from the combination arm of Advaxis’ ongoing Phase 1/2 study evaluating ADXS-503 in combination with KEYTRUDA® (pembrolizumab), Merck’s anti-PD-1 therapy in non-small cell lung cancer (NSCLC).

 

On November 9, 2020, Advaxis announced that it had presented updated data from its ongoing ADXS-503 Phase 1/2 Lung Cancer Trial at the 2020 Society for Immunotherapy of Cancer (SITC) Annual Meeting. The data presented across three cohorts; Part A monotherapy, Part B combination with KEYTRUDA® and Part C combination with KEYTRUDA® in the first line setting for patients with NSCLC with PD-L1 expression ≥ 1% or who are unfit for chemotherapy, together, demonstrated that ADXS-503 was safe and well tolerated, and may restore or enhance sensitivity to checkpoint inhibitors as an off-the-shelf, neoantigen immunotherapy.

 

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On November 10, 2020, management updated the Advaxis board on transaction discussions.

 

On November 11, 2020, an initial draft of the Merger Agreement was sent by White & Case LLP (“White & Case”), counsel to Biosight, to Morgan Lewis. Thereafter, the parties and their respective counsel began to negotiate the Merger Agreement and continued to exchange due diligence information.

 

At the November 16, 2020 Advaxis board of directors meeting, management updated the board on negotiations regarding a potential merger transaction with Biosight. Before further discussion, Dr. Sidransky reminded the board of his indirect relationship with Biosight. Management observed that although the exclusivity period had expired, Advaxis and Biosight had recently re engaged in further discussions and that a draft Merger Agreement was received by Advaxis on November 11, 2020. The board discussed the terms of the draft Merger Agreement and the various revisions that would be necessary in order to reach a more definitive agreement. No further action was taken at this time with respect to the transaction with Biosight by the board of Advaxis.

 

Management updated the board on the potential transaction for the out-license of the HOT program. Diligence was not yet conducted, and the current status of the letter of intent related to the transaction was discussed. The board authorized management to continue negotiations with respect to the out-license transaction of the HOT program.

 

At the November 16, 2020 Advaxis board of directors meeting, the board deemed it advisable and in the best interest of the stockholders of Advaxis that Advaxis make a public offering of up to $10,000,000 in shares of Advaxis common stock, together with warrants to purchase shares of Advaxis common stock in an amount equal to up to half of the number of shares issued in the offering, at a price per share and an exercise price, respectively, to be subsequently determined by a named Pricing Committee.

 

The Advaxis board also authorized any action deemed necessary to effect and keep effective the listing of the Advaxis common stock on Nasdaq.

 

After further discussion, the Advaxis board recommended that management engage in discussions directly with the board of directors of Biosight in an effort to expedite negotiations. Additionally, a financial analysis presentation, including the anticipated impact of the various transaction alternatives, was requested at the board’s next meeting to be held on November 25, 2020.

 

On November 19, 2020, the letter of intent relating to the potential outlicensing of the HOT program between Advaxis and Party D was executed. Thereafter, Advaxis and Party D engaged in discussions regarding the potential transaction and exchanged due diligence information. Also, on November 19, 2020, Morgan Lewis sent a revised draft of the Merger Agreement to White & Case.

 

On November 27, 2020, Advaxis announced the closing of a $9.2 million public offering. The net proceeds from the offering would be used to fund continued research and development initiatives in its product pipeline including, but not limited to, investment in its Advaxis HOT program and for general corporate purposes. Advaxis also indicated that it might use a portion of the net proceeds to acquire or invest in other businesses, products and technologies. The offering was made pursuant to an effective shelf registration statement on Form S-3 (File No. 333-226988) previously filed with the U.S. Securities and Exchange Commission (the “SEC”), which became effective upon filing on August 30, 2018.

 

On December 7, 2020, Advaxis sent to Party D an initial draft of a license agreement.

 

Between December 7, 2020 and late January 2021, Advaxis and Party D negotiated the license agreement and related documents and continued to exchange due diligence information.

 

On December 22, 2020, White & Case sent a revised draft of the Merger Agreement to Morgan Lewis.

 

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On December 22, 2020, Advaxis announced that the Nasdaq Stock Market had granted approval of Advaxis’ request to transfer its listing to the Nasdaq Capital Market from the Nasdaq Global Select Market, effective on December 24, 2020, because the stock price traded below the minimum bid price necessary to maintain its listing on the Nasdaq Global Select Market.

 

On December 29, 2020, Biosight and Advaxis conducted a teleconference with Biosight and Advaxis management members, Director Patton and respective counsel and financial advisors to discuss business, legal and tax matters related to the Merger Agreement.

 

On December 30, 2020, a telephone meeting of the Advaxis board of directors was held to discuss the terms, process and timing of the potential transaction with Biosight.

 

Thereafter, on January 7, 2021, Morgan Lewis sent a revised draft of the Merger Agreement to White & Case.

 

On January 19, 2021, Advaxis announced the first milestone payment related to the licensing agreement for ADVAXIS31-164, known as OST-HER2, with OS Therapies for evaluation in the treatment of osteosarcoma in humans. Under the terms of the licensing agreement, OS Therapies, in collaboration with the Children’s Oncology Group, was responsible for the conduct and funding of a clinical study evaluating ADXS-HER2 in recurrent, completely resected osteosarcoma and Advaxis was entitled to receive additional clinical, regulatory, and sales-based milestone payments as well as royalties on future product sales. The second milestone payment under the licensing agreement with OS Therapies was achieved on April 26, 2021 after OS Therapies completed a financing.

 

On January 24, 2021, Director David Sidransky introduced Ken Berlin to an executive at another potential transaction counterparty (“Party E”) to discuss potential synergies between companies.

 

At the January 25, 2021 meeting of the Advaxis board of directors, the board received an update from management with respect to the consideration of strategic alternatives, including discussions with Biosight, which had indicated a willingness to consider a post-merger ownership structure that would involve Biosight shareholders owning 82.5% of the combined company and Advaxis stockholders owning 17.5%. Specifically, the board was informed that Biosight would consider adjusting the valuation by 0.25% per $1 million raised by Advaxis in a financing transaction, with a valuation of the resulting combined company at $400 million. Director Sidransky reminded the board of his indirect interest in Biosight and recused himself from decisions regarding the Biosight merger.

 

The Advaxis board discussed various alternatives for how to proceed and respond to Biosight in light of the foregoing discussions. Following discussion, the board agreed to respond to Biosight with a proposal of an 80/20 valuation split, which would include the Party D out license transaction occurring before the Biosight merger. The board also agreed that if Biosight refused this offer, the Biosight merger and the Party D out-license transaction would not proceed.

 

After this meeting, Advaxis made the proposal to Biosight; Biosight rejected the proposal. On January 29, 2021, Mr. Berlin provided an email update to the Advaxis board members which noted Biosight’s rejection of the offer.

 

On February 8, 2021, a nondisclosure agreement between Party E and Advaxis was executed. Between February 8, 2021 and March 16, 2021, Advaxis and Party E exchanged due diligence information and discussed the terms of a potential transaction.

 

At the February 11, 2021 meeting of the Advaxis board of directors, the board approved, among other matters, an amendment to Advaxis’ Amended and Restated Certificate of Incorporation and a reverse stock split in order to meet the minimum price requirement of Nasdaq. The Board resolved to submit such matters to the stockholders for approval at the 2021 annual meeting of the stockholders.

 

On March 11, 2021, Advaxis was contacted by a potential transaction counterparty, with whom Advaxis had previously had contact (“Party F”), regarding clinical updates and a recent press release. Over the following two weeks, Advaxis and Party F discussed a potential transaction but Advaxis ultimately determined that the proposed deal terms were not favorable enough to continue to pursue a transaction with Party F.

 

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On March 12, 2021, Advaxis announced with Precision for Medicine, a specialized services company supporting drug development and commercialization, that data would be presented at the American Association for Cancer Research (AACR) Annual Meeting 2021 regarding the development of a novel flow immunophenotyping assay to accurately evaluate total PD-1 expression as a pharmacodynamic biomarker during PD-1 blockade treatment with pembrolizumab and clinical activity observed in the ongoing ADXS-503 clinical trial.

 

On March 16, 2021, Advaxis announced financial results for the first quarter ended January 31, 2021 and provided a business update regarding continued enrollment in the expanded ADXS-503 HOT program in NSCLC ADXS-503 Phase 1/2 trial, data presented at SITC, demonstrating disease control rate of 67% and overall response rate of 17% in the first six evaluable patients with immediate prior progression on KEYTRUDA®.

 

On March 17, 2021, Advaxis indicated to Party E that the proposed deal terms would not be acceptable based on recent negative read outs regarding Party E’s products.

 

On April 5, 2021, Advaxis announced an agreement with Columbia University Irving Medical Center to fund a Phase 1 clinical study evaluating ADXS-504 in patients with biochemically recurrent prostate cancer, expected to begin in the second fiscal quarter of 2021, with principal investigator Mark Stein, M.D., Associate Professor of Medicine, Division of Hematology/Oncology at Columbia University Vagelos College of Physicians and Surgeons.

 

On April 12, 2021, Advaxis announced definitive agreements with two healthcare-focused institutional investors for the purchase of an aggregate of 17,577,400 shares of common stock at an offering price of $0.7921 per share, and 7,671,937 pre-funded warrants, would be sold for a purchase price of $0.7911 per share and will have an exercise price of $0.001 per share. It was contemplated that net proceeds from the offering were planned to fund continued research and development initiatives to expand the product pipeline, including investment in the HOT program and for general corporate purposes. A portion of the net proceeds could also be used to acquire or invest in other businesses, products and technologies.

 

On April 15, 2021, Director Patton reached out to Director Orbach of Biosight and on April 20, 2021 the two Directors spoke by phone regarding their renewed interest in pursuing a transaction with a 75/25 ownership split of the combined company.

 

On April 29, 2021, Director Patton had another phone call with Director Orbach regarding certain terms of the proposed transaction, including a 75/25 ownership split of the combined company, with no adjustment based on cash of Advaxis held at closing, board composition and management of the combined company and the applicable break fee. On April 30, 2021, Director Patton updated the Advaxis board regarding the communications with Biosight and the board approved moving ahead with the transaction with Biosight.

 

On May 10, 2021, Advaxis was contacted by Party D, which expressed renewed interest in resuming deal discussions for the HOT program that had previously terminated in February 2021. Advaxis management explained to Party D that any such transaction would need to be executed after the potential merger with Biosight and that discussions could resume at that point.

 

On May 19, 2021, Advaxis announced updated data from the Phase 1/2 study evaluating ADXS 503 in combination with KEYTRUDA® presented as a poster at the American Society of Clinical Oncology (ASCO) 2021 Annual Meeting.

 

Also, on May 19, 2021, Director Patton spoke with Director Orbach and Director Orbach informed Director Patton that Biosight was interested in moving forward with the potential transaction as outlined by Advaxis.

 

On May 21, 2021, Advaxis indicated to Biosight its interest in proceeding with a transaction.

 

On May 27, 2021, the Advaxis board met and reviewed ongoing business development discussions and the current opportunities under evaluation by Advaxis management. Mr. Berlin provided an update on the status of management’s discussions with Biosight and the board agreed that Advaxis should continue discussions with Biosight and consider whether the opportunity advances further. The board also authorized Advaxis management to consider and move forward with other business development opportunities as they arise, subject to the further review and consideration of the board.

 

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On May 31, 2021, Advaxis sent to Biosight a revised draft of the Merger Agreement. Between May 31, 2021 and July 4, 2021, Advaxis, Biosight and their respective counsel continued to exchange due diligence information and negotiate the Merger Agreement.

 

On June 3, 2021, Advaxis held a virtual annual meeting of its stockholders. At the meeting, the following matters were submitted to a vote of stockholders: (i) the election of six (6) nominees to serve as directors of Advaxis until the 2022 Annual Meeting of Stockholders and until their respective successors were duly elected and qualified, or until such director’s earlier resignation, removal or death; (ii) the approval of an amendment to the Advaxis, Inc. 2015 Incentive Plan (the “2015 Incentive Plan”) to increase the existing limitations on awards granted in any calendar year; (iii) the approval of an amendment to Advaxis’ Amended and Restated Certificate of Incorporation to increase the number of authorized shares of common stock, from 170,000,000 shares to 300,000,000 shares; (iv) the approval of an amendment to Advaxis’ Amended and Restated Certificate of Incorporation to effect a reverse stock split of the Advaxis common stock at a range to be determined by the Advaxis board of directors between one-for-five and one-for-fifteen, without reducing the authorized number of shares of common stock, to be effected in the sole discretion of the Advaxis board of directors at any time within one year of the date of the annual meeting of stockholders without further approval or authorization of the stockholders; (v) the ratification of the appointment of Marcum LLP to serve as Advaxis’ independent registered public accounting firm for the fiscal year ending October 31, 2021; and (vi) the ratification and approval of the amendment to the 2015 Incentive Plan, which was adopted following the 2020 Annual Meeting of Stockholders, to increase the total number of shares of common stock authorized for issuance thereunder from 877,744 shares to 6,000,000 shares. While the other proposals were approved, the amendment to increase the authorized shares of common stock did not receive enough votes to be approved at the annual meeting.

 

On June 9, 2021, a teleconference call scheduled by Biosight was attended by Biosight and Advaxis management members, respective counsel and certain respective board members to discuss the Merger Agreement and various terms.

 

In early June, Party A contacted Advaxis and indicated a potential interest in renewed discussion regarding a potential transaction and requested certain information. Advaxis provided the information requested and thereafter had no further contact with Party A regarding a potential transaction.

 

On June 14, 2021, Advaxis announced financial results for the quarter ended April 30, 2021 and provided a business update, reflecting a cash runway anticipated into the 3rd fiscal quarter of 2023.

 

On June 16, 2021, a revised draft of the Merger Agreement was sent by White & Case to Morgan Lewis.

 

On June 17, 2021, Advaxis reconvened a virtual annual meeting of its stockholders. At the annual meeting, among other matters, the approval of an amendment to Advaxis’ Amended and Restated Certificate of Incorporation to effect a reverse stock split intended to ensure compliance with the Nasdaq listing requirement was submitted to a vote of stockholders, which proposal did not receive enough votes to be approved at the annual meeting.

 

On June 21, 2021, a revised draft of the Merger Agreement was sent by Morgan Lewis to White & Case.

 

On June 25, 2021, a revised draft of the Merger Agreement was sent by White & Case to Morgan Lewis. Thereafter, Advaxis and Biosight directly discussed various open issues with respect to the Merger Agreement and the potential transaction.

 

On June 28, 2021, a revised draft of the Merger Agreement, and an initial draft of the Support Agreement to be signed by executive officers and directors of Advaxis, were sent by Morgan Lewis to White & Case.

 

On June 29, 2021, a revised draft of the Support Agreement was sent by White & Case to Morgan Lewis, and on June 30, 2021, a revised draft of the Support Agreement was sent back to White & Case by Morgan Lewis. Later, on June 30, 2021, a revised draft of the Support Agreement was sent by White & Case to Morgan Lewis.

 

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On June 30, 2021, a revised draft of the Merger Agreement was sent by White & Case to Morgan Lewis. Later, on June 30, 2021, a revised draft of the Merger Agreement was sent by Morgan Lewis to White & Case. Following the exchange of drafts, a teleconference with Ken Berlin and Biosight Director Pini Orbach and Yuval Cabilly, a Co-Founder and Managing Partner of Israel Biotech Fund, was held to discuss open issues in the Merger Agreement.

 

On July 1, 2021, Advaxis reconvened a virtual annual meeting of its stockholders. At the annual meeting, the approval of an amendment to Advaxis’ Amended and Restated Certificate of Incorporation to effect a reverse stock split intended to ensure compliance with the Nasdaq listing requirement was submitted to a vote of stockholders, which proposal did not receive enough votes to be approved at the annual meeting.

 

Also, on July 1, 2021, White & Case sent a revised draft of the Merger Agreement to Morgan Lewis and Morgan Lewis sent a revised draft of the Support Agreement to White &Case, which draft of the Support Agreement was considered to be almost final by the parties. Later, on July 1, 2021, an initial draft of the Support Agreement to be signed by executive officers and directors of Biosight, was sent by White & Case to Morgan Lewis. Thereafter, on July 2, 2021, Morgan Lewis sent a revised draft of the Merger Agreement back to White & Case, which Advaxis considered to be almost final. Also, on July 2, 2021, White & Case sent to Morgan Lewis a further revised draft of the Support Agreement to be signed by executive officers and directors of Biosight, which draft was considered to be almost final by the parties.

 

On July 2, 2021, a meeting of the Advaxis board of directors was held to review the status of, and open items relating to, the potential transaction with Biosight. At the meeting, Mr. Berlin led the board in a discussion regarding Biosight’s technology and the strategic rationale for the proposed transaction with Biosight, indicating that the proposed transaction would make the combined company a late stage company. The board considered other relevant information, including, without limitation, Advaxis’ business, financial condition, results of operations, assets, management, competitive position, operating performance and prospects, both as an independent company and as a potential acquisition target for companies other than Biosight. Mr. Berlin then discussed the financial position of the combined company and the opportunity for a PIPE transaction at or following closing. A representative from LifeSci Capital then reviewed with the Board valuation metrics, Advaxis’ capitalization, Biosight’s capitalization, the exchange ratio, and the analysis of comparable public company transactions used to prepare the fairness opinion. LifeSci Capital then delivered its oral opinion, confirmed by delivery of a written opinion on July 2, 2021, to the effect that, as of that date and based upon and subject to the various assumptions set forth in LifeSci Capital’s opinion, the proposed transaction was fair, from a financial point of view, for the Advaxis stockholders.

 

In connection with rendering its fairness opinion, LifeSci Capital disclosed to the Advaxis board that it provides certain investor relations consulting services to Biosight and has received retainer or placement fees in connection with executive recruitment services provided to Biosight. Biosight has retained LifeSci Capital since December 2019 to provide such investor relations consulting services and pays LifeSci Capital a retainer fee of approximately $10,000 per month for such services. Biosight paid LifeSci Capital a placement fee of $120,000 in May 2021 in connection with the recruitment of Biosight’s current chief medical officer.

 

A summary of the terms of the Merger Agreement was provided to the Advaxis board by Mr. Berlin and Morgan Lewis. Mr. Berlin further discussed, and each member of the board acknowledged that they were aware of, all material facts regarding the interests that officers and directors of Advaxis may have in connection with the transactions contemplated by the Merger Agreement. Mr. Sidransky recused himself and following such recusal, the then-constituted board determined that the Merger Agreement and the transactions contemplated thereby were in the best interests of Advaxis and its stockholders and unanimously approved the Merger Agreement and the transactions contemplated thereby, including the merger with Biosight.

 

Between July 2, 2021 and July 4, 2021, negotiations continued on the Merger Agreement with representatives from Advaxis and Biosight, as well as their respective counsel.

 

On July 4, 2021, the parties finalized and executed the Merger Agreement and the support agreements with certain executive officers and directors of Advaxis and of Biosight.

 

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On the morning of July 6, 2021, prior to the opening of trading on the Nasdaq market, Advaxis and Biosight issued a joint press release announcing their entry into the Merger Agreement and held an investor conference call regarding the proposed transaction.

 

Advaxis Reasons for the Merger

 

At a meeting held on July 2, 2021, among other things, the Advaxis board of directors unanimously (i) determined that the Merger Agreement, the merger and other transactions contemplated thereby were advisable, fair to and in the best interests of Advaxis and its stockholders, (ii) approved, adopted and declared advisable the Merger Agreement, and (iii) determined to solicit, upon the terms and subject to the conditions set forth in the Merger Agreement, the approval of the Advaxis shareholders of the Merger Agreement.

 

During the course of its evaluation of the Merger Agreement and the transactions contemplated by the Merger Agreement, the Advaxis board of directors held numerous meetings, consulted with Advaxis’ senior management, legal counsel and financial advisor, and reviewed and assessed a significant amount of information. In reaching its decision to approve the Merger Agreement and the transactions contemplated by the Merger Agreement, the Advaxis board of directors considered a number of factors that it viewed as supporting its decision to approve the Merger Agreement, including:

 

  the financial condition and prospects of Advaxis and the risks associated with continuing to operate Advaxis on a stand-alone basis;

 

  that the Advaxis board of directors and its financial advisor undertook a comprehensive and thorough process of reviewing and analyzing potential strategic alternatives and merger partner candidates to identify the opportunity that would, in the Advaxis board of directors’ view, create the most value for Advaxis stockholders;

 

  the Advaxis board of directors’ belief, after a thorough review of strategic alternatives and discussions with Advaxis’ senior management, financial advisors and legal counsel, that the merger is more favorable to Advaxis Stockholders than the potential value that might have resulted from other strategic alternatives available to Advaxis;

 

  the Advaxis board of directors’ belief that, as a result of arm’s length negotiations with Biosight, Advaxis and its representatives negotiated the lowest exchange ratio to which Biosight was willing to agree, and that the other terms of the Merger Agreement include the most favorable terms to Advaxis in the aggregate to which Biosight was willing to agree;

 

  the Advaxis board of directors’ view, based on the scientific, regulatory and technical due diligence conducted by Advaxis management, of the regulatory pathway for, and market opportunity of, Biosight’s product candidates;

 

  the Advaxis board of directors’ consideration of the expected cash resources of the combined company as of the closing of the merger, with approximately $50 million of cash and cash equivalents on a pro forma basis after giving effect to the merger;

 

  the Advaxis board of directors’ view, following a review with Advaxis’ management of Biosight’s current development and clinical trial plans, of the likelihood that the combined company would possess sufficient cash resources at the closing of the merger to fund development of the product candidates of the combined company through upcoming value inflection points;

 

  the prospects of and risks associated with the other strategic candidates that had made proposals for a strategic transaction with Advaxis based on the scientific, technical and other due diligence conducted by Advaxis management;

 

  the ability of Advaxis stockholders to participate in the growth and value creation of the combined company following the closing of the merger by virtue of their continued ownership of Advaxis common stock;