We have entered into an At-the-Market Equity
Offering Sales Agreement, or the Sales Agreement, with Stifel, Nicolaus & Company, Incorporated, or Stifel, relating to shares of our common stock offered by this prospectus supplement and the accompanying prospectus. In accordance with the
terms of the Sales Agreement, we may offer and sell shares of our common stock, from time to time, having an aggregate offering price of up to $50.0 million through Stifel as our sales agent.
Our common stock is listed on the NASDAQ Global Select Market under the symbol “INO.” The last reported sale price of our common stock on the NASDAQ
Global Select Market on June 10, 2016 was $10.62 per share.
Sales of our common stock, if any, under this prospectus supplement and the accompanying
prospectus may be made in sales deemed to be an “at the market offering” as defined in Rule 415 promulgated under the Securities Act of 1933, as amended, or the Securities Act, including sales made directly on or through the NASDAQ Global
Select Market, the existing trading market for our common stock, sales made to or through a market maker other than on an exchange, in negotiated transactions at market prices prevailing at the time of sale or at prices related to such prevailing
market prices, and/or any other method permitted by law. Stifel is not required to sell any specific number or dollar amount of securities, but will act as a sales agent using commercially reasonable efforts consistent with its normal trading and
sales practices on mutually agreed terms between Stifel and us. There is no arrangement for funds to be received in any escrow, trust or similar arrangement.
The compensation to Stifel for sales of common stock sold pursuant to the sales agreement will be an amount equal to 2.0% of the gross sales price per share
of common stock sold under the Sales Agreement. In connection with the sale of the common stock on our behalf, Stifel may be deemed to be an “underwriter” within the meaning of the Securities Act and the compensation of Stifel may be
deemed to be underwriting commissions or discounts. We have also agreed to provide indemnification and contribution to Stifel with respect to certain liabilities, including liabilities under the Securities Act or the Securities Exchange Act of 1934,
as amended, or the Exchange Act.
RISK FACTORS
An investment in our common stock is subject to numerous risks as discussed more fully below and under the caption “Risk Factors”
in the accompanying prospectus, our most recent Annual Report on
Form 10-K
for the year ended December 31, 2015 and our Quarterly Report on
Form 10-Q
for
the quarter ended March 31, 2016, which we incorporate by reference herein, and other information that we file from time to time with the SEC after the date of this prospectus supplement and which we incorporate by reference herein. Any of
these risks could adversely affect our financial condition and results of operations or our ability to execute our business strategy. You should read and consider carefully all the information set forth and incorporated by reference in this
prospectus supplement and the accompanying prospectus before deciding whether to invest in our common stock. The risks and uncertainties we have described are not the only ones facing our company. Additional risks and uncertainties not presently
known to us or that we currently consider immaterial may also affect our business operations. See “Incorporation of Certain Documents By Reference.”
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.
We may issue common stock from time to time in connection with this offering. This issuance from time to time of these new shares of our
common stock, or our ability to issue these shares of 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.
There may be future sales or other dilution of our equity, which may adversely
affect the market price of our common stock.
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.
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, if any, 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.
Purchasers will experience immediate dilution in the book value per share of
the common stock purchased in the offering.
The expected offering price of our common stock will be substantially higher than the
net tangible book value per share of our outstanding common stock. As a result, based on our capitalization as of March 31, 2016, investors purchasing shares in this offering would incur immediate dilution of $7.94 per share of common stock
purchased, based on an assumed public offering price of our common stock of $10.62 per share, the last reported
S-7
sale price of the common stock on June 10, 2016. In addition to this offering, subject to market conditions and other factors, it is likely that we will pursue additional financings in the
future, as we continue to build our business. In future years, we will likely need to raise significant additional capital to finance our operations and to fund clinical trials, regulatory submissions and the development, manufacture and marketing
of other products under development and new product opportunities. Accordingly, we may conduct substantial future offerings of equity or debt securities. The exercise of outstanding options and warrants and future equity issuances, including future
public offerings or future private placements of equity securities and any additional shares issued in connection with acquisitions, will result in dilution to investors. In addition, the market price of our common stock could fall as a result of
resales of any of these shares of common stock due to an increased number of shares available for sale in the market.
USE OF PROCEEDS
We intend to use the net proceeds, if any, from the sale of the common stock under this prospectus supplement for
general corporate purposes, including clinical trial expenses, research and development expenses, working capital, general and administrative expenses, manufacturing expenses and potential acquisitions of companies and technologies that complement
our business.
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.
DILUTION
If you invest in our common stock, your interest will be diluted immediately to the extent of the difference between the public offering price
per share of our common stock and the adjusted net tangible book value per share of our common stock after this offering.
The net
tangible book value of our common stock as of March 31, 2016, was approximately $157.4 million, or approximately $2.18 per share. Net tangible book value per share represents the amount of our total tangible assets, excluding goodwill and
intangible assets, less total liabilities divided by the total number of shares of our common stock outstanding.
Dilution per share to
new investors represents the difference between the amount per share paid by purchasers for our common stock in this offering and the net tangible book value per share of our common stock immediately following the completion of this offering.
After giving effect to the sale of shares of our common stock in the aggregate amount of $50,000,000 at an assumed offering price of $10.62
per share, the last reported sale price of our common stock on June 10, 2016 on the NASDAQ Global Select Market, and after deducting estimated commissions and estimated offering expenses, our as adjusted net tangible book value as of
March 31, 2016 would have been approximately $206.3 million or approximately $2.68 per share. This represents an immediate increase in net tangible book value of approximately $0.50 per share to our existing stockholders and an immediate
dilution in as adjusted net tangible
S-8
book value of approximately $7.94 per share to purchasers of our common stock in this offering, as illustrated by the following table:
|
|
|
|
|
|
|
|
|
|
|
Assumed offering price per share
|
|
|
|
|
|
$
|
10.62
|
|
|
Net tangible book value per share as of March 31, 2016
|
|
$
|
2.18
|
|
|
|
|
|
|
Increase in net tangible book value per share attributable to new investors
|
|
$
|
0.50
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As adjusted net tangible book value per share after this offering
|
|
$
|
2.68
|
|
|
|
|
|
|
Net dilution per share to new investors participating in this offering
|
|
|
|
|
|
$
|
7.94
|
|
|
|
|
|
|
|
|
|
|
|
The table above assumes for illustrative purposes only an aggregate of 4,708,097 shares of our common
stock are sold at a price of $10.62 per share, for aggregate gross proceeds of $50.0 million. The shares, if any, sold in this offering will be sold from time to time at various prices. An increase of $1.00 per share in the price at which the
shares are sold from the assumed offering price of $10.62 per share shown in the table above, assuming all of our common stock in the aggregate amount of $50.0 million is sold at that price, would increase our adjusted net tangible book value
per share after the offering to $2.69 per share and would increase the dilution in net tangible book value per share to new investors in this offering to $8.93 per share, after deducting commissions and estimated aggregate offering expenses payable
by us. A decrease of $1.00 per share in the price at which the shares are sold from the assumed offering price of $10.62 per share shown in the table above, assuming all of our common stock in the aggregate amount of $50.0 million is sold at
that price, would increase our adjusted net tangible book value per share after the offering to $2.66 per share and would decrease the dilution in net tangible book value per share to new investors in this offering to $6.96 per share, after
deducting commissions and estimated aggregate offering expenses payable by us. This information is supplied for illustrative purposes only.
The
calculations above are based upon 72,268,183 shares of common stock outstanding as of March 31, 2016 and exclude:
|
|
•
|
|
7,135,624 shares issuable upon exercise of outstanding options pursuant to our stock incentive plans at a weighted average option exercise price of $6.55 per share as of March 31, 2016; and
|
|
|
•
|
|
560.904 shares issuable upon exercise of outstanding warrants, at a weighted average exercise price of $3.67 per share as of March 31, 2016.
|
DESCRIPTION OF CAPITAL STOCK
The following information supplements the discussion set forth in the accompanying prospectus under the heading “Description of Capital
Stock.”
A summary of some of the important terms of our common stock is set forth beginning on page 8 of the accompanying prospectus
under the heading, “Description of Capital Stock.” You should refer to our certificate of incorporation, as amended, and our by-laws, as amended, for the actual terms of our capital stock. Copies of our current charter and bylaws may be
obtained as described under the heading “Where You Can Find More Information” in this prospectus.
As of June 10, 2016,
73,347,632 shares of common stock and 23 shares of Series C preferred stock were issued and outstanding.
Computershare
Investor Services Inc. is the transfer agent and registrar for the common stock.
S-9
PLAN OF DISTRIBUTION
We have entered into an at-the-market equity offering sales agreement with Stifel under which we may issue and sell shares of our common
stock, from time to time, having aggregate gross proceeds of up to $50.0 million through Stifel acting as sales agent. Stifel may sell the common stock by any method that is deemed to be an “at the market offering” as defined in
Rule 415 promulgated under the Securities Act, including sales made directly on or through the NASDAQ Global Select Market or any other existing trading market for the common stock in the United States or to or through a market maker. Stifel
also may sell the common stock in negotiated transactions, subject to our prior approval.
Each time we wish to issue and sell common
stock under the sales agreement, we will notify Stifel of the number of shares to be issued, the dates on which such sales are anticipated to be made and any minimum price below which sales may not be made. Once we have so instructed Stifel, unless
Stifel declines to accept the terms of this notice, Stifel has agreed to use its commercially reasonable efforts consistent with its normal trading and sales practices to sell such shares up to the amount specified on such terms. The obligations of
Stifel under the sales agreement to sell our common stock are subject to a number of conditions that we must meet.
The settlement between
us and Stifel is generally anticipated to occur on the third trading day following the date on which the sale was made. Sales of our common stock as contemplated in this prospectus supplement will be settled through the facilities of The Depository
Trust Company or by such other means as we and Stifel may agree upon. There is no arrangement for funds to be received in an escrow, trust or similar arrangement.
We will pay Stifel a commission equal to 2.00% of the gross proceeds we receive from the sales of our common stock under the sales agreement.
Because there is no minimum offering amount required as a condition to close this offering, the actual total public offering size, commissions and proceeds to us, if any, are not determinable at this time. In connection with the sale of the common
stock on our behalf, Stifel may be deemed to be an “underwriter” within the meaning of the Securities Act, and the compensation of Stifel may be deemed to be underwriting commissions or discounts. We have agreed to provide indemnification
and contribution to Stifel with respect to certain civil liabilities, including liabilities under the Securities Act. With the exception of expenses related to the shares, Stifel will pay all of its own costs and expenses, including the fees of its
counsel. We estimate that our total expenses for the offering, excluding compensation payable to Stifel under the terms of the sales agreement, will be approximately $150,000.
The offering of our common stock pursuant to the sales agreement will terminate upon the earlier of (i) the sale of all of our common
stock provided for in this prospectus supplement or (ii) termination of the sales agreement as permitted therein. This summary of the material provisions of the sales agreement does not purport to be a complete statement of its terms and
conditions. A copy of the sales agreement is filed with the SEC and is incorporated by reference into the registration statement of which this prospectus supplement is a part. See “Where You Can Find More Information” in this prospectus
supplement.
To the extent required by Regulation M, Stifel will not engage in any market making activities involving our common
stock while the offering is ongoing under this prospectus supplement.
LEGAL MATTERS
The validity of the common stock being offered by this prospectus supplement and the accompanying prospectus has been passed upon for us by
Duane Morris LLP, Philadelphia, Pennsylvania. The sales agent is being represented in connection with this offering by Dechert LLP, New York, New York.
S-10
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, 2015, and the effectiveness of our internal control over financial reporting as of December 31, 2015, as set forth in their
reports, which are incorporated by reference in this prospectus supplement and the accompanying prospectus and elsewhere in the registration statement. Our financial statements are incorporated by reference in reliance on Ernst & Young
LLP’s report given on their authority as experts in accounting and auditing.
INCORPORATION OF
CERTAIN DOCUMENTS BY REFERENCE
The SEC allows us to “incorporate by reference” into this prospectus supplement the
information in documents we file with it, which means that we can disclose important information to you by referring you to those documents. The information we incorporate by reference is considered to be a part of this prospectus supplement and
accompanying prospectus, and information that we file later with the SEC will automatically update and supersede this information. Any statement contained in any document incorporated or deemed to be incorporated by reference herein shall be deemed
to be modified or superseded for purposes of this prospectus supplement and the accompanying prospectus to the extent that a statement contained in or omitted from this prospectus supplement or the accompanying prospectus, or in any other
subsequently filed document that also is or is deemed to be incorporated by reference herein, modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute
a part of this prospectus. We incorporate by reference the documents or information listed below and any future filings we make with the SEC 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 is completed:
|
|
•
|
|
The description of our common stock set forth in the accompanying prospectus;
|
|
|
•
|
|
Our Annual Report on
Form 10-K
for the year ended December 31, 2015, as filed with the SEC on March 14, 2016;
|
|
|
•
|
|
Our Quarterly Report on
Form 10-Q
for the quarter ended March 31, 2016, as filed with the SEC on May 9, 2016;
|
|
|
•
|
|
Our Definitive Proxy Statement on Schedule 14A filed with the SEC on March 25, 2016: and
|
|
|
•
|
|
Our Current Reports on
Form 8-K
as filed with the SEC on March 15, 2016, March 18, 2016 and May 17, 2016, respectively.
|
You may request, and we will provide to you, a copy of these filings at no cost by writing or telephoning us at the following address:
Inovio Pharmaceuticals, Inc.
660
W. Germantown Pike, Suite 110
Plymouth Meeting, Pennsylvania 19462
Attn: Investor Relations
Phone:
(877) 446-6846
S-11
We have filed with the SEC a registration statement on
Form S-3
under the Securities Act covering the common stock to be offered and sold by this prospectus supplement and the accompanying prospectus. This prospectus supplement and the accompanying prospectus
do not contain all of the information included in the registration statement, some of which is contained in exhibits to the registration statement. The registration statement, including the exhibits, can be read at the SEC website or at the SEC
offices referred to above. Any statement made in this prospectus supplement or the accompanying prospectus concerning the contents of any contract, agreement or other document is only a summary of the actual contract, agreement or other document. If
we have filed any contract, document, agreement or other document as an exhibit to the registration statement or a document incorporated by reference therein, you should read the exhibit for a more complete understanding of the document or matter
involved. We qualify in its entirety each statement regarding a contract, agreement or other document by reference to the actual document.
S-12
INOVIO PHARMACEUTICALS, INC.
$250,000,000
Common Stock
Preferred Stock
Debt Securities
Warrants
Units
From time to time, we may offer up to $250,000,000 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 NASDAQ Global
Select Market under the symbol “INO.” On May 20, 2015, the last reported sale price of our common stock on the NASDAQ Global Select Market was $8.21. The applicable prospectus supplement will contain information, where applicable, as to
any other listing, if any, on the NASDAQ Global Select Market or any securities market or other exchange of the securities covered by the applicable prospectus supplement.
On May 20, 2015, the aggregate market value of our outstanding common stock our non-affiliates held was approximately $558.6 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 June 5, 2015.
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 $250,000,000. 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, 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 SEC’s public reference room at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the public reference room. Our filings with the SEC are also available to
the public through the SEC’s Internet site at http://www.sec.gov.
The SEC’s 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 001-14888.
|
|
•
|
|
Our annual report on Form 10-K for the year ended December 31, 2014 we filed with the SEC on March 16, 2015;
|
|
|
•
|
|
Our quarterly report on Form 10-Q for the quarter ended March 31, 2015 we filed with the SEC on May 11, 2015;
|
|
|
•
|
|
Our current reports on Form 8-K we filed on March 10, 2015, April 30, 2015, May 5, 2015 and May 12, 2015, 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;
|
|
|
•
|
|
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
|
|
|
•
|
|
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.
|
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 that 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, 92121-5773, telephone (858) 597-6006.
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 March 31, 2015 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 developing active DNA immunotherapies and vaccines focused on treating and preventing cancers and infectious diseases. Our DNA-based
immunotherapies, in combination with our proprietary electroporation delivery devices, are intended to generate robust immune responses, in particular T cells, to fight such diseases. In 2014 we reported that in a large, controlled phase II clinical
study we achieved clinically relevant efficacy against a targeted disease (HPV-associated cervical dysplasia) by generating antigen-specific T cells. Our novel SynCon
®
immunotherapy design has
shown the ability to help break the immune system’s tolerance of cancerous cells. Alternatively, our SynCon
®
product design is also intended to facilitate cross-strain protection against
known as well as new unmatched strains of pathogens such as influenza. Given the recognized role of killer T cells in eliminating cancerous or infected cells from the body, our scientists believe that our active immunotherapies may play an important
role in helping fight such diseases. Human data to date have shown a favorable safety profile of our DNA immunotherapies delivered using electroporation. We have completed, current or planned clinical programs of our proprietary SynCon
®
immunotherapies for HPV-caused pre-cancers and cancers, prostate cancer, breast/lung/pancreatic cancer, hepatitis C virus (HCV), hepatitis B virus (HBV), HIV, influenza, and Ebola. Our partners
and collaborators include F. Hoffmann-La Roche Ltd and Hoffmann-La Roche Inc., University of Pennsylvania, Drexel University, National Microbiology Laboratory of the Public Health Agency of Canada, , National Institute of Allergy and Infectious
Diseases, United States Military HIV Research Program, U.S. Army Medical Research Institute of Infectious Diseases, HIV Vaccines Trial Network, Defense Advanced Research Projects Agency and MedImmune, LLC.
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
5
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 660 West Germantown Pike, Suite 110, Plymouth Meeting, Pennsylvania 19462, and our telephone number is (877) 446-6846. We maintain an Internet website at www.inovio.com. Information contained in or accessible through our website does not
constitute part of this prospectus.
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, 2010, 2011, 2012, 2013, 2014 and the three months ended March 31, 2015
(1)
.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Years Ended
December 31,
|
|
|
Three
Months
Ended
March 31,
2015
|
|
|
|
|
2010
|
|
|
2011
|
|
|
2012
|
|
|
2013
|
|
|
2014
|
|
|
|
Ratio of earnings to fixed charges
(2)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratio of earnings to Combined Fixed Charges and Preferred Stock dividends
(3)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
We reported a loss from continuing operations for the years ended December 31, 2010, 2011, 2012, 2013, 2014 and the three months ended March 31, 2015 and would have needed to generate additional income of
$17,638,746, $15,304,095, $19,712,980, $66,083,532, $36,140,133 and $10,582,871, respectively, to cover our fixed charges of $261,425, $141,900, $146,520, $298,980, $411,510 and $102,300, respectively.
|
|
(2)
|
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.
|
|
(3)
|
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.
|
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 general corporate purposes, research and development and clinical trial costs, including the costs associated with preparing for and conducting current and
potential Phase 1, Phase 2 and Phase 3 clinical trials. 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.
6
SELECTED FINANCIAL DATA
The following table sets forth our historical selected financial information. The share and per share information in the following table
reflects the 4:1 reverse split of each share of our outstanding common stock effected on June 5, 2014.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended
December 31,
2014
|
|
|
Year Ended
December 31,
2013
|
|
|
Year Ended
December 31,
2012
|
|
|
Year Ended
December 31,
2011
|
|
|
Year Ended
December 31,
2010
|
|
|
Three Months Ended
March 31,
|
|
|
|
|
|
|
|
|
|
2015
|
|
|
2014
|
|
|
Operations Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue under collaborative research and development arrangements, including from affiliated
entity
|
|
$
|
7,896,032
|
|
|
$
|
9,664,547
|
|
|
$
|
660,003
|
|
|
$
|
567,856
|
|
|
$
|
527,222
|
|
|
$
|
4,358,071
|
|
|
$
|
1,552,691
|
|
|
Grants and miscellaneous revenue
|
|
|
2,560,734
|
|
|
|
3,802,799
|
|
|
|
3,458,649
|
|
|
|
9,227,401
|
|
|
|
5,617,483
|
|
|
|
808,566
|
|
|
|
804,952
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues
|
|
|
10,456,766
|
|
|
|
13,467,346
|
|
|
|
4,118,652
|
|
|
|
9,795,257
|
|
|
|
6,144,705
|
|
|
|
5,166,637
|
|
|
|
2,357,643
|
|
|
Loss from operations
|
|
|
(39,495,961
|
)
|
|
|
(19,544,332
|
)
|
|
|
(23,493,532
|
)
|
|
|
(21,638,540
|
)
|
|
|
(19,220,162
|
)
|
|
|
(8,367,611
|
)
|
|
|
(10,000,055
|
)
|
|
Interest and other income, net
|
|
|
331,461
|
|
|
|
132,214
|
|
|
|
166,113
|
|
|
|
34,285
|
|
|
|
147,406
|
|
|
|
138,276
|
|
|
|
52,076
|
|
|
Change in fair value of common stock warrants
|
|
|
348,143
|
|
|
|
(45,632,669
|
)
|
|
|
1,982,620
|
|
|
|
8,690,658
|
|
|
|
2,403,924
|
|
|
|
(1,227
|
)
|
|
|
(505,926
|
)
|
|
(Loss) Gain on investment in affiliated entity
|
|
|
2,676,224
|
|
|
|
(1,038,745
|
)
|
|
|
1,631,819
|
|
|
|
(2,390,498
|
)
|
|
|
(969,914
|
)
|
|
|
(2,352,309
|
)
|
|
|
(376,963
|
)
|
|
Net loss
|
|
|
(36,140,133
|
)
|
|
|
(66,083,532
|
)
|
|
|
(19,712,980
|
)
|
|
|
(15,304,095
|
)
|
|
|
(17,638,746
|
)
|
|
|
(10,582,871
|
)
|
|
|
(10,830,868
|
)
|
|
Net loss attributable to non-controlling interest
|
|
|
18,420
|
|
|
|
55,084
|
|
|
|
44,025
|
|
|
|
51,150
|
|
|
|
24,950
|
|
|
|
1,092
|
|
|
|
9,408
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss attributable to Inovio Pharmaceuticals, Inc.
|
|
$
|
(36,121,713
|
)
|
|
$
|
(66,028,448
|
)
|
|
$
|
(19,668,955
|
)
|
|
$
|
(15,252,945
|
)
|
|
$
|
(17,613,796
|
)
|
|
$
|
(10,581,779
|
)
|
|
$
|
(10,821,460
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per common share attributable to Inovio Pharmaceuticals, Inc. stockholders:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
(0.61
|
)
|
|
$
|
(1.43
|
)
|
|
$
|
(0.58
|
)
|
|
$
|
(0.48
|
)
|
|
$
|
(0.68
|
)
|
|
$
|
(0.17
|
)
|
|
$
|
(0.20
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
|
|
$
|
(0.64
|
)
|
|
$
|
(1.43
|
)
|
|
$
|
(0.58
|
)
|
|
$
|
(0.48
|
)
|
|
$
|
(0.68
|
)
|
|
$
|
(0.18
|
)
|
|
$
|
(0.20
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of common shares outstanding used in per share
calculations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
59,127,349
|
|
|
|
46,087,773
|
|
|
|
34,127,312
|
|
|
|
31,559,834
|
|
|
|
25,800,470
|
|
|
|
60,741,082
|
|
|
|
55,159,002
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
|
|
|
59,408,252
|
|
|
|
46,087,773
|
|
|
|
34,127,312
|
|
|
|
31,559,834
|
|
|
|
25,800,970
|
|
|
|
60,913,423
|
|
|
|
55,159,002
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance Sheet Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
40,543,982
|
|
|
$
|
33,719,796
|
|
|
$
|
5,646,021
|
|
|
$
|
17,350,116
|
|
|
$
|
19,998,489
|
|
|
$
|
26,145,723
|
|
|
$
|
98,770,907
|
|
|
Short-term investments
|
|
|
53,075,974
|
|
|
|
18,905,608
|
|
|
|
8,034,001
|
|
|
|
12,863,420
|
|
|
|
1,849,271
|
|
|
|
54,866,570
|
|
|
|
18,011,492
|
|
|
Total assets
|
|
|
131,785,097
|
|
|
|
88,287,207
|
|
|
|
45,138,754
|
|
|
|
61,106,561
|
|
|
|
56,067,391
|
|
|
|
117,855,197
|
|
|
|
151,657,645
|
|
|
Current liabilities
|
|
|
14,023,752
|
|
|
|
28,966,456
|
|
|
|
8,376,577
|
|
|
|
11,043,021
|
|
|
|
6,436,708
|
|
|
|
8,158,888
|
|
|
|
15,641,074
|
|
|
Accumulated deficit
|
|
|
(331,910,290
|
)
|
|
|
(295,788,577
|
)
|
|
|
(229,760,129
|
)
|
|
|
(210,091,174
|
)
|
|
|
(194,838,229
|
)
|
|
|
(342,492,069
|
)
|
|
|
(306,610,037
|
)
|
|
Total stockholders’ equity
|
|
|
111,537,594
|
|
|
|
52,902,683
|
|
|
|
34,857,405
|
|
|
|
47,861,662
|
|
|
|
47,100,911
|
|
|
|
103,426,046
|
|
|
|
129,179,907
|
|
7
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.
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 May 20, 2015, there were:
|
|
•
|
|
71,810,186 shares of common stock outstanding; and
|
|
|
•
|
|
23 shares of Series C Cumulative Convertible Preferred Stock outstanding.
|
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 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 NASDAQ Stock Market 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.
8
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:
|
|
•
|
|
the title and stated value;
|
|
|
•
|
|
the number of shares we are offering;
|
|
|
•
|
|
the liquidation preference per share;
|
|
|
•
|
|
the dividend rate, period and payment date and method of calculation for dividends;
|
|
|
•
|
|
whether dividends will be cumulative or non-cumulative and, if cumulative, the date from which dividends will accumulate;
|
|
|
•
|
|
the procedures for any auction and remarketing, if any;
|
|
|
•
|
|
the provisions for a sinking fund, if any;
|
|
|
•
|
|
the provisions for redemption or repurchase, if applicable, and any restrictions on our ability to exercise those redemption and repurchase rights;
|
|
|
•
|
|
any listing of the preferred stock on any securities exchange or market;
|
|
|
•
|
|
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;
|
|
|
•
|
|
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;
|
|
|
•
|
|
voting rights, if any, of the preferred stock;
|
|
|
•
|
|
preemptive rights, if any;
|
|
|
•
|
|
restrictions on transfer, sale or other assignment, if any;
|
|
|
•
|
|
whether interests in the preferred stock will be represented by depositary shares;
|
|
|
•
|
|
a discussion of any material United States federal income tax considerations applicable to the preferred stock;
|
|
|
•
|
|
the relative ranking and preferences of the preferred stock as to dividend rights and rights if we liquidate, dissolve or wind up our affairs;
|
|
|
•
|
|
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
|
|
|
•
|
|
any other specific terms, preferences, rights or limitations of, or restrictions on, the preferred stock.
|
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.
9
Stock Options, Warrants, Restricted Stock Units and Convertible Preferred Stock
As of May 20, 2015, we have reserved 9,144,700 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 6,204,865 shares for issuance upon exercise of outstanding options and restricted stock units that we previously
granted under our stock option plans, 2,019,319 shares for issuance upon exercise of options that we may grant in the future under our stock option plans, 912,060 shares for issuance upon exercise of outstanding warrants and 8,456 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:
|
|
•
|
|
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;
|
|
|
•
|
|
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 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
|
|
|
•
|
|
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.
|
A
“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 corporation’s outstanding voting stock.
Charter Provisions
. Our amended
and restated certificate of incorporation includes the following provisions, among others:
|
|
•
|
|
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;
|
|
|
•
|
|
all stockholder actions must be effected at a duly called meeting of stockholders and not by written consent; and
|
|
|
•
|
|
the elimination of cumulative voting.
|
Indemnification
. Our certificate of
incorporation and our 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 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
10
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.
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 contains
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:
|
|
•
|
|
the principal amount being offered, and if a series, the total amount authorized and the total amount outstanding;
|
|
|
•
|
|
any limit on the amount that may be issued;
|
|
|
•
|
|
whether or not we will issue the series of debt securities in global form, the terms and who the depositary will be;
|
11
|
|
•
|
|
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;
|
|
|
•
|
|
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;
|
|
|
•
|
|
whether or not the debt securities will be secured or unsecured, and the terms of any secured debt;
|
|
|
•
|
|
the terms of the subordination of any series of subordinated debt;
|
|
|
•
|
|
the place where payments will be payable;
|
|
|
•
|
|
restrictions on transfer, sale or other assignment, if any;
|
|
|
•
|
|
our right, if any, to defer payment of interest and the maximum length of any such deferral period;
|
|
|
•
|
|
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;
|
|
|
•
|
|
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 holder’s option to purchase, the series of
debt securities and the currency or currency unit in which the debt securities are payable;
|
|
|
•
|
|
whether the indenture will restrict our ability and/or the ability of our subsidiaries to:
|
|
|
•
|
|
incur additional indebtedness;
|
|
|
•
|
|
issue additional securities;
|
|
|
•
|
|
pay dividends and make distributions in respect of our capital stock and the capital stock of our subsidiaries;
|
|
|
•
|
|
place restrictions on our subsidiaries’ ability to pay dividends, make distributions or transfer assets;
|
|
|
•
|
|
make investments or other restricted payments;
|
|
|
•
|
|
sell or otherwise dispose of assets;
|
|
|
•
|
|
enter into sale-leaseback transactions;
|
|
|
•
|
|
engage in transactions with stockholders and affiliates;
|
|
|
•
|
|
issue or sell stock of our subsidiaries; or
|
|
|
•
|
|
effect a consolidation or merger;
|
|
|
•
|
|
whether the indenture will require us to maintain any interest coverage, fixed charge, cash flow-based, asset-based or other financial ratios;
|
|
|
•
|
|
a discussion of any material United States federal income tax considerations applicable to the debt securities;
|
|
|
•
|
|
information describing any book-entry features;
|
|
|
•
|
|
provisions for a sinking fund purchase or other analogous fund, if any;
|
12
|
|
•
|
|
the applicability of the provisions in the indenture on discharge;
|
|
|
•
|
|
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;
|
|
|
•
|
|
the denominations in which we will issue the series of debt securities, if other than denominations of $1,000 and any integral multiple thereof;
|
|
|
•
|
|
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
|
|
|
•
|
|
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.
|
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.
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:
|
|
•
|
|
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;
|
|
|
•
|
|
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;
|
|
|
•
|
|
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
|
|
|
•
|
|
if specified events of bankruptcy, insolvency or reorganization occur.
|
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
13
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:
|
|
•
|
|
the direction so given by the holder is not in conflict with any law or the applicable indenture; and
|
|
|
•
|
|
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.
|
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:
|
|
•
|
|
the holder has given written notice to the debenture trustee of a continuing event of default with respect to that series;
|
|
|
•
|
|
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
|
|
|
•
|
|
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.
|
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:
|
|
•
|
|
to fix any ambiguity, defect or inconsistency in the indenture;
|
|
|
•
|
|
to comply with the provisions described above under “Description of Debt Securities — Consolidation, Merger or Sale;”
|
14
|
|
•
|
|
to comply with any requirements of the SEC in connection with the qualification of any indenture under the Trust Indenture Act of 1939;
|
|
|
•
|
|
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;
|
|
|
•
|
|
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 Securities — General” 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;
|
|
|
•
|
|
to evidence and provide for the acceptance of appointment hereunder by a successor trustee;
|
|
|
•
|
|
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;
|
|
|
•
|
|
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
|
|
|
•
|
|
to change anything that does not materially adversely affect the interests of any holder of debt securities of any series.
|
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:
|
|
•
|
|
extending the fixed maturity of the series of debt securities;
|
|
|
•
|
|
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
|
|
|
•
|
|
reducing the percentage of debt securities, the holders of which are required to consent to any amendment, supplement, modification or waiver.
|
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:
|
|
•
|
|
register the transfer or exchange of debt securities of the series;
|
|
|
•
|
|
replace stolen, lost or mutilated debt securities of the series;
|
|
|
•
|
|
maintain paying agencies;
|
|
|
•
|
|
hold monies for payment in trust;
|
|
|
•
|
|
recover excess money held by the debenture trustee;
|
|
|
•
|
|
compensate and indemnify the debenture trustee; and
|
|
|
•
|
|
appoint any successor trustee.
|
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.
15
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.
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:
|
|
•
|
|
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
|
|
|
•
|
|
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.
|
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.
16
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.
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:
|
|
•
|
|
the offering price and aggregate number of warrants offered;
|
|
|
•
|
|
the currency for which the warrants may be purchased;
|
17
|
|
•
|
|
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;
|
|
|
•
|
|
if applicable, the date on and after which the warrants and the related securities will be separately transferable;
|
|
|
•
|
|
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;
|
|
|
•
|
|
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;
|
|
|
•
|
|
the effect of any merger, consolidation, sale or other disposition of our business on the warrant agreements and the warrants;
|
|
|
•
|
|
the terms of any rights to redeem or call the warrants;
|
|
|
•
|
|
any provisions for changes to or adjustments in the exercise price or number of securities issuable upon exercise of the warrants;
|
|
|
•
|
|
the dates on which the right to exercise the warrants will commence and expire;
|
|
|
•
|
|
the manner in which the warrant agreements and warrants may be modified;
|
|
|
•
|
|
a discussion of any material or special United States federal income tax consequences of holding or exercising the warrants;
|
|
|
•
|
|
the terms of the securities issuable upon exercise of the warrants; and
|
|
|
•
|
|
any other specific terms, preferences, rights or limitations of or restrictions on the warrants.
|
Before exercising their warrants, holders of warrants will not have any of the rights of holders of the securities purchasable upon such
exercise, including:
|
|
•
|
|
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
|
|
|
•
|
|
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.
|
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
18
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.
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 supplements related to the particular series of 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:
|
|
•
|
|
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;
|
|
|
•
|
|
any provisions of the governing unit agreement that differ from those described below; and
|
|
|
•
|
|
any provisions for the issuance, payment, settlement, transfer or exchange of the units or of the securities comprising the units.
|
19
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.
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 depositary’s book-entry system. These participating institutions, which are referred to as participants, in turn, hold beneficial interests in the securities on behalf of
themselves or their customers.
Only the person in whose name a security is registered is recognized as the holder of that security.
Securities issued in global form will be registered in the name of the depositary or its participants. Consequently, for securities issued in global form, we will recognize only the depositary as the holder of the securities, and we will make all
payments on the securities to the depositary. The depositary passes along the payments it receives to its participants, which in turn pass the payments along to their customers who are the beneficial owners. The depositary and its participants do so
under agreements they have made with one another or with their customers; they are not obligated to do so under the terms of the securities.
As a result, investors in a book-entry security will not own securities directly. Instead, they will own beneficial interests in a global
security, through a bank, broker or other financial institution that participates in the depositary’s book-entry system or holds an interest through a participant. As long as the securities are issued in global form, investors will be indirect
holders, and not holders, of the securities.
20
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.
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:
|
|
•
|
|
how it handles securities payments and notices;
|
|
|
•
|
|
whether it imposes fees or charges;
|
|
|
•
|
|
how it would handle a request for the holders’ consent, if ever required;
|
|
|
•
|
|
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;
|
|
|
•
|
|
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
|
|
|
•
|
|
if the securities are in book-entry form, how the depositary’s rules and procedures will affect these matters.
|
Global Securities
A global security is a
security that represents one or any other number of individual securities held by a depositary. Generally, all securities represented by the same global securities will have the same terms.
21
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.
Special Considerations For Global Securities
The rights of an indirect holder relating to a global security will be governed by the account rules of the investor’s financial
institution and of the depositary, as well as general laws relating to securities transfers. 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:
|
|
•
|
|
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;
|
|
|
•
|
|
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;
|
|
|
•
|
|
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;
|
|
|
•
|
|
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;
|
|
|
•
|
|
the depositary’s policies, which may change from time to time, will govern payments, transfers, exchanges and other matters relating to an investor’s interest in a global security;
|
|
|
•
|
|
we and any applicable trustee have no responsibility for any aspect of the depositary’s actions or for its records of ownership interests in a global security, nor do we or any applicable trustee supervise the
depositary in any way;
|
|
|
•
|
|
the depositary may, and we understand that DTC will, require that those who purchase and sell interests in a global security within its book-entry system use immediately available funds, and your broker or bank may
require you to do so as well; and
|
|
|
•
|
|
financial institutions that participate in the depositary’s book-entry system, and through which an investor holds its interest in a global security, may also have their own policies affecting payments, notices and
other matters relating to the securities.
|
22
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:
|
|
•
|
|
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;
|
|
|
•
|
|
if we notify any applicable trustee that we wish to terminate that global security; or
|
|
|
•
|
|
if an event of default has occurred with regard to securities represented by that global security and has not been cured or waived.
|
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:
|
|
•
|
|
at a fixed price or prices, which may be changed;
|
|
|
•
|
|
at market prices prevailing at the time of sale;
|
|
|
•
|
|
at prices related to such prevailing market prices; or
|
A prospectus supplement or supplements will describe the terms of the
offering of the securities, including:
|
|
•
|
|
the name or names of the underwriters, if any;
|
|
|
•
|
|
the purchase price of the securities and the proceeds we will receive from the sale;
|
|
|
•
|
|
any over-allotment options under which underwriters may purchase additional securities from us;
|
|
|
•
|
|
any agency fees or underwriting discounts and other items constituting agents’ or underwriters’ compensation;
|
|
|
•
|
|
any public offering price;
|
|
|
•
|
|
any discounts or concessions allowed or reallowed or paid to dealers; and
|
|
|
•
|
|
any securities exchange or market on which the securities may be listed.
|
Only underwriters
named in the prospectus supplement will be underwriters of the securities offered by the prospectus supplement.
23
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.
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 NASDAQ Stock Market may engage in passive market making transactions in the common
stock on the NASDAQ Stock Market in accordance with Regulation M under the Exchange Act, during the business day prior to the pricing of the offering, before the commencement of offers or sales of 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 maker’s bid, however, the passive market maker’s bid must then be lowered when certain purchase limits are exceeded. Passive market making may stabilize the market price of the securities at a level
above that which might otherwise prevail in the open market and, if commenced, may be discontinued at any time.
24
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.
EXPERTS
The consolidated financial statements of Inovio Pharmaceuticals, Inc. appearing in Inovio Pharmaceuticals, Inc.’s Annual Report (Form
10-K) for the year ended December 31, 2014, and the effectiveness of Inovio Pharmaceuticals, Inc.’s internal control over financial reporting as of December 31, 2014 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.
25
$50,000,000
Common Stock
PROSPECTUS
SUPPLEMENT
June 17, 2016
Inovio Pharmaceuticals (NASDAQ:INO)
Historical Stock Chart
From Mar 2024 to Apr 2024
Inovio Pharmaceuticals (NASDAQ:INO)
Historical Stock Chart
From Apr 2023 to Apr 2024
