The consolidated financial statements of
Sonoma Pharmaceuticals, Inc. appearing in Sonoma Pharmaceuticals, Inc.’s annual report on Form 10-K for the
year ended March 31, 2017, filed on June 28, 2017, have been audited by Marcum LLP, an independent registered public accounting
firm, as set forth in their report included therein, and incorporated herein by reference. Such consolidated financial statements
are incorporated herein by reference in reliance upon such report given on the authority of such firm as experts in accounting
and auditing.
We file annual, quarterly and current reports,
proxy statements and other information with the SEC. You may read and copy the registration statement and any document we file
with the SEC at the SEC’s Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. 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 a website that contains
reports, proxy and information statements and other information regarding companies, such as ours, that file documents electronically
with the SEC. The address of the SEC’s website is www.sec.gov. The information on the SEC’s website is not part of
this prospectus, and any references to this website or any other website are inactive textual references only.
This prospectus is part of a registration
statement on Form S-3 that we filed with the SEC to register the securities to be offered hereby. This prospectus does not contain
all of the information included in the registration statement, including certain exhibits and schedules. You may obtain the registration
statement and exhibits to the registration statement from the SEC at the address listed above or from the SEC’s website listed
above. In addition to the foregoing, we maintain a website at www.sonomapharma.com. Our website content is made available for informational
purposes only. It should neither be relied upon for investment purposes nor is it incorporated by reference into this prospectus.
We make available at www.sonomapharma.com copies of our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current
Reports on Form 8-K and any amendments to such document as soon as practicable after we electronically file such material with
or furnish such documents to the SEC.
INCORPORATION OF CERTAIN DOCUMENTS BY
REFERENCE
The SEC permits us to “incorporate
by reference” the information contained in documents we file with the SEC, which means that we can disclose important information
to you by referring you to those documents rather than by including them in this prospectus. Information that is incorporated by
reference is considered to be part of this prospectus and you should read it with the same care that you read this prospectus.
Later information that we file with the SEC will automatically update and supersede the information that is either contained, or
incorporated by reference, in this prospectus, and will be considered to be a part of this prospectus from the date those documents
are filed. We have filed with the SEC, and incorporate by reference the following in this prospectus:
In addition, all documents that we file
with the SEC pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Securities and Exchange Act of 1934, as amended, after the date
of the initial registration statement of which this prospectus is a part and prior to the effectiveness of the registration statement
as well as all such documents that we file with the SEC after the date of this prospectus and before the termination of the offering
of our securities shall be deemed incorporated by reference into this prospectus and to be a part of this prospectus from the respective
dates of filing such documents. Unless specifically stated to the contrary, none of the information that we disclose under Items
2.02 or 7.01 of any Current Report on Form 8-K that we may from time to time furnish to the SEC will be incorporated by reference
into, or otherwise included in, this prospectus.
You may request a copy of any or all of
the documents incorporated by reference but not delivered with this prospectus, at no cost, by writing or telephoning us at the
following address and number: Investor Relations, Sonoma Pharmaceuticals, Inc., 1129 N. McDowell Blvd., Petaluma, California 94954,
telephone (707) 283-0550. We will not, however, send exhibits to those documents, unless the exhibits are specifically incorporated
by reference in those documents.
DISCLOSURE OF COMMISSION POSITION ON
INDEMNIFICATION
Insofar as indemnification for liabilities
arising under the Securities Act, as amended, may be permitted to directors, officers, and controlling persons of the registrant
pursuant to the Company’s constituent documents, or otherwise, the registrant has been advised that in the opinion of the
SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid
by a director, officer, or controlling person in the successful defense of any action, suit, or proceeding) is asserted by such
director, officer, or controlling person connected with the securities being registered, we will, unless in the opinion of our
counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication
of such issue.
Filed Pursuant to Rule 424(b)(3
)
Registration No. 333-221477
PROSPECTUS
$75,000,000
SONOMA PHARMACEUTICALS, INC.
Common Stock
Preferred Stock
Warrants
Units
We may, from time to time, offer and sell common
stock, preferred stock or warrants, either separately or in units, in one or more offerings. The preferred stock and warrants may
be convertible into or exercisable or exchangeable for common or preferred stock. We will specify in the accompanying prospectus
supplement more specific information about any such offering. The aggregate initial offering price of all securities sold under
this prospectus will not exceed $75,000,000, including the U.S. dollar equivalent if the public offering of any such securities
is denominated in one or more foreign currencies, foreign currency units or composite currencies.
We may offer these securities independently
or together in any combination for sale directly to investors or through underwriters, dealers or agents. We will set forth the
names of any underwriters, dealers or agents and their compensation in the accompanying prospectus supplement.
This prospectus may not be used to sell any
of these securities unless accompanied by a prospectus supplement.
Our common stock is traded on the Nasdaq Capital
Market under the symbol “SNOA.” On November 24, 2017, the last reported sale price for our common stock was $5.13
per share. The aggregate market value of our outstanding voting and non-voting equity held by non-affiliates on November 24, 2017
was $21,638,222 based on a share price of $5.13. We have not offered any securities pursuant to General Instruction I.B.6. of
Form S-3 during the 12 calendar months prior to and including the date hereof.
Investing in our securities involves a high
degree of risk. See the section entitled “
Risk Factors
” beginning on page 4.
Neither the Securities and Exchange Commission
nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of
this prospectus. Any representation to the contrary is a criminal offense.
The date of this prospectus
is November 28, 2017.
TABLE OF CONTENTS
You should rely only on the information incorporated
by reference or provided in this prospectus, any prospectus supplement and the registration statement. We have not authorized anyone
else to provide you with different information. If anyone provides you with different or inconsistent information, you should not
rely on it. We are not making an offer to sell these securities in any state where the offer or sale is not permitted. You should
assume that the information in this prospectus and any prospectus supplement, or incorporated by reference, is accurate only as
of the dates of those documents. Our business, financial condition, results of operations and prospects may have changed since
those dates.
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement
that we filed with the Securities and Exchange Commission, or SEC, using a “shelf” registration, or continuous offering,
process. Under this shelf registration process, we may, from time to time, issue and sell any combination of preferred stock, common
stock or warrants, either separately or in units, in one or more offerings with a maximum aggregate offering price of $75,000,000,
including the U.S. dollar equivalent if the public offering of any such securities is denominated in one or more foreign currencies,
foreign currency units or composite currencies.
This prospectus provides you with a general
description of the securities we may offer. Each time we sell securities, we will provide a prospectus supplement that will contain
specific information about the terms of that offering and the offered securities. Any prospectus supplement may also add, update
or change information contained in this prospectus. Any statement that we make in this prospectus will be modified or superseded
by any inconsistent statement made by us in a prospectus supplement. The registration statement we filed with the SEC includes
exhibits that provide more detail of the matters discussed in this prospectus. You should read this prospectus and the related
exhibits filed with the SEC and any prospectus supplement, together with additional information described under the heading “
Where
You Can Find More Information
,” before making your investment decision.
THIS PROSPECTUS MAY NOT BE USED TO CONSUMMATE A SALE OF SECURITIES
UNLESS IT IS ACCOMPANIED BY A PROSPECTUS SUPPLEMENT.
Neither we, nor any agent, underwriter or dealer
has authorized any person to give any information or to make any representation other than those contained or incorporated by reference
in this prospectus, any applicable prospectus supplement prepared by or on behalf of us or to which we have referred you. This
prospectus or any applicable supplement to this prospectus do not constitute an offer to sell or the solicitation of an offer to
buy any securities other than the registered securities to which they relate, nor do this prospectus or any applicable supplement
to 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 or any applicable prospectus supplement is accurate on any date subsequent to the date set forth on
the front of the document or that any information we have incorporated by reference is correct on any date subsequent to the date
of the document incorporated by reference, even though this prospectus or any applicable prospectus supplement is delivered, or
securities are sold, on a later date.
PROSPECTUS SUMMARY
This summary highlights information contained
elsewhere in this prospectus or incorporated by reference. This summary does not contain all of the information you should consider
before buying shares of our common stock, preferred stock, warrants, or units or any combination of these securities. You should
read the entire prospectus carefully, especially the risks of investing in our securities that we describe under “Risk Factors”
and our consolidated financial statements appearing in our annual and periodic reports incorporated in this prospectus by reference,
before deciding to invest in our securities. Unless the context requires otherwise, references to “Sonoma,” “the
Company,” “the Registrant,” “we,” “our” and “us” refer to Sonoma Pharmaceuticals,
Inc.
Company Overview
We are a specialty pharmaceutical company dedicated
to identifying, developing and commercializing unique, differentiated therapies to millions of patients living with chronic skin
conditions. We believe our products, which are sold throughout the United States and internationally, have improved patient outcomes
for more than five million patients globally by treating and reducing certain topical skin diseases including acne, atopic dermatitis,
scarring, infections, itch, pain and harmful inflammatory responses.
Corporate Information
We incorporated under the laws of the State
of California in April 1999 as Micromed Laboratories, Inc. In August 2001, we changed our name to Oculus Innovative Sciences, Inc.
In December 2006, we reincorporated under the laws of the State of Delaware. On December 6, 2016, we changed our name from Oculus
Innovative Sciences, Inc. to Sonoma Pharmaceuticals, Inc. Our principal executive offices are located at 1129 N. McDowell Blvd.,
Petaluma, California, 94954, and our telephone number is (707) 283-0550. We have two active wholly-owned subsidiaries: Oculus Technologies
of Mexico, S.A. de C.V., organized in Mexico; and Sonoma Pharmaceuticals Netherlands, B.V., organized in the Netherlands.
The Securities We May Offer
We may offer and sell, from time to time, in
one or more offerings, any combination of shares of our common stock and preferred stock, and warrants to purchase any of such
securities, up to a total aggregate offering price of $75,000,000 under this prospectus, together with any applicable prospectus
supplement, at prices and on terms to be determined by market conditions at the time of the relevant offering. This prospectus
provides you with a general description of the securities we may offer. Each time we offer a type or series of securities under
this prospectus, we will provide a prospectus supplement that will describe the specific amounts, prices and other important terms
of the securities, including, to the extent applicable:
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designation or classification;
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aggregate offering price;
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rates and times of payment of dividends, if any;
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redemption, conversion, exchange or sinking fund terms, if any;
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conversion or exchange prices or rates, if any, and, if applicable, any provisions for changes
to or adjustments in the conversion or exchange prices or rates and in the securities or other property receivable upon conversion
or exchange;
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ranking, if applicable;
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restrictive covenants, if any;
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voting or other rights, if any; and
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important United States federal income tax considerations.
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The prospectus supplement may also add, update
or change information contained in this prospectus or in documents we have incorporated by reference. However, no prospectus supplement
will offer a security that is not registered and described in this prospectus at the time of the effectiveness of the registration
statement of which this prospectus is a part.
This prospectus may not be used to consummate
a sale of securities unless it is accompanied by a prospectus supplement.
We may sell the securities directly to investors
or through underwriters, dealers or agents. We, and our underwriters or agents, reserve the right to accept or reject all or part
of any proposed purchase of securities. If we do offer securities through underwriters or agents, we will include in the applicable
prospectus supplement:
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the names of those underwriters or agents;
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applicable fees, discounts and commissions to be paid to them;
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details regarding over-allotment options, if any; and
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the estimated net proceeds to us.
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Risk Factors
Investing in our securities involves a high
degree of risk. You should carefully review the risks and uncertainties described under the heading “Risk Factors”
contained in the applicable prospectus supplement, and under similar headings in our Annual Report on Form 10-K for the year ended
March 31, 2017, as updated by our annual, quarterly and other reports and documents that are incorporated by reference into this
prospectus, before deciding whether to purchase any of the securities being registered pursuant to the registration statement of
which this prospectus is a part. Each of the risk factors could adversely affect our business, operating results and financial
condition, as well as adversely affect the value of an investment in our securities, and the occurrence of any of these risks might
cause you to lose all or part of your investment. Additional risks not presently known to us or that we currently believe are immaterial
may also significantly impair our business operations.
Where You Can Find More Information
We are subject to the information requirements
of the Exchange Act. Accordingly, we file annual, quarterly and current reports, proxy statements as may be required and other
information with the SEC and filed a registration statement on Form S-3 under the Securities Act relating to the securities offered
by this prospectus. This prospectus, which forms part of the registration statement, does not contain all of the information included
in the registration statement. For further information, you should refer to the registration statement and its exhibits.
You may read and copy the registration statement
and any document we file with the SEC at the SEC’s Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. Please
call the SEC at 1-800-SEC-0330 for further information on the operation of the Public Reference Room. You can also review our filings
by accessing the website maintained by the SEC at www.sec.gov. The site contains reports, proxy and information statements and
other information regarding issuers that file electronically with the SEC. In addition to the foregoing, we maintain a website
at www.sonomapharma.com. Our website content is made available for informational purposes only. It should neither be relied upon
for investment purposes nor is it incorporated by reference into this prospectus. We make available at www.sonomapharma.com copies
of our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K and any amendments to such document
as soon as practicable after we electronically file such material with or furnish such documents to the SEC.
OUR COMPANY
We are a specialty pharmaceutical company dedicated
to identifying, developing and commercializing unique, differentiated therapies to millions of patients living with chronic skin
conditions. We believe our products, which are sold throughout the United States and internationally, have improved patient outcomes
for more than five million patients globally by treating and reducing certain topical skin diseases including acne, atopic dermatitis,
scarring, infections, itch, pain and harmful inflammatory responses.
We incorporated under the laws of the State
of California in April 1999 as Micromed Laboratories, Inc. In August 2001, we changed our name to Oculus Innovative Sciences, Inc.
In December 2006, we reincorporated under the laws of the State of Delaware. On December 6, 2016, we changed our name from Oculus
Innovative Sciences, Inc. to Sonoma Pharmaceuticals, Inc. Our principal executive offices are located at 1129 N. McDowell Blvd.,
Petaluma, California, 94954, and our telephone number is (707) 283-0550. We have two active wholly-owned subsidiaries: Oculus Technologies
of Mexico, S.A. de C.V., organized in Mexico; and Sonoma Pharmaceuticals Netherlands, B.V., organized in the Netherlands.
RISK FACTORS
Investing in our securities involves a high
degree of risk. You should carefully review the risks and uncertainties described under the heading “Risk Factors”
contained in the applicable prospectus supplement, and under similar headings in our Annual Report on Form 10-K for the year ended
March 31, 2017, as updated by our quarterly and other reports and documents that are incorporated by reference into this prospectus,
before deciding whether to purchase any of the securities being registered pursuant to the registration statement of which this
prospectus is a part. Each of the risk factors could adversely affect our business, operating results and financial condition,
as well as adversely affect the value of an investment in our securities, and the occurrence of any of these risks might cause
you to lose all or part of your investment. Additional risks not presently known to us or that we currently believe are immaterial
may also significantly impair our business operations.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING
STATEMENTS
When used in this prospectus or any prospectus
supplement, the words “expect,” “believe,” “anticipate,” “estimate,” “may,”
“could,” “intend,” and similar expressions are intended to identify forward-looking statements. These statements
are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from those projected
or otherwise implied by the forward-looking statements. These forward-looking statements speak only as of the date of this prospectus.
Given these risks and uncertainties, you should not place undue reliance on these forward-looking statements. We have discussed
many of these risks and uncertainties in greater detail in this prospectus under the heading “Risk Factors.” Additional
cautionary statements or discussions of risks and uncertainties that could affect our results or the achievement of the expectations
described in forward-looking statements may also be contained in the documents we incorporate by reference into this prospectus.
These forward-looking statements speak
only as of the date of this prospectus. We expressly disclaim any obligation or undertaking to release publicly any updates
or revisions to any forward-looking statements contained herein to reflect any change in our expectations with regard thereto
or any change in events, conditions or circumstances on which any such statement is based. You should, however, review
additional disclosures we make in our Annual Report on Form 10-K, Quarterly Reports
on Form 10-Q, and Current Reports on Form 8-K filed with the SEC.
DILUTION
We will set forth in a prospectus supplement
the following information regarding any material dilution of the equity interests of investors purchasing securities in an offering
under this prospectus:
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the net tangible book value per share of our equity securities before and after the offering;
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the amount of the increase in such net tangible book value per share attributable to the cash payments made by purchasers in the offering; and
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the amount of the immediate dilution from the public offering price which will be absorbed by such purchasers.
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USE OF PROCEEDS
Unless we state otherwise in the accompanying
prospectus supplement, we intend to use the net proceeds from the sale of the securities offered by this prospectus for general
corporate purposes. General corporate purposes may include additions to working capital, research and development, financing of
capital expenditures, and future acquisitions and strategic investment opportunities. Pending the application of net proceeds,
we expect to invest the net proceeds in interest-bearing securities.
PLAN OF DISTRIBUTION
We may sell the securities offered by this
prospectus to one or more underwriters or dealers for public offering and sale by them or to investors directly or through agents.
The accompanying prospectus supplement will set forth the terms of the offering and the method of distribution and will identify
any firms acting as underwriters, dealers or agents in connection with the offering, including:
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the name or names of any underwriters, dealers or agents;
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the purchase price of the securities and the proceeds to us from the sale;
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any underwriting discounts and other items constituting compensation to underwriters, dealers or agents;
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any public offering price;
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any discounts or concessions allowed or re-allowed or paid to dealers; and
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any securities exchange or market on which the securities offered in the prospectus supplement may be listed.
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Only those underwriters identified in such
prospectus supplement are deemed to be underwriters in connection with the securities offered in the prospectus supplement.
The distribution of the securities may be effected
from time to time in one or more transactions at a fixed price or prices, which may be changed, or at prices determined as the
applicable prospectus supplement specifies. The securities may be sold through a rights offering, forward contracts or similar
arrangements. In connection with the sale of the securities, underwriters, dealers or agents may be deemed to have received compensation
from us in the form of underwriting discounts or commissions and also may receive commissions from securities purchasers for whom
they may act as agent. Underwriters may sell the securities to or through dealers, and the dealers may receive compensation in
the form of discounts, concessions or commissions from the underwriters or commissions from the purchasers for whom they may act
as agent. Some of the underwriters, dealers or agents who participate in the securities distribution may engage in other transactions
with, and perform other services for, us or our subsidiaries in the ordinary course of business.
We will provide in the applicable prospectus
supplement information regarding any underwriting discounts or other compensation that we pay to underwriters or agents in connection
with the securities offering, and any discounts, concessions or commissions which underwriters allow to dealers. Underwriters,
dealers and agents participating in the securities distribution may be deemed to be underwriters, and any discounts and commissions
they receive and any profit they realize on the resale of the securities may be deemed to be underwriting discounts and commissions
under the Securities Act of 1933. Underwriters and their controlling persons, dealers and agents may be entitled, under agreements
entered into with us, to indemnification against and contribution toward specific civil liabilities, including liabilities under
the Securities Act.
The securities may or may not be listed on
a national securities exchange. In connection with an offering, the underwriters may purchase and sell securities in the open market.
These transactions may include short sales, stabilizing transactions and purchases to cover positions created by short sales. Short
sales involve the sale by the underwriters of a greater number of securities than they are required to purchase in an offering.
Stabilizing transactions consist of bids or purchases made for the purpose of preventing or retarding a decline in the market price
of the securities while an offering is in progress. The underwriters also may impose a penalty bid. This occurs when a particular
underwriter repays to the underwriters a portion of the underwriting discount received by it because the underwriters have repurchased
securities sold by or for the account of that underwriter in stabilizing or short-covering transactions. These activities by the
underwriters may stabilize, maintain or otherwise affect the market price of the securities. As a result, the price of the securities
may be higher than the price that otherwise might exist in the open market. If these activities are commenced, they may be discontinued
by the underwriters at any time.
DESCRIPTION OF COMMON STOCK
This section describes the general terms and
provisions of the shares of our common stock. This description is only a summary and is qualified in its entirety by reference
to the description of our common stock incorporated by reference in this prospectus. A copy of our restated certificate of incorporation,
as amended, and our amended and restated bylaws, as amended, has been incorporated by reference from our filings with the SEC as
exhibits to the registration statement of which this prospectus forms a part. Our common stock and the rights of the holders of
our common stock are subject to the applicable provisions of the Delaware General Corporation Law, which we refer to as “Delaware
law,” our restated certificate of incorporation, as amended, our amended and restated bylaws, as amended, the rights of the
holders of our preferred stock, if any, as well as some of the terms of our outstanding indebtedness. See “
Where You Can
Find More Information
.”
We have 12,000,000 shares of authorized common
stock, par value $0.0001 per share. As of November 20, 2017, there were 4,323,831 shares of common stock issued and outstanding.
All outstanding shares of common stock are fully paid and nonassessable, and the shares of common stock offered, when issued,
will be fully paid and nonassessable.
The following description of our common stock,
and any description of our common stock in a prospectus supplement, may not be complete and is subject to, and qualified in its
entirety by reference to, Delaware law and the actual terms and provisions contained in our restated certificate of incorporation
and our amended and restated bylaws, each as amended from time to time.
Voting Rights:
Unless otherwise
provided by law or provided in our restated certificate of incorporation, as amended, each holder of common stock is entitled to
one vote for each share of common stock held on all matters submitted to a vote of stockholders. At a meeting of stockholders at
which a quorum is present, an affirmative vote of the majority of the shares entitled to vote on a matter and that are represented
either in person or by proxy decides all questions, unless the question is one upon which by express provision of law or our restated
certificate of incorporation or of our amended and restated bylaws, a different vote is required.
Dividends
:
Dividends upon the
capital stock of the corporation may be declared by our board of directors at any regular or special meeting or by unanimous written
consent, subject to any restrictions contained under Delaware law or the provisions of the restated certificate of incorporation,
as amended, if any. However, before payment of any dividend, the board of directors may set aside out of the funds of the corporation
available for dividends such sum or sums that the directors from time to time think proper as a reserve or reserves. If and when
a dividend is declared by the board of directors, the holders of shares of common stock shall be entitled to receive out of the
assets of the corporation which are by law available, dividends payable in cash, in property or in shares of capital stock, subject
to the preferential rights of the holders of preferred stock.
Preemptive Rights
:
The holders
of common stock do not have preemptive or conversion rights or other subscription rights.
Redemption
:
Shares of our common
stock are not subject to redemption by operation of a sinking fund or otherwise.
Liquidation Rights
:
Upon our
liquidation, dissolution or winding-up, and after distribution in full of preferential amounts, if any, to be distributed to the
holders of shares of preferred stock, the holders of common stock are entitled, unless otherwise provided by law or provided in
our restated certificate of incorporation, as amended, to receive all of the remaining assets of the corporation of whatever kind
available for distribution to stockholders ratably in proportion to the number of shares of common stock held by them respectively.
Listing:
Our common stock is
traded on the Nasdaq Capital Market under the symbol “SNOA.”
Transfer Agent and Registrar:
The transfer agent for our common stock is Computershare, Inc. located at 462 South 4
th
Street, Suite 1600, Louisville,
KY 40202. Its telephone number is 1-888-647-8901.
DESCRIPTION
OF Preferred Stock
This section describes the general terms of
our preferred stock to which any prospectus supplement may relate. A prospectus supplement will describe the terms relating to
any preferred stock to be offered by us in greater detail and may provide information that is different from terms described in
this prospectus. A copy of our restated certificate of incorporation, as amended, and our amended and restated bylaws, as amended,
has been incorporated by reference from our filings with the SEC as exhibits to the registration statement of which this prospectus
forms a part. A certificate of designation or amendment to the restated certificate of incorporation, as amended, will specify
the terms of the preferred stock being offered, and will be filed or incorporated by reference as an exhibit to the registration
statement before the preferred stock is issued. The following description of our preferred stock, and any description of the preferred
stock in a prospectus supplement may not be complete and is subject to, and qualified in its entirety by reference to, Delaware
law and the actual terms and provisions contained in our restated certificate of incorporation and our amended and restated bylaws,
each as amended from time to time.
Under our restated certificate of incorporation,
as amended, we have the authority to issue 714,286 shares of preferred stock, par value $0.0001 per share, which are issuable in
series on terms to be determined by our board of directors. Accordingly, our board of directors is authorized, without action by
the stockholders, to issue preferred stock from time to time with such dividend, liquidation, conversion, voting, redemption, sinking
fund and other rights and restrictions as it may determine. All shares of any one series of our preferred stock will be identical,
except that shares of any one series issued at different times may differ as to the dates from which dividends may be cumulative,
as described in the applicable prospectus supplement. As of the date of this prospectus, there were no outstanding shares of our
preferred stock.
Terms of Preferred Stock
:
Unless
provided in a prospectus supplement, the shares of our preferred stock to be issued will have no preemptive rights. Any prospectus
supplement offering our preferred stock will furnish the following information with respect to the preferred stock offered by that
prospectus supplement:
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the distinctive designation of each series and the number of shares that will constitute the series;
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the voting rights, if any, of shares of the series and the terms and conditions of the voting rights;
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the dividend rate on the shares of the series, the dates on which dividends are payable, any restriction, limitation or condition upon the payment of dividends, whether dividends will be cumulative, and the dates from and after which dividends shall accumulate;
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the prices at which, and the terms and conditions on which, the shares of the series may be redeemed, if the shares are redeemable;
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the terms and conditions of a sinking or purchase fund for the purchase or redemption of shares of the series, if such a fund is provided;
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any preferential amount payable upon shares of the series in the event of the liquidation, dissolution or winding up of, or upon the distribution of any of our assets; and
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the prices or rates of conversion or exchange at which, and the terms and conditions on which, the shares of the series may be converted or exchanged into other securities, if the shares are convertible or exchangeable.
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If our board of directors decides to issue
any shares of preferred stock, it may discourage or make more difficult a merger, tender offer, business combination or proxy contest,
assumption of control by a holder of a large block of our securities, or the removal of incumbent management, even if these events
were favorable to the interests of stockholders. Our board of directors, without stockholder approval, may issue preferred stock
with voting and conversion rights and dividend and liquidation preferences that may adversely affect the holders of our other equity
or debt securities.
The particular terms of any series of preferred
stock, and the transfer agent and registrar for that series, will be described in a prospectus supplement. All preferred stock
offered, when issued, will be fully paid and nonassessable. Any material United States federal income tax consequences and
other special considerations with respect to any preferred stock offered under this prospectus will also be described in the applicable
prospectus supplement.
Description
of Warrants
We may issue warrants for the purchase of preferred
stock, common stock, or any combination thereof. We may issue warrants independently or together with any other securities offered
by any prospectus supplement and may be attached to or separate from the other offered securities. Each series of warrants will
be issued under a separate warrant agreement to be entered into by us with a warrant agent. The warrant agent will act solely as
our agent in connection with the warrants and will not assume any obligation or relationship of agency or trust for or with any
holders or beneficial owners of warrants. Further terms of the warrants and the applicable warrant agreements will be set forth
in the applicable prospectus supplement.
The applicable prospectus supplement relating
to any particular issue of warrants will describe the terms of the warrants, including, as applicable, the following:
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the title of the warrants;
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the aggregate number of the warrants;
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the price or prices at which the warrants will be issued;
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the designation, terms and number of shares of preferred stock or common stock purchasable upon exercise of the warrants;
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the designation and terms of the offered securities, if any, with which the warrants are issued and the number of the warrants issued with each offered security;
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the date, if any, on and after which the warrants and the related preferred stock or common stock will be separately transferable;
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the price at which each share of preferred stock or common stock purchasable upon exercise of the warrants may be purchased;
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the date on which the right to exercise the warrants shall commence and the date on which that right shall expire;
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the minimum or maximum amount of the warrants which may be exercised at any one time;
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information with respect to book-entry procedures, if any;
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a discussion of certain U.S. federal income tax considerations; and
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any other terms of the warrants, including terms, procedures and limitations relating to the exchange and exercise of the warrants.
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We and the warrant agent may amend or supplement
the warrant agreement for a series of warrants without the consent of the holders of the warrants issued thereunder to effect changes
that are not inconsistent with the provisions of the warrants and that do not materially and adversely affect the interests of
the holders of the warrants.
Description
of Units
The following description, together with the
additional information we include in any applicable prospectus supplement, summarizes the material terms and provisions of the
units that we may offer under this prospectus. Units may be offered independently or together with common or preferred stock, and
warrants offered by any prospectus supplement, and may be attached to or separate from those securities. While the terms we have
summarized below will generally apply to any future units that we may offer under this prospectus, we will describe the particular
terms of any series of units that we may offer in more detail in the applicable prospectus supplement. The terms of any units offered
under a prospectus supplement may differ from the terms described below.
We will incorporate by reference into the registration
statement of which this prospectus forms a part the form of unit agreement, including a form of unit certificate, if any, that
describes the terms of the series of units we are offering before the issuance of the related series of units. The following summaries
of material provisions of the units and the unit agreements are subject to, and qualified in their entirety by reference to, all
the provisions of the unit agreement applicable to a particular series of units. We urge you to read the applicable prospectus
supplements related to the units that we sell under this prospectus, as well as the complete unit agreements that contain the terms
of the units.
We may issue units consisting of one or more
shares of common stock or preferred stock, warrants or any combination of such securities. Each unit will be issued so that the
holder of the unit is also the holder of each security included in the unit.
Additionally, we will describe in the applicable prospectus supplement
the terms of the series of units, including the following:
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the designation and terms of the units and the securities included in the units;
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any provision for the issuance, payment, settlement, transfer or exchange of the units;
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the date, if any, on and after which the units may be transferable separately;
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whether we will apply to have the units traded on a securities exchange or securities quotation system;
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any material United States federal income tax consequences; and
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how, for United States federal income tax purposes, the purchase price paid for the units is to be allocated among the component securities.
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CERTAIN PROVISIONS OF
DELAWARE LAW AND OUR CHARTER
AND BYLAWS
The following paragraphs summarize certain
provisions of Delaware law and our restated certificate of incorporation, as amended, and our amended and restated bylaws, as amended.
The summary does not purport to be complete and is subject to and qualified in its entirety by reference to Delaware law and to
our restated certificate of incorporation, as amended, and our amended and restated bylaws, as amended, copies of which are on
file with the SEC as exhibits to reports previously filed by us. See “
Where You Can Find More Information
.”
Delaware Law
We are subject to the provisions of Section 203
of the Delaware General Corporation Law regulating corporate takeovers. In general, this section prohibits a Delaware corporation
from engaging in any business combination with any interested stockholder for a period of three years following the date that the
stockholder became an interested stockholder, unless:
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the transaction is approved by the board of directors prior to the time that the interested stockholder became an interested stockholder;
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upon consummation of the transaction which resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced; or
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at or subsequent to such time that the stockholder became an interested stockholder, the business combination is approved by the board of directors and authorized at a meeting of stockholders by at least two-thirds of the outstanding voting stock that is not owned by the interested stockholder.
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Section 203 defines “business combination” to include
the following:
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any merger or consolidation involving the corporation and the interested stockholder;
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any sale, lease, exchange, mortgage, pledge, transfer or other disposition of 10% or more of the assets of the corporation involving the interested stockholder;
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subject to certain exceptions, any transaction that results in the issuance or transfer by the corporation of any stock of the corporation to the interested stockholder;
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any transaction involving the corporation that has the effect, directly or indirectly, of increasing the proportionate share of the stock of any class or series of the corporation beneficially owned by the interested stockholder; or
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the receipt by the interested stockholder of the benefit, directly or indirectly, of any loans, advances, guarantees, pledges or other financial benefits provided by or through the corporation.
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In general, Section 203 defines an interested
stockholder as any entity or person beneficially owning 15% or more of the outstanding voting stock of the corporation and any
entity or person affiliated with or controlling or controlled by any of these entities or persons.
A Delaware corporation may “opt out”
of these provisions either with an express provision in its original certificate of incorporation or in an amendment to its certificate
of incorporation or bylaws approved by its stockholders. However, we have not opted out, and do not currently intend to opt out
of, these provisions. The statute could prohibit or delay mergers or other takeover or change in control attempts and, accordingly,
may discourage attempts to acquire us.
Charter and Bylaws
Our restated certificate of incorporation,
as amended, and our amended and restated bylaws, as amended, provide that:
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our amended and restated bylaws, as amended, may be amended or repealed only by the approval of at least sixty-six and two-thirds percent (66-2/3%) of the total number of directors then in office or the affirmative vote of the holders of at least sixty-six and two-thirds percent (66-2/3%) of the shares entitled to vote at an election of directors;
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no action can be taken by stockholders except at an annual or special meeting of the stockholders called in accordance with our amended and restated bylaws, as amended, and stockholders may not act by written consent;
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a stockholder must provide advance notice of stockholder proposals relating to the nomination of candidates for election as directors or new business to be brought before meetings of stockholders;
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stockholders may not call special meetings of the stockholders or fill vacancies on the board;
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the approval of holders of at least sixty-six and two-thirds percent (66-2/3%) of the shares entitled to vote at an election of directors is required to amend or repeal the provisions of our restated certificate of incorporation, as amended, regarding the inability of stockholders to take action by written consent;
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our board of directors is authorized to issue preferred stock without stockholder approval; and
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we will indemnify officers and directors against losses that they may incur in investigations and legal proceedings resulting from their services to us, which may include services in connection with takeover defense measures.
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LEGAL MATTERS
The validity of any securities offered by this prospectus will be
passed upon for us by Trombly Business Law, PC.
EXPERTS
The consolidated financial statements of Sonoma
Pharmaceuticals, Inc. appearing in Sonoma Pharmaceuticals, Inc.’s annual report on Form 10-K for the year
ended March 31, 2017, filed on June 28, 2017, have been audited by Marcum LLP, an independent registered public accounting
firm, as set forth in their report included therein, and incorporated herein by reference. Such consolidated financial statements
are incorporated herein by reference in reliance upon such report given on the authority of such firm as experts in accounting
and auditing.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and current reports,
proxy statements and other information with the SEC. You may read and copy the registration statement and any document we file
with the SEC at the SEC’s Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. 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 a web site that contains
reports, proxy and information statements and other information regarding companies, such as ours, that file documents electronically
with the SEC. The address of the SEC’s website is www.sec.gov. The information on the SEC’s website is not part of
this prospectus, and any references to this website or any other website are inactive textual references only.
This prospectus is part of a registration statement
on Form S-3 that we filed with the SEC to register the securities to be offered hereby. This prospectus does not contain all of
the information included in the registration statement, including certain exhibits and schedules. You may obtain the registration
statement and exhibits to the registration statement from the SEC at the address listed above or from the SEC’s website listed
above. In addition to the foregoing, we maintain a website at www.sonomapharma.com. Our website content is made available for informational
purposes only. It should neither be relied upon for investment purposes nor is it incorporated by reference into this prospectus.
We make available at www.sonomapharma.com copies of our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current
Reports on Form 8-K and any amendments to such document as soon as practicable after we electronically file such material with
or furnish such documents to the SEC.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The SEC permits us to “incorporate by
reference” the information contained in documents we file with the SEC, which means that we can disclose important information
to you by referring you to those documents rather than by including them in this prospectus. Information that is incorporated by
reference is considered to be part of this prospectus and you should read it with the same care that you read this prospectus.
Later information that we file with the SEC will automatically update and supersede the information that is either contained, or
incorporated by reference, in this prospectus, and will be considered to be a part of this prospectus from the date those documents
are filed. We have filed with the SEC, and incorporate by reference the following in this prospectus:
In addition, all documents that we file with
the SEC pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Securities and Exchange Act of 1934, as amended, after the date of
the initial registration statement of which this prospectus is a part and prior to the effectiveness of the registration statement
as well as all such documents that we file with the SEC after the date of this prospectus and before the termination of the offering
of our securities shall be deemed incorporated by reference into this prospectus and to be a part of this prospectus from the respective
dates of filing such documents. Unless specifically stated to the contrary, none of the information that we disclose under Items
2.02 or 7.01 of any Current Report on Form 8-K that we may from time to time furnish to the SEC will be incorporated by reference
into, or otherwise included in, this prospectus.
You may request a copy of any or all of the
documents incorporated by reference but not delivered with this prospectus, at no cost, by writing or telephoning us at the following
address and number: Investor Relations, Sonoma Pharmaceuticals, Inc., 1129 N. McDowell Blvd., Petaluma, California 94954, telephone
(707) 283-0550. We will not, however, send exhibits to those documents, unless the exhibits are specifically incorporated
by reference in those documents.
DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION
Insofar as indemnification for liabilities
arising under the Securities Act, as amended, may be permitted to directors, officers, and controlling persons of the registrant
pursuant to the Company’s constituent documents, or otherwise, the registrant has been advised that in the opinion of the
SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid
by a director, officer, or controlling person in the successful defense of any action, suit, or proceeding) is asserted by such
director, officer, or controlling person connected with the securities being registered, we will, unless in the opinion of our
counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication
of such issue.
$5,000,000
COMMON STOCK
Prospectus Supplement
B. Riley FBR
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