DILUTION
If you invest in our common stock in this offering, your ownership interest will be diluted to the extent of the difference between the price per share of our
common stock in this offering and the as adjusted net tangible book value per share of our common stock immediately after this offering.
As
of June 30, 2018, our net tangible book value was $165.9 million, or $2.37 per share of our common stock, based upon 69,996,070 shares of common stock outstanding as of that date.
Historical net tangible book value per share is equal to our total tangible assets, less total liabilities, divided by the number of outstanding shares of our common stock. Dilution in net tangible
book value per share represents the difference between the amount per share paid by purchasers of shares of common stock in this offering and the net tangible book value per share of common stock
immediately after this offering.
After
giving effect to the sale of 9,459,460 shares of common stock in this offering at the public offering price of $18.50 per share, and after deducting underwriting discounts and commissions and
estimated offering expenses payable by us, our as adjusted net tangible book value as of June 30, 2018 would have been $329.9 million, or $4.15 per share of common stock. This represents
an immediate increase in as adjusted net tangible book value of $1.78 per share to existing stockholders and immediate dilution of $14.35 per share to new investors participating in this offering.
Dilution
per share to new investors is determined by subtracting net tangible book value per share after this offering from the public offering price per share paid by new investors. The following
table illustrates this per share dilution on a per share basis:
|
|
|
|
|
|
|
|
|
|
Public offering price per share
|
|
|
|
|
$
|
18.50
|
|
|
Historical net tangible book value per share as of June 30, 2018
|
|
$
|
2.37
|
|
|
|
|
|
Increase in net tangible book value per share attributable to new investors in this offering
|
|
|
1.78
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As adjusted net tangible book value per share after giving effect to this offering
|
|
|
|
|
|
4.15
|
|
|
|
|
|
|
|
|
|
|
|
Dilution per share to new investors participating in this offering
|
|
|
|
|
$
|
14.35
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
If
the underwriters exercise their option in full to purchase an additional 1,418,919 shares of our common stock in this offering at the public offering price of $18.50 per share, the as adjusted net
tangible book value per share as of June 30, 2018, after giving effect to this offering, would have been $4.38 per share, representing an increase in net tangible book value of $2.01 per share
to existing stockholders and immediate dilution of $14.12 per share to investors purchasing our common stock in this offering at the public offering price.
The
foregoing table and discussion is based on 69,996,070 shares of our common stock outstanding as of June 30, 2018, and excludes the following as of that
date:
-
§
-
5,720,507 shares of common stock issuable upon the exercise of outstanding stock options
under the Incentive Plan, with a weighted-average exercise price of $5.79 per share;
-
§
-
1,520,898 shares of common stock issuable upon the vesting of outstanding RSUs under the
Incentive Plan;
-
§
-
3,000 shares of common stock issuable upon the vesting of outstanding RSUs under the
Incentive Plan that were granted after June 30, 2018;
S-16
Table of Contents
-
§
-
2,023,572 shares of common stock reserved for future issuance under the Incentive Plan as
of June 30, 2018, as well as any future increases in the number of shares of our common stock reserved for issuance under the Incentive Plan pursuant to evergreen provisions;
-
§
-
744,190 shares of common stock reserved for future issuance under the ESPP as of
June 30, 2018, as well as any future increases in the number of shares of our common stock reserved for issuance under the ESPP pursuant to evergreen provisions; and
-
§
-
722,000 shares of common stock issuable upon the exercise of an outstanding warrant with
an exercise price of $1.39 per share.
To
the extent that any outstanding stock options are exercised, the outstanding warrant is exercised, outstanding RSUs are settled, new stock options or RSUs are issued under the Incentive Plan, or we
otherwise issue additional shares of common stock in the future at a price less than the public offering price, there will be further dilution to new investors.
In
addition, we may choose to raise additional capital due to market conditions or strategic considerations, even if we believe we have sufficient funds for our current or future operating plans. To
the extent that additional capital is raised through the sale of equity or convertible debt securities, the issuance of these securities could result in further dilution to our stockholders.
S-17
Table of Contents
MATERIAL UNITED STATES FEDERAL INCOME TAX
CONSIDERATIONS FOR NON-U.S. HOLDERS
The following is a summary of material U.S. federal income tax considerations of the ownership and disposition of our common stock by non-U.S. holders, as
defined below. It is not intended to be a complete analysis of all the U.S. federal income tax considerations that may be relevant to non-U.S. holders. This summary is based upon the provisions of the
Internal Revenue Code of 1986, as amended, or the Code, U.S. Treasury regulations promulgated thereunder, administrative rulings and judicial decisions, all as of the date hereof. These authorities
may be changed, possibly with retroactive effect, which may result in U.S. federal income tax consequences different from those set forth below. We have not sought any ruling from the Internal Revenue
Service, or the IRS with respect to the statements made and the conclusions reached in the following summary. There can be no assurance that the IRS will agree with such statements and conclusions or
that any contrary position taken by the IRS would not be sustained by a court.
This
summary also does not address the tax considerations arising under the laws of any foreign, state or local jurisdiction, or any alternative minimum or net investment income tax considerations. In
addition, this discussion does not address tax considerations applicable to an investor's particular circumstances or to investors that may be subject to special tax rules, including, without
limitation:
-
§
-
banks, insurance companies or other financial institutions;
-
§
-
tax-exempt organizations;
-
§
-
an integral part or controlled entity of a foreign sovereign;
-
§
-
dealers in securities or currencies;
-
§
-
traders in securities that elect to use a mark-to-market method of accounting for their
securities holdings;
-
§
-
persons that own, or are deemed to own, more than five percent of our capital stock
(except to the extent specifically set forth below);
-
§
-
controlled foreign corporations, passive foreign investment companies, and corporations
that accumulate earnings to avoid U.S. federal income tax;
-
§
-
certain former citizens or long-term residents of the United States;
-
§
-
persons who hold our common stock as a position in a hedging transaction, "straddle,"
"conversion transaction" or other risk reduction transaction;
-
§
-
qualified foreign pension funds;
-
§
-
persons deemed to sell our common stock under the constructive sale provisions of the
Code; or
-
§
-
persons who hold our common stock other than as a capital asset (generally, an asset held
for investment purposes).
In
addition, if a partnership (or other entity or arrangement treated as a partnership for U.S. federal income tax purposes) holds our common stock, the tax treatment of a partner generally will
depend on the status of the partner and upon the activities of the partnership. Accordingly, partnerships that hold our common stock, and partners in such partnerships, should consult their tax
advisors.
YOU ARE URGED TO CONSULT YOUR TAX ADVISOR WITH RESPECT TO THE APPLICATION OF THE UNITED STATES FEDERAL INCOME TAX LAWS TO YOUR PARTICULAR SITUATION, AS WELL AS ANY TAX
CONSEQUENCES OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF OUR COMMON STOCK ARISING
UNDER THE UNITED STATES FEDERAL ESTATE OR GIFT TAX RULES OR UNDER THE LAWS OF ANY STATE, LOCAL, FOREIGN OR OTHER TAXING JURISDICTION OR UNDER ANY APPLICABLE TAX TREATY.
S-18
Table of Contents
For the purposes of this discussion, a non-U.S. holder means a beneficial owner of our common stock that is neither a U.S. holder nor a partnership (or other
entity or arrangement treated as a partnership or a disregarded entity for U.S. federal income tax purposes, regardless of its place of organization or formation). A U.S. holder means a beneficial
owner of our common Stock that is for U.S. federal income tax purposes (a) an individual who is a citizen or resident of the United States, (b) a corporation or other entity treated as a
corporation created or organized in or under the laws of the United States, any state thereof or the District of Columbia, (c) an estate the income of which is subject to U.S. federal income
taxation regardless of its source or (d) a trust if it (1) is subject to the primary supervision of a court within the United States and one or more U.S. persons have the authority to
control all substantial decisions of the trust or (2) has a valid election in effect under applicable U.S. Treasury regulations to be treated as a U.S. person.
We have not made any distributions on our common stock and do not plan to make any distributions for the foreseeable future. However, if we do make
distributions on our common stock, those payments will constitute dividends for U.S. tax purposes to the extent paid from our current or accumulated earnings and profits, as determined under U.S.
federal income tax principles. To the extent those distributions exceed both our current and our accumulated earnings and profits, they will constitute a return of capital and will first reduce your
basis in our common stock, but not below zero, and then will be treated as gain from the sale of stock, which will be subject to tax as described in "Gain on Disposition of Common Stock", below.
Any
dividend paid to you generally will be subject to U.S. withholding tax either at a rate of 30% of the gross amount of the dividend or such lower rate as may be specified by an applicable income
tax treaty. In order to receive a reduced treaty rate, you must provide us with an IRS Form W-8BEN or other appropriate version of IRS Form W-8 or successor form certifying qualification
for the reduced rate.
Dividends
received by you that are effectively connected with your conduct of a U.S. trade or business (and, if an applicable income tax treaty so provides, that are attributable to a permanent
establishment (or, if you are an individual, a fixed base) maintained by you within the United States) are exempt from such withholding tax. In order to obtain this exemption, you must provide us with
an IRS Form W-8ECI or successor form properly certifying such exemption. Such effectively connected dividends, although not subject to withholding tax, are taxed at the same graduated rates
applicable to U.S. persons, net of certain deductions and credits. In addition, if you are a corporate non-U.S. holder, dividends you receive that are effectively connected with your conduct of a U.S.
trade or business may also be subject to a branch profits tax at a rate of 30% or such lower rate as may be specified by an applicable income tax treaty.
If
you are eligible for a reduced rate of withholding tax pursuant to a tax treaty, you may obtain a refund of any excess amounts withheld if you file an appropriate claim for refund with the IRS.
You generally will not be required to pay U.S. federal income tax on any gain realized upon the sale or other disposition of our common stock
unless:
-
§
-
the gain is effectively connected with your conduct of a U.S. trade or business (and, if
an applicable income tax treaty so provides, the gain is attributable to a permanent establishment (or, if you are an individual, a fixed base) maintained by you within the United States);
-
§
-
you are an individual non-U.S. holder who holds our common stock as a capital asset, who
is present in the United States for a period or periods aggregating 183 days or more during the calendar year in which the sale or disposition occurs and certain other conditions are met; or
-
§
-
our common stock constitutes a U.S. real property interest by reason of our status as a
"United States real property holding corporation" for U.S. federal income tax purposes, or USRPHC, at any
S-19
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If
you are a non-U.S. holder described in the first bullet above, you will be required to pay tax on the net gain derived from the sale under regular graduated U.S. federal income tax rates. Corporate
non-U.S. holders described in the first bullet above may be subject to an additional branch profits tax at a 30% rate or such lower rate as may be specified by an applicable income tax treaty. If you
are an individual non-U.S. holder described in the second bullet above, you will be required to pay a flat 30% tax on the gain derived from the sale, which may be offset by U.S.-source capital losses
(even though you are not considered a resident of the United States). You should consult any applicable income tax or other treaties, which may provide different rules.
We
believe that we are not currently and will not become a USRPHC. However, because the determination of whether we are a USRPHC depends on the fair market value of our U.S. real property relative to
the fair market value of our other business assets, there can be no assurance that we will not become a USRPHC in the future. Even if we become a USRPHC, however, as long as our common stock is
regularly traded on an established securities market, such common stock will be treated as U.S. real property interests only if you actually or constructively hold more than five percent of such
regularly traded common stock at any time during the shorter of the five-year period preceding the disposition or your holding period for our common stock. If gain on the sale or other taxable
disposition of our stock is ever subject to tax because we are a USRPHC, you would be subject to regular U.S. federal income tax with respect to such gain, generally in the same manner as a U.S.
person.
Generally, we must report annually to the IRS the amount of dividends paid to you, your name and address, and the amount of tax withheld, if any. A similar
report will be sent to you. Pursuant to applicable income tax treaties or other agreements, the IRS may make these reports available to tax authorities in your country of residence.
Payments
of dividends or of proceeds on the disposition of stock made to you may be subject to information reporting and backup withholding (currently at a rate of 24%) unless you establish an
exemption, for example by
properly certifying your non-U.S. status on a Form W-8BEN or another appropriate version of IRS Form W-8 or successor form. Notwithstanding the foregoing, backup withholding and
information reporting may apply if either we or our paying agent has actual knowledge, or reason to know, that you are a U.S. person.
Backup
withholding is not an additional tax; rather, the U.S. income tax liability of persons subject to backup withholding will be reduced by the amount of tax withheld. If withholding results in an
overpayment of taxes, a refund or credit may be obtained, provided that the required information is furnished to the IRS in a timely manner. Non-U.S. holders should consult their tax advisors
regarding the application of the information reporting and backup withholding rules to them.
The Foreign Account Tax Compliance Act, or FATCA, generally imposes a U.S. federal withholding tax at a rate of 30% on payments of dividends on, or gross
proceeds from the sale or other disposition of, our common stock paid to a foreign entity unless (i) if the foreign entity is a "foreign financial institution," such foreign entity undertakes
certain due diligence, reporting, withholding, and certification obligations, (ii) if the foreign entity is not a "foreign financial institution," such foreign entity identifies certain of its
U.S. investors, if any, or (iii) the foreign entity is otherwise exempt under FATCA. Under applicable U.S. Treasury regulations, withholding under FATCA currently applies to payments of
dividends on our common stock, but will only apply to payments of gross proceeds from a sale or other disposition of our common stock made
S-20
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after
December 31, 2018. Under certain circumstances, a non-U.S. holder may be eligible for refunds or credits of the tax. An intergovernmental agreement between the United States and an
applicable foreign country may modify the requirements described in this paragraph. Non-U.S. holders should consult their own tax advisors regarding the possible implications of this legislation on
their investment in our common stock and the entities through which they hold our common stock, including, without limitation, the process and deadlines for meeting the applicable requirements to
prevent the imposition of the 30% withholding tax under FATCA.
S-21
Table of Contents
UNDERWRITING
Subject to the terms and conditions set forth in the underwriting agreement, dated September 11, 2018, among us and Jefferies LLC, Wells Fargo
Securities, LLC and RBC Capital Markets, LLC, as the representatives of the underwriters, we have agreed to sell to the underwriters, and each of the underwriters has agreed, severally
and not jointly, to purchase from us, the number of shares of common stock shown opposite its name below:
|
|
|
|
|
Underwriter
|
|
Number of Shares
|
|
Jefferies LLC
|
|
3,972,974
|
|
Wells Fargo Securities, LLC
|
|
2,364,865
|
|
RBC Capital Markets, LLC
|
|
1,797,297
|
|
Wedbush Securities Inc.
|
|
1,324,324
|
|
|
|
|
|
Total
|
|
9,459,460
|
|
|
|
|
|
|
|
|
|
|
|
|
The
underwriting agreement provides that the obligations of the several underwriters are subject to certain conditions precedent such as the receipt by the underwriters of officers' certificates and
legal opinions and approval of certain legal matters by their counsel. The underwriting agreement provides that the underwriters will purchase all of the shares of common stock if any of them are
purchased. If an underwriter defaults, the underwriting agreement provides that the purchase commitments of the nondefaulting underwriters may be increased or the underwriting agreement may be
terminated. We have agreed to indemnify the underwriters and certain of their controlling persons against certain liabilities, including liabilities under the Securities Act, and to contribute to
payments that the underwriters may be required to make in respect of those liabilities.
The
underwriters have advised us that, following the completion of this offering, they currently intend to make a market in the common stock as permitted by applicable laws and regulations. However,
the underwriters are not obligated to do so, and the underwriters may discontinue any market-making activities at any time without notice in their sole discretion. Accordingly, no assurance can be
given as to the liquidity of the trading market for the
common stock, that you will be able to sell any of the common stock held by you at a particular time or that the prices that you receive when you sell will be favorable.
The
underwriters are offering the shares of common stock subject to their acceptance of the shares of common stock from us and subject to prior sale. The underwriters reserve the right to withdraw,
cancel, or modify offers to the public and to reject orders in whole or in part.
Commission and Expenses
The underwriters have advised us that they propose to offer the shares of common stock to the public at the public offering price set forth on the cover page
of this prospectus supplement and to certain dealers, which may include the underwriters, at that price less a concession not in excess of $0.666 per share of common stock. After the offering, the
public offering price and concession to dealers may be reduced by the underwriters. No such reduction will change the amount of proceeds to be received by us as set forth on the cover page of this
prospectus supplement.
The
following table shows the public offering price, the underwriting discounts and commissions that we are to pay the underwriters and the proceeds, before estimated expenses, to us in connection
with this offering. Such amounts are shown assuming both no exercise and full exercise of the underwriters' option to purchase additional shares.
S-22
Table of Contents
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per Share
|
|
Total
|
|
|
|
Without
Option to
Purchase
Additional
Shares
|
|
With
Option to
Purchase
Additional
Shares
|
|
Without
Option to
Purchase
Additional
Shares
|
|
With
Option to
Purchase
Additional
Shares
|
|
|
Public offering price
|
|
$
|
18.50
|
|
$
|
18.50
|
|
$
|
175,000,010
|
|
$
|
201,250,012
|
|
|
Underwriting discounts and commissions paid by us
|
|
$
|
1.11
|
|
$
|
1.11
|
|
$
|
10,500,001
|
|
$
|
12,075,001
|
|
|
Proceeds to us, before estimated expenses
|
|
$
|
17.39
|
|
$
|
17.39
|
|
$
|
164,500,009
|
|
$
|
189,175,011
|
|
We
estimate expenses payable by us in connection with this offering, other than the underwriting discounts and commissions referred to above, will be approximately $500,000. We have also agreed to
reimburse the underwriters for certain of their expenses in an amount up to $20,000.
Listing
Our common stock is listed on the Nasdaq Global Market under the trading symbol "ECYT."
Option to Purchase Additional Shares
We have granted to the underwriters an option, exercisable for 30 days from the date of this prospectus supplement, to purchase, from time to time, in
whole or in part, up to an additional 1,418,919 shares of our common stock from us at the public offering price set forth on the cover page of this prospectus supplement, less underwriting discounts
and commissions. If the underwriters exercise this option, each underwriter will be obligated, subject to specified conditions, to purchase a number of additional shares proportionate to that
underwriter's initial purchase commitment as indicated in the table above.
No Sales of Similar Securities
We, our officers, directors and certain of our other securityholders that are affiliated with certain of our directors have agreed, subject to specified
exceptions, not to directly or indirectly:
-
§
-
sell, offer, contract or grant any option to sell (including any short sale), pledge,
transfer, establish an open "put equivalent position" within the meaning of Rule 16a-l(h) under the Exchange Act, or
-
§
-
otherwise dispose of any shares of common stock, options or warrants to acquire shares of
common stock, or securities exchangeable or exercisable for or convertible into shares of common stock currently or hereafter owned either of record or beneficially, or
-
§
-
publicly announce an intention to do any of the foregoing for a period of 90 days
after the date of this prospectus without the prior written consent of Jefferies LLC.
This
restriction terminates after the 90th day after the date of this prospectus supplement.
Notwithstanding
the foregoing, our officers and directors may sell shares of common stock pursuant to plans created pursuant to Rule 10b5-1 under the Securities Exchange Act of 1934 that exist
on the date hereof, as well as to provide for the payment of taxes due in connection with the vesting of certain previously issued restricted stock units and other equity compensation awards.
Jefferies LLC
may, in its sole discretion and at any time or from time to time before the termination of the 90-day period, release all or any portion of the securities subject to lock-up
agreements.
S-23
Table of Contents
Stabilization
The underwriters have advised us that they, pursuant to Regulation M under the Exchange Act, and certain persons participating in the offering, may
engage in short sale transactions, stabilizing transactions, syndicate covering transactions, or the imposition of penalty bids in connection with this offering. These activities may have the effect
of stabilizing or maintaining the market price of our common stock at a level above that which might otherwise prevail in the open market. Establishing short sale positions may involve either
"covered" short sales or "naked" short sales.
"Covered"
short sales are sales made in an amount not greater than the underwriters' option to purchase additional shares of our common stock in this offering. The underwriters may close out any
covered short position by either exercising their option to purchase additional shares of our common stock or purchasing shares of our common stock in the open market. In determining the source of
shares to close out the covered short position, the underwriters will consider, among other things, the price of shares available for purchase in the open market as compared to the price at which they
may purchase shares through the option to purchase additional shares.
"Naked"
short sales are sales in excess of the option to purchase additional shares of our common stock. The underwriters must close out any naked short position by purchasing shares in the open
market. A naked short position is more likely to be created if the underwriters are concerned that there may be downward pressure on the price of the shares of our common stock in the open market
after pricing that could adversely affect investors who purchase in this offering.
A
stabilizing bid is a bid for the purchase of shares of common stock on behalf of the underwriters for the purpose of fixing or maintaining the price of the common stock. A syndicate covering
transaction is the bid for or the purchase of shares of common stock on behalf of the underwriters to reduce a short position incurred by the underwriters in connection with the offering. Similar to
other purchase transactions, the underwriter's purchases to cover the syndicate short sales may have the effect of raising or maintaining the market price of our common stock or preventing or
retarding a decline in the market price of our common stock. As a result, the price of our common stock may be higher than the price that might otherwise exist in the open market. A penalty bid is an
arrangement permitting the underwriters to reclaim the selling concession otherwise accruing to a syndicate member in connection with the offering if the shares of common stock originally sold by such
syndicate member are purchased in a syndicate covering transaction and therefore have not been effectively placed by such syndicate member.
Neither
we, nor any of the underwriters, make any representation or prediction as to the direction or magnitude of any effect that the transactions described above may have on the price of our common
stock. The underwriters are not obligated to engage in these activities and, if commenced, any of the activities may be discontinued at any time.
The
underwriters may also engage in passive market making transactions in our common stock on the Nasdaq Global Market in accordance with Rule 103 of Regulation M during a period before
the commencement of offers or sales of shares of our common stock in this offering and extending through the completion of distribution. A passive market maker must display its bid at a price not in
excess of the highest independent bid of that security. However, if all independent bids are lowered below the passive market maker's bid, that bid must then be lowered when specified purchase limits
are exceeded.
Electronic Distribution
A prospectus supplement in electronic format may be made available by e-mail or on the web sites or through online services maintained by one or more of the
underwriters or their affiliates. In those cases, prospective investors may view offering terms online and may be allowed to place orders online. The underwriters may agree with us to allocate a
specific number of shares of common stock for sale to online brokerage account holders. Any such allocation for online distributions will be made by the underwriters on
S-24
Table of Contents
the
same basis as other allocations. Other than the prospectus supplement in electronic format, the information on the underwriters' web sites and any information contained in any other web site
maintained by any of the underwriters is not part of this prospectus supplement, has not been approved and/or endorsed by us or the underwriters and should not be relied upon by investors.
Other Activities and Relationships
The underwriters and certain of their respective affiliates are full service financial institutions engaged in various activities, which may include securities
trading, commercial and investment banking, financial advisory, investment management, investment research, principal investment, hedging, financing and brokerage activities. The underwriters and
certain of their respective affiliates have, from time to time, performed, and may in the future perform, various commercial and investment banking and financial advisory services for us and our
affiliates, for which they received or will receive customary fees and expenses.
In
the ordinary course of their various business activities, the underwriters and certain of their respective affiliates may make or hold a broad array of investments and actively trade debt and
equity securities (or related derivative securities) and financial instruments (including bank loans) for their own account and for the accounts of their customers, and such investment and securities
activities may involve securities and/or instruments issued by us and our affiliates. If the underwriters or their respective affiliates have a lending relationship with us, they routinely hedge their
credit exposure to us consistent with their customary risk management policies. The underwriters and their respective affiliates may hedge such exposure by entering into transactions which consist of
either the purchase of credit default swaps or the creation of short positions in our securities or the securities of our affiliates, including potentially the common stock offered hereby. Any such
short positions could adversely affect future trading prices of the common stock offered hereby. The underwriters and certain of their respective
affiliates may also communicate independent investment recommendations, market color or trading ideas and/or publish or express independent research views in respect of such securities or instruments
and may at any time hold, or recommend to clients that they acquire, long and/or short positions in such securities and instruments.
Disclaimers About Non-U.S. Jurisdictions
Australia
This prospectus supplement is not a disclosure document for the purposes of Australia's Corporations Act 2001 (Cth) of Australia, or Corporations Act, has not
been lodged with the Australian Securities & Investments Commission and is only directed to the categories of exempt persons set out below. Accordingly, if you receive this prospectus
supplement in Australia:
-
A.
-
You
confirm and warrant that you are either:
-
§
-
a "sophisticated investor" under section 708(8)(a) or (b) of the
Corporations Act;
-
§
-
a "sophisticated investor" under section 708(8)(c) or (d) of the
Corporations Act and that you have provided an accountant's certificate to the company which complies with the requirements of section 708(8)(c)(i) or (ii) of the Corporations Act and
related regulations before the offer has been made;
-
§
-
a person associated with the Company under Section 708(12) of the Corporations
Act; or
-
§
-
a "professional investor" within the meaning of section 708(11)(a) or
(b) of the Corporations Act.
To
the extent that you are unable to confirm or warrant that you are an exempt sophisticated investor, associated person or professional investor under the Corporations Act, any offer made to you
under this prospectus supplement is void and incapable of acceptance.
-
B.
-
You
warrant and agree that you will not offer any of the securities issued to you pursuant to this prospectus supplement for resale in Australia within
12 months of those securities being issued
S-25
Table of Contents
Canada
-
A.
-
Resale Restrictions
. The distribution of the shares in Canada is being made only in the provinces of
Ontario, Quebec, Alberta and British Columbia on a private placement basis exempt from the requirement that we prepare and file a prospectus with the securities regulatory authorities in each
province where trades of these securities are made. Any resale of the shares in Canada must be made under applicable securities laws which may vary depending on the relevant jurisdiction, and which
may require resales to be made under available statutory exemptions or under a discretionary exemption granted by the applicable Canadian securities regulatory authority. Purchasers are advised to
seek legal advice prior to any resale of the securities.
-
B.
-
Representations of Canadian Purchasers
. By purchasing shares in Canada and accepting delivery of a purchase
confirmation, a purchaser is representing to and the dealer from whom the purchase confirmation is received
that:
-
§
-
the purchaser is entitled under applicable provincial securities laws to purchase the
shares of common stock without the benefit of a prospectus qualified under those securities laws as it is an "accredited investor" as defined under National
Instrument 45-106 —
Prospectus Exemptions
;
-
§
-
the purchaser is a "permitted client" as defined in National
Instrument 31-103 —
Registration Requirements, Exemptions and Ongoing Registrant Obligations
;
-
§
-
where required by law, the purchaser is purchasing as principal and not as agent; and
-
§
-
the purchaser has reviewed the text above under Resale Restrictions.
-
C.
-
Conflicts of Interest
. Canadian purchasers are hereby notified that the underwriters are relying on the
exemption set out in section 3A.3 or 3A.4, if applicable, of National Instrument 33-105 — Underwriting Conflicts from having to provide certain conflict of interest
disclosure in this document.
-
D.
-
Statutory Rights of Action
. Securities legislation in certain provinces or territories of Canada may
provide a purchaser with remedies for rescission or damages if the prospectus supplement (including any amendment thereto) such as this document contains a misrepresentation, provided that the
remedies for rescission or damages are exercised by the purchaser within the time limit prescribed by the securities legislation of the purchaser's province or territory. The purchaser of these
securities in Canada should refer to any applicable provisions of the securities legislation of the purchaser's province or territory for particulars of these rights or consult with a legal advisor.
-
E.
-
Enforcement of Legal Rights
. All of our directors and officers as well as the experts named herein may be
located outside of Canada and, as a result, it may not be possible for Canadian purchasers to effect service of process within Canada upon us or those persons. All or a substantial portion of our
assets and the assets of those persons may be located outside of Canada and, as a result, it may not be possible to satisfy a judgment against us or those persons in Canada or to enforce a judgment
obtained in Canadian courts against us or those persons outside of Canada.
-
F.
-
Taxation and Eligibility for Investment
. Canadian purchasers of shares of common stock should consult their
own legal and tax advisors with respect to the tax consequences of an investment in the company in their particular circumstances and about the eligibility of the shares of common stock for investment
by the purchaser under relevant Canadian legislation.
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European Economic Area
In relation to each Member State of the European Economic Area (each, a "Relevant Member State"), no offer of shares of common stock may be made to the public
in that Relevant Member State other than:
-
(a)
-
to
any legal entity which is a "qualified investor" as defined in the Prospectus Directive;
-
(b)
-
to
fewer than 150 natural or legal persons (other than qualified investors as defined in the Prospectus Directive), as permitted under the Prospectus Directive,
subject to obtaining the prior consent of the representatives; or
-
(c)
-
in
any other circumstances falling within Article 3(2) of the Prospectus Directive, provided that no such offer of shares shall require the Company or the
representatives to publish a prospectus pursuant to Article 3 of the Prospectus Directive or supplement a prospectus pursuant to Article 16 of the Prospectus Directive,
Each
person in a Relevant Member State who initially acquires any shares or to whom any offer is made will be deemed to have represented, acknowledged and agreed to and with each of the
representatives and the Company that it is a "qualified investor" within the meaning of the law in that Relevant Member State implementing Article 2(1)(e) of the Prospectus Directive. In the
case of any shares being offered to a financial intermediary as that term is used in Article 3(2) of the Prospectus Directive, each such financial intermediary will be deemed to have
represented, acknowledged and agreed that the shares acquired by it in the offer have not been acquired on a non-discretionary basis on behalf of, nor have they been acquired with a view to their
offer or resale to, persons in circumstances which may give rise to an offer of any shares to the public other than their offer or resale in a Relevant Member State to qualified investors as so
defined or in circumstances in which the prior consent of the representatives has been obtained to each such proposed offer or resale.
For
the purposes of this provision, the expression an "offer of shares to the public" in relation to any shares in any Relevant Member State means the communication in any form and by any means of
sufficient information on the terms of the offer and the shares to be offered so as to enable an investor to decide to purchase or subscribe the shares, as the same may be varied in the Relevant
Member State by any measure implementing the Prospectus Directive in the Relevant Member State and the expression "Prospectus Directive" means Directive 2003/71/EC (as amended by
Directive 2010/73/EU), and includes any relevant implementing measure in the Relevant Member State.
Hong Kong
No securities have been offered or sold, and no securities may be offered or sold, in Hong Kong, by means of any document, other than to persons whose ordinary
business is to buy or sell securities, whether as principal or agent; or to "professional investors" as defined in the Securities and Futures Ordinance (Cap. 571) of Hong Kong, or the SFO, and
any rules made under that Ordinance; or in other circumstances which do not result in the document being a "prospectus" as defined in the Companies Ordinance (Cap. 32) of Hong Kong, or
the CO, or which do not constitute an offer or invitation to the public for the purpose of the CO or the SFO. No document, invitation or advertisement relating to the securities has been issued or may
be issued or may be in the possession of any person for the purpose of issue (in each case whether in Hong Kong or elsewhere), which is directed at, or the contents of which are likely to be accessed
or read by, the public of Hong Kong (except if permitted under the securities laws of Hong Kong) other than with respect to securities which are or are
intended to be disposed of only to persons outside Hong Kong or only to "professional investors" as defined in the SFO and any rules made under that Ordinance.
This
prospectus supplement has not been registered with the Registrar of Companies in Hong Kong. Accordingly, this prospectus supplement may not be issued, circulated or distributed in Hong Kong, and
the securities may not be offered for subscription to members of the public in Hong Kong. Each person acquiring the securities will be required, and is deemed by the acquisition of the securities, to
confirm that
S-27
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he
is aware of the restriction on offers of the securities described in this prospectus supplement and the relevant offering documents and that he is not acquiring, and has not been offered any
securities in circumstances that contravene any such restrictions.
Israel
This document does not constitute a prospectus under the Israeli Securities Law, 5728-1968, or the Securities Law, and has not been filed with or approved by
the Israel Securities Authority. In Israel, this prospectus is being distributed only to, and is directed only at, and any offer of the shares of common stock is directed only at, (i) a limited
number of persons in accordance with the Israeli Securities Law and (ii) investors listed in the first addendum, or the Addendum, to the Israeli Securities Law, consisting primarily of joint
investment in trust funds, provident funds, insurance companies, banks, portfolio managers, investment advisors, members of the Tel Aviv Stock Exchange, underwriters, venture capital funds, entities
with equity in excess of NIS 50 million and "qualified individuals," each as defined in the Addendum (as it may be amended from time to time), collectively referred to as qualified investors
(in each case, purchasing for their own account or, where permitted under the Addendum, for the accounts of their clients who are investors listed in the Addendum). Qualified investors are required to
submit written confirmation that they fall within the scope of the Addendum, are aware of the meaning of same and agree to it.
Japan
The offering has not been and will not be registered under the Financial Instruments and Exchange Law of Japan (Law No. 25 of 1948 of Japan, as
amended), or FIEL, and the Initial Purchaser will not offer or sell any securities, directly or indirectly, in Japan or to, or for the benefit of, any resident of Japan (which
term as used herein means any person resident in Japan, including any corporation or other entity organized under the laws of Japan), or to others for re-offering or resale, directly or indirectly, in
Japan or to, or for the benefit of, any resident of Japan, except pursuant to an exemption from the registration requirements of, and otherwise in compliance with, the FIEL and any other applicable
laws, regulations and ministerial guidelines of Japan.
Singapore
This prospectus supplement has not been and will not be lodged or registered as a prospectus with the Monetary Authority of Singapore. Accordingly, this
prospectus supplement and any other document or material in connection with the offer or sale, or invitation for subscription or purchase, of the shares of common stock may not be circulated or
distributed, nor may the shares of common stock be offered or sold, or be made the subject of an invitation for subscription or purchase, whether directly or indirectly, to persons in Singapore other
than (i) to an institutional investor under Section 274 of the Securities and Futures Act, Chapter 289 of Singapore, or the SFA, (ii) to a relevant person pursuant to
Section 275(1), or any person pursuant to Section 275(1A), and in accordance with the conditions specified in Section 275, of the SFA, or (iii) otherwise pursuant to, and
in accordance with the conditions of, any other applicable provision of the SFA.
Where
the shares of common stock are subscribed or purchased under Section 275 of the SFA by a relevant person which is:
-
(a)
-
a
corporation (which is not an accredited investor (as defined in Section 4A of the SFA)) the sole business of which is to hold investments and the entire
share capital of which is owned by one or more individuals, each of whom is an accredited investor; or
-
(b)
-
a
trust (where the trustee is not an accredited investor) whose sole purpose is to hold investments and each beneficiary of the trust is an individual who is an
accredited investor,
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securities
(as defined in Section 239(1) of the SFA) of that corporation or the beneficiaries' rights and interest (howsoever described) in that trust shall not be transferred within six months
after that corporation or that trust has acquired the securities pursuant to an offer made under Section 275 of the SFA except:
-
(i)
-
to
an institutional investor or to a relevant person defined in Section 275(2) of the SFA, or to any person arising from an offer referred to in
Section 275(1A) or Section 276(4)(i)(B) of the SFA;
-
(ii)
-
where
no consideration is or will be given for the transfer;
-
(iii)
-
where
the transfer is by operation of law;
-
(iv)
-
as
specified in Section 276(7) of the SFA; or
-
(v)
-
as
specified in Regulation 32 of the Securities and Futures (Offers of Investments) (Shares and Debentures) Regulations 2005 of Singapore.
Switzerland
The securities may not be publicly offered in Switzerland and will not be listed on the SIX Swiss Exchange, or the SIX, or on any other stock exchange or
regulated trading facility in Switzerland. This prospectus supplement has been prepared without regard to the disclosure standards for issuance prospectuses under art. 652a or art. 1156 of the Swiss
Code of Obligations or the disclosure standards for listing prospectuses under art. 27 ff. of the SIX Listing Rules or the listing rules of any other stock exchange or regulated trading facility in
Switzerland. Neither this prospectus supplement nor any other offering or marketing material relating to the securities or the offering may be publicly distributed or otherwise made publicly available
in Switzerland.
Neither
this prospectus supplement nor any other offering or marketing material relating to the offering, the company or the securities have been or will be filed with or approved by any Swiss
regulatory authority. In particular, this prospectus supplement will not be filed with, and the offer of securities will not be supervised by,
the Swiss Financial Market Supervisory Authority FINMA, and the offer of securities has not been and will not be authorized under the Swiss Federal Act on Collective Investment Schemes, or the CISA.
The investor protection afforded to acquirers of interests in collective investment schemes under the CISA does not extend to acquirers of securities.
United Kingdom
This prospectus supplement is only being distributed to, and is only directed at, persons in the United Kingdom that are qualified investors within the meaning
of Article 2(1)(e) of the Prospectus Directive that are also (i) investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial
Promotion) Order 2005, as amended, or the Order, and/or (ii) high net worth entities falling within Article 49(2)(a) to (d) of the Order and other persons to whom it may lawfully
be communicated (each such person being referred to as a relevant person).
This
prospectus supplement and its contents are confidential and should not be distributed, published or reproduced (in whole or in part) or disclosed by recipients to any other persons in the United
Kingdom. Any person in the United Kingdom that is not a relevant person should not act or rely on this document or any of its contents.
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Table of Contents
WHERE YOU CAN FIND MORE INFORMATION
Available Information
This prospectus supplement and the accompanying prospectus are part of the registration statement on Form S-3 we filed with the SEC under the Securities
Act and do not contain all the information set forth in the registration statement. Whenever a reference is made in this prospectus supplement or the accompanying prospectus to any of our contracts 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 in this prospectus supplement and the accompanying prospectus for a copy of such contract, agreement or other document.
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 www.sec.gov.
You may also read and copy any document we file at the SEC's Public Reference Room at 100 F Street, NE, Washington, D.C. 20549.
Please call the SEC at 1-800-SEC-0330 for further information on the Public Reference Room. Our Annual Reports 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 in the Investor Relations section of our website, which is located at http://investor.endocyte.com. These filings will be available as soon as reasonably practicable after we
electronically file such material with, or furnish it to, the SEC. Information contained on our website is not incorporated by reference into this prospectus supplement and you should not consider
information contained on our website to be part of this prospectus supplement.
Incorporation by Reference
The SEC allows us to incorporate by reference into this prospectus supplement the information we file with the SEC, which means that we can disclose important
information to you by referring you to another document that we have filed separately with the SEC. You should read the information incorporated by reference because it is an important part of this
prospectus supplement. Information incorporated by reference is part of this prospectus supplement and the accompanying prospectus.
We
incorporate by reference the documents listed below and any future filings made with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this prospectus
supplement until the termination of the offering of the shares covered by this prospectus supplement (other than any portions of any such documents that are not deemed "filed" under the Exchange Act
in accordance with the Exchange Act and applicable SEC rules):
-
§
-
our Annual Report on Form 10-K for the year ended December 31, 2017, filed
with the SEC on February 27, 2018;
-
§
-
our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2018
and June 30, 2018, filed with the SEC on May 9, 2018 and August 1, 2018, respectively;
-
§
-
our Definitive Proxy Statement on Schedule 14A, filed with the SEC on
March 23, 2018 (solely those portions that were incorporated by reference into Part III of our Annual Report on Form 10-K for the year ended December 31, 2017);
-
§
-
our Current Reports on Form 8-K filed with the SEC on February 28, 2018,
March 2, 2018, March 15, 2018, May 9, 2018 (other than Item 2.02 and Exhibit 99.1 thereto) and July 11, 2018 (other than Item 7.01 and
Exhibit 99.1 thereto); and
-
§
-
the description of our common stock contained in our registration statement on
Form 8-A, which was filed with the SEC on January 24, 2011, including any amendment or report filed with the SEC for the purpose of updating such description.
S-31
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We
will provide without charge to each person, including any beneficial owner, to whom this prospectus supplement is delivered, upon written or oral request, a copy of any or all documents that are
incorporated by reference into this prospectus supplement, but not delivered with the prospectus supplement, other than exhibits to such documents unless such exhibits are specifically incorporated by
reference into the documents that this prospectus supplement incorporates. Any such request may be made by writing or telephoning us at the following address or phone number:
Endocyte, Inc.
3000 Kent Avenue, Suite A1-100
West Lafayette, Indiana 47906
Attention: Secretary
(765) 463-7175
In
accordance with Rule 412 of the Securities Act, any statement contained in a document incorporated by reference herein shall be deemed modified or superseded to the extent that a statement
contained herein or in any other subsequently filed document which also is or is deemed to be incorporated by reference herein modifies or supersedes such statement.
S-32
Table of Contents
PROSPECTUS
ENDOCYTE, INC.
Common Stock
Preferred Stock
Debt Securities
Warrants
Rights
Units
We or selling securityholders to be identified in supplements to this prospectus may offer and sell, from time to time in one or more offerings, common stock,
preferred stock, debt securities, warrants, rights and units, in any combination. This includes offerings of common stock, preferred stock or other securities covered herby upon conversion of debt
securities or exercise of warrants or rights. This prospectus provides you with a general description of the securities that may be offered. Each time we or selling securityholders offer and sell
securities using this prospectus, we will provide a supplement to this prospectus that contains specific information about the offering, as well as the amounts, prices and terms of the securities. The
supplement may also add, update or change information contained in this prospectus with respect to that offering. You should carefully read this prospectus and the applicable prospectus supplement
before you invest in any of our securities.
We
or selling securityholders may offer and sell the securities described in this prospectus and any prospectus supplement to or through one or more underwriters, dealers and agents, or directly to
purchasers, or through a combination of these methods. If any underwriters, dealers or agents are involved in the sale of any of the securities, their names and any applicable purchase price, fee,
commission or discount arrangement between or among them will be set forth, or will be calculable from the information set forth, in the applicable prospectus supplement. See the sections of this
prospectus entitled "About this Prospectus" and "Plan of Distribution" for more information. This prospectus may not be used to offer and sell our securities unless accompanied by a prospectus
supplement describing the method and terms of the offering of such securities. Unless the applicable prospectus supplement provides otherwise, we will not receive any proceeds from the sale of
securities by selling securityholders.
Investing in our securities involves risks. See "Risk Factors" on page 5 of this prospectus and any similar section contained in the applicable prospectus supplement and
in our periodic reports filed with the Securities and Exchange Commission concerning factors you should consider before investing in our securities.
Our
common stock is listed on The Nasdaq Global Market under the symbol "ECYT." On September 7, 2018, the last reported sale price of our common stock on The Nasdaq Global Market was $16.96 per
share. The applicable prospectus supplement will contain information, where applicable, as to other listings, if any, on The Nasdaq Global Market or other securities exchange of the securities covered
by the applicable prospectus supplement.
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of
this prospectus. Any representation to the contrary is a criminal offense.
The date of this prospectus is September 10, 2018.
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TABLE OF CONTENTS
Table of Contents
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we filed with the U.S. Securities and Exchange Commission, or the SEC, using a "shelf" registration
process as a "well-known seasoned issuer" as defined in Rule 405 under the Securities Act of 1933. By using a shelf registration statement, we or selling securityholders may sell securities
described in this prospectus from time to time and in one or more offerings. Each time that we or selling securityholders offer and sell securities using this prospectus, we will provide a prospectus
supplement to this prospectus that contains specific information about the securities being offered and sold and the specific 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 may also add, update or change information contained in this prospectus
with respect to that offering. If there is any inconsistency between the information in this prospectus and the applicable prospectus supplement or free writing prospectus, you should rely on the
prospectus supplement or free writing prospectus. 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." Before purchasing any securities, you should carefully read both this prospectus and the applicable prospectus supplement or free writing prospectus, together
with the additional information described under the heading "Where You Can Find More Information."
This prospectus may not be used to consummate a sale of securities unless it is accompanied by a prospectus supplement.
We
have not authorized any other person to provide you with different information from that contained in or incorporated by reference into this prospectus, any prospectus supplement or any applicable
free writing prospectus. Neither we nor any selling securityholder take any responsibility for, and can provide any assurance as to the reliability of, any other information that others may give you.
We will not make an offer to sell these securities in any jurisdiction where the offer or sale is not permitted. You should assume that the information appearing in this prospectus and the applicable
prospectus supplement to this prospectus is accurate only as of the date on its respective cover, and that any information incorporated by reference is accurate only as of the date of the document
incorporated by reference, unless we indicate otherwise. Our business, financial condition, results of operations and prospects may have changed since those dates.
This
prospectus incorporates by reference, and any prospectus supplement or free writing prospectus may contain and incorporate by reference, certain market and industry data obtained from independent
market research, industry publications and surveys, governmental agencies and publicly available information. Industry surveys, publications and forecasts generally state that the information
contained therein has been obtained from sources believed to be reliable, although they do not guarantee the accuracy or completeness of such information. We believe the data from such third-party
sources to be reliable. However, we have not independently verified any of such data and cannot guarantee its accuracy or completeness. Similarly, internal market research and industry forecasts,
which we believe to be reliable based upon our management's knowledge of the market and the industry, have not been verified by any independent sources. While we are not aware of any misstatements
regarding the market or industry data presented herein, our estimates involve risks and uncertainties and are subject to change based on various factors.
References
in this prospectus to "Endocyte", "we", "our", "us" and "the Company" refer to Endocyte, Inc., a Delaware corporation. This prospectus contains additional trade names, trademarks and
service marks of others, which are the property of their respective owners. Solely for convenience, trademarks and trade names referred to in this prospectus may appear without the ® or
™ symbols.
1
Table of Contents
PROSPECTUS SUMMARY
This summary highlights certain information about us and selected information contained elsewhere in or incorporated by reference into
this prospectus. This summary is not complete and does not contain all of the information that you should consider before deciding to invest in our common stock. For a more complete understanding of
our company, we encourage you to read and consider carefully the more detailed information in this prospectus, including the information incorporated by reference in this prospectus, before making an
investment decision. See "Where You Can Find More Information" in this prospectus.
Our Company
Overview
We are a biopharmaceutical company and leader in developing targeted therapies for the treatment of cancer. We use drug conjugation technology to create novel
therapeutics and companion imaging agents for personalized targeted therapies. Our agents actively target receptors that are over-expressed on diseased cells relative to healthy cells, such as
prostate specific membrane antigen, or PSMA, in prostate cancer. This targeted approach is designed to safely enable the delivery of highly potent drug payloads. The companion imaging agents are
designed to identify patients whose disease over-expresses the target of the therapy and who are therefore more likely to benefit from treatment.
Our Corporate Information
We were incorporated in the State of Indiana in 1995, and we were reincorporated in the State of Delaware in 2001. Our principal offices are located at 3000
Kent Avenue, Suite A1-100, West Lafayette, Indiana 47906, and our telephone number is +1 765 463 7175. Our website address is www.endocyte.com. Information contained
on or accessible through our website is not incorporated by reference into this prospectus, and you should not consider information contained on or accessible through our website as part of this
prospectus or part of any prospectus supplement.
The
name "Endocyte" and our logo are our trademarks. All other trademarks and trade names appearing in this prospectus are the property of their respective owners.
Selling Securityholders
Selling securityholders are persons or entities that, directly or indirectly, have acquired or will from time to time acquire from us, our securities.
Additional information about selling securityholders, if any, will be set forth in a prospectus supplement. See "Selling Securityholders" on page 34 of this prospectus.
Use of Proceeds
Except as described in any applicable prospectus supplement or in any free writing prospectuses we have authorized for use in connection with a specific
offering, we intend to use the net proceeds from the sale of the securities under this prospectus for general corporate purposes. See "Use of Proceeds" on page 7 of this prospectus. Unless the
applicable prospectus supplement provides otherwise, we will not receive any of the proceeds from the sale of our securities by selling securityholders.
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Table of Contents
WHERE YOU CAN FIND MORE INFORMATION
Available Information
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
www.sec.gov
. You may also read and copy any document we file with the SEC at its Public Reference Room at 100 F
Street, N.E., Washington, D.C. 20549. You can also obtain copies of the documents at prescribed rates by writing to the Office
of Investor Education and Advocacy of the SEC at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at (800) SEC-0330 for further information on the operation of the Public
Reference Room.
We
also make our SEC filings available, free of charge, on or through our website at
www.endocyte.com
. Please note, however, that information on or
accessible through our website is not, and should not be deemed to be, a part of this prospectus.
Incorporation by Reference
We "incorporate by reference" into this prospectus certain information we file with the SEC, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is an important part of this prospectus. Some information contained in this prospectus updates the information incorporated
by reference, and information that we file subsequently with the SEC will automatically update this prospectus as well as our other filings with the SEC. In other words, in the case of a conflict or
inconsistency between information set forth in this prospectus and information incorporated by reference into this prospectus, you should rely on the information contained in the document that was
filed later. We incorporate by reference the documents listed below and any filings we make with the SEC under Sections 13(a), 13(c), 14, or 15(d) of the Securities Exchange Act of 1934, as
amended, or the Exchange Act, after the date of this prospectus and prior to the expiration or termination of the registration statement of which this prospectus is a part (in each case, other than
any portions of any such documents that are not deemed "filed" under the Exchange Act in accordance with the Exchange Act and applicable SEC rules):
-
§
-
our Annual Report on Form 10-K for the year ended December 31, 2017, filed
with the SEC on February 27, 2018;
-
§
-
our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2018
and June 30, 2018, filed with the SEC on May 9, 2018 and August 1, 2018, respectively;
-
§
-
our Definitive Proxy Statement on Schedule 14A, filed with the SEC on
March 23, 2018 (solely those portions that were incorporated by reference into Part III of our Annual Report on Form 10-K for the year ended December 31, 2017);
-
§
-
our Current Reports on Form 8-K filed with the SEC on February 28, 2018,
March 2, 2018, March 15, 2018, May 9, 2018 (other than Item 2.02 and Exhibit 99.1 thereto) and July 11, 2018 (other than Item 7.01 and
Exhibit 99.1 thereto); and
-
§
-
the description of our common stock contained in our registration statement on
Form 8-A, which was filed with the SEC on January 24, 2011, including any amendment or report filed with the SEC for the purpose of updating such description.
All
reports and other documents we subsequently file pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act prior to the expiration or termination of the registration statement of
which this prospectus is a part but excluding any information furnished to, rather than filed with, the SEC, will also be incorporated by reference into this prospectus and deemed to be part of this
prospectus from the date of the filing of such reports and documents. You may request a copy of these filings, other than an exhibit to a filing
3
Table of Contents
unless
that exhibit is specifically incorporated by reference into that filing, at no cost, by writing to or telephoning us at the following:
Endocyte, Inc.
3000 Kent Avenue, Suite A1-100
West Lafayette, IN 47906
Attention: Secretary
(765) 463-7175
You
should rely only on the information incorporated by reference or presented in this prospectus or the applicable prospectus supplement. Neither we, the selling securityholders nor any underwriters
or agents have authorized anyone else to provide you with different information. Neither we nor the selling securityholders are making an offer of these securities in any jurisdiction where the offer
is not permitted. You should not assume that the information in this prospectus or the applicable prospectus supplement is accurate as of any date other than the dates on the front of those documents.
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Table of Contents
RISK FACTORS
An investment in our securities involves a high degree of risk. Prior to making a decision about investing in our securities, you should carefully consider the
risks and uncertainties contained in the applicable prospectus supplement and the risks and uncertainties incorporated by reference in this prospectus, including the information included under "Risk
Factors" in our most recent Annual Report on Form 10-K, as well as amendments thereto reflected in subsequent filings with the SEC, all of which are incorporated by reference herein in their
entirety, as well as any modification, replacement or update to these risks and uncertainties that are reflected in any future filings we make with the SEC, as described under "Where You Can Find More
Information" above, which will also be incorporated by reference herein in their entirety. The risks described in these documents are not the only ones we face, but those that we consider to be
material. Additional risks and uncertainties that we are unaware of, or that we currently believe are not material, may also become important factors that adversely affect our business. Past financial
performance may not be a reliable indicator of future performance, and historical trends should not be used to anticipate results or trends in future periods. If any of these risks actually occurs,
our business, reputation, financial condition, results of operations or cash flow could be seriously harmed. This could cause the trading price of our common stock to decline, resulting in a loss of
all or part of your investment. Please also carefully read the section below entitled "Cautionary Statement Regarding Forward-Looking Statements."
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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This prospectus, including the documents that we incorporate by reference, contains forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933 and Section 21E of the Exchange Act. The forward-looking statements involve substantial risks and uncertainties. All statements,
other than statements related to present facts or current conditions or of historical facts, contained in this prospectus, including statements regarding our strategy, future operations, future
financial position, future revenues, and projected costs, prospects, plans and objectives of management, are forward-looking statements. Accordingly, these statements involve estimates, assumptions
and uncertainties which could cause actual results to differ materially from those expressed in them. The words "anticipate," "believe," "continue," "could," "estimate," "expect," "intend," "may,"
"might," "ongoing," "plan," "potential," "predict," "project," "should," "target," "will," "would," or the negative of these terms or other comparable terminology are intended to identify
forward-looking statements, although not all forward-looking statements contain these identifying words. Any forward-looking statements are qualified in their entirety by reference to the factors
discussed throughout our SEC reports, and in particular those factors discussed under the heading "Risk Factors" on page 5 of this prospectus and in the other documents incorporated herein by
reference, as the same may be updated from time to time by our future filings under the Exchange Act.
You
should assume that the information appearing in this prospectus, any accompanying prospectus supplement, any related free writing prospectus and any document incorporated herein by reference is
accurate as of its date only. Because the risk factors referred to above could cause actual results or outcomes to differ materially from those expressed in any forward-looking statements made by us
or on our behalf, you should not place undue reliance on any forward-looking statements. Further, any forward-looking statement speaks only as of the date on which it is made. New factors emerge from
time to time, and it is not possible for us to predict which factors will arise. In addition, we cannot assess the impact of each factor on our business or the extent to which any factor, or
combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. All written or oral forward-looking statements attributable to us or any
person acting on our behalf made after the date of this prospectus are expressly qualified in their entirety by the risk factors and cautionary statements contained in and incorporated by reference
into this prospectus. Unless legally required, we do not undertake any obligation to release publicly any revisions to such forward-looking statements to reflect events or circumstances after the date
of this prospectus or to reflect the occurrence of unanticipated events.
Factors
that could cause actual results to differ materially from those in the forward-looking statements include:
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§
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we or independent investigators may experience delays in the initiation, availability of
data from, or completion of clinical trials and development programs (whether caused by competition, adverse events, patient enrollment rates, shortage of clinical trial materials, regulatory issues
or other factors);
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§
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suppliers or other third-party contractors may not fulfill their contractual obligations
on a timely basis or at all;
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data from prior clinical trials may not be indicative of subsequent clinical trial
results;
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lack of safety and/or efficacy of our product candidates;
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early stage pre-clinical data may not be indicative of subsequent data when expanded to
additional pre-clinical models or to subsequent clinical data;
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§
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evolving competitive activity and intellectual property landscape may impair our ability
to capture value for the technology;
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our inability to maintain, protect and enhance our intellectual property;
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§
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costs associated with defending intellectual property infringement and other claims; and
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§
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risks that expectations and estimates turn out to be incorrect, including estimates of
the potential markets for our product candidates, estimates of the capacity of manufacturing and other facilities required to support our product candidates, supply chain issues of any type, including
timing of supply, projected cash needs, projected timing of the use of cash, and expected future revenues, operations, expenditures and cash position.
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USE OF PROCEEDS
We intend to use the net proceeds from the sale of any securities offered by us for general corporate purposes unless otherwise indicated in the applicable
prospectus supplement. General corporate purposes may include clinical, regulatory and product development activities, and for working capital, general and administrative expenses and other general
corporate purposes. We may also use a portion of our net proceeds to acquire, invest in, or license complementary products, technologies or businesses or to make payments pursuant to a License
Agreement we entered into with ABX advanced biochemical compounds — Biomedizinische Forschungsreagenzien GmbH. The amounts and timing of our expenditures will depend on
numerous factors, including the scope of research and development efforts, the timing and success of our current and future clinical trials, and the timing of regulatory submissions. Accordingly, our
management will have broad discretion over the use of the net proceeds from the sale of any securities offered by us.
Unless
the applicable prospectus supplement provides otherwise, we will not receive any proceeds from the resale of the securities by selling securityholders.
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RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth our ratio of earnings to fixed charges for the periods indicated.
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Year Ended December 31,
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Six Months
Ended
June 30, 2018
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2017
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2016
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2015
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2014
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2013
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Ratio of Earnings to Fixed Charges
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N/A
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N/A
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N/A
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N/A
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44.7
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N/A
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For
purposes of these ratios, (i) "earnings" consist of income before income taxes and fixed charges and (ii) "fixed charges" consist of interest expense, non-cash interest expense and
an estimate of the portion of rental expense which is deemed to represent interest.
We
did not record earnings for any of the fiscal years ended December 31, 2013, 2015, 2016 and 2017, or for the six months ended June 30, 2018. Accordingly, our earnings were
insufficient to cover fixed charges for such periods, and we are unable to disclose a ratio of earnings to fixed charges for such periods. The dollar amount of the deficiency in earnings available for
fixed charges for the fiscal years ended December 31, 2013, 2015, 2016 and 2017, and for the six months ended June 30, 2018, was approximately $18,032,000, $41,270,000, $43,888,000,
$55,064,000 and $20,167,000, respectively.
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DESCRIPTION OF CAPITAL STOCK
The following description of our capital stock is not complete and may not contain all the information you should consider before investing in our capital
stock. This description is summarized from, and qualified in its entirety by reference to, our amended and restated certificate of incorporation and amended and restated bylaws, copies of which are
incorporated by reference as exhibits to the registration statement of which this prospectus is a part.
Authorized Capital Stock
Our authorized capital stock consists of 100,000,000 shares of common stock, par value $0.001 per share, and 10,000,000 shares of preferred stock, par value
$0.001 per share. As of September 7, 2018, we had 70,334,539 shares of common stock outstanding and no shares of preferred stock outstanding.
Common Stock
Voting Rights and Election of Directors
Except as otherwise provided by law or by resolution adopted by the board of directors designating the rights, powers and preferences of any series of
preferred stock, holders of our common stock have the exclusive right to vote for the election of directors and for all other purposes. All shares of common stock are entitled to one vote per share
and do not have any cumulative voting rights.
An
election of directors by our stockholders is determined by a plurality of the votes cast by the stockholders entitled to vote in the election. Except as otherwise required by our amended and
restated certificate of incorporation, other matters are decided by the affirmative vote of a majority of the shares of common stock represented at a meeting and entitled to vote on the subject
matter. Our directors may be removed by our stockholders only for cause.
Dividends
Subject to the rights, if any, of the holders of any outstanding series of preferred stock, holders of our common stock are entitled to receive dividends out
of any of our funds legally available when, as and if declared by the board of directors.
Other Rights and Preferences
Holders of common stock have no preemptive or conversion rights or other subscription rights.
Liquidation
Upon our liquidation, dissolution or winding-up, the holders of common stock would be entitled to share ratably in all assets remaining after payment of all
debts and other liabilities and the satisfaction of any liquidation preferences granted to the holders of outstanding shares of preferred stock.
Fully Paid and Non-Assessable
All outstanding shares of common stock are fully paid and non-assessable.
Listing
Our common stock is listed on The Nasdaq Global Market under the symbol "ECYT." On September 7, 2018, the closing price for our common stock, as
reported on The Nasdaq Global Market, was $16.96 per share.
Transfer Agent
The transfer agent and registrar for our common stock is Computershare Inc.
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Preferred Stock
Our amended and restated certificate of incorporation provides that we may issue up to 10,000,000 shares of preferred stock in one or more series as may be
determined by our board of directors. Our board of directors has broad discretionary authority with respect to the rights of any new series of preferred stock and may establish the following with
respect to the shares in each series, without any vote or action of the stockholders:
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§
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the number of shares;
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§
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the designations, powers, preferences and relative participation, optional or other
rights, including voting rights, dividend rights, conversion rights, redemption privileges and liquidation preferences; and
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§
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any qualifications, limitations or restrictions.
We
believe that the ability of our board of directors to issue one or more series of preferred stock provides us with flexibility in structuring possible future financings and acquisitions, and in
meeting other corporate needs that may arise. The authorized shares of preferred stock, as well as authorized and unissued shares of common stock, are available for issuance without action by our
stockholders, unless such action is required by applicable law or the rules of any stock exchange or automated quotation system on which our securities may be listed or traded.
Our
board of directors may authorize, without stockholder approval, the issuance of preferred stock with voting and conversion rights that could adversely affect the voting power and other rights of
holders of common stock. Although our board of directors has no current intention of doing so, it could issue a series of preferred stock that could, depending on the terms of such series, impede the
completion of a merger, tender offer or other takeover attempt of our company. Our board of directors could also issue preferred stock having terms that could discourage an acquisition attempt through
which an acquiror may be able to change the composition of our board of directors, including a tender offer or other transaction that some, or a majority, of our stockholders might believe to be in
their best interests or in which stockholders might receive a premium for their stock over the then-current market price. Any issuance of preferred stock therefore could have the effect of decreasing
the market price of our common stock.
Anti-Takeover Effects of Delaware Law and Our Certificate of Incorporation and Bylaws
Delaware Law
We are subject to Section 203 of the Delaware General Corporation Law. Section 203 generally prohibits a public Delaware corporation from
engaging in a "business combination" with an "interested stockholder" for a period of three years after the date of the transaction in which the person became an interested stockholder,
unless:
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§
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prior to the date of the transaction, the board of directors of the corporation approved
either the business combination or the transaction which resulted in the stockholder becoming an interested stockholder;
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§
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upon consummation of the transaction which resulted in the stockholder becoming an
interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, excluding for purposes of determining
the number of shares outstanding (but not the outstanding voting stock owned by the interested stockholder) (a) shares owned by persons who are directors and also officers and (b) shares
owned by employee stock plans in which employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer;
or
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§
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on or subsequent to the date of the transaction, the business combination is approved by
the board and authorized at an annual or special meeting of stockholders, and not by written consent, by the
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Section 203
defines a business combination to include:
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§
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any merger or consolidation involving the corporation and the interested stockholder;
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§
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any sale, transfer, pledge or other disposition involving the interested stockholder of
10% or more of the assets of the corporation;
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§
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subject to exceptions, any transaction that results in the issuance or transfer by the
corporation of any stock of the corporation to the interested stockholder;
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§
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any transaction involving the corporation having the effect of increasing the
proportionate share of the stock owned by the interested stockholder, subject to exceptions; and
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§
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the receipt by the interested stockholder of the benefit of any loans, advances,
guarantees, pledges or other financial benefits provided by or through the corporation.
In
general, Section 203 defines an interested stockholder as any entity or person (i) who, together with affiliates and associates, owns 15% or more of a corporation's voting stock or
(ii) who is an affiliate of the corporation and owned, together with affiliates and associates, 15% or more of the corporation's voting stock within three years prior to the determination of
interested stockholder status.
A
Delaware corporation may opt out of this provision by express provision in its original certificate of incorporation or by amendment to its certificate of incorporation or bylaws approved by its
stockholders. However, we have not opted out of, and do not currently intend to opt out of, this provision. The statute could prohibit or delay mergers or other takeover or change in control attempts
and, accordingly, may discourage attempts to acquire us.
Certificate of Incorporation and Bylaws
Provisions of our amended and restated certificate of incorporation and amended and restated bylaws may delay or discourage transactions involving an actual or
potential change in control of our company or change in our management, including transactions in which stockholders might otherwise receive a premium for their shares, or transactions that our
stockholders might otherwise deem to be in their best interests. Therefore, these provisions could adversely affect the price of our common stock. Among other things, our amended and restated
certificate of incorporation and amended and restated bylaws:
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§
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permit our board of directors to issue up to 10,000,000 shares of preferred stock, with
any rights, preferences and privileges as they may designate, including the right to approve an acquisition or other change in control;
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provide that the authorized number of directors may be changed by resolution of the board
of directors;
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provide that all vacancies, including newly created directorships, may, except as
otherwise required by law, be filled by the affirmative vote of a majority of directors then in office, even if less than a quorum;
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provide that our stockholders may only remove a director for cause;
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provide that a special meeting of stockholders may be called only by our chief executive
officer, our president (in the absence of a chief executive officer), the chairperson of our board of directors or by our board of directors;
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require that any action to be taken by our stockholders must be effected at a duly called
annual or special meeting of stockholders and not be taken by written consent;
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§
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provide that our bylaws may be amended or repealed by our board of directors or the
affirmative vote of the holders of at least two-thirds of the votes that all our stockholders would be entitled to cast in an election of directors;
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§
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provide that stockholders seeking to present proposals before a meeting of stockholders
or to nominate candidates for election as directors at a meeting of stockholders must provide notice in writing in a timely manner, and also specify requirements as to the form and content of a
stockholder's notice; and
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do not provide for cumulative voting rights (therefore allowing the holders of a majority
of the shares of common stock entitled to vote in any election of directors to elect all of the directors standing for election, if they should so choose).
The
amendment of any of the above provisions, except for the provision making it possible for our board of directors to issue preferred stock, and the addition of a provision permitting cumulative
voting, would require approval by holders of at least two-thirds in voting power of the outstanding shares of stock entitled to vote thereon.
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DESCRIPTION OF DEBT SECURITIES
This section describes the general terms and provisions of our debt securities, which could be senior debt securities or subordinated debt securities. A
prospectus supplement will describe the specific terms of the debt securities offered through that prospectus supplement and any general terms outlined in this section that will not apply to those
debt securities. The terms and conditions of the debt securities of a series
may be different in one or more respects from the terms and conditions described below. If so, those differences will be described in the applicable prospectus supplement.
The
senior debt securities will be issued under an indenture, referred to herein as the "senior indenture," between us and the trustee named in the applicable prospectus supplement. The subordinated
debt securities will be issued under an indenture, referred to herein as the "subordinated indenture," between us and the trustee named in the applicable prospectus supplement. The indenture will be
qualified under the Trust Indenture Act of 1939. We have filed the form of indenture as an exhibit to the registration statement of which this prospectus is a part, and supplemental indentures and
forms of debt securities containing the terms of the debt securities being offered will be filed as exhibits to the registration statement of which this prospectus is a part or will be incorporated by
reference from reports that we file with the SEC.
We
have summarized the anticipated material terms and provisions of the senior and subordinated indentures in this section. We have also filed the form of the indentures summarized in this section as
exhibits to the registration statement of which this prospectus is a part. You should read the applicable indenture for additional information before you buy any debt securities. The summary that
follows includes references to section numbers of the indentures so that you can more easily locate these provisions.
General
The debt securities will be our direct unsecured obligations. Neither of the indentures limits the amount of debt securities that we may issue. Both indentures
permit us to issue debt securities from time to time and debt securities issued under an indenture will be issued as part of a series that has been established by us under such indenture.
(Section 301)
The
senior debt securities will be unsecured and will rank equally with all of our other unsecured unsubordinated debt. The subordinated debt securities will be unsecured and will rank equally with
all of our other subordinated debt securities and, together with such other subordinated debt securities, will be subordinated to all of our existing and future Senior Debt (as defined below). See
"— Subordination" below.
The
debt securities are our unsecured senior or subordinated debt securities, as the case may be.
Unless
otherwise specified in the applicable prospectus supplement, we may, without the consent of the holders of a series of debt securities, issue additional debt securities of that series having
the same ranking and the same interest rate, maturity date and other terms (except for the price to public and issue date) as such debt securities. Any such additional debt securities, together with
the initial debt securities, will constitute a single series of debt securities under the applicable indenture. No additional debt securities of a series may be issued if an event of
default under the applicable indenture has occurred and is continuing with respect to that series of debt securities.
A
prospectus supplement relating to a series of debt securities being offered will include specific terms relating to the offering. (Section 301) These terms will include some or all of the
following:
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the title and type of the debt securities;
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any limit on the total principal amount of the debt securities of that series;
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the price at which the debt securities will be issued;
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§
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the date or dates on which the principal of and premium, if any, on the debt securities
will be payable;
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the maturity date or dates of the debt securities or the method by which those dates can
be determined;
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if the debt securities will bear
interest:
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the interest rate on the debt securities or the method by which the interest rate may be
determined;
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the date from which interest will accrue;
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the record and interest payment dates for the debt securities; and
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the first interest payment date;
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the place or places where:
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we can make payments on the debt securities;
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the debt securities can be surrendered for registration of transfer or exchange; and
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§
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notices and demands can be given to us relating to the debt securities and under the
applicable indenture;
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any optional redemption provisions that would permit us to elect redemption of the debt
securities, or the holders of the debt securities to elect repayment of the debt securities, before their final maturity;
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§
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any sinking fund provisions that would obligate us to redeem the debt securities before
their final maturity;
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whether the debt securities will be convertible and, if so, the terms and conditions of
any such conversion;
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if the debt securities will be issued in bearer form, the terms and provisions contained
in the bearer securities and in the applicable indenture specifically relating to the bearer securities;
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§
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whether all or part of the debt securities will not be issued as permanent global
securities and the extent to which the description of the book-entry procedures described below under "— Book-Entry, Delivery and Form" will not apply to such global
securities — a "global security" is a debt security that we issue in accordance with the applicable indenture to represent all or part of a series of debt securities;
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§
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whether all or part of the debt securities will be issued in whole or in part as
temporary global securities and, if so, the depositary for those temporary global securities and any special provisions dealing with the payment of interest and any terms relating to the ability to
exchange interests in a temporary global security for interests in a permanent global security or for definitive debt securities;
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§
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whether any additional amounts will be payable;
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§
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the denominations of the debt securities, if other than $1,000 and any integral multiple
thereof for registered securities, and $5,000 for bearer securities;
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§
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any portion of the principal amount of debt securities that shall be payable upon
acceleration;
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§
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the currency or currencies in which the debt securities will be denominated and payable,
if other than U.S. dollars and, if a composite currency, any special provisions relating thereto;
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§
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any circumstances under which the debt securities may be paid in a currency other than
the currency in which the debt securities are denominated and the manner in which the exchange rate shall be determined;
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§
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whether the provisions described below under the heading "— Defeasance" will
not apply to the debt securities;
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§
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any events of default that will apply to the debt securities in addition to those
contained in the applicable indenture;
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§
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any additions or changes to the covenants contained in the applicable indenture and the
ability, if any, of the holders to waive our compliance with those additional or changed covenants;
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§
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the identity of the trustee, security registrar and paying agent for the debt securities;
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§
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any material tax implications of the debt securities;
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any special provisions relating to the payment of any additional amounts on the debt
securities; and
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§
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any other terms of the debt securities.
When
we use the term "holder" in this prospectus with respect to a registered debt security, we mean the person in whose name such debt security is registered in the security register.
(Section 101)
Exchange and Transfer
At the option of the holder, any debt securities of a series can be exchanged for other debt securities of that series so long as the other debt securities are
denominated in authorized denominations and have the same aggregate principal amount and same terms as the debt securities that were surrendered for exchange, subject to limitations with respect to
bearer securities in global form. The debt securities may be presented for registration of transfer, duly endorsed or accompanied by a satisfactory written instrument of transfer, at the office or
agency maintained by us for that purpose in any place of payment that we may designate. However, holders of global securities may transfer and exchange global securities only in the manner and to the
extent set forth under "— Book-Entry, Delivery and Form" below. There will be no service charge for any registration of transfer or exchange of the debt securities, but we may require
holders to pay any tax or other governmental charge payable in connection with a transfer or exchange of the debt securities. (Sections 305, 1002) If the applicable prospectus supplement refers
to any office or agency, in addition to the security registrar, initially designated by us where holders can surrender the debt securities for registration of transfer or exchange, we may at any time
rescind the designation of any such office or agency or approve a change in the location. However, we will be required to maintain an office or agency in each place of payment for that series.
(Section 1002)
We
will not be required to:
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§
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issue, register the transfer of or exchange debt securities to be redeemed for a period
of 15 calendar days preceding the mailing of the relevant notice of redemption; or
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§
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register the transfer of or exchange any registered debt security selected for
redemption, in whole or in part, except the unredeemed or unpaid portion of that registered debt security being redeemed in part. (Section 305)
Interest and Principal Payments
Payments.
Holders may present debt securities for payment of principal, premium, if any, and interest, if any, register the transfer of the debt securities and
exchange the debt securities at the agency maintained by us for such purpose and identified in the applicable prospectus supplement. We refer to the applicable trustee acting in the capacity of a
paying agent for the debt securities as the "paying agent."
Any
money that we pay to the paying agent for the purpose of making payments on the debt securities and that remains unclaimed two years after the payments were due will, at our request, be returned
to us and after that time any holder of a debt security can only look to us for the payments on the debt security. (Section 1003)
Recipients of Payments.
The paying agent will pay interest to the person in whose name the debt security is registered at the close of business on the applicable
record date. However, upon maturity, redemption or repayment, the paying agent will pay any interest due to the person to whom it pays the principal of the debt security. The paying agent will make
the payment on the date of maturity, redemption or repayment, whether or not that date is an interest payment date. An "interest payment date" for any debt security means a date on which, under the
terms of that debt security, regularly scheduled interest is payable. (Section 307, 1003)
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Book-Entry Debt Securities.
The paying agent will make payments of principal, premium, if any, and interest, if any, to the account of The Depository Trust Company,
referred to herein as "DTC," or other depositary specified in the applicable prospectus supplement, as holder of book-entry debt securities, by wire transfer of immediately available funds. The
"depositary" means the depositary for global securities issued under the applicable indenture and, unless provided otherwise in the applicable prospectus supplement, means DTC. We expect that the
depositary, upon receipt of any payment, will immediately credit its participants' accounts in amounts proportionate to their respective beneficial interests in the book-entry debt securities as shown
on the records of the depositary. We also expect that payments by the depositary's participants to owners of beneficial interests in the book-entry debt securities will be governed by standing
customer instructions and customary practices and will be the responsibility of those participants.
Certificated Debt Securities.
Except as indicated below for payments of interest at maturity, redemption or repayment, the paying agent will make payments of
interest either:
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§
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by check mailed to the address of the person entitled to payment as shown on the security
register; or
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§
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by wire transfer to an account designated by a holder, if the holder has given written
notice not later than 10 calendar days prior to the applicable interest payment date. (Section 307)
Redemption and Repayment of Debt Securities
Optional Redemption by Us.
If applicable, the prospectus supplement will indicate the terms of our option to redeem any series of debt securities. We will mail a
notice of redemption to each holder which, in the case of global securities, will be the depositary, as holder of the global securities, by first-class mail, postage prepaid, at least 30 days
and not more than 60 days prior to the date fixed for redemption, or within the redemption notice period designated in the applicable prospectus supplement, to the address of each holder as
that address appears upon the books maintained by the security registrar. (Section 1104)
A
partial redemption of any series of debt securities may be effected by such method as required by us, the registrar or the trustee, and may provide for the selection for redemption of a portion of
the principal amount of debt securities held by a holder equal to an authorized denomination. (Section 1107) If we redeem less than all of the debt securities of a series and such debt
securities are then held in book-entry form, the redemption will be made in accordance with the depositary's customary procedures. We have been advised that it is DTC's practice to determine by the
lot the amount of each participant in the debt securities to be redeemed.
Unless
we default in the payment of the redemption price, on and after the redemption date interest will cease to accrue on the debt securities of a series called for redemption.
Repayment at Option of Holder.
If applicable, the prospectus supplement relating to a series of debt securities will indicate that the holder has the option to have
us repay a debt security of that series on a date or dates specified prior to its stated maturity date. Unless otherwise specified in the applicable prospectus supplement, the repayment price will be
equal to 100% of the principal amount of the debt security, together with accrued interest to the date of repayment.
Each
holder desiring to exercise such holder's option for repayment shall surrender the debt security to be repaid, together with written notice of the exercise, at least 30 days but not more
than 45 days prior to the repayment date, at any of our offices or agencies in a place of payment, setting forth the principal amount of the debt security, the principal amount of the debt
security to be repaid, and in the case of partial repayment, shall specify the denomination or denominations of the debt securities of the same series and the portion of the principal amount which is
not to be repaid. (Section 1303)
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Exercise of the repayment option by the holder of a debt security will be irrevocable. The holder may exercise the repayment option for less than the entire principal amount of
the debt security but, in that event, the principal amount of the debt security remaining outstanding after repayment must be an authorized denomination. (Section 1303)
If
a debt security is represented by a global security, the depositary or the depositary's nominee will be the holder of the debt security and therefore will be the only entity that can exercise a
right to repayment. In order to ensure that the depositary's nominee will timely exercise a right to repayment of a particular debt security, the beneficial owner of the debt security must instruct
the broker or other direct or indirect participant through which it holds an interest in the debt security to notify the depositary of its desire to exercise a right to repayment. Different firms have
different cut-off times for accepting instructions from their customers and, accordingly, each beneficial owner should consult the broker or other direct or indirect participant through which it holds
an interest in a debt security in order to ascertain the cut-off time by which an instruction must be given in order for timely notice to be delivered to the depositary.
We
may purchase debt securities at any price in the open market or otherwise. Debt securities so purchased by us may, at our discretion, be held or resold or surrendered to the applicable trustee for
cancellation.
Denominations
Unless we state otherwise in the applicable prospectus supplement, the debt securities may be issued in registered form in denominations of $1,000 each and
integral multiples of $1,000 in excess thereof, or in bearer form in denominations of $5,000. (Section 302)
Consolidation, Merger or Sale
Each of the indentures permits a consolidation or merger between us and another entity, subject to certain conditions. They also permit the sale or transfer by
us of all or substantially all of our property and assets. These transactions are permitted if:
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§
-
the resulting or acquiring entity, if other than us, is organized and existing under the
laws of a domestic jurisdiction and assumes all of our responsibilities and liabilities under the applicable indenture, including the payment of all amounts due on the debt securities and performance
of the covenants in the applicable indenture; and
-
§
-
immediately after giving effect to the transaction, no event of default under the
applicable indenture exists. (Section 801)
If
we consolidate or merge with or into any other entity or sell or lease all or substantially all of our assets according to the terms and conditions of the indentures, the resulting or acquiring
entity will be substituted for us in the indentures with the same effect as if it had been an original party to the indentures. As a result, such successor entity may exercise our rights and powers
under the indentures, in our name and, except in the case of a lease of all or substantially all of our properties, we will be released from all our liabilities and obligations under the indentures
and under the debt securities. (Section 802)
Modification and Waiver
Under each of the indentures, certain of our rights and obligations and certain of the rights of holders of the debt securities may be modified or amended with
the consent of the holders of at least a majority of the aggregate principal amount of the outstanding debt securities of all series of debt securities affected by the modification or amendment,
acting as one class. However, the following modifications and amendments will not be effective against any holder without its
consent:
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§
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a change in the stated maturity date of any payment of principal or interest;
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§
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a reduction in payments due on the debt securities;
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-
§
-
a change in the place of payment or currency in which any payment on the debt securities
is payable;
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§
-
a limitation of a holder's right to sue us for the enforcement of payments due on the
debt securities;
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§
-
a reduction in the percentage of outstanding debt securities required to consent to a
modification or amendment of the applicable indenture or required to consent to a waiver of compliance with certain provisions of the applicable indenture or certain defaults under the applicable
indenture;
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§
-
a reduction in the requirements contained in the applicable indenture for quorum or
voting;
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§
-
a limitation of a holder's right, if any, to repayment of debt securities at the holder's
option; and
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§
-
a modification of any of the foregoing requirements contained in the applicable
indenture. (Section 902)
Under
each of the indentures, the holders of at least a majority of the aggregate principal amount of the outstanding debt securities of all series of debt securities affected by a particular covenant
or condition, acting as one class, may, on behalf of all holders of such series of debt securities, waive compliance by us with any covenant or condition contained in the applicable indenture unless
we specify that such covenant or condition cannot be so waived at the time we establish the series.
In
addition, under each of the indentures, the holders of a majority in aggregate principal amount of the outstanding debt securities of any series of debt securities may, on behalf of all holders of
that series, waive any past default under the applicable indenture, except:
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§
-
a default in the payment of the principal of or any premium or interest on any debt
securities of that series; or
-
§
-
a default under any provision of the applicable indenture which itself cannot be modified
or amended without the consent of the holders of each outstanding debt security of that series. (Section 513)
Events of Default
Unless otherwise specified in the applicable prospectus supplement, an "event of default," when used in the senior indenture or the subordinated indenture with
respect to any series of debt securities issued thereunder, means any of the following:
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§
-
failure to pay interest on any debt security of that series for 30 days after the
payment is due;
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§
-
failure to pay the principal of or any premium on any debt security of that series when
due;
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§
-
failure to deposit any sinking fund payment on debt securities of that series when due;
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§
-
failure to perform any other covenant in the applicable indenture that applies to debt
securities of that series for 90 days after we have received written notice of the failure to perform in the manner specified in the applicable indenture;
-
§
-
certain events in bankruptcy, insolvency or reorganization; or
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§
-
any other event of default that may be specified for the debt securities of that series
when that series is created. (Section 501)
If
an event of default for any series of debt securities occurs and continues, the trustee or the holders of at least 25% in aggregate principal amount of the outstanding debt securities of the series
may declare the entire principal of all the debt securities of that series to be due and payable immediately. If such a declaration occurs, the holders of a majority of the aggregate principal amount
of the outstanding debt securities of that series can, subject to conditions, rescind the declaration. (Sections 502, 513)
Each
of the indentures requires us to file an officers' certificate with the applicable trustee each year that states, to the knowledge of the certifying officers, whether or not any defaults exist
under the terms of the applicable indenture. (Section 1005) The applicable trustee may withhold notice to the holders of debt securities of any default, except defaults in the payment of
principal, premium, interest or any sinking fund installment, if it considers the withholding of notice to be in the interest of the holders. For purposes of this
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paragraph,
"default" means any event which is, or after notice or lapse of time or both would become, an event of default under the applicable indenture with respect to the debt securities of the
applicable series. (Section 602)
Other
than its duties in the case of a default, a trustee is not obligated to exercise any of its rights or powers under the applicable indenture at the request, order or direction of any holders,
unless the holders offer that trustee security or indemnity satisfactory to the trustee. (Sections 601, 603) If satisfactory indemnification is provided, then, subject to other rights of the
trustee, the holders of a majority in principal amount of the outstanding debt securities of any series may, with respect to the debt securities of that series, direct the time, method and place
of:
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§
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conducting any proceeding for any remedy available to the trustee; or
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§
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exercising any trust or power conferred upon the trustee. (Sections 512, 601)
The
holder of a debt security of any series will have the right to begin any proceeding with respect to the applicable indenture or for any remedy only
if:
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§
-
the holder has previously given the trustee written notice of a continuing event of
default with respect to that series;
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§
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the holders of at least 25% in aggregate principal amount of the outstanding debt
securities of that series have made a written request of, and offered reasonable indemnification to, the trustee to begin such proceeding;
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§
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the trustee has not started such proceeding within 60 days after receiving the
request; and
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§
-
the trustee has not received directions inconsistent with such request from the holders
of a majority in aggregate principal amount of the outstanding debt securities of that series during those 60 days. (Section 507)
However,
the holder of any debt security will have an absolute right to receive payment of principal of and any premium and interest on the debt security when due and to institute suit to enforce this
payment, subject to limitations with respect to subordinated debt securities.
Defeasance
Defeasance and Discharge.
At the time that we establish a series of debt securities under the applicable indenture, we can provide that the debt securities of that
series are subject to the defeasance and discharge provisions of that indenture. Unless we specify otherwise in the applicable prospectus supplement, the debt securities offered thereby will be
subject to the defeasance and discharge provisions of the applicable indenture, and we will be discharged from our obligations on the debt securities of that series
if:
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§
-
we deposit with the applicable trustee, in trust, sufficient money or, if the debt
securities of that series are denominated and payable in U.S. dollars only, Eligible Instruments, to pay the principal, any interest, any premium and any other sums due on the debt securities of that
series, such as sinking fund payments, on the dates the payments are due under the applicable indenture and the terms of the debt securities;
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§
-
we deliver to the applicable trustee an opinion of counsel that states that the holders
of the debt securities of that series will not recognize income, gain or loss for federal income tax purposes as a result of the deposit and will be subject to federal income tax on the same amounts
and in the same manner and at the same times as would have been the case if no deposit, defeasance and discharge had been made; and
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§
-
if the debt securities of that series are listed on any domestic or foreign securities
exchange, the debt securities will not be delisted as a result of the deposit. (Section 403)
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When
we use the term "Eligible Instruments" in this section, we mean monetary assets, money market instruments and securities that are payable in U.S. dollars only and essentially risk free as to
collection of principal and interest, including:
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§
-
monetary assets, money market instruments and securities that are payable in U.S. dollars
only and essentially risk free as to collection of principal and interest; or
-
§
-
direct obligations of the United States for the payment of which its full faith and
credit is pledged, or obligations of a person controlled or supervised by and acting as an agency or instrumentality of the United States if the timely payment of the obligation is unconditionally
guaranteed as a full faith and credit obligation by the United States. (Section 101)
In
the event that we deposit money and/or Eligible Instruments in trust and discharge our obligations under a series of debt securities as described above,
then:
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§
-
the applicable indenture, including, in the case of subordinated debt securities, the
subordination provisions contained in the subordinated indenture, will no longer apply to the debt securities of that series; however, certain obligations to compensate, reimburse and indemnify the
trustee, to register the transfer and exchange of debt securities, to replace lost, stolen or mutilated debt securities, to maintain paying agencies and the trust funds and to pay additional amounts,
if any, required as a result of U.S. withholding taxes imposed on payments to non-U.S. persons will continue to apply; and
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§
-
holders of debt securities of that series can only look to the trust fund for payment of
principal, any premium and any interest on the debt securities of that series. (Section 403)
Defeasance of Certain Covenants and Certain Events of Default.
At the time that we establish a series of debt securities under the applicable indenture, we can
provide that the debt securities of that series are subject to the
covenant defeasance provisions of that indenture. Unless we specify otherwise in the applicable prospectus supplement, the debt securities offered thereby will be subject to the covenant defeasance
provisions of the applicable indenture, and if we make the deposit and deliver the opinion of counsel described above in this section under the heading "— Defeasance and Discharge," we
will not have to comply with any covenant we designate when we establish the series of debt securities. In the event of a covenant defeasance, our obligations under the applicable indenture and the
debt securities, other than with respect to the covenants specifically designated upon establishing the debt securities, will remain in effect. (Section 1501)
If
we exercise our option not to comply with certain covenants as described above and the debt securities of the series become immediately due and payable because an event of default has occurred,
other than as a result of an event of default specifically relating to any of such covenants, the amount of money and/or Eligible Instruments on deposit with the applicable trustee will be sufficient
to pay the principal, any interest, any premium and any other sums, due on the debt securities of that series, such as sinking fund payments, on the date the payments are due under the applicable
indenture and the terms of the debt securities, but may not be sufficient to pay amounts due at the time of acceleration. However, we would remain liable for the balance of the payments.
(Section 1501)
Subordination
The subordinated debt securities will be subordinate to all of our existing and future Senior Debt, as defined below. Our "Senior Debt" includes the senior
debt securities and means the principal of, premium, if any, and interest on, rent under, and any other amounts payable on or in or in respect of any of our indebtedness (including, without
limitation, any obligations in respect of such indebtedness and any interest accruing after the filing of a petition by or against us under any bankruptcy law, whether or not allowed as a claim after
such filing in any proceeding under such bankruptcy law), whether outstanding on the date of the senior indenture or thereafter created, incurred, assumed, guaranteed or in effect guaranteed by us
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(including
all deferrals, renewals, extensions, refinancings or refundings of, or amendments, modifications or supplements to the foregoing). However, Senior Debt does not
include:
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§
-
any liability for federal, state, local or other taxes owed or owing by us;
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§
-
our indebtedness to any of our subsidiaries;
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§
-
our trade payables and accrued expenses (including, without limitation, accrued
compensation) for goods, services or materials purchased or provided in the ordinary course of business; and
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§
-
any particular indebtedness in which the instrument creating or evidencing the same
expressly provides that such indebtedness shall not be senior in right of payment to, or is pari passu with, or is subordinated or junior to, the subordinated debt securities. (Section 101 of
the subordinated indenture)
If
certain events in bankruptcy, insolvency or reorganization occur, we will first pay all Senior Debt, including any interest accrued after the events occur, in full before we make any payment or
distribution, whether in cash, securities or other property, on account of the principal of or interest on the subordinated debt securities. In such an event, we will pay or deliver directly to the
holders of Senior Debt any payment or distribution otherwise payable or deliverable to holders of the subordinated debt securities. We will make the payments to the holders of Senior Debt according to
priorities existing among those holders until we have paid all Senior Debt, including accrued interest, in full. Notwithstanding the subordination provisions discussed in this paragraph, we may make
payments or distributions on the subordinated debt securities so long as:
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§
-
the payments or distributions consist of securities issued by us or another company in
connection with a plan of dissolution, reorganization, readjustment or winding up; and
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§
-
payment on those securities is subordinate to outstanding Senior Debt and any securities
issued with respect to Senior Debt under such plan of dissolution, reorganization, readjustment or winding up at least to the same extent provided in the subordination provisions of the subordinated
debt securities. (Section 1601 of the subordinated indenture)
If
such events in bankruptcy, insolvency or reorganization occur, after we have paid in full all amounts owed on Senior
Debt:
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§
-
the holders of subordinated debt securities,
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§
-
together with the holders of any of our other obligations ranking equal with those
subordinated debt securities,
will
be entitled to receive from our remaining assets any principal, premium or interest due at that time on the subordinated debt securities and such other obligations before we make any payment or
other distribution on account of any of our capital stock or obligations ranking junior to those subordinated debt securities.
If
we violate the subordinated indenture by making a payment or distribution to holders of the subordinated debt securities before we have paid all of the Senior Debt in full, then such holders of the
subordinated debt securities will be deemed to have received the payments or distributions in trust for the benefit of, and will have to pay or transfer the payments or distributions to, the holders
of the Senior Debt outstanding at the time. The payment or transfer to the holders of the Senior Debt will be made according to the priorities existing among those holders. Notwithstanding the
subordination provisions discussed in this paragraph, holders of subordinated debt securities will not be required to pay, or transfer payments or distributions to, holders of Senior Debt so long
as:
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§
-
the payments or distributions consist of securities issued by us or another company in
connection with a plan of reorganization or readjustment; and
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§
-
payment on those securities is subordinated to outstanding Senior Debt and any securities
issued with respect to Senior Debt under such plan of reorganization or readjustment at least to the same
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Because
of the subordination, if we become insolvent, holders of Senior Debt may receive more, ratably, and holders of the subordinated debt securities having a claim pursuant to those securities may
receive less, ratably, than our other creditors.
We
may modify or amend the subordinated indenture as provided under "— Modification and Waiver" above. However, the modification or amendment may not, without the consent of the holders of
all Senior Debt outstanding, modify any of the provisions of the subordinated indenture relating to the subordination of the subordinated debt securities in a manner that would adversely affect the
holders of Senior Debt. (Section 902 of the subordinated indenture)
Payment of Additional Amounts
Unless we specify otherwise in the applicable prospectus supplement, we will not pay any additional amounts on the debt securities offered thereby to
compensate any beneficial owner for any United States tax withheld from payments on such debt securities.
Book-Entry, Delivery and Form
We have obtained the information in this section concerning DTC, Clearstream Banking S.A., or "Clearstream," and Euroclear Bank S.A./N.V., as
operator of the Euroclear System, or "Euroclear," and the book-entry system and procedures from sources that we believe to be reliable, but we take no responsibility for the accuracy of this
information. This information could change at any time. In addition, we have no control over DTC, Clearstream or Euroclear, or any of their participants, and therefore we take no responsibility for
their activities.
Unless
otherwise specified in the applicable prospectus supplement, the debt securities will be issued as fully registered global securities that will be deposited with, or on behalf of, DTC and
registered, at the request of DTC, in the name of Cede & Co. Beneficial interests in the global securities will be represented through book-entry accounts of financial institutions
acting on behalf of beneficial owners as direct or indirect participants in DTC. The direct and indirect participants will remain responsible for keeping account of their holdings on behalf of their
customers. Investors may elect to hold their interests in the global securities through either DTC (in the United States) or (in Europe) through Clearstream or through Euroclear. Investors may hold
their interests in the global securities directly if they are participants of such systems, or indirectly through organizations that are participants in these systems. Interests held through
Clearstream and Euroclear will be recorded on DTC's books as being held by the U.S. Depositary for each of Clearstream and Euroclear (the "U.S. Depositaries"), which U.S. Depositaries will, in turn,
hold interests on behalf of their participants' customers' securities accounts. Unless otherwise specified in the applicable prospectus supplement, beneficial interests in the global securities will
be held in denominations of $1,000 and multiples of $1,000 in excess thereof. Except as set forth below, the global securities may be transferred, in whole and not in part, only to another nominee of
DTC or to a successor of DTC or its nominee.
Debt
securities represented by a global security can be exchanged for definitive securities in registered form only
if:
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§
-
DTC notifies us that it is unwilling or unable to continue as depositary for that global
security and we do not appoint a qualified successor depositary within 90 days after receiving that notice;
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§
-
at any time DTC ceases to be a clearing agency registered under the Exchange Act and we
do not appoint a successor depositary within 90 days after becoming aware that DTC has ceased to be registered as a clearing agency;
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-
§
-
we in our sole discretion determine that such global security will be exchangeable for
definitive securities in registered form or elect to terminate the book-entry system through DTC and notify the applicable trustee of our decision; or
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§
-
an event of default with respect to the debt securities represented by that global
security has occurred and is continuing.
A
global security that can be exchanged as described in the preceding sentence will be exchanged for definitive securities issued in authorized denominations in registered form for the same aggregate
amount. The definitive securities will be registered in the names of the owners of the beneficial interests in the global security as directed by DTC.
We
will make principal and interest payments on all debt securities represented by a global security to the paying agent which in turn will make payment to DTC or its nominee, as the case may be, as
the sole registered owner and the sole holder of the debt securities represented by a global security for all purposes under the applicable indenture. Accordingly, we, the applicable trustee and any
paying agent will have no responsibility or liability for:
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§
-
any aspect of DTC's records relating to, or payments made on account of, beneficial
ownership interests in a debt security represented by a global security;
-
§
-
any other aspect of the relationship between DTC and its participants or the relationship
between those participants and the owners of beneficial interests in a global security held through those participants; or
-
§
-
the maintenance, supervision or review of any of DTC's records relating to those
beneficial ownership interests.
We
understand that DTC's current practice is to credit direct participants' accounts on each payment date with payments in amounts proportionate to their respective beneficial interests in the
principal amount of such global security as shown on DTC's records, upon DTC's receipt of funds and corresponding detail information. The underwriters or agents for the debt securities represented by
a global security will initially designate the accounts to be credited. Payments by participants to owners of beneficial interests in a global security will be governed by standing instructions and
customary practices, as is the case with securities held for customer accounts registered in "street name," and will be the sole responsibility of those participants, and not of DTC or its nominee,
the trustee, any agent of ours, or us, subject to any statutory or regulatory requirements. Book-entry notes may be more difficult to pledge because of the lack of a physical note.
DTC
So long as DTC or its nominee is the registered owner of a global security, DTC or its nominee, as the case may be, will be considered the sole owner and
holder of the debt securities represented by that global security for all purposes of the debt securities. Owners of beneficial interests in the debt securities will not be entitled to have debt
securities registered in their names, will not receive or be entitled to receive physical delivery of the debt securities in definitive form and will not be considered owners or holders of debt
securities under the applicable indenture. Accordingly, each person owning a beneficial interest in a global security must rely on the procedures of DTC and, if that person is not a DTC participant,
on the procedures of the participant through which that person owns its interest, to exercise any rights of a holder of debt securities. The laws of some jurisdictions may require that certain
purchasers of securities take physical delivery of the securities in certificated form. These laws may impair the ability to transfer beneficial interests in a global security. Beneficial owners may
experience delays in receiving distributions on their debt securities since distributions will initially be made to DTC and must then be transferred through the chain of intermediaries to the
beneficial owner's account.
We
understand that, under existing industry practices, if we request holders to take any action, or if an owner of a beneficial interest in a global security desires to take any action which a holder
is entitled to
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take
under the applicable indenture, then DTC would authorize the participants holding the relevant beneficial interests to take that action and those participants would authorize the beneficial
owners owning through such participants to take that action or would otherwise act upon the instructions of beneficial owners owning through them.
Beneficial
interests in a global security will be shown on, and transfers of those ownership interests will be effected only through, records maintained by DTC and its participants for that global
security. The conveyance of
notices and other communications by DTC to its participants and by its participants to owners of beneficial interests in the debt securities will be governed by arrangements among them, subject to any
statutory or regulatory requirements in effect.
We
understand that DTC is a limited-purpose trust company organized under the New York Banking Law, a "banking organization" within the meaning of the New York Banking Law, a member of the Federal
Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code and a "clearing agency" registered under the Exchange Act. DTC is a wholly owned subsidiary of The
Depository Trust & Clearing Corporation ("DTCC"). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are
registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries.
DTC
holds the securities of its participants and facilitates the clearance and settlement of securities transactions among its participants in such securities through electronic book-entry changes in
accounts of its participants. The electronic book-entry system eliminates the need for physical certificates. DTC's participants include securities brokers and dealers, including underwriters, banks,
trust companies, clearing corporations and certain other organizations, some of which, and/or their representatives, own DTCC. Banks, brokers, dealers, trust companies and others that clear through or
maintain a custodial relationship with a participant, either directly or indirectly, also have access to DTC's book-entry system. The rules applicable to DTC and its participants are on file with the
SEC.
The
above information with respect to DTC has been provided for informational purposes only and is not intended to serve as a representation, warranty or contract modification of any kind.
Clearstream
We understand that Clearstream was incorporated under the laws of Luxembourg as an international clearing system. Clearstream holds securities for its
participating organizations, or "Clearstream Participants," and facilitates the clearance and settlement of securities transactions between Clearstream Participants through electronic book-entry
changes in accounts of Clearstream Participants, thereby eliminating the need for physical movement of certificates. Clearstream provides to Clearstream Participants, among other things, services for
safekeeping, administration, clearance and settlement of internationally traded securities and securities lending and borrowing. Clearstream interfaces with domestic securities markets in several
countries. As a professional depositary, Clearstream is subject to regulation by the Luxembourg Commission for the Supervision of the Financial Sector (
Commission de
Surveillance du Secteur Financier
). Clearstream Participants are recognized financial institutions around the world, including underwriters, securities brokers and dealers,
banks, trust companies, clearing corporations and certain other organizations. Clearstream's U.S. Participants are limited to securities brokers and dealers and banks. Indirect access to Clearstream
is also available to others, such as banks, brokers, dealers and trust companies that clear through or maintain a custodial relationship with a Clearstream Participant either directly or indirectly.
Distributions
with respect to debt securities held beneficially through Clearstream will be credited to cash accounts of Clearstream Participants in accordance with its rules and procedures, to the
extent received by the U.S. Depositary for Clearstream.
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Euroclear
We understand that Euroclear was created in 1968 to hold securities for participants of Euroclear, or "Euroclear Participants," and to clear and settle
transactions between Euroclear Participants through simultaneous electronic book-entry delivery against payment, thereby eliminating the need for physical movement of certificates and any risk from
lack of simultaneous transfers of securities and cash. Euroclear performs various other services, including securities lending and borrowing and interacts with domestic markets in several countries.
Euroclear is operated by Euroclear Bank S.A./N.V., or the "Euroclear Operator," under contract with Euroclear plc, a U.K. corporation. All operations are conducted by the Euroclear
Operator, and all Euroclear securities clearance accounts and Euroclear cash accounts are accounts with the Euroclear Operator, not Euroclear plc. Euroclear plc establishes policy for
Euroclear on behalf of Euroclear Participants. Euroclear Participants include banks, including central banks, securities brokers and dealers and other professional financial intermediaries. Indirect
access to Euroclear is also available to other firms that clear through or maintain a custodial relationship with a Euroclear Participant, either directly or indirectly. Euroclear is an indirect
participant in DTC.
The
Euroclear Operator is a Belgian bank. As such it is regulated by the Belgian Banking and Finance Commission and the National Bank of Belgium.
Securities
clearance accounts and cash accounts with the Euroclear Operator are governed by the Terms and Conditions Governing Use of Euroclear and the related Operating Procedures of the Euroclear
System, and applicable Belgian law, which we will refer to herein as the "Terms and Conditions." The Terms and Conditions govern transfers of securities and cash within Euroclear, withdrawals of
securities and cash from Euroclear, and receipts of payments with respect to securities in Euroclear. All securities in Euroclear are held on a fungible basis without attribution of specific
certificates to specific securities clearance accounts. The Euroclear Operator acts under the Terms and Conditions only on behalf of Euroclear Participants, and has no record of or relationship with
persons holding through Euroclear Participants.
Distributions
with respect to debt securities held beneficially through Euroclear will be credited to the cash accounts of Euroclear Participants in accordance with the Terms and Conditions, to the
extent received by the Euroclear Operator.
We
further understand that investors that acquire, hold and transfer interests in the debt securities by book-entry through accounts with the Euroclear Operator or any other securities intermediary
are subject to the laws and contractual provisions governing their relationship with their intermediary, as well as the laws and contractual provisions governing the relationship between such an
intermediary and each other intermediary, if any, standing between themselves and the global securities.
Global Clearance and Settlement Procedures
Unless otherwise specified in the applicable prospectus supplement, initial settlement for the debt securities will be made in immediately available funds.
Secondary market trading between DTC participants will occur in the ordinary way in accordance with DTC rules and will be settled in immediately available funds using DTC's Same-Day Funds Settlement
System. Secondary market trading between Clearstream Participants and/or Euroclear Participants will occur in the ordinary way in accordance with the applicable rules and operating procedures of
Clearstream and Euroclear and will be settled using the procedures applicable to conventional eurobonds in immediately available funds.
Cross-market
transfers between persons holding directly or indirectly through DTC, on the one hand, and directly or indirectly through Clearstream Participants or Euroclear Participants, on the other,
will be effected through DTC in accordance with DTC rules on behalf of the relevant European international clearing system by its U.S. Depositary; however, such cross-market transactions will require
delivery of instructions to the relevant European international clearing system by the counterparty in such system in accordance with its rules and procedures and within its established deadlines
(European time). The relevant
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European
international clearing system will, if the transaction meets its settlement requirements, deliver instructions to its U.S. Depositary to take action to effect final settlement on its behalf
by delivering or receiving debt securities through DTC, and making or receiving payment in accordance with normal procedures for same-day funds settlement applicable to DTC. Clearstream Participants
and Euroclear Participants may not deliver instructions directly to their respective U.S. Depositaries.
Because
of time-zone differences, credits of debt securities received through Clearstream or Euroclear as a result of a transaction with a DTC participant will be made during subsequent securities
settlement processing and dated the business day following the DTC settlement date. Such credits or any transactions in such debt securities settled during such processing will be reported to the
relevant Euroclear Participants or Clearstream Participants on such business day. Cash received in Clearstream or Euroclear as a result of sales of debt securities by or through a Clearstream
Participant or a Euroclear Participant to a DTC participant will be received with value on the DTC settlement date but will be available in the relevant Clearstream or Euroclear cash account only as
of the business day following settlement in DTC.
If
the debt securities are cleared only through Euroclear and Clearstream (and not DTC), you will be able to make and receive through Euroclear and Clearstream payments, deliveries, transfers,
exchanges, notices, and other transactions involving any securities held through those systems only on days when those systems are open for business. Those systems may not be open for business on days
when banks, brokers, and other institutions are open for business in the United States. In addition, because of time-zone differences, U.S. investors who hold their interests in the securities through
these systems and wish to transfer their interests, or to receive or make a payment or delivery or exercise any other right with respect to their interests, on a particular day may find that the
transaction will not be effected until the next business day in Luxembourg or Brussels, as applicable. Thus, U.S. investors who wish to exercise rights that expire on a particular day may need to act
before the expiration date.
Although
DTC, Clearstream and Euroclear have agreed to the foregoing procedures in order to facilitate transfers of debt securities among participants of DTC, Clearstream and Euroclear, they are under
no obligation to perform or continue to perform such procedures and such procedures may be modified or discontinued at any time. Neither we nor any paying agent will have any responsibility for the
performance by DTC, Euroclear or Clearstream or their respective direct or indirect participants of their obligations under the rules and procedures governing their operations.
Conversion and Exchange
If any offered debt securities are convertible at the option of the holders or exchangeable at our option, the prospectus supplement relating to those debt
securities will include the terms and conditions governing any conversions and exchanges.
Governing Law
The indentures and the debt securities will be governed by and will be construed in accordance with New York law.
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DESCRIPTION OF WARRANTS
As of September 7, 2018, there was one outstanding warrant to purchase shares of our common stock. The warrant is exercisable for 722,000 shares at any
time prior to September 29, 2027 at an exercise price per share of $1.39.
We
may issue warrants for the purchase of shares of our common stock or preferred stock or of debt securities. We may issue warrants independently or together with other securities, and the warrants
may be attached to or separate from any offered securities. Each series of warrants will be issued under a separate warrant agreement to be entered into between us and the investors or a warrant
agent. The following summary of material provisions of the warrants and warrant agreements are subject to, and qualified in their entirety by reference to, all the provisions of the warrant agreement
and warrant certificate applicable to a particular series of warrants. The terms of any warrants offered under a prospectus supplement may differ from the terms described below. We urge you to
read the applicable prospectus supplement and any related free writing prospectus, as well as the complete warrant agreements and warrant certificates that contain the terms of the warrants.
The
particular terms of any issue of warrants will be described in the prospectus supplement relating to the issue. Those terms may
include:
-
§
-
the number of shares of common stock or preferred stock purchasable upon the exercise of
warrants to purchase such shares and the price at which such number of shares may be purchased upon such exercise;
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§
-
the designation, stated value and terms (including, without limitation, liquidation,
dividend, conversion and voting rights) of the series of preferred stock purchasable upon exercise of warrants to purchase preferred stock;
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§
-
the principal amount of debt securities that may be purchased upon exercise of a debt
warrant and the exercise price for the warrants, which may be payable in cash, securities or other property;
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§
-
the date, if any, on and after which the warrants and the related debt securities,
preferred stock or common stock will be separately transferable;
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§
-
the terms of any rights to redeem or call the warrants;
-
§
-
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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§
-
a discussion of certain United States federal income tax consequences applicable to the
warrants; and
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§
-
any additional terms of the warrants, including terms, procedures, and limitations
relating to the exchange, exercise and settlement of the warrants.
Holders
of equity warrants will not be entitled to:
-
§
-
vote, consent or receive dividends;
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§
-
receive notice as stockholders with respect to any meeting of stockholders for the
election of our directors or any other matter; or
-
§
-
exercise any rights as stockholders of Endocyte.
Each
warrant will entitle its holder to purchase the principal amount of debt securities or the number of shares of preferred stock or common stock at the exercise price set forth in, or calculable as
set forth in, the applicable prospectus supplement. Unless we otherwise specify in the applicable prospectus supplement, holders of the warrants may exercise the warrants at any time up to the
specified time on the expiration date that we set forth in the applicable prospectus supplement. After the close of business on the expiration date, unexercised warrants will become void.
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A
holder of warrant certificates may exchange them for new warrant certificates of different denominations, present them for registration of transfer and exercise them at the corporate trust office of
the warrant agent or any other office indicated in the applicable prospectus supplement. Until any warrants to purchase debt securities are exercised, the holder of the warrants will not have any
rights of holders of the debt securities that can be purchased upon exercise, including any rights to receive payments of principal, premium or interest on the underlying debt securities or to enforce
covenants in the applicable indenture. Until any warrants to purchase common stock or preferred stock are exercised, the holders of the warrants will not have any rights of holders of the underlying
common stock or preferred stock, including any rights to receive dividends or payments upon any liquidation, dissolution or winding up on the common stock or preferred stock, if any.
Governing Law
Unless we provide otherwise in the applicable prospectus supplement, the warrants and any warrant agreements will be governed by and construed in accordance
with the internal laws of the State of New York.
Enforceability of Rights by Holders of Warrants
Each warrant agent, if any, will act solely as our agent under the applicable warrant agreement and will not assume any obligation or relationship of agency or
trust with any holder of any warrant. A single bank or trust company may act as warrant agent for more than one issue of warrants. A warrant agent will have no duty or responsibility in case of any
default by us under the applicable warrant agreement or warrant, including any duty or responsibility to initiate any proceedings at law or otherwise, or to make any demand upon us. Any holder of a
warrant may, without the consent of the related warrant agent or the holder of any other warrant, enforce by appropriate legal action its right to exercise, and receive the securities purchasable upon
exercise of, its warrants.
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DESCRIPTION OF RIGHTS
We may issue rights to purchase our common stock. 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. Each series of rights will be issued under a separate rights agent agreement to be entered into between us and
one or more banks, trust companies or other financial institutions, as rights agent, that we will name in the applicable prospectus supplement. The rights agent will act solely as our agent in
connection with the rights and will not assume any obligation or relationship of agency or trust for or with any holders of rights certificates or beneficial owners of rights.
The
prospectus supplement and any incorporated documents 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 number of shares of common stock
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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§
-
a discussion of certain United States federal income tax consequences applicable to the
rights offering.
Each
right would entitle the holder of the rights to purchase for cash shares of common stock 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.
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 our security holders, to or through agents,
underwriters or dealers or through a combination of such methods, including pursuant to standby arrangements, as described in the applicable prospectus supplement.
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DESCRIPTION OF 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 will issue under a separate agreement. We may enter into unit agreements with a unit agent. Each unit agent will be a bank or trust company that we select.
We will indicate the name and address of the unit agent in the applicable prospectus supplement relating to a particular series of units.
The
following description, together with the additional information included in any applicable prospectus supplement, summarizes the general features of the units that we may offer under this
prospectus. You should read any prospectus supplement and any free writing prospectus that we may authorize to be provided to you related to the series of units being offered, as well as the complete
unit agreements that contain the terms of the units. Specific unit agreements will contain additional important terms and provisions and we will file as an exhibit to the registration statement of
which this prospectus is a part, or will incorporate by reference from another report that we file with the SEC, the form of each unit agreement 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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§
-
identification and description of the separate constituent securities comprising the
units;
-
§
-
the price or prices at which the units will be issued;
-
§
-
the date, if any, on and after which the constituent securities comprising the units will
be separately transferable;
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§
-
a discussion of certain United States federal income tax considerations applicable to the
units; and
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§
-
any other terms of the units and their constituent securities.
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LEGAL OWNERSHIP OF SECURITIES
We may issue securities in registered form or in the form of one or more global securities. We describe global securities in greater detail below. We refer to
those persons who have securities registered in their own names on the books that we or any applicable trustee, depositary or warrant agent maintain for this purpose as the "holders" of those
securities. These persons are the legal holders of the securities. We refer to those persons who, indirectly through others, own beneficial interests in securities that are not registered in their own
names, as "indirect holders" of those securities. As we discuss below, indirect holders are not legal holders, and investors in securities issued in book-entry form or in street name will be indirect
holders.
Book-Entry Holders
We may issue securities in book-entry form only, as we will specify in the applicable prospectus supplement. This means securities may be represented by one or
more global securities registered in the name of a financial institution that holds them as depositary on behalf of other financial institutions that participate in the depositary's book-entry system.
These participating institutions, which are referred to as participants, in turn, hold beneficial interests in the securities on behalf of themselves or their customers.
Only
the person in whose name a security is registered is recognized as the holder of that security. Securities issued in global form will be registered in the name of the depositary or its
participants. Consequently, for securities issued in global form, we will recognize only the depositary as the holder of the securities, and we will make all payments on the securities to the
depositary. The depositary passes along the payments it receives to its participants, which in turn pass the payments along to their customers who are the beneficial owners. The depositary and its
participants do so under agreements they have made with one another or with their customers; they are not obligated to do so under the terms of the securities.
As
a result, investors in a book-entry security will not own securities directly. Instead, they will own beneficial interests in a global security, through a bank, broker or other financial
institution that participates in the depositary's book-entry system or holds an interest through a participant. As long as the securities are issued in global form, investors will be indirect holders,
and not holders, of the securities.
Street Name Holders
We may terminate a global security or issue securities in non-global form. In these cases, investors may choose to hold their securities in their own names or
in "street name." Securities held by an investor in street name would be registered in the name of a bank, broker or other financial institution that the investor chooses, and the investor would hold
only a beneficial interest in those securities through an account he or she maintains at that institution.
For
securities held in street name, we will recognize only the intermediary banks, brokers and other financial institutions in whose names the securities are registered as the holders of those
securities, and we will make all payments on those securities to them. These institutions pass along the payments they receive to their customers who are the beneficial owners, but only because they
agree to do so in their customer agreements or because they are legally required to do so. Investors who hold securities in street name will be indirect holders, not holders, of those securities.
Legal Holders
Our obligations, as well as the obligations of any applicable trustee and of any third parties employed by us or a trustee, run only to the legal holders of
the securities. We do not have obligations to investors who hold beneficial interests in global securities, in street name or by any other indirect means. This will be the case whether an investor
chooses to be an indirect holder of a security or has no choice because we are issuing the securities only in global form.
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For
example, once we make a payment or give a notice to the holder, we have no further responsibility for the payment or notice even if that holder is required, under agreements with depositary
participants or customers or by law, to pass it along to the indirect holders but does not do so. Similarly, we may want to obtain the approval of the holders to amend an indenture, to relieve us of
the consequences of a default or of our obligation to comply with a particular provision of the indenture or for other purposes. In such an event, we would seek approval only from the holders, and not
the indirect holders, of the securities. Whether and how the holders contact the indirect holders is up to the holders.
Special Considerations for Indirect Holders
If you hold securities through a bank, broker or other financial institution, either in book-entry form or in street name, you should check with your own
institution to find out:
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§
-
the performance of third-party service providers;
-
§
-
how it handles securities payments and notices;
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§
-
whether it imposes fees or charges;
-
§
-
how it would handle a request for the holders' consent, if ever required;
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§
-
whether and how you can instruct it to send you securities registered in your own name so
you can be a holder, if that is permitted in the future;
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§
-
how it would exercise rights under the securities if there were a default or other event
triggering the need for holders to act to protect their interests; and
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§
-
if the securities are in book-entry form, how the depositary's rules and procedures will
affect these matters.
Global Securities
A global security is a security that represents one or any other number of individual securities held by a depositary. Generally, all securities represented by
the same global securities will have the same terms.
Each
security issued in book-entry form will be represented by a global security that we deposit with and register in the name of a financial institution or its nominee that we select. The financial
institution that we select for this purpose is called the depositary. Unless we specify otherwise in the applicable prospectus supplement, DTC will be the depositary for all securities issued in
book-entry form.
A
global security may not be transferred to or registered in the name of anyone other than the depositary, its nominee or a successor depositary, unless special termination situations arise. We
describe those situations below under the section entitled "Special Situations When a Global Security Will Be Terminated" in this prospectus. As a result of these arrangements, the depositary, or its
nominee, will be the sole registered owner and holder of all securities represented by a global security, and investors will be permitted to own only beneficial interests in a global security.
Beneficial interests must be held by means of an account with a broker, bank or other financial institution that in turn has an account with the depositary or with another institution that does. Thus,
an investor whose security is represented by a global security will not be a holder of the security, but only an indirect holder of a beneficial interest in the global security.
If
the prospectus supplement for a particular security indicates that the security will be issued in global form only, then the security will be represented by a global security at all times unless
and until the global security is terminated. If termination occurs, we may issue the securities through another book-entry clearing system or decide that the securities may no longer be held through
any book-entry clearing system.
Special Considerations for Global Securities
The rights of an indirect holder relating to a global security will be governed by the account rules of the investor's financial institution and of the
depositary, as well as general laws relating to securities transfers.
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We
do not recognize an indirect holder as a holder of securities and instead deal only with the depositary that holds the global security.
If
securities are issued only in the form of a global security, an investor should be aware of the following:
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§
-
an investor cannot cause the securities to be registered in his or her name, and cannot
obtain non-global certificates for his or her interest in the securities, except in the special situations we describe below;
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§
-
an investor will be an indirect holder and must look to his or her own bank or broker for
payments on the securities and protection of his or her legal rights relating to the securities, as we describe above;
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§
-
an investor may not be able to sell interests in the securities to some insurance
companies and to other institutions that are required by law to own their securities in non-book-entry form;
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§
-
an investor may not be able to pledge his or her interest in a global security in
circumstances where certificates representing the securities must be delivered to the lender or other beneficiary of the pledge in order for the pledge to be effective;
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§
-
the depositary's policies, which may change from time to time, will govern payments,
transfers, exchanges and other matters relating to an investor's interest in a global security;
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§
-
we and any applicable trustee have no responsibility for any aspect of the depositary's
actions or for its records of ownership interests in a global security, nor do we or any applicable trustee supervise the depositary in any way;
-
§
-
the depositary may, and we understand that DTC will, require that those who purchase and
sell interests in a global security within its book-entry system use immediately available funds, and your broker or bank may require you to do so as well; and
-
§
-
financial institutions that participate in the depositary's book-entry system, and
through which an investor holds its interest in a global security, may also have their own policies affecting payments, notices and other matters relating to the securities.
There
may be more than one financial intermediary in the chain of ownership for an investor. We do not monitor and are not responsible for the actions of any of those intermediaries.
Special Situations When a Global Security Will Be Terminated
In a few special situations described below, the global security will terminate and interests in it will be exchanged for physical certificates representing
those interests. After that exchange, the choice of whether to hold securities directly or in street name will be up to the investor. Investors must consult their own banks or brokers to find out how
to have their interests in securities transferred to their own name, so that they will be direct holders. We have described the rights of holders and street name investors above.
Unless
we provide otherwise in the applicable prospectus supplement, the global security will terminate when the following special situations
occur:
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§
-
if the depositary notifies us that it is unwilling, unable or no longer qualified to
continue as depositary for that global security and we do not appoint another institution to act as depositary within 90 days;
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§
-
if we notify any applicable trustee that we wish to terminate that global security; or
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§
-
if an event of default has occurred with regard to securities represented by that global
security and has not been cured or waived.
The
applicable prospectus supplement may also list additional situations for terminating a global security that would apply only to the particular series of securities covered by the applicable
prospectus supplement. When a global security terminates, the depositary, and not we or any applicable trustee, is responsible for deciding the names of the institutions that will be the initial
direct holders.
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SELLING SECURITYHOLDERS
Selling securityholders are persons or entities that, directly or indirectly, have acquired or will from time to time acquire from us, our securities. If the
registration statement of which this prospectus forms a part is used by selling securityholders for the resale of any securities registered thereunder pursuant to a registration rights
agreement between us and such selling securityholders or otherwise, information about such selling securityholders, their beneficial ownership of our securities and their relationship with us will be
set forth in a prospectus supplement.
PLAN OF DISTRIBUTION
We or selling securityholders may sell securities in any one or more of the following ways from time to time: (i) to or through agents; (ii) to
or through underwriters (including through syndicates or acting alone for resale); (iii) to or through brokers or dealers; (iv) directly by us to purchasers, including through a specific
bidding, auction or other process; (v) upon the exercise of subscription rights that may be distributed to our stockholders; (vi) through a combination of any of these methods of sale;
or (vii) by any other method permitted by law. Any dealers and agents participating in the distribution of the securities may be deemed to be underwriters, and compensation received by them on
resale of the securities may be deemed to be underwriting discounts.
A
prospectus supplement or supplements (and any related free writing prospectus that we may authorize to be provided to you) will describe the terms of the offering of the securities, including, to
the extent applicable:
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§
-
the name or names of the underwriters, dealers or agents, if any;
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§
-
the name or names of the selling securityholders, if any;
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§
-
the purchase price of the securities or other consideration therefor, and the proceeds,
if any, we will receive from the sale;
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§
-
any over-allotment or other options under which underwriters may purchase additional
securities from us or any selling securityholders;
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§
-
any agency fees or underwriting discounts and other items constituting agents' or
underwriters' compensation;
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§
-
any public offering price;
-
§
-
any discounts or concessions allowed or reallowed or paid to dealers; and
-
§
-
any securities exchange or market on which the securities may be listed.
Sales
of the securities may be effected from time to time in one or more transactions, including negotiated transactions, (a) at a fixed price or prices, which may be changed; (b) at
market prices prevailing at the time of sale; (c) at prices related to prevailing market prices; (d) at varying prices determined at the time of sale; or (e) at negotiated prices.
Any initial offering price, dealer purchase price, discount or commission may be changed from time to time.
The
securities may be distributed from time to time in one or more transactions, at negotiated prices, at a fixed price or fixed prices (that may be subject to change), at market prices prevailing at
the time of sale, at various prices determined at the time of sale or at prices related to prevailing market prices.
Offers
to purchase securities may be solicited directly by us or selling securityholders or by agents designated by us or the selling securityholders from time to time. Any such agent may be deemed to
be an underwriter, as that term is defined in the Securities Act, of the securities so offered and sold.
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If
underwriters or dealers acting as principal are utilized in the sale of any securities in respect of which this prospectus is being delivered, such securities will be acquired by the underwriters
or dealers for their own account and may be resold from time to time in one or more transactions, including negotiated transactions, at fixed public offering prices or at varying prices determined by
the underwriters or dealers at the time of sale. Securities may be offered to the public either through underwriting syndicates represented by managing underwriters or directly by one or more
underwriters. If any underwriter or underwriters are utilized in the sale of securities, unless otherwise indicated in the applicable prospectus supplement and/or other offering material, the
obligations of the underwriters are subject to certain conditions precedent, and the underwriters will be obligated to purchase all such securities if any are purchased.
If
a dealer is utilized in the sale of the securities in respect of which this prospectus is delivered, we or the selling securityholders will sell such securities to the dealer, as principal. The
dealer may then resell such securities to the public at varying prices to be determined by such dealer at the time of resale. Transactions through brokers or dealers may include block trades in which
brokers or dealers will attempt to sell shares as agent but may position and resell as principal to facilitate the transaction or in crosses, in which the same broker
or dealer acts as agent on both sides of the trade. Any such dealer may be deemed to be an underwriter, as such term is defined in the Securities Act, of the securities so offered and sold.
Offers
to purchase securities may be solicited directly by us or selling securityholders and the sale thereof may be made directly to institutional investors or others, who may be deemed to be
underwriters within the meaning of the Securities Act with respect to any resale thereof.
If
so indicated in the applicable prospectus supplement and/or other offering material, we or selling securityholders may authorize agents and underwriters to solicit offers by certain institutions to
purchase securities at the public offering price set forth in the applicable prospectus supplement and/or other offering material pursuant to delayed delivery contracts providing for payment and
delivery on the date or dates stated in the applicable prospectus supplement and/or other offering material. Such delayed delivery contracts will be subject only to those conditions set forth in the
applicable prospectus supplement and/or other offering material.
Agents,
underwriters and dealers may be entitled under relevant agreements to indemnification against certain liabilities, including liabilities under the Securities Act, or to contribution with
respect to payments which such agents, underwriters and dealers may be required to make in respect thereof. The terms and conditions of any indemnification or contribution will be described in the
applicable prospectus supplement and/or other offering material.
We
or selling securityholders may also sell shares of our common stock through various arrangements involving mandatorily or optionally exchangeable securities, and this prospectus may be delivered in
connection with those sales.
We
or selling securityholders may enter into derivative, sale or forward sale transactions with third parties, or sell securities not covered by this prospectus to third parties in privately
negotiated transactions. If the applicable prospectus supplement and/or other offering material indicates, in connection with those transactions, the third parties may sell securities covered by this
prospectus and the applicable prospectus supplement and/or other offering material, including in short sale transactions and by issuing securities not covered by this prospectus but convertible into,
or exchangeable for or representing beneficial interests in such securities covered by this prospectus, or the return of which is derived in whole or in part from the value of such securities. The
third parties may use securities received under derivative, sale or forward sale transactions, or securities pledged by us or the selling securityholders or borrowed from us, the selling
securityholders or others to settle those sales or to close out any related open borrowings of stock, and may use securities received from us or the selling securityholders in settlement of those
transactions to close out any related open borrowings of stock. The third party in such sale transactions will be an underwriter and
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will
be identified in the applicable prospectus supplement (or a post-effective amendment) and/or other offering material.
Additionally,
the selling stockholders may engage in hedging transactions with broker-dealers in connection with distributions of shares or otherwise. In those transactions, broker-dealers may engage
in short sales of shares in the course of hedging the positions they assume with the selling stockholders. The selling stockholders also may sell shares short and redeliver shares to close out such
short positions. The selling stockholders may also enter into option or other transactions with broker-dealers which require the delivery of shares to the broker-dealer. The broker-dealer may then
resell or otherwise transfer such shares pursuant to this prospectus. The selling stockholders also may loan or pledge shares, and the borrower or pledgee may sell or otherwise transfer the shares so
loaned or pledged pursuant to this prospectus. Such borrower or pledgee also may transfer those shares to investors in our securities or in connection with the offering of other securities not covered
by this prospectus.
Underwriters,
broker-dealers or agents may receive compensation in the form of commissions, discounts or concessions from us or the selling securityholders. Underwriters, broker-dealers or agents may
also receive compensation from the purchasers of shares for whom they act as agents or to whom they sell as principals, or both. Compensation as to a particular underwriter, broker-dealer or agent
might be in excess of customary commissions and will be in amounts to be negotiated in connection with transactions involving shares. In effecting sales, broker-dealers may arrange for other
broker-dealers to participate in the resales.
Each
series of securities will be a new issue and, other than the common stock, which is listed on the Nasdaq Global Market, will have no established trading market. We may elect to list any series of
securities on an exchange, and in the case of the common stock, on any additional or substitute exchange, but, unless otherwise specified in the applicable prospectus supplement and/or other offering
material, we shall not be obligated to do so. No assurance can be given as to the liquidity of the trading market for any of the securities.
Agents,
underwriters and dealers may engage in transactions with, or perform services for us, the selling securityholders and our respective subsidiaries in the ordinary course of business.
Any
underwriter may engage in overallotment, stabilizing transactions, short covering transactions and penalty bids in accordance with Regulation M under the Exchange Act. Overallotment
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. Short covering transactions involve purchases of the securities 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 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. An underwriter may carry out these transactions on the
Nasdaq Global Market, any additional or substitute exchange on which our common stock is listed, in the over-the-counter market or otherwise. We do not
make any representation or prediction as to the direction or magnitude of any effect that the transactions described above might have on the price of the securities. In addition, we do not make any
representation that underwriters will engage in such transactions or that such transactions, once commenced, will not be discontinued without notice.
The
place and time of delivery for securities will be set forth in the accompanying prospectus supplement and/or other offering material for such securities.
The
selling stockholders may also sell their shares in accordance with Rule 144 under the Securities Act or other applicable exemptions, rather than pursuant to this prospectus, regardless of
whether the shares are covered by this prospectus.
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Selling
securityholders may be deemed to be underwriters under the Securities Act in connection with the securities they resell and any profits on the sales may be deemed to be underwriting discounts
and commissions under the Securities Act.
To
comply with applicable state securities laws, the securities offered by this prospectus will be sold, if necessary, in such jurisdictions only through registered or licensed brokers or dealers. In
addition, securities may not be sold in some states unless they have been registered or qualified for sale in the applicable state or an exemption from the registration or qualification requirement is
available and is complied with.
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Table of Contents
LEGAL MATTERS
Faegre Baker Daniels LLP, Indianapolis, Indiana, will pass upon the validity of the securities offered hereby. Additional legal matters may be passed
upon for us, the selling securityholders or any underwriters, dealers or agents, by counsel named in the applicable prospectus supplement.
EXPERTS
Ernst & Young LLP, independent registered public accounting firm, has audited our consolidated financial statements included in our Annual Report on
Form 10-K for the year ended December 31, 2017, and the effectiveness of our internal control over financial reporting as of December 31, 2017, as set forth in their reports,
which are incorporated by reference in this prospectus and elsewhere in the registration statement. Our financial statements are incorporated by reference in reliance on Ernst &
Young LLP's report, given on their authority as experts in accounting and auditing.
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Table of Contents
9,459,460 Shares
Common Stock
PROSPECTUS SUPPLEMENT
Joint Book-Running Managers
Jefferies
Wells Fargo Securities
RBC Capital Markets
Lead Manager
Wedbush PacGrow
September 11, 2018
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