Filing

Table of Contents

Filed pursuant to Rule 424(b)(5)

Registration Nos. 333-188870

333-160778

333-162361

PROSPECTUS

 

Up to 28,313,500 Shares of Common Stock

Issuable upon Exercise of Outstanding Warrants

 

 

This prospectus relates to the issuance of up to 28,313,500 shares of our common stock upon the exercise of outstanding warrants that we issued in registered offerings described below:

•    In October 2009, we completed an offering of 11,283 shares of our convertible preferred stock and warrants to purchase up to 792,000 shares of our common stock. All 11,283 shares of the convertible preferred stock have been converted into shares of our common stock and all of the warrants have been exercised other than one warrant to purchase up to 216,000 shares of our common stock. This one warrant, which remains outstanding as of the date of this prospectus and which we refer to in this prospectus as the 2009 Warrant, has an exercise price of $3.67 per share, and is exercisable at any time on or before October 9, 2014.

•    In June 2013, we completed an offering of 56,195,000 shares of our common stock and warrants to purchase up to 28,097,500 shares of our common stock. These securities were offered and sold in units with each unit consisting of one share of common stock and one warrant to purchase up to 0.5 of a share of common stock. All of these warrants remain outstanding as of the date of this prospectus. These warrants, which we refer to in this prospectus as the 2013 Warrants, have an exercise price of $0.65 per share, and are exercisable at any time on or before June 19, 2018.

Our common stock is listed on the NYSE MKT under the symbol “MSTX.” On May 12, 2014, the closing sale price for our common stock was $0.57 per share.

 

 

Investing in our securities involves a high degree of risk. Before buying any of our securities, see the section entitled “Risk Factors” on page 3 of this prospectus, and as updated in future filings we make with the Securities and Exchange Commission that are incorporated by reference into this prospectus. See “Information Incorporated by Reference.”

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

 

 

The date of this prospectus is May 14, 2014

---

Table of Contents

TABLE OF CONTENTS

 

ABOUT THIS PROSPECTUS			i
SUMMARY			1
THE OFFERING			2
RISK FACTORS			3
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS			3
DESCRIPTION OF SECURITIES			3
USE OF PROCEEDS			5
PLAN OF DISTRIBUTION			5
LEGAL MATTERS			5
EXPERTS			5
INFORMATION INCORPORATED BY REFERENCE			5
WHERE YOU CAN FIND MORE INFORMATION			6

ABOUT THIS PROSPECTUS

This prospectus is part of a registration statement that we filed with the SEC. As permitted by SEC rules, that registration statement includes additional information not contained in this prospectus. You may read that registration statement and the other reports we file with the SEC at its web site or at its offices described below under “Where You Can Find Additional Information.”

We have not authorized any dealer, agent or other person to give any information or to make any representation other than those contained or incorporated by reference in this prospectus. You must not rely upon any information or representation not contained or incorporated by reference in this prospectus. This prospectus does not constitute an offer to sell or the solicitation of an offer to buy any securities other than the registered securities to which it relates, nor does this prospectus constitute an offer to sell or the solicitation of an offer to buy securities in any jurisdiction to any person to whom it is unlawful to make such offer or solicitation in such jurisdiction. You should not assume that the information contained in this prospectus is accurate on any date subsequent to the date set forth on the front of this prospectus, or that any information we have incorporated by reference is correct on any date subsequent to the date of the document incorporated by reference (as our business, financial condition, results of operations and prospects may have changed since that date), even though this prospectus is delivered or securities are sold on a later date.

 

i

---

Table of Contents

 

1

---

Table of Contents

 

2

---

Table of Contents

RISK FACTORS

Investing in our securities involves a high degree of risk. You should carefully consider the risk factors set forth under “Risk Factors” in Item 1A of our annual report on Form 10-K for the year ended December 31, 2013, which are incorporated by reference in this prospectus, together with all other information contained or incorporated by reference in this prospectus, as may be updated by our subsequent filings under the Securities Exchange Act of 1934, as amended, or the Exchange Act, before deciding whether to invest in our securities. Each of the risk factors could adversely affect our business, operating results and financial condition, as well as adversely affect the value of an investment in our securities, and the occurrence of any of those risks might cause you to lose all or part of your investment. Additional risks and uncertainties that we do not presently know about or that we currently believe are not material may also adversely affect our business.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This prospectus and our SEC filings that are incorporated by reference into this prospectus contain or incorporate by reference forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. All statements, other than statements of historical fact, included or incorporated by reference in this prospectus regarding our development of our products, financial position, strategy, regulatory status, clinical and nonclinical studies, collaborations, commercial prospects, internal growth, competition, intellectual property, regulatory reforms, products, objectives of management, and compliance with NYSE MKT listing standards are forward-looking statements. The words “believe,” “anticipate,” “estimate,” “plan,” “expect,” “intend,” “may,” “could,” “should,” “potential,” “likely,” “projects,” “continue,” “will,” and “would” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. We cannot guarantee that we actually will achieve the plans, intentions or expectations expressed in our forward-looking statements and you should not place undue reliance on our forward-looking statements. There are a number of important factors that could cause our actual results to differ materially from those indicated or implied by forward-looking statements. These important factors include those set forth above under “Risk Factors.” These factors and the other cautionary statements made in this prospectus should be read as being applicable to all related forward-looking statements whenever they appear in this prospectus. Except as required by law, we do not assume any obligation to update any forward-looking statement. We disclaim any intention or obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

DESCRIPTION OF SECURITIES

The following description of our capital stock and the 2009 and 2013 Warrants summarizes the material terms and provisions thereof. The shares of our common stock issued upon the exercise, if any, of the 2009 and 2013 Warrants will be issued pursuant to the warrants between each of the investors and us. For the complete terms of our capital stock and the terms and conditions applicable to the 2009 and 2013 Warrants, please refer to our amended and restated certificate of incorporation and our amended and restated bylaws, as amended, and the forms of the 2009 Warrant and the 2013 Warrant, which we filed as exhibits to the registration statement of which this prospectus is a part. The summary below is qualified in its entirety by reference to our amended and restated certificate of incorporation and our amended and restated bylaws, as amended, and the forms of the 2009 Warrant and 2013 Warrant. The terms of these securities may also be affected by Delaware General Corporation Law.

Common Stock

As of the date of this prospectus, our certificate of incorporation authorizes us to issue 500,000,000 shares of common stock, par value $0.001 per share, of which 114,136,502 shares were issued and outstanding as of April 30, 2014. Additional shares of authorized common stock may be issued, as authorized by our board of directors from time to time, without stockholder approval, except as may be required by applicable securities exchange requirements. The holders of common stock possess exclusive voting rights in us, except to the extent our board of directors specifies voting power with respect to any other class of securities issued in the future. Each holder of our common stock is entitled to one vote for each share held of record on each matter submitted to a vote of stockholders, including the election of directors. Stockholders do not have any right to cumulate votes in the election of directors.

Subject to preferences that may be granted to the holders of preferred stock, each holder of our common stock is entitled to share ratably in distributions to stockholders and to receive ratably such dividends as may be declared by our board of directors out of funds legally available therefor. In the event of our liquidation, dissolution or winding up, the holders of our common stock will be entitled to receive, after payment of all of our debts and liabilities and of all sums to which holders of any preferred stock may be entitled, the distribution of any of our remaining assets. Holders of our common stock have no conversion, exchange, sinking fund, redemption or appraisal rights (other than such as may be determined by our board of directors in its sole discretion) and have no preemptive rights to subscribe for any of our securities.

All of the outstanding shares of our common stock are fully paid and non-assessable. The shares of common stock offered by this prospectus upon exercise of the 2009 and 2013 Warrants, when issued and paid for in accordance with the terms of the 2009 and 2013 Warrants, as applicable, will also be, fully paid and non-assessable.

 

3

---

Table of Contents

Securities Exchange Listing

Our common stock is traded on the NYSE MKT under the symbol “MSTX.”

Transfer Agent and Registrar

The transfer agent and registrar for our common stock is American Stock Transfer & Trust Company, LLC.

Preferred Stock

Our certificate of incorporation authorizes us to issue 1,000,000 shares of preferred stock, par value $0.001 per share, none of which are outstanding. Pursuant to our certificate of incorporation, our board of directors has the authority to provide for the issuance, in one or more series, of our authorized preferred stock and to fix or alter the rights, preferences, privileges and restrictions granted to or imposed upon any series of our preferred stock. The rights, privileges, preferences and restrictions of any such series of our preferred stock may be subordinated to, pari passu with (including, without limitation, inclusion in provisions with respect to liquidation and acquisition preferences, redemption or approval of matters by vote or written consent), or senior to any of those of any present or future class or series of preferred stock or common stock. Our board of directors is also expressly authorized to increase or decrease the number of shares of any series prior or subsequent to the issue of that series, but not below the number of shares of such series then outstanding. The issuance of preferred stock may have the effect of decreasing the market price of our common stock and may adversely affect the voting power of holders of our common stock and reduce the likelihood that holders of our common stock will receive dividend payments and payments upon liquidation.

The General Corporate Law of the State of Delaware, the state of our incorporation, provides that the holders of preferred stock will have the right to vote separately as a class on any proposal involving fundamental changes in the rights of holders of that preferred stock. This right is in addition to any voting rights that may be provided for in the applicable certificate of designation.

The 2009 and 2013 Warrants

The 2009 Warrant was issued in a registered offering completed in October 2009 pursuant to a prospectus dated October 6, 2009. In that offering we offered and sold 11,283 shares of our 4.25660% Series D Convertible Preferred Stock and warrants to purchase up to 792,000 shares of our common stock. In addition, pursuant to that prospectus, as subsequently supplemented, 3,192,000 shares of our common stock issuable upon conversion of the convertible preferred stock and exercise of the warrants were registered to permit their issuance by us to the purchasers of our convertible preferred stock and warrants. All 11,283 shares of the convertible preferred stock have been converted into shares of our common stock. We did not receive any proceeds upon conversion of the convertible preferred stock. Warrants to purchase 576,000 shares of our common stock have been exercised and such warrants are no longer outstanding. The only warrant that remains outstanding from that offering as of the date of this prospectus is the 2009 Warrant, which entitles the holder to purchase up to 216,000 shares of our common stock at an exercise price of $3.67 per share and which is exercisable at any time on or before October 9, 2014.

The 2013 Warrants were issued in an underwritten public offering completed in June 2013 pursuant to a prospectus dated June 14, 2013. In that offering we offered and sold 56,195,000 shares of our common stock and warrants to purchase up to 28,097,500 shares of our common stock. These securities were offered and sold to the underwriters and the public in units with each unit consisting of one share of common stock and one warrant to purchase up to 0.5 of a share of common stock. All of the 2013 Warrants remain outstanding as of the date of this prospectus and entitle the holders thereof to purchase up to 28,097,500 shares of our common stock in the aggregate at an exercise price of $0.65 per share and which are exercisable at any time on or before June 19, 2018.

Subject to limited exceptions, the holder of the 2009 Warrant does not have the right to exercise any portion of such warrant if the holder, together with its affiliates, would beneficially own in excess of 4.99% of the number of shares of our common stock outstanding immediately after the exercise. Similarly, the holders of the 2013 Warrants do not have the right to exercise any portion of their warrant if the holder, together with its affiliates, would beneficially own in excess of 9.99% of the number of shares of our common stock outstanding immediately after the exercise.

The exercise prices of the 2009 and 2013 Warrants, and in some cases the number of shares issuable upon exercise thereof, are subject to adjustment in the event of stock splits, stock dividends, combinations, rights offerings and similar events affecting our common stock. In addition, in the event we consummate a fundamental corporate transaction such as a merger or consolidation with or into another person or other reorganization event in which our common stock is converted or exchanged for securities, cash or other property, or we sell, lease, license or otherwise dispose of all or substantially all of our assets or we or another person acquires 50% or more of our outstanding common stock, then following such event, the holders of the 2009 and 2013 Warrants will be entitled to receive, for each share that would have been issuable upon exercise of the 2009 and 2013 Warrants immediately prior to such fundamental transaction, the number of shares of common stock of the successor or acquiring corporation or of ours, if we are the surviving corporation, and any additional consideration receivable as a result of such fundamental transaction by a holder of the number of shares of common stock for which the 2009 and 2013 Warrants are exercisable immediately prior to such fundamental transaction. Any successor to us or surviving entity shall assume our obligations under the 2009 and 2013 Warrants.

 

4

---

Table of Contents

The holders of the 2009 and 2013 Warrants must surrender payment in cash of the aggregate exercise price of the shares being acquired upon exercise of the 2009 and 2013 Warrants. If, however, we are unable to offer and sell the shares underlying the 2009 and 2013 Warrants pursuant to this prospectus due to the registration statement of which this prospectus is a part not being effective, then the 2009 and 2013 Warrants may only be exercised on a “net” or “cashless” basis. No fractional shares of common stock will be issued in connection with the exercise of the 2009 and 2013 Warrants. In lieu of fractional shares, we will pay the holder an amount in cash equal to the fractional amount multiplied by the exercise price.

The 2009 and 2013 Warrants do not entitle the holders thereof to any voting rights, dividends or other rights as a stockholder of ours prior to the exercise of their 2009 and 2013 Warrants.

The 2009 and 2013 Warrants are not listed on, and we do not intend to list any of them on, any securities exchange or automated quotation system.

Warrant Agent

American Stock Transfer & Trust Company, LLC serves as our agent for the transfer, exchange, replacement and exercise of the 2013 Warrants.

We do not engage a third-party warrant agent for the transfer, exchange, replacement or exercise of the 2009 Warrant. The processing of such transactions is conducted directly by us.

USE OF PROCEEDS

If all of the 2009 and 2013 Warrants are exercised in full and the exercise price therefor is paid in cash, we will receive approximately $19.1 million in proceeds. However, the timing of the exercise and the extent to which any of the 2009 and 2013 Warrants are exercised are beyond our control and depend on a number of factors, including the market price of our common stock. There can be no assurance that any of the 2009 and 2013 Warrants will be exercised, and it is possible that all of 2009 and 2013 Warrants may expire and may never be exercised. We will have broad discretion in the use of the net proceeds we receive from the exercise of the 2009 and 2013 Warrants, if any. We intend to use the net proceeds for working capital and general corporate purposes, which include, but are not limited to, the funding of research and product development activities, including our ongoing and future nonclinical and clinical trials, and general and administrative expenses. We may also use a portion of the net proceeds for strategic acquisitions of other companies, businesses or assets and/or evaluation of such opportunities from time to time.

We have not determined the amount of net proceeds to be used specifically for such purposes. Pending the use of any net proceeds, we expect to invest the net proceeds in interest-bearing, marketable securities.

PLAN OF DISTRIBUTION

We are offering the shares of common stock issuable upon exercise of the 2009 and 2013 Warrants directly to the holders of the 2009 and 2013 Warrants, and such holders may purchase such shares of common stock directly from us by exercising their 2009 and 2013 Warrants in accordance with their terms.

LEGAL MATTERS

The validity of the 2009 and 2013 Warrants and the shares of our common stock issuable upon exercise of the 2009 and 2013 Warrants has been passed upon for us by DLA Piper LLP (US), San Diego, California.

EXPERTS

The consolidated financial statements incorporated in this prospectus by reference to the Annual Report on Form 10-K for the year ended December 31, 2013 have been so incorporated in reliance on the report of PricewaterhouseCoopers LLP, an independent registered public accounting firm, given on the authority of said firm as experts in auditing and accounting.

INFORMATION INCORPORATED BY REFERENCE

The SEC allows us to “incorporate by reference” into this prospectus the information we file with the SEC, which means that we can disclose important information to you by referring you to those documents. Any statement contained in a document incorporated by reference in this prospectus shall be deemed to be modified or superseded for purposes of this prospectus to the extent that a statement contained herein, or in any subsequently filed document, which also is incorporated by reference herein, modifies or supersedes such earlier statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this prospectus.

We hereby incorporate by reference into this prospectus the following documents that we have filed with the SEC under the Exchange Act File No. 001-32157 (other than current reports on Form 8-K, or portions thereof, furnished under Items 2.02 or 7.01 of Form 8-K):

 

5

---

Table of Contents

•

our Annual Report on Form 10-K for the fiscal year ended December 31, 2013, filed with the SEC on March 26, 2014;

 

•

the portions of our definitive proxy statement filed with the SEC on April 29, 2014 in connection with our 2014 annual meeting of stockholders that are incorporated by reference into Part III of our Annual Report on Form 10-K for the fiscal year ended December 31, 2013;

 

•

our Quarterly Report on Form 10-Q for the quarter ended March 31, 2014, filed with the SEC on May 5, 2014;

 

•

our Current Reports on Form 8-K filed with the SEC on January 8, 2014, February 10, 2014, February 24, 2014, February 28, 2014, March 21, 2014 and March 26, 2014; and

 

•

the description of our common stock contained in our registration statement on Form 8-A filed with the SEC on April 27, 2004 (File No. 001-32157-041020580).

All documents that we file with the SEC pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act (other than current reports on Form 8-K, or portions thereof, furnished under Items 2.02 or 7.01 of Form 8-K) (i) after the initial filing date of the registration statement of which this prospectus forms a part and prior to the effectiveness of such registration statement and (ii) after the date of this prospectus and prior to the termination of the offering shall be deemed to be incorporated by reference in this prospectus from the date of filing of the documents, unless we specifically provide otherwise. Information that we file with the SEC will automatically update and may replace information previously filed with the SEC. To the extent that any information contained in any current report on Form 8-K or any exhibit thereto, was or is furnished to, rather than filed with the SEC, such information or exhibit is specifically not incorporated by reference.

Upon written or oral request made to us at the address or telephone number below, we will, at no cost to the requester, provide to each person, including any beneficial owner, to whom this prospectus is delivered, a copy of any or all of the information that has been incorporated by reference in this prospectus (other than an exhibit to a filing, unless that exhibit is specifically incorporated by reference into that filing), but not delivered with this prospectus. You may also access this information on our website at www.masttherapeutics.com by viewing the “SEC Filings” subsection of the “Investors” menu. No additional information on our website is deemed to be part of or incorporated by reference into this prospectus. We have included our website address in this prospectus solely as an inactive textual reference.

Mast Therapeutics, Inc.

12390 El Camino Real, Suite 150

San Diego, CA 92130

Attn: Investor Relations

(858) 552-0866

WHERE YOU CAN FIND MORE INFORMATION

As permitted by SEC rules, this prospectus omits certain information that is included in the registration statement of which this prospectus forms a part and its exhibits. Since this prospectus may not contain all of the information that you may find important, you should review the full text of these documents. If we have filed a contract, agreement or other document as an exhibit to the registration statement of which this prospectus forms a part, you should read the exhibit for a more complete understanding of the document or matter involved. Each statement in this prospectus, including statements incorporated by reference as discussed above, regarding a contract, agreement or other document is qualified in its entirety by reference to the actual document.

We are subject to the information reporting requirements of the Exchange Act, and, in accordance with these requirements, we file annual, quarterly and current reports, proxy statements, and other information with the SEC. You may inspect, read and copy the reports and other information we file with the SEC at the SEC’s Public Reference Room located at 100 F Street, N.E., Washington, D.C. You may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC also maintains an internet website at http://www.sec.gov that contains our filed reports, proxy and information statements, and other information that we file electronically with the SEC. Additionally, we make these filings available, free of charge, on our website at www.masttherapeutics.com in the “SEC Filings” subsection of the “Investors” menu as soon as reasonably practicable after we electronically file such materials with, or furnish them to, the SEC. The information on our website, other than these filings, is not, and should not be, considered part of this prospectus, is not incorporated by reference into this prospectus, and should not be relied upon in connection with making any investment decision with respect to our securities.

 

6

---

Table of Contents

 

Up to 28,313,500 Shares of Common Stock

Issuable upon Exercise of Outstanding Warrants

 

 

PROSPECTUS

 

 

May 14, 2014