Filed
Pursuant to Rule 424(b)(5)
Registration
No. 333-220572
Prospectus
Supplement to Prospectus dated October 5, 2017
5,300,000
Shares of Common Stock
Atossa
Genetics Inc. is offering by this prospectus supplement shares of our common stock. In a concurrent private placement, we are
also selling warrants to purchase a total of two shares of common stock for each share purchased in this offering (the “Warrants”).
Each Warrant will be exercisable on the six-month anniversary of the date of issuance of the common stock sold hereunder (the
“Exercise Date”) at an exercise price of $0.315 per share, subject to adjustment. One half of the Warrants will expire
on the eight-month anniversary of the date of issuance of the common stock sold hereunder (the “Class A Warrants”)
and one-half of the Warrants will expire on the twelve-month anniversary of the date of issuance of the common stock sold hereunder
(the “Class B Warrants”). The Warrants and the shares of common stock issuable upon the exercise of the Warrants (the
“Warrant Shares”) are not being registered under the Securities Act of 1933, as amended (the “Securities Act”),
pursuant to the registration statement of which this prospectus supplement and the accompanying base prospectus form a part nor
are such Warrants and Warrant Shares being offered pursuant to such prospectus supplement and base prospectus. The Warrants are
being offered under an exemption from the registration requirements of the Securities Act. The Warrants are not and will not be
listed for trading on any national securities exchange. Each purchaser will be an “accredited investor” as such term
is defined in Rule 501(a) under the Securities Act.
Our
common stock is listed on The NASDAQ Capital Market under the symbol “ATOS.” On December 19, 2017, the last reported
sales price of our common stock on The NASDAQ Capital Market was $0.312 per share.
We
have retained Maxim Group LLC to act as placement agent in connection with this offering. The placement agent is not purchasing
or selling any securities offered by this prospectus supplement and the accompanying base prospectus. See “Plan of Distribution”
beginning on page S-13 of this prospectus supplement for more information regarding these arrangements.
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 December 20, 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 $6,284,668 based on 26,522,741
shares of our outstanding common stock, of which 336,626 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 $75.0 million. We have not offered any securities pursuant
to General Instruction I.B.6 of Form S-3 during the 12 calendar months prior to and including the date of this prospectus.
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Per Share
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Total
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|
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Offering Price
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$
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0.27
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$
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1,431,000
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Placement Agent Fees
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$
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0.02
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$
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100,170
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Proceeds, before expenses, to us
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$
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0.25
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$
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1,330,830
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Delivery
of the shares of common stock will be made on or about December 22, 2017.
MAXIM
GROUP LLC
The
date of this prospectus supplement is December 20, 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 placement agent 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 placement agent 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, or MPA) to begin the study and the MPA has provided comments on our application. Based on those comments we have
withdrawn our application and intend to submit a new application by the end of 2017. The primary endpoint is MBD reduction, as
well as safety and tolerability. We are planning to begin 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 2017, 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 was filed on 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 September 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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5,300,000
shares.
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Common
stock to be outstanding
immediately after this offering
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31,822,741
shares.
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Concurrent
Private Placement
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We are
offering 5,300,000 shares of our common stock in this offering pursuant to this prospectus supplement and the accompanying
base prospectus and a securities purchase agreement at a price of $0.27 per share. In a concurrent private placement, we are
also selling to investors, for no additional consideration, a Class A Warrant and a Class B Warrant for each share purchased
in this offering. Each Warrant will be exercisable for one share of common stock on the six-month anniversary of
the date of issuance of the common stock sold hereunder, or the Exercise Date, at an exercise price of $0.315 per share, subject
to adjustment. One half of the Warrants, the Class A Warrants, will expire on the eight-month anniversary of the
date of issuance of the common stock sold hereunder. One-half of the Warrants, the Class B Warrants, will expire
on the twelve-month anniversary of the date of issuance of the common stock sold hereunder. The Warrants and the
shares of common stock issuable upon the exercise of the Warrants, or the Warrant Shares, are not being registered under the
Securities Act, pursuant to the registration statement of which this prospectus supplement and the accompanying base prospectus
form a part nor are such Warrants and Warrant Shares being offered pursuant to such prospectus supplement and base prospectus. The
Warrants are not and will not be listed for trading on any national securities exchange. Each purchaser will be
an “accredited investor” as such term is defined in Rule 501(a) under the Securities Act.
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Use
of proceeds
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The
net proceeds from this offering after deducting estimated fees and commissions and offering expenses payable by us will be
approximately $1,300,830 at an offering price of $0.27 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
nine months ended September 30, 2017, we incurred a net loss of $6,129,553 and we had an accumulated deficit of $63,433,301. 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 six to eight months. If this offering is completed, we expect to have sufficient funding for
the next ten 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. On November
15, 2017, NASDAQ informed us that we remain out of compliance with Rule 5550(a)(2) and granted us an extension until May 7, 2018
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 September 30, 2017 was approximately $2,001,444, or approximately $0.14 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 $0.27 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 September 30, 2017 would have been approximately $3,272,274 or approximately $0.17 per share.
This represents an immediate increase in net tangible book value of approximately $0.03 per share to our existing stockholders
and an immediate dilution in pro forma net tangible book value of approximately $0.10 per share to purchasers of shares of common
stock in this offering, as illustrated by the following table:
Offering price per share
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$
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0.27
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Net tangible book value per share as of September 30, 2017
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$
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0.14
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Increase per share attributable to the offering
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$
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0.03
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As adjusted net tangible book value per share after this offering
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$
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0.17
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Dilution per share to new investors
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$
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0.10
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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 14,022,741 shares outstanding as
of September 30, 2017, and excludes the following as of such date:
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2,072,999
shares of our common stock subject to options outstanding having a weighted average exercise price of $4.10 per share;
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100,456
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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380,561
shares of our common stock that have been reserved for issuance upon exercise of outstanding warrants, of which 283,470 warrants
have exercise prices ranging from $18.75 to $24.00, 77,790 warrants have an exercise price of $45.00, 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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PLAN
OF DISTRIBUTION
Maxim
Group LLC has agreed to act as our placement agent in connection with this offering. The placement agent is not purchasing or
selling any shares offered by this prospectus supplement and the accompanying base prospectus, but have arranged for the sale
of certain of the shares offered hereby through a direct securities purchase agreement entered into among the purchasers and us.
The offering price of the shares offered by this prospectus supplement and the accompanying base prospectus per share has been
determined based upon arm’s-length negotiations between the purchasers and us.
Commissions
and Expenses
We
have agreed to pay the placement agent an aggregate cash placement fee equal to 7.0% of the gross proceeds raised in this offering
and the concurrent private placement. Subject to compliance with FINRA Rule 5110(f)(2)(D), we also have agreed to reimburse all
reasonable out-of-pocket expenses of the placement agent actually incurred in connection with this offering, including but not
limited to the reasonable, actual and documented fees of the placement agent’s legal counsel, which expenses shall be limited
to, in the aggregate, $30,000. If the placement agent agreement terminates prior to the consummation of this offering, the placement
agent will be entitled to reimbursement for the actual, reasonable, documented and accountable fees and expenses of the placement
agent’s counsel and for such other out-of-pocket expenses as shall have been reasonably incurred by them in connection with
the placement agent agreement and this offering, which shall not exceed $30,000 in the aggregate.
Our
obligation to issue and sell shares to the purchasers is subject to the conditions set forth in the securities purchase agreement,
which may be waived by us at our discretion. A purchaser’s obligation to purchase shares is subject to the conditions set
forth in the securities purchase agreement as well, which may also be waived.
We
currently anticipate that the delivery of the shares will occur on or about December 22, 2017. At the closing, The Depository
Trust Company will credit the shares of common stock to the respective accounts of the purchasers or the transfer agent will issue
the shares to the purchasers in book-entry form, as elected by the purchasers in the securities purchase agreement.
Other
Terms
Our
executive officers and directors have agreed, subject to limited exceptions, for a period of 90 days after the date of this prospectus
supplement, not to offer, sell, contract to sell, pledge, grant any option to purchase any shares of common stock owned.
We
have also agreed that, for a period of 75 days after the closing of this offering and subject to certain exceptions set forth
under the securities purchase agreement, neither us nor any of our subsidiaries will issue, enter into any agreement to issue
or announce the issuance or proposed issuance of shares of our common stock or securities that would entitle the holder thereof
to acquire shares of our common stock.
Indemnification
We
have agreed to indemnify the placement agent against certain liabilities relating to or arising out of their activities under
the placement agent agreement, or to contribute to payments that the placement agent may be required to make in respect of those
liabilities.
Electronic
Distribution
This
prospectus supplement and the accompanying base prospectus may be made available in electronic format on websites or through other
online services maintained by the placement agent or by an affiliate. Other than this prospectus supplement and the accompanying
base prospectus, the information on the placement agent’s website and any information contained in any other website maintained
by the placement agent is not part of this prospectus supplement and the accompanying base prospectus or the registration statement
of which this prospectus supplement and the accompanying base prospectus form a part, has not been approved and/or endorsed by
us or the placement agent, and should not be relied upon by investors.
The
foregoing does not purport to be a complete statement of the terms and conditions of the placement agent’s engagement agreement
and the securities purchase agreement. A copy of the securities purchase agreement with the purchasers is included as an exhibit
to our Current Report on Form 8-K that will be filed with the SEC and incorporated by reference into the registration statement
of which this prospectus supplement and the accompanying base prospectus form a part. See “Information Incorporated by Reference;
Where You Can Find More Information.”
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.
The
placement agent 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.
Regulation
M Restrictions
The
placement agent may be deemed to be an underwriter within the meaning of Section 2(a)(11) of the Securities Act, and any
commissions received by them and any profit realized on the resale of the shares sold by them while acting as a principal might
be deemed to be underwriting discounts or commissions under the Securities Act. As an underwriter, the placement agent would be
required to comply with the requirements of the Securities Act and the Exchange Act, including, without limitation, Rule 415(a)(4)
under the Securities Act and Rule 10b-5 and Regulation M under the Exchange Act. These rules and regulations may limit the timing
of purchases and sales of shares by the placement agent acting as principals. Under these rules and regulations, the placement
agent:
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must
not engage in any stabilization activity in connection with our securities; and
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must
not bid for or purchase any of our securities or attempt to induce any person to purchase
any of our securities, other than as permitted under the Exchange Act, until they have
completed their participation in the distribution.
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PRIVATE
PLACEMENT TRANSACTION AND WARRANTS
In
a concurrent private placement, we are selling to each of the investors in this offering, for no additional consideration, one
Class A Warrant and one Class B Warrant for each share purchased for cash in this offering. The aggregate number of shares of
common stock exercisable pursuant to the Warrants is 10,600,000, subject to adjustment.
The
Warrants will be exercisable beginning on the Exercise Date, which is six months after the date of issuance of the common stock
sold hereunder, each at an exercise price of $0.315 per share, subject to adjustment.
The
Class A Warrants will expire on the eight-month anniversary of the date of issuance of the common stock sold hereunder. The Class
B Warrants will expire on the twelve-month anniversary of the date of issuance of the common stock sold hereunder.
The
exercise price and number of shares of common stock issuable upon the exercise of the Warrants will be subject to adjustment in
the event of any stock dividend and split, reverse stock split, recapitalization, reorganization or similar transaction, as described
in the Warrants.
The
Warrants and the Warrant Shares are not being registered under the Securities Act pursuant to the registration statement of which
this prospectus supplement and the accompanying base prospectus form a part and are not being offered pursuant to this prospectus
supplement and the accompanying base prospectus. The Warrants and the Warrant Shares are being offered pursuant to an exemption
from the registration requirement of the Securities.
After
the Exercise Date, if and only if there is no effective registration statement registering the applicable shares of common stock,
or no current prospectus available for such shares, the resale of the shares of common stock issuable upon exercise of the Warrants,
the purchasers may exercise the Warrants by means of a “cashless exercise.”
All
purchasers will be “accredited investors” as such term is defined in Rule 501(a) under the Securities Act.
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.
5,300,000
Shares of Common Stock
ATOSSA
GENETICS INC.
PROSPECTUS
SUPPLEMENT
Maxim
Group LLC
December
20, 2017
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