As filed with the Securities and
Exchange Commission on May 10, 2018
Registration
No. 333-221119
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
AMENDMENT
NO. 2
TO
FORM
S-3
REGISTRATION
STATEMENT
UNDER
THE
SECURITIES ACT OF 1933
MYOS
RENS TECHNOLOGY INC.
(Exact
name of registrant as specified in its charter)
Nevada
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90-0772394
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(State
or other jurisdiction of
incorporation or organization)
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|
(I.R.S.
Employer
Identification Number)
|
45
Horsehill Road, Suite 106
Cedar
Knolls, New Jersey 07927
(973)
509-0444
(Address,
including zip code, and telephone number, including area code, of registrant’s principal executive offices)
Joseph
Mannello
Chief
Executive Officer
45
Horsehill Road, Suite 106
Cedar
Knolls, New Jersey 07927
(973)
509-0444
(Name,
address, including zip code, and telephone number, including area code, of agent for service)
Copies
to:
Stuart
Neuhauser, Esq.
Joshua N. Englard, Esq.
Ellenoff
Grossman & Schole LLP
1345
Avenue of the Americas
New
York, New York 10105-0302
(212)
370-1300
Approximate
date of commencement of proposed sale to the public:
From time to time after the effective date of this Registration Statement.
If
the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please
check the following box: ☐
If
any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under
the Securities Act of 1933, as amended, other than securities offered only in connection with dividend or interest reinvestment
plans, check the following box: ☒
If
this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please
check the following box and list the Securities Act registration statement number of the earlier effective registration statement
for the same offering: ☐
If
this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list
the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
If
this Form is a registration statement pursuant to General Instruction I.D. or a post-effective amendment thereto that shall become
effective upon filing with the Commission pursuant to Rule 462(e) under the Securities Act, check the following box. ☐
If
this Form is a post-effective amendment to a registration statement filed pursuant to General Instruction I.D. filed to register
additional securities or additional classes of securities pursuant to Rule 413(b) under the Securities Act, check the following
box. ☐
Indicate
by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting
company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,”
“smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large
accelerated filer
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☐
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Accelerated
filer
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☐
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Non-accelerated
filer
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☐ (Do
not check if a smaller reporting company)
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Smaller
reporting company
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☒
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Emerging
growth company
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☐
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If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for
complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of Securities Act.
☐
CALCULATION
OF REGISTRATION FEE
Title of Each Class of Securities to be Registered (1)
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Amount
to be
Registered
(2)(3)
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Proposed
Maximum
Aggregate
Offering
Price
per
Security
(2)(3)
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Proposed
Maximum
Aggregate
Offering
Price
(2)(3)
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Amount of
Registration
Fee
(4)
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Common Stock, par value $0.001 per share
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—
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—
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—
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—
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Series A Preferred Stock Purchase Rights, $0.001 par value (8)
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—
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—
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—
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—
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Preferred Stock, par value $0.001 per share
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—
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—
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—
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—
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Debt Securities
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—
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—
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—
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—
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Warrants (5)
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—
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—
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—
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—
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Rights (6)
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—
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—
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—
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—
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Units (7)
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—
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—
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—
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—
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TOTAL
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—
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—
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$
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75,000,000
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$
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9,337.50
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(9)
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(1)
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Securities
registered hereunder may be sold separately, together or as units with other securities registered hereunder.
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(2)
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Not
specified as to each class of securities to be registered pursuant to General Instruction II.D of Form S-3.
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(3)
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The
Registrant is registering an indeterminate aggregate principal amount and number of securities of each identified class of
securities up to a proposed aggregate offering price of $75,000,000, which may be offered from time to time in unspecified
numbers and at indeterminate prices, and as may be issuable upon conversion, redemption, repurchase, exchange, or exercise
of any securities registered hereunder, including under any applicable anti-dilution provisions. In addition, pursuant to
Rule 416 under the Securities Act, the shares being registered hereunder include such indeterminate number of shares of common
stock and preferred stock as may be issuable with respect to the shares being registered hereunder as a result of stock splits,
stock dividends or similar transaction.
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(4)
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The
registration fee is calculated in accordance with Rule 457(o) under the Securities Act of 1933, as amended (the “Securities
Act”). An aggregate of $7,559.80 of the amount of the registration fee was previously paid in connection with $65,058,485
of unissued securities registered under the Registrant’s registration statement on Form S-3 (File No. 333-199392) initially
filed on October 16, 2014, or the Prior Registration Statement. In accordance with Question 212.24 of the Securities and Exchange
Commission, Division of Corporation Finance’s Compliance and Disclosure Interpretations regarding Securities Act Rules,
the registrant is not required to pay any additional fee with respect to the $65,058,485 of unsold securities being included
in this registration in reliance on Rule 415(a)(6), because such unsold securities (and associated fees) are being moved from
the Prior Registration Statement to this registration statement. Accordingly, the registrant paid only the registration fee
of $615.20 attributable to the $4,941,515 of new securities registered on this registration statement. Pursuant to Rule 415(a)(6)
of the Securities Act, the registration fee of $8,715 previously paid by the registrant relating to the unsold securities
included on this registration statement will continue to be applied to such unsold securities.
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(5)
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Warrants
may represent rights to purchase debt securities, common stock, preferred stock or other securities registered hereunder.
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(6)
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Rights
evidencing rights to purchase securities of the registrant.
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(7)
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Each
Unit consists of any combination of two or more of the securities being registered hereby.
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(8)
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Each
share of common stock currently includes a Series A Preferred Stock Purchase Right. Until the occurrence of certain events,
none of which have occurred, the Series A Preferred Stock Purchase Rights are not exercisable, are evidenced by the certificate
for our common stock and will be transferred along with and only with and are not severable from, our common stock. The value
attributable to the Series A Preferred Stock Purchase Rights, if any, is reflected in the market price of our common stock.
No separate consideration will be payable for the Series A Preferred Stock Purchase Rights.
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(9)
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Previously
paid.
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The
Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until
the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become
effective in accordance with Section 8(a) of the Securities Act or until this Registration Statement shall become effective on
such date as the Commission, acting pursuant to said Section 8(a), may determine.
The
information in this prospectus is not complete and may be changed. We may not sell the securities until the Registration Statement
filed with the Securities and Exchange Commission, of which this prospectus is a part, is effective. This prospectus is not an
offer to sell these securities and is not soliciting an offer to buy these securities in any state where the offer or sale is
not permitted.
SUBJECT TO COMPLETION,
DATED MAY 10, 2018
Prospectus
MYOS
RENS TECHNOLOGY INC.
$75,000,000
COMMON
STOCK
PREFERRED
STOCK
DEBT
SECURITIES
WARRANTS
RIGHTS
UNITS
We
may offer and sell from time to time, in one or more series, any one of the following securities of our company, for total gross
proceeds of up to $75,000,000:
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common
stock;
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preferred
stock;
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debt
securities (which may be senior or subordinated, convertible or non-convertible, secured or unsecured);
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purchase
contracts;
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warrants
to purchase our securities;
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subscription
rights to purchase any of the foregoing securities; and
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units
comprised of the foregoing securities.
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We
may offer and sell these securities separately or together, in one or more series or classes and in amounts, at prices and on
terms described in one or more offerings. When we decide to sell a particular class or series of those securities, we will provide
specific terms of the securities, including the initial offering price and the aggregate amount of the offering, in one or more
supplements to this prospectus.
We
may offer securities through underwriting syndicates managed or co-managed by one or more underwriters or dealers, through agents
or directly to purchasers. The prospectus supplement for each offering of securities will describe in detail the plan of distribution
for that offering. For general information about the distribution of securities offered, please see “Plan of Distribution”
in this prospectus.
Our common stock is traded on the Nasdaq
Capital Market under the symbol “MYOS.” The last reported sale price of our common stock on the Nasdaq Capital Market
on May 9, 2018 was $1.55 per share. The aggregate market value of our common stock held by non-affiliates was $7,577,908, based
on 7,473,723 shares of common stock outstanding, of which 4,889,473 are held by non-affiliates, and a closing sale price on the
Nasdaq Capital Market of $1.55 on May 9, 2018. We have sold securities with aggregate gross proceeds of $1,544,021 pursuant to
General Instruction I.B.6. of Form S-3 during the twelve calendar months prior to the date of this prospectus.
Investing
in our securities involves certain risks. You should carefully read and consider the section entitled “Risk Factors”
on page 16 and the risk factors included in our periodic reports filed with the Securities and Exchange Commission and, if any,
in the relevant prospectus supplement. We urge you to carefully read this prospectus and the applicable prospectus supplement,
together with the documents we incorporate by reference, before making your investment decision.
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 , 2018.
Table
of Contents
ABOUT
THIS PROSPECTUS
This
prospectus is part of a registration statement on Form S-3 that we filed with the Securities and Exchange Commission, or SEC,
utilizing a “shelf” registration process. Under this shelf registration process, we may offer and sell, either individually
or in combination, in one or more offerings, any of the securities described in this prospectus, for total gross proceeds of up
to $75,000,000. This prospectus provides you with a general description of the securities we may offer. Each time we offer securities
under this prospectus, we will provide a prospectus supplement to this prospectus that will contain more specific information
about the terms of that offering. We may also authorize one or more free writing prospectuses to be provided to you that may contain
material information relating to these offerings. The prospectus supplement and any related free writing prospectus that we may
authorize to be provided to you may also add, update or change any of the information contained in this prospectus or in the documents
that we have incorporated by reference into this prospectus. In this prospectus, unless the context indicates otherwise, the terms
“Company,” “we,” “us,” and “our” refer to MYOS RENS Technology Inc., a Nevada
corporation, and its subsidiaries.
We
urge you to read carefully this prospectus, any applicable prospectus supplement and any free writing prospectuses we have authorized
for use in connection with a specific offering, together with the information incorporated herein by reference as described under
the heading “Incorporation of Certain Information by Reference,” before investing in any of the securities being offered.
You should rely only on the information contained in, or incorporated by reference into, this prospectus and any applicable prospectus
supplement, along with the information contained in any free writing prospectuses we have authorized for use in connection with
a specific offering. We have not authorized anyone to provide you with different or additional information. This prospectus is
an offer to sell only the securities offered hereby, and only under circumstances and in jurisdictions where it is lawful to do
so.
The
information appearing in this prospectus, any applicable prospectus supplement or any related free writing prospectus is accurate
only as of the date on the front of the document and any information we have incorporated by reference is accurate only as of
the date of the document incorporated by reference, regardless of the time of delivery of this prospectus, any applicable prospectus
supplement or any related free writing prospectus, or any sale of a security.
This
prospectus contains summaries of certain provisions contained in some of the documents described herein, but reference is made
to the actual documents for complete information. All of the summaries are qualified in their entirety by the actual documents.
Copies of some of the documents referred to herein have been filed, will be filed or will be incorporated by reference as exhibits
to the registration statement of which this prospectus is a part, and you may obtain copies of those documents as described below
under the section entitled “Where You Can Find More Information.”
Dollar
amounts in this prospectus are in thousands, unless otherwise indicated.
CAUTIONARY
NOTE REGARDING FORWARD-LOOKING STATEMENTS
This
prospectus and any accompanying prospectus supplement and the documents incorporated by reference herein or therein include forward-looking
statements within the meaning of Section 27A of the Securities Act and Section 21B of the Securities Exchange Act of 1934, as
amended, or the Exchange Act. All statements other than statements of historical fact contained or incorporated by reference in
this prospectus are forward-looking statements. The words “believe,” “may,” “will,” “estimate,”
“continue,” “anticipate,” “intend,” “expect” and similar expressions, as they
relate to us, are intended to identify forward-looking statements. We have based these forward-looking statements on our current
expectations and projections about future events and financial trends that we believe may affect our financial condition, results
of operations, business strategy, business prospectus, growth strategy and liquidity. These forward-looking statements are subject
to a number of known and unknown risks, uncertainties and assumptions and our actual results could differ materially from those
anticipated in forward-looking statements for many reasons, including the factors described in the sections entitled “Risk
Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in
our most recent Annual Report on Form 10-K and in our subsequent Quarterly Reports on Form 10-Q filed with the SEC.
The
forward-looking statements speak as of the date made and are not guarantees of future performance. Actual results or developments
may differ materially from the expectations expressed or implied in the forward-looking statements, and we undertake no obligation
to update any such statements unless required by law. You should not place undue reliance on these forward-looking statements.
You
should carefully read the factors described in the “Risk Factors” section of any prospectus supplement or other offering
material, as well as any risks described in the documents incorporated by reference into this prospectus for a description of
certain risks that could, among other things, cause our actual results to differ from these forward-looking statements. You should
understand that it is not possible to predict or identify all such factors and that this list should not be considered a complete
statement of all potential risks and uncertainties. You should also realize that if the assumptions we have made prove inaccurate
or if unknown risks or uncertainties materialize, actual results could vary materially from the views and estimates included or
incorporated by reference in this prospectus.
BUSINESS
Overview
We
are an emerging bionutrition and biotherapeutics company focused on the discovery, development and commercialization of products
that improve muscle health and function essential to the management of sarcopenia, cachexia and degenerative muscle diseases,
and as an adjunct to the treatment of obesity. As used in this prospectus, the “Company”, “MYOS”, “our”,
or “we” refers to MYOS RENS Technology Inc. and its wholly-owned subsidiary, unless the context indicates otherwise.
We
were incorporated under the laws of the State of Nevada on April 11, 2007. On March 17, 2016, we merged with our wholly-owned
subsidiary and changed our name from MYOS Corporation to MYOS RENS Technology Inc. Prior to February 2011, we did not have any
operations and did not generate revenues. In February 2011, we entered into an intellectual property purchase agreement pursuant
to which our subsidiary purchased from Peak Wellness, Inc., or Peak, the intellectual property pertaining to Fortetropin
®
,
a dietary supplement that has been shown in clinical studies to temporarily decrease the levels of serum myostatin, MYO-T12, a
proprietary formulation containing Fortetropin
®
, certain trademarks, trade secrets, patent applications and certain
domain names.
Since
February 2011, our principal business activities have been to: (i) deepen our scientific understanding of the activity of Fortetropin
®
,
which refers to a proprietary proteo-lipid composition derived from fertilized eggs of specific chicken species processed using
a patented methodology which preserves the bioactivity of the constituent proteins and lipids, specifically as a natural, reversible,
temporary reducing agent of myostatin, and to leverage this knowledge to strengthen and build our intellectual property; (ii)
conduct research and development activities to evaluate myostatin modulation in a range of both wellness and disease states; (iii)
identify other products and technologies which may broaden our portfolio and define a business development strategy to protect,
enhance and accelerate the growth of our products; (iv) reduce the cost of manufacturing through process improvement; (v) identify
contract manufacturing organizations that can fully meet our future growth requirements; (vi) develop a differentiated and advantaged
consumer positioning, brand name and iconography; and, (vii) create sales and marketing capabilities to maximize near-term and
future revenues.
We
believe that existing wellness and therapeutic targets, such as myostatin, represent a rational entry point for additional drug
discovery efforts and are evaluating a separate, concurrent objective in this area. We continue to pursue additional distribution
and branded sales opportunities. We expect to continue developing our own core branded products in markets such as functional
foods, sports and fitness nutrition and rehabilitation and restorative health and to pursue international sales opportunities.
There can be no assurance that we will be able to secure distribution arrangements on terms acceptable to us, or that we will
be able to generate significant sales of our current and future branded products.
Our
executive offices are currently located at 45 Horsehill Road, Suite 106, Cedar Knolls, New Jersey 07927 and our telephone number
is (973) 509-0444. Our corporate website address is http://www.myosrens.com and our new muscle health education and product website
is http://www.qurr.com. Neither the information on our current or future website is, nor shall such information be deemed to be,
a part of this prospectus or incorporated in filings we make with the Securities and Exchange Commission.
General
Following
our purchase of Fortetropin
®
in February 2011, we have been focusing on the discovery, development, and commercialization
of nutritional ingredients, functional foods, therapeutic products, and other technologies aimed at maintaining or improving the
health and performance of muscle tissue. Our officers, directors and members of our Scientific Advisory Board, including Dr. Robert
Hariri, Dr. Louis Aronne, Dr. Neilank Jha and Dr. Caroline Apovian, have significant research and development experience.
Fortetropin
®
is
our proprietary all-natural food ingredient clinically shown to increase muscle size, lean body mass and strength as part of resistance
training. Fortetropin
®
is made from fertilized chicken egg yolks using a proprietary process that retains
the biological integrity and bioactivity of the product. In an animal study, Fortetropin
®
was shown
to up-regulate muscle building pathways and down-regulate muscle degrading pathways. While Fortetropin
®
is
our first proprietary ingredient, we plan to discover, develop, formulate and/or acquire additional products in the future.
We
are developing nutritional and therapeutic products aimed at maintaining and improving the health and performance of muscle tissue.
Our research is focused on developing strategies and therapeutic interventions to address muscle related conditions including
sarcopenia, cachexia, and inherited and acquired muscle diseases as described in more detail below.
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Sarcopenia
is
a degenerative process characterized by the progressive loss of muscle mass with advancing
age. The loss of muscle affects all individuals regardless of ethnicity or gender although
the rate and degree of muscle loss varies between individuals and is affected by many
factors. Those individuals who have lost significant amounts of muscle mass and strength
often require assistance for accomplishing daily living activities, which has a significant
economic burden on a nation’s healthcare system and impacts the overall economy.
In addition to the many direct costs, sarcopenia adversely affects the overall quality
of life.
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●
|
Cachexia
is
a syndrome that occurs in many diseases such as cancer, chronic heart failure, chronic
kidney failure and AIDS. It is characterized by a significant loss of body weight as
a consequence of pathological changes in different metabolic pathways, with the loss
of muscle mass as the core component of the syndrome. Cachexia leads to a poor quality
of life and increased mortality. As skeletal muscle is diminished, individuals experience
a reduced ability to move, a loss of strength, and an increase in conditions associated
with immobility such as thrombosis, pneumonia, respiratory failure and ultimately death.
Weight loss is an important prognosticator in cancer therapy with the greater the weight
loss, generally the shorter the survival time. Weight loss in cancer patients due to
cachexia arises from the loss of both adipose tissue and skeletal muscle.
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●
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Inherited
and acquired muscle diseases
, such as muscular dystrophy and muscle dysfunction
that occur as a consequence of denervation such as seen in amyotrophic lateral sclerosis
(ALS), are conditions marked by the progressive deterioration of muscle tissue that results
in weakness and impairs normal function. These diseases are typified by difficulty with
walking, balance, and coordination with many such diseases affecting speech, swallowing,
and breathing. There are currently very few treatment options for most degenerative muscle
diseases.
|
Myostatin
Myostatin,
which is a natural regulatory protein, plays a central role in skeletal muscle health. Interest in myostatin continues to grow
within the medical community. Research on animals and humans with genetic deficiency for producing myostatin have shown an increased
muscle mass, suggesting that myostatin is responsible for down-regulating muscle growth and development.
A
1997 article in the journal
Nature
first described the discovery of a novel member of the transforming growth
factor-β (TGF-β) superfamily of growth and differentiation factors. This factor was expressed specifically in adult
skeletal muscle and referred to as growth/differentiation factor-8 (GDF-8) (McPherron
et al
., 1997). The researchers
created “knockout” mice, whereby they disrupted the expression of GDF-8 throughout the organism, with the resulting
mice showing a large and widespread increase in skeletal muscle mass. Individual muscles of mutant animals weighted 2-3 times
more than those of wild-type animals, with the increase a result of both muscle cell hypertrophy and hyperplasia. The newly created
mice were subsequently named “mighty mice”. Based on the phenotype, the researchers dubbed the newly discovered protein
myostatin.
This
work suggests myostatin exerts an effect on both muscle hypertrophy and hyperplasia, as myostatin knock-out “mighty mice”
were shown to have an increase in both the number of muscle fibers and in fiber sizes. Hypertrophy refers to the enlargement of
a tissue or organ due to the enlargement of its component cells. In contrast, hyperplasia refers to an increase in the number
of cells or a proliferation of cells. Both of these processes can lead to enlargement of an organ.
Skeletal
muscle is the primary producer of myostatin, where it is secreted into the blood stream and acts as a negative regulator of muscle
differentiation and growth. The protein begins as a 375 amino acid dimer that is cleaved by proteases to a 109 amino acid active
domain. The active form of the protein binds to activin type II receptors, ActRIIA and ActRIIB (Lee
et al
., 2001).
Binding to the receptors initiates a signaling cascade that results in an increase in protein breakdown and subsequent inhibition
of protein synthesis.
Clinical
Research to Evaluate Effects of Fortetropin
®
In
March 2013, we completed a human clinical trial which demonstrated the beneficial effects of Fortetropin
®
in
suppressing free serum myostatin levels. In this double blind, randomized, placebo-controlled, parallel, single dose study involving
12 healthy adult male subjects per arm, test subjects in the active arm were administered a 6.6 gram dose of Fortetropin
®
mixed
with vanilla fat free/sugar free pudding. An equal amount of vanilla fat free/sugar free pudding alone was given to the placebo
arm. Blood samples were collected at baseline (before dosing) and at 6, 12, 18, and 24 hours post dose intervals for measurement
of myostatin blood concentration. Results demonstrated greater than 30% decrease in serum myostatin levels compared to baseline
during the 24 hour period. No study related adverse events were reported during this study.
In
another study performed on our behalf at the University of Tampa, a randomized, double-blind, placebo-controlled trial examined
the effects of Fortetropin
®
on skeletal muscle growth, lean body mass, strength, and power in recreationally
trained individuals who rely heavily on satellite cell activation. Forty-five subjects were divided into placebo, 6.6 gram and
19.8 gram dosing arms of Fortetropin
®
daily for a period of 12 weeks. All exercise sessions were conducted
and monitored by trained personnel. Standardized diets consisted of roughly 54% carbohydrates, 22% fat and 24% protein. There
were no differences in total calories and macronutrients between groups. Dual emission X-ray absorptiometry (DEXA) was utilized
to measure lean body mass and fat mass. Direct ultrasound measurements determined muscle thickness of the quadriceps.
Results
demonstrated a statistically significant increase in both muscle thickness and lean body mass in subjects taking Fortetropin
®
but
not in subjects taking a placebo. Strength and power endpoints, as measured by bench press, leg press and Wingate power, significantly
increased from baseline in all study groups. No study related adverse events were reported during the study.
*
p <0.05 post measurement compared to pre
Association
between Muscular Strength and Mortality
In
a clinical study at the Karolinska Institutet’s Department of Biosciences and Nutrition at NOVUM, Unit for Preventive Nutrition,
in Huddinge, Sweden, 8,762 men aged 20-80 were evaluated over an average period of 18.9 years in a prospective cohort study to
measure the association between muscular strength and mortality in men. After adjusting for age, physical activity, smoking, alcohol
intake, body mass index, baseline medical conditions, and family history of cardiovascular disease, the study found that muscular
strength is inversely and independently associated with deaths from all causes and cancer in men. The findings were valid for
men of normal weight, those who were overweight, and younger or older men, and were valid even after adjusting for several potential
confounders, including cardiorespiratory fitness. This study extends previous studies that showed the importance of muscular strength
as a predictor of death from all causes, cardiovascular disease, and cancer in a large cohort of men. Several prospective studies
have also shown that muscular strength is inversely associated with all-cause mortality. These data suggests that muscular strength
adds to the protective effect of cardiorespiratory fitness against the risk of death in men. Moreover, it might be possible to
reduce all-cause mortality among men by promoting regular resistance training.
WADA
Compliance
Fortetropin
®
has
received Certified Drug Free® certification from the Banned Substances Control Group (BSCG). The BSCG Certified Drug Free®
program is a comprehensive certification program for the dietary supplement industry and includes screening for substances prohibited
by the World Anti-Doping Agency (WADA) along with most U.S. professional sports leagues. WADA is a foundation created through
a collective initiative led by the International Olympic Committee to promote, coordinate and monitor the fight against drugs
in sports.
Research
and Development
As
an advanced nutrition and biotherapeutics company, we are dedicated to basic and clinical research that supports our existing
and future product portfolio. We are focused on the following areas of research:
Basic
Research
|
●
|
Biochemical
characterization of Fortetropin
®
, including cutting edge proteomic and lipidomic approaches
|
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Novel
biotherapeutics products
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Computational
design of novel peptide inhibitors of myostatin
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Identifying
proteins, peptides, and lipids responsible for pro-myogenic activity
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Pro-myogenic
activity of novel bioactive molecules and formulations
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Pre-Clinical
Research
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Effect
of Fortetropin
®
to reverse disuse atrophy in dogs after orthopedic surgery to repair the cranial cruciate
ligament (CCL)
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PK/PD
studies of novel bioactive molecules with pro-myogenic activity
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Clinical
Research
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Effect
of Fortetropin
®
on lean muscle mass, thickness and strength in older adults
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Effect
of Fortetropin
®
on muscle function and recovery after orthopedic procedures
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We
expect our investment in research and development to continue in the future
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Our
research program is actively evaluating the many active proteins, lipids and peptides in Fortetropin
®
. We believe
our research programs will establish a basis for the continued prosecution of patent applications in order to protect and augment
our intellectual property assets. We are dedicated to protecting our innovative technology.
Clinical
and Basic Research Programs
We
invest in research and development activities externally through academic and industry collaborations aimed at enhancing our products,
optimizing manufacturing and broadening the product portfolio. We have developed the following collaborations with various academic
centers:
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In May 2018, we entered into a research agreement with Weill Cornell
Medical College to study the efficacy of Fortetropin
®
in preventing weight and muscle loss associated with
cancer in a mouse model of lung cancer. We anticipate that the study will be completed and the results announced in the first
quarter of 2019.
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In
March 2018, we entered into a research agreement with Rutgers University, The State University
of New Jersey, to work with Rutgers researchers in a program focused on discovering compounds
and products for improving muscle health and performance.
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In
December 2017, we entered into an agreement with the University of California, Berkeley’s
Department of Nutritional Sciences & Toxicology. The research project will
study the effects of Fortetropin
®
on increasing the fractional rate
of skeletal muscle protein synthesis in men and women between 60 and 75 years old. The
Principal Investigator for this clinical study is William J. Evans, PhD, Adjunct Professor
of Human Nutrition at the Department of Nutritional Sciences & Toxicology at the
University of California, Berkeley campus. Professor Evans, a leading authority
in muscle health research, will coordinate the activities of a multi-disciplinary team
of scientists and physicians. In this randomized, double-blind, placebo-controlled
clinical study, 20 subjects, men and women 60 – 75 years of age, will consume either
Fortetropin
®
or a placebo for 21 days along with daily doses of a
heavy water tracer. After 21 days, a micro-biopsy will be collected from each subject
to determine the fractional rate of muscle protein synthesis. MYOS anticipates
the clinical study will be completed and its results announced in the second half of
2018.
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In
April 2017, we entered into an agreement with the College of Veterinary Medicine at Kansas
State University to study the impact of Fortetropin
®
on reducing
muscle atrophy in dogs after tibial-plateau-leveling osteotomy (TPLO) surgery to repair
the cranial cruciate ligament (CCL). The study is expected to be completed by the end
of the second quarter of 2018.
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In
May 2015, we initiated a dose response clinical study led by Jacob Wilson, Ph.D., CSCS*D, Professor of Health Sciences and
Human Performance at the University of Tampa, to examine the effects of Fortetropin
®
supplementation on
plasma myostatin levels at various dosing levels in young adult males and females. This study is intended to help us better
define the dose response curve, the minimal effective dose and effects of Fortetropin
®
on serum myostatin.
In this double blind placebo controlled clinical study, 80 male and female subjects ranging in ages between 18 and 22 were
randomized into four groups such that no significant differences in serum myostatin concentration existed between groups.
Following assignment to one of the four groups, blood samples were collected to establish baseline values. Subjects were subsequently
supplemented with three different doses of Fortetropin
®
(2.0g, 4.0g and 6.6g) and a matching placebo for
one week. Following one week of supplementation, blood samples were collected and serum myostatin levels were assayed. Results
demonstrated that Fortetropin
®
is effective as a myostatin reducing agent at daily doses of 4.0g and 6.6g.
This research, which continues to build upon our current understanding of Fortetropin
®
, may result in the formulation
of new products. An abstract of this study was presented at the 2016 International Conference on Frailty & Sarcopenia
Research (Philadelphia, PA) in April 2016.
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In August 2014,
we entered into a research agreement with Human Metabolome Technologies America, Inc., (“HMT”), to apply their
proprietary, state-of-the-art capillary electrophoresis-mass spectrometry (CE-MS) technologies to characterize the metabolomic
profiles of plasma samples obtained from healthy male subjects who used either Fortetropin
®
or placebo
with the goal of identifying metabolites with pro-myogenic activity in the plasma samples of subjects who took Fortetropin
®
as
well as examining the effect on glucose and fat metabolism. HMT used a metabolite database of over 290 lipids and over 900
metabolites to identify potential plasma biomarkers of muscle growth. The study was completed during the fourth quarter of
2014. Initial data from this study indicated that subjects who received Fortetropin
®
displayed differential
metabolomic profiles relative to subjects who received placebo. The results of this study enhance our understanding of the
mechanism of action of Fortetropin
®
and provides guidance for the development of biotherapeutics based
on Fortetropin
®
. Additionally, the early indications of plasma biomarkers may guide future study design for
Fortetropin
®
clinical trials by identifying clinically-relevant endpoints and potential stratification
of patient populations. The results from this study were presented at the Sarcopenia, Cachexia and Wasting Disorders Conference
(Berlin, Germany) in December 2016.
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In
May 2014, we entered into an agreement with the University of Tampa to study the effects of Fortetropin
®
supplementation
in conjunction with modest resistance training in18-21 year old males. The study was a double-blind, placebo-controlled trial
which examined the effects of Fortetropin
®
on skeletal muscle growth, lean body mass, strength, and power
in recreationally trained males. Forty-five subjects were divided into placebo, 6.6g and 19.8g dosing arms of Fortetropin
®
daily
for a period of 12 weeks. Results demonstrated a statistically significant increase in both muscle thickness and lean body
mass in subjects taking Fortetropin
®
but not in subjects taking placebo. The clinical study also analyzed
blood myostatin and cytokines levels via high-sensitivity enzyme-linked immunosorbent assay (“ELISA”) based analysis.
Serum was analyzed for a plethora of relative cytokine levels via high-sensitivity enhanced chemiluminescent-based methods.
The Interferon-Gamma (“IFN-γ”) inflammatory cytokine protocol screening showed no statistically significant
changes in serum levels of IFN-γ for subjects in the placebo group. However, subjects in both Fortetropin
®
daily
dosing arms experienced statistically significant decreases (p < 0.05) in serum levels of the IFN-γ inflammatory
cytokine. IFN-γ is recognized as a signature pro-inflammatory cytokine protein that plays a central role in inflammation
and autoimmune diseases. Excess levels of inflammatory cytokines are associated with muscle-wasting diseases such as sarcopenia
and cachexia. The lipid serum safety protocol demonstrated that daily use of Fortetropin
®
at recommended
and three times the recommended dose had no adverse lipid effect and did not adversely affect cholesterol, HDL or triglyceride
levels. Data from the study was presented at the American College of Nutrition’s 55
th
annual conference.
A separate mechanism of action study at the University of Tampa demonstrated that in addition to reducing serum myostatin
levels, Fortetropin
®
showed activity in mTOR and Ubiquitin pathways, two other crucial signaling pathways
in the growth and maintenance of healthy muscle. Specifically, the preclinical data showed that Fortetropin
®
up-regulates
the mTOR regulatory pathway. The mTOR pathway is responsible for production of a protein kinase related to cell growth and
proliferation that increases skeletal muscle mass. Up-regulation of the mTOR pathway is important in preventing muscle atrophy.
We believe Fortetropin
®
’s ability to affect the mTOR pathway may have a significant impact in treating
patients suffering from degenerative muscle diseases and suggests that Fortetropin
®
-based products may help
slow muscle loss secondary to immobility and denervation. The preclinical data also demonstrated that Fortetropin
®
acts
to reduce the synthesis of proteins in the Ubiquitin Proteasome Pathway, a highly selective, tightly regulated system that
serves to activate muscle breakdown. Over-expression of the Ubiquitin Proteasome Pathway is responsible for muscle degradation.
We believe Fortetropin
®
’s ability to regulate production in the Ubiquitin Proteasome Pathway may have
significant implications for repairing age-related muscle loss and for patients suffering from chronic diseases such as cachexia.
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In
May 2014, we entered into a three-year master service agreement with Rutgers University.
The initial phase under the agreement was to develop cell-based assays for high-throughput
screening studies of next generation myostatin inhibitors. Additionally, we initiated
a second phase of the agreement to develop a secondary assay for measuring myostatin
activity using a genetically engineered muscle cell line that fluoresce in the presence
of myostatin. Phase I and II were completed in 2015. We believe the assays developed
will enable us to elucidate the specific molecules in Fortetropin
®
that
impart activity as it relates to the development of muscle tissue.
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The
foregoing agreements are an integral part of our business strategy and we believe they will provide a clear scientific rationale
for Fortetropin
®
’s role as an advanced nutritional product and support its use in different medical and health
applications in the future.
We
are also building a small molecule and biologics discovery program aimed at regulators of myostatin synthesis and activation and
the different pathways that act upon muscle development. In July 2014, we entered into a research and development agreement with
Cloud Pharmaceuticals, Inc., (“Cloud”), to discover product candidates related to the inhibition of targets in the
myostatin regulatory pathway as well as inflammatory mediators associated with sarcopenia and cachexia. Cloud utilizes cloud computing
technology to identify and design small molecule drug candidates based on their proprietary Inverse Design drug discovery platform.
The research is focusing on the development of product candidates related to the myostatin pathway. Cloud has identified several
peptides that may have myostatin inhibition properties based on computational modeling. We intend to evaluate the physiological
activity of these peptides on myostatin.
We
intend to pursue additional clinical studies and medical research to support differentiated and advantaged marketing claims, to
build and enhance our competitive insulation through an aggressive intellectual property strategy, to develop product improvements
and new products in consumer preferred dosage forms, to enhance overall marketing, to establish a scientific foundation for therapeutic
applications for our technology, and to pursue best in class personnel.
Market
Overview
According
to the Natural Marketing Institute, the Dietary Supplement, Functional Food and Beverage, and Natural Personal Care markets represent
more than $250 billion in annual worldwide sales. The global market for functional foods alone in 2017 was worth an estimated
$54 billion. In 2018, it is expected to continue to grow and the United States is expected to be the fastest growing market for
functional foods. The global sports nutrition market was valued at $30.7 billion in 2017, and is expected to grow at a compounded
annual growth rate of 8.1% during the period from 2018 to 2022 up to $45 billion. We believe our proprietary ingredient, Fortetropin
®
,
which is the only clinically proven natural supplement available in the market that temporarily reduces free serum myostatin level,
is well-positioned to market to a wide base of consumers looking for nutritional and performance maximization as well as for wellness
and maintenance products as they age. Additionally, the medical community has increased its focus on muscle health, specifically
focusing on the aging U.S. population that can benefit most from myostatin modulation.
We
believe the combination of the foregoing marketplace characteristics, combined with the experience of our directors and our management
team and our current and future products, will enable our business model to succeed.
Strategy
Our
strategy is to understand the complex genetic and molecular pathways regulating muscle mass and function as well as other disease
mechanisms. Understanding the impact of complex regulatory pathways which act to build and maintain healthy lean muscle is central
to our biotherapeutic research. We are developing nutritional products that target specific mechanisms to promote muscle health
in ways that cannot be met by other diets or lifestyle changes.
We
will seek to gain market share for our core branded products in functional foods, sports and fitness nutrition and rehabilitation
and restorative health verticals by (i) formulating and developing new and complementary product lines, (ii) expanding U.S. distribution
by increasing the channels of sale, (iii) expanding distribution geography beyond the U.S. and (iv) seeking strategic relationships
with other distributors. Our strategy is to utilize the revenue and awareness generated by the sales and marketing of Fortetropin
®
to
further advance our research and development of therapeutic treatments for muscular disorders, including sarcopenia.
Marketing,
Sales and Distribution
Our
commercial focus is to leverage our clinical data to develop multiple products to target the large, but currently underserved
markets focused on muscle health. The sales channels through which we sell our products are evolving. The first product we introduced
was MYO-T12, which was sold in the sports nutrition market. MYO T-12 is a proprietary formula containing Fortetropin
®
and
other ingredients. The formula was sold under the brand name MYO-T12 and later as MYO-X through an exclusive distribution agreement
with Maximum Human Performance (“MHP”). The exclusive distribution agreement with MHP terminated in March 2015 and
there were no subsequent sales to MHP.
In
February 2014, we expanded our commercial operations into the age management market through a distribution agreement with Cenegenics
Product and Lab Services, LLC (“Cenegenics”), under which Cenegenics distributed and promoted a proprietary formulation
containing Fortetropin
®
through its age management centers and its community of physicians focused on treating
a growing population of patients focused on proactively addressing age-related health and wellness concerns. The distribution
agreement with Cenegenics expired in December 2016. As of December 31, 2016 we recognized all of the deferred revenue. In 2017,
we recorded $200 of sales to Cenegenics.
During
the second quarter of 2015 we launched Rē Muscle Health
TM
, our own direct-to-consumer brand with a portfolio of
muscle health bars, meal replacement shakes and daily supplement powders each powered by a full 6.6 gram single serving dose of
Fortetropin
®
. Our Rē Muscle Health products were sold through our e-commerce website, remusclehealth.com,
and amazon.com until March 2017 when we introduced our new Qurr line of products.
In
March 2017, we launched Qurr, a Fortetropin
®
-powered product line formulated to support the vital role of muscle
in overall well-being as well as in fitness. Qurr is a line of flavored puddings, powders, and shakes for daily use. Our Qurr
line of muscle-focused over-the-counter products are available through a convenient, direct-to-consumer e-commerce platform. All
Qurr products contain Fortetropin
®
, our proprietary ingredient which has been clinically demonstrated to reduce
serum myostatin levels which helps increase muscle size and lean body mass in conjunction with resistance training.
In
April 2018, we received the prestigious Certified for Sport® certification from NSF International for our new sports nutrition
product line Yolked
TM
, an advanced nutrition product based on Fortetropin® that will be marketed specifically to
competitive athletes.
We
expect to launch our Fortetropin based pet product in the near future. Two veterinarian hospitals, which performed some informal
observational studies with older dogs experiencing muscle atrophy and saw positive results after taking our pet product, are seeking
to purchase our product. We believe that the positive feedback we are receiving from these two hospitals, together with the potential
results from our Kansas State University study, will enable us to launch and grow our pet business product line.
We
continue to pursue additional distribution and branded sales opportunities. There can be no assurance that we will be able to
secure distribution arrangements on terms acceptable to us, or that we will be able to generate significant sales of our current
and future branded products. We expect to continue developing our own core branded products in markets such as functional foods,
sports and fitness nutrition and to pursue international sales opportunities. The growing awareness of the potential uses of myostatin
reducing ingredients supports continued development of our own core products. We remain committed to continuing our focus on various
clinical trials in support of enhancing our commercial strategy as well as enhancing our intellectual property assets, to develop
product improvements and new products, and to reduce the cost of our products by finding more efficient manufacturing processes
and contract manufacturers.
Intellectual
Property
We
have adopted a comprehensive intellectual property strategy, the implementation of which is ongoing. We are focusing our efforts
on ensuring our current commercial products and processes, and those currently under development, are being protected to the maximum
extent possible. We are in the process of filing multiple patent applications in the United States and abroad, and we are currently
prosecuting pending patent applications in the United States, all of which are directed towards our compositions and methods of
manufacturing the same. In addition to a proactive protection strategy, we are conducting defensive due diligence to ensure our
products and processes do not encroach upon the rights of third parties. Moreover, we are also engaged in a survey of the intellectual
property landscape of potential competitors, and are devising a proactive path to stay ahead of such potential competitors.
In
August 2014, the U.S. Patent and Trademark Office, or USPTO, issued U.S. Patent No. 8,815,320 B2 to us covering our proprietary
methods of manufacturing Fortetropin
®
. The patent entitled “Process for Producing a Composition Containing
Active Follistatin,” provides intellectual property protection for manufacturing Fortetropin
®
, the key ingredient
in our core commercial muscle health products, and carries a patent term through early 2033. Additionally, we are currently prosecuting
a core patent application covering the basic science on which our business was built, which is currently undergoing examination
at the USPTO. The scope of this application covers the various applications of avian follistatin products and the benefits thereof.
In particular, this application is focused on the composition currently in our commercially available Fortetropin
®
-powered
products and the known benefits thereof.
We
intend to file as many applications as possible as continuation/divisional/continuation-in-part applications. Several additional
pending patent applications that we are pursuing include:
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Method
of obtaining effective amounts of avian follistatin - covering a method of controlling the amount of avian follistatin and
the concentrations thereof within a product by extracting the proteins from various parts of fertilized and unfertilized
avian eggs.
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Methods
of treating degenerative muscle disease – covering methods of treating various degenerative muscle diseases, such as
sarcopenia, with avian egg-based products and the compositions thereof.
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Methods
and products for increasing muscle mass – covering various combinations of proteins, lipids and other molecules, which
are active in the natural form of our core commercial products, which may be combined in advantageous amounts to yield
improved products and methods for increasing muscle mass.
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Egg-based
product containing hydroxymethylbutyrate, or HMB, for the treatment of degenerative muscle
disease – covering a line of products combining avian egg-based products with HMB
for improved treatment of degenerative muscle diseases and the methods of treating the
same.
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Egg-based
product containing leucine for treatment of degenerative muscle disease - covering a
line of products combining avian egg-based products with leucine for improved treatment
of degenerative muscle diseases and the methods of treating the same.
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Methods
of treatment of degenerative muscle disease using egg-based products and testosterone replacement therapy – covering
methods of treating degenerative muscle disease in combination with testosterone replacement therapy for improved
results.
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Methods
of treatment of cancer using avian egg powder.
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Methods
of treatment of insulin resistance and Type II diabetes using avian egg powder.
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Methods
of treatment of neurological diseases using avian egg powder.
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Method
of enhancing overall health and longevity using avian egg powder.
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In
addition to patent protection, we are also engaged in protecting our brands, including corporate brands and product brands, and
have sought trademark registrations in the United States for the same. We have implemented a clearance strategy for new brands
that we intend to launch, to ensure any risk of encroaching on the rights of third parties is minimized.
We
regard our trademarks and other proprietary rights as valuable assets and believe that protecting our key trademarks is crucial
to our business strategy of building strong brand name recognition. These trademarks are crucial elements of our business, and
have significant value in the marketing of our products. Federally registered trademarks have a perpetual life, provided that
they are maintained and renewed on a timely basis and used correctly as trademarks, subject to the rights of third parties to
attempt to cancel a trademark if priority is claimed or there is confusion of usage. We rely on common law trademark rights to
protect our unregistered trademarks. Common law trademark rights generally are limited to the geographic area in which the trademark
is actually used, while a United States federal registration of a trademark enables the registrant to stop the unauthorized use
of the trademark by third parties in the United States. Much of our ongoing work, including our research and development, is kept
highly confidential. As such, we have adopted corporate confidentiality policies that comply with the Uniform Trade Secrets Act
and the New Jersey Trade Secret Act to protect our most valuable intellectual property assets.
Regulatory
Environment
The
importing, manufacturing, processing, formulating, packaging, labeling, distributing, selling and advertising of our current and
future products may be subject to regulation by one or more federal or state agencies. The Food and Drug Administration, or the
FDA, has primary jurisdiction over our products pursuant to the Federal Food, Drug and Cosmetic Act, as amended by the Dietary
Supplement and Health Education Act, or the FDCA, and the regulations promulgated thereunder. The FDCA provides the regulatory
framework for the safety and labeling of dietary supplements, foods and medical foods. In particular, the FDA regulates the safety,
manufacturing, labeling and distribution of dietary supplements. In addition, the Animal Plant Health and Inspection Service,
or APHIS, regulates the importation of our primary product from Germany. The Federal Trade Commission, or the FTC, and the FDA
share jurisdiction over the promotion and advertising of dietary supplements. Pursuant to a memorandum of understanding between
the two agencies, the FDA has primary jurisdiction over claims that appear on product labels and labeling and the FTC has primary
jurisdiction of product advertising.
The
term “medical foods” does not pertain to all foods fed to sick patients. Medical foods are prescription foods specially
formulated and intended for the dietary management of a disease that has distinctive nutritional needs that cannot be met by normal
diet alone. They were defined in the FDA’s 1988 Orphan Drug Act Amendments and are subject to the general food safety and
labeling requirements of the FDCA but are exempt from the labeling requirements for health claims and nutrient content claims
under the Nutrition Labeling and Education Act of 1990. Medical foods are distinct from the broader category of foods for special
dietary use and from traditional foods that bear a health claim. In order to be considered a medical food, a product must, at
a minimum, be a specially formulated and processed product (as opposed to a naturally occurring food in its natural state) for
oral ingestion or tube feeding (nasogastric tube), be labeled for the dietary management of a specific medical disorder, disease
or condition for which there are distinctive nutritional requirements and be intended to be used under medical supervision.
Compliance
with applicable federal, state, and local laws and regulations is a critical part of our business. We endeavor to comply with
all applicable laws and regulations. However, as with any regulated industry, the laws and regulations are subject to interpretation
and there can be no assurances that a government agency would necessarily agree with our interpretation of the governing laws
and regulations. Moreover, we are unable to predict the nature of such future laws, regulations, interpretations or applications,
nor can we predict what effect additional governmental regulations or administrative orders, when and if promulgated, would have
on our business in the future. These regulations could, however, require the reformulation of our products to meet new standards,
market withdrawal or discontinuation of certain products not able to be reformulated. The risk of a product recall exists within
the industry although we endeavor to minimize the risk of recalls by distributing products that are not adulterated or misbranded.
However, the decision to initiate a recall is often made for business reasons in order to avoid confrontation with the FDA.
Our
products are required to be prepared in compliance with the FDA’s Good Manufacturing Practices, or GMPs, as set forth in
21 CFR Part 111. Fortetropin
®
, the active ingredient in our products, must be imported into the United States in
conformance with USDA-APHIS’s requirements for egg products. Other statutory obligations include reporting all serious adverse
events on a Medwatch Form 3500A. To date, we have not filed a Medwatch Form 3500A with the FDA nor have we been placed on notice
regarding any serious adverse events related to any of our products. Since eggs are considered a major food allergen under the
Food Allergen Labeling and Consumer Protection Act of 2004, we are required to label all our products containing Fortetropin
®
to
note that they contain egg product.
Advertising
of dietary supplement products is subject to regulation by the FTC under the Federal Trade Commission Act, or FTCA, which prohibits
unfair methods of competition and unfair or deceptive trade acts or practices in or affecting commerce. The FTCA provides that
the dissemination of any false advertising pertaining to foods, including dietary supplements, is an unfair or deceptive act or
practice. Under the FTC’s substantiation doctrine, an advertiser is required to have a reasonable basis for all objective
product claims before the claims are made. All advertising is required to be truthful and not misleading. All testimonials are
required to be typical of the results the consumer may expect when using the product as directed. Accordingly, we are required
to have adequate substantiation of all material advertising claims made for our products. Failure to adequately substantiate claims
may be considered either deceptive or unfair practices.
In
addition, medical foods must comply with all applicable requirements for the manufacturing of foods, including food Current Good
Manufacturing Practices (“cGMP”), registration of food facility requirements and, if applicable, FDA regulations for
low acid canned food and emergency permit controls. The FDA considers the statutory definition of medical foods to narrowly constrain
the types of products that fit within this category of food. The FDA inspects medical food manufacturers annually to assure the
safety and integrity of the products. Failure of our contract manufacturers to comply with applicable requirements could lead
to sanctions that could adversely affect our business.
We
cannot predict what effect additional domestic or international governmental legislation, regulations, or administrative orders,
when and if promulgated, would have on our business in the future. New legislation or regulations may require the reformulation
of certain products to meet new standards, require the recall or discontinuance of certain products not capable of reformulation,
impose additional record keeping or require expanded documentation of the properties of certain products, expanded or different
labeling or scientific substantiation.
Manufacturing;
Raw Materials and Suppliers
We
are committed to producing and selling highly efficacious products that are trusted for their quality and safety. To date, our
products have been outsourced to third party manufacturers where the products are manufactured in full compliance with cGMP standards
set by the FDA. All of the raw materials for our current products are currently sourced from third-party suppliers. Any shortages
in our raw materials could result in materially higher raw material prices and adversely affect our ability to source our product.
Since the beginning of 2012, we have been focusing on the efficiency and economics of manufacturing Fortetropin
®
.
Our management has examined the production cost and is working to achieve cost savings in production.
We
currently have an agreement with only one third-party manufacturer of Fortetropin
®
, who will manufacture the formula
exclusively for us in perpetuity, and may not manufacture the formula for other entities. We have multiple vendors for blending,
packaging and labeling our products.
Competition
Given
the large populations that could potentially benefit from myostatin modulation, a number of pharmaceutical companies are currently
developing various types of myostatin inhibitors. Eli Lilly and Co., Novartis AG, Pfizer Inc., Scholar Rock and Acceleron Pharma
Inc, are among the companies that we are aware of that are testing new compounds in the field of myostatin inhibition. The market
for nutritional supplements is highly competitive. Companies operating in the space include PepsiCo Inc., Glanbia Plc. GNC Holdings,
The Coca-Cola Company, GlaxoSmithKline, Abbott Laboratories, Nestle S.A. and Universal Nutrition. Competition is based on price,
quality, customer service, marketing and product effectiveness. Our competition includes numerous nutritional supplement companies
that are highly fragmented in terms of geographic market coverage, distribution channels and product categories. In addition,
large pharmaceutical companies and packaged food and beverage companies compete with us in the nutritional supplement market.
These companies and certain nutritional supplement companies have broader product lines and/or larger sales volumes than us and
have greater financial and other resources available to them and possess extensive manufacturing, distribution and marketing capabilities.
Other companies are able to compete more effectively due to a greater extent of vertical integration. Private label products of
our competitors, which in recent years have significantly increased in certain nutrition categories, compete directly with our
products. In several product categories, private label items are the market share leaders. Increased competition from such companies,
including private label pressures, could have a material adverse effect on our results of operations and financial condition.
Many companies within our industry are privately-held and therefore, we are unable to assess the size of all of our competitors
or where we rank in comparison to such privately-held competitors with respect to sales.
Insurance
We
maintain commercial liability, including product liability coverage, and property insurance. Our policy provides for a general
liability of $5.0 million per occurrence, and $10.0 million annual aggregate coverage. We carry property coverage on our main
office facility to cover our legal liability, tenant’s improvements, business property, and inventory. We maintain commercial
general liability and products liability insurance with coverage of up to $5.0 million.
Employees
We
currently have ten full-time employees (including one executive officer). We also employ several consultants. None of our employees
are represented by a labor union and we consider our employee relations to be good.
Legal
Proceedings
On
January 6, 2017, in connection with the financing contemplated by a securities purchase agreement with RENS Technology Inc. (the
“Purchaser”), we commenced an action in the Supreme Court of New York, County of New York (the “Court”),
against the Purchaser, RENS Agriculture, the parent company of the Purchaser, and Ren Ren, a principal in both entities and one
of our directors, arising from the Purchaser’s breach of the agreement under which the Purchaser agreed to invest an aggregate
of $20.25 million in our company in exchange for an aggregate of 3,537,037 shares of our common stock and warrants to purchase
an aggregate of 884,259 shares of common stock.
On
April 11, 2017, the Court noted that we had demonstrated a likelihood of success on the merits of the breach of contract claim.
Thereafter, a hearing was scheduled on the application by the Purchaser to dismiss the complaint and various pre-trial discovery
applications by both parties.
In
August 2017, we amended our complaint repeating most of the initial claims but adding several additional claims against RENS Agriculture,
Mr. Ren and two additional Chinese defendants, including a claim against RENS Agriculture for breaching the exclusive distribution
agreement, as well as claims against all defendants for theft and misappropriation of our confidential proprietary information
and trade secrets, breach of fiduciary duty and duty of loyalty, misappropriation of corporate opportunity, unfair competition
and a number of other torts. We are seeking damages and injunctive relief. The Purchaser has filed a motion to dismiss the amended
complaint, which is still pending and scheduled for oral argument in April 2018.
On
August 16, 2017, the Purchaser commenced an action in the District Court of Clark County in the State of Nevada against us and
Joseph Mannello, our then interim Chief Executive Officer, alleging that Mr. Mannello had breached his fiduciary duties and was
grossly negligent in managing our company. The action seeks monetary damages and injunctive relief from Mr. Mannello as well as
the appointment of a receiver over us. Subsequently, the Purchaser submitted a petition to appoint a receiver and we and Mr. Mannello
submitted a motion to dismiss the action, both of which are currently pending and are due to be heard in April 2018. An application
on consent to adjourn the hearing date on the receiver application and motion to dismiss is pending.
The parties are currently in settlement
discussions regarding the foregoing matters.
RISK
FACTORS
Investing
in our securities involves a high degree of risk. Before deciding whether to invest in our securities, you should carefully consider
the risk factors set forth below, as well as those incorporated by reference into any prospectus supplement and in any related
free-writing prospectus for a specific offering of securities. You should also carefully consider other information contained
and incorporated by reference in this prospectus and any applicable prospectus supplement, including our financial statements
and the related notes thereto. The risks and uncertainties set forth below or described in the applicable prospectus supplement
and our other filings with the SEC incorporated by reference herein are not the only ones we face. Additional risks and uncertainties
not presently known to us or that we currently consider immaterial may also adversely affect us. If any of the described risks
occur, our business, financial condition or results of operations could be materially harmed. In such case, the value of our securities
could decline and you may lose all or part of your investment.
RISKS
RELATING TO OUR BUSINESS
Our
limited operating history makes it difficult to evaluate our future prospects and results of operations
.
We
are an early stage company and have a limited operating history. Our future prospects should be considered in light of the risks
and uncertainties experienced by early stage companies in evolving markets such as the market for our current and future products,
if any, in the United States. We will continue to encounter risks and difficulties that companies at a similar stage of development
frequently experience, including the potential failure to:
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build
a strong and compelling consumer brand;
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adequately
protect and build our intellectual property;
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develop
new products;
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conduct
successful research and development activities;
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increase
awareness of our products and develop customer loyalty;
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respond
to competitive market conditions;
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respond
to requirements and changes in our regulatory environment;
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maintain
effective control of our costs and expenses;
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availability
of sufficient capital resources to adequately promote and market our products; and
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attract,
retain and motivate qualified personnel.
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If
we are unable to address any or all of the foregoing risks, our business may be materially and adversely affected.
If
we are unable to successfully market and promote our own core branded products, we will not be able to increase our sales and
our business and results of operations would be adversely affected.
In
March 2017, we launched Qurr, our proprietary branded products, using multiple delivery formats. Successfully marketing and promoting
products is a complex and uncertain process, dependent on the efforts of management, outside consultants and general economic
conditions, among other things. There is no assurance that we will successfully market and/or promote our own core branded products.
Any factors that adversely impact the marketing or promotion of our products including, but not limited to, competition, acceptance
in the marketplace, or delays related to production and distribution or regulatory issues, will likely have a negative impact
on our cash flow and operating results. The commercial success of our products also depends upon various other factors including:
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the
quality and acceptance of other competing brands and products;
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creating
effective distribution channels and brand awareness;
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critical
reviews;
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the
availability of alternatives;
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general
economic conditions; and
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the availability
of sufficient capital resources to adequately promote and market our products.
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Each
of these factors is subject to change and cannot be predicted with certainty. We cannot assure you that we will be successful
in marketing or promoting any of our own core branded products. If we are unable to successfully market and promote our own core
branded products or any enhancements to our products which we may develop, we will not be able to increase our sales, and our
results of operations would be adversely affected.
If
distributors are unable or unwilling to purchase our products and we are unable to secure alternative distributors or customers,
our operating results and financial condition will be adversely affected since historically this represents a large percentage
of our sales.
We
have previously sold our products primarily through two distributors, MHP and Cenegenics. For the year ended December 31, 2017,
our net sales were $526, of which 38% was attributable to Cenegenics. For the year ended December 31, 2016, our net sales were
$327, of which 50% was attributable to Cenegenics. We did not sell any products through MHP during the years ended December 31,
2016 and 2017.
In
March 2017 we launched a new product line Qurr which we sell direct to consumers. About 80% of our sales were purchased via our
website www.qurr.com and the remainder were purchased via our amazon.com site.
If
we decide to continue selling our products to distributors and our prior distributors are unable or unwilling to purchase our
products and we are unable to secure alternative distributors or customers, our operating results and financial condition will
be adversely affected.
We
have a history of losses and cash flow deficits, and we expect to continue to operate at a loss and to have negative cash flow
for the foreseeable future, which could cause the price of our stock to decline.
At March 31,
2018, we had cumulative net losses from inception of $33,057. Our net loss for the years ended December 31, 2017 and 2016 were
$4,058 and $4,341, respectively. We also had negative cash flow from operating activities. Historically, we have funded our operations
from the proceeds from the sale of equity securities, debt issuances, and to a lesser extent, internally generated funds. Our
strategic business plan is likely to result in additional losses and negative cash flow for the foreseeable future. We cannot
give assurances that we will ever become profitable.
There is no assurance that we
will be able to increase our sales.
Our sales for
the three months ended March 31, 2018 were $57, our sales for the year ended December 31, 2017 were $526 and our sales for the
year ended December 31, 2016 were $327. We cannot give assurances that our current business model will enable us to increase our
sales.
The
report of our independent registered public accounting firm expresses substantial doubt about our ability to continue as a going
concern.
Our
auditors have indicated in their report on our financial statements for the years ended December 31, 2017 and December 31, 2016
that conditions exist that raise substantial doubt about our ability to continue as a going concern since we may not have sufficient
capital resources from operations and existing financing arrangements to meet our operating expenses and working capital requirements.
A “going concern” opinion could impair our ability to finance our operations through the sale of equity, incurring
debt, or other financing alternatives. There can be no assurance that we will be able to generate the level of operating revenues
projected in our business plan, or if additional sources of financing will be available on acceptable terms, if at all. If no
additional sources of financing become available, our future operating prospects may be adversely affected and investors may lose
all or a part of their investment.
Our
intangible assets, which represent a significant amount of our total assets, are subject to impairment testing and may result
in impairment charges, which would adversely affect our results of operations and financial condition.
At March 31, 2018,
our total assets were $4,011, of which $1,568, or approximately 39%, represents intangible assets, net of accumulated amortization.
Our intangible assets primarily relate to intellectual property pertaining to Fortetropin
®
, including the MYO-T12
formula, trademarks, trade secrets, patent application and domain names acquired from Peak Wellness, Inc. in February 2011. The
intellectual property asset was initially recorded as an indefinite-lived intangible asset and tested annually for impairment
or more frequently if events or circumstances changed that could potentially reduce the fair value of the asset below its carrying
value. Impairment testing requires the development of significant estimates and assumptions involving the determination of estimated
net cash flows, selection of the appropriate discount rate to measure the risk inherent in future cash flow streams, assessment
of an asset’s life cycle, competitive trends impacting the asset as well as other factors. Our forecasted future results
and related net cash flows contemplate the direct offering of product and successfully establishing future sales channels among
other factors. Changes in these underlying assumptions could significantly impact the asset’s estimated fair value.
In
2011, based on (i) assessment of current and expected future economic conditions, (ii) trends, strategies and projected revenues
and (iii) assumptions similar to those that market participants would make in valuing our intangible assets, management determined
that the carrying values of the intellectual property asset exceeded its fair value. Accordingly, we recorded noncash impairment
charges totaling $2,662 and reduced the intellectual property asset to its fair value of $2,000. During the second quarter of
2015, management made an assessment and based on expansion into new markets and introduction of new formulas determined that the
intellectual property had a finite useful life of ten (10) years and began amortizing the carrying value of the intellectual property
asset over its estimated useful life. Management made a separate determination that no further impairment existed at that time.
Based on fourteen consecutive quarters of minimal revenues combined with changes in the sales channels through which we sell our
products and our inability to predict future orders, if any, from MHP or Cenegenics or to what extent we will be able to secure
new distribution arrangements, we tested the intellectual property for impairment in the fourth quarter of 2017 and 2016 and determined
that the asset value was recoverable and therefore no impairment was recognized. Nevertheless, a significant amount of our total
assets are subject to impairment testing and may result in noncash impairment charges, which would adversely affect our results
of operations and financial condition.
We
will need to raise additional funds in the future to continue our operations. If we are unable to raise funds as needed, we may
not be able to maintain our business.
We
expect that our current funds will not be sufficient to fund our projected operations through December 2018. We require substantial
funds for operating expenses, research and development activities, to establish manufacturing capability, to develop consumer
marketing and retail selling capability, and to cover public company costs. In addition, we have incurred substantial costs in
connection with our litigation with Mr. Ren and RENS Technology Inc., or the RENS litigation See “Part 1 Item 3 –
Legal Proceedings” for additional information regarding the RENS litigation. The extent of our capital needs will depend
on numerous factors, including (i) our profitability, (ii) the release of competitive products, (iii) the level of investment
in research and development, (iv) the amount of our capital expenditures, (v) the amount of our working capital including collections
on accounts receivable, (vi) the sales, marketing and distribution investment needed to develop and launch our own core branded
products, (vii) cash generated by sales of those products and (viii) the status of the RENS litigation. We expect that we will
need to seek additional funding in 2018 through public or private financing or through collaborative arrangements with strategic
partners.
We
cannot assure you that we will be able to obtain additional financing or that such financing would be sufficient to meet our needs.
If we cannot obtain additional funding, we may be required to limit our marketing efforts, decrease or eliminate capital expenditures
or cease all or a portion of our operations, including any research and development activities. Any available additional financing
may not be adequate to meet our goals.
Even
if we are able to locate a source of additional capital, we may not be able to negotiate terms and conditions for receiving the
additional capital that are acceptable to us.
Any
future capital investments could dilute or otherwise materially adversely affect the holdings or rights of our existing stockholders.
In addition, new equity or convertible debt securities issued by us to obtain financing could have rights, preferences and privileges
senior to our common stock. There is no assurance that any additional financing will be available, or if available, will be on
terms favorable to us. In addition, any equity financing would result in dilution to stockholders.
Since
our revenues are generated in U.S. dollars but a portion of our expenses are incurred in foreign currencies, our earnings may
be reduced due to currency exchange rate fluctuations.
Our
revenues are generated in U.S. dollars, while a portion of our expenses related to our supply agreement are incurred in foreign
currencies, principally the payments to our primary manufacturer that are paid in euros. The exchange rates between the U.S. dollar
and other currencies fluctuate and are affected by, among other things, changes in political and economic conditions. Any significant
fluctuation in the exchange rate for these currencies may materially and adversely affect our earnings, cash flows and financial
condition.
If
we are unable to manage our infrastructure growth, our business results may be materially and adversely affected.
We
need to manage our infrastructure growth to support and maximize our potential revenue growth and achieve our expected business
results. Engaging the full capacity of our limited staff may place a significant strain on our management, operations, and accounting
and information systems. We expect that we will need to continue to improve our financial controls, operating procedures and management
information systems. The failure to manage our infrastructure growth could adversely affect our business results.
If
we are not able to implement our business objectives, our operations and financial performance may be adversely affected.
Our
principal objectives are to: (i) create a sales platform through marketing products containing our proprietary ingredient Fortetropin
®
in
established, growing, and new markets and strategic selection of partnerships and collaborations to maximize near-term and future
revenues, (ii) deepen the scientific understanding of the activity of Fortetropin
®
, specifically as a natural,
reversible, temporary modulator of the regulatory protein myostatin, and to leverage this knowledge to strengthen and build our
intellectual property, (iii) conduct research and development activities to evaluate myostatin modulation in a range of both wellness
and disease states, (iv) identify other products and technologies which may broaden our portfolio and define a business development
strategy to protect, enhance and accelerate the growth of our products, (v) reduce the cost of manufacturing through process improvement,
and (vi) identify contract manufacturing organizations that can fully meet our future growth requirements. Our business plan is
based on circumstances currently prevailing and assumptions that certain circumstances will or will not occur as well as the inherent
risk and uncertainties involved in various stages of development. However, there is no assurance that we will be successful in
achieving our objectives. If we are not able to achieve our objectives, our business operations and financial performance may
be adversely affected.
If
we lose the services of our key personnel, we may be unable to replace them, and our business, financial condition and results
of operations could be adversely affected.
Our
success largely depends on the continued skills, experience, efforts and policies of our management, directors and other key personnel
and our ability to continue to attract, motivate and retain highly qualified employees. In particular, certain of our directors,
including Dr. Robert Hariri and Dr. Louis Aronne have significant research and development experience and are integral to the
creation of our future products and the execution of our business strategy. In addition, our prospects depend substantially on
the services of our executive management team.
If
one or more of our key employees or directors leaves us, we will need to find a replacement with the combination of skills and
attributes necessary to execute our strategy. Because competition for skilled personnel is intense, and the process of finding
qualified individuals can be lengthy and expensive, we believe that the loss of the services of key personnel could adversely
affect our business, financial condition and results of operations. We cannot assure you that we will continue to retain such
personnel.
Our
success depends on our ability to anticipate and respond in a timely manner to changing consumer demands.
Our
success depends on the appeal of our current and future products to a broad range of consumers whose preferences cannot be predicted
with certainty and are subject to change. If our current and future products do not meet consumer demands, our sales may decline.
In addition, our growth depends upon our ability to develop new products through product line extensions and product modifications,
which involve numerous risks. We may not be able to accurately identify consumer preferences, translate our knowledge into customer
accepted products, establish the appropriate pricing for our products or successfully integrate these products with our existing
product platform or operations. We may also experience increased expenses incurred in connection with product development, marketing
and advertising that are not subsequently supported by a sufficient level of sales, which would negatively affect our margins.
Furthermore, product development may divert management’s attention from other business concerns, which could cause sales
of our existing products to suffer. We cannot assure you that newly developed products will contribute favorably to our operating
results.
Products
often have to be promoted heavily in stores or in the media to obtain visibility and consumer acceptance. Acquiring distribution
for products is difficult and often expensive due to slotting and other promotional charges mandated by retailers. Products can
take substantial periods of time to develop consumer awareness, consumer acceptance and sales volume. Accordingly, some products
may fail to gain or maintain sufficient sales volume and as a result may have to be discontinued.
If
our current or future products fail to properly perform, our business could suffer due to increased costs and reduced income.
Failure of our current or future products to meet consumer expectations could result in decreased sales, delayed market acceptance
of our products, increased accounts receivable, unsaleable inventory and customer returns, and divert our resources to reformulation
or alternative products.
Intense
competition from existing and new entities may adversely affect our revenues and profitability
.
We
face competitors that will attempt to create, or are already creating, products that are similar to our current and future products.
Many of our current and potential competitors have significantly longer operating histories and significantly greater managerial,
financial, marketing, technical and other competitive resources, as well as greater brand recognition, than we do. These competitors
may be able to respond more quickly to new or changing opportunities and customer requirements and may be able to undertake more
extensive promotional activities, offer more attractive terms to customers or adopt more aggressive pricing policies. We cannot
assure you that we will be able to compete effectively with current or future competitors or that the competitive pressures we
face will not harm our business.
Our
business is dependent on continually developing or acquiring new and advanced products and processes and our failure to do so
may cause us to lose our competitiveness and may adversely affect our operating results.
To
remain competitive in our industry, we believe it is important to continually develop new and advanced products and processes.
There is no assurance that competitive new products and processes will not render our existing or new products obsolete or non-competitive.
Our competitiveness in the marketplace relies upon our ability to continuously enhance our current products, introduce new products,
and develop and implement new technologies and processes. Our failure to evolve and/or develop new or enhanced products may cause
us to lose our competitiveness in the marketplace and adversely affect our operating results.
Adverse
publicity or consumer perception of our products and any similar products distributed by others could harm our reputation and
adversely affect our sales and revenues.
We
are highly dependent upon positive consumer perceptions of the safety, efficacy and quality of our products as well as similar
products distributed by our competitors. Consumer perception of dietary supplements and our products in particular can be substantially
influenced by scientific research or findings, national media attention including social media attention and other publicity about
product use. Adverse publicity from such sources regarding the safety, efficacy or quality of dietary supplements, in general,
and our products in particular, could harm our reputation and results of operations. The mere publication of reports asserting
that such products may be harmful or questioning their efficacy could have a material adverse effect on our business, financial
condition and results of operations, regardless of whether such reports are scientifically supported or whether the claimed harmful
effects would be present at the dosages recommended for such products.
Marketing
of our products through social media and other advertising methods could harm our business and reputation.
There
are many considerations that can affect the marketing and advertising of our products through social media such as claims and
concerns about safety, new discoveries, patent disputes and claims about adverse side effects. Further, claims and concerns about
safety can result in a negative impact on product sales, product recalls or withdrawals, and/or consumer fraud, product liability
and other litigation and claims. A video published online, a blog on the internet, or a post on a website, can be distributed
rapidly and negatively harm our reputation.
Cyberattacks
and other security breaches could compromise our proprietary and confidential information as well as our e-commerce infrastructure
and customer database which could harm our business and reputation.
We
generate, collect and store proprietary information, including intellectual property and business information. The secure storage,
maintenance, and transmission of and access to this information is important to our operations and reputation. Computer hackers
may attempt to penetrate our computer systems and, if successful, misappropriate our proprietary and confidential information
including e-mails and other electronic communications. In addition, an employee, contractor, or other third-party with whom we
do business may attempt to obtain such information, and may willfully or inadvertently cause a breach involving such information.
While we have certain safeguards in place to reduce the risk of and detect cyber-attacks, our information technology networks
and infrastructure may be vulnerable to unpermitted access by hackers or other breaches, or employee error or malfeasance. Any
such compromise of our data security and access to, or public disclosure or loss of, confidential business or proprietary information
could disrupt our operations, damage our reputation, provide our competitors with valuable information, and subject us to additional
costs which could adversely affect our business.
The
scientific support for Fortetropin
®
is subject to uncertainty.
Our
research, scientific knowledge and clinical testing supporting the benefits of our products are an essential element of our ability
to legally market our products. There is, however, the risk that new or undiscovered information may become available that may
undermine or refute our scientific support. In addition, our clinical studies of Fortetropin
®
have been limited
in scope and additional testing may reveal deficiencies and side effects that we are currently unaware of. A reduction in the
credibility of our scientific support for the effectiveness of Fortetropin
®
could have a material adverse
effect on our operations and financial condition.
If
we are required to withdraw our products from the market, change the labeling of our products and/or are subject to product liability
claims, our operations and financial performance may be adversely affected.
There
is a potential for any ingested product to result in side effects in certain consumers. Although we are not aware of any adverse
effects of our products on the health of consumers, if any such side effects are identified after marketing and sale of the product,
we may be required to withdraw our products from the market or change its labeling. We may also be required to withdraw our products
from the market as a result of regulatory issues. If we are required to withdraw our products from the market, our business operations
and financial performance may be adversely affected. Furthermore, if a product liability claim is brought against us, it may,
regardless of merit or eventual outcome, result in damage to our reputation, decreased demand for our products, costly litigation
and loss of revenue.
An
increase in product returns could negatively impact our operating results and profitability.
Historically,
sales allowances for product returns have not been provided, since under our existing arrangements, customers are not permitted
to return product except for non-conforming product. In certain instances we may permit the return of damaged or defective products
and accept limited amounts of product returns. While such returns have historically been nominal and within management’s
expectations and the provisions established, future return rates may differ from those experienced in the past. Any significant
increase in damaged or defective products or expected returns could have a material adverse effect on our operating results for
the period or periods in which such returns materialize. With respect to future sales, we may need to offer retail customers sales
incentives, including the right to return product. If those customers are not able to sell our products to end-consumers, significant
product returns may materialize, which could have a material adverse effect on our operating results.
We
are dependent on third-party manufacturers, suppliers and processors to produce our products.
We
currently rely on third-party manufacturers, suppliers and processors to produce our products. If our manufacturers, suppliers
or processors are unable to provide us with the required finished products or raw materials or are unable or unwilling to produce
sufficient quantities of our products, our business and revenues will be adversely affected.
A
shortage in the supply of, or a price increase in, raw materials could increase our costs or adversely affect our sales and revenues.
All
of the raw materials for our products are sourced from third-party suppliers. Currently, we have one primary third-party manufacturer
to produce Fortetropin
®
under a fixed price agreement that runs through December 2018. If we are unable to
renew the agreement, any shortages in our raw materials could adversely affect operations. Price increases from a supplier will
affect our profitability if we are not able to pass price increases on to customers. The inability to obtain adequate supplies
of raw materials in a timely manner of our raw materials could have a material adverse effect on our business, financial condition
and results of operations.
While
our raw material inventories generally have a long shelf life, we may be required to write-off or reserve for inventories that
are slow-moving, off-grade, damaged or otherwise not saleable. Such write-offs and/or reserves could have a material adverse effect
on our business, financial condition and results of operations.
Our
raw material inventories are comprised of dried powder derived from egg-yolk, and despite generally having a long shelf life,
we may be required to write-off or reserve for inventories that are slow-moving, off-grade, damaged or otherwise not saleable.
Cost of sales for the year ended December 31, 2017 and 2016 included slow moving obsolete/damaged goods inventory charges of $-2-
and $107, respectively. Future required write-offs or reserves could have a material adverse effect on our business, financial
condition and results of operations.
We
have no manufacturing capacity and anticipate continued reliance on third-party manufacturers for the development and commercialization
of our products.
We
do not currently operate manufacturing facilities for production of our product. We lack the resources and the capabilities to
manufacture our products on a commercial scale. We do not intend to develop facilities for manufacturing our products in the foreseeable
future. We rely on third-party manufacturers to produce bulk products required to meet our sales needs. We plan to continue to
rely upon contract manufacturers to manufacture commercial quantities of our products.
Our
contract manufacturers’ failure to achieve and maintain high manufacturing standards, in accordance with the FDA’s
GMP’s as set forth in 21 CFR Part 111 and/or applicable regulatory requirements, or the incidence of manufacturing errors,
could result in consumer injury or death, product shortages, product recalls or withdrawals, delays or failures in product testing
or delivery, cost overruns or other problems that could seriously harm our business. Contract manufacturing organizations often
encounter difficulties involving production yields, quality control and quality assurance, as well as shortages of qualified personnel.
Our existing manufacturers and any future contract manufacturing organizations may not perform as agreed upon or may not remain
in the contract manufacturing business. In the event of a natural disaster, business failure, strike or other difficulty, we may
be unable to replace a third-party manufacturer in a timely manner and the production of our products would be interrupted, resulting
in delays, additional costs and reduced revenues.
Our
research and development activities may be costly and/or untimely, and there are no assurances that our research and development
activities will either be successful or completed within the anticipated timeframe, if ever at all.
Research
and development activities may be costly and/or untimely, and there are no assurances that our research and development activities
will either be successful or completed within the anticipated timeframe, if at all. The continued research and development relating
to Fortetropin
®
and our future products is important to our success. In addition, the development of new products
requires significant research, development and testing all of which require significant investment and resources. At this time,
our resources are limited and our research and development activities are dependent upon our ability to fund our activities and
to raise capital which may not be possible. We may enter into agreements with third party contract research organizations (CROs),
academic institutes or non-profit research institutes to engage in research and development for us. However, the failure of the
third-party researcher to perform under agreements entered into with us, or our failure to renew important research agreements
with a third party, may delay or curtail our research and development efforts. The research and development of new products is
costly and time consuming, and there are no assurances that our research and development activities will be successful. Even if
a new product is developed, there is no assurance that it will be commercialized or result in sales.
We
may not be able to protect our intellectual property rights which could cause our assets to lose value.
Our
business depends on and will continue to depend on our intellectual property, including our valuable brands and internally-developed
products. We believe our intellectual property rights are important to our continued success and our competitive position. However,
we may be unable or unwilling to strictly enforce our intellectual property rights, including our patents and trademarks, from
infringement due to the substantial costs of such enforcement. In addition, while there are patent applications pending for our
core product, there is no assurance that such applications will issue as patents. Our failure to enforce our intellectual property
rights could diminish the value of our brands and product offerings and harm our business and future growth prospects.
In
addition, unauthorized parties may attempt to copy or otherwise obtain and use our services, technology and other intellectual
property, and we cannot be certain that the steps we have taken to protect our proprietary rights will prevent any misappropriation
or confusion among consumers and merchants, or unauthorized use of these rights. Advancements in technology have exacerbated the
risk by making it easier to duplicate and disseminate intellectual property. In addition, as our business becomes more global
in scope, we may not be able to protect our proprietary rights in a cost-effective manner in a multitude of jurisdictions with
varying laws. If we are unable to procure, protect and enforce our intellectual property rights, we may not realize the full value
of these assets, and our business may suffer. If we need to commence litigation to enforce our intellectual property rights or
determine the validity and scope of the proprietary rights of others, such litigation may be costly and divert the attention of
our management.
We
may be subject to intellectual property rights claims, which are costly to defend, could require us to pay damages and could limit
our ability to sell some of our products.
We
may become subject to intellectual property litigation or infringement claims, which could cause us to incur significant expenses
to defend such claims, divert management’s attention or prevent us from manufacturing, importing, selling or using some
aspect of our current or future products. If we choose or are forced to settle such claims, we may be required to pay for a license
to certain rights, pay royalties on both a retrospective and prospective basis, and/or cease manufacturing importing and selling
certain infringing products. Future infringement claims against us by third parties may adversely impact our business, financial
condition and results of operations.
In
addition, our primary third-party manufacturer assigned its United States patent application for making Fortetropin
®
,
the key ingredient in our products, to us in exchange for royalty payments for each kilogram of Fortetropin
®
that
we produce, for a period of seven years from the expiration date of the supply agreement on December 31, 2016. Subsequent to the
assignment of the patent application, in August 2014, the USPTO issued to us U.S. Patent No. 8,815,320 B2 covering the proprietary
methods of manufacturing Fortetropin
®
.
Our
advertising and marketing efforts may be costly and may not achieve desired results.
We
intend to incur substantial expenses in connection with our advertising and marketing efforts for our products. Although we intend
to target our advertising and marketing efforts on current and potential customers who we believe are likely to be in the market
for the products we sell, we cannot assure you that our advertising and marketing efforts will achieve our desired results. We
will periodically adjust our advertising expenditures in an effort to optimize the return on such expenditures knowing that any
such decrease we make to optimize such return could adversely affect our sales.
We
rely on independent shipping companies to deliver the products we sell.
We
rely upon third party carriers, especially FedEx and UPS, for timely delivery of our product shipments. As a result, we are subject
to carrier disruptions and increased costs due to factors that are beyond our control, including employee strikes, inclement weather
and increased fuel costs. Any failure to deliver products to our customers in a timely and accurate manner may damage our reputation
and brand and could cause us to lose customers. We do not have a written long-term agreement with any of these third party carriers,
and we cannot be sure that these relationships will continue on terms favorable to us, if at all. If our relationship with any
of these third party carriers is terminated or impaired, or if any of these third parties are unable to deliver products for us,
we would be required to use alternatives for shipment of products to our customers. We may be unable to engage alternative carriers
on a timely basis or on terms favorable to us, if at all. Potential adverse consequences include:
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reduced
visibility of order status and package tracking;
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delays
in order processing and product delivery;
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increased
cost of delivery, resulting in reduced margins; and
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reduced
shipment quality, which may result in damaged products and customer dissatisfaction.
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Furthermore,
shipping costs represent a significant operational expense for us. Any future increases in shipping rates could have a material
adverse effect on our business, financial condition and results of operations.
We
rely on fulfillment centers to package and deliver our product to customers who place orders online
We
have an agreement with one fulfillment center to box and ship our products to customers once an order has been placed. We cannot
be sure that our relationship with the fulfillment center will continue on terms favorable to us, if at all. If our relationship
with them is terminated or impaired, or if they are unable to deliver products for us, we would be required to use alternatives
for shipment of products to our customers.
We
face significant inventory risk.
We
are exposed to significant inventory risks that may adversely affect our operating results as a result of new product launches,
rapid changes in product cycles and pricing, defective merchandise, changes in consumer demand and consumer spending patterns,
changes in consumer tastes with respect to our products, and other factors. We endeavor to accurately predict these trends and
avoid overstocking or understocking our products. Demand for products, however, can change significantly between the time inventory
is ordered and the date of sale. In addition, when we begin selling or manufacturing a new product, it may be difficult to determine
appropriate product selection, and accurately forecast demand. The acquisition of inventory may require significant lead-time
and prepayment and we may be unable to sell products in sufficient quantities or during the relevant selling seasons. Any one
of these risks may adversely affect our operating results.
Our
failure to respond appropriately to competitive challenges, changing consumer preferences and demand for new products could significantly
harm our customer relationships and product sales.
The
nutritional supplement industry is characterized by intense competition for product offerings and rapid and frequent changes in
consumer demand. Our failure to predict accurately product trends could negatively impact our products and cause our revenues
to decline.
Our
success with any particular product offering (whether new or existing) depends upon a number of factors, including our ability
to:
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deliver
quality products in a timely manner in sufficient volumes;
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accurately
anticipate customer needs and forecast accurately to our manufacturers;
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differentiate
our product offerings from those of our competitors;
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competitively
price our products; and
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develop
new products.
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Furthermore,
products often have to be promoted heavily in stores or in the media to obtain visibility and consumer acceptance. Acquiring distribution
for products is difficult and often expensive due to slotting and other promotional charges mandated by retailers. Products can
take substantial periods of time to develop consumer awareness, consumer acceptance and sales volume. Accordingly, some products
may fail to gain or maintain sufficient sales volume and as a result may have to be discontinued.
Our
industry is highly competitive, and our failure to compete effectively could adversely affect our market share, financial condition
and future growth.
The
nutritional supplement industry is highly competitive with respect to:
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price;
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shelf
space and store placement;
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brand
and product recognition;
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product
introductions; and
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raw
materials.
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Most
of our competitors are larger, more established companies and possess greater financial strength, personnel, distribution and
other resources than we have. We face competition in the supplement market from a number of large nationally known manufacturers,
private label brands and many smaller manufacturers.
Adverse
publicity or consumer perception of our products and any similar products distributed by others could harm our reputation and
adversely affect our sales.
We
believe we are highly dependent upon positive consumer perceptions of the safety and quality of our products as well as similar
products distributed by other nutritional supplement companies. Consumer perception of nutritional supplements and our products
in particular can be substantially influenced by scientific research or findings, national media attention and other publicity
about product use. Adverse publicity from these sources regarding the safety, quality or efficacy of nutritional supplements and
our products could harm our reputation and results of operations. The mere publication of news articles or reports asserting that
such products may be harmful or questioning their efficacy could have a material adverse effect on our business, financial condition
and results of operations, regardless of whether such news articles or reports are scientifically supported or whether the claimed
harmful effects would be present at the dosages recommended for such products.
Changes
in the economies of the markets in which we do business may affect consumer demand for our products.
Consumer
spending habits, including spending for our products, are affected by, among other things, prevailing economic conditions, levels
of employment, fuel prices, changes in exchange rates, salaries and wages, the availability of consumer credit, consumer confidence
and consumer perception of economic conditions. Economic slowdowns in the markets in which we do business and an uncertain economic
outlook may adversely affect consumer spending habits, which may result in lower sales of our products in future periods. A prolonged
global or regional economic downturn could have a material negative impact on our financial position, results of operation or
cash flows.
Our
insurance coverage may be insufficient to cover our legal claims or other losses that we may incur in the future.
We
maintain insurance, including property, general and product liability and other forms of insurance to protect ourselves against
potential loss exposures. In the future, insurance coverage may not be available at adequate levels or on adequate terms to cover
potential losses. If insurance coverage is inadequate or unavailable, we may face claims that exceed coverage limits or that are
not covered, which could increase our costs and adversely affect our operating results.
We
may be subject to uncertain and costly compliance with government regulations.
The
importing, manufacturing, processing, formulating, packaging, labeling, distributing, selling and advertising of our current and
future products may be subject to regulation by one or more federal or state agencies. The Food and Drug Administration, or the
FDA, has primary jurisdiction over our products pursuant to the Federal Food, Drug and Cosmetic Act, as amended by the Dietary
Supplement and Health Education Act, or the FDCA, and regulations promulgated thereunder. The FDCA provides the regulatory framework
for the safety and labeling of dietary supplements, foods and medical foods. In particular, the FDA regulates the safety, manufacturing,
labeling and distribution of dietary supplements. In addition, the Animal Plant Health and Inspection Service, or APHIS, regulates
the importation of our primary product from Germany. The Federal Trade Commission, or the FTC, and the FDA share jurisdiction
over the promotion and advertising of dietary supplements. Pursuant to a memorandum of understanding between the two agencies,
the FDA has primary jurisdiction over claims that appear on product labels and labeling and the FTC has primary jurisdiction over
product advertising.
Compliance
with applicable federal, state, and local laws and regulations is a critical part of our business. We endeavor to comply with
all applicable laws and regulations. However, as with any regulated industry, the laws and regulations are subject to interpretation
and there can be no assurances that a government agency would necessarily agree with our interpretation of the governing laws
and regulations. Moreover, we are unable to predict the nature of such future laws, regulations, interpretations or applications,
nor can we predict what effect additional governmental regulations or administrative orders, when and if promulgated, would have
on our business in the future. These regulations could, however, require the reformulation of our products to meet new standards,
market withdrawal or discontinuation of certain products not able to be reformulated. The risk of a product recall exists within
the industry although we endeavor to minimize the risk of recalls by distributing products that are not adulterated or misbranded.
However, the decision to initiate a recall is often made for business reasons in order to avoid confrontation with the FDA.
Our
products are required to be prepared in compliance with cGMPs and 21 CFR Part 111 (also known as the FDA’s “Dietary
Supplement Rule”). Fortetropin
®
, the main ingredient in our products, is also required to be imported into
the United States in conformance with APHIS’s requirements for egg products. In the event it is determined that we have
not complied with the foregoing requirements, we may be required to initiate a product recall and/or be subject to financial or
other penalties. We are continuously monitoring and reviewing our processes to ensure compliance with APHIS and limit the likelihood
of potential recalls.
Other
statutory obligations include reporting all serious adverse events on a Medwatch Form 3500A. To date, we have not filed a Medwatch
Form 3500A with the FDA nor have we been placed on notice regarding any serious adverse events related to any of our products.
Since eggs are considered a major food allergen under the Food Allergen Labeling and Consumer Protection Act of 2004, the labeling
of all our products must note that they contain an egg product.
Advertising
of dietary supplement products is subject to regulation by the FTC under the Federal Trade Commission Act, or FTCA, which prohibits
unfair methods of competition and unfair or deceptive trade acts or practices in or affecting commerce. The FTCA provides that
the dissemination of any false advertising pertaining to foods, including dietary supplements, is an unfair or deceptive act or
practice. Under the FTC’s substantiation doctrine, an advertiser is required to have a reasonable basis for all objective
product claims before the claims are made. All advertising is required to be truthful and not misleading. All testimonials are
required to be typical of the results the consumer may expect when using the product as directed. Accordingly, we are required
to have adequate substantiation of all material advertising claims made for our products. Failure to adequately substantiate claims
may be considered either deceptive or unfair practices.
We
cannot predict what effect additional domestic or international governmental legislation, regulations, or administrative orders,
when and if promulgated, would have on our business in the future. New legislation or regulations may require the reformulation
of certain products to meet new standards, require the recall or discontinuance of certain products not capable of reformulation,
impose additional record keeping or require expanded documentation of the properties of certain products, expanded or different
labeling or scientific substantiation.
RISKS
RELATED TO OUR COMMON STOCK
Trading
in our common stock over the last 12 months has fluctuated, so investors may not be able to sell as many of their shares as they
want at prevailing prices.
Our
common stock is listed on the Nasdaq Capital Market. There has been a fluctuation in trading of our shares over the last 12 months,
but it still may be difficult for investors to sell such shares in the public market at any given time.
Our
common stock may be delisted from the Nasdaq Capital Market if we cannot satisfy its continued listing requirements.
Among
the conditions required for continued listing on the Nasdaq Capital Market is that we maintain at least $2.5 million in stockholders’
equity. There can be no assurance that our stockholders’ equity will remain above the $2.5 million minimum. If we fail to
timely comply with the stockholders’ equity requirement, our common stock may be delisted from the Nasdaq Capital Market.
In addition, even if we demonstrate compliance with the stockholders’ equity requirement, we will need to continue to meet
other objective and subjective listing requirements to continue to be listed on the Nasdaq Capital Market. Delisting from the
Nasdaq Capital Market could make trading our common stock more difficult for investors, potentially leading to declines in our
share price and liquidity. Without a Nasdaq Capital Market listing, stockholders may have a difficult time getting a quote for
the sale or purchase of our common stock, the sale or purchase of our common stock would likely be made more difficult and the
trading volume and liquidity of our stock could decline. Delisting from the Nasdaq Capital Market could also result in negative
publicity and could also make it more difficult for us to raise additional capital. The absence of such a listing may adversely
affect the acceptance of our common stock as currency or the value accorded by other parties. Further, if we are delisted, we
would be required to incur additional costs under state blue sky laws in connection with any sale of our securities. These requirements
could severely limit the market liquidity of our common stock and the ability of our stockholders to sell our common stock in
the secondary market. If our common stock is delisted from the Nasdaq Capital Market, our common stock may be eligible to trade
on an over-the-counter quotation system, such as the OTCQB market, where an investor may find it more difficult to sell our stock
or obtain accurate quotations as to the market value of our common stock. We cannot assure you that our common stock, if delisted
from the Nasdaq Capital Market, will be listed on another national securities exchange or quoted on an over-the-counter quotation
system.
If
the Nasdaq Capital Market delists our shares of common stock from trading on its exchange and we are not able to list our securities
on another national securities exchange, we expect our securities could be quoted on an over-the-counter market. If this were
to occur, we could face significant material adverse consequences, including:
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a
limited availability of market quotations for our securities;
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reduced
liquidity for our shares;
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a
determination that our common stock is a “penny stock” which will require brokers trading in our common stock to
adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for
our shares;
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a
limited amount of news and analyst coverage; and
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a
decreased ability to issue additional securities or obtain additional financing in the future.
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An
active and visible trading market for our common stock may not develop.
We
cannot predict whether an active market for our common stock will develop in the future. In the absence of an active trading market:
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investors
may have difficulty buying and selling our common stock or obtaining market quotations;
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market
visibility for our common stock may be limited; and
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a
lack of visibility for our common stock may have a depressive effect on the market price for our common stock.
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The
trading price of our common stock is expected to be subject to significant fluctuations in response to variations in quarterly
operating results, changes in analysts’ earnings estimates, announcements of innovations by us or our competitors, general
conditions in the industry in which we operate and other factors. These fluctuations, as well as general economic and market conditions,
may have a material or adverse effect on the market price of our common stock.
The
market price for our stock may be volatile.
The
market price for our stock may be volatile and subject to wide fluctuations in response to factors including the following:
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actual
or anticipated fluctuations in our quarterly operating results;
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changes
in financial estimates by securities research analysts;
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conditions
in nutritional supplement markets;
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changes
in the economic performance or market valuations of other nutritional supplement companies;
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announcements
by us or our competitors of new products, acquisitions, strategic partnerships, joint
ventures or capital commitments;
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addition
or departure of key personnel;
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intellectual
property prosecution or other litigation; and
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general
economic or political conditions.
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In
addition, the securities market has from time to time experienced significant price and volume fluctuations that are not related
to the operating performance of particular companies. These market fluctuations may also materially and adversely affect the market
price of our stock.
Our
stockholders may experience significant dilution if future equity offerings are used to fund operations or acquire complementary
businesses or as a result of the issuance of a substantial number of shares of common stock upon the exercise of outstanding options
and warrants.
If
our future operations or acquisitions are financed through the issuance of equity securities, our stockholders could experience
significant dilution. In addition, securities issued in connection with future financing activities or potential acquisitions
may have rights and preferences senior to the rights and preferences of our common stock. We have also reserved 850,000 shares
of our common stock under an equity incentive plan for our directors, officers, employees, consultants and advisors and granted
options to purchase shares of our common stock under the plan. The issuance of shares of our common stock upon the exercise of
these options as well as upon the exercise of outstanding warrants to purchase up to 821,202 shares of our common stock, which
includes a warrant to purchase 375,000 shares of common stock previously issued to RENS Technology Inc., may result in significant
dilution to our stockholders.
Mr.
Ren can exert significant influence over us and make decisions that are not in the best interests of all stockholders.
Mr.
Ren and his affiliates currently beneficially own approximately 25% of our outstanding shares of common stock. As a result, he
is able to assert significant influence over all matters requiring stockholder approval, including the election and removal of
directors and any change in control. In particular, this concentration of ownership of our outstanding shares of common stock
could have the effect of delaying or preventing a change in control, or otherwise discouraging or preventing a potential acquirer
from attempting to obtain control. This, in turn, could have a negative effect on the market price of our common stock. It could
also prevent our stockholders from realizing a premium over the market prices for their shares of common stock. In addition, we
are currently involved in litigation with Mr. Ren and RENS Technology Inc. See “Business – Legal Proceedings”
for additional information regarding the litigation. Moreover, the interests of the owners of this concentration of ownership
may not always coincide with our interests or the interests of other stockholders and, accordingly, could cause us to enter into
transactions or agreements that we would not otherwise consider.
Compliance
with changing corporate governance regulations and public disclosure, and our management’s inexperience with such regulations,
will result in additional expenses and creates a risk of non-compliance.
Our
reporting obligations as a public company will place a significant strain on our management, operational and financial resources
and systems for the foreseeable future. Changing laws, regulations and standards relating to corporate governance and public disclosure,
including the Sarbanes-Oxley Act of 2002 and related SEC regulations, have created uncertainty for public companies and significantly
increased the costs and risks associated with accessing the public markets and public reporting. Our management team will need
to invest significant time and financial resources to comply with both existing and evolving standards for public companies, which
will lead to increased general and administrative expenses and a diversion of management time and attention from revenue generating
activities to compliance activities.
We
do not foresee paying cash dividends in the foreseeable future and, as a result, our investors’ sole source of gain, if
any, will depend on capital appreciation, if any.
We
do not plan to declare or pay any cash dividends on our shares of common stock in the foreseeable future and currently intend
to retain any future earnings for funding growth. As a result, investors should not rely on an investment in our securities if
they require the investment to produce dividend income. Capital appreciation, if any, of our shares may be investors’ sole
source of gain for the foreseeable future. Moreover, investors may not be able to resell their common stock at or above the price
they paid for them.
Provisions
in our charter documents, the shareholder rights plan we have adopted, and under Nevada law could discourage a takeover that stockholders
may consider favorable.
Our
articles of incorporation provides for the authorization to issue up to 500,000 shares of blank check preferred stock with designations,
rights and preferences as may be determined from time to time by our board of directors. Our board of directors is empowered,
without stockholder approval, to issue a series of preferred stock with dividend, liquidation, conversion, voting or other rights
which could dilute the interest of, or impair the voting power of, our common stockholders. The issuance of a series of preferred
stock could be used as a method of discouraging, delaying or preventing a change in control. For example, it would be possible
for our board of directors to issue preferred stock with voting or other rights or preferences that could impede the success of
any attempt to change control of our company. In addition, we have a classified board of directors that consists of three groups,
which may increase the length of time necessary for an acquirer to change the composition of a majority of directors to gain control
of our board of directors.
We
have also adopted a shareholder rights plan that could make it more difficult for a third party to acquire, or could discourage
a third party from acquiring, us or a large block of our common stock. A third party that acquires 10% or more of our common stock
could suffer substantial dilution of its ownership interest under the terms of the shareholder rights plan through the issuance
of our shares to all stockholders other than the acquiring person. These and other provisions in our articles of incorporation
and bylaws could make it more difficult for stockholders or potential acquirers to obtain control of our board of directors or
initiate actions that are opposed by our then-current board of directors, including a merger, tender offer, or proxy contest involving
our company. Any delay or prevention of a change of control transaction or changes in our board of directors could cause the market
price of our common stock to decline.
Provisions
of Nevada corporate law limit the personal liability of corporate directors and officers and require indemnification under certain
circumstances.
Section
78.138(7) of the Nevada Revised Statutes provides that, subject to certain very limited statutory exceptions or unless the articles
of incorporation provide for greater individual liability, a director or officer of a Nevada corporation is not individually liable
to the corporation or its stockholders for any damages as a result of any act or failure to act in his or her capacity as a director
or officer, unless it is proven that the act or failure to act constituted a breach of his or her fiduciary duties as a director
or officer and such breach involved intentional misconduct, fraud or a knowing violation of law. We have not included in our articles
of incorporation any provision intended to provide for greater liability as contemplated by this statutory provision.
In
addition, Section 78.7502(3) of the Nevada Revised Statutes provides that to the extent a director or officer of a Nevada corporation
has been successful on the merits or otherwise in the defense of certain actions, suits or proceedings (which may include certain
stockholder derivative actions), the corporation shall indemnify such director or officer against expenses (including attorneys’
fees) actually and reasonably incurred by such director or officer in connection therewith.
If
securities or industry analysts do not publish research or reports about our business, or if they change their recommendations
regarding our stock adversely, our stock price and trading volume could decline.
The
trading market for our common stock will be influenced by the research and reports that industry or securities analysts publish
about us or our business. We do not currently have and may never obtain significant research coverage by industry or financial
analysts. If few analysts commence coverage of us, the trading price of our stock would likely decrease. Even if we do obtain
significant analyst coverage, if one or more of the analysts who cover us downgrade our stock, our stock price would likely decline.
If one or more of these analysts cease coverage of us or fail to regularly publish reports on us, we could lose visibility in
the financial markets, which in turn could cause our stock price or trading volume to decline.
We
have identified a material weakness in our internal control over financial reporting which could, if not remediated, result in
material misstatements in our financial statements.
Our
management has identified a material weakness in our internal controls over financial reporting. A material weakness is defined
as a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable
possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a
timely basis. The material weakness that we identified was the lack of segregation of duties within our accounting and finance
group as a result of our limited financial resources. We are remediating this weakness, primarily through supplementing our accounting
and finance staff with an outside financial expert to review our financial statements and periodic reports. If our remedial measures
are insufficient to address the material weakness, or if additional material weaknesses or significant deficiencies in our internal
control are discovered or occur in the future, our financial statements may contain material misstatements and we could be required
to restate our financial results, which could lead to substantial additional costs for accounting and legal fees and shareholder
litigation.
RISKS
RELATED TO OUR FUTURE PRODUCTS
The
research and development of pharmaceutical products, which is separate from nutritional supplements, entails special considerations
and risks. If we are successful in developing pharmaceutical products for muscular disorders, we will be subject to, and possibly
adversely affected by, the following risks:
Our
failure to obtain costly government approvals, including required FDA approvals, or to comply with ongoing governmental regulations
relating to our technologies and proposed products and formulations could delay or limit introduction of our proposed formulations
and products and result in failure to achieve revenues or maintain our ongoing business.
Our
research and development activities for our products and product candidates are currently at an early development stage and are
subject to extensive regulation for safety, efficacy and quality by numerous government authorities in the United States and abroad.
Before receiving FDA regulatory clearance to market our future proposed formulations and products, we will have to demonstrate
that our formulations and products are safe and effective in the patient population and for the indicated diseases that are to
be treated. Clinical trials, manufacturing and marketing of drugs are subject to the rigorous testing and approval process of
the FDA and equivalent foreign regulatory authorities such as the European Medicines Agency (EMA). The Federal Food, Drug and
Cosmetic Act and other federal, state and foreign statutes and regulations govern and influence the testing, manufacturing, labeling,
advertising, distribution and promotion of drugs and medical devices. As a result, regulatory approvals can take a number of years
or longer to accomplish and require the expenditure of substantial financial, managerial and other resources.
Conducting
and completing the clinical trials necessary for FDA approval is costly and subject to intense regulatory scrutiny as well as
the risk of failing to meet the primary endpoint of such trials. We will not be able to commercialize and sell our future products
and formulations without successfully completing such trials.
In
order to conduct clinical trials that are necessary to obtain approval by the FDA to market a formulation or product, it is necessary
to receive clearance from the FDA to conduct such clinical trials. The FDA can halt clinical trials at any time for safety reasons
or because we or our clinical investigators did not follow the FDA’s requirements for conducting clinical trials. If we
are unable to receive clearance to conduct clinical trials or the trials are permanently halted by the FDA, we would not be able
to achieve any revenue from such product as it is illegal to sell any drug or medical device for human consumption or use without
FDA approval.
Data
obtained from clinical trials are susceptible to varying interpretations, which could delay, limit or prevent regulatory clearances.
Data
we may obtain in the future, from non-clinical studies and clinical trials do not necessarily predict the results that will be
obtained from later-stage non-clinical studies and clinical trials. Moreover, non-clinical and clinical data are susceptible to
multiple and varying interpretations, which could delay, limit or prevent regulatory approval. A number of companies in the pharmaceutical
industry have suffered significant setbacks in advanced clinical trials, even after promising results in earlier trials. The failure
to adequately demonstrate the safety and effectiveness of a proposed formulation or product under development could delay or prevent
regulatory clearance of the product candidate, resulting in delays to commercialization, and could materially harm our business.
In addition, our clinical trials may not demonstrate sufficient levels of safety and efficacy necessary to obtain the requisite
regulatory approvals for our drugs, and thus our proposed drugs may not be approved for marketing. Finally, if any of our clinical
trials do not meet their primary endpoints, we would need to repeat such clinical trials in order to progress the development
of the investigational drug candidate. These additional trials would be costly and divert resources from other projects.
Competitors
may develop competing technologies or products which outperform or supplant our technologies or products.
Drug
companies and/or other technology companies may in the future seek to develop and market pharmaceutical products which may compete
with our future technologies and products. Competitors may in the future develop similar or different technologies or products
which may become more accepted by the marketplace or which may supplant our technology entirely. In addition, many of our future
competitors may be significantly larger and better financed than we are, thus giving them a significant advantage over us.
We
may be unable to respond to competitive forces presently in the marketplace (including competition from larger companies), which
would severely impact our business. Moreover, should competing or dominating technologies or products come into existence and
the owners thereof patent the applicable technological advances, we could also be required to license such technologies in order
to continue to manufacture, market and sell our products. We may be unable to secure such licenses on commercially acceptable
terms, or at all, and our resulting inability to manufacture, market and sell the affected products could have a material adverse
effect on us.
The
market for our product candidates is rapidly changing and competitive, and new drug delivery mechanisms, drug delivery technologies,
new drugs and new treatments which may be developed by others could impair our ability to maintain and grow our business and remain
competitive.
Even
if successfully developed, our product candidates may not gain market acceptance among physicians, patients and healthcare payers,
which may not utilize our products. If our product candidates do not achieve market acceptance, our business and financial condition
will be materially adversely affected. The pharmaceutical industry is subject to rapid and substantial technological change. Developments
by others may render our technologies and our product candidates noncompetitive or obsolete, or we may be unable to keep pace
with technological developments or other market factors. Technological competition from pharmaceutical and biotechnology companies,
universities, government entities and others now existing or diversifying into the field is intense and is expected to increase.
Many of these entities have significantly greater research and development capabilities, human resources and budgets than we do,
as well as substantially more marketing, manufacturing, financial and managerial resources. These entities represent significant
competition for us. Acquisitions of, or investments in, competing pharmaceutical or biotechnology companies by large corporations
could increase such competitors’ financial, marketing, manufacturing and other resources.
The
market for our future products is rapidly changing and competitive, and new drug delivery mechanisms, drug delivery technologies,
new drugs and new treatments which may be developed by others could impair our ability to maintain and grow our business and remain
competitive.
Even
if successfully developed, our future products may not gain market acceptance among physicians, patients and healthcare payers,
which may not utilize our products. If our future products do not gain market acceptance, our business and financial condition
will be materially adversely affected. The pharmaceutical industry is subject to rapid and substantial technological change. Developments
by others may render our technologies and our product candidates noncompetitive or obsolete, or we may be unable to keep pace
with technological developments or other market factors. Technological competition from pharmaceutical and biotechnology companies,
universities, governmental entities and other entities now existing or diversifying into the field is intense and is expected
to increase. Many of these entities have significantly greater research and development capabilities, human resources and budgets
than we do, as well as substantially more marketing, manufacturing, financial and managerial resources. These entities represent
significant competition for us. Acquisitions of, or investments in, competing pharmaceutical or biotechnology companies by large
corporations could increase such competitors’ financial, marketing, manufacturing and other resources.
USE
OF PROCEEDS
Except
as otherwise disclosed in the applicable prospectus supplement, we intend to use the net proceeds from the sales of securities
hereunder for research and development, including conducting clinical and basic research, expanding our commercial operations,
including sales, marketing and distribution capabilities, to meet our on-going working capital needs and general corporate purposes.
As of the date of this prospectus, we cannot specify with certainty all of the particular uses for the net proceeds to us from
the sale of the securities offered by us hereunder and the applicable prospectus supplement. Accordingly, our management will
have broad discretion in the timing and application of these proceeds. Pending application of the net proceeds, we intend to temporarily
invest the proceeds in short-term, interest-bearing instruments.
PLAN
OF DISTRIBUTION
We
may sell the securities from time to time to or through underwriters or dealers, through agents, or directly to one or more purchasers.
A distribution of the securities offered by this prospectus may also be effected through the issuance of derivative securities,
including without limitation, preferred stock, warrants, and rights. In addition, the manner in which we may sell some or all
of the securities covered by this prospectus includes, without limitation, through:
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a
block trade in which a broker-dealer will attempt to sell as agent, but may position or resell a portion of the block, as
principal, in order to facilitate the transaction;
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purchases
by a broker-dealer, as principal, and resale by the broker-dealer for its account; or
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ordinary
brokerage transactions and transactions in which a broker solicits purchasers.
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A
prospectus supplement or supplements with respect to each series of securities will describe the terms of the offering, including,
to the extent applicable:
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the
terms of the offering;
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the
name or names of the underwriters or agents and the amounts of securities underwritten or purchased by each of them, if any;
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the
public offering price or purchase price of the securities or other consideration thereof, and the proceeds to be received
by us from the sale;
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any
delayed delivery requirements;
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any
over-allotment options under which underwriters may purchase additional securities from us;
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any
underwriting discounts or agency fees and other items constituting underwriters’ or agents’ compensation;
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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 may be listed.
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The
offer and sale of the securities described in this prospectus by us, the underwriters or the third parties described above may
be effected from time to time in one or more transactions, including privately negotiated transactions, either:
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at
a fixed price or prices, which may be changed;
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in
an “at the market” offering within the meaning of Rule 415(a)(4) of the Securities Act;
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at
prices related to such prevailing market prices; or
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at
negotiated prices.
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Only
underwriters named in a prospectus supplement will be underwriters of the securities offered pursuant to such prospectus supplement.
Underwriters
and Agents; Direct Sales
If
underwriters are used in a sale, they will acquire the offered securities for their own account and may resell the offered securities
from time to time in one or more transactions, including negotiated transactions, at a fixed public offering price or at varying
prices determined at the time of sale. We may offer the securities to the public through underwriting syndicates represented by
managing underwriters or by underwriters without a syndicate.
Unless
the prospectus supplement states otherwise, the obligations of the underwriters to purchase the securities will be subject to
the conditions set forth in the applicable underwriting agreement. Subject to certain conditions, the underwriters will be obligated
to purchase all of the securities offered by the prospectus supplement, other than securities covered by any over-allotment option.
Any public offering price and any discounts or concessions allowed or re-allowed or paid to dealers may change from time to time.
We may use underwriters with whom we have a material relationship. We will describe in the prospectus supplement, naming the underwriter,
the nature of any such relationship.
We
may sell securities directly or through agents we designate from time to time. We will name any agent involved in the offering
and sale of securities, and we will describe any commissions we will pay the agent in the prospectus supplement. Unless the prospectus
supplement states otherwise, our agent will act on a best-efforts basis for the period of its appointment.
Dealers
We
may sell the offered securities to dealers as principals. The dealer may then resell such securities to the public either at varying
prices to be determined by the dealer or at a fixed offering price agreed to with us at the time of resale.
Institutional
Purchasers
We
may authorize agents, dealers or underwriters to solicit certain institutional investors to purchase offered securities on a delayed
delivery basis pursuant to delayed delivery contracts providing for payment and delivery on a specified future date. The applicable
prospectus supplement or other offering materials, as the case may be, will provide the details of any such arrangement, including
the offering price and commissions payable on the solicitations.
We
will enter into such delayed contracts only with institutional purchasers that we approve. These institutions may include commercial
and savings banks, insurance companies, pension funds, investment companies and educational and charitable institutions.
Indemnification;
Other Relationships
We
may provide agents, underwriters, dealers and remarketing firms with indemnification against certain civil liabilities, including
liabilities under the Securities Act, or contribution with respect to payments that the agents or underwriters may make with respect
to these liabilities. Agents, underwriters, dealers and remarketing firms, and their affiliates, may engage in transactions with,
or perform services for, us in the ordinary course of business. This includes commercial banking and investment banking transactions.
Market-Making;
Stabilization and Other Transactions
There
is currently no market for any of the offered securities, other than our common stock, which is listed on the Nasdaq Capital Market.
If the offered securities are traded after their initial issuance, they may trade at a discount from their initial offering price,
depending upon prevailing interest rates, the market for similar securities and other factors. While it is possible that an underwriter
could inform us that it intends to make a market in the offered securities, such underwriter would not be obligated to do so,
and any such market-making could be discontinued at any time without notice. Therefore, no assurance can be given as to whether
an active trading market will develop for the offered securities. We have no current plans for listing of the preferred stock,
warrants, rights, debt securities or units on any securities exchange or quotation system; any such listing with respect to any
particular securities will be described in the applicable prospectus supplement or other offering materials, as the case may be.
Any
underwriter may engage in over-allotment, stabilizing transactions, short-covering transactions and penalty bids in accordance
with Regulation M under the Exchange Act. Over-allotment involves sales in excess of the offering size, which create a short position.
Stabilizing transactions permit bids to purchase the underlying security so long as the stabilizing bids do not exceed a specified
maximum price.
Syndicate-covering
or other short-covering transactions involve purchases of the securities, either through exercise of the over-allotment option
or in the open market after the distribution is completed, to cover short positions. Penalty bids permit the underwriters to reclaim
a selling concession from a dealer when the securities originally sold by the dealer are purchased in a stabilizing or covering
transaction to cover short positions. Those activities may cause the price of the securities to be higher than it would otherwise
be. If commenced, the underwriters may discontinue any of the activities at any time.
Any
underwriters or agents that are qualified market makers on the Nasdaq Capital Market may engage in passive market making transactions
in our common stock on the Nasdaq Capital Market in accordance with Regulation M under the Exchange Act, during the business day
prior to the pricing of the offering, before the commencement of offers or sales of our common stock. Passive market makers must
comply with applicable volume and price limitations and must be identified as passive market makers. In general, a passive market
maker must display its bid at a price not in excess of the highest independent bid for such security; if all independent bids
are lowered below the passive market maker’s bid, however, the passive market maker’s bid must then be lowered when
certain purchase limits are exceeded. Passive market making may stabilize the market price of the securities at a level above
that which might otherwise prevail in the open market and, if commenced, may be discontinued at any time.
Fees
and Commissions
If
5% or more of the net proceeds of any offering of securities made under this prospectus will be received by a member of the Financial
Industry Regulatory Authority, or “FINRA,” participating in the offering or affiliates or associated persons of such
FINRA member, the offering will be conducted in accordance with FINRA Rule 5121.
DESCRIPTION
OF SECURITIES WE MAY OFFER
General
This
prospectus describes the general terms of our capital stock. The following description is not complete and may not contain all
the information you should consider before investing in our capital stock. For a more detailed description of these securities,
you should read the applicable provisions of Nevada law and our articles of incorporation, as amended, and our bylaws. When we
offer to sell a particular series of these securities, we will describe the specific terms of the series in a supplement to this
prospectus.
Accordingly,
for a description of the terms of any series of securities, you must refer to both the prospectus supplement relating to that
series and the description of the securities described in this prospectus. To the extent the information contained in the prospectus
supplement differs from this summary description, you should rely on the information in the prospectus supplement.
Our
authorized capital stock consists of 12,000,000 shares of common stock, par value $0.001 per share, and 500,000 authorized undesignated
shares of preferred stock, par value $0.001 per share.
We,
directly or through agents, dealers or underwriters designated from time to time, may offer, issue and sell, together or separately,
up to $75 million in the aggregate of:
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common
stock;
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preferred
stock;
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secured
or unsecured debt securities consisting of notes, debentures or other evidences of indebtedness which may be senior debt securities,
senior subordinated debt securities or subordinated debt securities, each of which may be convertible into equity securities;
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warrants
to purchase our securities;
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rights
to purchase our securities; or
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units
comprised of, or other combinations of, the foregoing securities.
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We
may issue the debt securities as exchangeable for or convertible into shares of common stock, preferred stock or other securities.
The preferred stock may also be exchangeable for and/or convertible into shares of common stock, another series of preferred stock
or other securities. When a particular series of securities is offered, a supplement to this prospectus will be delivered with
this prospectus, which will set forth the terms of the offering and sale of the offered securities.
Common
Stock
As of May 9, 2018, there were 7,473,723
shares of common stock issued and outstanding and 137 holders of record of our common stock. Further, there were outstanding,
Series B warrants to purchase 157,846 shares of common stock, Series C warrants to purchase 145,399 shares of common stock, Series
E warrants to purchase 142,957 shares of common stock and a warrant issued to RENS Technology Inc. to purchase 375,000 shares
of common stock.
Voting.
Holders of common stock are entitled to one vote for each share held on all matters submitted to a vote of the stockholders,
and do not have cumulative voting rights.
Dividends.
Subject to preferences that may be applicable to any then outstanding preferred stock, and further subject to any contractual
limitations on the declaration, setting aside or payment of dividends, holders of common stock are entitled to receive ratably
such dividends, if any, as may be declared from time to time by our board of directors out of funds legally available for dividend
payments.
Liquidation
.
In the event of any liquidation, dissolution or winding up of our affairs, holders of common stock will be entitled to share ratably
in our assets that are remaining after payment or provision for payment of all of our debts and other liabilities and the satisfaction
of any liquidation preferences that may be granted to the holders of any then outstanding shares of preferred stock.
Rights
and Preferences
. The common stock has no preemptive, conversion or other subscription rights, and there are no redemption
or sinking fund provisions applicable to the common stock. The rights, preferences and privileges of the holders of common stock
are subject to, and may be adversely affected by, the rights of the holders of shares of any series of preferred stock, which
we may designate and issue in the future.
Our
common stock is admitted for trading on the Nasdaq Capital Market under the symbol “MYOS.”
The
transfer agent and registrar for our common stock is Island Stock Transfer.
Preferred
Stock
Our board of directors has the authority
to issue up to an aggregate of 500,000 shares of preferred stock in one or more series and to fix the voting powers, designations,
preferences and rights, and qualifications, limitations or restrictions thereof, of each such series without any further vote
or action by the stockholders. As of May 9, 2018, there were no shares of preferred stock outstanding.
We
will fix the rights, preferences, privileges and restrictions of the preferred stock of each series in the certificate of designation
relating to that series. We will file as an exhibit to the registration statement of which this prospectus is a part, or will
incorporate by reference from a Current Report on Form 8-K that we file with the SEC, the form of any certificate of designation
that describes the terms of the series of preferred stock we are offering before the issuance of the related series of preferred
stock. This description will include any or all of the following, as required:
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the
title and stated value;
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the
number of shares we are offering;
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the
liquidation preference per share;
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the
purchase price;
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the
dividend rate, period and payment date and method of calculation for dividends;
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whether
dividends will be cumulative or non-cumulative and, if cumulative, the date from which dividends will accumulate;
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any
contractual limitations on our ability to declare, set aside or pay any dividends;
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the
procedures for any auction and remarketing, if any;
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the
provisions for a sinking fund, if any;
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the
provisions for redemption or repurchase, if applicable, and any restrictions on our ability to exercise those redemption and
repurchase rights;
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any
listing of the preferred stock on any securities exchange or market;
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whether
the preferred stock will be convertible into our common stock, and, if applicable, the conversion price, or how it will be
calculated, and the conversion period;
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whether
the preferred stock will be exchangeable into debt securities, and, if applicable, the exchange price, or how it will be calculated,
and the exchange period;
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voting
rights, if any, of the preferred stock;
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preemptive
rights, if any;
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restrictions
on transfer, sale or other assignment, if any;
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whether
interests in the preferred stock will be represented by depositary shares;
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a
discussion of any material or special United States federal income tax considerations applicable to the preferred stock;
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the
relative ranking and preferences of the preferred stock as to dividend rights and rights if we liquidate, dissolve or wind
up our affairs;
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any
limitations on issuance of any class or series of preferred stock ranking senior to or on a parity with the series of preferred
stock as to dividend rights and rights if we liquidate, dissolve or wind up our affairs; and
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any
other specific terms, preferences, rights or limitations of, or restrictions on, the preferred stock.
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If
we issue shares of preferred stock under this prospectus, after receipt of payment therefor, the shares will be fully paid and
non-assessable.
Our
board of directors may authorize the issuance of preferred stock with voting or conversion rights that could adversely affect
the voting power or other rights of the holders of our common stock. Preferred stock could be issued quickly with terms designed
to delay or prevent a change in control of our company or make removal of management more difficult. Additionally, the issuance
of preferred stock could have the effect of decreasing the market price of our common stock.
Debt
Securities
As
used in this prospectus, the term “debt securities” means the debentures, notes, bonds and other evidences of indebtedness
that we may issue from time to time. The debt securities will either be senior debt securities, senior subordinated debt or subordinated
debt securities. We may also issue convertible debt securities. Debt securities may be issued under an indenture (which we refer
to herein as an Indenture), which are contracts entered into between us and a trustee to be named therein. A form of the Indenture
has been filed as an exhibit to the registration statement of which this prospectus forms a part. We may issue debt securities
and incur additional indebtedness other than through the offering of debt securities pursuant to this prospectus. It is likely
that convertible debt securities will not be issued under an Indenture.
In
the event that any series of debt securities will be subordinated to other indebtedness that we have outstanding or may incur,
the terms of the subordination will be set forth in the prospectus supplement relating to the subordinated debt securities.
We
may issue debt securities from time to time in one or more series, in each case with the same or various maturities, at par or
at a discount. Unless indicated in a prospectus supplement, we may issue additional debt securities of a particular series without
the consent of the holders of the debt securities of such series outstanding at the time of the issuance. Any such additional
debt securities, together with all other outstanding debt securities of that series, will constitute a single series of debt securities
under the applicable Indenture and will be equal in ranking.
Should
an Indenture relate to unsecured indebtedness, in the event of a bankruptcy or other liquidation event involving a distribution
of assets to satisfy our outstanding indebtedness or an event of default under a loan agreement relating to secured indebtedness
of our company or its subsidiaries, the holders of such secured indebtedness, if any, would be entitled to receive payment of
principal and interest prior to payments on the unsecured indebtedness issued under an Indenture.
Each
prospectus supplement will describe the terms relating to the specific series of debt securities. These terms will include some
or all of the following:
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the
title of debt securities and whether the debt securities are senior or subordinated;
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any
limit on the aggregate principal amount of debt securities of such series;
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the
percentage of the principal amount at which the debt securities of any series will be issued;
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the
ability to issue additional debt securities of the same series;
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the
purchase price for the debt securities and the denominations of the debt securities;
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the
specific designation of the series of debt securities being offered;
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the
maturity date or dates of the debt securities and the date or dates upon which the debt securities are payable and the rate
or rates at which the debt securities of the series shall bear interest, if any, which may be fixed or variable, or the method
by which such rate shall be determined;
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the
basis for calculating interest;
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the
date or dates from which any interest will accrue or the method by which such date or dates will be determined;
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the
duration of any deferral period, including the period during which interest payment periods may be extended;
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whether
the amount of payments of principal of (and premium, if any) or interest on the debt securities may be determined with reference
to any index, formula or other method, such as one or more currencies, commodities, equity indices or other indices, and the
manner of determining the amount of such payments;
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the
dates on which we will pay interest on the debt securities and the regular record date for determining who is entitled to
the interest payable on any interest payment date;
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the
place or places where the principal of (and premium, if any) and interest on the debt securities will be payable, where any
securities may be surrendered for registration of transfer, exchange or conversion, as applicable, and notices and demands
may be delivered to or upon us pursuant to the applicable Indenture;
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the
rate or rates of amortization of the debt securities;
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any
terms for the attachment to the debt securities of warrants, options or other rights to purchase or sell our securities;
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if
the debt securities will be secured by any collateral and, if so, a general description of the collateral and the terms and
provisions of such collateral security, pledge or other agreements;
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if
we possess the option to do so, the periods within which and the prices at which we may redeem the debt securities, in whole
or in part, pursuant to optional redemption provisions, and the other terms and conditions of any such provisions;
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our
obligation or discretion, if any, to redeem, repay or purchase debt securities by making periodic payments to a sinking fund
or through an analogous provision or at the option of holders of the debt securities, and the period or periods within which
and the price or prices at which we will redeem, repay or purchase the debt securities, in whole or in part, pursuant to such
obligation, and the other terms and conditions of such obligation;
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the
terms and conditions, if any, regarding the option or mandatory conversion or exchange of debt securities;
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the
period or periods within which, the price or prices at which and the terms and conditions upon which any debt securities of
the series may be redeemed, in whole or in part at our option and, if other than by a board resolution, the manner in which
any election by us to redeem the debt securities shall be evidenced;
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any
restriction or condition on the transferability of the debt securities of a particular series;
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the
portion, or methods of determining the portion, of the principal amount of the debt securities which we must pay upon the
acceleration of the maturity of the debt securities in connection with any event of default;
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the
currency or currencies in which the debt securities will be denominated and in which principal, any premium and any interest
will or may be payable or a description of any units based on or relating to a currency or currencies in which the debt securities
will be denominated;
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provisions,
if any, granting special rights to holders of the debt securities upon the occurrence of specified events;
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any
deletions from, modifications of or additions to the events of default or our covenants with respect to the applicable series
of debt securities, and whether or not such events of default or covenants are consistent with those contained in the applicable
Indenture;
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any
limitation on our ability to incur debt, redeem stock, sell our assets or other restrictions;
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the
application, if any, of the terms of the applicable Indenture relating to defeasance and covenant defeasance (which terms
are described below) to the debt securities;
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what
subordination provisions will apply to the debt securities;
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the
terms, if any, upon which the holders may convert or exchange the debt securities into or for our securities or property;
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whether
we are issuing the debt securities in whole or in part in global form;
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any
change in the right of the trustee or the requisite holders of debt securities to declare the principal amount thereof due
and payable because of an event of default;
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the
depositary for global or certificated debt securities, if any;
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any
material federal income tax consequences applicable to the debt securities, including any debt securities denominated and
made payable, as described in the prospectus supplements, in foreign currencies, or units based on or related to foreign currencies;
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any
right we may have to satisfy, discharge and defease our obligations under the debt securities, or terminate or eliminate restrictive
covenants or events of default in the Indentures, by depositing money or U.S. government obligations with the trustee of the
Indentures;
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the
names of any trustees, depositories, authenticating or paying agents, transfer agents or registrars or other agents with respect
to the debt securities;
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to
whom any interest on any debt security shall be payable, if other than the person in whose name the security is registered,
on the record date for such interest, the extent to which, or the manner in which, any interest payable on a temporary global
debt security will be paid;
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if
the principal of or any premium or interest on any debt securities is to be payable in one or more currencies or currency
units other than as stated, the currency, currencies or currency units in which it shall be paid and the periods within and
terms and conditions upon which such election is to be made and the amounts payable (or the manner in which such amount shall
be determined);
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the
portion of the principal amount of any debt securities which shall be payable upon declaration of acceleration of the maturity
of the debt securities pursuant to the applicable Indenture;
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if
the principal amount payable at the stated maturity of any debt security of the series will not be determinable as of any
one or more dates prior to the stated maturity, the amount which shall be deemed to be the principal amount of such debt securities
as of any such date for any purpose, including the principal amount thereof which shall be due and payable upon any maturity
other than the stated maturity or which shall be deemed to be outstanding as of any date prior to the stated maturity (or,
in any such case, the manner in which such amount deemed to be the principal amount shall be determined); and
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any
other specific terms of the debt securities, including any modifications to the events of default under the debt securities
and any other terms which may be required by or advisable under applicable laws or regulations.
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Unless
otherwise specified in the applicable prospectus supplement, we do not anticipate the debt securities will be listed on any securities
exchange. Holders of the debt securities may present registered debt securities for exchange or transfer in the manner described
in the applicable prospectus supplement. Except as limited by the applicable Indenture, we will provide these services without
charge, other than any tax or other governmental charge payable in connection with the exchange or transfer.
Debt
securities may bear interest at a fixed rate or a variable rate as specified in the prospectus supplement. In addition, if specified
in the prospectus supplement, we may sell debt securities bearing no interest or interest at a rate that at the time of issuance
is below the prevailing market rate, or at a discount below their stated principal amount. We will describe in the applicable
prospectus supplement any special federal income tax considerations applicable to these discounted debt securities.
We
may issue debt securities with the principal amount payable on any principal payment date, or the amount of interest payable on
any interest payment date, to be determined by referring to one or more currency exchange rates, commodity prices, equity indices
or other factors. Holders of such debt securities may receive a principal amount on any principal payment date, or interest payments
on any interest payment date, that are greater or less than the amount of principal or interest otherwise payable on such dates,
depending upon the value on such dates of applicable currency, commodity, equity index or other factors. The applicable prospectus
supplement will contain information as to how we will determine the amount of principal or interest payable on any date, as well
as the currencies, commodities, equity indices or other factors to which the amount payable on that date relates and certain additional
tax considerations.
Warrants
We
may issue warrants to purchase our securities or other rights, including rights to receive payment in cash or securities based
on the value, rate or price of one or more specified commodities, currencies, securities or indices, or any combination of the
foregoing. Warrants may be issued independently or together with any other securities and may be attached to, or separate from,
such securities. To the extent warrants that we issue are to be publicly-traded, each series of such warrants will be issued under
a separate warrant agreement to be entered into between us and a warrant agent.
We
will file as exhibits to the registration statement of which this prospectus is a part, or will incorporate by reference from
a Current Report on Form 8-K that we file with the SEC, forms of the warrant and warrant agreement, if any. The prospectus supplement
relating to any warrants that we may offer will contain the specific terms of the warrants and a description of the material provisions
of the applicable warrant agreement, if any. These terms may include the following:
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the
title of the warrants;
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●
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the
price or prices at which the warrants will be issued;
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the
designation, amount and terms of the securities or other rights for which the warrants are exercisable;
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the
designation and terms of the other securities, if any, with which the warrants are to be issued and the number of warrants
issued with each other security;
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●
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the
aggregate number of warrants;
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●
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any
provisions for adjustment of the number or amount of securities receivable upon exercise of the warrants or the exercise price
of the warrants;
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●
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the
price or prices at which the securities or other rights purchasable upon exercise of the warrants may be purchased;
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●
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if
applicable, the date on and after which the warrants and the securities or other rights purchasable upon exercise of the warrants
will be separately transferable;
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●
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a
discussion of any material U.S. federal income tax considerations applicable to the exercise of the warrants;
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●
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the
date on which the right to exercise the warrants will commence, and the date on which the right will expire;
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the
maximum or minimum number of warrants that may be exercised at any time;
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information
with respect to book-entry procedures, if any; 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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Exercise
of Warrants.
Each warrant will entitle the holder of warrants to purchase the amount of securities or other rights, at the
exercise price stated or determinable in the prospectus supplement for the warrants. Warrants may be exercised at any time up
to the close of business on the expiration date shown in the applicable prospectus supplement, unless otherwise specified in such
prospectus supplement. After the close of business on the expiration date, if applicable, unexercised warrants will become void.
Warrants may be exercised in the manner described in the applicable prospectus supplement. When the warrant holder makes the payment
and properly completes and signs the warrant certificate at the corporate trust office of the warrant agent, if any, or any other
office indicated in the prospectus supplement, we will, as soon as possible, forward the securities or other rights that the warrant
holder has purchased. If the warrant holder exercises less than all of the warrants represented by the warrant certificate, we
will issue a new warrant certificate for the remaining warrants.
Rights
We
may issue rights to purchase our securities. The rights may or may not be transferable by the persons purchasing or receiving
the rights. In connection with any rights offering, we may enter into a standby underwriting or other arrangement with one or
more underwriters or other persons pursuant to which such underwriters or other persons would purchase any offered securities
remaining unsubscribed for after such rights offering. In connection with a rights offering to holders of our capital stock a
prospectus supplement will be distributed to such holders on the record date for receiving rights in the rights offering set by
us.
We
will file as exhibits to the registration statement of which this prospectus is a part, or will incorporate by reference from
a Current Report on Form 8-K that we file with the SEC, forms of the subscription rights, standby underwriting agreement or other
agreements, if any. The prospectus supplement relating to any rights that we offer will include specific terms relating to the
offering, including, among other matters:
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the
date of determining the security holders entitled to the rights distribution;
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the
aggregate number of rights issued and the aggregate amount of securities purchasable upon exercise of the rights;
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the
exercise price;
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the
conditions to completion of the rights offering;
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the
date on which the right to exercise the rights will commence and the date on which the rights will expire; and
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any
applicable federal income tax considerations.
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Each
right would entitle the holder of the rights to purchase the principal amount of securities at the exercise price set forth in
the applicable prospectus supplement. Rights may be exercised at any time up to the close of business on the expiration date for
the rights provided in the applicable prospectus supplement. After the close of business on the expiration date, all unexercised
rights will become void.
Holders
may exercise rights as described in the applicable prospectus supplement. Upon receipt of payment and the rights certificate properly
completed and duly executed at the corporate trust office of the rights agent, if any, or any other office indicated in the prospectus
supplement, we will, as soon as practicable, forward the securities purchasable upon exercise of the rights. If less than all
of the rights issued in any rights offering are exercised, we may offer any unsubscribed securities directly to persons other
than stockholders, to or through agents, underwriters or dealers or through a combination of such methods, including pursuant
to standby underwriting arrangements, as described in the applicable prospectus supplement.
Units
We
may issue units consisting of any combination of the other types of securities offered under this prospectus in one or more series.
We may evidence each series of units by unit certificates that we may issue under a separate agreement. We may enter into unit
agreements with a unit agent. Each unit agent, if any, may be a bank or trust company that we select. We will indicate the name
and address of the unit agent, if any, in the applicable prospectus supplement relating to a particular series of units. Specific
unit agreements, if any, will contain additional important terms and provisions. We will file as an exhibit to the registration
statement of which this prospectus is a part, or will incorporate by reference from a Current Report on Form 8-K that we file
with the SEC, the form of unit and the form of each unit agreement, if any, relating to units offered under this prospectus.
If
we offer any units, certain terms of that series of units will be described in the applicable prospectus supplement, including,
without limitation, the following, as applicable
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the
title of the series of units;
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●
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identification
and description of the separate constituent securities comprising the units;
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●
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the
price or prices at which the units will be issued;
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●
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the
date, if any, on and after which the constituent securities comprising the units will be separately transferable;
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●
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a
discussion of certain United States federal income tax considerations applicable to the units; and
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●
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any
other material terms of the units and their constituent securities.
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LEGAL
MATTERS
Unless
otherwise indicated in the applicable prospectus supplement, the validity of the securities offered by this prospectus will be
passed upon for us by Ellenoff Grossman & Schole LLP, New York, New York. If legal matters in connection with offerings made
by this prospectus are passed on by counsel for the underwriters, dealers or agents, if any, that counsel will be named in the
applicable prospectus supplement.
EXPERTS
The
consolidated balance sheets of MYOS RENS Technology Inc. and Subsidiary as of December 31, 2017 and 2016, and the related consolidated
statements of operations and comprehensive loss, stockholders’ equity, and cash flows for the two years in the period ended
December 31, 2017, have been audited by WithumSmith+Brown, PC, an independent registered public accounting firm, as stated in
their report which is incorporated herein by reference. Such financial statements have been incorporated herein by reference in
reliance on the report of such firm given upon their authority as experts in accounting and auditing.
WHERE
YOU CAN FIND MORE INFORMATION
We
file annual, quarterly and special reports, proxy statements and other information with the SEC. Information filed with the SEC
by us can be inspected and copied at the Public Reference Room maintained by the SEC at 100 F Street, N.E., Washington, D.C. 20549.
You may also obtain copies of this information by mail from the Public Reference Section of the SEC at prescribed rates. Further
information on the operation of the SEC’s Public Reference Room in Washington, D.C. can be obtained 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
about issuers, such as us, who file electronically with the SEC. The address of that website is www.sec.gov.
INCORPORATION
OF CERTAIN INFORMATION BY REFERENCE
We
are “incorporating by reference” in this prospectus certain documents we file with the SEC, which means that we can
disclose important information to you by referring you to those documents. The information in the documents incorporated by reference
is considered to be part of this prospectus. Statements contained in documents that we file with the SEC and that are incorporated
by reference in this prospectus will automatically update and supersede information contained in this prospectus, including information
in previously filed documents or reports that have been incorporated by reference in this prospectus, to the extent the new information
differs from or is inconsistent with the old information. We have filed or may file the following documents with the SEC and they
are incorporated herein by reference as of their respective dates of filing.
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Our Annual Report on Form 10-K for the fiscal year ended December 31, 2017 filed with the SEC on March 27, 2018;
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Our Quarterly
Report on Form 10-Q for the quarter ended March 31, 2018 filed with the SEC on May 9, 2018;
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●
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Our Current Reports
on Form 8-K filed with the SEC on April 27, 2018 and May 9, 2018;
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●
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The
description of our common stock contained in our Form 8-A filed on July 9, 2014 and as it may be further amended from time
to time; and
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●
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The
description of our Series A preferred stock purchase rights contained in our Form 8-A filed on February 14, 2017 and as it
may be further amended from time to time.
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All documents filed by us pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of the registration statement of which this prospectus forms
a part and prior to the effectiveness of the registration statement, and all such documents filed after the date of this prospectus
and before the termination or completion of this offering of our securities shall be deemed to be incorporated by reference in
this prospectus and to be a part of it from the filing dates of such documents, except in each case for information contained
in any such filing where we indicate that such information is being furnished and is not to be considered “filed”
under the Securities Exchange Act of 1934, as amended.
Any
statement contained in a document incorporated or deemed to be incorporated by reference in this prospectus shall be deemed modified,
superseded or replaced for purposes of this prospectus to the extent that a statement contained in this prospectus, or in any
subsequently filed document that also is deemed to be incorporated by reference in this prospectus, modifies, supersedes or replaces
such statement. Any statement so modified, superseded or replaced shall not be deemed, except as so modified, superseded or replaced,
to constitute a part of this prospectus. None of the information that we disclose under Items 2.02 or 7.01 of any Current Report
on Form 8-K or any corresponding information, either furnished under Item 9.01 or included as an exhibit therein, that we may
from time to time furnish to the SEC will be incorporated by reference into, or otherwise included in, this prospectus, except
as otherwise expressly set forth in the relevant document. Subject to the foregoing, all information appearing in this prospectus
is qualified in its entirety by the information appearing in the documents incorporated by reference.
Documents
incorporated by reference are available from us without charge, excluding all exhibits unless we have specifically incorporated
by reference the exhibit in this prospectus. You may obtain documents incorporated by reference in this prospectus by requesting
them in writing or by telephone from:
MYOS
RENS Technology Inc.
45
Horsehill Road, Suite 106
Cedar
Knolls, New Jersey 07927
Attention:
Secretary
(973) 509-0444
PART
II
INFORMATION
NOT REQUIRED IN THE PROSPECTUS
Item
14. Other Expenses of Issuance and Distribution.
The
following table sets forth all expenses to be paid by the registrant. All amounts shown are estimates except for the registration
fee.
SEC registration fee
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|
$
|
9,337.50
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Printing
|
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*
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|
Legal fees and expenses
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*
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|
Accounting fees and expenses
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|
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*
|
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Trustees’ Fees and Expenses
|
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|
*
|
|
Warrant Agent Fees and Expenses
|
|
|
*
|
|
Miscellaneous
|
|
|
*
|
|
Total
|
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*
|
|
*
|
These
fees are calculated based on the securities offered and the number of issuances and accordingly cannot be estimated at this
time. The applicable prospectus supplement will set forth the estimated amount of expenses of any offering of securities.
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Item
15. Indemnification of Directors and Officers.
Charter
and Bylaws
Our
articles of incorporation, as amended, and our amended and restated bylaws provide for the indemnification of a present or former
director or officer. We will indemnify any director, officer, employee or agent who is successful on the merits or otherwise in
defense on any action or suit. Such indemnification shall include, but not necessarily be limited to, expenses, including attorney's
fees actually or reasonably incurred by him. We may indemnify such individual against all costs, expenses and liabilities incurred
in a threatened, pending or completed action, suit or proceeding brought because such individual is a director or officer. Such
individual must have conducted himself in good faith and reasonably believed that his or her conduct was in, or not opposed to,
our best interests. In a criminal action, he or she must not have had a reasonable cause to believe that such conduct was unlawful.
Nevada
Law
We
are incorporated under the laws of the State of Nevada. Section 78.7502 of the Nevada Revised Statutes provides that a Nevada
corporation may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or investigative, except an action by or in the right of the
corporation, by reason of the fact that he is or was a director, officer, employee or agent of the corporation, or is or was serving
at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise, against expenses, including attorneys’ fees, judgments, fines and amounts paid in settlement
actually and reasonably incurred by him in connection with the action, suit or proceeding if he acted in good faith and in a manner
which he reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal
action or proceeding, had no reasonable cause to believe his conduct was unlawful. The termination of any action, suit or proceeding
by judgment, order, settlement, conviction or upon a plea of nolo contendere or its equivalent, does not, of itself, create a
presumption that the person did not act in good faith and in a manner which he reasonably believed to be in or not opposed to
the best interests of the corporation, and that, with respect to any criminal action or proceeding, he had reasonable cause to
believe that his conduct was unlawful.
Section
78.7502 further provides a Nevada corporation may indemnify any person who was or is a party or is threatened to be made a party
to any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor
by reason of the fact that he is or was a director, officer, employee or agent of the corporation, or is or was serving at the
request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust
or other enterprise against expenses, including amounts paid in settlement and attorneys' fees actually and reasonably incurred
by him in connection with the defense or settlement of the action or suit if he acted in good faith and in a manner which he reasonably
believed to be in or not opposed to the best interests of the corporation. Indemnification may not be made for any claim, issue
or matter as to which such a person has been adjudged by a court of competent jurisdiction, after exhaustion of all appeals therefrom,
to be liable to the corporation or for amounts paid in settlement to the corporation, unless and only to the extent that the court
in which the action or suit was brought or other court of competent jurisdiction determines upon application that in view of all
the circumstances of the case, the person is fairly and reasonably entitled to indemnity for such expenses as the court deems
proper.
Section
78.751 of the Nevada Revised Statutes provides that discretionary indemnification under Section 78.7502 unless ordered by a court
or advanced pursuant to subsection 2 of section 78.751, may be the corporation only as authorized in the specific case upon a
determination that indemnification of the director, officer, employee or agent is proper in the circumstances. The determination
must be made by:
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By
the stockholders;
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By
the board of directors by majority vote of a quorum consisting of directors - who were not parties to the action, suit or
proceeding;
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●
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If
a majority vote of a quorum consisting of directors who were not parties to the action, suit or proceeding so orders, by independent
legal counsel in a written opinion; or
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●
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If
a quorum consisting of directors who were not parties to the action, suit or proceeding cannot be obtained, by independent
legal counsel in a written opinion.
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The
Articles of Incorporation, the Bylaws or an agreement made by the corporation may provide that the expenses of officers and directors
incurred in defending a civil or criminal action, suit or proceeding must be paid by the corporation as they are incurred and
in advance of the final disposition of the action, suit or proceeding, upon receipt of an undertaking by or on behalf of the director
or officer to repay the amount if it is ultimately determined by a court of competent jurisdiction that he is not entitled to
be indemnified by the corporation. The provisions of this subsection do not affect any rights to advancement of expenses to which
corporate personnel other than directors or officers may be entitled under any contract or otherwise by law.
The
indemnification and advancement of expenses authorized in or ordered by a court pursuant to NRS Section 78.751:
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does
not exclude any other rights to which a person seeking indemnification or advancement of expenses may be entitled under the
articles of incorporation or any bylaw, agreement, vote of stockholders or disinterested directors or otherwise, for either
an action in his official capacity or an action in another capacity while holding his office, except that indemnification,
unless ordered by a court pursuant to section 78.7502 or for the advancement of expenses made pursuant to subsection 2 of
section 78.751, may not be made to or on behalf of any director or officer if a final adjudication establishes that his acts
or omissions involved intentional misconduct, fraud or a knowing violation of the law and was material to the cause of action;
and
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●
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continues
for a person who has ceased to be a director, officer, employee or agent and inures to the benefit of the heirs, executors
and administrators of such a person.
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Other
Insofar
as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons
of our company under Nevada law or otherwise, we have been advised that the opinion of the Securities and Exchange Commission
is that such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In
the event a claim for indemnification against such liabilities (other than payment by us for expenses incurred or paid by a director,
officer or controlling person of our company in successful defense of any action, suit, or proceeding) is asserted by a director,
officer or controlling person in connection with the securities being registered, we will, unless in the opinion of its counsel
the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction, the question of whether such
indemnification by it is against public policy in the Securities Act and will be governed by the final adjudication of such issue.
Item
16. Exhibits
The
agreements included or incorporated by reference as exhibits to this registration statement contain representations and warranties
by each of the parties to the applicable agreement. These representations and warranties were made solely for the benefit of the
other parties to the applicable agreement and (i) were not intended to be treated as categorical statements of fact, but rather
as a way of allocating the risk to one of the parties if those statements prove to be inaccurate; (ii) may have been qualified
in such agreement by disclosures that were made to the other party in connection with the negotiation of the applicable agreement;
(iii) may apply contract standards of “materiality” that are different from “materiality” under the applicable
securities laws; and (iv) were made only as of the date of the applicable agreement or such other date or dates as may be specified
in the agreement.
The
undersigned registrant acknowledges that, notwithstanding the inclusion of the foregoing cautionary statements, it is responsible
for considering whether additional specific disclosures of material information regarding material contractual provisions are
required to make the statements in this registration statement not misleading.
Exhibit
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Reference
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Filing
|
Number
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|
Exhibit
Description
|
|
Form
|
|
Exhibit
|
|
Date
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|
|
|
|
|
3.1
|
|
Articles
of Incorporation
|
|
SB-2
|
|
3(a)
|
|
6/27/2007
|
3.2
|
|
Amended
and Restated Bylaws
|
|
8-K
|
|
3.1
|
|
1/11/2017
|
3.3
|
|
Certificate
of Amendment to Articles of Incorporation, dated June 8, 2010
|
|
14C
|
|
A
|
|
6/09/2010
|
3.4
|
|
Articles
of Merger, dated May 15, 2012
|
|
8-K
|
|
3.1
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|
5/21/2012
|
3.5
|
|
Certificate
of Change Pursuant to Nevada Revised Statutes 78.209, dated February 4, 2014
|
|
8-K
|
|
3.1
|
|
2/10/2014
|
3.6
|
|
Certificate
of Amendment to Articles of Incorporation, dated December 22, 2014
|
|
8-K
|
|
3.1
|
|
12/23/2014
|
3.7
|
|
Certificate
of Amendment to the Articles of Incorporation, dated March 8, 2016
|
|
8-K
|
|
3.1
|
|
3/8/2016
|
3.8
|
|
Articles
of Merger, dated March 17, 2016
|
|
8-K
|
|
3.1
|
|
3/22/2016
|
3.9
|
|
Certificate
of Designation of Series A Preferred Stock
|
|
8-K
|
|
3.1
|
|
2/14/2017
|
4.1
|
|
Form
of Series A Warrant
|
|
8-K
|
|
4.1
|
|
1/28/2014
|
4.2
|
|
Form
of Series B Warrant
|
|
8-K
|
|
4.1
|
|
1/28/2014
|
4.3
|
|
Form
of Series C Warrant
|
|
10-K
|
|
4.3
|
|
3/27/2015
|
4.4
|
|
Form
of Series E Warrant
|
|
10-K
|
|
4.5
|
|
3/27/2015
|
4.5
|
|
Form
of Warrant Exercise Agreement, dated May 18, 2015
|
|
8-K
|
|
4.1
|
|
5/19/2015
|
4.6
|
|
Form
of RENS Warrant
|
|
8-K
|
|
4.1
|
|
12/22/2015
|
4.7
|
|
Rights
Agreement dated as of February 14, 2017 between MYOS RENS Technology Inc. and Island Stock Transfer
|
|
8-K
|
|
4.1
|
|
2/14/2017
|
4.8**
|
|
Form
of Preferred Stock Certificate and Form of Certificate of Designation of Preferred Stock
|
|
|
|
|
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|
4.9**
|
|
Form
of Warrant Agreement and Form of Warrant Certificate
|
|
|
|
|
|
|
4.10**
|
|
Form
of Rights Agreement and Form Rights Certificate
|
|
|
|
|
|
|
4.11**
|
|
Form
of Unit Agreement
|
|
|
|
|
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|
4.12**
|
|
Form
of Unit
|
|
|
|
|
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|
4.13
|
|
Form
of Indenture
|
|
|
|
|
|
|
4.14**
|
|
Form
of Note
|
|
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|
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|
4.15**
|
|
Form
of Debt Securities
|
|
|
|
|
|
|
5.1
|
|
Opinion
of Ellenoff Grossman & Schole LLP
|
|
|
|
|
|
|
12.1**
|
|
Computation
of Ratio of Earnings to Fixed Charges
|
|
|
|
|
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|
23.1*
|
|
Consent of WithumSmith+Brown, PC
|
|
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23.2
|
|
Consent
of Ellenoff Grossman & Schole LLP (included in Exhibit 5.1)
|
|
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24.1
|
|
Power
of Attorney (included in Part II of this Registration Statement)
|
|
|
|
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25.1**+
|
|
Statement
of Eligibility of Trustee on Form T-1
|
|
|
|
|
|
|
*
Filed herewith.
** If applicable, to be filed by an amendment or as an exhibit to a report pursuant to Section 13(a) or Section 15(d) of the Exchange
Act and incorporated by reference.
+
To be filed pursuant to Rule 305(b)(2) of the Trust Indenture Act.
Item
17. Undertakings
(a)
The undersigned Registrant hereby undertakes:
(1)
To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:
(i)
to include any prospectus required by Section 10(a)(3) of the Securities Act of 1933;
(ii)
to reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set
forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if
the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high
end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule
424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering
price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and
(iii)
to include any material information with respect to the plan of distribution not previously disclosed in the registration statement
or any material change to such information in the registration statement;
provided
,
however
, that paragraphs (1)(i), (1)(ii) and (1)(iii) do not apply if the information required to be included in a post-effective
amendment by those paragraphs is contained in reports filed with or furnished to the Commission by the registrant pursuant to
Section 13 or 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the registration statement, or
is contained in a form of prospectus filed pursuant to Rule 424(b) that is part of the registration statement.
(2)
That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall
be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering thereof.
(3)
To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold
at the termination of the offering.
(4)
That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser:
(i)
Each prospectus filed by the registrant pursuant to Rule 424(b)(3) shall be deemed to be part of the registration statement as
of the date the filed prospectus was deemed part of and included in the registration statement; and
(ii)
Each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as part of a registration statement in reliance
on Rule 430B relating to an offering made pursuant to Rule 415(a)(1)(i), (vii), or (x) for the purpose of providing the information
required by Section 10(a) of the Securities Act of 1933 shall be deemed to be part of and included in the registration statement
as of the earlier of the date such form of prospectus is first used after effectiveness or the date of the first contract of sale
of securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and
any person that is at that date an underwriter, such date shall be deemed to be a new effective date of the registration statement
relating to the securities in the registration statement to which that prospectus relates, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof. Provided, however, that no statement made in a registration
statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by
reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with
a time of contract of sale prior to such effective date, supersede or modify any statement that was made in the registration statement
or prospectus that was part of the registration statement or made in any such document immediately prior to such effective date.
(5)
That, for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial
distribution of the securities, the undersigned registrant undertakes that in a primary offering of securities of the undersigned
registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser,
if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant
will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:
(i)
Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant
to Rule 424;
(ii)
Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred
to by the undersigned registrant;
(iii)
The portion of any other free writing prospectus relating to the offering containing material information about the undersigned
registrant or its securities provided by or on behalf of the undersigned registrant; and
(iv)
Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.
(b)
The undersigned registrant hereby undertakes that, for purposes of determining any liability of the registrant under the Securities
Act of 1933, each filing of the registrant’s annual report pursuant to Section 13(a) or Section 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to section
15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed
to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(c)
Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that
in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities
Act of 1933 and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than
the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection
with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Securities Act of 1933 and will be governed by the final adjudication of such issue.
(d)
The undersigned registrant hereby undertakes to file an application for the purpose of determining the eligibility of the trustee
to act under subsection (a) of Section 310 of the Trust Indenture Act in accordance with the rules and regulations prescribed
by the Commission under Section 305(b)(2) of the Trust Indenture Act.
SIGNATURES
Pursuant to the requirements of the
Securities Act of 1933, as amended, the Registrant certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Cedar Knolls, State of New Jersey, on May 10, 2018.
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MYOS
RENS TECHNLOGY INC.
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By:
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/s/
Joseph Mannello
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Name:
Joseph Mannello
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Title:
Chief Executive Officer
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Pursuant
to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the
capacities and on the dates indicated below.
/s/ Joseph Mannello
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Chief Executive Officer and Director
(Principal Executive Officer, Principal
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May
10, 2018
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Joseph Mannello
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Financial Officer and Principal
Accounting Officer)
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*
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Chairman of the Board
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May 10, 2018
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Dr. Robert J. Hariri
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*
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Director
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May 10, 2018
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Dr. Louis Aronne
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*
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Director
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May 10, 2018
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Christopher Pechock
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*
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Director
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May 10, 2018
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Victor Mandel
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*
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Director
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May 10, 2018
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John Nosta
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Global Chairman
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May
10, 2018
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Ren Ren
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Director
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May
10, 2018
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Bin Zhou
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*
Signed by Joseph Mannello as Attorney-in-Fact
II-6
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