As filed with the Securities and Exchange Commission on January 14, 2022
Registration No. 333-
Castle Biosciences Inc S-3ASR, filed Jan 14, 2022
Castle Biosciences Inc (CSTL)
S-3ASR
2022-01-14
View Original
Added on
October 22, 2026
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
CASTLE BIOSCIENCES, INC.
(Exact name of Registrant as specified in its charter)
Delaware | | | 77-0701774 |
(State or other jurisdiction of incorporation or organization) | | | (I.R.S. Employer Identification Number) |
505 S. Friendswood Drive, Suite 401
Friendswood, Texas 77546
(866) 788-9007
(Address, including zip code, and telephone number, including area code, of Registrant’s principal executive offices)
Derek Maetzold
President and Chief Executive Officer
Castle Biosciences, Inc.
505 S. Friendswood Drive, Suite 401
Friendswood, Texas 77546
(866) 788-9007
(Name, address, including zip code, and telephone number, including area code, of agent for service)
Copies to:
Thomas A. Coll, Esq.
Karen E. Deschaine, Esq.
Phillip S. McGill, Esq.
Cooley LLP
4401 Eastgate Mall
San Diego, CA 92121
(858) 550-6000
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, 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.
Large accelerated filer | | | ☒ | | | | | Accelerated filer | | | ☐ | |
Non-accelerated filer | | | ☐ | | | | | Smaller reporting company | | | ☒ | |
| | | | | | | Emerging Growth Company | | | ☐ |
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 the Securities Act. ☐
CALCULATION OF REGISTRATION FEE
Title of Each Class of Securities to be Registered | | | Number of Shares to be Registered(1) | | | Proposed Maximum Offering Price Per Share(2) | | | Proposed Maximum Aggregate Offering Price(2) | | | Amount of Registration Fee |
Common Stock, $0.001 par value | | | 5,034,642 | | | $37.47 | | | $188,648,036 | | | $17,488 |
(1) | Pursuant to Rule 416 under the Securities Act of 1933, as amended, the shares of common stock being registered hereunder include such indeterminate number of additional shares of common stock as may become issuable as a result of stock splits, stock dividends or similar transactions with respect to the shares being registered hereunder. |
(2) | Estimated solely for the purpose of calculating the amount of the registration fee pursuant to Rule 457(c) under the Securities Act, based upon the average of the high and low prices for the registrant’s common stock on January 13, 2022, as reported by the Nasdaq Global Market. |
PROSPECTUS
5,034,642 Shares
Common Stock
This prospectus covers the offer and resale by the selling stockholders identified in this prospectus of up to an aggregate of 5,034,642 shares of our common stock that may be issued to the selling stockholders as earnout consideration pursuant to that certain Agreement and Plan of Merger, by and among us, Space Merger Sub, Inc., Cernostics, Inc. (“Cernostics”), and Shareholder Representative Services LLC, dated October 18, 2021 (the “Merger Agreement”), contingent upon the achievement of certain commercial milestones relating to the year ended December 31, 2022 and whether we elect to pay all or a portion of the earnout consideration in shares of our common stock. Such shares have not been earned or issued as of the date of this prospectus, and may never be issued.
We are not selling any shares of common stock under this prospectus and will not receive any of the proceeds from the sale of such shares by the selling stockholders.
You should read this prospectus and any prospectus supplement, together with additional information described under the headings “Incorporation of Certain Information by Reference” and “Where You Can Find More Information,” carefully before you invest in any of our securities.
The selling stockholders may offer and sell the shares of common stock described in this prospectus at fixed prices, at prevailing market prices at the time of sale, at prices related to the prevailing market price, at varying prices determined at the time of sale or at negotiated prices. The selling stockholders may sell the shares to or through underwriters, broker-dealers or agents, who may receive compensation in the form of discounts, concessions or commissions from the selling stockholders, the purchasers of the shares, or both. We are paying the cost of registering the shares of common stock covered by this prospectus as well as various related expenses. The selling stockholders will bear all commissions and discounts, if any, attributable to the sale or disposition of the shares, or interests therein. We provide more information about how the selling stockholders may sell or otherwise dispose of their shares of common stock in the section entitled “Plan of Distribution” on page 11.
Our common stock is listed on the Nasdaq Global Market under the symbol “CSTL.” On January 13, 2022, the last reported sales price of our common stock was $36.96.
An investment in our common stock involves a high degree of risk. You should review carefully the risks and uncertainties referred to under the heading “Risk Factors” beginning on page 5 of this prospectus and under any similar headings in any amendment or supplement to this prospectus or in any filing with the Securities and Exchange Commission that is incorporated by reference herein.
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 January 14, 2022
This prospectus is part of an automatic registration statement on Form S-3 that we filed with the Securities and Exchange Commission (the “SEC”) using a “shelf” registration process as a “well-known seasoned issuer,” as defined in Rule 405 under the Securities Act of 1933, as amended (the “Securities Act”). Under this registration statement, the selling stockholders may sell from time to time in one or more offerings the common stock described in this prospectus.
We have not, and the selling stockholders have not, authorized anyone to provide you with information other than the information contained or incorporated by reference in this prospectus and any related prospectus supplement. No one is making offers to sell or seeking offers to buy these securities in any jurisdiction where the offer or sale is not permitted. You should assume that the information contained in this prospectus and any prospectus supplement is accurate only as of the date on the front of this prospectus or the prospectus supplement, as applicable, and that any information incorporated by reference in this prospectus or any prospectus supplement is accurate only as of the date given in the document incorporated by reference, regardless of the time of delivery of this prospectus, any applicable prospectus supplement or any sale of our common stock. Our business, financial condition, results of operations and prospects may have changed since that date.
All references to “this prospectus” refer to this prospectus and any applicable prospectus supplement, including the documents incorporated by reference herein and therein, unless the context otherwise requires.
References in this prospectus to “CSTL,” “Castle,” the “Company,” “we,” “us” and “our” refer to Castle Biosciences, Inc., together with its subsidiaries.
We use Castle, Castle Biosciences, the Castle logo, and other marks as trademarks in the United States and other countries. This prospectus contains references to our trademarks and service marks and to those belonging to other entities. Solely for convenience, trademarks and trade names referred to in this prospectus, including logos, artwork and other visual displays, may appear without the ® or TM symbols, but such references are not intended to indicate in any way that we will not assert, to the fullest extent under applicable law, our rights or the rights of the applicable licensor to these trademarks and trade names. We do not intend our use or display of other entities’ trade names, trademarks or service marks to imply a relationship with, or endorsement or sponsorship of us by, any other entity.
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This summary highlights information contained elsewhere in this prospectus or incorporated by reference in this prospectus. This summary does not contain all of the information you should consider before investing in our securities. Before you decide to invest in our securities, you should carefully read the entire prospectus, the applicable prospectus supplement and any related free writing prospectus, including the section titled “Risk Factors” contained in the applicable prospectus supplement and any related free writing prospectus, and under similar headings in the other documents that are incorporated by reference into this prospectus. You should also carefully read the information incorporated by reference into this prospectus, including our consolidated financial statements, and the exhibits to the registration statement of which this prospectus is a part.
Overview
We are a leading diagnostics company that provides personalized, clinically actionable information to clinicians and patients to inform treatment decisions and improve health outcomes. We believe that the traditional approach to developing a treatment plan for certain cancers using clinical and pathology factors alone is inadequate and can be improved by incorporating personalized genomic information. Our non-invasive products utilize proprietary algorithms to provide an assessment of a patient’s specific risk of metastasis or recurrence of their cancer, allowing physicians to identify patients who are likely to benefit from an escalation of care as well as those who may avoid unnecessary medical and surgical interventions. Since our inception in 2008, we have devoted substantially all of our resources to organizing and staffing our company, business planning, raising capital, discovering product candidates, conducting clinical study activities to generate evidence demonstrating the clinical validity, clinical utility, economic benefits, and patient outcomes of our products, and commercialization activities for those products. We currently market five proprietary multianalyte assays with algorithmic analysis gene expression profile (“GEP”) products and a precision medicine test for patients with Barret’s esophagus. We currently generate substantially all of our revenue from DecisionDx-Melanoma and DecisionDx-UM.
Our lead product, DecisionDx®-Melanoma, is a proprietary GEP test that predicts the risk of metastasis or recurrence (risk-stratifies) for patients diagnosed with invasive cutaneous melanoma, a deadly skin cancer. This test has two current clinically actionable uses. The first use immediately following diagnosis predicts a patient’s likelihood of having a sentinel lymph node negative biopsy result so that physicians and patients can discuss the risk and benefit of undergoing sentinel lymph node biopsy (“SLNB”) surgery. The second use is to inform the appropriate treatment plan, regardless of the decision to undergo or avoid the SLNB surgery. In a typical year, we estimate more than 130,000 patients are diagnosed with invasive cutaneous melanoma in the United States. We launched DecisionDx-Melanoma in May 2013. We also market DecisionDx®-UM, which is a proprietary GEP test that predicts the risk of metastasis (risk-stratifies) for patients with uveal melanoma, a rare eye cancer. We launched DecisionDx-UM in January 2010. Based on the substantial clinical evidence that we have developed, we have received Medicare coverage for DecisionDx-Melanoma and DecisionDx-UM, which represents approximately 50% of the addressable patient population for both of these tests.
In August 2020, we commercially launched our cutaneous squamous cell carcinoma (“SCC”) proprietary GEP test, DecisionDx®-SCC, and on November 2, 2020, we commercially launched our proprietary GEP test for suspicious pigmented lesions, DecisionDx® DiffDx™-Melanoma. These two indications are areas of high clinical need in dermatological cancer and, together, represent an addressable population of approximately 500,000 patients in the United States.
In May 2021, we completed the acquisition of all the equity of Myriad myPath, LLC, or the Myriad myPath Laboratory, from Myriad Genetics for a cash purchase price of $32.5 million. myPath Melanoma is a clinically validated GEP test designed to be used as an adjunct to histopathology when the distinction between a benign nevus and a malignant melanoma cannot be made confidently by histopathology alone. Our myPath Melanoma offering complements our DecisionDx DiffDx-Melanoma offering and enables us to provide a comprehensive diagnostic offering (or CDO) molecular testing solution for difficult-to-diagnose melanocytic lesions.
In May 2021, we announced the launch of our innovative pipeline initiative to develop a genomic test aimed at predicting systemic therapy response in patients with moderate to severe psoriasis, atopic dermatitis and related conditions. In the U.S. alone, there are approximately 18 million patients diagnosed with psoriasis and atopic dermatitis, and approximately 450,000 of these patients annually are eligible for these systemic therapies, which has the potential to add approximately $1.9 billion to our current estimated U.S. total addressable market. We recently initiated a 4,800 patient, prospective, multi-center clinical study to develop and validate this pipeline test, and plan
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to enroll more than 50 centers with the leading experts in the field. Based upon our current development and validation timelines, we expect to launch this pipeline test by the end of 2025.
As discussed in “Selling Stockholders” below, on December 3, 2021, we completed our previously announced acquisition of Cernostics, pursuant to which Cernostics became our wholly owned subsidiary. Cernostics specializes in spatial biology and artificial intelligence-driven image analysis of tissue biopsies. Its TissueCypher® Barrett’s Esophagus Assay is a precision medicine test designed to predict future development of high-grade dysplasia and/or esophageal cancer in patients with Barrett’s esophagus.
Risk Factors Summary
Below is a summary of the principal factors that make an investment in our securities speculative or risky. This summary does not address all of the risks that we face. Additional discussion of the risks and uncertainties summarized in this risk factor summary, and other risks and uncertainties that we face, are set forth below under the heading “Risk Factors” contained in this prospectus, any accompanying prospectus supplement or free writing prospectus, and under similar headings in the documents that are incorporated by reference into this prospectus.
Risk Related to our Financial Condition
• | We rely upon a small number of third-party payors for a significant portion of our revenue. |
• | Our method of recognizing revenue may not reflect our underlying business. |
• | We have incurred significant losses since inception, and we may never achieve profitability. |
• | We are an early, commercial-stage company and have a limited operating history, which may make it difficult to evaluate our current business and predict our future performance. |
• | Our financial results could fluctuate in the future, causing the market price of our stock to decline substantially. |
• | If our internal control over financial reporting is ineffective, we may not be able to accurately report our financial results or file our periodic reports in a timely manner. |
• | We may need to raise additional capital to commercialize new products, to expand operations or to fund existing operations. |
Risks Related to our Business
• | We have been, and may continue to be, adversely impacted by the COVID-19 pandemic, which has caused decreased test report volume. |
• | Our revenue heavily relies upon the sale of a single product and our current or future products may not achieve or maintain significant commercial market acceptance. |
• | Billing for our products is complex and we require substantial time and resources to collect payment. |
• | We rely on third parties for sample collection, preparation and delivery. |
• | A depletion or loss of our tumor sample database could significantly harm our business. |
• | If our primary clinical laboratory facilities become damaged or inoperable or we are required to vacate our existing facilities, our ability to conduct our laboratory work for our commercialized products and pursue our research and development efforts may be jeopardized. |
• | Our current or future products may not achieve or maintain significant commercial market acceptance. |
• | New product development is lengthy and complex and our revenues could be limited if we are unable to increase and support adoption of our products by healthcare providers. |
• | We may experience limits on our revenue if we are unable to increase and support adoption of our products by both physicians and other healthcare providers. |
• | We rely on limited or sole suppliers for some of the reagents, equipment, chips and other materials used by our products, and we may not be able to find replacements or transition to alternative suppliers. |
• | The sizes of the markets for our current and future products have not been established with precision and may be smaller than we estimate. |
• | The diagnostic testing industry is subject to rapid change, which could make our current or future products obsolete. |
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Risks Related to Reimbursement and Government Regulation
• | We currently have limited reimbursement coverage for our lead product, DecisionDx-Melanoma, and if third-party payors, including government and commercial payors, do not provide sufficient coverage of, or adequate reimbursement for, our products, our commercial success will be negatively affected. |
• | We conduct business in a heavily regulated industry and failure to comply with regulatory requirements, including those established by the U.S. Food and Drug Administration or any other regulatory authority, or changes in enforcement discretion for laboratory developed tests could harm our business. |
• | Data from our clinical studies may change materially, which could harm our business. |
• | Changes in health care policy or healthcare statutes and regulations or our ability to comply with applicable requirements could cause a material adverse effect to our business and operations. |
Risks Related to Intellectual Property
• | If we are unable to obtain and maintain sufficient intellectual property protection for our technology, our ability to successfully commercialize our products may be impaired. |
• | Our commercial success depends significantly on our ability to operate without infringing upon the intellectual property rights of third parties. |
• | We rely on information technology systems that we license from third parties and other royalty-bearing license agreements. |
Risks Related to Employee Matters and Managing Growth and Other Risks Related to Our Business
• | We are highly dependent on the services of our key personnel, including our President and Chief Executive Officer. |
• | Our employees and any current or potential commercial partners may engage in misconduct or other improper activities, including non-compliance with regulatory standards and requirements and insider trading. |
• | We may engage in strategic transactions, such as the acquisition of businesses, assets, products or technologies, which could be disruptive to our existing operations, divert the attention of our management team and adversely impact our liquidity, cash flows, financial condition and results of operations. |
• | Our business may be negatively impacted by cyber security threats, natural disasters and public health crises. |
• | Product or professional liability lawsuits against us could cause us to incur substantial liabilities and could limit our commercialization of our products. |
Risks Related to Ownership of Our Common Stock.
• | The stock price of our common stock may be volatile or may decline regardless of our operating performance, and you may lose all or part of your investment. |
• | We have broad discretion in the use of working capital and may not use it effectively or in ways that increase our share price. |
• | The concentration of our stock ownership will likely limit your ability to influence corporate matters, including the ability to influence the outcome of director elections and other matters requiring stockholder approval. |
• | Delaware law and provisions in our amended and restated certificate of incorporation and amended and restated bylaws could make a merger, tender offer or proxy contest difficult, thereby depressing the trading price of our common stock. |
• | Our amended and restated certificate of incorporation provides that the Court of Chancery of the State of Delaware is the exclusive forum for certain disputes between us and our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees. |
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Corporate Information
We were incorporated in Delaware in September 2007. Our principal executive offices are located at 505 S. Friendswood Drive, Suite 401, Friendswood, Texas 77456 and our telephone number is (866) 788-9007. Our corporate website address is www.CastleBiosciences.com. Information contained on or accessible through our website is not incorporated by reference into this prospectus, and you should not consider information on our website as part of this prospectus.
The Offering
Common Stock Offered by the Selling Stockholders
Up to 5,034,642 shares that may be issued as earnout consideration pursuant to the Merger Agreement.
Terms of the Offering
Each selling stockholder will determine when and how it will sell the common stock offered in this prospectus, as described in the section entitled “Plan of Distribution.”
Use of Proceeds
The selling stockholders will receive all of the proceeds from the sale of the shares of common stock covered by this prospectus. We will not receive any proceeds from the sale of the shares of common stock covered by this prospectus.
Risk Factors
Investing in our common stock involves a high degree of risk. You should carefully review and consider the “Risk Factors” section of this prospectus beginning on page 5 for a discussion of factors you should carefully consider before deciding to invest in our common stock.
Nasdaq Global Market Symbol
CSTL
The selling stockholders named in this prospectus may offer and sell up to an aggregate of 5,034,642 shares of our common stock issuable as earnout consideration pursuant to the Merger Agreement. Throughout this prospectus, when we refer to the shares of our common stock being registered on behalf of the selling stockholders, we are referring to the shares of common stock that may be issued to the selling stockholders. We are not selling any shares of common stock under this prospectus and will not receive any of the proceeds from the sale of such shares by the selling stockholders. Pursuant to the Merger Agreement, we agreed to file the registration statement to which this prospectus forms a part to register these shares. Additional information with respect to the Merger Agreement is contained in this prospectus under the heading “Selling Stockholders” and in our Quarterly Report on Form 10-Q filed with the SEC on November 8, 2021.
When we refer to the selling stockholders in this prospectus, we are referring to the individuals or entities named in this prospectus as the selling stockholders and, as applicable, any donees, pledgees, transferees or other successors-in-interest selling shares of common stock received after the date of this prospectus from a selling stockholder as a gift, pledge, partnership distribution or other transfer.
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An investment in our common stock involves a high degree of risk. Prior to making a decision about investing in our common stock, you should consider carefully the specific risk factors discussed in the sections entitled “Risk Factors” contained in our Quarterly Report on Form 10-Q for the quarter ended September 30, 2021, as filed with the SEC which is incorporated in this prospectus by reference in its entirety, as well as any amendment or updates to our risk factors reflected in subsequent filings with the SEC, including any prospectus supplement hereto. These risks and uncertainties are not the only risks and uncertainties we face. Additional risks and uncertainties not presently known to us, or that we currently view as immaterial, may also impair our business. If any of the risks or uncertainties described in our SEC filings or any additional risks and uncertainties actually occur, our business, financial condition, results of operations and cash flow could be materially and adversely affected. In that case, the trading price of our common stock could decline and you might lose all or part of your investment.
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This prospectus contains, and the documents incorporated by reference herein and any applicable prospectus supplement may contain, forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These statements relate to future events or to our future financial performance and involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to be materially different from any future results, performances or achievements expressed or implied by the forward-looking statements. Forward-looking statements may include, but are not limited to statements about:
In some cases, you can identify forward-looking statements by terminology such as “anticipates,” “believes,” “could,” “estimates,” “expects,” “may,” “plans,” “potential,” “predicts,” “projects,” “should,” “would,” “will” or the negative or plural of those terms, and similar expressions intended to identify statements about the future, although not all forward-looking statements contain these words. These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from the information expressed or implied by these statements.
These statements involve risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from the information expressed or implied by these forward-looking statements. Although we believe that we have a reasonable basis for each forward-looking statement contained in this prospectus, we caution you that these statements are based on a combination of facts and factors currently known by us and our projections of the future, about which we cannot be certain.
Forward-looking statements in this prospectus or incorporated herein by reference include, but are not limited to, statements about:
• | estimates of our addressable market, future revenue, expenses, capital requirements and our needs for additional financing; |
• | expectations with respect to reimbursement for our products, including third-party payor reimbursement and coverage decisions; |
• | anticipated cost, timing and success of our products in development, and our plans to research, develop and commercialize new tests; |
• | the impact of the COVID-19 pandemic on our business; |
• | our ability to obtain funding for our operations, including funding necessary to complete the expansion of our operations and development of our product candidates; |
• | the implementation of our business model and strategic plans for our products, technologies and businesses; |
• | expectations with respect to acquisitions of businesses, assets, products or technologies; |
• | our ability to manage and grow our business by expanding our sales to existing customers or introducing our products to new customers; |
• | our ability to develop and maintain sales and marketing capabilities; |
• | regulatory developments in the United States and foreign countries; |
• | the performance of our third-party suppliers; |
• | the success of competing diagnostic products that are or become available; |
• | our ability to attract and retain key personnel; and |
• | our expectations regarding our ability to obtain and maintain intellectual property protection for our products and our ability to operate our business without infringing on the intellectual property rights of others. |
You should read this prospectus, the registration statement of which this prospectus is a part, the documents incorporated by reference herein, and any applicable prospectus supplement completely and with the understanding that our actual future results may be materially different from what we expect. We qualify all of the forward-looking statements in the foregoing documents by these cautionary statements. Unless required by law, we undertake no obligation to update or revise any forward-looking statements to reflect new information or future events or developments. Thus, you should not assume that our silence over time means that actual events are bearing out as expressed or implied in such forward-looking statements.
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We are registering the resale of up to 5,034,642 shares of our common stock that may be issued pursuant to the Merger Agreement to the selling stockholders named in the table below. The shares have not been earned or issued as of the date of this prospectus, and we may not issue the full number of shares of our common stock registered for resale pursuant to this prospectus.
On December 3, 2021, we completed our acquisition of Cernostics. Pursuant to the Merger Agreement, we paid upfront consideration of approximately $30 million in cash and we also agreed to pay up to an additional $50 million in cash or our common stock, as determined in our sole discretion, based on the achievement of certain commercial milestones relating to the year ending December 31, 2022. The purchase price is subject to customary working capital and other adjustments.
The number of shares of our common stock covered by this prospectus represents the maximum number of shares, based on a limitation set forth in the Merger Agreement for compliance with Nasdaq Listing Rules, that may be issued to the selling stockholders. For purposes of this prospectus, we have assumed that all milestones contemplated under the Merger Agreement will be achieved, such that the maximum earnout consideration to the selling stockholders will be triggered, and that we will elect to pay the selling stockholders the full amount of the earnout consideration in shares of our common stock.
The actual number of shares that may be issued to the selling stockholders, if any, could be materially less than the number of shares covered by this prospectus and depends on (a) whether and to what extent the applicable future milestones are achieved, (b) whether we elect to pay all or a portion of the earnout payments to the selling stockholders in shares of our common stock, and (c) the actual volume weighted average price of our common stock for the 15 trading days ended December 30, 2022. This presentation is not an indication or prediction of whether any of the future milestones will be achieved, our present intent to issue shares in lieu of cash as earnout consideration or the future market price of our common stock.
Our registration obligations under the Merger Agreement cover all shares of our common stock issued to the selling stockholders pursuant to the Merger Agreement, and will continue in effect until December 3, 2023, or such earlier time as all shares covered by this prospectus (i) have been sold pursuant to this registration statement or otherwise, (ii) may be transferred under Rule 144 promulgated under the Securities Act or another similar exemption under the Securities Act without manner of sale or volume restrictions, or (iii) cease to be outstanding.
The table below sets forth the number of shares of our common stock that each selling stockholder may offer pursuant to this prospectus, as well as each selling stockholder’s beneficial ownership of our common stock prior to and following their sale of shares covered by this prospectus. Each selling stockholder’s beneficial ownership of our common stock prior to their sale of shares covered by this prospectus assumes the issuance of the maximum number of shares that may be issued as earnout consideration. The number of shares beneficially owned after the offering assumes the sale of all shares available for sale under this prospectus and no further acquisitions of shares of common stock by the selling stockholders. The number of shares owned are those beneficially owned, as determined under the rules of the SEC, and the information is not necessarily indicative of beneficial ownership for any other purpose. Under these rules, beneficial ownership includes any shares of common stock as to which a person has sole or shared voting power or investment power and any shares of common stock that the person has the right to acquire within 60 days.
The names of the selling stockholders and information about their holdings and the offering are set forth below. The names of any additional selling stockholders and information about their holdings and any offering of such shares by them will be set forth in one or more supplements to this prospectus.
All information with respect to the selling stockholders, including the names of the selling stockholders, the nature of any position, office or other material relationship, if any, which the selling stockholders have had, within the past three years, with us or with any of our predecessors or affiliates, and the number of shares of our common stock beneficially owned by the selling stockholders before and after this offering, was furnished to us by or on behalf of the selling stockholders. The percentages of shares owned after the offering are based on 25,378,520 shares of our common stock outstanding as of December 31, 2021.
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The selling stockholders may sell all, some or none of their shares in this offering. See “Plan of Distribution”.
Name of Selling Stockholder | | | Number of Shares Beneficially Owned Before Offering(1) | | | Maximum Number of Shares Offered | | | Shares Beneficially Owned After Offering(2) | |||
| | Number | | | Percent | ||||||||
AJM Investments, LLC(3) | | | 44,358 | | | 44,358 | | | — | | | * |
Argos Capital Appreciation Master Fund, LP(4) | | | 541,064 | | | 541,064 | | | — | | | * |
Ben Franklin Technology Partners of Northeastern PA Inc.(5) | | | 42,023 | | | 42,023 | | | — | | | * |
Philadelphia Municipal Employee Retirement System(6) | | | 77,804 | | | 77,804 | | | — | | | * |
D. Lansing Taylor | | | 3,154 | | | 3,154 | | | — | | | * |
Frome Family Partners, L.P.(7) | | | 20,839 | | | 20,839 | | | — | | | * |
Geisinger Health(8) | | | 39,204 | | | 39,204 | | | — | | | * |
Illumina Innovation Fund I, L.P.(9) | | | 3,623,224 | | | 3,623,224 | | | — | | | * |
Innovation Works, Inc.(10) | | | 1,941 | | | 1,941 | | | — | | | * |
JRP Investors 2015, L.P.(11) | | | 110,222 | | | 110,222 | | | — | | | * |
John M. Inadomi | | | 6,588 | | | 6,588 | | | — | | | * |
LeRoy L. Metz II | | | 5,272 | | | 5,272 | | | — | | | * |
MLB Investments 2001, LP(12) | | | 1,296 | | | 1,296 | | | — | | | * |
Michael Caruso | | | 1,296 | | | 1,296 | | | — | | | * |
Noel Thomas Doheny | | | 74,584 | | | 74,584 | | | — | | | * |
Paul Schmitt | | | 3,612 | | | 3,612 | | | — | | | * |
Paul T. Touhey Jr. | | | 78 | | | 78 | | | — | | | * |
Pittsburgh Life Science Greenhouse(13) | | | 84,088 | | | 84,088 | | | — | | | * |
RHP Investments, LP(14) | | | 5,186 | | | 5,186 | | | — | | | * |
Rebecca Jane Thorne | | | 203,859 | | | 203,859 | | | — | | | * |
The Robert E. Gadomski 2011 “Four-Way” Irrevocable Trust (8/12/11)(15) | | | 1,296 | | | 1,296 | | | — | | | * |
UPMC(16) | | | 117,721 | | | 117,721 | | | — | | | * |
West Virginia University Hospitals, Inc.(17) | | | 15,560 | | | 15,560 | | | — | | | * |
West Virginia University Foundation, Inc.(18) | | | 10,373 | | | 10,373 | | | — | | | * |
Total | | | 5,034,642 | | | 5,034,642 | | | | | ||
* | Represents beneficial ownership of less than one percent of the outstanding shares of our common stock. |
(1) | Assumes the issuance of the maximum number of shares that may be issued as earnout consideration. The shares have not been earned or issued as of the date of this prospectus, and we may not issue the full number of shares of our common stock registered for resale pursuant to this prospectus. |
(2) | Assumes the sale of all shares available for sale under this prospectus and no further acquisitions of shares of common stock by the selling stockholder. |
(3) | Alan Douglas, Marsha Timmerman and Jim Johnston hold shared voting and investment control over the shares of common stock being registered for resale by AJM Investments, LLC. |
(4) | Ephraim Gildor, President of Argos Capital Management, Inc., the General Partner of Argos Capital Appreciation Master Fund, LP (“Argos”), holds sole voting and investment control over the shares of common stock being registered for resale by Argos. |
(5) | Angelo Valletta, Kathy Ann Minnich and Wayne Barz hold shared voting and investment control over the shares of common stock being registered for resale by Ben Franklin Technology Partners of Northeastern PA Inc. |
(6) | Rob Dubow, Carol Stukes-Baylor, Roosevelt Poplar, Rebecca Rhynhart, Paul Reed, Brian Coughlin, Diana Cortes, Michael Zaccagni and Tumar Alexander, as Trustees of the Philadelphia Municipal Employee Retirement System (the “Philadelphia Retirement System”), hold shared voting and investment control over the shares of common stock being registered for resale by the Philadelphia Retirement System. |
(7) | Matthew Frome, Stan Frome and Eric Frome hold shared voting and investment control over the shares of common stock being registered for resale by Frome Family Partners, L.P. |
(8) | Steve Bender, Executive Vice President and Chief Legal Officer of Geisinger Health (“Geisinger”), holds sole voting and investment control over the shares of common stock being registered for resale by Geisinger, formerly known as Geisinger Health System Foundation. |
(9) | Nicholas Naclerio, Managing Member of Illumina Innovation Fund I GP, L.L.C., the General Partner of Illumina Innovation Fund I, L.P. (“Illumina”), holds sole voting and investment control over the shares of common stock being registered for resale by Illumina. |
(10) | Rebecca Doerge, Joe Ferrara, Juan Garrett, Tom Jones, Donna Myers, Catherine Mott, Steven Reis, MD, Rob A. Rutenbar and Jimmy Williams Jr., Ph.D., as board members of Innovation Works, Inc. (“Innovation”), hold shared voting and investment control over the shares of common stock being registered for resale by Innovation. |
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(11) | Raymond Durham, Vice President of Jasper Ridge Genpar Holdings, LLC, the General Partner of JRP Investors 2015, L.P. (“JRP”), holds sole voting and investment control over the shares of common stock being registered for resale by JRP. |
(12) | Steven Cohen, as Trustee of the MLB Equity Trust, the General Partner of MLB Investments 2001, LP (“MLB Investments”), holds sole voting and investment control over the shares of common stock being registered for resale by MLB Investments. |
(13) | Diana Cugliari holds sole voting and investment control over the shares of common stock being registered for resale by Pittsburgh Life Science Greenhouse. |
(14) | Richard H. Penske holds sole voting and investment control over the shares of common stock being registered for resale by RHP Investments, LP. |
(15) | Susan F. Gadomski, Trustee of The Robert E. Gadomski 2011 “Four-Way” Irrevocable Trust (8/12/11) (the “Gadomski Trust”), holds sole voting and investment control over the shares of common stock being registered for resale by the Gadomski Trust. |
(16) | Jeanne Cunicelli, Executive Vice President of UPMC and President of UPMC Enterprises, holds sole voting and investment control over the shares of common stock being registered for resale by UPMC. |
(17) | Jennifer B. Cunanan holds sole voting and investment control over the shares of common stock being registered for resale by West Virginia University Hospitals, Inc. |
(18) | Jennifer B. Cunanan holds sole voting and investment control over the shares of common stock being registered for resale by West Virginia University Foundation, Inc. |
Except as discussed above, neither the selling stockholders nor any persons having control over such selling stockholders have held any position or office with us or our affiliates within the last three years or has had a material relationship with us or any of our predecessors or affiliates within the past three years, other than as a result of the ownership of our shares of common stock or other securities.
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The selling stockholders may sell the shares offered by this prospectus. The selling stockholders, including their donees, pledgees, transferees or other successors-in-interest selling shares of common stock received after the date of this prospectus from a selling stockholder as a gift, pledge, partnership distribution or other transfer, may, from time to time, sell, transfer or otherwise dispose of any or all of their shares of common stock or interests in shares of common stock on any stock exchange, market or trading facility on which the shares are traded or in private transactions. These dispositions may be at fixed prices, at prevailing market prices at the time of sale, at prices related to the prevailing market price, at varying prices determined at the time of sale or at negotiated prices. To the extent any of the selling stockholders gift, pledge, grant a security interest in, or otherwise transfer the shares offered hereby, such transferees may offer and sell the shares from time to time under this prospectus, provided that this prospectus has been amended under Rule 424(b)(3) or other applicable provision of the Securities Act to include the name of such transferee in the list of selling stockholders under this prospectus if and when necessary or required.
The selling stockholders will act independently of us in making decisions with respect to the timing, manner and size of each sale. They may use any one or more of the following methods when disposing of shares or interests therein:
• | ordinary brokerage transactions and transactions in which a broker-dealer solicits purchasers; |
• | block trades in which a broker-dealer will attempt to sell the shares as agent, but may position and resell a portion of the block as principal to facilitate the transaction; |
• | purchases by a broker-dealer as principal and resale by the broker-dealer for its account under this prospectus; |
• | an exchange distribution in accordance with the rules of the applicable exchange; |
• | privately negotiated transactions; |
• | “at the market” or through market makers or into an existing market for the shares; |
• | through the distribution of the common stock by any selling stockholders to its partners, members or stockholders; |
• | through broker-dealers that agree with the selling stockholders to sell a specified number of such shares at a stipulated price per share; |
• | through one or more underwritten offerings on a firm commitment or best efforts basis; |
• | a combination of any such methods of sale; and |
• | any other method permitted pursuant to applicable law. |
The aggregate proceeds to the selling stockholders from the sale of the shares offered by them will be the purchase price of the common stock less discounts or commissions, if any. Each of the selling stockholders reserves the right to accept and, together with their agents from time to time, to reject, in whole or in part, any proposed purchase of common stock to be made directly or through agents. We will not receive any of the proceeds from this offering. We will bear all fees and expenses incident to our obligation to register such shares.
The selling stockholders also may resell all or a portion of the shares in open market transactions in reliance upon Rule 144 under the Securities Act, provided that they meet the criteria and conform to the requirements of that rule.
Sales by selling stockholders may be made directly to investors or through securities firms acting as agents, brokers or dealers. Any agent, broker or dealer that participates in any such sales may be deemed to be an “underwriter” within the meaning of Section 2(11) of the Securities Act in connection with such sales, and any commissions received by such agents, brokers or dealers and any profit on the resale of the securities sold by them while acting as principals may be deemed to be underwriting discounts or commissions under the Securities Act. The selling stockholders may indemnify any agent, broker or dealer that participates in transactions involving the sale of the shares against certain liabilities, including liabilities arising under the Securities Act.
To the extent required, the shares of our common stock to be sold, the names of the selling stockholders, the respective purchase prices and public offering prices, the names of any agents, dealer or underwriter, any applicable commissions or discounts with respect to a particular offer will be set forth in an accompanying prospectus supplement or, if appropriate, a post-effective amendment to the registration statement that includes this prospectus.
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To comply with the securities laws of some states, if applicable, the shares may be sold in these jurisdictions only through registered or licensed brokers or dealers. In addition, in some states the shares may not be sold unless they have been registered or qualified for sale or an exemption from registration or qualification requirements is available and is complied with.
We have advised the selling stockholders that the anti-manipulation rules of Regulation M under the Exchange Act may apply to sales of shares of our common stock in the market and to the activities of the selling stockholders and their affiliates. These rules may limit the timing of purchases and sales of the shares by such selling stockholders. Regulation M may also restrict the ability of any person engaged in the distribution of the shares of common stock to engage in market-making activities with respect to the shares of common stock. All of the foregoing may affect the marketability of the shares of common stock and the ability of any person or entity to engage in market-making activities with respect to the shares of common stock.
There can be no assurance that any selling stockholder will sell any or all of the shares of common stock registered pursuant to the registration statement, of which this prospectus forms a part.
We have agreed with the selling stockholder to use our reasonable best efforts to cause the registration statement of which this prospectus constitutes a part to be continuously effective and usable until December 3, 2023, or such earlier time as all shares covered by this prospectus (i) have been sold pursuant to a registration statement or otherwise, (ii) may be transferred under Rule 144 or another similar exemption under the Securities Act without manner of sale or volume restrictions, or (iii) cease to be outstanding.
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The validity of the common stock being offered by this prospectus will be passed upon for us by Cooley LLP.
The financial statements of Castle Biosciences, Inc. as of December 31, 2020 and 2019, and for each of the years in the two-year period ended December 31, 2020, have been incorporated by reference herein and in the registration statement in reliance upon the report of KPMG LLP, independent registered public accounting firm, incorporated by reference herein, and upon the authority of said firm as experts in accounting and auditing.
The financial statements of Cernostics, Inc. as of December 31, 2020 and for the year then ended have been incorporated by reference herein and in the registration statement in reliance upon the report of Grossman Yanak & Ford LLP, independent auditors, incorporated by reference herein, and upon the authority of said firm as experts in accounting and auditing.
This prospectus is part of the registration statement on Form S-3 we filed with the SEC under the Securities Act and does not contain all the information set forth or incorporated by reference in the registration statement. Whenever a reference is made in this prospectus to any of our contracts, agreements or other documents, the reference may not be complete and you should refer to the exhibits that are a part of the registration statement or the exhibits to the reports or other documents incorporated by reference into this prospectus for a copy of such contract, agreement or other document. Because we are subject to the information and reporting requirements of the Exchange Act, we file annual, quarterly and current reports, proxy statements and other information with the SEC. Our SEC filings are available to the public over the Internet at the SEC’s website at http://www.sec.gov. Our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, including any amendments to those reports, and other information that we file with or furnish to the SEC pursuant to Section 13(a) or 15(d) of the Exchange Act can also be accessed free of charge on the Investor section of our website. These filings will be available as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC. Our website address is www. CastleBiosciences.com. Information contained on or accessible through our website is not a part of this prospectus and is not incorporated by reference herein, and the inclusion of our website address in this prospectus is an inactive textual reference only.
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The SEC allows us to “incorporate by reference” the information we file with it, which means that we can disclose important information to you by referring to those documents. The information incorporated by reference is an important part of this prospectus, and information that we file later with the SEC will automatically update and supersede this information.
We incorporate by reference the following documents we filed with the SEC pursuant to Section 13 of the Exchange Act and any future filings we will make with the SEC under Sections 13(a), 13(c), 14, or 15(d) of the Exchange Act after the date of this prospectus until the termination of the offering of the shares covered by this prospectus (other than information furnished under Item 2.02 or Item 7.01 of Form 8-K):
• | our Annual Report on Form 10-K for the fiscal year ended December 31, 2020, filed with the SEC on March 11, 2021; |
• | The information specifically incorporated by reference into our Annual Report on Form 10-K for the fiscal year ended December 31, 2020 from our definitive proxy statement on Schedule 14A (other than information furnished rather than filed) filed with the SEC on April 27, 2021 and supplemented on May 13, 2021; |
• | our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2021, June 30, 2021 and September 30, 2021, filed with the SEC on May 10, 2021, August 9, 2021 and November 8, 2021, respectively; |
• | our Current Reports on Form 8-K (other than information furnished rather than filed) filed with the SEC on April 9, 2021, June 14, 2021, July 16, 2021, September 9, 2021, October 19, 2021, December 3, 2021, December 6, 2021 (as amended on January 14, 2022), and January 5, 2022; and |
• | the description of our common stock, which is registered under Section 12 of the Exchange Act, in our registration statement on Form 8-A, filed with the SEC on July 15, 2019, including any amendments or reports filed for the purpose of updating such description, including any amendment or report filed for the purpose of updating such description, including any amendment or report filed for the purposes of updating such description, including Exhibit 4.1 to our Annual Report on Form 10-K for the year ended December 31, 2019, filed with the SEC on March 10, 2020. |
You may access our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, Proxy Statement, and amendments, if any, to those documents filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act with the SEC free of charge at the SEC’s website or our website as soon as reasonably practicable after such material is electronically filed with, or furnished to, the SEC. The reference to our website does not constitute incorporation by reference of the information contained in our website. We do not consider information contained on, or that can be accessed through, our website to be part of this prospectus or the related registration statement.
We will provide to each person, including any beneficial owner, to whom a prospectus is delivered, without charge upon written or oral request, a copy of any or all of the information that is incorporated by reference into this prospectus but not delivered with the prospectus, including exhibits which are specifically incorporated by reference into such documents. You should direct any requests for documents to Castle Biosciences, Inc. at 505 S. Friendswood Drive, Suite 401, Friendswood, Texas 77546; telephone (866) 788-9007.
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. | Other Expenses of Issuance and Distribution |
The following table sets forth the costs and expenses, payable in connection with the offering of common stock being registered. All amounts are estimates except the registration fee.
| | | Amount to Be Paid | |
SEC registration fee | | | $17,488 |
Legal fees and expenses | | | $50,000 |
Accounting fees and expenses | | | $32,000 |
Printing and miscellaneous | | | $20,512 |
Total | | | $120,000 |
Item 15. | Indemnification of Directors and Officers |
We are incorporated under the laws of the State of Delaware. Section 145 of the Delaware General Corporation Law provides that a Delaware corporation may indemnify any persons who were, are, or are threatened to be made, parties to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of such corporation), by reason of the fact that such person is or was an officer, director, employee or agent of such corporation, or is or was serving at the request of such corporation as an officer, director, employee or agent of another corporation or enterprise. The indemnity may include expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding, provided that such person acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the corporation’s best interests and, with respect to any criminal action or proceeding, had no reasonable cause to believe that his or her conduct was illegal. A Delaware corporation may indemnify any persons who were, are, or are threatened to be made, a party to any threatened, pending or completed action or suit by or in the right of the corporation by reason of the fact that such person is or was a director, officer, employee or agent of such corporation, or is or was serving at the request of such corporation as a director, officer, employee or agent of another corporation or enterprise. The indemnity may include expenses (including attorneys’ fees) actually and reasonably incurred by such person in connection with the defense or settlement of such action or suit, provided such person acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the corporation’s best interests, except that no indemnification is permitted without judicial approval if the officer or director is adjudged to be liable to the corporation. Where an officer or director is successful on the merits or otherwise in the defense of any action referred to above, the corporation must indemnify him or her against the expenses (including attorneys’ fees) actually and reasonably incurred.
Our amended and restated certificate of incorporation and amended and restated bylaws, respectively, provide for the indemnification of our directors and officers to the fullest extent permitted under the Delaware General Corporation Law. Section 102(b)(7) of the Delaware General Corporation Law permits a corporation to provide in its certificate of incorporation that a director of the corporation shall not be personally liable to the corporation or its stockholders for monetary damages for breach of fiduciary duties as a director, except for liability for any:
• | transaction from which the director derives an improper personal benefit; |
• | act or omission not in good faith or that involves intentional misconduct or a knowing violation of law; |
• | unlawful payment of dividends or redemption of shares; or |
• | breach of a director’s duty of loyalty to the corporation or its stockholders. |
Expenses incurred by any officer or director in defending any such action, suit or proceeding in advance of its final disposition shall be paid by us upon delivery to it of an undertaking, by or on behalf of such director or officer, to repay all amounts so advanced if it shall ultimately be determined that such director or officer is not entitled to be indemnified by us.
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Section 174 of the Delaware General Corporation Law provides, among other things, that a director who willfully or negligently approves of an unlawful payment of dividends or an unlawful stock purchase or redemption may be held liable for such actions. A director who was either absent when the unlawful actions were approved or dissented at the time may avoid liability by causing his or her dissent to such actions to be entered in the books containing minutes of the meetings of the board of directors at the time such action occurred or immediately after such absent director receives notice of the unlawful acts.
As permitted by the Delaware General Corporation Law, we have entered into indemnity agreements with each of our directors and executive officers, that require us to indemnify such persons against any and all costs and expenses (including attorneys’, witness or other professional fees) actually and reasonably incurred by such persons in connection with any action, suit or proceeding (including derivative actions), whether actual or threatened, to which any such person may be made a party by reason of the fact that such person is or was a director or officer or is or was acting or serving as an officer, director, employee or agent of us or any of our affiliated enterprises. Under these agreements, we are not required to provide indemnification for certain matters, including:
• | indemnification beyond that permitted by the Delaware General Corporation Law; |
• | indemnification for any proceeding with respect to the unlawful payment of remuneration to the director or officer; |
• | indemnification for certain proceedings involving a final judgment that the director or officer is required to disgorge profits from the purchase or sale of our stock; |
• | indemnification for proceedings involving a final judgment that the director’s or officer’s conduct was in bad faith, knowingly fraudulent or deliberately dishonest or constituted willful misconduct or a breach of his or her duty of loyalty, but only to the extent of such specific determination; |
• | indemnification for proceedings or claims brought by an officer or director against us or any of our directors, officers, employees or agents, except for claims to establish a right of indemnification or proceedings or claims approved by our board of directors or required by law; |
• | indemnification for settlements the director or officer enters into without our consent; or |
• | indemnification in violation of any undertaking required by the Securities Act, or in any registration statement filed by us. |
The indemnification agreements also set forth certain procedures that will apply in the event of a claim for indemnification thereunder.
We have an insurance policy in place that covers our officers and directors with respect to certain liabilities, including liabilities arising under the Securities Act, or otherwise.
Pursuant to any underwriting agreement we may enter, the underwriters are obligated, under some circumstances, to indemnify our directors, officers and controlling persons against specified liabilities, including liabilities under the Securities Act.
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Item 16. | Exhibits |
Exhibit Number | | | Description |
2.1*+ | | | Agreement and Plan of Merger, dated October 18, 2021, by and among the Company, Space Merger Sub, Inc., Cernostics, Inc., and Shareholder Representative Services LLC, as amended, incorporated by reference to Exhibit 2.1 of the Registrant’s Current Report on Form 8-K filed with the SEC on December 6, 2021. |
| | | ||
| | | Amended and Restated Certificate of Incorporation of the Company, incorporated by reference to Exhibit 3.1 of the Registrant’s Current Report on Form 8-K filed with the SEC on July 29, 2019. | |
| | | ||
| | | Amended and Restated Bylaws of the Company, incorporated by reference to Exhibit 3.2 of the Registrant’s Current Report on Form 8-K filed with the SEC on July 29, 2019. | |
| | | ||
4.1 | | | |
| | | ||
| | | Form of Common Stock Certificate of the Company, incorporated by reference to Exhibit 4.1 of the Registrant’s Registration Statement on Form S-1 (File No. 333-232369), as amended, originally filed with the SEC on June 26, 2019. | |
| | | ||
| | | Sixth Amended and Restated Investors’ Rights Agreement, dated July 12, 2019, by and among the Company and certain of its stockholders, incorporated by reference to Exhibit 4.2 of the Company’s Registration Statement on Form S-1 (File No. 333-232369), as amended, originally filed with the SEC on June 26, 2019. | |
| | | ||
| | | Opinion of Cooley LLP. | |
| | | ||
| | | Consent of KPMG LLP. | |
| | | ||
| | | Consent of Grossman Yanak & Ford LLP. | |
| | | ||
| | | Consent of Cooley LLP (included in Exhibit 5.1). | |
| | | ||
| | | Power of Attorney (included on signature page). |
* | Schedules and exhibits to the Agreement have been omitted pursuant to Item 601(a)(5) of Regulation S-K. A copy of any omitted schedule and/or exhibit will be furnished to the Securities and Exchange Commission upon request. |
+ | Pursuant to Item 601(b)(10) of Regulation S-K, certain portions of this exhibit have been omitted (indicated by “[***]”) because the Company has determined that the information is not material and is the type that the Company treats as private or confidential. |
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Item 17. | Undertakings |
The undersigned Registrant hereby undertakes:
(1) | To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: |
(i) | To include any prospectus required by Section 10(a)(3) of the Securities Act; |
(ii) | To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the SEC 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; |
(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 subparagraphs (i), (ii) and (iii) above 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 SEC by the Registrant pursuant to Section 13 or Section 15(d) of the Exchange Act that are incorporated by reference in the registration statement, or is contained in a form of prospectus filed pursuant to Rule 424(b) that is part of the registration statement.
(2) | That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. |
(3) | To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. |
(4) | That, for the purpose of determining liability under the Securities Act 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 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 purposes of determining any liability under the Securities Act, each filing of the registrant’s annual report pursuant to section 13(a) or section 15(d) of the Exchange Act (and, where applicable, each filing |
II-4
of an employee benefit plan’s annual report pursuant to section 15(d) of the Exchange Act) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered herein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Registrant pursuant to the provisions of Item 15 above, or otherwise, the Registrant has been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act, 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 Friendswood, State of Texas, on January 14, 2022.
| | | CASTLE BIOSCIENCES, INC. | ||||
| | | | | |||
| | | By: | | | /s/ Derek J. Maetzold | |
| | | | | Derek J. Maetzold President and Chief Executive Officer | ||
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Derek J. Maetzold and Frank Stokes, and each of them, as his or her true and lawful attorneys in fact and agents, with full power of substitution and resubstitution, for him or her and in his or her name, place, and stead, in any and all capacities, to sign any and all amendments to this registration statement and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys in fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys in fact and agents, or any of them, or their or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.
Signature | | | Title | | | Date |
/s/ Derek J. Maetzold | | | President, Chief Executive Officer and Director (Principal Executive Officer) | | | January 14, 2022 |
Derek J. Maetzold | | |||||
| | | | | |||
/s/ Frank Stokes | | | Chief Financial Officer (Principal Financial and Accounting Officer) | | | January 14, 2022 |
Frank Stokes | | |||||
| | | | | |||
/s/ Daniel M. Bradbury | | | Director | | | January 14, 2022 |
Daniel M. Bradbury | | |||||
| | | | | |||
/s/ Mara G. Aspinall | | | Director | | | January 14, 2022 |
Mara G. Aspinall | | |||||
| | | | | |||
/s/ Kimberlee Caple | | | Director | | | January 14, 2022 |
Kimberlee Caple | | |||||
| | | | | |||
/s/ G. Bradley Cole | | | Director | | | January 14, 2022 |
G. Bradley Cole | | |||||
| | | | | |||
/s/ Ellen Goldberg | | | Director | | | January 14, 2022 |
Ellen Goldberg | | |||||
| | | | | |||
/s/ Miles Harrison | | | Director | | | January 14, 2022 |
Miles Harrison | | |||||
| | | | | |||
/s/ Tiffany Olson | | | Director | | | January 14, 2022 |
Tiffany Olson | |
Exhibit 5.1
+1 858 550 6013
collta@cooley.com
January 14, 2022
Castle Biosciences, Inc.
505 S. Friendswood Dr. Suite 401
Friendswood, TX 77546
Ladies and Gentlemen:
We have acted as counsel to Castle Biosciences, Inc., a Delaware corporation (the “Company”), in connection with the filing of a Registration Statement on
Form S‑3 (the “Registration Statement”) by the Company under the Securities Act of 1933, as amended, covering the resale by certain selling stockholders (the “Selling Stockholders”) of 5,034,642 shares (the “Shares”) of the Company’s Common Stock, par value $0.001 per share (the “Common Stock”), issuable to the Selling Stockholders pursuant to the Agreement and Plan of Merger, dated October 18, 2021, by and among the Company, Space Merger Sub, Inc., Cernostics, Inc.,
and Shareholder Representative Services LLC, as amended on December 2, 2021 (the “Merger Agreement”).
In connection with this opinion, we have examined and relied upon the Registration Statement and related prospectus, the Company’s Amended and Restated Certificate of Incorporation and
Amended and Restated Bylaws, each as currently in effect, the Merger Agreement and such other documents, records, certificates, memoranda and other instruments as in our judgment are necessary or appropriate to enable us to render the
opinion expressed below. We have assumed the genuineness of all signatures, the authenticity of all documents submitted to us as originals, the conformity to originals of all documents submitted to us as copies, the
accuracy, completeness and authenticity of certificates of public officials and the due authorization, execution and delivery of all documents by all persons other than the Company where execution and delivery are prerequisites to the
effectiveness thereof. As to certain factual matters, we have relied upon a certificate of an officer of the Company and have not independently verified such matters.
We express no opinion to the extent that future issuances of securities of the Company and/or antidilution adjustments to outstanding securities of the Company cause the Shares to be greater than the
number of shares of Common Stock that then remain authorized but unissued and not committed to be issued by the Company.
Our opinion is expressed only with respect to the General Corporation Law of the State of Delaware. We express no opinion as to whether any particular laws other than those identified above are
applicable to the subject matter hereof. We are not rendering any opinion as to compliance with any federal or state antifraud law, rule or regulation relating to securities, or to the sale or issuance thereof.
On the basis of the foregoing, in reliance thereon, and subject to the foregoing, we are of the opinion that the Shares, when issued in accordance with the terms of the Merger Agreement, will be validly
issued, fully paid and nonassessable.
Cooley LLP 4401 Eastgate Mall San Diego, CA 92121-1909
t: (858) 550-6000 f: (858) 550-6420 cooley.com
t: (858) 550-6000 f: (858) 550-6420 cooley.com
Castle Biosciences, Inc.
January 14, 2022
Page Two
We hereby consent to the reference to our firm under the caption “Legal Matters” in the prospectus included in the Registration Statement and to the filing of this opinion as an exhibit to the
Registration Statement.
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Very truly yours,
Cooley LLP
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/s/ Thomas A. Coll
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Thomas A. Coll, Partner |
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Cooley LLP 4401 Eastgate Mall San Diego, CA 92121-1909
t: (858) 550-6000 f: (858) 550-6420 cooley.com
t: (858) 550-6000 f: (858) 550-6420 cooley.com
Exhibit 23.1
Consent of Independent Registered Public Accounting Firm
The Board of Directors
Castle Biosciences, Inc.:
We consent to the use of our report dated March 11, 2021, with respect to the financial statements of Castle Biosciences, Inc., incorporated herein
by reference and to the reference to our firm under the heading “Experts” in the prospectus.
/s/ KPMG LLP
San Diego, California
January 14, 2022
Exhibit 23.2
Consent of Independent Auditors
We consent to the incorporation by reference in the Prospectus constituting a part of this Registration Statement on Form S-3 of Castle Biosciences, Inc. of
our report dated May 26, 2021, except for Note 1, for which the date is November 10, 2021, with respect to the consolidated balance sheet of Cernostics, Inc. as of December 31, 2020, the related consolidated statements of operations, redeemable
convertible preferred stock and stockholders’ deficit, and consolidated cash flows for the year then ended, and the related notes to the consolidated financial statements, appearing in the Form 8-K/A of Castle Biosciences, Inc. filed on January 14,
2022. We also consent to the reference to us under the heading “Experts” in such Registration Statement.
/s/ Grossman Yanak & Ford LLP
Pittsburgh, Pennsylvania
January 14, 2022