The
information in this preliminary prospectus supplement is not complete and may be changed. This preliminary prospectus supplement
and the accompanying prospectus do not constitute an offer to sell these securities and we are not soliciting offers to buy these
securities in any jurisdiction where the offer or sale is not permitted.
Filed Pursuant to Rule 424(b)(3)
Registration No. 333-220572
Subject
to Completion, dated October 26, 2017
Preliminary
Prospectus Supplement to Prospectus dated October 5, 2017
Shares of Common Stock
Atossa Genetics Inc. is offering
by this prospectus supplement shares of our common stock.
Our common stock
is listed on The NASDAQ Capital Market under the symbol “ATOS.” On October 25, 2017, the last reported sales price
of our common stock on The NASDAQ Capital Market was $1.22 per share.
Investing
in our securities involves certain risks. Before purchasing our common stock, please review the information, including the information
incorporated by reference, under the heading “Risk Factors” beginning on page S-9 of this prospectus supplement and
page 6 of the accompanying prospectus.
Neither the Securities
and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the
adequacy or accuracy of this prospectus supplement or the accompanying prospectus. Any representation to the contrary is a criminal
offense.
As of October
24, 2017, the aggregate market value of the voting and non-voting common equity held by non-affiliates, computed by reference to
the price at which the common equity was last sold on that date, was approximately $ , based on 14,022,071 shares of our
outstanding common stock, of which 326,626 were held by affiliates. Pursuant to General Instruction I.B.6 of Form S-3, in no
event will we sell securities in a public primary offering with a value exceeding more than one-third of our public float in any
12-month period so long as our public float remains below $75.0 million. We have not offered any securities pursuant to General
Instruction I.B.6 of Form S-3 during the 12 calendar months prior to and including the date of this prospectus.
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Per Share
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Total
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Offering Price
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$
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$
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Underwriting Discounts and Commissions
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$
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$
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Proceeds, before expenses, to us
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$
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$
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Delivery of the
shares of common stock will be made on or about October 31, 2017. We have granted the underwriter an option for a period of
45 days to purchase up to an additional shares of our common stock. If the underwriter exercises the option in full, the total
underwriting discounts and commissions payable by us will be $ and the total proceeds to us, before expenses, will be $ .
MAXIM GROUP LLC
The date of this prospectus supplement
is , 2017
TABLE OF CONTENTS
ABOUT THIS PROSPECTUS SUPPLEMENT
This document
consists of two parts. The first part is this prospectus supplement, which describes the specific terms of this offering. The second
part, the accompanying prospectus, gives more general information, some of which may not apply to this offering. Generally, when
we refer only to the “prospectus,” we are referring to both parts combined. This prospectus supplement may add to,
update or change information in the accompanying prospectus and the documents incorporated by reference into this prospectus supplement
or the accompanying prospectus.
If information
in this prospectus supplement is inconsistent with the information contained in the accompanying prospectus or in any document
incorporated by reference that was filed with the Securities and Exchange Commission before the date of this prospectus supplement,
you should rely on this prospectus supplement. If any statement in one of these documents is inconsistent with a statement in another
document having a later date — for example, a document incorporated by reference in the accompanying prospectus — the
statement in the document having the later date modifies or supersedes the earlier statement. This prospectus supplement, the accompanying
prospectus and the documents incorporated into each by reference include important information about us, the shares being offered
and other information you should know before investing in shares of our common stock. Before you invest, you should carefully read
this prospectus supplement, the accompanying prospectus, all information incorporated by reference herein and therein, as well
as the additional information described under “Where You Can Find Additional Information” on page 24 of the accompanying
prospectus.
You should rely
only on this prospectus supplement, the accompanying prospectus and the information incorporated or deemed to be incorporated by
reference in this prospectus supplement and the accompanying prospectus. We have not, and the underwriter has not, authorized anyone
to provide you with information that is in addition to, or different from, that contained or incorporated by reference in this
prospectus supplement and the accompanying prospectus. If anyone provides you with different or inconsistent information, you should
not rely on it. We are not, and the underwriter is not, offering to sell shares of our common stock in any jurisdiction where the
offer or sale is not permitted. You should not assume that the information contained or incorporated by reference in this prospectus
supplement or the accompanying prospectus is accurate as of any date other than as of the date of this prospectus supplement or
the accompanying prospectus, as the case may be, or in the case of the documents incorporated by reference, the date of such documents
regardless of the time of delivery of this prospectus supplement and the accompanying prospectus or any sale of shares of our common
stock to purchase our common stock. Our business, financial condition, liquidity, results of operations, and prospects may have
changed since those dates.
Unless otherwise
noted, (1) the term “Atossa” refers to Atossa Genetics Inc., a Delaware corporation, (2) the terms “Atossa,”
the “Company,” “we,” “us,” and “our,” refer to the ongoing business operations
of Atossa, (3) the term “common stock” refers to shares of Atossa’s common stock, and (4) the term “stockholder(s)”
refers to the holders of common stock or securities exercisable for common stock.
NOTE REGARDING FORWARD-LOOKING
STATEMENTS
This
prospectus and the documents incorporated by reference into it contain, in addition to historical information, certain information,
assumptions and discussions that may constitute forward-looking statements within the meaning of Section 27A of the Securities
Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended
(the “
Exchange Act
”). We have made these statements in reliance on the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995. These statements are subject to certain risks and uncertainties, which could
cause actual results to differ materially from those projected or anticipated. Although we believe our assumptions underlying
our forward-looking statements are reasonable as of the date of this prospectus, we cannot assure you that the forward- looking
statements set out in this prospectus will prove to be accurate. We typically identify these forward-looking statements by the
use of forward-looking words such as “expect,” “potential,” “continue,” “may,”
“will,” “should,” “could,” “would,” “seek,” “intend,”
“plan,” “estimate,” “anticipate” or the negative version of those words or other comparable
words. Forward-looking statements contained in this prospectus include, but are not limited to, statements about:
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whether we can obtain approval from the U.S. Food
and Drug Administration, (the “
FDA
”), and foreign regulatory bodies, to sell, market and distribute
our therapeutics and devices under development;
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our ability to successfully complete clinical trials
of our pharmaceutical candidates under development, including endoxifen and our intraductal microcatheters to administer therapeutics,
including our study using fulvestrant;
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the success, cost and timing of our product and drug
development activities and clinical trials, including whether the ongoing clinical study using our intraductal microcatheters
to administer fulvestrant will enroll a sufficient number of subjects, if any, or be completed in a timely fashion or at all;
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our ability to contract with third-party suppliers,
manufacturers and service providers, including clinical research organizations, and their ability to perform adequately;
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our ability to successfully develop and commercialize
new therapeutics currently in development or that we might identify in the future and in the time frames currently expected;
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our ability to successfully defend ongoing litigation,
including the November 3, 2014 appeal of a dismissal of a securities class action lawsuit that was filed against us, and other
similar complaints that may be brought in the future, in a timely manner and within the coverage, scope and limits of our insurance
policies;
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our ability to establish and maintain intellectual
property rights covering our products;
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our expectations regarding, and our ability to satisfy,
federal, state and foreign regulatory requirements;
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the accuracy of our estimates of the size and characteristics
of the markets that our products and services may address;
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whether the final study results will vary from preliminary
study results that we may announce;
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our expectations as to future financial performance,
expense levels and capital sources;
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our ability to attract and retain key personnel;
and
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our ability to raise capital, including our ability
to sell up to 467,650 shares of Common Stock to Aspire Capital Fund LLC (“
Aspire Capital
”) under the
terms of the May 25, 2016 Common Stock purchase agreement with Aspire Capital (the “
Aspire Purchase Agreement
”).
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This prospectus
also contains estimates and other statistical data provided by independent parties and by us relating to market size and growth
and other industry data. These and other forward-looking statements made in this prospectus are presented as of the date on which
the statements are made. We have included important factors in the cautionary statements included in this prospectus, particularly
in the section titled “Risk Factors,” that we believe could cause actual results or events to differ materially from
the forward-looking statements that we make. Our forward-looking statements do not reflect the potential impact of any new information,
future events or circumstances that may affect our business after the date of this prospectus. Except as required by law, we do
not intend to update any forward-looking statements after the date on which the statement is made, whether as a result of new information,
future events or circumstances or otherwise.
PROSPECTUS SUPPLEMENT SUMMARY
This summary highlights
selected information appearing elsewhere or incorporated by reference in this prospectus supplement and accompanying prospectus
and may not contain all of the information that is important to you. This prospectus supplement and the accompanying prospectus
include or incorporate by reference information about the common stock we are offering as well as information regarding our business
and detailed financial data. You should read this prospectus supplement and the accompanying prospectus in their entirety, including
the information incorporated by reference.
Our Company
We are a clinical-stage
pharmaceutical company focused on developing novel, proprietary therapeutics and delivery methods for the treatment of breast cancer
and other breast conditions. We are developing Endoxifen with two routes of delivery: a topical formulation, applied like a lotion,
for the treatment of a condition called mammographic breast density (or, MBD), and an oral formulation for breast cancer survivors
who do not benefit from taking oral tamoxifen which is the current FDA-approved standard of care. We are also developing our patented
intraductal microcatheter technology to potentially target the delivery of therapies, including fulvestrant and CAR-T cell therapies,
directly to the site of breast cancer.
Our Programs
Under Development
Endoxifen
Oral tamoxifen has been widely
used for over 30 years to both treat and prevent breast cancer. Tamoxifen, however, has significant drawbacks: First, it can cause
side effects including headaches, nausea and early menopausal symptoms as well as rare but serious side effects such as cataracts,
stokes and cancer of the uterus. Second, tamoxifen is a “pro-drug,” meaning that it must be processed by the liver in
order to produce therapeutic metabolites. The metabolite in tamoxifen that accounts for most of its therapeutic activity is called
Endoxifen. Unfortunately, up to 50% of breast cancer survivors who are taking tamoxifen do not produce therapeutic levels of Endoxifen
(meaning they are “refractory”) for a number of reasons including that they do not have the requisite liver enzymes.
We are developing Endoxifen because of these drawbacks to tamoxifen.
We are developing two different
presentations of proprietary Endoxifen for two different potential treatment settings:
First, we are developing
topical Endoxifen for women with MBD for transdermal administration. Legislation that has been recently enacted in approximately
30 states currently requires that women be notified if they have MBD and those notifications typically state that women with MBD
have a higher risk of developing breast cancer, and that mammography may not be as effective because of the MBD. We estimate that
approximately ten million women in the Unites States have MBD, for which there is no FDA-approved treatment. Although oral tamoxifen
is approved to prevent breast cancer in “high-risk” women, it is used by less than 5% of women with an increased risk
of developing breast cancer because of the actual or perceived side effects and risks of tamoxifen. We believe our topical Endoxifen
may provide an effective treatment for MBD because, unlike an oral medication, it is applied directly to the breast and penetrates
the skin; it does not require metabolism by the liver; and it may produce fewer side effects than tamoxifen.
Second, we are developing
oral Endoxifen for breast cancer patients who are refractory to tamoxifen. Approximately one million breast cancer patients take
tamoxifen to prevent recurrence and new breast cancer; however, up to 50% of those patients are refractory to tamoxifen. We believe
our oral Endoxifen may provide an effective treatment supplement or option for these refractory patients because Endoxifen, unlike
tamoxifen, does not require liver metabolism.
We recently completed
a comprehensive Phase 1 study in 48 healthy women in Australia using both the topical and oral forms of our proprietary Endoxifen.
The objectives of this double-blinded, placebo-controlled, Phase 1 study were to assess the pharmacokinetics of our proprietary
Endoxifen dosage forms as single (oral) and repeat (oral and topical) doses, as well as to assess safety and tolerability. The
study was conducted in two parts based on route of administration.
In
September 2017, we reported preliminary results for the topical arm of the study and in October 2017 we reported preliminary
results for the oral arm of the study. We concluded that all objectives were successfully met in both arms of the study:
there were no clinically significant safety signals and no clinically significant adverse events and both the oral and
topical Endoxifen were well tolerated. In the topical arm of the study, there were low but measurable Endoxifen levels
detected in the blood in a dose-dependent fashion and in the oral arm of the study participants exhibited dose-dependent
Endoxifen levels in published reports of the therapeutic range. In September 2017, we contracted Stockholm South General
Hospital in Sweden to conduct a Phase 2 study of our topical Endoxifen. The study will be led by principal investigator Dr.
Per Hall, MD, Ph.D., Head of the Department of Medical Epidemiology and Biostatistics at Karolinska Institutet. We have
applied for approval from the Institutional Review Board and Swedish regulatory authority (Medical Products Agency) to begin
enrollment. The placebo-controlled, double-blinded study is expected to enroll up to 480 subjects. The primary endpoint is
MBD reduction, which will be measured after six and twelve months of dosing, as well as safety and tolerability. We are
planning to start enrollment in this study in the first quarter of 2018.
We plan to commence a Phase 2 clinical study of our oral Endoxifen for patients who are refractory to tamoxifen. We currently
expect that we will retain a clinical research organization to manage the study and that we will commence the study the first
quarter of 2018.
Proprietary
Intraductal Microcatheter Technology
In October 2018,
we announced a new program using Chimeric Antigen Receptor Therapy, or CAR-T. We plan to use our proprietary intraductal microcatheter
technology for the potential transpapillary, or “TRAP,” delivery of T-cells that have been genetically modified to
attack breast cancer cells. We believe this method has several potential advantages: reduced toxicity by limiting systemic exposure
of the T-cells; improved efficacy by placing the T-cells in direct contact with the target ductal epithelial cells that are undergoing
malignant transformation; and, lymphatic migration of the CAR-T cells along the same path taken by migrating cancer cells, potentially
extending their cytotoxic actions into the regional lymph system, which could limit tumor cell dissemination. This program is in
the research and development phase and has not been approved by the FDA or any other regulatory body. Pre-clinical studies, and
clinical studies demonstrating safety and efficacy among other things, and regulatory approvals will be required before commercialization.
We have developed
a foundational intellectual property position with respect to TRAP CAR-T, and we intend to continue research and development through
partnership with leading investigators, institutions, and organizations around the world, bringing our technology and expertise
in TRAP delivery together with experts in cancer immunology and T-cell biology.
The
TRAP delivery of therapeutics in breast cancer clinical trials have demonstrated “that cytotoxic drugs can be safely administered
into breast ducts with minimal toxicity” (Zhang B, et al. Chin J Cancer Res. 2014 Oct;26(5):579-87;
www.ncbi.nlm.nih.gov/pubmed/25400424
).
T cells are removed from a patient and modified so that they express receptors specific to the patient's particular breast cancer.
The T cells, which can then recognize and kill the cancer cells, are reintroduced into the patient using a microcatheter into
the natural ducts of the breast. Chimeric antigen receptors (or, “CARs” and also known as chimeric immunoreceptors,
chimeric T cell receptors, artificial T cell receptors or CAR-T) are engineered receptors, which graft an arbitrary specificity
onto an immune effector cell (“T cell”). Typically, these receptors are used to graft the specificity of a monoclonal
antibody onto a T cell, with transfer of their coding sequence facilitated by retroviral vectors. The receptors are called chimeric
because they are composed of parts from different sources.
We are currently
conducting a Phase 2 study using our microcatheter technology to deliver fulvestrant at Montefiore Medical Center. This trial is
a Phase 2 study in women with ductal carcinoma in situ (“DCIS”) or Stage 1 or 2 breast cancer (invasive ductal carcinoma)
scheduled for mastectomy or lumpectomy within 30 to 45 days. This study is assessing the safety, tolerability, cellular activity
and distribution of fulvestrant when delivered directly into breast milk ducts of these patients compared to those who receive
the same drug by injection. Of the 30 patients required for full enrollment, six will receive the standard intramuscular injection
of fulvestrant and 24 will receive fulvestrant with our microcatheter device.
The primary endpoint
of the clinical trial is to compare the safety, tolerability and distribution of fulvestrant between the two routes of administration
(intramuscular injection or through our microcatheters). The secondary endpoint of the study is to determine if there are changes
in the expression of Ki67 (a measure of cellular proliferation that correlates with tumor growth) as well as estrogen and progesterone
receptors between a pre-fulvestrant biopsy and post-fulvestrant surgical specimens. Digital breast imaging before and after drug
administration in both groups will also be performed to determine the effect of fulvestrant on any lesions as well as breast density
of the participant.
Potential Market Opportunities
We believe that,
based in part on a January 2017 study by Defined Health, a leading market research firm, the potential U.S. market for intraductal
administration of fulvestrant or similar drugs in DCIS patients is up to $800 million annually. This estimate includes treatment
of DCIS patients prior to surgery as well as patients who would use intraductal treatment as an alternative to surgery. We believe
that the potential U.S. market for endoxifen in the treatment and prevention settings is up to $1 billion annually.
The Breast Cancer
and Related Markets
The American Cancer
Society (“ACS”) estimates that in 2017, 250,000 women will be diagnosed with breast cancer in the United States. Every
two minutes an American woman is diagnosed with breast cancer and 40,000 die each year. Although about 100 times less common than
in women, breast cancer also affects men. The ACS estimates that the lifetime risk of men getting breast cancer is about 1 in 1,000;
2,470 new cases of invasive breast cancer will be diagnosed; and, 460 men will die from breast cancer in 2017.
Our key objectives
are to advance our programs through Phase 2 trials and then evaluate further development independently or with partners.
Our common stock
is currently quoted on The NASDAQ Capital Market under the symbol “ATOS.”
Intellectual Property
As of October 20, 2017, and based
on a recent periodic review of our patent estate, we own 13 issued patents (11 US and 2 international) and 16 pending patent applications
(7 in the United States, and 9 international applications) directed to our programs on Endoxifen, Fulvestrant, CAR-T therapeutics
and intraductal delivery using devices such as microcatheters. The foregoing patent counts exclude certain patents and applications
with short patent terms remaining on them and those covering our ForeCyte, FullCyte and Acueity devices and various tests that
are no longer core to our business. The patent counts disclosed herein and in our patent estate are subject to change.
Atossa
and Atossa Genetics (stylized) are our registered trademarks.
Other
Recent Developments
On
October 10, 2013, a putative securities class action complaint, captioned
Cook v. Atossa Genetics, Inc., et al.
, No. 2:13-cv-01836-RSM,
was filed in the United States District Court for the Western District of Washington against us, certain of our directors and
officers and the underwriters of our November 2012 initial public offering. The complaint alleged that all defendants violated
Sections 11 and 12(a)(2), and that we and certain of our directors and officers violated Section 15, of the Securities Act by
making material false and misleading statements and omissions in the offering’s registration statement, and that we and
certain of our directors and officers violated Sections 10(b) and 20A of the Exchange Act and SEC Rule 10b-5 promulgated thereunder
by making false and misleading statements and omissions in the registration statement and in certain of our subsequent press releases
and SEC filings with respect to our NAF specimen collection process, our ForeCYTE Breast Health Test and our MASCT device. The
complaint sought, on behalf of persons who purchased our common stock between November 8, 2012 and October 4, 2013, inclusive,
damages of an unspecific amount.
On
February 14, 2014, the district court appointed plaintiffs Miko Levi, Bandar Almosa and Gregory Harrison (collectively, the
“Levi Group”) as lead plaintiffs, and approved their selection of co-lead counsel and liaison counsel. The
Court also amended the caption of the case to read
In re Atossa Genetics, Inc. Securities Litigation
No.
2:13-cv-01836-RSM. An amended complaint was filed on April 15, 2014. The Company and other defendants filed motions
to dismiss the amended complaint on May 30, 2014. On October 6, 2014 the Court granted defendants’ motion dismissing
all claims against Atossa and all other defendants. On October 30, 2014, the Court entered a final order of dismissal. On
November 3, 2014, plaintiffs filed a notice of appeal with the Court and appealed the Court’s dismissal order to the
U.S. Court of Appeals for the Ninth Circuit. On August 18, 2017, the Ninth Circuit affirmed in part and reversed in part the
district court’s judgment.
On
September 11, 2017, the Ninth Circuit entered an order and mandate remanding the case to the United States District Court
for the Western District of Washington. On October 19, 2017, plaintiffs filed an amended complaint that conforms to the
ruling by the Ninth Circuit. Defendants’ answer to the amended complaint is due December 8, 2017. Since the claims
under Sections 11, 12(a)(2) and 15 were dismissed by the district court and not appealed, the amended complaint only alleges
violations of Section 10(b) and 20A of the Exchange Act and SEC Rule 10b-5 promulgated thereunder against the company and one
officer. All other claims and defendants have been dismissed. The alleged class period in the amended complaint is December
20, 2012 through October 4, 2013.
We
believe this complaint is without merit and plan to defend ourselves vigorously; however failure to obtain a favorable resolution
of the claims set forth in the complaint could have a material adverse effect on our business, results of operations and financial
condition. Currently, the amount of such material adverse effect cannot be reasonably estimated, and no provision or liability
has been recorded for these claims as of June 30, 2017. The costs associated with defending and resolving the complaint and ultimate
outcome cannot be predicted. These matters are subject to inherent uncertainties and the actual cost, as well as the distraction
from the conduct of our business, will depend upon many unknown factors and management’s view of these may change in the
future.
Implications of being an Emerging Growth Company
We are an “emerging
growth company,” as defined in the JOBS Act, and, for as long as we continue to be an “emerging growth company,”
we may choose to take advantage of exemptions from various reporting requirements applicable to other public companies but not
to “emerging growth companies,” including, but not limited to, not being required to comply with the auditor attestation
requirements of Section 404 of the Sarbanes-Oxley Act of 2002 (the “
Sarbanes-Oxley Act
”), reduced disclosure
obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements
of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously
approved. We could be an “emerging growth company” for up to five years, or until the earliest of (i) the last day
of the first fiscal year in which our annual gross revenues exceed $1.07 billion, (ii) the date that we become a “large accelerated
filer” as defined in Rule 12b-2 under the Exchange Act, which would occur if the market value of our Common Stock that is
held by non- affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter,
or (iii) the date on which we have issued more than $1 billion in non-convertible debt during the preceding three-year period.
We are choosing to “opt out” of the extended transition periods available under the JOBS Act for complying with new
or revised accounting standards, and intend to take advantage of the other exemptions.
Corporate Information
Our corporate website
is located at
www.atossagenetics.com
. Information contained on, or that can be accessed through, our website is not a part
of this prospectus. We make available, free of charge through our website or upon written request, our Annual Reports on Form 10-K,
Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and other periodic SEC reports, along with amendments to all of those
reports, as soon as reasonably practicable after we file the reports with the SEC.
Unless otherwise
noted, the term “Atossa Genetics” refers to Atossa Genetics Inc., a Delaware corporation, the terms “Atossa,”
the “Company,” “we,” “us,” and “our,” refer to Atossa Genetics Inc. We were incorporated
in Delaware in April 2009. Our principal executive offices are located at 107 Spring Street, Seattle WA 98104, and our telephone
number is (866) 893-4927.
THE OFFERING
Common stock offered by this
prospectus supplement
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shares.
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Common stock to be outstanding
immediately after this offering
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shares.
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Option to purchase additional shares
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We have granted the underwriter an option for a period of 45 days from the date of this prospectus supplement to purchase up to
additional shares.
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Use of proceeds
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The net proceeds from this offering after deducting estimated underwriting discounts and commissions and offering expenses payable
by us will be approximately $ million (or $ million if the underwriters exercise in full their option to purchase additional shares
of common stock from us, at an offering price of $ per share. We intend to use the net proceeds from this offering for working
capital and general corporate purposes. See “Use of Proceeds” for a more detailed description of the intended use
of proceeds from this offering.
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Risk factors
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See “Risk Factors” beginning on page S-9 of this prospectus supplement and page 6 of the accompanying prospectus for
a discussion of factors that you should read and consider before investing in our securities.
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Dividend policy
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We currently intend to retain any future earnings to fund the development and growth of our business. Therefore, we do not currently
anticipate paying cash dividends on our common stock.
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Trading symbol
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Our common stock is listed on The NASDAQ Capital Market under the symbol “ATOS”.
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RISK FACTORS
We are
a development-stage company and we have accrued net losses annually since inception. Before making an investment decision, you
should carefully consider the risks described below and in the sections entitled “Risk Factors” in the prospectus to
which this prospectus supplement forms a part, as well as our most recent Annual Report on Form 10-K or Quarterly Report on Form
10-Q, as filed with the Securities and Exchange Commission, which are incorporated herein by reference in their entirety, as well
any amendment or updates to our risk factors reflected in subsequent filings with the Securities and Exchange Commission, including
any applicable prospectus supplement. Our business, financial condition or results of operations could be materially adversely
affected by any of these risks. The trading price of our common stock could decline due to any of these risks, and you may lose
all or part of your investment. This prospectus and the incorporated documents also contain forward- looking statements that involve
risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements
as a result of certain factors, including the risks mentioned elsewhere in this prospectus supplement.
Risks Related to This Offering
We may not
continue as a going concern.
We have not yet established an ongoing source
of revenue sufficient to cover operating costs and allow us to continue as a going concern. The report issued by our independent
auditors also emphasized our ability to continue as a going concern. Our ability to continue as a going concern is dependent on
obtaining adequate capital to fund operating losses until we become profitable. If we are unable to obtain adequate capital, we
may be unable to develop and commercialize our product offerings or geographic reach and we could be forced to cease operations.
If
we do not raise additional capital, we anticipate liquidity issues in the next four to six months.
For
the year ended December 31, 2016, we incurred a net loss of $6,368,885 and we had an accumulated deficit of $57,303,748. For
the six months ended June 30, 2017, we incurred a net loss of $(3,945,043) and we had an accumulated deficit of
$(61,248,791). As of the date of filing this prospectus supplement, we expect that our existing resources will be sufficient
to fund our planned operations for at least the next four to six months. If this offering is completed, we expect to have
sufficient funding for the next eight to 12 months. We have not yet established an ongoing source of revenue sufficient
to cover our operating costs and allow us to continue as a going concern. Our ability to continue as a going concern
is dependent on obtaining adequate capital to fund operating losses until we become profitable. We may not receive or
maintain regulatory clearance for our products and other sources of capital may not be available when we need them or on
acceptable terms. If we are unable to raise in a timely fashion the amount of capital we anticipate needing, we will be
forced to curtail or cease operations.
Management
will have broad discretion as to the use of the net proceeds from this offering, and we may not use the proceeds effectively.
Our management
will have broad discretion as to the application of the net proceeds 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 our market value.
Investors
in this offering will experience immediate and substantial dilution.
The public
offering price of the securities offered pursuant to this prospectus supplement may be substantially higher than the net tangible
book value per share of our common stock. Therefore, if you purchase shares of common stock in this offering, you will incur immediate
and substantial dilution in the pro forma net tangible book value per share of common stock from the price per share that you pay
for such common stock. If the holders of outstanding options or other securities convertible into our common stock exercise those
options or other such securities at prices below the public offering price, you will incur further dilution. See “Dilution”
on page S-11 of this prospectus supplement for a more detailed discussion of the dilution you will incur in this offering.
Future
sales of substantial amounts of our common stock could adversely affect the market price of our common stock.
Future
sales of substantial amounts of our common stock, or securities convertible or exchangeable into shares of our common stock, into
the public market, including shares of our common stock issued upon exercise of options and warrants, or perceptions that those
sales could occur, could adversely affect the prevailing market price of our common stock and our ability to raise capital in the
future.
Our
shares of Common Stock are listed on The NASDAQ Capital Market, but we cannot guarantee that we will be able to satisfy the continued
listing standards going forward.
Although
our shares of Common Stock are listed on The NASDAQ Capital Market, we cannot ensure that we will be able to satisfy the continued
listing standards of The NASDAQ Capital Market going forward. If we cannot satisfy the continued listing standards going forward,
NASDAQ may commence delisting procedures against us, which could result in our stock being removed from listing on The NASDAQ Capital
Market. On May 11, 2017, we received a letter from NASDAQ stating we are not in compliance with Rule 5550(a)(2) because our common
stock failed to maintain a minimum closing bid price of $1.00 per share for 30 consecutive business days. We have until November
7, 2017 to either regain compliance, or request additional time to regain compliance.
If our
stock price does not satisfy the $1.00 minimum bid price requirement or we otherwise fail to satisfy other continued listing requirements,
we may be delisted from NASDAQ, which could adversely affect our stock price, liquidity, and our ability to raise funding.
USE OF PROCEEDS
We anticipate
that we will use the net proceeds from this offering for working capital and general corporate purposes. We may also use a portion
of the net proceeds from this offering for the acquisition of, or investment in, complementary business, products, or technologies,
although we have no present commitments or agreements for any specific acquisitions or investments. Pending our use of the net
proceeds from this offering, we intend to invest the net proceeds in a variety of capital preservation investments, including short-term,
investment grade, interest bearing instruments and U.S. government securities.
These expected
uses of the net proceeds from this offering represent our intentions based upon our current financial condition, results of operations,
business plans, and conditions. As of the date of this prospectus, we cannot predict with certainty all of the particular uses
for the net proceeds to be received upon the closing of this offering or the amounts that we will actually spend on the uses set
forth above. The amounts and timing of our actual expenditures may vary significantly depending on numerous factors. As a result,
our management will retain broad discretion over the allocation of the net proceeds from this offering.
DIVIDEND POLICY
We have
not declared any dividends and do not anticipate that we will declare dividends in the foreseeable future; rather, we intend
to retain any future earnings for the development of the business. Payment of future cash dividends, if any, will be at the discretion
of our Board of Directors after taking into account various factors, including our financial condition, operating results, current
and anticipated cash needs, outstanding indebtedness and plans for expansion and restrictions imposed by lenders, if any.
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 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 June 30, 2017 was approximately $ , or approximately $ 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 each share of 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 common stock offered by this prospectus supplement at an offering price of $ per share in
connection with this offering and after deducting the estimated underwriting discounts and offering expenses, our pro forma net
tangible book value as of June 30, 2017 would have been approximately $ or approximately $ per share. This represents an immediate
increase in net tangible book value of approximately $ per share to our existing stockholders and an immediate dilution in pro
forma net tangible book value of approximately $ per share to purchasers of shares of common stock in this offering, as illustrated
by the following table:
Offering price per share
|
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$
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Net tangible book value per share as of June 30, 2017
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$
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Increase per share attributable to the offering
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$
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As adjusted net tangible book value per share after this offering
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$
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Dilution per share to new investors
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$
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The discussion
of dilution, and the table quantifying it, assumes no exercise of any outstanding options or warrants or the issuance of other
potentially dilutive securities. The exercise of potentially dilutive securities having an exercise price less than the offering
price would increase the dilutive effect to new investors.
The number
of shares of common stock shown above to be outstanding after this offering is based on 14,022,071 shares outstanding as of October
20, 2017, and excludes the following as of October 20, 2017:
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shares of our common stock subject to options outstanding having a weighted average exercise
price of $ per share;
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●
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shares of our common stock that have been reserved
for issuance in connection with future grants under our 2010 Stock Option and Incentive Plan, as amended; and
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shares of our common stock that have been reserved
for issuance upon exercise of outstanding warrants having a weighted average exercise price of $ per share, of which
warrants have exercise prices ranging from $18.75 to $24.00, 21,667 warrants have an exercise price of $75.00, 16,135 warrants
have exercise prices ranging from $31.80 to $186.45, and 3,166 warrants have an exercise price of $63.60.
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If
the underwriters exercise in full their option to purchase additional shares at the public offering price of $ per
share, the pro forma as adjusted net tangible book value after this offering would be approximately $ per
share, representing an increase in pro forma as adjusted net tangible book value of approximately $ per
share to existing stockholders and immediate dilution in pro forma as adjusted net tangible book value of approximately $ per
share to investors purchasing our common stock in this offering at the public offering price.
UNDERWRITING
We have entered into an underwriting
agreement with Maxim Group LLC acting as the sole book-running manager and sole representative for the underwriters named below.
Subject to the terms and conditions of the underwriting agreement, the underwriters named below have agreed to purchase, and we
have agreed to sell to them, the number of shares of common stock at the public offering price, less the underwriting discounts
and commissions, as set forth on the cover page of this prospectus supplement and as indicated below:
Underwriters
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Number of Shares
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Maxim Group LLC
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Total
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The underwriting agreement
provides that the obligations of the underwriters to pay for and accept delivery of the shares of common stock offered by this
prospectus supplement are subject to the approval of certain legal matters by their counsel and to other conditions. The underwriters
are obligated to take and pay for all of the shares of common stock offered by this prospectus supplement if any such shares of
common stock are taken, other than those shares of common stock covered by the over-allotment option described below.
Over-Allotment Option
We have granted to the underwriters an
option, exercisable not later than 45 days after the effective date of the underwriting agreement, to purchase up to
additional shares of common stock at the public offering price less the underwriting discounts and commissions set forth on the
cover page of this prospectus supplement. The underwriters may exercise this option only to cover over-allotments made in connection
with this offering; provided, that in no event may the aggregate market value of securities sold in the offering, including from
the over-allotment option, exceed the limitations set forth in General Instruction I.B.6 of Form S-3. We will be obligated, pursuant
to the option, to sell these additional shares of common stock to the underwriters to the extent the option is exercised. If any
additional shares of common stock are purchased, the underwriters will offer the additional shares of common stock on the same
terms as those on which the other shares of common stock are being offered hereunder.
Commissions
We have agreed to
pay the underwriters a cash fee equal to 8% of the gross proceeds raised in this offering. The representative of the underwriters,
Maxim Group LLC, has advised us that the underwriters propose to offer the shares of common stock directly to the public at the
public offering price set forth on the cover of this prospectus supplement. After the offering to the public, the offering price
and other selling terms may be changed by the representative without changing the proceeds we will receive from the underwriters.
The following
table summarizes the public offering price, underwriting commissions and proceeds before expenses to us assuming both no exercise
and full exercise of the underwriters’ option to purchase additional shares of common stock. The underwriting commissions
are equal to the public offering price per share less the amount per share the underwriters pay us for the shares of common stock.
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Per Share
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Total Without
Over-
Allotment
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Total With
Over-
Allotment
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Public offering price
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$
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$
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$
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Underwriting discounts and commissions
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$
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$
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$
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Proceeds to us before expenses
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$
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$
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$
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We estimate the total expenses of this
offering, including registration, filing and listing fees, printing fees and legal and accounting expenses, but excluding underwriting
discounts and commissions, will be approximately $ , all of which
are payable by us. This estimate includes up to $50,000 of out-of-pocket fees and expenses of the representative in connection
with this offering.
Lock-Up Agreements
We and each of our
officers and directors have agreed, subject to certain exceptions, not to offer, issue, sell, contract to sell, encumber, grant
any option for the sale of or otherwise dispose of any shares of our common stock or other securities convertible into or exercisable
or exchangeable for shares of our common stock for a period of ninety (90) days after the date of this prospectus supplement without
the prior written consent of Maxim Group LLC.
Maxim Group LLC
may in its sole discretion and at any time without notice release some or all of the shares subject to lock-up agreements prior
to the expiration of the lock-up period. When determining whether or not to release shares from the lock-up agreements, the representative
will consider, among other factors, the security holder’s reasons for requesting the release, the number of shares for which
the release is being requested and market conditions at the time.
Subsequent Equity Sales
Subject to certain
exceptions, until ninety (90) days following the date hereof, neither we nor any of our subsidiaries may issue, enter into any
agreement to issue or announce the issuance or proposed issuance of any shares of common stock or common stock equivalents. In
addition, until ninety (90) days following the date hereof, we are prohibited from effecting or entering into an agreement to effect
any issuance by us or any of our subsidiaries of common stock or common stock equivalents (or a combination of units thereof) involving
a variable rate transaction (as defined in the underwriting agreement) or certain significant capital changes.
Determination of Offering Price
The public offering price of the securities offered by
this prospectus supplement will be determined by negotiation between us and the underwriters. Among the factors considered in determining
the public offering price of the shares were:
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our
history and our prospects;
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•
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the industry in which
we operate;
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•
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our past and present
operating results;
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•
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the previous experience
of our executive officers; and
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•
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the general condition
of the securities markets at the time of this offering.
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The offering price stated on the cover page of this prospectus
supplement should not be considered an indication of the actual value of the securities sold in this offering. That price is subject
to change as a result of market conditions and other factors and we cannot assure you that the securities sold in this offering
can be resold at or above the public offering price.
Price Stabilization, Short Positions and Penalty
Bids
In connection with this offering, the
underwriters may engage in transactions that stabilize, maintain or otherwise affect the price of our common stock. Specifically,
the underwriters may over-allot in connection with this offering by selling more shares of common stock than are set forth on the
cover page of this prospectus supplement. This creates a short position in our common stock for the underwriters’ own account.
The short position may be either a covered short position or a naked short position. In a covered short position, the number of
shares of common stock over-allotted by the underwriters is not greater than the number of shares of common stock that they may
purchase in the over-allotment option. In a naked short position, the number of shares of common stock involved is greater than
the number of shares of common stock in the over-allotment option. To close out a short position, the underwriters may elect to
exercise all or part of the over-allotment option. The underwriters may also elect to stabilize the price of our common stock or
reduce any short position by bidding for, and purchasing, common stock in the open market.
The underwriters may also impose a penalty
bid. This occurs when a particular underwriter or dealer repays selling concessions allowed to it for distributing a security in
this offering because the underwriter repurchases that security in stabilizing or short covering transactions.
Finally, the underwriters may bid for,
and purchase, shares of our common stock in market making transactions, including “passive” market making transactions
as described below.
These activities may stabilize or maintain
the market price of our common stock at a price that is higher than the price that might otherwise exist in the absence of these
activities. The underwriters are not required to engage in these activities, and may discontinue any of these activities at any
time without notice. These transactions may be effected on The Nasdaq Capital Market, in the over-the-counter market, or otherwise.
In connection with this offering, the
underwriters and selling group members, if any, or their affiliates may engage in passive market making transactions in our common
stock immediately prior to the commencement of sales in this offering, in accordance with Rule 103 of Regulation M under the Securities
Exchange Act of 1934, as amended, or the Exchange Act. Rule 103 generally provides that:
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a passive market maker may not effect transactions or display bids for our common stock in excess of the highest independent bid price by persons who are not passive market makers;
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net purchases by a passive market maker on each day are generally limited to 30% of the passive market maker’s average daily trading volume in our common stock during a specified two-month prior period or 200 shares of common stock, whichever is greater, and must be discontinued when that limit is reached; and
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passive market making bids must be identified as such.
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Other Terms
In addition, we have agreed to reimburse
the underwriters for all reasonable out-of-pocket expenses up to $50,000, including but not limited to reasonable legal fees, incurred
by the underwriters in connection with the offering. We will reimburse the underwriters for all such expenses regardless of
whether the offering is consummated.
Our Relationships with the Underwriters
The underwriters and their affiliates
have engaged, and may in the future engage, in investment banking transactions and other commercial dealings in the ordinary course
of business with us or our affiliates. The underwriters and their affiliates have received, or may in the future receive, customary
fees and commissions for these transactions.
In addition, in the ordinary course of
their business activities, the underwriters and their affiliates may make or hold a broad array of investments and actively trade
debt and equity securities (or related derivative securities) for their own account and for the accounts of their customers. Such
investments and securities activities may involve securities and/or instruments of ours or our affiliates. The underwriters and
their affiliates may also make investment recommendations and/or publish or express independent research views in respect of such
securities or financial instruments and may hold, or recommend to clients that they acquire, long and/or short positions in such
securities and instruments
Indemnification
We have agreed to indemnify the underwriters
against liabilities relating to the offering arising under the Securities Act and the Exchange Act, liabilities arising from breaches
of some or all of the representations and warranties contained in the underwriting agreement, and to contribute to payments that
the underwriters may be required to make for these liabilities.
The underwriting agreement will be filed
as an exhibit to our Current Report on Form 8-K to be filed with the SEC in connection with this offering.
Electronic Distribution
A prospectus supplement and accompanying
base prospectus in electronic format may be made available on a website maintained by the representative of the underwriters and
may also be made available on a website maintained by other underwriters. The underwriters may agree to allocate a number of shares
to underwriters for sale to their online brokerage account holders. Internet distributions will be allocated by the representatives
of the underwriters to underwriters that may make Internet distributions on the same basis as other allocations. In connection
with the offering, the underwriters or syndicate members may distribute prospectus supplements and accompanying base prospectuses
electronically. No forms of electronic prospectus other than prospectus supplements and accompanying base prospectuses that are
printable as Adobe® PDF will be used in connection with this offering.
The underwriters have informed
us that they do not expect to confirm sales of shares of common stock offered by this prospectus supplement to accounts over which
they exercise discretionary authority.
Other than the prospectus supplement
in electronic format, the information on any underwriter’s website and any information contained in any other website maintained
by an underwriter is not part of this prospectus supplement or the registration statement of which this prospectus forms a part,
has not been approved and/or endorsed by us or any underwriter in its capacity as underwriter and should not be relied upon by
investors.
Foreign Regulatory Restrictions on Purchase of
Securities Offered Hereby Generally
No action has been or will be taken in
any jurisdiction (except in the United States) that would permit a public offering of the securities offered by this prospectus
supplement and accompanying base prospectus, or the possession, circulation or distribution of this prospectus supplement and accompanying
base prospectus or any other material relating to us or the securities offered hereby in any jurisdiction where action for that
purpose is required. Accordingly, the securities offered hereby may not be offered or sold, directly or indirectly, and neither
of this prospectus supplement and accompanying base prospectus nor any other offering material or advertisements in connection
with the securities offered hereby may be distributed or published, in or from any country or jurisdiction except in compliance
with any applicable rules and regulations of any such country or jurisdiction.
Each of the underwriters may arrange
to sell securities offered by this prospectus supplement and accompanying base prospectus in certain jurisdictions outside the
United States, either directly or through affiliates, where they are permitted to do so.
DESCRIPTION OF THE SECURITIES
Common Stock
The material
terms and provisions of our common stock are described in our registration statement on Form 8-A (Registration No. 001-35610),
filed on July 24, 2012, including any amendments or reports filed for the purpose of updating such description.
Effective
August 26, 2016, we effected a reverse split of our common stock at a ratio of 1-for-15. The reverse split was approved by our
stockholders at an annual meeting of the stockholders held on May 18, 2016. All share and per share numbers included in this prospectus
supplement give effect to the reverse split.
Listing; Transfer Agent
Our
shares of common stock are traded on the NASDAQ Capital Market under the symbol “ATOS.” The transfer agent for
our shares of common stock to be issued in this offering is VStock Transfer, LLC, 18 Lafayette Place, Woodmere, New York
11598 (Telephone: (212) 828-8436; Facsimile (646) 536-3179).
Dividend Policy
We have
never declared or paid dividends on our common stock and do not anticipate paying any dividends on our common stock in the foreseeable
future.
LEGAL MATTERS
Gibson,
Dunn & Crutcher LLP, San Francisco, California, will pass upon the validity of the common stock offered by this prospectus
supplement and the accompanying prospectus. Ellenoff Grossman & Schole LLP, New York, New York is acting as counsel for the
underwriters in connection with certain legal matters related to this offering.
EXPERTS
The
consolidated financial statements as of December 31, 2016 and 2015 and for each of the two years in the period ended December
31, 2016 incorporated by reference in this Prospectus Supplement have been so included in reliance on the report of BDO USA,
LLP, an independent registered public accounting firm (the report on the consolidated financial statements contains an
explanatory paragraph regarding the Company's ability to continue as a going concern) which is incorporated by reference in
the Prospectus Supplement, given on the authority of said firm as experts in auditing and accounting.
PROSPECTUS
$50,000,000
ATOSSA GENETICS INC.
Common
Stock
Preferred
Stock
Debt
Securities
Warrants
We may offer and sell an indeterminate
number of shares of our common stock, preferred stock, debt securities and warrants from time to time under this prospectus. We
may offer these securities separately or together in combination with other securities registered by this prospectus. We will describe
in a prospectus supplement the securities we are offering and selling, as well as the specific terms of the securities.
We may offer these securities
in amounts, at prices and on terms determined at the time of offering. We may sell the securities directly to you, through agents
we select, or through underwriters and dealers we select. If we use agents, underwriters or dealers to sell the securities, we
will name them and describe their compensation in a prospectus supplement or sales agreement prospectus.
Our Common Stock is currently
quoted on the NASDAQ Capital Market under the symbol “ATOS”. On September 21, 2017, the last reported sale price per
share of our Common Stock on the NASDAQ Capital Market was $0.52.
Our principal executive offices
are located at 107 Spring Street, Seattle, Washington 98104.
INVESTING IN OUR SECURITIES
INVOLVES RISKS. YOU SHOULD REVIEW CAREFULLY THE RISKS AND UNCERTAINTIES DESCRIBED HEREIN UNDER THE HEADING “RISK FACTORS”
AND 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 ARE INCORPORATED BY REFERENCE INTO THIS PROSPECTUS.
Neither the Securities and
Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus
is truthful or complete. Any representation to the contrary is a criminal offense.
The date of this prospectus
is October 5, 2017
ABOUT
THIS PROSPECTUS
This prospectus is part of a
registration statement that we filed with the Securities and Exchange Commission, or SEC, utilizing a shelf registration process.
Under the shelf registration process, we may offer shares of our common stock and preferred stock, various series of debt securities
and warrants to purchase any of such securities with a total value of up to $50,000,000 from time to time under this prospectus
at prices and on terms to be determined by market conditions at the time of offering. This prospectus provides you with a general
description of the securities we may offer. Each time we offer a type or series of securities, we will provide a prospectus supplement
(which term includes, as applicable, the sales agreement prospectus filed with the registration statement of which this prospectus
forms a part) that will describe the specific amounts, prices and other important terms of the securities, including, to the extent
applicable:
A prospectus supplement may
include a discussion of risks or other special considerations applicable to us or the offered securities. A prospectus supplement
may also add, update or change information in this prospectus. If there is any inconsistency between the information in this prospectus
and the applicable prospectus supplement, you must rely on the information in the prospectus supplement. Please carefully read
both this prospectus and the applicable prospectus supplement in their entirety together with additional information described
under the heading “Where You Can Find More Information” in this prospectus. This prospectus may not be used to offer
or sell any securities unless accompanied by a prospectus supplement.
The registration statement
containing this prospectus, including exhibits to the registration statement, provides additional information about us and the
securities offered under this prospectus. The registration statement can be read on the SEC’s website or at the SEC’s
public reading room mentioned under the heading “Where You Can Find More Information” in this prospectus.
We have not authorized any broker-dealer,
salesperson or other person to give any information or to make any representation other than those contained or incorporated by
reference in this prospectus and the accompanying supplement to this prospectus. You must not rely upon any information or representation
not contained or incorporated by reference in this prospectus or the accompanying prospectus supplement. This prospectus and the
accompanying supplement to this prospectus do not constitute an offer to sell or the solicitation of an offer to buy securities,
nor do this prospectus and the accompanying supplement to this prospectus constitute an offer to sell or the solicitation of an
offer to buy securities in any jurisdiction to any person to whom it is unlawful to make such offer or solicitation. The information
contained in this prospectus and the accompanying prospectus supplement speaks only as of the date set forth on the cover page
and may not reflect subsequent changes in our business, financial condition, results of operations and prospects even though this
prospectus and any accompanying prospectus supplement is delivered or securities are sold on a later date.
NOTE
REGARDING FORWARD-LOOKING STATEMENTS
This prospectus and the documents
incorporated by reference into it contain, in addition to historical information, certain information, assumptions and discussions
that may constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the
“
Securities Act
”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “
Exchange
Act
”). We have made these statements in reliance on the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. These statements are subject to certain risks and uncertainties, which could cause actual results to differ
materially from those projected or anticipated. Although we believe our assumptions underlying our forward-looking statements are
reasonable as of the date of this prospectus, we cannot assure you that the forward-looking statements set out in this prospectus
will prove to be accurate. We typically identify these forward-looking statements by the use of forward- looking words such as
“expect,” “potential,” “continue,” “may,” “will,” “should,”
“could,” “would,” “seek,” “intend,” “plan,” “estimate,”
“anticipate” or the negative version of those words or other comparable words. Forward-looking statements contained
in this prospectus include, but are not limited to, statements about:
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whether we can obtain approval from the U.S. Food and
Drug Administration, or FDA, and foreign regulatory bodies, to sell, market and distribute our therapeutics and devices under
development;
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the success, cost and timing of our product and drug
development activities and clinical trials, including whether the ongoing clinical study using our intraductal microcatheters
to administer fulvestrant will enroll a sufficient number of subjects or be completed in a timely fashion or at all;
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whether final clinical data will vary from any preliminary
clinical data we may announce from time to time;
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our ability to contract with third-party suppliers, manufacturers
and service providers, including clinical research organizations, and their ability to perform adequately;
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our ability to successfully develop and commercialize
new therapeutics currently in development or that we might identify in the future and in the time frames currently expected;
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our ability to successfully defend ongoing litigation,
including the November 3, 2014 appeal of a dismissal of a securities class action law suit filed against us, and other similar
complaints that may be brought in the future, in a timely manner and within the coverage, scope and limits of our insurance policies;
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our ability to establish and maintain intellectual property
rights covering our products;
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our expectations regarding, and our ability to satisfy,
federal, state and foreign regulatory requirements;
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the accuracy of our estimates of the size and characteristics
of the markets that our products and services may address;
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our expectations as to future financial performance,
expense levels and capital sources;
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our ability to attract and retain key personnel;
and
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our ability to raise capital, including our ability to
sell shares of common stock to Aspire Capital under the terms of the May 25, 2016 common stock purchase agreement with Aspire
Capital.
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This prospectus also contains
estimates and other statistical data provided by independent parties and by us relating to market size and growth and other industry
data. These and other forward-looking statements made in this prospectus are presented as of the date on which the statements are
made. We have included important factors in the cautionary statements included in this prospectus, particularly in the section
entitled “Risk Factors,” that we believe could cause actual results or events to differ materially from the forward-looking
statements that we make. Our forward- looking statements do not reflect the potential impact of any new information, future events
or circumstances that may affect our business after the date of this prospectus. Except as required by law, we do not intend to
update any forward-looking statements after the date on which the statement is made, whether as a result of new information, future
events or circumstances or otherwise.
ABOUT
THE COMPANY
We are a clinical-stage pharmaceutical
company focused on developing novel, proprietary therapeutics and delivery methods for the treatment of breast cancer and other
breast conditions. We currently have three programs underway: two using our proprietary Endoxifen (oral and topical formulations)
and the other using our patented microcatheter technology. We have completed a comprehensive Phase 1 dose-escalation study in healthy
women in Australia using both the topical and oral formulations of our proprietary Endoxifen and we are planning to commence one
or more Phase 2 studies of Endoxifen in the fourth quarter of 2017. Our patented microcatheter technology is in a Phase 2 clinical
study at Montefiore Medical Center in New York.
The American Cancer Society (ACS)
estimates that in 2017 250,000 women will be diagnosed with breast cancer in the United States. Every two minutes an American woman
is diagnosed with breast cancer and 40,000 die each year. Although about 100 times less common than women, breast cancer also affects
men. The ACS estimates that the lifetime risk of men getting breast cancer is about 1 in 1,000; 2,470 new cases of invasive
breast cancer will be diagnosed; and 460 men will die from breast cancer in 2017.
Tamoxifen has been widely used
for over 30 years to both treat and prevent breast cancer. Tamoxifen, however, has serious drawbacks: although approximately one
million breast cancer survivors take tamoxifen to prevent recurrence and new breast cancer, up to 50% of those patients do not
benefit from tamoxifen (meaning they are “refractory”) for a number of reasons including that they do not properly
metabolize tamoxifen.
Additionally, because of the
serious side effects of tamoxifen, it is estimated that only about 2% of the approximately 10 million American women who are at
high risk of developing breast cancer will take tamoxifen as a preventative measure.
Additional research has shown
that it is the
metabolites
of tamoxifen and not tamoxifen itself, of which Endoxifen is the most active, that have potential
therapeutic value.
We are developing two different
presentations of proprietary Endoxifen for two different potential treatment settings: Frist, topical Endoxifen is under development
for women with a condition called mammographic breast density, or MBD. Studies conducted by other have shown that women with MBD
have a higher risk of developing breast cancer. Second, we are developing oral Endoxifen for breast cancer survivors who are refractory
to tamoxifen.
We have completed a Phase 1 dose-escalation
study of topical and oral Endoxifen. The study was a placebo-controlled, repeat dose study of 48 healthy female volunteers over
a 28-day dosing period. In September 2017, we reported preliminary results for the topical arm of the study with all objectives
(safety, tolerability and pharmacokinetics) successfully met. Results from the oral arm of the Phase 1 study are expected to be
reported before November 15, 2017. We are planning one or more Phase 2 studies of the topical and/or oral dosage forms of Endoxifen
to commence in the fourth quarter 2017.
We are currently conducting a
Phase 2 study using our microcatheter technology to deliver fulvestrant at Montefiore Medical Center. This trial is a Phase 2 study
in women with ductal carcinoma in situ (DCIS) or Stage 1 or 2 breast cancer (invasive ductal carcinoma) scheduled for mastectomy
or lumpectomy within 30 to 45 days. This study is assessing the safety, tolerability, cellular activity and distribution of fulvestrant
when delivered directly into breast milk ducts of these patients compared to those who receive the same drug by injection. Of the
30 patients required for full enrollment, six will receive the standard intramuscular injection of fulvestrant and 24 will receive
fulvestrant with our microcatheter device.
The primary endpoint of the
clinical trial is to compare the safety, tolerability and distribution of fulvestrant between the two routes of administration
(intramuscular injection or through our microcatheters). The secondary endpoint of the study is to determine if there are changes
in the expression of Ki67 (a measure of cellular proliferation that correlates with tumor growth) as well as estrogen and progesterone
receptors between a pre-fulvestrant biopsy and post-fulvestrant surgical specimens. Digital breast imaging before and after drug
administration in both groups will also be performed to determine the effect of fulvestrant on any lesions as well as breast density
of the participant.
Our key objectives are to advance
our programs through Phase 2 trials and then evaluate further development independently or with partners. Our common stock is currently
quoted on The NASDAQ Capital Market under the symbol “ATOS.”
RISK
FACTORS
Investors should carefully consider
the risks and uncertainties and all other information contained or incorporated by reference in this prospectus, including the
risks and uncertainties discussed under “Risk Factors” in our most recent Annual Report on Form 10-K, as may be amended
from time to time, and in subsequent filings, including our most recent Quarterly Report on Form 10-Q, that are incorporated herein
by reference. All of these “Risk Factors” are incorporated by reference herein in their entirety. These risks and uncertainties
are not the only ones facing us. Our business, financial condition or results of operations could be materially adversely affected
by any of these risks. The trading price of our Common Stock could decline due to any of these risks, and you may lose all or part
of your investment. This prospectus and the incorporated documents also contain forward-looking statements that involve risks and
uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result
of certain factors, including the risks mentioned in this prospectus.
USE
OF PROCEEDS
We will retain broad discretion
over the use of the net proceeds from the sale of our securities offered hereby. Except as described in any prospectus supplement,
we currently anticipate using the net proceeds from the sale of our securities offered hereby primarily for general corporate purposes,
which include, but are not limited to, funding our ongoing and future development of our drugs and devices under development, and
for general and administrative expenses. We may also use a portion of the net proceeds to pay off outstanding indebtedness, if
any, and/or acquire or invest in complementary businesses, products and technologies. Further, from time to time we may evaluate
acquisition opportunities and engage in related discussions with other companies. Pending the use of the net proceeds, we intend
to invest the net proceeds in short-term, interest- bearing, investment-grade securities.
RATIO
OF EARNINGS TO FIXED CHARGES
If we offer debt securities and/or
preference equity securities under this prospectus, then we will, if required at that time, provide a ratio of earnings to fixed
charges and/or ratio of combined fixed charges and preference dividends to earnings, respectively, in the applicable prospectus
supplement for such offering.
PLAN
OF DISTRIBUTION
We may sell the securities covered
by this prospectus from time to time in one or more offerings. Registration of the securities covered by this prospectus does not
mean, however, that those securities will necessarily be offered or sold.
We may sell the securities separately
or together:
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through one or more underwriters or dealers in a public offering and sale
by them;
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directly to investors; or
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We may sell the securities from
time to time:
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in one or more transactions at a fixed price or prices, which may be changed
from time to time;
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at market prices prevailing at the times of sale;
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at prices related to such prevailing market prices; or
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We will describe the method of
distribution of the securities and the terms of the offering in the prospectus supplement. Any discounts or concessions allowed
or re-allowed or paid to dealers may be changed from time to time.
If underwriters are used in
the sale of any securities, the securities will be acquired by the underwriters for their own account and may be resold from time
to time in one or more transactions described above. The securities may be either offered to the public through underwriting syndicates
represented by managing underwriters, or directly by underwriters. Generally, the underwriters’ obligations to purchase the
securities will be subject to conditions precedent and the underwriters will be obligated to purchase all of the securities if
they purchase any of the securities. 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 authorize underwriters,
dealers or agents to solicit offers by certain purchasers to purchase the 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. The contracts will be subject only to those conditions set forth in the prospectus supplement, and the prospectus supplement
will set forth any commissions we pay for solicitation of these contracts.
We may enter into derivative
transactions with third parties, or sell securities not covered by this prospectus to third parties in privately negotiated transactions.
If the applicable prospectus supplement indicates, in connection with those derivatives, the third parties may sell securities
covered by this prospectus and the applicable prospectus supplement, including in short sale transactions. If so, the third party
may use securities pledged by us or borrowed from us or others to settle those sales or to close out any related open borrowings
of stock, and may use securities received from us in settlement of those derivatives to close out any related open borrowings of
stock. The third party in such sale transactions will be an underwriter and will be identified in the applicable prospectus supplement
or in a post-effective amendment.
Underwriters, dealers and agents
may be entitled to indemnification by us against certain civil liabilities, including liabilities under the Securities Act, or
to contribution with respect to payments made by the underwriters, dealers or agents, under agreements between us and the underwriters,
dealers and agents.
We may grant underwriters who
participate in the distribution of securities an option to purchase additional securities to cover over-allotments, if any, in
connection with the distribution.
Underwriters, dealers or agents
may receive compensation in the form of discounts, concessions or commissions from us or our purchasers, as their agents in connection
with the sale of securities. These underwriters, dealers or agents may be considered to be underwriters under the Securities Act.
As a result, discounts, commissions or profits on resale received by the underwriters, dealers or agents may be treated as underwriting
discounts and commissions. The prospectus supplement will identify any such underwriter, dealer or agent and describe any compensation
received by them from us. Any initial public offering price and any discounts or concessions allowed or re-allowed or paid to dealers
may be changed from time to time.
Unless otherwise specified in
the related prospectus supplement, all securities we offer, other than common stock, will be new issues of securities with no established
trading market. Any underwriters 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. Any common stock sold pursuant to a prospectus supplement will be listed for trading
on the NASDAQ Capital Market or other principal market for our common stock. We may apply to list any series of debt securities,
preferred stock or warrants on an exchange, but we are not obligated to do so. Therefore, there may not be liquidity or a trading
market for any series of securities.
Any underwriter may engage
in over-allotment transactions, 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.
Short covering transactions involve purchases of the securities in the open market after the distribution is completed to cover
short positions. Penalty bids permit the underwriters to reclaim a selling concession from a dealer when the securities originally
sold by the dealer are purchased in a covering transaction to cover short positions. Those activities may cause the price of the
securities to be higher than it would otherwise be. If commenced, the underwriters may discontinue any of the activities at any
time. We make no representation or prediction as to the direction or magnitude of any effect that such transactions may have on
the price of the securities. For a description of these activities, see the information under the heading “Underwriting”
or “Plan of Distribution” in the applicable prospectus supplement.
Underwriters, broker-dealers
or agents who may become involved in the sale of the common stock may engage in transactions with and perform other services for
us in the ordinary course of their business for which they receive compensation.
DESCRIPTION
OF SECURITIES TO BE REGISTERED
We
may offer shares of our common stock, preferred stock, various series of debt securities and warrants to purchase any such securities
with a total value of up to $50,000,000 from time to time under this prospectus at prices and on terms to be determined by market
conditions at the time of offering. Each time we offer a type or series of securities, we will provide a prospectus supplement
that will describe the specific amounts, prices and other important terms of the securities.
Common
Stock
Holders
of Common Stock are entitled to receive ratably dividends out of funds legally available, if and when declared from time to time
by our Board of Directors. We have never paid any cash dividends on our Common Stock and our Board of Directors does not anticipate
that we will pay cash dividends in the foreseeable future. The future payment of dividends, if any, on our Common Stock is within
the discretion of the Board of Directors and will depend upon earnings, capital requirements, financial condition and other relevant
factors. Holders of Common Stock are entitled to one vote for each share held on each matter to be voted on by stockholders. There
is no cumulative voting in the election of directors. In the event of liquidation, dissolution or winding up of the affairs of
us, holders of Common Stock are to share in all assets remaining after the payment of liabilities and any preferential distributions
payable to preferred stockholders, if any. The holders of Common Stock have no preemptive or conversion rights and are not subject
to further calls or assessments. There are no redemption or sinking fund provisions applicable to the Common Stock. The rights
of the holders of the Common Stock are subject to any rights that may be fixed for holders of preferred stock, if any. All of
the outstanding shares of Common Stock are fully paid and non-assessable.
Certificate
of Incorporation
Under
our Certificate of Incorporation, as amended, our Board of Directors, without further action by our stockholders, currently has
the authority to issue up to 10,000,000 shares of preferred stock and to fix the rights (including voting rights), preferences
and privileges of these “blank check” preferred shares. Such preferred stock may have rights, including economic rights,
senior to our Common Stock. As a result, the issuance of the preferred stock could have a material adverse effect on the price
of our Common Stock and could make it more difficult for a third party to acquire a majority of our outstanding Common Stock.
Anti-Takeover
Devices
Our
certificate of incorporation and bylaws include a number of provisions that may have the effect of delaying, deferring or preventing
another party from acquiring control of us and encouraging persons considering unsolicited tender offers or other unilateral takeover
proposals to negotiate with our Board of Directors rather than pursue non-negotiated takeover attempts. These provisions include
the items described below.
Board
Composition and Filling Vacancies.
In accordance with our certificate of incorporation, our Board of Directors is divided
into three classes serving staggered three-year terms, with one class being elected each year. Our certificate of incorporation
also provides that directors may only be removed from office for cause and only by the affirmative vote of holders of 75% or more
of the outstanding shares of capital stock then entitled to vote at an election of directors. Furthermore, any vacancy on our
Board of Directors, however occurring, including any vacancy resulting from an increase in the size of the board, may only be
filled by the affirmative vote of a majority of our directors then in office even if less than a quorum. The classification of
directors, together with the limitations on removal of directors and treatment of vacancies, has the effect of making it more
difficult for stockholders to change the composition of our Board of Directors.
Undesignated
Preferred Stock.
Our certificate of incorporation authorizes “blank-check” preferred stock, which means that our
Board of Directors has the authority to designate one or more series of preferred stock without stockholder approval. These series
of preferred stock may have superior rights, preferences and privileges over our Common Stock, including dividend rights, voting
rights and liquidation preferences. The ability of our Board of Directors to issue shares of our preferred stock without stockholder
approval could deter takeover offers and make it more difficult or costly for a third party to acquire us without the consent
of our Board of Directors.
Section
203 of the Delaware General Corporation Law.
In addition, our certificate of incorporation does not opt out of Section 203
of the Delaware General Corporation Law, which protects a corporation against an unapproved takeover by prohibiting a company
from engaging in any business combination with any interested stockholder (defined as a stockholder owning more than 15% of the
outstanding shares) for a period of three years from the time such stockholder became a 15% holder unless approved by our Board
of Directors.
Transfer
Agent and Registrar
The
transfer agent and registrar for our Common Stock is VStock Transfer, LLC, 18 Lafayette Place, Woodmere, New York 11598 (Telephone:
(212) 828-8436; Facsimile (646) 536-3179).
Quotation
Our
Common Stock is currently quoted on the NASDAQ Capital Market under the symbol “ATOS”.
Preferred
Stock
We
may issue shares of our preferred stock from time to time, in one or more series. Under our certificate of incorporation, our
board of directors has the authority, without further action by stockholders, to designate up to 10,000,000 shares of preferred
stock in one or more series and to fix the rights, preferences, privileges, qualifications and restrictions granted to or imposed
upon the preferred stock, including dividend rights, conversion rights, voting rights, rights and terms of redemption, liquidation
preference and sinking fund terms, any or all of which may be greater than the rights of the common stock.
If
we issue preferred stock, we will fix the rights, preferences, privileges, qualifications and restrictions of the preferred stock
of each series that we sell under this prospectus and applicable prospectus supplements in the certificate of designations relating
to that series. If we issue preferred stock, we will incorporate by reference into the registration statement of which this prospectus
is a part the form of any certificate of designations that describes the terms of the series of preferred stock we are offering
before the issuance of the related series of preferred stock. We urge you to read the prospectus supplement related to any series
of preferred stock we may offer, as well as the complete certificate of designations that contains the terms of the applicable
series of preferred stock.
Series
A Junior Participating Preferred Stock
. In connection with our May 19, 2014 Shareholder Rights Plan, discussed below,
the Company has designated 750,000 shares of Series-A Junior Participating Preferred Stock, par value $0.001 per share through
the filing of a certificate of designation with the Delaware Secretary of State. The shareholder rights agreement provides that
all stockholders of record on May 26, 2014 received a non-taxable distribution of one preferred stock purchase right for each
share of our Common Stock held by such stockholder. Each right is attached to and trades with the associated share of Common Stock.
The rights will become exercisable only if one of the following occurs: (1) a person becomes an “Acquiring Person”
by acquiring beneficial ownership of 15% or more of our Common Stock (or, in the case of a person who beneficially owned 15% or
more of our Common Stock on the date the stockholder rights agreement was executed, by acquiring beneficial ownership of additional
shares representing 2.0% of our Common Stock then outstanding (excluding compensatory arrangements)); or (2) a person commences
a tender offer that, if consummated, would result in such person becoming an Acquiring Person. If a person becomes an Acquiring
Person, each right will entitle the holder, other than the Acquiring Person and certain related parties, to purchase a number
of shares of our Common Stock with a market value that equals twice the exercise price of the right. The initial exercise price
of each right is $15.00, so each holder (other than the Acquiring Person and certain related parties) exercising a right would
be entitled to receive $30.00 worth of our Common Stock. If the Company is acquired in a merger or similar business combination
transaction at any time after a person has become an Acquiring Person, each holder of a right (other than the Acquiring Person
and certain related parties) will be entitled to purchase a similar amount of stock of the acquiring entity.
Series
A Convertible Preferred Stock
. In connection with our April 2017 financing, we designated 4,000 shares of the 10,000,000
authorized shares of preferred stock as Series A Convertible Preferred. As of the date of this prospectus, no shares of Series
A Convertible Preferred are outstanding.
Debt
Securities
The
paragraphs below describe the general terms and provisions of the debt securities we may issue. When we offer to sell a particular
series of debt securities, we will describe the specific terms of the securities in a supplement to this prospectus, including
any additional covenants or changes to existing covenants relating to such series. The prospectus supplement also will indicate
whether the general terms and provisions described in this prospectus apply to a particular series of debt securities. You should
read the actual indenture if you do not fully understand a term or the way we use it in this prospectus.
We
may offer senior or subordinated debt securities. Each series of debt securities may have different terms. The senior debt securities
will be issued under one or more senior indentures, dated as of a date prior to such issuance, between us and a trustee, as amended
or supplemented from time to time. We will refer to any such indenture throughout this prospectus as a “senior indenture.”
Any subordinated debt securities will be issued under one or more separate indentures, dated as of a date prior to such issuance,
between us and a trustee, as amended or supplemented from time to time. We will refer to any such indenture throughout this prospectus
as a “subordinated indenture” and to the trustee under any senior or subordinated indenture as the “trustee.”
The senior indenture and the subordinated indenture are sometimes collectively referred to in this prospectus as the “indentures.”
The indentures will be subject to and governed by the Trust Indenture Act of 1939, as amended. We included copies of the forms
of the indentures as exhibits to our registration statement and they are incorporated into this prospectus by reference.
If
we issue debt securities at a discount from their principal amount, then, for purposes of calculating the aggregate initial offering
price of the offered securities issued under this prospectus, we will include only the initial offering price of the debt securities
and not the principal amount of the debt securities.
We
have summarized below the material provisions of the indentures and the debt securities, or indicated which material provisions
will be described in the related prospectus supplement. The prospectus supplement relating to any particular securities offered
will describe the specific terms of the securities, which may be in addition to or different from the general terms summarized
in this prospectus. Because the summary in this prospectus and in any prospectus supplement does not contain all of the information
that you may find useful, you should read the documents relating to the securities that are described in this prospectus or in
any applicable prospectus supplement. Please read “Where You Can Find More Information” in this prospectus to find
out how you can obtain a copy of those documents. Except as otherwise indicated, the terms of the indentures are identical. As
used under this caption, the term “debt securities” includes the debt securities being offered by this prospectus
and all other debt securities issued by us under the indentures.
General
The
indentures:
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do
not limit the amount of debt securities that we may issue;
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allow
us to issue debt securities in one or more series;
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do
not require us to issue all of the debt securities of a series at the same time;
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allow
us to reopen a series to issue additional debt securities without the consent of the
holders of the debt securities of such series; and
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provide
that the debt securities will be unsecured, except as may be set forth in the applicable
prospectus supplement.
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Unless
we give you different information in the applicable prospectus supplement, the senior debt securities will be unsubordinated obligations
and will rank equally with all of our other unsecured and unsubordinated indebtedness. Payments on the subordinated debt securities
will be subordinated to the prior payment in full of all of our senior indebtedness, as described under “Description of
the Debt Securities—Subordination” and in the applicable prospectus supplement.
Each
indenture provides that we may, but need not, designate more than one trustee under an indenture. Any trustee under an indenture
may resign or be removed and a successor trustee may be appointed to act with respect to the series of debt securities administered
by the resigning or removed trustee. If two or more persons are acting as trustee with respect to different series of debt securities,
each trustee shall be a trustee of a trust under the applicable indenture separate and apart from the trust administered by any
other trustee. Except as otherwise indicated in this prospectus, any action described in this prospectus to be taken by each trustee
may be taken by each trustee with respect to, and only with respect to, the one or more series of debt securities for which it
is trustee under the applicable indenture.
The
prospectus supplement for each offering will provide the following terms, where applicable:
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the
title of the debt securities and whether they are senior or subordinated;
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the
aggregate principal amount of the debt securities being offered, the aggregate principal
amount of the debt securities outstanding as of the most recent practicable date and
any limit on their aggregate principal amount, including the aggregate principal amount
of debt securities authorized;
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the
price at which the debt securities will be issued, expressed as a percentage of the principal
and, if other than the principal amount thereof, the portion of the principal amount
thereof payable upon declaration of acceleration of the maturity thereof or, if applicable,
the portion of the principal amount of such debt securities that is convertible into
common stock or preferred stock or the method by which any such portion shall be determined;
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if
convertible, the terms on which such debt securities are convertible, including the initial
conversion price or rate and the conversion period and any applicable limitations on
the ownership or transferability of common stock or preferred stock received on conversion;
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the
date or dates, or the method for determining the date or dates, on which the principal
of the debt securities will be payable;
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the
fixed or variable interest rate or rates of the debt securities, or the method by which
the interest rate or rates is determined;
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the
date or dates, or the method for determining the date or dates, from which interest will
accrue;
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the
dates on which interest will be payable;
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the
record dates for interest payment dates, or the method by which we will determine those
dates;
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the
persons to whom interest will be payable;
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the
basis upon which interest will be calculated if other than that of a 360-day year of
twelve 30-day months;
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any
make-whole amount, which is the amount in addition to principal and interest that is
required to be paid to the holder of a debt security as a result of any optional redemption
or accelerated payment of such debt security, or the method for determining the make-
whole amount;
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the
place or places where the principal of, and any premium, or make-whole amount, and interest
on, the debt securities will be payable;
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where
the debt securities may be surrendered for registration of transfer or conversion or
exchange;
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where
notices or demands to or upon us in respect of the debt securities and the applicable
indenture may be served;
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the
times, prices and other terms and conditions upon which we may redeem the debt securities;
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any
obligation we have to redeem, repay or purchase the debt securities pursuant to any sinking
fund or analogous provision or at the option of holders of the debt securities, and the
times and prices at which we must redeem, repay or purchase the debt securities as a
result of such an obligation;
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the
currency or currencies in which the debt securities are denominated and payable if other
than United States dollars, which may be a foreign currency or units of two or more foreign
currencies or a composite currency or currencies and the terms and conditions relating
thereto, and the manner of determining the equivalent of such foreign currency in United
States dollars;
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whether
the principal of, and any premium, or make-whole amount, or interest on, the debt securities
of the series are to be payable, at our election or at the election of a holder, in a
currency or currencies other than that in which the debt securities are denominated or
stated to be payable, and other related terms and conditions;
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whether
the amount of payments of principal of, and any premium, or make-whole amount, or interest
on, the debt securities may be determined according to an index, formula or other method
and how such amounts will be determined;
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whether
the debt securities will be in registered form, bearer form or both and: (1) if in registered
form, the person to whom any interest shall be payable, if other than the person in whose
name the security is registered at the close of business on the regular record date for
such interest; or (2) if in bearer form, the manner in which, or the person to whom,
any interest on the security shall be payable if otherwise than upon presentation and
surrender upon maturity;
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any
restrictions applicable to the offer, sale or delivery of securities in bearer form and
the terms upon which securities in bearer form of the series may be exchanged for securities
in registered form of the series and vice versa if permitted by applicable laws and regulations;
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whether
any debt securities of the series are to be issuable initially in temporary global form
and whether any debt securities of the series are to be issuable in permanent global
form with or without coupons and, if so, whether beneficial owners of interests in any
such permanent global security may or shall be required to exchange their interests for
other debt securities of the series, and the manner in which interest shall be paid;
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the
identity of the depositary for securities in registered form, if such series are to be
issuable as a global security;
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the
date as of which any debt securities in bearer form or in temporary global form shall
be dated if other than the original issuance date of the first security of the series
to be issued;
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the
applicability, if any, of the defeasance and covenant defeasance provisions described
in this prospectus or in the applicable indenture;
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whether
and under what circumstances we will pay any additional amounts on the debt securities
in respect of any tax, assessment or governmental charge and, if so, whether we will
have the option to redeem the debt securities in lieu of making such a payment;
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whether
and under what circumstances the debt securities being offered are convertible into common
stock or preferred stock, as the case may be, including the conversion price or rate
or manner or calculation thereof;
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the
circumstances, if any, specified in the applicable prospectus supplement, under which
beneficial owners of interests in the global security may obtain definitive debt securities
and the manner in which payments on a permanent global debt security will be made if
any debt securities are issuable in temporary or permanent global form;
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any
provisions granting special rights to holders of securities upon the occurrence of such
events as specified in the applicable prospectus supplement;
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if
the debt securities of such series are to be issuable in definitive form only upon receipt
of certain certificates or other documents or satisfaction of other conditions, then
the form and/or terms of such certificates, documents or conditions;
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the
name of the applicable trustee and the nature of any material relationship with us or
any of our affiliates, and the percentage of debt securities of the class necessary to
require the trustee to take action;
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any
deletions from, modifications of, or additions to our events of default or covenants
and any change in the right of any trustee or any of the holders to declare the principal
amount of any of such debt securities due and payable;
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applicable
CUSIP numbers; and
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any
other terms of such debt securities not inconsistent with the provisions of the applicable
indenture.
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We
may issue debt securities at a discount below their principal amount and provide for less than the entire principal amount thereof
to be payable upon declaration of acceleration of the maturity of the debt securities. We refer to any such debt securities throughout
this prospectus as “original issue discount securities.” The applicable prospectus supplement will describe the United
States federal income tax consequences and other relevant considerations applicable to original issue discount securities.
We
also may issue indexed debt securities. Payments of principal of and premium and interest on, indexed debt securities are determined
with reference to the rate of exchange between the currency or currency unit in which the debt security is denominated and any
other currency or currency unit specified by us, to the relationship between two or more currencies or currency units or by other
similar methods or formulas specified in the prospectus supplement.
Except
as described under “—Merger, Consolidation or Sale of Assets” or as may be set forth in any prospectus supplement,
the debt securities will not contain any provisions that: (1) would limit our ability to incur indebtedness; or (2) would
afford holders of debt securities protection in the event of (a) a highly leveraged or similar transaction involving us, or (b)
a change of control or reorganization, restructuring, merger or similar transaction involving us that may adversely affect the
holders of the debt securities. In the future, we may enter into transactions, such as the sale of all or substantially all of
our assets or a merger or consolidation, that may have an adverse effect on our ability to service our indebtedness, including
the debt securities, by, among other things, substantially reducing or eliminating our assets.
Neither
the Delaware General Corporation Law nor our governing instruments define the term “substantially all” as it relates
to the sale of assets. Additionally, Delaware cases interpreting the term “substantially all” rely upon the facts
and circumstances of each particular case. Consequently, to determine whether a sale of “substantially all” of our
assets has occurred, a holder of debt securities must review the financial and other information that we have disclosed to the
public.
We
will provide you with more information in the applicable prospectus supplement regarding any deletions, modifications, or additions
to the events of default or covenants that are described below, including any addition of a covenant or other provision providing
event risk or similar protection.
Payment
Unless
we give you different information in the applicable prospectus supplement, the principal of, and any premium, or make-whole amount,
and interest on, any series of the debt securities will be payable at the corporate trust office of the trustee. We will provide
you with the address of the trustee in the applicable prospectus supplement. We may also pay interest by mailing a check to the
address of the person entitled to it as it appears in the applicable register for the debt securities or by wire transfer of funds
to that person at an account maintained within the United States.
All
monies that we pay to a paying agent or a trustee for the payment of the principal of, and any premium, or make-whole amount,
or interest on, any debt security will be repaid to us if unclaimed at the end of two years after the obligation underlying payment
becomes due and payable. After funds have been returned to us, the holder of the debt security may look only to us for payment,
without payment of interest for the period which we hold the funds.
Denomination,
Interest, Registration and Transfer
Unless
otherwise described in the applicable prospectus supplement, the debt securities of any series will be issuable in denominations
of $1,000 and integral multiples of $1,000.
Subject
to the limitations imposed upon debt securities that are evidenced by a computerized entry in the records of a depository company
rather than by physical delivery of a note, a holder of debt securities of any series may:
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exchange
them for any authorized denomination of other debt securities of the same series and
of a like aggregate principal amount and kind upon surrender of such debt securities
at the corporate trust office of the applicable trustee or at the office of any transfer
agent that we designate for such purpose; and
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surrender
them for registration of transfer or exchange at the corporate trust office of the applicable
trustee or at the office of any transfer agent that we designate for such purpose.
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Every
debt security surrendered for registration of transfer or exchange must be duly endorsed or accompanied by a written instrument
of transfer satisfactory to the applicable trustee or transfer agent. Payment of a service charge will not be required for any
registration of transfer or exchange of any debt securities, but we or the trustee may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith. If in addition to the applicable trustee, the applicable
prospectus supplement refers to any transfer agent initially designated by us for any series of debt securities, we may at any
time rescind the designation of any such transfer agent or approve a change in the location through which any such transfer agent
acts, except that we will be required to maintain a transfer agent in each place of payment for such series. We may at any time
designate additional transfer agents for any series of debt securities.
Neither
we, nor any trustee, will be required to:
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issue,
register the transfer of or exchange debt securities of any series during a period beginning
at the opening of business 15 days before the day that the notice of redemption of any
debt securities selected for redemption is mailed and ending at the close of business
on the day of such mailing;
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register
the transfer of or exchange any debt security, or portion thereof, so selected for redemption,
in whole or in part, except the unredeemed portion of any debt security being redeemed
in part; and
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issue,
register the transfer of or exchange any debt security that has been surrendered for
repayment at the option of the holder, except the portion, if any, of such debt security
not to be so repaid.
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Merger,
Consolidation or Sale of Assets
The
indentures provide that we may, without the consent of the holders of any outstanding debt securities: (1) consolidate with;
(2) sell, lease or convey all or substantially all of our assets to; or (3) merge with or into, any other entity provided
that:
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either
we are the continuing entity, or the successor entity, if other than us, assumes the
obligations: (A) to pay the principal of, and any premium (or make-whole amount) and
interest on, all of the debt securities; and (B) to duly perform and observe all
of the covenants and conditions contained in each indenture;
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after
giving effect to the transaction, there is no event of default under the indentures and
no event which, after notice or the lapse of time, or both, would become such an event
of default, occurs and continues; and
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an
officers’ certificate and legal opinion covering such conditions are delivered
to each applicable trustee.
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Covenants
Existence
.
Except as permitted under “—Merger, Consolidation or Sale of Assets,” the indentures require us to do or
cause to be done all things necessary to preserve and keep in full force and effect our existence, rights and franchises. However,
the indentures do not require us to preserve any right or franchise if we determine that any right or franchise is no longer desirable
in the conduct of our business.
Provision
of financial information
.
The indentures require us to: (1) within 15 days of each of the respective dates by which we
are required to file our annual reports, quarterly reports and other documents with the SEC, file with the trustee copies of the
annual report, quarterly report and other documents that we file with the SEC under Section 13 or 15(d) of the Securities Exchange
Act of 1934, as amended, or the Exchange Act; (2) file with the trustee and the SEC any additional information, documents
and reports regarding compliance by us with the conditions and covenants of the indentures, as required; (3) within 30 days
after the filing with the trustee, mail to all holders of debt securities, as their names and addresses appear in the applicable
register for such debt securities, without cost to such holders, summaries of any documents and reports required to be filed by
us pursuant to (1) and (2) above; and (4) supply, promptly upon written request and payment of the reasonable cost of duplication
and delivery, copies of such documents to any prospective holder.
Additional
covenants
.
The applicable prospectus supplement will set forth any additional covenants of the Company relating to any
series of debt securities.
Events
of Default, Notice and Waiver
Unless
the applicable prospectus supplement states otherwise, when we refer to “events of default” as defined in the indentures
with respect to any series of debt securities, we mean:
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default
in the payment of any installment of interest on any debt security of such series continuing
for 30 days;
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default
in the payment of principal of, or any premium, or make-whole amount, on any debt security
of such series for five business days at its stated maturity;
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default
in making any sinking fund payment as required for any debt security of such series for
five business days;
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default
in the performance or breach of any covenant or warranty in the debt securities or in
the indenture by the Company continuing for 60 days after written notice as provided
in the applicable indenture, but not of a covenant added to the indenture solely for
the benefit of a series of debt securities issued thereunder other than such series;
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bankruptcy,
insolvency or reorganization, or court appointment of a receiver, liquidator or trustee
of the Company or any significant subsidiary of the Company; and
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any
other event of default provided with respect to a particular series of debt securities.
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When
we use the term “significant subsidiary,” we refer to the meaning ascribed to such term in Rule 1-02 of Regulation
S-X promulgated under the Securities Act of 1933, as amended, or Securities Act.
If
an event of default occurs and is continuing with respect to debt securities of any series outstanding, then the applicable trustee
or the holders of 25% or more in principal amount of the debt securities of that series will have the right to declare the principal
amount of all the debt securities of that series to be due and payable. If the debt securities of that series are original issue
discount securities or indexed securities, then the applicable trustee or the holders of 25% or more in principal amount of the
debt securities of that series will have the right to declare the portion of the principal amount as may be specified in the terms
thereof to be due and payable.
However,
at any time after such a declaration of acceleration has been made, but before a judgment or decree for payment of the money due
has been obtained by the applicable trustee, the holders of at least a majority in principal amount of outstanding debt securities
of such series or of all debt securities then outstanding under the applicable indenture may rescind and annul such declaration
and its consequences if:
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we
have deposited with the applicable trustee all required payments of the principal, any
premium, or make-whole amount, interest and, to the extent permitted by law, interest
on overdue installment of interest, plus applicable fees, expenses, disbursements and
advances of the applicable trustee; and
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all
events of default, other than the non-payment of accelerated principal, or a specified
portion thereof, and any premium, or make-whole amount, have been cured or waived.
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The
indentures also provide that the holders of at least a majority in principal amount of the outstanding debt securities of any
series or of all debt securities then outstanding under the applicable indenture may, on behalf of all holders, waive any past
default with respect to such series and its consequences, except a default:
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in
the payment of the principal, any premium, or make-whole amount, or interest;
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in
respect of a covenant or provision contained in the applicable indenture that cannot
be modified or amended without the consent of the holders of the outstanding debt security
that is affected by the default; or
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in
respect of a covenant or provision for the benefit or protection of the trustee, without
its express written consent.
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The
indentures require each trustee to give notice to the holders of debt securities within 90 days of a default unless such default
has been cured or waived. However, the trustee may withhold notice if specified persons of such trustee consider such withholding
to be in the interest of the holders of debt securities. The trustee may not withhold notice of a default in the payment of principal,
any premium or interest on any debt security of such series or in the payment of any sinking fund installment in respect of any
debt security of such series.
The
indentures provide that holders of debt securities of any series may not institute any proceedings, judicial or otherwise, with
respect to such indenture or for any remedy under the indenture, unless the trustee fails to act for a period of 60 days after
the trustee has received a written request to institute proceedings in respect of an event of default from the holders of 25%
or more in principal amount of the outstanding debt securities of such series, as well as an offer of indemnity reasonably satisfactory
to the trustee. However, this provision will not prevent any holder of debt securities from instituting suit for the enforcement
of payment of the principal of, and any premium, or make-whole amount, and interest on, such debt securities at the respective
due dates thereof.
The
indentures provide that, subject to provisions in each indenture relating to its duties in the case of a default, a trustee has
no obligation to exercise any of its rights or powers at the request or direction of any holders of any series of debt securities
then outstanding under the indenture, unless the holders have offered to the trustee reasonable security or indemnity. The holders
of at least a majority in principal amount of the outstanding debt securities of any series or of all debt securities then outstanding
under an indenture shall have the right to direct the time, method and place of conducting any proceeding for any remedy available
to the applicable trustee, or of exercising any trust or power conferred upon such trustee. However, a trustee may refuse to follow
any direction which:
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is
in conflict with any law or the applicable indenture;
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upon
a good faith determination of a responsible officer of the trustee, may involve the trustee
in personal liability; or
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upon
a good faith determination of a responsible officer of the trustee, may be unduly prejudicial
to the holders of debt securities of the series not joining the proceeding.
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Within
120 days after the close of each fiscal year, we will be required to deliver to each trustee a certificate, signed by one of our
several specified officers, stating whether or not that officer has knowledge of any default under the applicable indenture. If
the officer has knowledge of any default, the notice must specify the nature and status of the default.
Modification
of the Indentures
The
indentures provide that modifications and amendments may be made only with the consent of the affected holders of at least a majority
in principal amount of all outstanding debt securities issued under that indenture. However, no such modification or amendment
may, without the consent of all of the holders of the debt securities affected by the modification or amendment:
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change
the stated maturity of the principal of, or any premium, or make-whole amount, on, or
any installment of principal of or interest on, any such debt security;
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reduce
the principal amount of, the rate or amount of interest on or any premium, or make-whole
amount, payable on redemption of any such debt security;
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reduce
the amount of principal of an original issue discount security that would be due and
payable upon declaration of acceleration of the maturity thereof or would be provable
in bankruptcy, or adversely affect any right of repayment of the holder of any such debt
security;
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change
the place of payment or the coin or currency for payment of principal of, or any premium,
or make-whole amount, or interest on, any such debt security;
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impair
the right to institute suit for the enforcement of any payment on or with respect to
any such debt security;
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reduce
the percentage in principal amount of any outstanding debt securities necessary to modify
or amend the applicable indenture with respect to such debt securities, to waive compliance
with particular provisions thereof or defaults and consequences thereunder or to reduce
the quorum or voting requirements set forth in the applicable indenture; and
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modify
any of the foregoing provisions or any of the provisions relating to the waiver of particular
past defaults or covenants, except to increase the required percentage to effect such
action or to provide that some of the other provisions may not be modified or waived
without the consent of the holder of such debt security.
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The
holders of a majority in aggregate principal amount of the outstanding debt securities of each series may, on behalf of all holders
of debt securities of that series, waive, insofar as that series is concerned, our compliance with material restrictive covenants
of the applicable indenture.
We
and our respective trustee may make modifications and amendments of an indenture without the consent of any holder of debt securities
for any of the following purposes:
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to
evidence the succession of another person to us as obligor under such indenture;
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to
add to our covenants for the benefit of the holders of all or any series of debt securities
or to surrender any right or power conferred upon us in such indenture;
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to
add events of default for the benefit of the holders of all or any series of debt securities;
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to
add or change any provisions of an indenture: (1) to change or eliminate restrictions
on the payment of principal of, or premium, or make-whole amount, or interest on, debt
securities in bearer form; or (2) to permit or facilitate the issuance of debt securities
in uncertificated form, provided that such action shall not adversely affect the interests
of the holders of the debt securities of any series in any material respect;
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to
change or eliminate any provisions of an indenture, provided that any such change or
elimination shall become effective only when there are no debt securities outstanding
of any series created prior thereto which are entitled to the benefit of such provision;
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to
secure the debt securities;
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to
establish the form or terms of debt securities of any series;
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to
provide for the acceptance of appointment by a successor trustee or facilitate the administration
of the trusts under an indenture by more than one trustee;
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to
cure any ambiguity, defect or inconsistency in an indenture, provided that such action
shall not adversely affect the interests of holders of debt securities of any series
issued under such indenture; and
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to
supplement any of the provisions of an indenture to the extent necessary to permit or
facilitate defeasance and discharge of any series of such debt securities, provided that
such action shall not adversely affect the interests of the holders of the outstanding
debt securities of any series.
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Voting
The
indentures provide that in determining whether the holders of the requisite principal amount of outstanding debt securities of
a series have given any request, demand, authorization, direction, notice, consent or waiver under the indentures or whether a
quorum is present at a meeting of holders of debt securities:
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the
principal amount of an original issue discount security that shall be deemed to be outstanding
shall be the amount of the principal thereof that would be due and payable as of the
date of such determination upon declaration of acceleration of the maturity thereof;
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the
principal amount of any debt security denominated in a foreign currency that shall be
deemed outstanding shall be the United States dollar equivalent, determined on the issue
date for such debt security, of the principal amount or, in the case of an original issue
discount security, the United States dollar equivalent on the issue date of such debt
security of the amount determined as provided in the preceding bullet point;
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the
principal amount of an indexed security that shall be deemed outstanding shall be the
principal face amount of such indexed security at original issuance, unless otherwise
provided for such indexed security under such indenture; and
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debt
securities owned by us or any other obligor upon the debt securities or by any affiliate
of ours or of such other obligor shall be disregarded.
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The
indentures contain provisions for convening meetings of the holders of debt securities of a series. A meeting will be permitted
to be called at any time by the applicable trustee, and also, upon request, by us or the holders of at least 25% in principal
amount of the outstanding debt securities of such series, in any such case upon notice given as provided in such indenture. Except
for any consent that must be given by the holder of each debt security affected by the modifications and amendments of an indenture
described above, any resolution presented at a meeting or adjourned meeting duly reconvened at which a quorum is present may be
adopted by the affirmative vote of the holders of a majority of the aggregate principal amount of the outstanding debt securities
of that series represented at such meeting.
Notwithstanding
the preceding paragraph, except as referred to above, any resolution relating to a request, demand, authorization, direction,
notice, consent, waiver or other action that may be made, given or taken by the holders of a specified percentage, which is less
than a majority of the aggregate principal amount of the outstanding debt securities of a series, may be adopted at a meeting
or adjourned meeting duly reconvened at which a quorum is present by the affirmative vote of such specified percentage.
Any
resolution passed or decision taken at any properly held meeting of holders of debt securities of any series will be binding on
all holders of such series. The quorum at any meeting called to adopt a resolution, and at any reconvened meeting, will be persons
holding or representing a majority in principal amount of the outstanding debt securities of a series. However, if any action
is to be taken relating to a consent or waiver which may be given by the holders of at least a specified percentage in principal
amount of the outstanding debt securities of a series, the persons holding such percentage will constitute a quorum.
Notwithstanding
the foregoing provisions, the indentures provide that if any action is to be taken at a meeting with respect to any request, demand,
authorization, direction, notice, consent, waiver or other action that such indenture expressly provides may be made, given or
taken by the holders of a specified percentage in principal amount of all outstanding debt securities affected by such action,
or of the holders of such series and one or more additional series:
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there
shall be no minimum quorum requirement for such meeting; and
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the
principal amount of the outstanding debt securities of such series that vote in favor
of such request, demand, authorization, direction, notice, consent, waiver or other action
shall be taken account in determining whether such request, demand, authorization, direction,
notice, consent, waiver or other action has been made, given or taken under such indenture.
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Subordination
Unless
otherwise provided in the applicable prospectus supplement, subordinated securities will be subject to the following subordination
provisions.
Upon
any distribution to our creditors in a liquidation, dissolution or reorganization, the payment of the principal of and interest
on any subordinated securities will be subordinated to the extent provided in the applicable indenture in right of payment to
the prior payment in full of all senior debt. However, our obligation to make payments of the principal of and interest on such
subordinated securities otherwise will not be affected. No payment of principal or interest will be permitted to be made on subordinated
securities at any time if a default on senior debt exists that permits the holders of such senior debt to accelerate its maturity
and the default is the subject of judicial proceedings or we receive notice of the default. After all senior debt is paid in full
and until the subordinated securities are paid in full, holders of subordinated securities will be subrogated to the rights of
holders of senior debt to the extent that distributions otherwise payable to holders of subordinated securities have been applied
to the payment of senior debt. The subordinated indenture will not restrict the amount of senior debt or other indebtedness of
the Company and its subsidiaries. As a result of these subordination provisions, in the event of a distribution of assets upon
insolvency, holders of subordinated securities may recover less, ratably, than our general creditors.
The
term “senior debt” will be defined in the applicable indenture as the principal of and interest on, or substantially
similar payments to be made by us in respect of, other outstanding indebtedness, whether outstanding at the date of execution
of the applicable indenture or subsequently incurred, created or assumed. The prospectus supplement may include a description
of additional terms implementing the subordination feature.
No
restrictions will be included in any indenture relating to subordinated securities upon the creation of additional senior debt.
If
this prospectus is being delivered in connection with the offering of a series of subordinated securities, the accompanying prospectus
supplement or the information incorporated in this prospectus by reference will set forth the approximate amount of senior debt
outstanding as of the end of our most recent fiscal quarter.
Discharge,
Defeasance and Covenant Defeasance
Unless
otherwise indicated in the applicable prospectus supplement, the indentures allow us to discharge our obligations to holders of
any series of debt securities issued under any indenture when:
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either:
(1) all securities of such series have already been delivered to the applicable trustee
for cancellation; or (2) all securities of such series have not already been delivered
to the applicable trustee for cancellation but (A) have become due and payable, (B) will
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become
due and payable within one year, or (C) if redeemable at our option, are to be redeemed
within one year, and we have irrevocably deposited with the applicable trustee, in trust,
funds in such currency or currencies, currency unit or units or composite currency or
currencies in which such debt securities are payable, an amount sufficient to pay the
entire indebtedness on such debt securities in respect of principal and any premium,
or make-whole amount, and interest to the date of such deposit if such debt securities
have become due and payable or, if they have not, to the stated maturity or redemption
date;
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we
have paid or caused to be paid all other sums payable; and
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an
officers’ certificate and an opinion of counsel stating the conditions to discharging
the debt securities have been satisfied has been delivered to the trustee.
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Unless
otherwise indicated in the applicable prospectus supplement, the indentures provide that, upon our irrevocable deposit with the
applicable trustee, in trust, of an amount, in such currency or currencies, currency unit or units or composite currency or currencies
in which such debt securities are payable at stated maturity, or government obligations, or both, applicable to such debt securities,
which through the scheduled payment of principal and interest in accordance with their terms will provide money in an amount sufficient
to pay the principal of, and any premium, or make-whole amount, and interest on, such debt securities, and any mandatory sinking
fund or analogous payments thereon, on the scheduled due dates therefor, the issuing company may elect either:
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to
defease and be discharged from any and all obligations with respect to such debt securities;
or
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to
be released from its obligations with respect to such debt securities under the applicable
indenture or, if provided in the applicable prospectus supplement, its obligations with
respect to any other covenant, and any omission to comply with such obligations shall
not constitute an event of default with respect to such debt securities.
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Notwithstanding
the above, we may not elect to defease and be discharged from the obligation to pay any additional amounts upon the occurrence
of particular events of tax, assessment or governmental charge with respect to payments on such debt securities and the obligations
to register the transfer or exchange of such debt securities, to replace temporary or mutilated, destroyed, lost or stolen debt
securities, to maintain an office or agency in respect of such debt securities, or to hold monies for payment in trust.
The
indentures only permit us to establish the trust described in the paragraph above if, among other things, it has delivered to
the applicable trustee an opinion of counsel to the effect that the holders of such debt securities will not recognize income,
gain or loss for United States federal income tax purposes as a result of such defeasance or covenant defeasance and will be subject
to United States federal income tax on the same amounts, in the same manner and at the same times as would have been the case
if such defeasance or covenant defeasance had not occurred.
Such
opinion of counsel, in the case of defeasance, will be required to refer to and be based upon a ruling received from or published
by the Internal Revenue Service or a change in applicable United States federal income tax law occurring after the date of the
indenture. In the event of such defeasance, the holders of such debt securities would be able to look only to such trust fund
for payment of principal, any premium, or make- whole amount, and interest.
When
we use the term “government obligations,” we mean securities that are:
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direct
obligations of the United States or the government that issued the foreign currency in
which the debt securities of a particular series are payable, for the payment of which
its full faith and credit is pledged; or
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obligations
of a person controlled or supervised by and acting as an agency or instrumentality of
the United States or other government that issued the foreign currency in which the debt
securities of such series are payable, the payment of which is unconditionally guaranteed
as a full faith and credit obligation by the United States or such other government,
which are not callable or redeemable at the option of the issuer thereof and shall also
include a depository receipt issued by a bank or trust company as custodian with respect
to any such government obligation or a specific payment of interest on or principal of
any such government obligation held by such custodian for the account of the holder of
a depository receipt. However, except as required by law, such custodian is not authorized
to make any deduction from the amount payable to the holder of such depository receipt
from any amount received by the custodian in respect of the government obligation or
the specific payment of interest on or principal of the government obligation evidenced
by such depository receipt.
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Unless
otherwise provided in the applicable prospectus supplement, if after we have deposited funds and/or government obligations to
effect defeasance or covenant defeasance with respect to debt securities of any series, (1) the holder of a debt security of such
series is entitled to, and does, elect under the terms of the applicable indenture or the terms of such debt security to receive
payment in a currency, currency unit or composite currency other than that in which such deposit has been made in respect of such
debt security, or (2) a conversion event occurs in respect of the currency, currency unit or composite currency in which such
deposit has been made, the indebtedness represented by such debt security will be deemed to have been, and will be, fully discharged
and satisfied through the payment of the principal of, and premium, or make whole amount, and interest on, such debt security
as they become due out of the proceeds yielded by converting the amount so deposited in respect of such debt security into the
currency, currency unit or composite currency in which such debt security becomes payable as a result of such election or such
cessation of usage based on the applicable market exchange rate.
When
we use the term “conversion event,” we mean the cessation of use of:
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a
currency, currency unit or composite currency both by the government of the country that
issued such currency and for the settlement of transactions by a central bank or other
public institutions of or within the international banking community;
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the
European Currency Unit both within the European Monetary System and for the settlement
of transactions by public institutions of or within the European Communities; or
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any
currency unit or composite currency other than the European Currency Unit for the purposes
for which it was established.
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Unless
otherwise provided in the applicable prospectus supplement, all payments of principal of, and any premium, or make-whole amount,
and interest on, any debt security that is payable in a foreign currency that ceases to be used by its government of issuance
shall be made in United States dollars.
In
the event that (1) we effect covenant defeasance with respect to any debt securities and (2) those debt securities are declared
due and payable because of the occurrence of any event of default, the amount in the currency, currency unit or composite currency
in which such debt securities are payable, and government obligations on deposit with the applicable trustee, will be sufficient
to pay amounts due on such debt securities at the time of their stated maturity but may not be sufficient to pay amounts due on
such debt securities at the time of the acceleration resulting from such event of default. However, the issuing company would
remain liable to make payments of any amounts due at the time of acceleration.
If
a trustee or paying agent is unable to apply any money in accordance with the foregoing paragraphs describing discharge and defeasance
by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such
application, then the obligations under the indentures and such securities from which the Company has been discharged or released
pursuant to the foregoing shall be revived and reinstated as though no deposit had occurred with respect to such securities, until
such time as the trustee or paying agent is permitted to apply all money held in trust with respect to such securities in accordance
with the foregoing; provided, that if the Company makes any payment of principal of or any premium or interest on any such
security following such reinstatement of its obligations, the Company shall be subrogated to the rights (if any) of the holders
of such securities to receive such payment from the money so held in trust.
The
applicable prospectus supplement may further describe the provisions, if any, permitting such defeasance or covenant defeasance,
including any modifications to the provisions described above, with respect to the debt securities of or within a particular series.
Conversion
Rights
The
terms and conditions, if any, upon which the debt securities are convertible into common stock or preferred stock will be set
forth in the applicable prospectus supplement. The terms will include whether the debt securities are convertible into shares
of common stock or preferred stock, the conversion price, or manner of calculation thereof, the conversion period, provisions
as to whether conversion will be at the issuing company’s option or the option of the holders, the events requiring an adjustment
of the conversion price and provisions affecting conversion in the event of the redemption of the debt securities and any restrictions
on conversion.
Global
Securities
The
debt securities of a series may be issued in whole or in part in the form of one or more global securities that will be deposited
with, or on behalf of, a depository identified in the applicable prospectus supplement relating to such series. Global securities,
if any, issued in the United States are expected to be deposited with The Depository Trust Company, or DTC, as depository. We
may issue global securities in either registered or bearer form and in either temporary or permanent form. We will describe the
specific terms of the depository arrangement with respect to a series of debt securities in the applicable prospectus supplement
relating to such series. We expect that unless the applicable prospectus supplement provides otherwise, the following provisions
will apply to depository arrangements.
All
interests in global securities will be subject to the operations and procedures of the depository for such global securities or
its nominee. We provide the following summaries of those operations and procedures solely for the convenience of investors. Once
a global security is issued, we expect that the depository for such global security or its nominee will credit on its book-entry
registration and transfer system the respective principal amounts of the individual debt securities represented by such global
security to the accounts of participants that have accounts with such depository. Such accounts shall be designated by the underwriters,
dealers or agents with respect to such debt securities or by us if we offer such debt securities directly. Ownership of beneficial
interests in such global security will be limited to participants with the depository or persons that may hold interests through
those participants.
We
expect that, under procedures established by DTC, ownership of beneficial interests in any global security for which DTC is the
depository will be shown on, and the transfer of that ownership will be effected only through, records maintained by DTC or its
nominee, with respect to beneficial interests of participants with the depository, and records of participants, with respect to
beneficial interests of persons who hold through participants with the depository. Neither we nor the trustee will have any responsibility
or liability for any aspect of the records of DTC or for maintaining, supervising or reviewing any records of DTC or any of its
participants relating to beneficial ownership interests in the debt securities.
So
long as the depository for a global security or its nominee is the registered owner of such global security, such depository or
such nominee, as the case may be, will be considered the sole owner or holder of the debt securities represented by the global
security for all purposes under the applicable indenture. Except as described below or in the applicable prospectus supplement,
owners of beneficial interest in a global security will not be entitled to have any of the individual debt securities represented
by such global security registered in their names, will not receive or be entitled to receive physical delivery of any such debt
securities in definitive form and will not be considered the owners or holders thereof under the applicable indenture. Beneficial
owners of debt securities evidenced by a global security will not be considered the owners or holders thereof under the applicable
indenture for any purpose, including with respect to the giving of any direction, instructions or approvals to the trustee under
the indenture. Accordingly, each person owning a beneficial interest in a global security with respect to which DTC is the depository
must rely on the procedures of DTC and, if such person is not a participant with the depository, on the procedures of the participant
through which such person owns its interests, to exercise any rights of a holder under the applicable indenture.
Payments
of principal of, and any premium, or make-whole amount, and interest on, individual debt securities represented by a global security
registered in the name of a depository or its nominee will be made to or at the direction of the depository or its nominee, as
the case may be, as the registered owner of the global security under the applicable indenture. Under the terms of the applicable
indenture, we and the trustee may treat the persons in whose name debt securities, including a global security, are registered
as the owners thereof for the purpose of receiving such payments. Consequently, neither we nor the trustee have or will have any
responsibility or liability for the payment of such amounts to beneficial owners of debt securities including principal, any premium,
or make-whole amount, or interest. We believe, however, that it is currently the policy of DTC to immediately credit the accounts
of relevant participants with such payments, in amounts proportionate to their respective holdings of beneficial interests in
the relevant global security as shown on the records of DTC or its nominee. We also expect that payments by participants to owners
of beneficial interests in such global security held through such participants will be governed by standing instructions and customary
practices, as is the case with securities held for the account of customers in bearer form or registered in street name, and will
be the responsibility of such participants. Redemption notices with respect to any debt securities represented by a global security
will be sent to the depository or its nominee. If less than all of the debt securities of any series are to be redeemed, we expect
the depository to determine the amount of the interest of each participant in such debt securities to be redeemed to be determined
by lot. Neither we, the trustee, any paying agent nor the security registrar for such debt securities will have any responsibility
or liability for any aspect of the records relating to or payments made on account of beneficial ownership interests in the global
security for such debt securities or for maintaining any records with respect thereto.
Neither
we nor the trustee will be liable for any delay by the holders of a global security or the depository in identifying the beneficial
owners of debt securities, and we and the trustee may conclusively rely on, and will be protected in relying on, instructions
from the holder of a global security or the depository for all purposes. The rules applicable to DTC and its participants are
on file with the SEC.
If
a depository for any debt securities is at any time unwilling, unable or ineligible to continue as depository and we do not appoint
a successor depository within 90 days, we will issue individual debt securities in exchange for the global security representing
such debt securities. In addition, we may at any time and in our sole discretion, subject to any limitations described in the
applicable prospectus supplement relating to such debt securities, determine not to have any of such debt securities represented
by one or more global securities and in such event will issue individual debt securities in exchange for the global security or
securities representing such debt securities. Individual debt securities so issued will be issued in denominations of $1,000 and
integral multiples of $1,000.
The
debt securities of a series may also be issued in whole or in part in the form of one or more bearer global securities that will
be deposited with a depository, or with a nominee for such depository, identified in the applicable prospectus supplement. Any
such bearer global securities may be issued in temporary or permanent form. The specific terms and procedures, including the specific
terms of the depositary arrangement, with respect to any portion of a series of debt securities to be represented by one or more
bearer global securities will be described in the applicable prospectus supplement.
No
Recourse
There
is no recourse under any obligation, covenant or agreement in the applicable indenture or with respect to any security against
any of our or our successor’s past, present or future stockholders, employees, officers or directors.
Warrants
We
may issue warrants for the purchase of common stock, preferred stock and/or debt securities in one or more series, from time to
time. 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 those securities.
If
we issue warrants, they will be evidenced by warrant agreements or warrant certificates issued under one or more warrant agreements,
which are contracts between us and an agent for the holders of the warrants. We urge you to read the prospectus supplement related
to any series of warrants we may offer, as well as the complete warrant agreement and warrant certificate that contain the terms
of the warrants. If we issue warrants, forms of warrant agreements and warrant certificates relating to warrants for the purchase
of common stock, preferred stock and debt securities will be incorporated by reference into the registration statement of which
this prospectus is a part from reports we would subsequently file with the SEC.
EXPERTS
The
consolidated financial statements as of December 31, 2016 and 2015 and for each of the two years in the period ended December
31, 2016 incorporated by reference in this Prospectus have been so included in reliance on the report of BDO USA, LLP, an independent
registered public accounting firm (the report on the consolidated financial statements contains an explanatory paragraph regarding
the Company’s ability to continue as a going concern) which is incorporated by reference in the Prospectus, given on the
authority of said firm as experts in auditing and accounting.
LEGAL
MATTERS
Certain
legal matters relating to the validity of the securities offered by this prospectus will be passed upon for us by Gibson, Dunn
& Crutcher LLP, San Francisco, California.
WHERE
YOU CAN FIND ADDITIONAL INFORMATION
The
Company files annual, quarterly and special reports, proxy statements and other information with the SEC. You may read and copy
any document filed by the Company 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. The Company’s filings with the SEC
are also available to the public at the SEC’s Internet web site at
http://www.sec.gov
.
Statements
contained in this prospectus as to the contents of any contract or other document are not necessarily complete, and in each instance
we refer you to the copy of the contract or document filed as an exhibit to the registration statement, each such statement being
qualified in all respects by such reference.
INFORMATION
INCORPORATED BY REFERENCE
The
SEC allows the Company to “incorporate by reference” the information that is filed by the Company with the SEC, which
means that the Company can disclose important information to you by referring you to those documents. The documents incorporated
by reference are:
1. The
Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2016, filed with the SEC on March 16, 2017 (as
amended on March 21, 2017);
2. The
Company’s Quarterly Reports on Forms 10-Q for the quarters ended March 31, 2017 filed with the SEC on May 11, 2017, and
June 30, 2017 filed with the SEC on August 14, 2017, and amendments to the Quarterly Reports on Form 10-Q for the quarters ended
March 31, 2016, June 30, 2016, and September 30, 2016 each filed with the SEC on March 21, 2017;
3. The
Company’s Current Reports on Forms 8-K filed with the SEC on April 4, 2017, May 11, 2017, June 2, 2017, June 30, 2017, August
14, 2017 and September 14, 2017;
4. The
description of the Company’s Common Stock contained in the registration statement on Form 8-A filed with the Commission
on July 24, 2012 pursuant to Section 12 of the Exchange Act of 1934, as amended (the “Exchange Act”), including any
amendment or report filed for the purpose of updating that description; and
5. All
documents filed by the Company pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act, after the date of the original
Registration Statement and prior to effectiveness of the registration statement of which this prospectus is a part, provided that
all documents “furnished” by the Company to the SEC and not “filed” are not deemed incorporated by reference
herein.
Any
statement contained in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified
or superseded for purposes of this registration statement to the extent that a statement contained herein or in any other subsequently
filed document which also is or is deemed to be incorporated by reference herein modifies or supersedes such statement. Any such
statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this registration
statement. Under no circumstances will any information filed under items 2.02 or 7.01 of Form 8-K be deemed to be incorporated
by reference unless such Form 8-K expressly provides to the contrary.
The
Company will provide, without charge, to each person, including any beneficial owner, to whom a copy of this prospectus is delivered,
upon such person’s written or oral request, a copy of any and all of the information incorporated by reference in this prospectus,
other than exhibits to such documents, unless such exhibits are specifically incorporated by reference into the information that
this prospectus incorporates. Requests should be directed to the Secretary at Atossa Genetics Inc., 107 Spring Street, Seattle,
Washington, 98104, phone (866) 893-4927. You may also find these documents in the “Investor Relations” section of
our website, www.atossagenetics.com. The information on our website is not incorporated into this prospectus.
Shares
of Common Stock
Common
Stock
ATOSSA
GENETICS INC.
PROSPECTUS
SUPPLEMENT
Maxim Group LLC
, 2017
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