Filed pursuant to Rule 424(b)(5)
Registration No. 333-193698
PROSPECTUS SUPPLEMENT
To Prospectus dated February 13, 2014
18,966,000 Shares
INOVIO PHARMACEUTICALS, INC.
Common Stock
$2.90 per share
We are offering 18,966,000 shares of our common
stock.
Our common stock is listed on the NYSE MKT under the symbol INO. The last sale price of our common stock on February 26, 2014, as
reported by the NYSE MKT, was $3.73 per share.
Investing in our securities involves a high degree of risk. See
Risk Factors
, beginning on page S-6 of
this prospectus supplement, as well as in the documents incorporated or deemed to be incorporated by reference into this prospectus supplement and the accompanying prospectus, for a discussion of the factors you should carefully consider before
deciding to purchase our securities.
Neither the Securities and Exchange Commission nor any state securities commission has approved or
disapproved of these securities or determined if this prospectus supplement or the accompanying prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
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Per
Share
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Total
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Public Offering Price
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$
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2.90
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$
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55,001,400
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Underwriting Discounts and Commissions
(1)
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$
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0.174
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$
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3,300,084
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Proceeds to Us, Before Expenses
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$
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2.726
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$
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51,701,316
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(1) See Underwriting for additional disclosure regarding underwriting discounts and commissions and expense reimbursement.
The underwriters expect to deliver the shares of common stock on or about March 4, 2014.
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Piper Jaffray
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Stifel
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Brean Capital
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Maxim Group LLC
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The date of this prospectus supplement is February 27, 2014.
TABLE OF CONTENTS
i
ABOUT THIS PROSPECTUS SUPPLEMENT
This document is in two parts. The first part is the prospectus supplement, including the documents incorporated or deemed to be incorporated herein by
reference, which describes the specific terms of this offering. The second part, the accompanying prospectus, including the documents incorporated or deemed to be incorporated therein by reference, provides more general information about us and our
securities. Generally, when we refer to this prospectus, we are referring to both parts of this document combined together with all documents incorporated or deemed incorporated by reference. Before you invest, you should carefully read this
prospectus supplement, the accompanying prospectus, all information incorporated or deemed to be incorporated by reference herein and therein, as well as the additional information described under Where You Can Find More Information on
page S-14 of this prospectus supplement. These documents contain information you should consider when making your investment decision. This prospectus supplement may add, update or change information contained in the accompanying prospectus. To the
extent there is a conflict between the information contained in this prospectus supplement, on the one hand, and the information contained in the accompanying prospectus or any document incorporated or deemed to be incorporated by reference therein
filed prior to the date of this prospectus supplement, on the other hand, you should rely on the information in this prospectus supplement. If any statement in one of these documents is inconsistent with a statement in another document having a
later datefor example, a document filed after the date of this prospectus supplement and deemed to be incorporated by reference in this prospectus supplement and the accompanying prospectusthe statement in the document having the later
date modifies or supersedes the earlier statement.
You should rely only on the information contained in or incorporated or deemed to be incorporated by
reference in this prospectus supplement, the accompanying prospectus and in any free writing prospectuses we may provide to you in connection with this offering. We have not, and the underwriters have not, authorized any other person to provide you
with any information that is different. If anyone provides you with different or inconsistent information, you should not rely on it. We are offering to sell, and seeking offers to buy, shares of our common stock only in jurisdictions where offers
and sales are permitted. The distribution of this prospectus supplement and the offering of the common stock in certain jurisdictions may be restricted by law. Persons outside the United States who come into possession of this prospectus supplement
must inform themselves about, and observe any restrictions relating to, the offering of the common stock and the distribution of this prospectus supplement outside the United States. This prospectus supplement does not constitute, and may not be
used in connection with, an offer to sell, or a solicitation of an offer to buy, any securities offered by this prospectus supplement by any person in any jurisdiction in which it is unlawful for such person to make such an offer or solicitation.
We further note that the representations, warranties and covenants made by us in any agreement that is filed as an exhibit to any filing that is
incorporated or deemed to be incorporated by reference into this prospectus supplement or the accompanying prospectus were made solely for the benefit of the parties to such agreement, including, in some cases, for the purpose of allocating risk
among the parties to such agreements, and should not be deemed to be a representation, warranty or covenant to you. Moreover, such representations, warranties or covenants were accurate only as of the date when made. Accordingly, such
representations, warranties and covenants should not be relied on as accurately representing the current state of our affairs.
S-1
PROSPECTUS SUPPLEMENT SUMMARY
This summary highlights selected information about us, this offering and information appearing elsewhere in this prospectus supplement, in the accompanying
prospectus and in the documents we incorporate by reference. This summary is not complete and does not contain all the information you should consider before investing in our common stock pursuant to this prospectus supplement and the accompanying
prospectus. Before making an investment decision, to fully understand this offering and its consequences to you, you should carefully read this entire prospectus supplement and the accompanying prospectus, including Risk Factors
beginning on page S-6 of this prospectus supplement and the financial statements and related notes and the other information that we incorporated by reference herein, including our Annual Report on Form 10-K and Quarterly Reports on Form 10-Q that
we file from time to time.
Inovio Pharmaceuticals, Inc.
Overview
We are engaged in the discovery and development
of a new generation of vaccines and immune therapies, called synthetic vaccines, focused on cancers and infectious diseases. Our DNA-based SynCon
®
technology is designed to provide universal
protection against known as well as new unmatched strains of pathogens such as influenza and also generate strong T-cell responses to fight cancers and infectious diseases. Our preclinical development and clinical programs include cervical
dysplasia/cancer (therapeutic), influenza (preventive), prostate cancer (therapeutic), hepatitis C virus, hepatitis B virus, HIV, and malaria vaccines. Our partners and collaborators include Roche, University of Pennsylvania, Drexel University,
National Microbiology Laboratory of the Public Health Agency of Canada, Program for Appropriate Technology in Health/Malaria Vaccine Initiative, National Institute of Allergy and Infectious Diseases, Merck, University of Southampton, United States
Military HIV Research Program, U.S. Army Medical Research Institute of Infectious Diseases, HIV Vaccines Trial Network and Department of Homeland Security.
All of our potential human products are in research and development phases. We have not generated any revenues from the sale of any such products, and we do
not expect to generate any such revenues for at least the next several years. We earn revenue from license fees and milestone revenue, collaborative research and development agreements, grants and government contracts. Our product candidates will
require significant additional research and development efforts, including extensive preclinical and clinical testing. All product candidates that we advance to clinical testing will require regulatory approval prior to commercial use, and will
require significant costs for commercialization. We may not be successful in our research and development efforts, and we may never generate sufficient product revenue to be profitable.
Industry Background
Historical Importance of Vaccines
We believe vaccines have saved more lives and prevented more human suffering than any other human invention. As recently as a century ago, infectious
diseases were the main cause of death worldwide, even in the most developed countries. Today, there is a vast range of vaccines available to protect against more than two dozen infectious diseases, especially for children. Our society has found that
the only way to control or even eliminate infectious diseases is consistent, widespread use of vaccines.
Challenges Facing Vaccines
Despite the advances made to quality of life as a result of the development and use of vaccines over the past century, several significant challenges continue
to exist. The technical limitations of conventional vaccine technology have constrained the development of new vaccines for other diseases. Development of vaccines based on conventional technology requires significant infrastructure in research and
manufacturing, and can be time
S-2
consuming. Safety risks associated with conventional vaccine approaches may offset their potential benefits, as the conventional vaccines we have depended upon employ either weakened or killed
viruses or different parts of a virus as vaccines. Further, conventional vaccines are still grown in eggs or cells and harvested over periods of weeks with very inefficient manufacturing processes.
In addition, it is important to note a changing dynamic in the broader vaccine marketplace. Traditionally, vaccines have been predominantly focused on the
pediatric market, intended to protect children from diseases that could cause them serious harm or death. Today, there is a growing interest in vaccines against diseases that may affect adolescents and adults, which include both sexually transmitted
diseases and infections that strike opportunistically, such as during pregnancy, in immuno-compromised individuals, and in the geriatric population. Furthermore, there is encouraging data from and ongoing development of immunotherapies against
cancers.
Inovios Solution
With our synthetic
vaccine platform comprising our SynCon
®
vaccine design process and proprietary electroporation delivery technology, we have developed a preclinical and clinical stage pipeline of vaccines that
we believe has the potential to be safer than traditional vaccines (our synthetic vaccines are non-live and non-replicating therefore they cannot cause the disease), have equivalent or stronger immune-stimulating power than traditional vaccines
(live viruses being the best at eliciting strong immune responses), are showing the potential to be used against diseases for which conventional vaccine technology cannot be applied, and have added advantages with respect to development time and
cost. Preclinical studies in animals and initial human clinical study data have demonstrated a favorable safety profile and best-in-class immune responses that suggest the potential efficacy of our approach.
The Next Generation of Vaccines: Synthetic Vaccines
Our
synthetic vaccines are designed to prevent a disease (prophylactic vaccines) or treat an existing disease (therapeutic vaccines). Our synthetic vaccine consists of a DNA plasmid encoding a selected antigen(s) that is introduced into cells of humans
or animals with the purpose of having those cells produce the antigen encoded by the DNA instructions and consequently inducing an immune response to the antigen. Production by these cells of the targeted antigenic protein(s) may trigger one or both
of two immune responses: the production of antibodies, known as a humoral immune response, and/or the activation of T-cells, known as a cellular or cell-mediated immune response. These responses may then neutralize or eliminate infectious agents
(e.g. viruses, bacteria, and other microorganisms) or abnormal cells (e.g. malignant tumor cells). Synthetic vaccines have several advantages over traditional vaccines in that they are non-pathogenic (meaning they cannot cause the disease), may be
effective against diseases which cannot be controlled by traditional vaccines, and are relatively fast, easy and inexpensive to design and produce. Synthetic vaccines are stable under normal environmental conditions for extended periods of time.
Another potentially major advantage of synthetic vaccines is their relatively short development cycle. For example, synthetic vaccines against newly identified viral agents may be developed within weeks or months, as opposed to the years often
required to develop a traditional vaccine candidate. In the area of cancer, synthetic vaccines use a portion of the genetic code of a cancer antigen to cause a host to produce proteins of the antigen that may induce an immune response.
Inovios SynCon
®
Vaccines
Our synthetic vaccines are designed to generate specific antibody and/or T-cell responses. Our SynCon
®
technology provides processes that employ bioinformatics, which combine extensive genetic data and sophisticated algorithms. Our design process is based on the genetic make-up of a common antigen(s) from multiple strains of a virus within a viral
sub-type or taxonomic group (family) of pathogens such as HIV, hepatitis C virus (HCV), human papillomavirus (HPV), influenza and other diseases. We synthetically create a new antigen that represents a consensus of the DNA
make-up of these multiple strains of the desired pathogen
S-3
target. This synthetic consensus DNA sequence does not exist in nature (and is consequently patentable). This unmatched antigen has been shown to nevertheless induce a powerful immune response in
humans against that antigen, providing protection not only against multiple existing strains of the same sub-type that were used to develop this synthetic antigen but to also provide protection against newly emergent strains not used in designing
the vaccine. Thus, the SynCon
®
technology allows us to develop universal vaccines against target pathogens. These SynCon
®
synthetic
vaccine constructs may provide a solution to the genetic shift and drift that is typical of infectious diseases. SynCon
®
immunogens are able to elicit broad, diverse
immune responses, which in theory are important to protect against variable pathogens such as influenza, dengue, HCV and HIV.
SynCon
®
vaccine antigens are designed by aligning numerous primary sequences and choosing DNA-based triplets for the most common or important amino acid at each site. These antigens are further optimized
for codon usage, improved mRNA stability, and enhanced leader sequences for ribosome loading. The DNA inserts are therefore optimized at the genetic level to give them high expression capability in human cells.
We believe these design capabilities allow us to better target appropriate immune system mechanisms and produce a higher level of the coded antigen to enhance
the overall ability of the synthetic vaccine to induce the desired immune response.
Preclinical studies have shown that immunization of mice and
non-human primates using SynCon
®
synthetic vaccine constructs elicited an immune response against multiple, unmatched strains within specific sub-types of HIV, HCV, HPV, dengue, prostate
cancer and influenza viruses. Vaccine candidates for all these diseases are being advanced through preclinical and clinical studies.
Roche
Collaboration
We have granted an exclusive worldwide license to Roche to research, develop and commercialize our multi-antigen DNA immunotherapies
targeting prostate cancer and hepatitis B. Pursuant to the terms of our agreement, Roche holds an exclusive license for our DNA-based vaccines INO-5150 (targeting prostate cancer) and INO-1800 (targeting hepatitis B) as well as the use of our
CELLECTRA
®
electroporation technology for delivery of these vaccines. Roche also has an option to exclusively license up to five additional prostate cancer antigen targets in connection with a
collaborative prostate cancer research program, and we have agreed to work exclusively with Roche regarding such targets during the term of the research program, and beyond with respect to any of these targets if Roche exercises the option, and
products resulting from such program. The exclusive rights granted to Roche do not prevent us from working with products outside the collaboration with respect to our electroporation delivery technology and certain of our DNA expression
technologies. We are collaborating with Roche to further develop INO-5150 and INO-1800.
Pursuant to the terms of our agreement, Roche will pay for
preclinical and clinical development costs. Total milestone payments upon reaching certain development and commercial milestones may potentially amount to $412.5 million. Additional development milestone payments could also be made to us if Roche
pursues other indications with INO-5150 or INO-1800. In addition, we are entitled to receive up to double-digit tiered royalties on product sales.
Corporate Information
Our executive offices are located
at 1787 Sentry Parkway West, Building 18, Suite 400, Blue Bell, Pennsylvania, our telephone number is (267) 440-4200 and our Internet address is www.inovio.com. The information on our Internet website is not incorporated by reference in this
prospectus and should not be considered to be part of this prospectus. Our website address is included in this prospectus as an inactive technical reference only. Unless the context otherwise requires, references in this prospectus to Inovio
Pharmaceuticals, we, us, and our refer to Inovio Pharmaceuticals, Inc.
S-4
THE OFFERING
Common stock offered by us
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18,966,000 shares.
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Common stock to be outstanding after this offering
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226,586,037 shares.
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Over-allotment Option
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We have granted the underwriters an option for a period of 30 days to purchase up to additional 2,844,900 shares of our common stock.
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Use of proceeds
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We intend to use the net proceeds received from the sale of our common stock for general corporate purposes, including clinical trial expenses, research and development expenses, general and administrative expenses, manufacturing expenses and
potential acquisitions of companies and technologies that complement our business. There are no understandings, agreements or commitments with respect to any potential acquisitions. Please see Use of Proceeds on page S-8.
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Risk factors
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See Risk Factors beginning on page S-6 of this prospectus supplement, as well as the other information included in or incorporated by reference in this prospectus supplement and the accompanying prospectus, for a discussion of risks
you should carefully consider before investing in our securities.
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The number of shares of our common stock to be outstanding after this offering set forth above is based on 207,620,037 shares of
our common stock outstanding as of September 30, 2013.
Unless otherwise indicated, all information in this prospectus, including the number of
shares of our common stock to be outstanding after this offering set forth above, excludes the following:
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16,982,197 shares subject to outstanding options as of September 30, 2013, having a weighted average exercise price of $1.20 per share;
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14,639,260 shares of our common stock issuable upon exercise of outstanding warrants as of September 30, 2013, having a weighted average exercise price of $1.23 per share; and
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38,233 shares of our common stock issuable upon conversion of outstanding preferred stock as of September 30, 2013, having a conversion price of $6.80 per share.
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Except as otherwise indicated, all information in this prospectus supplement assumes no exercise by the underwriter of its over-allotment option.
S-5
RISK FACTORS
Investing in our securities involves a high degree of risk. You should carefully consider the risks described below, together with all of the other
information included or incorporated by reference in this prospectus supplement, the accompanying prospectus and the documents we incorporate by reference, before making an investment decision. Our business, financial condition and results of
operations could be materially and adversely affected by any of these risks or uncertainties. In that case, the market price of our common stock could decline, and you may lose all or part of your investment in our securities.
Risks Related to this Offering
Resales of our common stock in the public market during this offering by our stockholders may cause the market price of our common stock to fall.
The issuance of new shares of our common stock in this offering could result in resales of our common stock by our current stockholders concerned
about the potential dilution of their holdings. In turn, these resales could have the effect of depressing the market price for our common stock. A substantial majority of the outstanding shares of our common stock are, and all of the shares sold in
this offering upon issuance will be, freely tradable without restriction or further registration under the Securities Act of 1933, as amended, or the Securities Act.
As a new investor, you will incur substantial dilution as a result of this offering and future equity issuances, and as a result, our stock price could
decline.
The offering price is substantially higher than the net tangible book value per share of our outstanding common stock. As a result, based
on our capitalization as of September 30, 2013, investors purchasing common stock in this offering will incur immediate dilution of $2.47 per share of common stock purchased, based on the offering price of $2.90 per share. We are
generally not restricted from issuing additional common stock, including any securities that are convertible into or exchangeable for, or that represent the right to receive, common stock. The market price of our common stock could decline as a
result of sales of common stock or securities that are convertible into or exchangeable for, or that represent the right to receive, common stock after this offering or the perception that such sales could occur. See Dilution on page
S-10 of this prospectus supplement for a more detailed discussion of the dilution you will incur in this offering.
We have broad discretion in how
we use the net proceeds of this offering, and we may not use these proceeds effectively or in ways with which you agree.
Our management will have
broad discretion as to the application of the net proceeds of this offering and could use them for purposes other than those contemplated at the time of this offering. Our stockholders may not agree with the manner in which our management chooses to
allocate and spend the net proceeds. Moreover, our management may use the net proceeds for corporate purposes that may not increase the market price of our common stock.
S-6
FORWARD-LOOKING STATEMENTS
This prospectus supplement, the accompanying prospectus and the information incorporated or deemed to be incorporated by reference herein or
therein contain or incorporate by reference forward-looking statements within the meaning of Section 27A of the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. These
statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as may, will, should, expect, plan,
anticipate, believe, estimate, predict, potential or continue, the negative of such terms or other comparable terminology. These statements are only predictions. Actual events
or results may differ materially.
Although we believe that the expectations reflected in the forward-looking statements are reasonable,
we cannot guarantee future results, levels of activity, performance or achievements. Moreover, neither we, nor any other person, assume responsibility for the accuracy and completeness of the forward-looking statements. We are under no obligation to
update any of the forward-looking statements after the filing of this prospectus supplement to conform such statements to actual results or to changes in our expectations.
Such statements are based on currently available operating, financial and competitive information and are subject to various risks,
uncertainties and assumptions that could cause actual results to differ materially from those anticipated or implied in our forward-looking statements due to a number of factors including, but not limited to, those set forth under the sections
entitled Risk Factors in this prospectus supplement or the accompanying prospectus, in our most recent Annual Report on Form 10-K and in our Quarterly Reports on Form 10-Q, as well as any amendments or supplements thereto filed with the
SEC. We qualify all of the information presented or incorporated by reference in this prospectus, and particularly our forward-looking statements, by these cautionary statements. In particular, you should note the following risk factors that could
cause actual results to differ from those contained in the forward-looking statements include but are not limited to:
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our lack of products that have received regulatory approval;
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uncertainties inherent in clinical trials and product development programs, including but not limited to the fact that pre-clinical and clinical results may not be indicative of results achievable in other trials or for
other indications, that results from one study may not necessarily be reflected or supported by the results of other similar studies, that results from an animal study may not be indicative of results achievable in human studies, that clinical
testing is expensive and can take many years to complete, that the outcome of any clinical trial is uncertain and failure can occur at any time during the clinical trial process, and that our electroporation technology and DNA vaccines may fail to
show the desired safety and efficacy traits in clinical trials;
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the availability of funding;
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the ability to manufacture vaccine candidates;
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the availability or potential availability of alternative therapies or treatments for the conditions we or our collaborators target, including alternatives that may be more efficacious or cost-effective than any therapy
or treatment that we and our collaborators hope to develop;
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whether our proprietary rights are enforceable or defensible or infringe or allegedly infringe on rights of others or can withstand claims of invalidity; and
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the impact of government healthcare legislation and proposals.
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You should not place undue
reliance on any forward-looking statements, which we base on current expectations. Further, forward-looking statements speak only as of the date we make them, and we undertake no obligation to update publicly any of them in light of new information
or future events.
S-7
USE OF PROCEEDS
We estimate that the net proceeds to us of the sale of the common stock that we are offering will be approximately $51.4 million, based on the public
offering price of $2.90 per share of common stock sold pursuant to this offering, after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us. See Underwriting for additional
disclosure regarding underwriting discounts and commissions and expense reimbursement.
We intend to use the net proceeds received from the sale of our
common stock for general corporate purposes, including clinical trial expenses, research and development expenses, general and administrative expenses, manufacturing expenses and potential acquisitions of companies and technologies that complement
our business. There are no understandings, agreements or commitments with respect to any potential acquisitions. As of the date of this prospectus supplement, we cannot specify with certainty all of the particular uses of the proceeds from this
offering. Accordingly, our management will retain broad discretion over the use of such proceeds. Pending the use of the net proceeds from this offering, we intend to invest the net proceeds in investment-grade, interest-bearing instruments.
S-8
CAPITALIZATION
The following table sets forth our cash and cash equivalents, short-term investments and capitalization as of September 30, 2013, as follows:
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on an actual basis; and
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on an as adjusted basis to reflect our issuance and sale in this offering of 18,966,000 shares of our common stock, at the public offering price of $2.90 per share of our common stock after deducting the
estimated underwriting discounts and commissions and estimated offering expenses payable by us.
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You should read this table together with
the section of this prospectus supplement entitled Use of Proceeds and with the financial statements and related notes and the other information that we incorporated by reference into this prospectus supplement and the accompanying
prospectus, including our Annual Report on Form 10-K and Quarterly Reports on Form 10-Q that we file from time to time.
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As of September 30, 2013
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Actual
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As Adjusted
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(in thousands)
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Cash and cash equivalents and short-term investments
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$
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46,172
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$
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97,618
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Stockholders Equity:
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Preferred stock, $0.001 par value; 1,969,383 shares authorized, 1,968,950 issued and 26 outstanding:
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Series C Convertible Preferred stock; 1,091 shares designated, 1,091 shares issued and 26 shares outstanding, actual and as
adjusted
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0
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0
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Common stock, $0.001 par value; 600,000,000 shares authorized, 207,620,037 shares issued and outstanding, actual and 226,586,037 as
adjusted
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208
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227
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Additional paid-in capital
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341,980
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393,407
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Accumulated deficit
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(280,334
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)
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(280,334
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)
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Accumulated other comprehensive (loss) income
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(98
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)
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(98
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)
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Total Inovio Pharmaceuticals, Inc. stockholders equity
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61,756
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113,202
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Non-controlling interest
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461
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461
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Total capitalization
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$
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62,217
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$
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113,663
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The table above excludes the following as of September 30, 2013:
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16,982,197 shares subject to outstanding options, having a weighted average exercise price of $1.20 per share;
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14,639,260 shares of our common stock issuable upon exercise of outstanding warrants, having a weighted average exercise price of $1.23 per share; and
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38,233 shares of our common stock issuable upon conversion of outstanding preferred stock, having a conversion price of $6.80 per share.
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S-9
DILUTION
Purchasers of the securities offered by this prospectus supplement and the accompanying prospectus will suffer immediate and substantial dilution in the net
tangible book value per share of our common stock. Dilution in net tangible book value per share represents the difference between the amount per share paid by purchasers in this offering and the net tangible book value per share of our common stock
immediately after this offering.
Our historical net tangible book value as of September 30, 2013 was approximately $45.9 million, or $0.22 per share
of our outstanding common stock, based on 207,620,037 shares of common stock outstanding as of September 30, 2013.
Investors participating in this
offering will incur immediate and significant dilution. After giving effect to the issuance and sale in this offering of 18,966,000 shares of our common stock at the public offering price of $2.90 per share of our common stock after deducting the
estimated underwriting discounts and commissions and estimated offering expenses payable by us, our as adjusted net tangible book value as of September 30, 2013 would have been approximately $97.4 million, or approximately $0.43 per
share of our common stock. This amount represents an immediate increase in net tangible book value of $0.21 per share of our common stock to existing stockholders and an immediate dilution in net tangible book value of $2.47 per share of
our common stock to investors purchasing securities in this offering. The following table illustrates this dilution:
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Assumed offering price per share
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$
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2.90
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Net tangible book value per share as of September 30, 2013
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$
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0.22
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Increase per share attributable to this offering
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$
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0.21
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As adjusted net tangible book value per share as of September 30, 2013, after giving effect to this offering
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$
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0.43
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Dilution per share to new investors participating in this offering
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$
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2.47
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If the underwriters exercise their over-allotment option or if any shares of our common stock are issued upon exercise of
outstanding options or warrants, you will experience further dilution.
S-10
UNDERWRITING
We are offering the shares of common stock described in this prospectus supplement through Piper Jaffray & Co. and Stifel, Nicolaus &
Company, Incorporated as the joint book-running managers of this offering. Subject to the terms and conditions of the underwriting agreement, we have agreed to sell to the underwriters, and the underwriters have agreed to purchase from us, the
number of shares of common stock shown opposite each underwriters name below.
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Underwriters
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Number of
Shares
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Piper Jaffray & Co.
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8,345,040
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Stifel, Nicolaus & Company, Incorporated
|
|
|
6,448,440
|
|
Brean Capital, LLC
|
|
|
2,275,920
|
|
Maxim Group LLC
|
|
|
1,896,600
|
|
|
|
|
|
|
Total
|
|
|
18,966,000
|
|
|
|
|
|
|
The underwriters are committed to purchase all the shares of common stock offered by us if they purchase any shares, other
than those shares covered by the option to purchase additional shares of our common stock described below.
The underwriters have advised us that they
propose to offer the shares of common stock directly to the public at the public offering prices set forth on the cover page of this prospectus supplement and to certain dealers at the same prices less a concession not in excess of $0.087 per
share of common stock. After the offering, these figures may be changed by the underwriters.
The underwriters have advised us that they currently intend
to make a market in the common stock. However, the underwriters are not obligated to do so and may discontinue market-making activities at any time without notice. No assurance can be given as to the liquidity of the trading market for the common
stock.
We have granted to the underwriters an option to purchase up to an additional 2,844,900 shares of common stock from us at the same price to the
public as set forth on the cover page of this prospectus supplement. The underwriters may exercise this option any time during the 30-day period after the date of this prospectus supplement.
The underwriting fee per share of common stock is equal to the public offering price per share of common stock, less the amount paid by the underwriters to us
per share of common stock. The following table shows the per share underwriting discounts and commissions and the total underwriting discounts and commissions to be paid to the underwriters in connection with this offering.
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Total
|
|
|
|
Per
Share
|
|
|
Without
Over-allotment
|
|
|
With Over-
allotment
|
|
Public offering price
|
|
$
|
2.90
|
|
|
$
|
55,001,400
|
|
|
$
|
63,251,610
|
|
Underwriting discounts and commissions paid by us
|
|
$
|
0.174
|
|
|
$
|
3,300,084
|
|
|
$
|
3,795,096.60
|
|
Proceeds to us, before expenses
|
|
$
|
2.726
|
|
|
$
|
51,701,316
|
|
|
$
|
59,456,513.40
|
|
We estimate that the total fees and expenses payable by us, excluding underwriting discounts and commissions, will be
approximately $255,000. Pursuant to the terms of the underwriting agreement, we have also agreed to reimburse the underwriters for expenses, including reasonable fees and disbursements of counsel, relating to this offering of up to $100,000, which
amount is included in the above total and shall not be increased without our prior written consent.
We have agreed to indemnify the underwriters against
certain liabilities, including liabilities under the Securities Act, or to contribute to payments that the underwriters may be required to make in respect of those liabilities.
S-11
We and each of our directors and executive officers are subject to lock-up agreements that prohibit us and them
from offering for sale, pledging, selling, contracting to sell, selling any option or contract to purchase, purchasing any option or contract to sell, granting any option, right or warrant to purchase, lend, or otherwise transferring or disposing
of, directly or indirectly, any shares of our common stock or any securities convertible into or exercisable or exchangeable for shares of our common stock, from entering into any swap or other agreement that transfers, in whole or in part, any of
the economic consequences of ownership of the common stock, or making any demand for, or exercising any right with respect to, the registration of any shares of our common stock or any security convertible into or exercisable or exchangeable for
common stock, or making any public announcement of the intention to do any of the foregoing, for a period of at least 90 days following the date of the underwriting agreement without the prior written consent of the underwriters. The lock-up
agreements do not prohibit our directors and executive officers from transferring shares of our common stock for bona fide estate or tax planning purposes, subject to certain requirements, including that the transferee be subject to the same lock-up
terms, participating in any exchange of underwater options with us, acquiring or exercising stock options issued pursuant to our existing stock option plans, or entering into plans that satisfy the requirements of Rule 10b5-1 under the
Exchange Act, provided that no sales are made under such plans during the lock-up period.
The lock-up agreements do not prohibit us from issuing shares
upon the exercise or conversion of securities outstanding on the date of this prospectus supplement. The lock-up provisions do not prevent us from selling shares to the underwriters pursuant to the underwriting agreement, or prevent us from granting
options to acquire securities under our existing stock option plans or issuing shares upon the exercise or conversion of securities outstanding on the date of this prospectus supplement.
The 90-day lock-up period in all of the lock-up agreements is subject to extension if (i) during the last 17 days of the lock-up period we issue an
earnings release or material news or a material event relating to us occurs or (ii) prior to the expiration of the lock-up period, we announce that we will release earnings results during the 16-day period beginning on the last day of the
lock-up period, in which case the restrictions imposed in these lock-up agreements shall continue to apply until the expiration of the 18-day period beginning on the issuance of the earnings release or the occurrence of the material news or material
event, if, within three days of that issuance or occurrence, either underwriter publishes or otherwise distributes a research report or makes a public appearance concerning us, unless the underwriters waive the extension in writing and except to
extent that our securities are actively traded securities within the meaning of Rule 101(c)(1) of Regulation M of the Exchange Act, and we other satisfy the requirements set forth in Rule 139 of the Securities Act that would permit the
underwriters to publish issuer-specific research reports pursuant to Rule 139 of the Securities Act.
Our shares are quoted on the NYSE MKT under the
symbol INO.
To facilitate the offering, the underwriters may engage in transactions that stabilize, maintain or otherwise affect the price of
our common stock during and after the offering. Specifically, the underwriters may over-allot or otherwise create a short position in the common stock for its own account by selling more shares of common stock than we have sold to it. Short sales
involve the sale by the underwriters of a greater number of shares than they are required to purchase in the offering. The underwriters may close out any short position by either exercising its option to purchase additional shares or purchasing
shares in the open market.
The underwriters may also engage in passive market making transactions in our common stock. Passive market making consists of
displaying bids on the NYSE MKT limited by the prices of independent market makers and effecting purchases limited by those prices in response to order flow. Rule 103 of Regulation M promulgated by the Securities and Exchange Commission limits the
amount of net purchases that each passive market maker may make and the displayed size of each bid. Passive market making may stabilize the market price of our common stock at a level above that which might otherwise prevail in the open market and,
if commenced, may be discontinued at any time.
This prospectus supplement in electronic format may be made available on websites maintained by the
underwriters, and the underwriters may distribute the prospectus supplement electronically.
S-12
From time to time in the ordinary course of their respective businesses, the underwriters and certain of its
affiliates may in the future engage in commercial banking or investment banking transactions with us and our affiliates.
S-13
LEGAL MATTERS
The validity of the securities offered hereby will be passed upon for us by Duane Morris LLP, Philadelphia, Pennsylvania. The underwriters are being
represented in connection with this offering by Dechert LLP, New York, New York.
EXPERTS
Ernst & Young LLP, an 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, 2012, and the effectiveness of our internal control over financial reporting as of December 31, 2012, as set forth in their reports, which are incorporated by reference in this prospectus
supplement and the accompanying prospectus. Our financial statements are incorporated by reference in reliance on Ernst & Young LLPs reports, given on their authority as experts in accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and current reports, proxy statements and other information with the Securities and Exchange Commission. Our Securities and Exchange
Commission filings are available to the public over the Internet at the Securities and Exchange Commissions website at www.sec.gov. Copies of certain information filed by us with the Securities and Exchange Commission are also available on our
website at www.inovio.com. Our website is not a part of this prospectus supplement and is not incorporated by reference into this prospectus supplement. You may also read and copy any document we file at the Securities and Exchange Commissions
Public Reference Room, 100 F Street, N.E., Washington, D.C. 20549. Please call the Securities and Exchange Commission at 1-800-SEC-0330 for further information on the operation of the Public Reference Room.
This prospectus supplement and the accompanying prospectus omit some information contained in our registration statement in accordance with SEC rules and
regulations. You should review the information contained in and exhibits filed to the registration statement for further information on us and the securities we are offering. Statements in this prospectus supplement and the accompanying prospectus
concerning any document we filed as an exhibit to the registration statement or that we otherwise filed with the Securities and Exchange Commission are not intended to be comprehensive and are qualified by reference to those filings. You should
review the complete document to evaluate these statements.
S-14
INCORPORATION BY REFERENCE
The Securities and Exchange Commission allows us to incorporate by reference into this prospectus supplement much of the information we file with the
Securities and Exchange Commission, which means that we can disclose important information to you by referring you to those publicly available documents. The information that we incorporate by reference into this prospectus supplement is considered
to be part of this prospectus supplement. Because we are incorporating by reference future filings with the Securities and Exchange Commission, this prospectus supplement is continually updated and those future filings may modify or supersede some
of the information included or incorporated in this prospectus supplement. This means that you must look at all of the Securities and Exchange Commission filings that we incorporate by reference to determine if any of the statements in this
prospectus supplement or in any document previously incorporated by reference have been modified or superseded. This prospectus supplement incorporates by reference the documents listed below (File No. 001-14888) and any future filings we make
with the Securities and Exchange Commission under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act (in each case, other than those documents or the portions of those documents not deemed to be filed) until the offering of the securities under
the registration statement of which this prospectus supplement forms a part is terminated or completed:
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Annual Report on Form 10-K for the fiscal year ended December 31, 2012;
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Quarterly Reports on Form 10-Q for the fiscal quarters ended March 31, 2013, June 30, 2013 and September 30, 2013;
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Current Reports on Form 8-K filed March 7, 2013, April 15, 2013, May 21, 2013, September 10, 2013 September 12, 2013, February 26, 2014 and February 27, 2014; and
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The description of our common stock contained in our registration statement filed pursuant to Section 12 of the Securities Exchange Act, as modified by our reports we file under the Exchange Act.
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You may request a copy of these filings, at no cost, by writing or telephoning us at the following address or phone number:
Inovio Pharmaceuticals, Inc.
10480 Wateridge Circle
San Diego,
California 92121
Attn: Investor Relations
Phone: (858) 410-3140
S-15
INOVIO PHARMACEUTICALS, INC.
$125,000,000
Common
Stock
Preferred Stock
Debt Securities
Warrants
Units
From time to
time, in one or more offerings, we may offer up to $125,000,000 aggregate dollar amount of any combination of the securities described in this prospectus, either individually or in units. We may also offer common stock or preferred stock upon
conversion of debt securities, common stock upon conversion of preferred stock, or common stock, preferred stock or debt securities upon the exercise of warrants. We will provide the specific terms of these offerings and securities in one or more
supplements to this prospectus. We may also authorize the provision to you of one or more free writing prospectuses in connection with these offerings. The prospectus supplement and any related free writing prospectus may also add, update or change
information we include in this prospectus. You should carefully read this prospectus, the applicable prospectus supplement and any related free writing prospectus, as well as any documents we incorporate by reference, before buying any of the
securities being offered.
Our common stock is traded on the NYSE MKT under the symbol INO. On February 10, 2014, the
last reported sale price of our common stock on the NYSE MKT was $2.73. The applicable prospectus supplement will contain information, where applicable, as to any other listing, if any, on the NYSE MKT or any securities market or other exchange of
the securities covered by the applicable prospectus supplement.
On February 10, 2014, the aggregate market value of our outstanding
common stock non-affiliates held was approximately $542.3 million.
We may sell the securities directly to investors, through agents
designated from time to time or to or through underwriters or dealers, on a continuous or delayed basis. For additional information on the methods of sale, you should refer to the section entitled Plan of Distribution in this prospectus.
If any agents or underwriters are involved in the sale of any securities with respect to which this prospectus is being delivered, we will set forth in a prospectus supplement the names of such agents or underwriters and any applicable fees,
commissions, discounts and over-allotment options. We will also set forth in a prospectus supplement the price to the public of such securities and the net proceeds that we expect to receive from such sale.
Investing in our securities involves a high degree of risk. You should review carefully the risks and uncertainties described under the
heading
Risk Factors
contained in the applicable prospectus supplement and any related free writing prospectus, and under similar headings in the other documents that we incorporate by reference into this
prospectus.
This prospectus may not be used to consummate a sale of any securities unless accompanied by a prospectus supplement.
Neither the U.S. Securities and Exchange Commission, any state securities commission nor any other regulatory body has approved or
disapproved of these securities or passed upon the accuracy or adequacy of this prospectus. Any representation to the contrary is a criminal offense.
This
prospectus is dated February 11, 2014.
You should rely only on the information contained in this prospectus, any applicable prospectus
supplement and any related free writing prospectus, including the information we incorporate by reference as described under Where You Can Find More Information. We have not authorized anyone to provide you with different information. If
you receive any other information, you should not rely on it. No dealer, salesperson or other person is authorized to give any information or to represent anything not contained in this prospectus, any applicable prospectus supplement or any related
free writing prospectus that we may authorize to be provided to you. You must not rely on any unauthorized information or representation. This prospectus is an offer to sell only the securities offered hereby, but only under circumstances and in
jurisdictions where it is lawful to do so. You should assume that the information in this prospectus, any applicable prospectus supplement or any related free writing prospectus is accurate only as of the date on the front of the document and that
any information we have incorporated by reference is accurate only as of the date of the document incorporated by reference, regardless of the time of delivery of this prospectus, any applicable prospectus supplement or any related free writing
prospectus, or any sale of a security.
TABLE OF CONTENTS
2
RISK FACTORS
Investing in our securities involves a high degree of risk. You should carefully consider the specific risks and uncertainties we describe
under the caption Risk Factors or similar heading in our periodic reports referred to in Where You Can Find More Information below and, if included in an applicable prospectus supplement or free writing prospectus under the
caption Risk Factors or similar heading in the applicable prospectus supplement. Additional risks not presently known to us or that we currently believe are immaterial may also significantly impair our business operations.
ABOUT THIS PROSPECTUS
All references in this prospectus to Inovio, Company, we, our and us refer to
Inovio Pharmaceuticals, Inc. and its consolidated subsidiaries unless the context otherwise requires.
This prospectus is part of a
registration statement on Form S-3 that we have filed with the Securities and Exchange Commission, or SEC, using a shelf registration process. Under this shelf registration process, we and certain holders of our securities
may sell the securities described in this prospectus in one or more offerings, up to the total dollar amount of $125,000,000. This prospectus provides you with a general description of the securities we may offer. Each time we or holders of our
securities offer to sell securities under this shelf registration statement, we will provide a prospectus supplement that will contain more specific information about the terms of the offering and those securities. We may also authorize one or more
free writing prospectuses to be provided to you that may contain material information relating to these offerings. The prospectus supplement and any related free writing prospectus that we may authorize to be provided to you may also modify, add to
or supersede the information contained in this prospectus or in the documents we have incorporated by reference into this prospectus. You should read this prospectus together with the documents incorporated by reference, the applicable prospectus
supplement and any related free writing prospectus, and with the additional information referred to below under Where You Can Find More Information, before buying any of the securities being offered.
We have filed a registration statement on Form S-3 with the SEC relating to the securities covered by this prospectus. This prospectus is a
part of the registration statement and does not contain all of the information in the registration statement. Whenever we refer in this prospectus, including other documents we incorporate by reference, to a Company contract or other document,
please be aware that the reference is only a summary and that you should refer to the exhibits that are a part of the registration statement for a copy of the applicable contract or other document. We qualify all of the summaries 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 heading Where You Can Find Additional Information.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and current reports, proxy statements and other information with the SEC. You may read and copy any documents we
file with the SEC at the SECs public reference room at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the public reference room. Our filings with the SEC are also available to the
public through the SECs Internet site at http://www.sec.gov.
The SECs rules allow us to incorporate by reference
information into this prospectus. Therefore, we can disclose important information to you by referring you to any of the SEC filings we reference in the list below. Any information we refer to in this way in this prospectus or the applicable
prospectus supplement is considered
3
part of this prospectus or the applicable prospectus supplement. Any reports we file with the SEC after the date of this prospectus and before the date that the offering of securities by means of
this prospectus terminates will automatically update and, where applicable, supersede any information contained or incorporated by reference in this prospectus or the applicable prospectus supplement.
We incorporate by reference into this prospectus the following documents or information we file with the SEC, other than, in each case,
documents or information deemed to have been furnished and not filed in accordance with SEC rules. The SEC file number for these documents is 001-31940.
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Our annual report on Form 10-K for the year ended December 31, 2012 we filed with the SEC on March 18, 2013;
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Our quarterly reports on Form 10-Q for the quarters ended March 31, 2013, June 30, 2013 and September 30, 2013 we filed with the SEC on May 10, 2013, August 9, 2013 and
November 12, 2013, respectively;
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Our current reports on Form 8-K we filed on March 7, 2013, April 15, 2013, May 21, 2013, September 10, 2013 and September 12, 2013;
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The description of our common stock contained in our registration statement filed pursuant to Section 12 of the Securities Exchange Act of 1934, or the Exchange Act, as modified by our reports we file under the
Exchange Act; and
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All documents we file under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act on or after the date of this prospectus and before the termination of the offering of securities under this prospectus, other than
current reports furnished under Item 2.02 or Item 7.01 of Form 8-K and exhibits we file on such form that relate to such items.
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Any statement contained in a document incorporated by reference in this prospectus will be deemed to be modified or superseded for purposes of
this prospectus to the extent that any statement contained in this prospectus or in any subsequently filed document, which also is or is deemed to be incorporated by reference in this prospectus or any prospectus supplement, modifies or supersedes
this statement. Any statement modified or superseded in this way will not be deemed, except as so modified or superseded, to constitute a part of this prospectus or any prospectus supplement. The information incorporated by reference contains
information about us and our financial condition and performance and is an important part of this prospectus.
We will provide without
charge to each person, including any beneficial owner, to whom this prospectus is delivered, upon his or her written or oral request, a copy of any or all documents referred to above which have been or may be incorporated by reference into this
prospectus, excluding exhibits to those documents unless they are specifically incorporated by reference into those documents. You can request those documents from Inovio Pharmaceuticals, Inc., Attention: Investor Relations, 10480 Wateridge Circle,
San Diego, California, 92121, telephone (858) 410-3140.
CAUTIONARY STATEMENT ON FORWARD-LOOKING
INFORMATION
This prospectus, including documents we incorporate by reference, any applicable prospectus supplement and any related
free writing prospectus, contains forward-looking statements, as defined in Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements relate to future events or our future financial
performance. In some cases, you can identify forward-looking statements by terminology such as may, will, should, expect, plan, anticipate, believe,
estimate, predict, potential or continue, the negative of such terms or other comparable terminology. These statements are only predictions. Actual events or results may differ materially.
4
Although we believe that the expectations reflected in the forward-looking statements are
reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Moreover, neither we, nor any other person, assume responsibility for the accuracy and completeness of the forward-looking statements. We are under no
obligation to update any of the forward-looking statements after the date of this prospectus and any applicable prospectus supplement to conform such statements to actual results or to changes in our expectations.
Readers are also urged to carefully review and consider the various disclosures made by us that attempt to advise interested parties of the
factors that affect our business, including without limitation the disclosures made in our quarterly report on Form 10-Q for the quarter ended September 30, 2013 under the caption Risk Factors.
Risk factors that could cause actual results to differ from those contained in the forward-looking statements include but are not limited to:
our history of losses; our lack of products that have received regulatory approval; uncertainties inherent in clinical trials and product development programs, including but not limited to the fact that pre-clinical and clinical results may not be
indicative of results achievable in other trials or for other indications, that results from one study may not necessarily be reflected or supported by the results of other similar studies, that results from an animal study may not be indicative of
results achievable in human studies, that clinical testing is expensive and can take many years to complete, that the outcome of any clinical trial is uncertain and failure can occur at any time during the clinical trial process, and that our
electroporation technology and DNA vaccines may fail to show the desired safety and efficacy traits in clinical trials; the availability of funding; the ability to manufacture vaccine candidates; the availability or potential availability of
alternative therapies or treatments for the conditions targeted by us or our collaborators, including alternatives that may be more efficacious or cost-effective than any therapy or treatment that we and our collaborators hope to develop; whether
our proprietary rights are enforceable or defensible or infringe or allegedly infringe on rights of others or can withstand claims of invalidity; and the impact of government healthcare proposals.
OUR COMPANY
We are engaged in the discovery and development of a new generation of vaccines and immune therapies, called synthetic vaccines, focused on
cancers and infectious diseases. Our DNA-based SynCon® technology is designed to provide universal protection against known as well as new unmatched strains of pathogens such as influenza. These synthetic vaccines, in combination with our
proprietary electroporation delivery, have been shown in humans to generate best-in-class immune responses with a favorable safety profile. Our preclinical development and clinical programs include cervical dysplasia/cancer (therapeutic), influenza
(preventive), prostate cancer (therapeutic), leukemia (therapeutic), hepatitis C virus, hepatitis B virus, HIV, and malaria vaccines. Our partners and collaborators include Roche, University of Pennsylvania, Drexel University, National Microbiology
Laboratory of the Public Health Agency of Canada, Program for Appropriate Technology in Health/Malaria Vaccine Initiative, National Institute of Allergy and Infectious Diseases, Merck, University of Southampton, United States Military HIV Research
Program, U.S. Army Medical Research Institute of Infectious Diseases, HIV Vaccines Trial Network and Department of Homeland Security.
All
of our potential human products are in research and development phases. We have not generated any revenues from the sale of any such products, and we do not expect to generate any such revenues for at least the next several years. We earn revenue
from license fees and milestone revenue, collaborative research and development agreements, grants and government contracts. Our product candidates will require significant additional research and development efforts, including extensive preclinical
and clinical testing. All product candidates that we advance to clinical testing will require regulatory approval prior to commercial use, and will require significant costs for commercialization. We may not be successful in our research and
development efforts, and we may never generate sufficient product revenue to be profitable.
Our executive offices are located at 1787
Sentry Park West, Blue Bell, Pennsylvania 19422, and our telephone number is (267) 440-4200. We maintain an Internet website at www.inovio.com. Information contained in or accessible through our website does not constitute part of this
prospectus.
5
STATEMENT OF COMPUTATION OF RATIOS
The following table sets forth our ratio of earnings to fixed charges and to combined fixed charges and preferred stock dividends for the
years ended December 31, 2008, 2009, 2010, 2011, 2012 and the nine months ended September 30, 2013
(1)
.
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Years Ended December 31,
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Nine
Months Ended
September 30,
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2008
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2009
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2010
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2011
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2012
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2013
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Ratio of earnings to fixed charges
(2)
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Ratio of earnings to combined fixed charges and preferred stock
dividends
(3)
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(1)
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We reported a loss for the years ended December 31, 2008, 2009, 2010, 2011, 2012 and the nine months ended September 30, 2013 and would have needed to generate additional income of $12,965,622, $24,458,924,
$17,638,746, $15,304,095, $19,712,980 and $50,615,729, respectively, to cover our fixed charges of $167,395, $408,647, $261,425, $141,900, $146,520 and $225,720, respectively.
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(2)
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For purposes of computing the ratio of earnings to fixed charges, earnings consist of net loss plus fixed charges. Fixed charges consist of interest expense and an estimate of the interest within rental expense.
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(3)
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For purposes of computing the ratio of earnings to combined fixed charges and preferred stock dividends, earnings consist of net loss plus fixed charges. Combined fixed charges and preferred stock dividends consist of
interest expense, an estimate of interest within rental expense and preferred stock dividends.
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USE OF PROCEEDS
Except as described in any prospectus supplement or in any related free writing prospectus that we may authorize to be provided to you, we
currently intend to use the net proceeds from the sale of the securities offered hereby for research and development, including clinical trials, and general corporate purposes. We may also use a portion of the net proceeds to acquire or invest
in businesses, products and technologies that are complementary to our own. Pending these uses, we expect to invest the net proceeds in short-term, investment-grade securities.
DESCRIPTION OF CAPITAL STOCK
This prospectus contains summary descriptions of the common stock, preferred stock, warrants, debt securities and units that we may offer and
sell from time to time. When we offer one or more of these securities in the future, a prospectus supplement will explain the particular terms of the securities and the extent to which these general provisions may apply. These summary descriptions
and any summary descriptions in the applicable prospectus supplement do not purport to be complete descriptions of the terms and conditions of each security and are qualified in their entirety by reference to our certificate of incorporation and
by-laws, each as amended to date, the Delaware General Corporation Law, or DGCL, and any other documents referenced in such summary descriptions and from which such summary descriptions are derived. If any particular terms of a security described in
the applicable prospectus supplement differ from any of the terms described in this prospectus, then the terms described in this prospectus will be deemed superseded by the terms set forth in that prospectus supplement.
We may issue securities in book-entry form through one or more depositaries, such as The Depository Trust Company, named in the applicable
prospectus supplement. Each sale of a security in book-entry form will settle in immediately available funds through the applicable depositary, unless otherwise stated. We will issue the securities only in registered form, without coupons, although
we may issue the securities in bearer form if so specified in the applicable prospectus supplement. If any securities are to be listed or quoted on a securities exchange or quotation system, the applicable prospectus supplement will so indicate.
6
Capital Stock
Our authorized capital stock consists of 600,000,000 shares of common stock, $0.001 par value per share, and 10,000,000 shares of preferred
stock, $0.001 par value per share. As of January 29, 2014, there were:
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211,404,957 shares of common stock outstanding; and
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26 shares of Series C Cumulative Convertible Preferred Stock outstanding.
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Common Stock
The holders of our common stock are entitled to one vote for each share held of record on all matters submitted to a vote of stockholders and
do not have any cumulative voting rights. Any election at a meeting of stockholders is determined by a plurality of the votes cast by the stockholders entitled to vote at the election, and all other matters are generally determined by a majority of
the votes cast on the matter. Holders of our common stock are entitled to receive ratably such dividends, if any, as may be declared by our board of directors out of funds legally available. In the event of we liquidate, dissolve or wind up, after
payment of all of our debts and liabilities, and subject to the preferential rights, if any, of any outstanding preferred stock, the holders of our common stock are entitled to share ratably in all assets. Our common stock has no preemptive or
conversion rights or other subscription rights, and there are no redemptive or sinking funds provisions applicable to the our common stock. We have received full payment for all outstanding shares of our common stock and cannot require our
stockholders to make further payments on the stock.
Preferred Stock
Pursuant to our amended and restated certificate of incorporation, our board of directors has the authority, without further action by the
stockholders (unless such stockholder action is required by applicable law or NYSE Amex rules), to designate and issue up to 10,000,000 shares of preferred stock in one or more series, to establish from time to time the number of shares to be
included in each such series, to fix the designations, powers, preferences and rights of the shares of each wholly unissued series, and any qualifications, limitations or restrictions thereon, and to increase or decrease the number of shares of any
such series, but not below the number of shares of such series then outstanding.
We will fix the designations, powers, preferences and
rights of the preferred stock of each series, as well as the qualifications, limitations or restrictions thereon, in the certificate of designation relating to that series. We will file as an exhibit to the registration statement of which this
prospectus is a part, or will incorporate by reference from reports that we file with the SEC, the form of any certificate of designation that describes the terms of the series of preferred stock we are offering before the issuance of that series of
preferred stock. This description will include:
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the title and stated value;
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the number of shares we are offering;
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the liquidation preference per share;
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the dividend rate, period and payment date and method of calculation for dividends;
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whether dividends will be cumulative or non-cumulative and, if cumulative, the date from which dividends will accumulate;
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the procedures for any auction and remarketing, if any;
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the provisions for a sinking fund, if any;
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the provisions for redemption or repurchase, if applicable, and any restrictions on our ability to exercise those redemption and repurchase rights;
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any listing of the preferred stock on any securities exchange or market;
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whether the preferred stock will be convertible into our common stock, and, if applicable, the conversion price, or how it will be calculated, and the conversion period;
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whether the preferred stock will be exchangeable into debt securities, and, if applicable, the exchange price, or how it will be calculated, and the exchange period;
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voting rights, if any, of the preferred stock;
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preemptive rights, if any;
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restrictions on transfer, sale or other assignment, if any;
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whether interests in the preferred stock will be represented by depositary shares;
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a discussion of any material United States federal income tax considerations applicable to the preferred stock;
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the relative ranking and preferences of the preferred stock as to dividend rights and rights if we liquidate, dissolve or wind up our affairs;
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any limitations on the issuance of any class or series of preferred stock ranking senior to or on a parity with the series of preferred stock as to dividend rights and rights if we liquidate, dissolve or wind up our
affairs; and
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any other specific terms, preferences, rights or limitations of, or restrictions on, the preferred stock.
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Our board of directors may authorize the issuance of preferred stock with voting or conversion rights that could adversely affect the voting
power or other rights of the holders of our common stock. Preferred stock could be issued quickly with terms designed to delay or prevent a change in control of our company or make removal of management more difficult. Additionally, the issuance of
preferred stock may have the effect of decreasing the market price of our common stock.
Stock Options, Warrants and Convertible Preferred Stock
As of January 29, 2014, we have reserved 32,663,112 shares of common stock for issuance under our equity compensation plans, upon
exercise of outstanding stock options, warrants or upon conversion of outstanding convertible preferred stock. Of this number, we have reserved 16,458,431 shares for issuance upon exercise of outstanding options that we previously granted under
our stock option plans, 3,128,887 shares for issuance upon exercise of options that we may grant in the future under our stock option plans, 13,037,561 shares for issuance upon exercise of outstanding warrants and 38,233 shares for issuance upon
conversion of outstanding shares of preferred stock.
Delaware Anti-Takeover Law and Certain Charter Provisions
Delaware Section 203
. We are subject to the provisions of Section 203 of the Delaware General Corporation Law. In general, the
statute prohibits a publicly held Delaware corporation from engaging in a business combination with an interested stockholder for a period of three years following the date that the stockholder became an interested
stockholder unless:
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prior to such date, the board of directors of the corporation approved either the business combination or the transaction that resulted in the stockholder becoming an interested stockholder;
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upon consummation of the transaction that resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least
85% of the voting stock of the corporation
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outstanding at the time the transaction commenced, excluding for purposes of determining the number of shares outstanding, those shares owned by persons who are directors and also officers, and
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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on or subsequent to such date, the board of directors approves the business combination and stockholders authorize the business combination at an annual or special meeting of stockholders, and not by written consent, by
the affirmative vote of at least two-thirds of the outstanding voting stock that the interested stockholder does not own.
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business combination includes a merger, asset or stock sale or other transaction resulting in financial benefit to the stockholder. An interested stockholder is a person who, together with affiliates and associates, owns, or
within three years prior, did own, 15% or more of a corporations outstanding voting stock.
Charter Provisions
. Our amended
and restated certificate of incorporation includes the following provisions, among others:
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the authority of our board of directors to issue shares of undesignated preferred stock and to determine the rights, preferences and privileges of these shares, without stockholder approval;
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all stockholder actions must be effected at a duly called meeting of stockholders and not by written consent; and
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the elimination of cumulative voting.
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Indemnification
. Our amended and restated
certificate of incorporation and our amended and restated bylaws provide that we will indemnify officers and directors against losses as they incur in investigations and legal proceedings resulting from their services to us, which may include
service in connection with a takeover.
These provisions may have the effect of deterring hostile takeovers or delaying changes in our
control or management. We intend these provisions to enhance the likelihood of continued stability in the composition of our board of directors and in the policies they implement, and to discourage certain types of transactions that may involve an
actual or threatened change of our control. We designed these provisions to reduce our vulnerability to an unsolicited acquisition proposal. We also intend for the provisions to discourage certain tactics that may be used in proxy fights. However,
such provisions could have the effect of discouraging others from making tender offers for our shares and, as a consequence, they also may inhibit fluctuations in the market price of our shares that could result from actual or rumored takeover
attempts. Such provisions may also have the effect of preventing changes in our management.
Transfer Agent and Registrar
The transfer agent and registrar for our common stock is Computershare. Its address is 3rd Floor 510 Burrard St., Vancouver, BC V6C 3B9,
and its telephone number is (604) 661-0258. The transfer agent for any series of preferred stock that we may offer under this prospectus will be named and described in the prospectus supplement for that series.
DESCRIPTION OF DEBT SECURITIES
We may issue debt securities, in one or more series, as either senior or subordinated debt or as senior or subordinated convertible debt.
While the terms we have summarized below will apply generally to any debt securities that we may offer under this prospectus, we will describe the particular terms of any debt securities that we may offer in more detail in the applicable prospectus
supplement. The terms of any debt securities offered under a prospectus supplement may differ from the terms described below. Unless the context requires otherwise, whenever we refer to the indentures, we also are referring to any supplemental
indentures that specify the terms of a particular series of debt securities.
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We will issue the senior debt securities under the senior indenture that we will enter into with
the trustee named in the senior indenture. We will issue the subordinated debt securities under the subordinated indenture that we will enter into with the trustee named in the subordinated indenture. The indentures will be qualified under the Trust
Indenture Act of 1939. We use the term debenture trustee to refer to either the trustee under the senior indenture or the trustee under the subordinated indenture, as applicable. We have filed forms of indentures 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.
The following summaries of material provisions of the
senior debt securities, the subordinated debt securities and the indentures are subject to, and qualified in their entirety by reference to, all of the provisions of the indenture applicable to a particular series of debt securities. We urge you to
read the applicable prospectus supplements and any related free writing prospectuses related to the debt securities that we may offer under this prospectus, as well as the complete indentures that contain the terms of the debt securities. Except as
we may otherwise indicate, the terms of the senior indenture and the subordinated indenture are identical.
General
We will describe in the applicable prospectus supplement the terms of the series of debt securities being offered, including:
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the principal amount being offered, and if a series, the total amount authorized and the total amount outstanding;
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any limit on the amount that may be issued;
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whether or not we will issue the series of debt securities in global form, the terms and who the depositary will be;
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whether and under what circumstances, if any, we will pay additional amounts on any debt securities held by a person who is not a United States person for tax purposes, and whether we can redeem the debt securities if
we have to pay such additional amounts;
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the annual interest rate, which may be fixed or variable, or the method for determining the rate and the date interest will begin to accrue, the dates interest will be payable and the regular record dates for interest
payment dates or the method for determining such dates;
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whether or not the debt securities will be secured or unsecured, and the terms of any secured debt;
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the terms of the subordination of any series of subordinated debt;
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the place where payments will be payable;
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restrictions on transfer, sale or other assignment, if any;
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our right, if any, to defer payment of interest and the maximum length of any such deferral period;
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the date, if any, after which, and the price at which, we may, at our option, redeem the series of debt securities pursuant to any optional or provisional redemption provisions and the terms of those redemption
provisions;
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the date, if any, on which, and the price at which we are obligated, pursuant to any mandatory sinking fund or analogous fund provisions or otherwise, to redeem, or at the holders option to purchase, the series of
debt securities and the currency or currency unit in which the debt securities are payable;
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whether the indenture will restrict our ability and/or the ability of our subsidiaries to:
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incur additional indebtedness;
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issue additional securities;
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pay dividends and make distributions in respect of our capital stock and the capital stock of our subsidiaries;
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place restrictions on our subsidiaries ability to pay dividends, make distributions or transfer assets;
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make investments or other restricted payments;
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sell or otherwise dispose of assets;
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enter into sale-leaseback transactions;
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engage in transactions with stockholders and affiliates;
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issue or sell stock of our subsidiaries; or
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effect a consolidation or merger;
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whether the indenture will require us to maintain any interest coverage, fixed charge, cash flow-based, asset-based or other financial ratios;
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a discussion of any material United States federal income tax considerations applicable to the debt securities;
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information describing any book-entry features;
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provisions for a sinking fund purchase or other analogous fund, if any;
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the applicability of the provisions in the indenture on discharge;
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whether the debt securities are to be offered at a price such that they will be deemed to be offered at an original issue discount as defined in paragraph (a) of Section 1273 of the Internal
Revenue Code;
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the denominations in which we will issue the series of debt securities, if other than denominations of $1,000 and any integral multiple thereof;
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the currency of payment of debt securities if other than U.S. dollars and the manner of determining the equivalent amount in U.S. dollars; and
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any other specific terms, preferences, rights or limitations of, or restrictions on, the debt securities, including any additional events of default or covenants provided with respect to the debt securities, and any
terms that may be required by us or advisable under applicable laws or regulations.
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Conversion or Exchange Rights
We will set forth in the prospectus supplement the terms on which a series of debt securities may be convertible into or exchangeable for our
common stock or our other securities. We will include provisions as to whether conversion or exchange is mandatory, at the option of the holder or at our option. We may include provisions pursuant to which the number of shares of our common stock or
our other securities that the holders of the series of debt securities receive would be subject to adjustment.
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Consolidation, Merger or Sale
Unless we provide otherwise in the prospectus supplement applicable to a particular series of debt securities, the indentures will not contain
any covenant that restricts our ability to merge or consolidate, or sell, convey, transfer or otherwise dispose of all or substantially all of our assets. However, any successor to or acquirer of such assets must assume all of our obligations under
the indentures or the debt securities, as appropriate. If the debt securities are convertible into or exchangeable for our other securities or securities of other entities, the person with whom we consolidate or merge or to whom we sell all of our
property must make provisions for the conversion of the debt securities into securities that the holders of the debt securities would have received if they had converted the debt securities before the consolidation, merger or sale.
Events of Default Under the Indenture
Unless we provide otherwise in the prospectus supplement applicable to a particular series of debt securities, the following are events of
default under the indentures with respect to any series of debt securities that we may issue:
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if we fail to pay interest when due and payable and our failure continues for 90 days and the time for payment has not been extended or deferred;
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if we fail to pay the principal, premium or sinking fund payment, if any, when due and payable and the time for payment has not been extended or delayed;
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if we fail to observe or perform any other covenant contained in the debt securities or the indentures, other than a covenant specifically relating to another series of debt securities, and our failure continues for 90
days after we receive notice from the debenture trustee or holders of at least 25% in aggregate principal amount of the outstanding debt securities of the applicable series; and
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if specified events of bankruptcy, insolvency or reorganization occur.
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If an event of default
with respect to debt securities of any series occurs and is continuing, other than an event of default specified in the last bullet point above, the debenture trustee or the holders of at least 25% in aggregate principal amount of the outstanding
debt securities of that series, by notice to us in writing, and to the debenture trustee if notice is given by such holders, may declare the unpaid principal of, premium, if any, and accrued interest, if any, due and payable immediately. If an event
of default specified in the last bullet point above occurs with respect to us, the principal amount of and accrued interest, if any, of each issue of debt securities then outstanding shall be due and payable without any notice or other action on the
part of the debenture trustee or any holder.
The holders of a majority in principal amount of the outstanding debt securities of an
affected series may waive any default or event of default with respect to the series and its consequences, except defaults or events of default regarding payment of principal, premium, if any, or interest, unless we have cured the default or event
of default in accordance with the indenture. Any waiver shall cure the default or event of default.
Subject to the terms of the
indentures, if an event of default under an indenture shall occur and be continuing, the debenture trustee will be under no obligation to exercise any of its rights or powers under such indenture at the request or direction of any of the holders of
the applicable series of debt securities, unless such holders have offered the debenture trustee reasonable indemnity. The holders of a majority in principal amount of the outstanding debt securities of any series will have the right to direct the
time, method and place of conducting any proceeding for any remedy available to the debenture trustee, or exercising any trust or power conferred on the debenture trustee, with respect to the debt securities of that series, provided that:
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the direction so given by the holder is not in conflict with any law or the applicable indenture; and
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subject to its duties under the Trust Indenture Act of 1939, the debenture trustee need not take any action that might involve it in personal liability or might be unduly prejudicial to the holders not involved in the
proceeding.
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A holder of the debt securities of any series will have the right to institute a proceeding under
the indentures or to appoint a receiver or trustee, or to seek other remedies only if:
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the holder has given written notice to the debenture trustee of a continuing event of default with respect to that series;
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the holders of at least 25% in aggregate principal amount of the outstanding debt securities of that series have made written request, and such holders have offered reasonable indemnity to the debenture trustee to
institute the proceeding as trustee; and
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the debenture trustee does not institute the proceeding, and does not receive from the holders of a majority in aggregate principal amount of the outstanding debt securities of that series other conflicting directions
within 90 days after the notice, request and offer.
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These limitations do not apply to a suit instituted by a holder of debt
securities if we default in the payment of the principal, premium, if any, or interest on, the debt securities.
We will periodically file
statements with the debenture trustee regarding our compliance with specified covenants in the indentures.
Modification of Indenture; Waiver
We and the debenture trustee may change an indenture without the consent of any holders with respect to specific matters:
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to fix any ambiguity, defect or inconsistency in the indenture;
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to comply with the provisions described above under Description of Debt SecuritiesConsolidation, Merger or Sale;
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to comply with any requirements of the SEC in connection with the qualification of any indenture under the Trust Indenture Act of 1939;
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to add to, delete from or revise the conditions, limitations, and restrictions on the authorized amount, terms, or purposes of issue, authentication and delivery of debt securities, as set forth in the indenture;
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to provide for the issuance of and establish the form and terms and conditions of the debt securities of any series as provided under Description of Debt SecuritiesGeneral to establish the form of any
certifications required to be furnished pursuant to the terms of the indenture or any series of debt securities, or to add to the rights of the holders of any series of debt securities;
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to evidence and provide for the acceptance of appointment hereunder by a successor trustee;
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to provide for uncertificated debt securities in addition to or in place of certificated debt securities and to make all appropriate changes for such purpose;
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to add to our covenants such new covenants, restrictions, conditions or provisions for the protection of the holders, and to make the occurrence, or the occurrence and the continuance, of a default in any such
additional covenants, restrictions, conditions or provisions an event of default; or
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to change anything that does not materially adversely affect the interests of any holder of debt securities of any series.
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In addition, under the indentures, the rights of holders of a series of debt securities may be
changed by us and the debenture trustee with the written consent of the holders of at least a majority in aggregate principal amount of the outstanding debt securities of each series that is affected. However, unless we provide otherwise in the
prospectus supplement applicable to a particular series of debt securities, we and the debenture trustee may make the following changes only with the consent of each holder of any outstanding debt securities affected:
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extending the fixed maturity of the series of debt securities;
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reducing the principal amount, reducing the rate of or extending the time of payment of interest, or reducing any premium payable upon the redemption of any debt securities; or
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reducing the percentage of debt securities, the holders of which are required to consent to any amendment, supplement, modification or waiver.
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Discharge
Each indenture provides that
we can elect to be discharged from our obligations with respect to one or more series of debt securities, except for specified obligations, including obligations to:
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register the transfer or exchange of debt securities of the series;
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replace stolen, lost or mutilated debt securities of the series;
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maintain paying agencies;
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hold monies for payment in trust;
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recover excess money held by the debenture trustee;
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compensate and indemnify the debenture trustee; and
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appoint any successor trustee.
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In order to exercise our rights to be discharged, we must
deposit with the debenture trustee money or government obligations sufficient to pay all the principal of, any premium, if any, and interest on, the debt securities of the series on the dates payments are due.
Form, Exchange and Transfer
We will
issue the debt securities of each series only in fully registered form without coupons and, unless we provide otherwise in the applicable prospectus supplement, in denominations of $1,000 and any integral multiple thereof. The indentures provide
that we may issue debt securities of a series in temporary or permanent global form and as book-entry securities that will be deposited with, or on behalf of, The Depository Trust Company or another depositary named by us and identified in a
prospectus supplement with respect to that series. See Legal Ownership of Securities for a further description of the terms relating to any book-entry securities.
At the option of the holder, subject to the terms of the indentures and the limitations applicable to global securities described in the
applicable prospectus supplement, the holder of the debt securities of any series can exchange the debt securities for other debt securities of the same series, in any authorized denomination and of like tenor and aggregate principal amount.
Subject to the terms of the indentures and the limitations applicable to global securities set forth in the applicable prospectus supplement,
holders of the debt securities may present the debt securities for exchange or for registration of transfer, duly endorsed or with the form of transfer endorsed thereon duly executed if so required by us or the security registrar, at the office of
the security registrar or at the office of any transfer agent designated by us for this purpose. Unless otherwise provided in the debt securities that the holder presents for transfer or exchange, we will impose no service charge for any
registration of transfer or exchange, but we may require payment of any taxes or other governmental charges.
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We will name in the applicable prospectus supplement the security registrar, and any transfer
agent in addition to the security registrar, that we initially designate for any debt securities. We may at any time designate additional transfer agents or rescind the designation of any transfer agent or approve a change in the office through
which any transfer agent acts, except that we will be required to maintain a transfer agent in each place of payment for the debt securities of each series.
If we elect to redeem the debt securities of any series, we will not be required to:
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issue, register the transfer of, or exchange any debt securities of that series during a period beginning at the opening of business 15 days before the day of mailing of a notice of redemption of any debt securities
that may be selected for redemption and ending at the close of business on the day of the mailing; or
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register the transfer of or exchange any debt securities so selected for redemption, in whole or in part, except the unredeemed portion of any debt securities we are redeeming in part.
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Information Concerning the Debenture Trustee
The debenture trustee, other than during the occurrence and continuance of an event of default under an indenture, undertakes to perform only
those duties as are specifically set forth in the applicable indenture. Upon an event of default under an indenture, the debenture trustee must use the same degree of care as a prudent person would exercise or use in the conduct of his or her own
affairs. Subject to this provision, the debenture trustee is under no obligation to exercise any of the powers given it by the indentures at the request of any holder of debt securities unless it is offered reasonable security and indemnity against
the costs, expenses and liabilities that it might incur.
Payment and Paying Agents
Unless we otherwise indicate in the applicable prospectus supplement, we will make payment of the interest on any debt securities on any
interest payment date to the person in whose name the debt securities, or one or more predecessor securities, are registered at the close of business on the regular record date for the interest.
We will pay principal of and any premium and interest on the debt securities of a particular series at the office of the paying agents
designated by us, except that unless we otherwise indicate in the applicable prospectus supplement, we will make interest payments by check that we will mail to the holder or by wire transfer to certain holders. Unless we otherwise indicate in the
applicable prospectus supplement, we will designate the corporate trust office of the debenture trustee in the City of New York as our sole paying agent for payments with respect to debt securities of each series. We will name in the applicable
prospectus supplement any other paying agents that we initially designate for the debt securities of a particular series. We will maintain a paying agent in each place of payment for the debt securities of a particular series.
All money we pay to a paying agent or the debenture trustee for the payment of the principal of or any premium or interest on any debt
securities that remains unclaimed at the end of two years after such principal, premium or interest has become due and payable will be repaid to us, and the holder of the debt security thereafter may look only to us for payment thereof.
Governing Law
The indentures and the
debt securities will be governed by and construed in accordance with the laws of the State of New York, except to the extent that the Trust Indenture Act of 1939 is applicable.
Subordination of Subordinated Debt Securities
The subordinated debt securities will be unsecured and will be subordinate and junior in priority of payment to certain of our other
indebtedness to the extent described in a prospectus supplement. The subordinated indenture does not limit the amount of subordinated debt securities that we may issue, nor does it limit us from issuing any other secured or unsecured debt.
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DESCRIPTION OF WARRANTS
We may issue warrants for the purchase of common stock, preferred stock and/or debt securities in one or more series. We may issue warrants
independently or together with common stock, preferred stock and/or debt securities, and the warrants may be attached to or separate from these securities. While the terms summarized below will apply generally to any warrants that we may offer, we
will describe the particular terms of any series of warrants in more detail in the applicable prospectus supplement. The terms of any warrants offered under a prospectus supplement may differ from the terms described below.
We will file as exhibits to the registration statement of which this prospectus is a part, or will incorporate by reference from reports that
we file with the SEC, the form of warrant agreement, including a form of warrant certificate, that describes the terms of the particular series of warrants we are offering before the issuance of the related series of warrants. The following
summaries of material provisions of the warrants and the 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 the particular series of
warrants that we may offer under this prospectus. We urge you to read the applicable prospectus supplements related to the particular series of warrants that we may offer under this prospectus, as well as any related free writing prospectuses, and
the complete warrant agreements and warrant certificates that contain the terms of the warrants.
General
We will describe in the applicable prospectus supplement the terms of the series of warrants being offered, including:
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the offering price and aggregate number of warrants offered;
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the currency for which the warrants may be purchased;
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if applicable, the designation and terms of the securities with which the warrants are issued and the number of warrants issued with each such security or each principal amount of such security;
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if applicable, the date on and after which the warrants and the related securities will be separately transferable;
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in the case of warrants to purchase debt securities, the principal amount of debt securities purchasable upon exercise of one warrant and the price at, and currency in which, this principal amount of debt securities may
be purchased upon such exercise;
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in the case of warrants to purchase common stock or preferred stock, the number of shares of common stock or preferred stock, as the case may be, purchasable upon the exercise of one warrant and the price at which these
shares may be purchased upon such exercise;
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the effect of any merger, consolidation, sale or other disposition of our business on the warrant agreements and the warrants;
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the terms of any rights to redeem or call the warrants;
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any provisions for changes to or adjustments in the exercise price or number of securities issuable upon exercise of the warrants;
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the dates on which the right to exercise the warrants will commence and expire;
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the manner in which the warrant agreements and warrants may be modified;
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a discussion of any material or special United States federal income tax consequences of holding or exercising the warrants;
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the terms of the securities issuable upon exercise of the warrants; and
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any other specific terms, preferences, rights or limitations of or restrictions on the warrants.
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Before exercising their warrants, holders of warrants will not have any of the rights of holders of the securities purchasable upon such
exercise, including:
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in the case of warrants to purchase debt securities, the right to receive payments of principal of, or premium, if any, or interest on, the debt securities purchasable upon exercise or to enforce covenants in the
applicable indenture; or
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in the case of warrants to purchase common stock or preferred stock, the right to receive dividends, if any, or payments upon our liquidation, dissolution or winding up or to exercise voting rights, if any.
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Exercise of Warrants
Each warrant will entitle the holder to purchase the securities that we specify in the applicable prospectus supplement at the exercise price
that we describe 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.
Holders of the warrants may exercise the warrants by delivering
the warrant certificate representing the warrants to be exercised together with specified information, and paying the required amount to the warrant agent in immediately available funds, as provided in the applicable prospectus supplement. We will
set forth on the reverse side of the warrant certificate and in the applicable prospectus supplement the information that the holder of the warrant will be required to deliver to the warrant agent.
Upon receipt of the required payment and the warrant certificate properly completed and duly executed at the corporate trust office of the
warrant agent or any other office indicated in the applicable prospectus supplement, we will issue and deliver the securities purchasable upon such exercise. If fewer than all of the warrants represented by the warrant certificate are exercised,
then we will issue a new warrant certificate for the remaining amount of warrants. If we so indicate in the applicable prospectus supplement, holders of the warrants may surrender securities as all or part of the exercise price for warrants.
Governing Law
Unless we provide
otherwise in the applicable prospectus supplement, the warrants and warrant agreements will be governed by and construed in accordance with the laws of the State of New York.
Enforceability of Rights by Holders of Warrants
Each warrant agent 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.
DESCRIPTION OF UNITS
We may issue, in one more series, units consisting of common stock, preferred stock, debt securities and/or warrants for the purchase of
common stock, preferred stock and/or debt securities in any combination. While the terms we have summarized below will apply generally to any units that we may offer under this prospectus, we will describe the particular terms of any series of units
in more detail in the applicable prospectus supplement. The terms of any units offered under a prospectus supplement may differ from the terms described below.
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We will file as exhibits to the registration statement of which this prospectus is a part, or
will incorporate by reference from reports that we file with the SEC, the form of unit agreement that describes the terms of the series of units we are offering, and any supplemental agreements, before the issuance of the related series of units.
The following summaries of material terms and provisions of the units are subject to, and qualified in their entirety by reference to, all the provisions of the unit agreement and any supplemental agreements applicable to a particular series of
units. We urge you to read the applicable prospectus supplement related to any particular units that we may offer under this prospectus, as well as any related free writing prospectuses and the complete unit agreement and any supplemental agreements
that contain the terms of the units.
General
We will issue each unit so that the holder of the unit is also the holder of each security included in the unit. Thus, the holder of a unit
will have the rights and obligations of a holder of each included security. The unit agreement under which we issue a unit may provide that the securities included in the unit may not be held or transferred separately, at any time or at any time
before a specified date.
We will describe in the applicable prospectus supplement the terms of the series of units being offered,
including:
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the designation and terms of the units and of the securities comprising the units, including whether and under what circumstances those securities may be held or transferred separately;
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any provisions of the governing unit agreement that differ from those described below; and
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any provisions for the issuance, payment, settlement, transfer or exchange of the units or of the securities comprising the units.
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The provisions described in this section, as well as those described under Description of Capital Stock, Description of Debt
Securities and Description of Warrants will apply to each unit and to any common stock, preferred stock, debt security or warrant included in each unit, respectively.
Issuance in Series
We may issue units in
such amounts and in such numerous distinct series as we determine.
Enforceability of Rights by Holders of Units
Each unit agent will act solely as our agent under the applicable unit agreement and will not assume any obligation or relationship of agency
or trust with any holder of any unit. A single bank or trust company may act as unit agent for more than one series of units. A unit agent will have no duty or responsibility in case of any default by us under the applicable unit agreement or unit,
including any duty or responsibility to initiate any proceedings at law or otherwise, or to make any demand upon us. Any holder of a unit may, without the consent of the related unit agent or the holder of any other unit, enforce by appropriate
legal action its rights as holder under any security included in the unit.
We, and any unit agent and any of their agents, may treat the
registered holder of any unit certificate as an absolute owner of the units evidenced by that certificate for any purpose and as the person entitled to exercise the rights attaching to the units so requested, despite any notice to the contrary. See
Legal Ownership of Securities below.
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LEGAL OWNERSHIP OF SECURITIES
We can 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 depositarys 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 depositarys 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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how it handles securities payments and notices;
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whether it imposes fees or charges;
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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 depositarys rules and procedures will affect these matters.
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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, The Depository Trust Company, New York, New York,
known as 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 Special Situations When a Global Security Will Be
Terminated. 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.
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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 investors financial
institution and of the depositary, as well as general laws relating to securities transfers. 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 depositarys policies, which may change from time to time, will govern payments, transfers, exchanges and other matters relating to an investors interest in a global security;
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we and any applicable trustee have no responsibility for any aspect of the depositarys 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;
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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
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financial institutions that participate in the depositarys 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.
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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.
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The 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.
PLAN OF DISTRIBUTION
We may sell the securities from time to time pursuant to underwritten public offerings, negotiated transactions, block trades or a combination
of these methods. We may sell the securities to or through underwriters or dealers, through agents, or directly to one or more purchasers. We may distribute securities from time to time in one or more transactions:
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at a fixed price or prices, which may be changed;
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at market prices prevailing at the time of sale;
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at prices related to such prevailing market prices; or
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A prospectus supplement or supplements will describe the terms of the
offering of the securities, including:
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the name or names of the underwriters, if any;
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the purchase price of the securities and the proceeds we will receive from the sale;
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any over-allotment options under which underwriters may purchase additional securities from us;
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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;
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any discounts or concessions allowed or reallowed or paid to dealers; and
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any securities exchange or market on which the securities may be listed.
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Only underwriters
named in the prospectus supplement will be underwriters of the securities offered by the prospectus supplement.
If underwriters are used
in the sale, they will acquire the securities for their own account and may resell the securities from time to time in one or more transactions at a fixed public offering price or at varying prices determined at the time of sale. The obligations of
the underwriters to purchase the securities will be subject to the conditions set forth in the applicable underwriting agreement. We may offer the securities to the public through underwriting syndicates represented by managing underwriters or by
underwriters without a syndicate. Subject to certain conditions, the underwriters will be obligated to purchase all of the securities offered by the prospectus supplement, other than securities covered by any over-allotment option. Any public
offering price and any discounts or concessions allowed or reallowed or paid to dealers may change from time to time. We may use underwriters with whom we have a material relationship. We will describe in the prospectus supplement, naming the
underwriter, the nature of any such relationship.
We may sell securities directly or through agents we designate from time to time. We
will name any agent involved in the offering and sale of securities and we will describe any commissions we will pay the agent in the prospectus supplement. Unless the prospectus supplement states otherwise, our agent will act on a best-efforts
basis for the period of its appointment.
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We may authorize agents or underwriters to solicit offers by certain types of institutional
investors to purchase securities from us at the public offering price set forth in the prospectus supplement pursuant to delayed delivery contracts providing for payment and delivery on a specified date in the future. We will describe the conditions
to these contracts and the commissions we must pay for solicitation of these contracts in the prospectus supplement.
We may provide
agents and underwriters with indemnification against civil liabilities, including liabilities under the Securities Act, or contribution with respect to payments that the agents or underwriters may make with respect to these liabilities. Agents and
underwriters may engage in transactions with, or perform services for, us in the ordinary course of business.
All securities we may
offer, other than common stock, will be new issues of securities with no established trading market. Any underwriter may make a market in these securities, but will not be obligated to do so and may discontinue any market making at any time without
notice. We cannot guarantee the liquidity of the trading markets for any securities.
Any underwriter may engage in over-allotment,
stabilizing transactions, short-covering transactions and penalty bids in accordance with Regulation M under the Exchange Act. Over-allotment involves sales in excess of the offering size, which create a short position. Stabilizing transactions
permit bids to purchase the underlying security so long as the stabilizing bids do not exceed a specified maximum price. Syndicate-covering or other short-covering transactions involve purchases of the securities, either through exercise of the
over-allotment option or in the open market after the distribution is completed, to cover short positions. Penalty bids permit the underwriters to reclaim a selling concession from a dealer when the securities originally sold by the dealer are
purchased in a stabilizing or covering transaction to cover short positions. Those activities may cause the price of the securities to be higher than it would otherwise be. If commenced, the underwriters may discontinue any of the activities at any
time.
Any underwriters that are qualified market makers on the NYSE Amex may engage in passive market making transactions in the common
stock on the NYSE Amex in accordance with Regulation M under the Exchange Act, during the business day prior to the pricing of the offering, before the commencement of offers or sales of the common stock. Passive market makers must comply with
applicable volume and price limitations and must be identified as passive market makers. In general, a passive market maker must display its bid at a price not in excess of the highest independent bid for such security; if all independent bids are
lowered below the passive market makers bid, however, the passive market makers bid must then be lowered when certain purchase limits are exceeded. Passive market making may stabilize the market price of the securities at a level above
that which might otherwise prevail in the open market and, if commenced, may be discontinued at any time.
In compliance with guidelines
of the Financial Industry Regulatory Authority, or FINRA, the maximum consideration or discount to be received by any FINRA member or independent broker dealer may not exceed 8% of the aggregate amount of the securities offered pursuant to this
prospectus and any applicable prospectus supplement.
VALIDITY OF SECURITIES
Unless otherwise indicated in the applicable prospectus supplement, Duane Morris LLP, Philadelphia, Pennsylvania, will pass upon the validity
of the securities offered by this prospectus.
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EXPERTS
The consolidated financial statements of Inovio Pharmaceuticals, Inc. appearing in Inovio Pharmaceutical, Inc.s Annual Report (Form
10-K) for the year ended December 31, 2012, and the effectiveness of Inovio Pharmaceuticals, Inc.s internal control over financial reporting as of December 31, 2012 have been audited by Ernst & Young LLP, independent
registered public accounting firm, as set forth in their reports thereon, included therein, and incorporated herein by reference. Such consolidated financial statements are incorporated herein by reference in reliance upon such reports given on the
authority of such firm as experts in accounting and auditing.
24
18,966,000 Shares
INOVIO PHARMACEUTICALS, INC.
Common Stock
PROSPECTUS SUPPLEMENT
Piper Jaffray
Stifel
Brean
Capital
Maxim Group LLC
February 27,
2014
Inovio Pharmaceuticals (NASDAQ:INO)
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