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TABLE OF CONTENTS
Table of Contents
Filed Pursuant to Rule 424(b)(5)
Registration No. 333-228149
The information contained in this preliminary prospectus supplement and the accompanying prospectus is not complete and may be changed. A registration statement relating to the
securities has been declared effective by the Securities and Exchange Commission. This preliminary prospectus supplement and the accompanying prospectus do not constitute an offer to sell these
securities and we are not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.
SUBJECT TO COMPLETION, DATED FEBRUARY 20, 2020
PRELIMINARY PROSPECTUS SUPPLEMENT
(To Prospectus dated November 14, 2018)
Shares of Common Stock
Agile Therapeutics, Inc. is offering shares of common stock.
Our
common stock is listed on The Nasdaq Capital Market under the symbol "AGRX". The last reported sale price of our common stock on The Nasdaq Capital Market on February 20, 2020 was $3.58 per
share.
Investing in our common stock involves a high degree of risk. See "Risk Factors" beginning on page S-6 and in the documents incorporated by reference in
this prospectus supplement.
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Per Share
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Total
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Public offering price
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Underwriting discounts and commissions(1)
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Offering proceeds to us, before expenses
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(1)
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We
refer you to the section entitled "Underwriting" beginning on page S-21 of this prospectus supplement for additional information regarding total
underwriter compensation.
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.
We
have granted the underwriters the right to purchase up to additional shares of common stock. The underwriters can exercise this
right at any time within 30 days after the
offering. If the
underwriters exercise their option in full, the total underwriting discounts and commissions payable by us will be $ , and the total proceeds to us, before expenses, will be
$ .
The
underwriters expect to deliver the shares of common stock to investors on or about February , 2020, subject to customary closing conditions.
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RBC CAPITAL MARKETS
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WILLIAM BLAIR
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OPPENHEIMER & CO.
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H.C. WAINWRIGHT & CO.
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MAXIM GROUP LLC
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JANNEY MONTGOMERY SCOTT
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The date of this prospectus supplement is February , 2020.
Table of Contents
TABLE OF CONTENTS
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ABOUT THIS PROSPECTUS SUPPLEMENT
This prospectus supplement and the accompanying prospectus form part of a registration statement on Form S-3 that we
filed with the Securities and Exchange Commission, or SEC, utilizing a "shelf" registration process. This document contains two parts. The first part consists of this prospectus supplement, which
provides you with specific information about this offering. The second part, the accompanying prospectus, provides 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, update or change information contained in the accompanying prospectus. To the
extent that any statement we make in this prospectus supplement is inconsistent with statements made in the accompanying
prospectus or any documents incorporated by reference herein or therein, the statements made in this prospectus supplement will be deemed to modify or supersede those made in the accompanying
prospectus and such documents incorporated by reference herein and therein. You should read this prospectus supplement and the accompanying prospectus, including the information incorporated by
reference herein and therein, and any related free writing prospectus that we have authorized for use in connection with this offering.
You
should rely only on the information that we have included or incorporated by reference in this prospectus supplement, the accompanying prospectus and any related free writing
prospectus that we may authorize to be provided to you. We have not authorized any dealer, salesman or other person to give any information or to make any representation other than those contained or
incorporated by reference in this prospectus supplement, the accompanying prospectus or any related free writing prospectus that we may authorize to be provided to you. You must not rely upon any
information or representation not contained or incorporated by reference in this prospectus supplement, the accompanying prospectus or any related free writing prospectus. This prospectus supplement,
the accompanying prospectus and any related free writing prospectus do not constitute an offer to sell or the solicitation of an offer to buy any securities other than the registered securities to
which they relate, nor do this prospectus supplement, the accompanying prospectus or any related free writing 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 in such jurisdiction.
You
should not assume that the information contained in this prospectus supplement, the accompanying prospectus or any related free writing prospectus is accurate on any date subsequent
to the date set forth on the front of the document or that any information we have incorporated by reference herein or therein is correct on any date subsequent to the date of the document
incorporated by reference, even though this prospectus supplement, accompanying prospectus or any related free writing prospectus is delivered, or securities are sold, on a later date.
Neither
we nor the underwriters have authorized anyone to provide any information or to make any representations other than those contained or incorporated by reference in this
prospectus supplement, the accompanying prospectus or in any free writing prospectuses we have authorized for use in connection with this offering. We take no responsibility for, and can provide no
assurance as to the reliability of, any other information that others may give you. This prospectus supplement and the accompanying prospectus together constitute an offer to sell only the securities
offered hereby, but only under circumstances and in jurisdictions where it is lawful
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to
do so. The information contained in this prospectus supplement, the accompanying prospectus and any free writing prospectuses that we have authorized for use in connection with this offering is
current only as of its date. Our business, financial condition, results of operations and prospects may have changed since those dates. You should read this prospectus supplement, the accompanying
prospectus, the documents incorporated by reference herein and therein, and any free writing prospectus that we have authorized for use in connection with this offering when making your investment
decision. You should also read and consider the information in the documents we have referred you to in the section of the accompanying prospectus entitled "Information Incorporated by Reference."
This
prospectus supplement contains or incorporates by reference summaries of certain provisions contained in some of the documents described herein, but reference is made to the actual
documents for complete information. All of the summaries are qualified in their entirety by the actual documents. Copies of some of the documents referred to herein have been or will be filed or have
been or will be incorporated by reference as exhibits to the registration statement of which this prospectus supplement forms a part, and you may obtain copies of those documents as described
in this prospectus supplement under the heading "Where You Can Find More Information."
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FORWARD-LOOKING STATEMENTS
This prospectus supplement, including the information incorporated by reference into our prospectus or this prospectus
supplement, contains, and any other prospectus supplement may contain, "forward-looking statements" within the meaning of Section 27A of the Securities Act and Section 21E of the
Securities Exchange Act of 1934, as amended, or the Exchange Act. You can identify these forward-looking statements by the use of words such as "outlook," "believes," "expects," "potential,"
"continues," "may," "will," "should," "seeks,"
"approximately," "predicts," "intends," "plans," "estimates," "anticipates" or the negative version of these words or other comparable words. These statements relate to future events or to our future
operating or financial performance and involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to be materially different from
any future results, performances or achievements expressed or implied by the forward-looking statements.
Some
of the factors that we believe could cause actual results to differ from those anticipated or predicted include:
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our ability to successfully launch and commercialize Twirla;
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our ability along with the ability of our third-party manufacturer, Corium International, Inc.'s, or Corium, to complete successfully
the scale-up of the commercial manufacturing process for Twirla, including the qualification and validation of equipment related to the expansion of Corium's manufacturing facility;
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the rate and degree of market acceptance of Twirla and any of our product candidates;
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the size and growth of the markets for Twirla and our product candidates and our ability to serve those markets;
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regulatory and legislative developments in the United States and foreign countries, which could include, among other things, a government
shutdown;
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our available cash and our ability to obtain additional funding to fund our business plan without delay and to continue as a going concern;
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the accuracy of our estimates regarding expenses, future revenues, capital requirements and needs for additional financing;
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our inability to timely obtain from our third-party manufacturer, Corium, sufficient quantities or quality of Twirla and our potential product
candidates or other materials required for a clinical trial or other tests and studies;
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the ability of Corium to produce commercial supply in quantities and quality sufficient to satisfy market demand for Twirla;
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the performance and financial condition of Corium or any of the suppliers to our third-party manufacturer;
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our ability to design and successfully complete a post-marketing long-term, prospective observational safety study comparing risks for venous
thromboembolism, or VTE, and arterial thromboembolism, or ATE, in new users of Twirla to new users of oral combined hormonal contraceptives, or CHCs, and new users of Xulane in U.S. women of
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We
may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements.
Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements we make. We have included important cautionary statements in
our prospectus or this prospectus supplement or in the documents incorporated by reference in our prospectus and this prospectus supplement, particularly in the "Risk Factors" section, that we believe
could cause actual results or events to differ materially from the forward-looking statements that we make. For a summary of such factors, please refer to the section entitled "Risk Factors" in our
prospectus and this prospectus supplement, as updated and supplemented by the discussion of risks and uncertainties under "Risk Factors" contained in any further supplements to our prospectus and in
our most recent annual report on Form 10-K, as revised or supplemented by our subsequent quarterly reports on Form 10-Q or our current reports on Form 8-K, as well as any
amendments thereto, as filed with the SEC and which are incorporated herein by reference. The information contained in this document is believed to be current as of the date of this document. We do
not intend to update any of the forward-looking statements after the date of this document to conform these statements to actual results or to changes in our expectations, except as required by law.
In
light of these assumptions, risks and uncertainties, the results and events discussed in the forward-looking statements contained in our prospectus or this prospectus supplement or in
any document incorporated herein by reference might not occur. Investors are cautioned not to place undue reliance on the forward-looking statements, which speak only as of the date of this prospectus
supplement or the date of the document incorporated by reference in this prospectus supplement. We are not under any obligation, and we expressly disclaim any obligation, to update
or alter any forward-looking statements, whether as a result of new information, future events or otherwise. All subsequent forward-looking statements attributable to us or to any person acting on our
behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section.
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SUMMARY
This summary highlights information contained in other parts of this prospectus supplement. Because it
is only a summary, it does not contain all of the information that you should consider before investing in shares of our common stock and it is qualified in its entirety by, and should be read in
conjunction with, the more detailed information appearing elsewhere in this prospectus supplement, the accompanying prospectus, any applicable free writing prospectus and the documents incorporated by
reference herein and therein. You should read all such documents carefully, especially the risk factors and our financial statements and the related notes included or incorporated by reference herein
or therein, before deciding to buy shares of our common stock. Unless the context requires otherwise, references in this prospectus to "Agile," "we," "us" and "our" refer to Agile
Therapeutics, Inc.
Company Overview
We are a women's healthcare company dedicated to fulfilling the unmet health needs of today's women. Twirla®
(levonorgestrel and ethinyl estradiol) transdermal system and our potential product candidates are designed to provide women with contraceptive options that offer greater convenience and facilitate
compliance. Twirla, our first and only approved product, is a once-weekly prescription combination hormonal contraceptive patch. Twirla is designed using our proprietary transdermal patch technology,
called Skinfusion®, designed with properties to optimize patch adhesion and patient wearability, which may help support compliance while, for the first time, delivering a dose of estrogen
consistent with commonly prescribed combined hormonal contraceptives, or CHCs. We believe there is an unmet market need for a contraceptive patch that is designed to deliver approximately 30 mcg of
estrogen and 120 mcg of progestin in a convenient dosage form that may support compliance in a non-invasive fashion.
Twirla
was approved for sale in the United States on February 14, 2020 as a method of contraception for use in women of reproductive potential with a body mass index, or BMI,
< 30 kg/m2 for whom a combined hormonal contraceptive is appropriate. Based on the observed relationship between efficacy and BMI in a Phase 3
clinical trial, Twirla's limitation of use instructs healthcare providers to consider Twirla's reduced effectiveness in women with a BMI ³ 25 to
<30 kg/m2 before prescribing. Twirla is contraindicated in women with a BMI ³ 30 kg/m2 because compared to
women with a lower BMI, women in this group had reduced effectiveness and may have a higher risk for venous thromboembolisms, or VTEs.
As
part of Twirla's approval, the U.S. Food and Drug Administration, or FDA, is requiring us to conduct a long-term prospective, observational post-marketing study comparing the risks
for VTE and arterial thromboembolism, or ATE, in new users of Twirla to new users of other CHCs. The FDA's requirement for Twirla is similar to another post-marketing study requirement for a recently
approved CHC. The final study report for the Twirla post-marketing study is scheduled to be submitted to the FDA in November 2032, with interim safety data reporting to the FDA due in November 2026.
We have also agreed to a small post-marketing commitment, or PMC, study to assess the residual drug content and strength of Twirla. The PMC study is similar to residual drug studies requested of patch
developers in the FDA's November 2019 draft guidance entitled Transdermal and Topical Delivery Systems — Product Development and Quality Considerations. We are evaluating the design
and cost of these post-marketing studies.
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With
the approval of Twirla we now plan to focus on our transition from a clinical development stage company to a commercial company. During 2020, we plan to begin the implementation of
our commercialization plan for Twirla and to manage the growth of our company. Our near term plan for the commercialization of Twirla includes:
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Activity
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Expected Timing
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Initiate coverage and reimbursement activities in the United States from third-party payors
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First Quarter 2020
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Initiate hiring of contract sales force
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Second Quarter 2020
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Complete pre-validation and validation of the commercial manufacturing process consistent with our approved marketing application
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Second Half 2020 with first shipment of product in the Fourth Quarter 2020.
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Our
short-term goal is to establish an initial franchise in the multi-billion-dollar U.S. hormonal contraceptive market built on approval of Twirla in the U.S. Our resources are
currently focused on the commercialization of Twirla. To that end, our goal is to begin the pre-validation and validation of the commercial manufacturing process in the first half of 2020, manufacture
three validation batches of Twirla and complete the validation process in the second half of 2020. At the same time, we will prepare for the availability of commercial product supply. In the first
quarter of 2020, we plan to initiate work with managed care and patient payors to gain market access for Twirla. In the second quarter of 2020, we plan to begin hiring and training an initial sales
team, which we estimate to be in the range of 70 to 100 persons. We intend to ship product to wholesalers in fourth quarter of 2020. We also expect to explore the advancement of our existing pipeline
and its possible expansion through business development activities.
Recent Developments
Perceptive Credit Agreement
In February 2020, we entered into a Credit Agreement and Guaranty with Perceptive Credit Holdings III, LP, or Perceptive, for a senior
secured term loan facility of up to $35 million, which we refer to as the Perceptive Credit Agreement. A first tranche of $5 million was funded on execution of the Perceptive Credit
Agreement. A second tranche of $15 million was funded as a result of the approval of Twirla by the FDA. Another $15 million tranche will be available upon the achievement of certain
revenue milestones. The facility will be interest only until the third anniversary of the closing date. We also granted Perceptive warrants to purchase 1,400,000 shares of our common stock.
FDA Approval of Twirla
On February 14, 2020, we announced that the FDA approved Twirla as a method of contraception for use in women of reproductive potential
with a BMI < 30 kg/m2 for whom a combined hormonal contraceptive is appropriate.
Corporate Information
Information concerning our business is contained in the documents that we file with the SEC as a reporting company under the
Securities Exchange Act of 1934, which are accessible at
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www.sec.gov, and on our website at www.agiletherapeutics.com. The information contained on, or that can be accessed through, our
website is not a part of this prospectus. Investors should not rely on any such information in deciding whether to purchase our common stock. We have included our website address in this prospectus
solely as an inactive textual reference.
Our
principal executive offices are located at 101 Poor Farm Road, Princeton, New Jersey 08540, and our telephone number is (609) 683-1880.
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THE OFFERING
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Common stock offered by us
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shares of common stock (or shares if the underwriters exercise
their option to purchase additional shares in full).
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Offering Price
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$ per share
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Total common stock to be outstanding after this offering
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shares
(or shares if the underwriters exercise their option to purchase additional shares in full).
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Option to purchase additional shares
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The underwriters have an option for a period of 30 days to purchase up
to additional shares of our common stock at the public offering price less underwriting discounts and commissions.
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Use of proceeds
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We intend to use the net proceeds of this offering to pursue the commercialization of Twirla, to explore the advancement of
our existing pipeline, and for working capital and other general corporate purposes. We may also use a portion of the net proceeds to invest in or acquire businesses or technologies that we believe are complementary to our own, although we have no
current plans, commitments or agreements with respect to any acquisitions as of the date of this prospectus supplement.
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Risk factors
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You should read the "Risk Factors" section of this prospectus supplement beginning on page S-6 and the documents
referred to therein for a discussion of factors to consider carefully before deciding to invest in shares of our common stock.
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Nasdaq Capital Market symbol
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AGRX
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The
number of shares of our common stock to be outstanding after this offering is based on 69,810,305 shares of our common stock outstanding as of December 31, 2019, and
excludes:
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7,192,357 shares of common stock issuable upon the exercise of outstanding options to purchase common stock as of December 31, 2019 at a
weighted average exercise price of $3.42 per share;
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2,170,175 shares of common stock reserved for future issuance under our 2014 Amended and Restated Incentive Compensation Plan as of
December 31, 2019;
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180,274 shares of common stock issuable upon the exercise of outstanding warrants as of December 31, 2019 at a weighted average exercise
price of $5.89 per share;
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1,400,000 shares of common stock issuable upon the exercise of outstanding warrants issued subsequent to December 31, 2019 at a weighted
average exercise price of $4.21 per share;
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1,830,555 shares of common stock issuable upon the exercise of outstanding options to purchase common stock issued subsequent to
December 31, 2019 at a weighted average exercise price of $2.83; and
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52,651 shares of common stock issuable upon the vesting of restricted stock units issued subsequent to December 31, 2019.
Except
as otherwise indicated herein, all information in this prospectus supplement, including the number of shares of common stock that will be outstanding after this offering, assumes
the following:
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no exercise by the underwriters' of their option to purchase additional shares in this offering; and
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no exercise of outstanding options or warrants after December 31, 2019.
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RISK FACTORS
An investment in our common stock involves a high degree of risk. Before deciding whether to invest in our common stock, you should carefully consider the risks
described below and those discussed under the Section captioned "Risk Factors" contained in our Annual Report on Form 10-K for the year ended December 31, 2019, as revised or
supplemented by our subsequent quarterly reports on Form 10-Q or our current reports on Form 8-K, each as filed with the SEC and which are incorporated by reference in this prospectus
supplement and the accompanying prospectus, together with other information in this prospectus supplement, the accompanying prospectus, the information and
documents incorporated by reference herein and therein, and in any free writing prospectus that we have authorized for use in connection with this offering. If any of these risks actually occurs, our
business, financial condition, results of operations or cash flow could be seriously harmed. This could cause the trading price of our common stock to decline, resulting in a loss of all or part of
your investment. Please also read carefully the section above entitled "Forward-Looking Statements."
Risks Related to This Offering
The price of our common stock may be volatile and fluctuate substantially, and you may not be able to resell
your shares at or above the public offering price.
The public offering price for our shares will be determined by negotiations between us and the representatives of the underwriters and may not
be indicative of prices that actually prevail in the trading market either before or after this offering. The market price for shares of our common stock may be subject to wide fluctuations in
response to many risk factors, including:
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Our failure to commercialize Twirla or develop and commercialize additional potential product candidates;
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Unanticipated efficacy, safety or tolerability concerns related to the use of Twirla;
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Regulatory actions with respect to Twirla;
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Inability to obtain adequate product supply of Twirla or inability to do so at acceptable prices;
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Adverse results or delays in our clinical trials for our potential product candidates;
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Changes in laws or regulations applicable to Twirla or any future potential product candidates, including but not limited to clinical trial
requirements for approvals, post-approval requirements, and product marketing, advertising, and promotional requirements and limitations;
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Actual or anticipated fluctuations in our financial condition and operating results;
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Actual or anticipated changes in our growth rate relative to our competitors;
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Competition from existing products or new products that may emerge;
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Announcements by us, our collaborators or our competitors of significant acquisitions, strategic partnerships, joint ventures, collaborations
or capital commitments;
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Failure to meet or exceed financial estimates and projections of the investment community or that we provide to the public;
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Issuance of new or updated research or reports by securities analysts;
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Fluctuations in the valuation of companies perceived by investors to be comparable to us;
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Share price and volume fluctuations attributable to inconsistent trading volume levels of our shares;
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Additions or departures of key personnel;
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Disputes or other developments related to proprietary rights, including patents, litigation matters and our ability to obtain patent protection
for our technologies;
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Announcement or expectation of additional debt or equity financing efforts;
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Sales of our common stock by us, our insiders or our other stockholders; and
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General economic and market conditions..
In
addition, the stock market has recently experienced significant volatility, particularly with respect to pharmaceutical and other life sciences company stocks. The volatility of such
stocks often does not relate to individual company performance. As we operate in a single industry, we are especially vulnerable to these factors to the extent that they affect our industry or our
product candidates or, to a lesser extent, our markets. In the past, securities class-action litigation has often been instituted against companies following periods of volatility in their stock
price. We may face securities class-action litigation if we fail to commercialize Twirla or cannot obtain regulatory approvals for our product candidates. Such litigation, if instituted against us,
could cause us to incur substantial costs to defend such claims and divert management's attention and resources, which could materially harm our financial condition and results of operations.
Management will have broad discretion as to the use of the proceeds from this offering, and we may not use
the proceeds effectively.
Our management will have broad discretion with respect to the use of proceeds of this offering, including for any of the purposes described in
the section of this prospectus supplement entitled "Use of Proceeds." You will be relying on the judgment of our
management regarding the application of the proceeds of this offering. The results and effectiveness of the use of proceeds are uncertain, and we could spend the proceeds in ways that you do not agree
with or that do not improve our results of operations or enhance the value of our common stock. Our failure to apply these funds effectively could have a material adverse effect on our business, delay
the development of our product candidates and cause the price of our common stock to decline.
You will experience immediate and substantial dilution in the net tangible book value per share of the common
stock you purchase.
Since the public offering price for our common stock in this offering is substantially higher than the net tangible book value per share of our
common stock outstanding prior to this offering, you will suffer immediate and substantial dilution in the net tangible book value of the common stock you purchase in this offering. Based on the
public offering price of $ per share, if you purchase shares in this offering, you will suffer immediate dilution of
$ per share in the net tangible book value of the
common stock. If the underwriters exercise their option to purchase
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additional
shares, you will experience additional dilution. See the section entitled "Dilution" below for a more detailed discussion of the dilution you will incur if you purchase shares in this
offering.
We have incurred operating losses in each year since our inception and expect to continue to incur
substantial losses for the foreseeable future. Management has concluded that these factors raise substantial doubt about our ability to continue as a going concern.
We have incurred losses in each year since our inception in December 1997. Our net loss was $18.6 million, $19.8 million and
$28.3 million for the years ended December 31, 2019, 2018 and 2017, respectively. As of December 31, 2019, we had an accumulated deficit of approximately $260.4 million. We
believe that our cash and cash equivalents as December 31, 2019,
along with the proceeds of the Perceptive Credit Agreement we have received to date, will be sufficient to meet our projected operating requirements through the end of 2020. They will not be
sufficient to fund our current and planned operations through the 12 months following the date on which our Annual Report on Form 10-K for the year ended December 31, 2019 was
filed, which raises substantial doubt about our ability to continue as a going concern. Substantial doubt about our ability to continue as a going concern may create negative reactions to the price of
our common stock and we may have a more difficult time obtaining financing in the future.
Specialty
pharmaceutical product development is a speculative undertaking, involves a substantial degree of risk and is a capital-intensive business. We expect to incur expenses without
corresponding revenues until we are able to sell Twirla in significant quantities, which may not happen. We have devoted most of our financial resources to research and development, including our
non-clinical development activities and clinical trial for Twirla. We expect we will need to incur additional expenses as we complete the qualification and validation of our commercial manufacturing
process consistent with our approved marketing application, initiate pre-launch commercial activities, commercially launch Twirla, advance our other potential product candidates and expand our
research and development programs. We will require additional capital to fund our operating needs beyond 2020, including among other items, the completion of our commercial plan for Twirla, which
primarily includes the aforementioned validation of our commercial manufacturing process, as well as the commercial launch of Twirla and advancing the development of our other potential product
candidates. We may not be able to obtain sufficient additional funding to continue our operations at planned levels and be forced to reduce, or even terminate, our operations. To date, we have
financed our operations primarily through sales of common stock, convertible preferred stock and convertible promissory notes and to a lesser extent, through term loans and government grants. Our
product candidates will require the completion of regulatory review, significant marketing efforts and substantial investment before they can provide us with any revenue.
We
expect that our expenses will increase as we prepare for the commercial launch of Twirla. As a result, we expect to continue to incur substantial losses for the foreseeable future,
and these losses may increase. We are uncertain when or if we will be able to achieve or sustain profitability. If we achieve profitability in the future, we may not be able to sustain profitability
in subsequent periods. Any failure to become and remain profitable would impair our ability to sustain operations and adversely affect the price of our common stock and our ability to raise additional
capital. We are significantly dependent on the success of Twirla, and if we do not achieve the commercial success of Twirla and/or are unable to obtain additional funding, we will need to
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reassess
our operating capital needs and may be unable to continue our operations at planned levels and be forced to reduce, or even terminate, our operations.
Our
forecast of the period of time through which our financial resources will be adequate to support our operating requirements is a forward- looking statement and involves risks and
uncertainties, and actual results could vary as a result of a number of factors, including the factors discussed elsewhere in this "Risk Factors" section and Part I, Item 1A "Risk
Factors" of our Annual Report on Form 10-K filed with the SEC on February 20, 2020, as revised or supplemented by our subsequent quarterly reports on Form 10-Q or our current
reports on Form 8-K, each as filed with the SEC. We have based this estimate on a number of assumptions that may prove to be wrong, and changing circumstances beyond our control may cause us to
consume capital more rapidly than we currently anticipate. Our inability to obtain additional funding when we need it could seriously harm our business.
A significant portion of our total outstanding shares is restricted from immediate resale but may be sold
into the market in the near future, which could cause the market price of our common stock to decline significantly, even if our business is doing well.
Sales of a substantial number of shares of our common stock in the public market could occur at any time. These sales, or the perception in the
market that the holders of a large number of shares of common stock intend to sell shares, could reduce the market price of our common stock. After this offering, we will
have shares
of common stock outstanding based on the 69,810,305 shares outstanding as of December 31, 2019 and assuming the issuance and sale of shares of our common stock in this offering. Of these
shares, shares are subject to a contractual lock-up with the underwriters for this offering for a period of 90 days following this offering. These shares can be sold, subject
to
any applicable volume limitations under federal securities laws, after the earlier of the expiration of, or release from, the 90-day lock-up period. Additionally, 8,426,750 shares held by our largest
shareholder were acquired in a private placement and are currently restricted securities. These shares, subject to any applicable volume limitations under federal securities laws, are eligible for
sale in the public market to the extent permitted by Rule 144 under the Securities Act of 1933, as amended, which we refer to as the Securities Act. The balance of our outstanding shares of
common stock may be freely sold in the public market at any time. Moreover, certain holders of our common stock have rights, subject to certain conditions, to require us to file registration
statements covering their shares or to include their shares in registration statements that we may file for ourselves or other stockholders.
In
addition, as of December 31, 2019, there were 7,192,357 shares subject to outstanding grants under our equity incentive plans, all of which shares we have registered under the
Securities Act, on a registration statement on Form S-8. These shares, once vested and issued upon exercise, will be able to be freely sold in the public market, subject to volume limits
applicable to affiliates and the lock-up agreements described above, to the extent applicable. Furthermore, as of the date of this prospectus, there were 1,580,274 shares subject to outstanding
warrants. These shares will become eligible for sale in the public market to the extent such warrants are exercised and to the extent permitted by Rule 144 under the Securities Act.
S-9
Table of Contents
Our ability to use net operating loss and tax credit carryforwards and certain built-in losses to reduce
future tax payments may be limited by provisions of the Internal Revenue Code, and may be subject to further limitation as a result of this offering.
Sections 382 and 383 of the Internal Revenue Code of 1986, as amended, or the Code, contain rules that limit the ability of a company
that undergoes an ownership change, which is generally any change in ownership of more than 50% of its stock over a three-year period, to utilize its net operating loss and tax credit carryforwards
and certain built-in losses recognized in years after the ownership change. These rules generally operate by focusing on ownership changes involving stockholders owning, directly or indirectly, 5% or
more of the stock of a company and any change in ownership arising from a new issuance of stock by the company. Generally, if an ownership change occurs, the yearly taxable income limitation on the
use of net operating loss and tax credit carryforwards and certain built-in losses is equal to the product of the applicable long-term tax exempt rate and the value of the company's stock immediately
before the ownership change. We may be unable to offset future taxable income, if any, with losses, or our tax liability with credits, before such losses and credits expire and therefore would incur
larger federal income tax liability.
In
addition, it is possible that the transactions relating to this offering, either on a standalone basis or when combined with future transactions, have caused or will cause us to
undergo one or more additional ownership changes. In that event, we generally would not be able to use our pre-change loss or credit carryovers or certain built-in losses prior to such ownership
change to offset future taxable income in excess of the annual limitations imposed by Sections 382 and 383. We have not
completed a study to assess whether an ownership change has occurred, or whether there have been multiple ownership changes since our inception.
S-10
Table of Contents
USE OF PROCEEDS
We estimate that the net proceeds from this offering will be approximately $ million, or approximately
$ million if the underwriters exercise their option to purchase additional shares in full, after deducting the underwriting discounts and commissions and the estimated
offering
expenses payable by us.
We
intend to use the net proceeds of this offering to pursue the commercialization of Twirla, to explore the advancement of our existing pipeline, and for working capital and other
general corporate purposes. We may also use a portion of the net proceeds to invest in or acquire
businesses or technologies that we believe are complementary to our own, although we have no current plans, commitments or agreements with respect to any acquisitions as of the date of this prospectus
supplement. Pending these uses, we plan to invest these net proceeds in investment-grade, interest bearing securities.
These
expected uses represent our intentions based upon our current plans and business conditions, which could change in the future as our plans and business conditions evolve. The
amounts and timing of our actual expenditures may vary significantly depending on numerous factors, including the progress of our development, the status of and results from future clinical trials,
and any unforeseen cash needs. As a result, our management will have broad discretion in the application of the net proceeds from this offering, and investors will be relying on the judgment of our
management regarding the application of the net proceeds from this offering. The timing and amount of our actual expenditures will be based on many factors, including cash flows from operations and
the anticipated growth of our business.
We
believe that our available funds following this offering will allow us to complete the pre-commercial activities and qualification and validation of our commercial manufacturing
process consistent with our approved marketing application in coordination with the commercialization of Twirla. We have based these estimates on assumptions that may prove to be wrong, and we could
use our available capital resources sooner than we currently expect. We expect that we will need to obtain additional funding in order to continue to operate our business beyond the commercial launch
of Twirla, if approved, including continued commercialization activities for Twirla.
DIVIDEND POLICY
We currently intend to retain all available funds and any future earnings for use in the operation of our business and do not
anticipate paying any dividends on our common stock in the foreseeable future. In addition, our Credit Agreement and Guaranty among us, the guarantors from time to time party thereto, the lenders from
time to time party thereto and Perceptive Credit Holdings III, LP, as a lender and as Administrative Agent for the lenders, contains, and any other loan facilities that we may enter into may
contain, restrictions on our ability to pay dividends. Subject to such restrictions, any future determination to declare dividends will be made at the discretion of our board of directors and will
depend on our financial condition, operating results, capital requirements, general business conditions and other factors that our board of directors may deem relevant.
S-11
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CAPITALIZATION
The following table sets forth our cash and cash equivalents and our capitalization as of December 31,
2019:
-
•
-
on an actual basis; and
-
•
-
on an as adjusted basis to reflect our issuance and sale
of shares of common stock in this offering at the public offering
price of $ per share, after deducting the underwriting discounts and commissions and estimated offering expenses payable by us.
You
should read this table together with our financial statements and the related notes incorporated by reference in this prospectus supplement and the sections entitled "Management's
Discussion and Analysis of Financial Condition and Results of Operations" included in our most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q, each as incorporated
by reference herein.
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|
|
|
|
|
|
|
|
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As of December 31, 2019
|
|
|
|
Actual
|
|
As Adjusted(1)
|
|
|
|
(in thousands, except share
and per share data)
(unaudited)
|
|
|
Cash and cash equivalents
|
|
$
|
34,479
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
Stockholders' equity:
|
|
|
|
|
|
|
|
|
Preferred stock, $0.0001 par value; 10,000,000 shares authorized, no shares issued and outstanding, actual or as adjusted
|
|
|
—
|
|
|
—
|
|
|
Common stock, $0.0001 par value; 150,000,000 shares authorized, 69,810,305 shares issued and outstanding, actual
or shares issued and outstanding as adjusted
|
|
|
7
|
|
|
|
|
|
Additional paid-in capital
|
|
|
306,108
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|
|
|
|
|
Accumulated deficit
|
|
|
(260,370
|
)
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|
|
|
|
|
|
|
|
|
|
|
|
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Total stockholders' equity
|
|
|
45,785
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|
|
|
|
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|
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|
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|
|
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|
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|
|
|
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Total capitalization
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|
$
|
45,785
|
|
|
|
|
|
|
|
|
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|
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|
|
|
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|
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|
|
|
|
|
|
|
-
(1)
-
The
as adjusted balance sheet data reflects the sale of shares of common stock offered by us in this offering at the public offering
price of
$ per share, after deducting the underwriting discounts and commissions and estimated offering expenses payable by us.
The
foregoing table and calculations are based on 69,810,305 shares of our common stock outstanding as of December 31, 2019, and
exclude:
-
•
-
7,192,357 shares of common stock issuable upon the exercise of outstanding options to purchase common stock as of December 31, 2019 at a
weighted average exercise price of $3.42 per share;
S-12
Table of Contents
-
•
-
2,170,175 shares of common stock reserved for future issuance under our 2014 Amended and Restated Incentive Compensation Plan as of
December 31, 2019;
-
•
-
180,274 shares of common stock issuable upon the exercise of outstanding warrants as of December 31, 2019 at a weighted average exercise
price of $5.89 per share;
-
•
-
1,400,000 shares of common stock issuable upon the exercise of outstanding warrants issued subsequent to December 31, 2019 at a weighted
average exercise price of $4.21 per share;
-
•
-
1,830,555 shares of common stock issuable upon the exercise of outstanding options to purchase common stock issued subsequent to
December 31, 2019 at a weighted average exercise price of $2.83; and
-
•
-
52,651 shares of common stock issuable upon the vesting of restricted stock units issued subsequent to December 31, 2019.
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DILUTION
If you invest in our common stock, your ownership interest will be diluted immediately to the extent of the difference between
the public offering price per share you will pay in this offering and the as adjusted net tangible book value per share of our common stock after this offering. Net tangible book value per share
represents our total tangible assets less total liabilities, divided by the number of shares of our common stock outstanding.
As
of December 31, 2019, our net tangible book value was $45.8 million, or $0.66 per share of common stock. After giving effect to our issuance and sale
of
shares of common stock in this offering at a public offering price of $ per share, net underwriting discounts and commissions and the estimated offering expenses payable by us,
the as
adjusted net tangible book value as of December 31, 2019 would have been $ , or $ per share. This
represents an immediate increase in as adjusted net tangible book
value to existing stockholders of $ per share and an immediate dilution to new investors purchasing common stock in this offering of
$ per share.
The
following table illustrates this per share dilution to the new investors purchasing shares of common stock in this offering:
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|
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Public offering price per share
|
|
|
|
|
$
|
|
|
|
Net tangible book value per share at December 31, 2019
|
|
$
|
0.66
|
|
|
|
|
|
Increase in net tangible book value per share attributable to new investors purchasing shares in this offering
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As adjusted net tangible book value per share after this offering
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dilution per share to new investors in this offering
|
|
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
If
the underwriters exercise their option to purchase additional shares in full, at the public offering price of $ per share, after deducting offering expenses payable by
us, the as adjusted net tangible book value will increase to $ per share, representing an immediate increase in net tangible book value to existing stockholders of
$ per
share and an immediate dilution in net tangible book value of $ per share to new investors.
The
foregoing table and calculations are based on 69,810,305 shares of our common stock outstanding as of December 31, 2019, and
exclude:
-
•
-
7,192,357 shares of common stock issuable upon the exercise of outstanding options to purchase common stock as of December 31, 2019 at a
weighted average exercise price of $3.42 per share;
-
•
-
2,170,175 shares of common stock reserved for future issuance under our 2014 Amended and Restated Incentive Compensation Plan as of
December 31, 2019;
-
•
-
180,274 shares of common stock issuable upon the exercise of outstanding warrants as of December 31, 2019 at a weighted average exercise
price of $5.89 per share;
-
•
-
1,400,000 shares of common stock issuable upon the exercise of outstanding warrants issued subsequent to December 31, 2019 at a weighted
average exercise price of $4.21 per share;
S-14
Table of Contents
-
•
-
1,830,555 shares of common stock issuable upon the exercise of outstanding options to purchase common stock issued subsequent to
December 31, 2019 at a weighted average exercise price of $2.83; and
-
•
-
52,651 shares of common stock issuable upon the vesting of restricted stock units issued subsequent to December 31, 2019.
S-15
Table of Contents
MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES TO
NON-U.S. HOLDERS
The following is a general discussion of the material U.S. federal income tax consequences of the acquisition, ownership and
disposition of our common stock by "Non-U.S. Holders" (as defined below). This discussion is a summary for general information purposes only and does not consider all aspects of U.S. federal income
taxation that may be relevant to particular Non-U.S. Holders in light of their individual circumstances or to certain types of Non-U.S. Holders subject to special tax rules under the Code, including
partnerships or other pass-through entities for U.S. federal income tax purposes, banks, financial institutions or other financial services entities, broker-dealers, insurance companies, tax-exempt
organizations, regulated
investment companies, real estate investment trusts, controlled foreign corporations, passive foreign investment companies, corporations that accumulate earnings to avoid U.S. federal income tax,
persons who use or are required to use mark-to-market accounting, persons that hold our shares as part of a "straddle," a "hedge" or a "conversion transaction," persons for whom our stock constitutes
"qualified small business stock" within the meaning of Section 1202 of the Code, certain former citizens or permanent residents of the U.S., or investors in pass-through entities. In addition,
this summary does not address the effects of any applicable gift or estate tax, and this summary does not address the potential application of the alternative minimum tax, Medicare contribution tax or
any tax considerations that may apply to Non-U.S. Holders of our common stock under state, local or non-U.S. tax laws or any other U.S. federal tax laws.
This
summary is based on the Code, and applicable Treasury Regulations, rulings, administrative pronouncements and decisions as of the date of this registration statement, all of which
are subject to change or differing interpretations at any time with possible retroactive effect. We have not sought, and will not seek, any ruling from the Internal Revenue Service, or the IRS, with
respect to the tax consequences discussed herein, and there can be no assurance that the IRS will not take a position contrary to the tax consequences discussed below or that any position taken by the
IRS would not be sustained. This discussion assumes that a Non-U.S. Holder will hold our common stock as a "capital asset" within the meaning of Section 1221 of the Code (generally, property
held for investment).
The
following discussion is for general information only and is not tax advice for any Non-U.S. Holder under its particular circumstances. Persons considering the purchase of our common
stock pursuant to this offering should consult their tax advisors concerning the U.S. federal income, estate and gift tax consequences of acquiring, owning and disposing of our common stock in light
of their particular situations as well as any consequences arising under the laws of any other taxing jurisdiction, including any state, local and non-U.S. tax consequences and the possible
application of tax treaties that might change the general provisions discussed below.
For
purposes of this discussion, the term "Non-U.S. Holder" means a beneficial owner of our shares that is not a partnership (or entity or arrangement treated as a partnership for U.S.
federal income tax purposes) or an entity that is treated as a disregarded entity for U.S. federal income tax purposes and is not:
-
•
-
an individual who is a citizen or resident of the U.S.;
S-16
Table of Contents
-
•
-
a corporation (or other entity treated as a corporation for U.S. federal income tax purposes) created or organized in the U.S. or under the
laws of the U.S. or of any state thereof or the District of Columbia;
-
•
-
an estate, the income of which is subject to U.S. federal income tax regardless of its source; or
-
•
-
a trust if (1) a U.S. court can exercise primary supervision over the trust's administration and one or more U.S. persons have the
authority to control all of the trust's substantial decisions or (2) the trust has a valid election in effect under applicable U.S. Treasury Regulations to be treated as a U.S. person for U.S.
federal income tax purposes.
If
a partnership (or entity or arrangement treated as a partnership for U.S. federal income tax purposes) or an entity that is treated as a disregarded entity for U.S. federal income tax
purposes (regardless of its place of organization or formation) is a beneficial owner of our common stock, the tax treatment of a partner in the partnership or the owner of the disregarded entity will
generally depend upon the status of the partner or the owner of the disregarded entity and the activities of the partnership or the disregarded entity. If you are a partner of a partnership holding
our common stock or the owner of a disregarded entity holding our common stock, you should consult your tax advisor regarding the tax consequences of the purchase, ownership, and disposition of our
common stock.
PROSPECTIVE
INVESTORS SHOULD CONSULT THEIR TAX ADVISORS REGARDING THE PARTICULAR U.S. FEDERAL INCOME TAX CONSEQUENCES TO THEM OF ACQUIRING, OWNING AND DISPOSING OF OUR COMMON STOCK, AS
WELL AS ANY
TAX CONSEQUENCES ARISING UNDER ANY STATE, LOCAL OR FOREIGN TAX LAWS AND ANY OTHER U.S. FEDERAL TAX LAWS.
Distributions on Our Common Stock
In general, distributions, if any, paid to a Non-U.S. Holder (to the extent paid out of our current or accumulated earnings and profits, as
determined under U.S. federal income tax principles) will constitute dividends and be subject to U.S. withholding tax at a rate equal to 30% of the gross amount of the dividend, or a lower rate
prescribed by an applicable income tax treaty, unless the dividends are effectively connected with a trade or business carried on by the Non-U.S. Holder within the U.S. Any distribution not
constituting a dividend (because such distribution exceeds our current and accumulated earnings and profits) will be treated first as reducing the Non-U.S. Holder's basis in its shares of common
stock, but not below zero, and to the extent it exceeds the Non-U.S. Holder's basis, as capital gain and will be treated as described below under "Gain on Sale, Exchange or Other Disposition of Our
Common Stock".
A
Non-U.S. Holder who claims the benefit of an applicable income tax treaty generally will be required to satisfy certain certification and other requirements prior to the distribution
date. Non-U.S. Holders must generally provide the withholding agent with a properly executed IRS Form W-8BEN, Form W-8BEN-E or other appropriate form claiming an exemption from or
reduction in withholding under an applicable income tax treaty. This certification must be updated periodically. If a Non-U.S. Holder holds our common stock through a financial institution or other
agent acting on the Non-U.S. Holder's behalf, the Non-U.S. Holder will be required to provide appropriate documentation to the agent, who then will be required to provide certification to us
S-17
Table of Contents
or
our paying agent, either directly or through other intermediaries. If tax is withheld in an amount in excess of the amount applicable under an income tax treaty, a refund of the excess amount may
generally be obtained by timely filing an appropriate claim for refund with the IRS. Non-U.S. Holders should consult their tax advisors regarding their entitlement to benefits under an applicable
income tax treaty.
Dividends
that are effectively connected with a Non-U.S. Holder's conduct of a U.S. trade or business (and, if required by an applicable income tax treaty, attributable to a U.S.
permanent establishment or fixed base of the Non-U.S. Holder) generally will not be subject to U.S. withholding tax if the Non-U.S. Holder provides the withholding agent with the required forms,
including IRS Form W-8ECI, but instead generally will be subject to U.S. federal income tax on a net income basis at the regular graduated rates in the same manner as if the Non-U.S. Holder
were a resident of the U.S. A corporate Non-U.S. Holder that receives effectively connected dividends may also be subject to an additional branch profits tax at a rate of 30% (or a lower rate
prescribed by an applicable income tax treaty) of its effectively connected earnings and profits for the taxable year, as adjusted for certain items.
Gain on Sale, Exchange or Other Disposition of Our Common Stock
In general, a Non-U.S. holder will not be subject to any U.S. federal income tax or withholding tax on any gain realized upon such holder's
sale, exchange or other disposition of shares of our common stock unless:
(i) the
gain is effectively connected with a trade or business carried on by the Non-U.S. Holder within the U.S. (and, if required by an applicable income tax treaty,
attributable to a U.S. permanent establishment or fixed base of the Non-U.S. Holder);
(ii) the
Non-U.S. Holder is an individual who is present in the U.S. for 183 days or more in the taxable year of disposition and certain other conditions are met; or
(iii) we
are or have been a "United States real property holding corporation" for U.S. federal income tax purposes at any time during the shorter of the five-year period
ending on the date of disposition or the period that the Non-U.S. Holder held the common stock, and, in the case where shares of our common stock are regularly traded on an established securities
market, the Non-U.S. Holder owns, or is treated as owning, more than five percent of our common stock at any time during the foregoing period.
Net
gain realized by a Non-U.S. Holder described in clause (i) above generally will be subject to U.S. federal income tax in the same manner as if the Non-U.S. Holder were a U.S.
person. Any
gains of a corporate Non-U.S. Holder described in clause (i) above may also be subject to an additional branch profits tax at a 30% rate, or such lower rate as may be specified by an applicable
income tax treaty.
Gain
realized by an individual Non-U.S. Holder described in clause (ii) above will be subject to a flat 30% (or such lower rate specified by an applicable income tax treaty) tax,
which gain may be offset by certain U.S. source capital losses, even though the individual is not considered a resident of the U.S., provided that the Non-U.S. Holder has timely filed U.S. federal
income tax returns with respect to such losses.
S-18
Table of Contents
For
purposes of clause (iii) above, a corporation is a "United States real property holding corporation" if the fair market value of its U.S. real property interests equals or
exceeds 50% of the sum of the fair market value of its worldwide real property interests plus its other assets used or held for use in a trade or business. We believe that we are not, and we do not
anticipate that we will become, a United States real property holding corporation. However, because the determination of whether we are a United States real property holding corporation depends on the
fair market value of our U.S. real property interests relative to the fair market value of our other business assets, there can be no assurance that we will not become a United States real property
holding corporation in the future. If we become a United States real property holding corporation, as long as our common stock is regularly traded on an established securities market, our common stock
will be treated as a U.S. real property interest only with respect to a Non-U.S. Holder that actually or constructively held more than 5% of our common stock at any time during the shorter of the two
periods described in clause (iii), above. If gain on the sale or other taxable disposition of our common stock were subject to taxation under clause (iii) above, the Non-U.S. Holder
would be subject to regular U.S. federal income tax with respect to such gain in generally the same manner as a U.S. person.
Information Reporting and Backup Withholding
Generally, we must report annually to the IRS and to each Non-U.S. Holder the amount of dividends paid, the name and address of the recipient,
and the amount, if any, of
tax withheld. These information reporting requirements apply even if withholding was not required because the dividends were effectively connected with the Non-U.S. Holder's conduct of a trade or
business within the U.S. or withholding was reduced by an applicable income tax treaty. Under applicable income tax treaties or other agreements, the IRS may make its reports available to the tax
authorities in the Non-U.S. Holder's country of residence.
Dividends
paid to a Non-U.S. Holder that is not an exempt recipient generally will be subject to backup withholding, currently at a rate of 24%, unless the Non-U.S. Holder certifies to
the withholding agent as to its foreign status, which certification may generally be made on IRS Form W-8BEN, Form W-8BEN-E or other appropriate version of IRS Form W-8.
Notwithstanding the foregoing, backup withholding may apply if either we or our paying agent has actual knowledge, or reason to know, that the holder is a U.S. person that is not an exempt recipient.
Proceeds
from the sale or other disposition of common stock by a Non-U.S. Holder effected by or through a U.S. office of a broker will generally be subject to information reporting and
backup withholding, currently at a rate of 24%, unless the Non-U.S. Holder certifies to the withholding agent under penalties of perjury as to, among other things, its name, address and status as a
Non-U.S. Holder or otherwise establishes an exemption. Payment of disposition proceeds effected outside the U.S. by or through a non-U.S. office of a non-U.S. broker generally will not be subject to
information reporting or backup withholding if the payment is not received in the U.S. Information reporting, but generally not backup withholding (provided the broker does not have actual knowledge
or reason to know that the holder is a U.S. person that is not an exempt recipient), will apply to such a payment if the broker has certain connections with the U.S. unless the broker has documentary
evidence in its records that the beneficial owner thereof is a Non-U.S. Holder and specified conditions are met or an exemption is otherwise established.
S-19
Table of Contents
Backup
withholding is not an additional tax. Any amount withheld under the backup withholding rules from a payment to a Non-U.S. Holder that results in an overpayment of taxes generally
will be refunded, or credited against the holder's U.S. federal income tax liability, if any, provided that the required information is timely furnished to the IRS.
Foreign Accounts
A U.S. federal withholding tax of 30% may apply to dividends of our common stock paid to a "foreign financial institution" (as specially defined
under applicable rules) unless such institution enters into an agreement with the U.S. government to withhold on certain payments and to collect and provide to the U.S. tax authorities substantial
information regarding certain U.S. account holders of such institution (which includes certain equity and debt holders of such institution, as well as certain account holders that are foreign entities
with U.S. owners). This U.S. federal withholding tax of 30% will also apply to payments of dividends paid to a "non-financial foreign entity" (as specially defined under applicable rules) unless such
entity either certifies it does not have any substantial U.S. owners or provides the withholding agent with a certification identifying substantial direct and indirect U.S. owners of the entity. While
such withholding tax would have applied also to payments of gross proceeds from the sale or other disposition on or after January 1, 2019 of our common stock, recently proposed Treasury
Regulations eliminate such withholding on payments of gross proceeds entirely. Taxpayers generally may rely on these proposed Treasury Regulations until final Treasury Regulations are issued. The
withholding tax described above will not apply if the foreign financial institution or non-financial foreign entity otherwise qualifies for an exemption from the rules. Under certain circumstances, a
Non-U.S. Holder might be eligible for refunds or credits of such taxes. The U.S. has entered into agreements with certain countries that modify these general rules for entities located in those
countries. Prospective investors are encouraged to consult with their tax advisors regarding the possible implications of these withholding provisions on their investment in our common stock.
S-20
Table of Contents
UNDERWRITING
Underwriting
We entered into an underwriting agreement with the underwriters named below on , 2020. RBC
Capital Markets, LLC, William
Blair & Company, L.L.C. and Oppenheimer & Co. Inc. are acting as the representatives of the underwriters. Subject to the terms and conditions stated in the underwriting agreement
dated the date of this prospectus supplement, each underwriter named below has severally and not jointly agreed to purchase, and we have agreed to sell to that underwriter, the number of shares set
forth opposite the underwriter's name.
|
|
|
|
|
|
|
Underwriter
|
|
Number of
Shares
|
|
|
RBC Capital Markets, LLC
|
|
|
|
|
|
William Blair & Company, L.L.C.
|
|
|
|
|
|
Oppenheimer & Co. Inc.
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
|
The
underwriting agreement provides that the obligations of the underwriters to purchase the shares included in this offering are subject to approval of legal matters by counsel and to
other conditions. The underwriters are obligated to purchase all the shares (other than those covered by the underwriters' option to purchase additional shares option described below) if they purchase
any of the shares.
Shares
sold by the underwriters to the public will initially be offered at the initial public offering price set forth on the cover of this prospectus supplement. Any shares sold by the
underwriters to securities dealers may be sold at a discount from the initial public offering price not to exceed $ per share. If all the shares are not sold at the initial
offering
price, the underwriters may change the offering price and the other selling terms.
Underwriting discounts and commissions
The following table shows the underwriting discounts and commissions that we are to pay to the underwriters in connection with this offering.
These amounts are shown
assuming both no exercise and full exercise of the underwriters' option to purchase additional shares.
|
|
|
|
|
|
|
|
|
|
|
Paid by the Company
|
|
|
|
No Exercise
|
|
Full Exercise
|
|
|
Per share
|
|
$
|
|
|
$
|
|
|
|
Total
|
|
$
|
|
|
$
|
|
|
Indemnification
We have agreed to indemnify the underwriters against certain liabilities, including liabilities under the Securities Act, or to contribute to
payments the underwriters may be required to make because of any of those liabilities.
S-21
Table of Contents
Option to Purchase Additional Shares
We have granted to the underwriters an option, exercisable for 30 days from the date of this prospectus supplement, to purchase up to
additional shares at the public offering price less the underwriting discounts and commissions. To the
extent the option is exercised, each underwriter must purchase a number of
additional shares approximately proportionate to that underwriter's initial purchase commitment. Any shares issued or sold under the option will be issued and sold on the same terms and conditions as
the other shares that are the subject of this offering.
Lock-Ups
We and our officers and directors have agreed that, for a period of 90 days from the date of this prospectus supplement, we and they will
not, without the prior written consent of RBC Capital Markets, LLC, dispose of or hedge any shares or any securities convertible into or exchangeable for our common stock, subject to limited
exceptions. RBC Capital Markets, LLC in its sole discretion may release any of the securities subject to these lock-up agreements at any time without notice.
NASDAQ Capital Market Listing
The shares are listed on the The Nasdaq Capital Market under the symbol "AGRX."
Expenses and Reimbursements
We estimate that our portion of the total expenses of this offering will be $ , which includes the fees and
expenses for which we
have agreed to reimburse the underwiters.
Price Stabilization, Short Positions and Penalty Bids
In connection with the offering, the underwriters may purchase and sell shares in the open market. Purchases and sales in the open market may
include short sales, purchases to cover short positions, which may include purchases pursuant to the underwriters' option to purchase additional shares, and stabilizing purchases.
-
•
-
Short sales involve secondary market sales by the underwriters of a greater number of shares than they are required to purchase in the
offering.
-
•
-
"Covered" short sales are sales of shares in an amount up to the number of shares represented by the underwriters' option to
purchase additional shares.
-
•
-
"Naked" short sales are sales of shares in an amount in excess of the number of shares represented by the underwriters' option to
purchase additional shares.
-
•
-
Covering transactions involve purchases of shares either pursuant to the underwriters' option to purchase additional shares or in the open
market in order to cover short positions.
-
•
-
To close a naked short position, the underwriters must purchase shares in the open market. A naked short position is more likely
to be created if the underwriters are
S-22
Table of Contents
-
•
-
Stabilizing transactions involve bids to purchase shares so long as the stabilizing bids do not exceed a specified maximum.
Purchases
to cover short positions and stabilizing purchases, as well as other purchases by the underwriters for their own accounts, may have the effect of preventing or retarding a
decline in the market price of the shares. They may also cause the price of the shares to be higher than the
price that would otherwise exist in the open market in the absence of these transactions. The underwriters may conduct these transactions on the The Nasdaq Capital Market, in the over-the-counter
market or otherwise. If the underwriters commence any of these transactions, they may discontinue them at any time.
In
addition, in connection with this offering, some of the underwriters (and selling group members, if any) may engage in passive market making transactions in the shares on The Nasdaq
Capital Market, prior to the pricing and completion of the offering. Passive market making consists of displaying bids on The Nasdaq Capital Market no higher than the bid prices of independent market
makers and making purchases at prices no higher than those independent bids and effected in response to order flow. Net purchases by a passive market maker on each day are limited to a specified
percentage of the passive market maker's average daily trading volume in the shares during a specified period and must be discontinued when that limit is reached. Passive market making may cause the
price of the shares to be higher than the price that otherwise would exist in the open market in the absence of those transactions. If the underwriters commence passive market making transactions,
they may discontinue them at any time.
Electronic Distribution
In connection with the offering, certain of the underwriters or securities dealers may distribute prospectuses by electronic means, such as
e-mail.
Other Relationships
The underwriters are full service financial institutions engaged in various activities, which may include securities trading, commercial and
investment banking, financial advisory, investment management, principal investment, hedging, financing and brokerage activities. The underwriters and their respective affiliates may, from time to
time, engage in transactions with and perform services for us in the ordinary course of their business for which they may receive customary fees and reimbursement of expenses. In the ordinary course
of their various business activities, the underwriters and their respective affiliates may make or hold a broad array of investments and actively trade debt and equity securities (or related
derivative
securities) and financial instruments (which may include bank loans and/or credit default swaps) for their own account and for the
S-23
Table of Contents
accounts
of their customers and may at any time hold long and short positions in such securities and instruments. Such investments and securities activities may involve securities and/or instruments
of ours or our affiliates. The underwriters and their affiliates may also make investment recommendations and/or publish or express independent research views in respect of such securities or
financial instruments and may hold, or recommend to clients that they acquire, long and/or short positions in such securities and instruments.
Sales Outside the United States
No action has been taken in any jurisdiction (except in the United States) that would permit a public offering of our common stock, or the
possession, circulation or distribution of this prospectus supplement or any other material relating to us or our common stock in any jurisdiction where action for that purpose is required.
Accordingly, the shares of common stock may not be offered or sold, directly or indirectly, and neither this prospectus supplement nor any other offering material or advertisements in connection with
our common stock 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
underwriters may arrange to sell the common stock offered hereby in certain jurisdictions outside the United States, either directly or through affiliates, where it is permitted to
do so.
European Economic Area
In relation to each Member State of the European Economic Area which has implemented the Prospectus Directive (each, a "Relevant Member State")
an offer to the public of our common shares may not be made in that Relevant Member State, except that an offer to the public in that Relevant Member State of our common shares may be made at any time
under the following exemptions under the Prospectus Directive:
-
(a)
-
to
any legal entity which is a qualified investor as defined in the Prospectus Directive;
-
(b)
-
to
fewer than 150 natural or legal persons (other than qualified investors as defined in the Prospectus Directive), subject to obtaining the prior consent of the
representative for any such offer; or
-
(c)
-
in
any other circumstances falling within Article 3(2) of the Prospectus Directive,
provided
that no such offer of shares of our common stock shall result in a requirement for the publication by us or any underwriter of a prospectus pursuant to Article 3 of the Prospectus
Directive.
For
the purposes of this provision, the expression an "offer to the public" in relation to our common shares in any Relevant Member State means the communication in any form and by any
means of sufficient information on the terms of the offer and our common shares to be offered so as to enable an investor to decide to purchase our common shares, as the same may be varied in that
Member State by any measure implementing the Prospectus Directive in that Member State, the expression "Prospectus Directive" means Directive 2003/71/EC (as amended), including by Directive
2010/73/EU, and includes any relevant implementing measure in the Relevant Member State.
S-24
Table of Contents
This
European Economic Area selling restriction is in addition to any other selling restrictions set out below.
United Kingdom
In the United Kingdom, this prospectus is only addressed to and directed as qualified investors who are (i) investment professionals
falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the Order); or (ii) high net worth entities and other persons to whom it may
lawfully be communicated, falling within Article 49(2)(a) to (d) of the Order (all such persons together being referred to as "relevant persons"). Any investment or investment activity
to which this prospectus relates is available only to relevant persons and will only be engaged with relevant persons. Any person who is not a relevant person should not act or relay on this
prospectus or any of its contents.
Hong Kong
The shares may not be offered or sold in Hong Kong by means of any document other than (i) in circumstances which do not constitute an
offer to the public within the meaning of the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap. 32 of the Laws of Hong Kong) ("Companies (Winding Up and Miscellaneous Provisions)
Ordinance") or which do not constitute an invitation to the public within the meaning of the Securities and Futures Ordinance (Cap. 571 of the Laws of Hong Kong) ("Securities and Futures Ordinance"),
or (ii) to "professional investors" as defined in the Securities and Futures Ordinance and any rules made thereunder, or (iii) in other circumstances which do not result in the document
being a "prospectus" as defined in the Companies (Winding Up and Miscellaneous Provisions) Ordinance, and no advertisement, invitation or document relating to the shares may be issued or may be in the
possession of any person for the purpose of issue (in each case whether in Hong Kong or
elsewhere), which is directed at, or the contents of which are likely to be accessed or read by, the public in Hong Kong (except if permitted to do so under the securities laws of Hong Kong) other
than with respect to shares which are or are intended to be disposed of only to persons outside Hong Kong or only to "professional investors" in Hong Kong as defined in the Securities and Futures
Ordinance and any rules made thereunder.
Singapore
This prospectus has not been registered as a prospectus with the Monetary Authority of Singapore. Accordingly, this prospectus and any other
document or material in connection with the offer or sale, or invitation for subscription or purchase, of the shares may not be circulated or distributed, nor may the shares be offered or sold, or be
made the subject of an invitation for subscription or purchase, whether directly or indirectly, to persons in Singapore other than (i) to an institutional investor (as defined under
Section 4A of the Securities and Futures Act, Chapter 289 of Singapore (the "SFA")) under Section 274 of the SFA, (ii) to a relevant person (as defined in
Section 275(2) of the SFA) pursuant to Section 275(1) of the SFA, or any person pursuant to Section 275(1A) of the SFA, and in accordance with the conditions specified in
Section 275 of the SFA or (iii) otherwise pursuant to, and in accordance with the conditions of, any other applicable provision of the SFA, in each case subject to conditions set forth
in the SFA.
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Table of Contents
Where
the shares are subscribed or purchased under Section 275 of the SFA by a relevant person which is a corporation (which is not an accredited investor (as defined in
Section 4A of the SFA)) the sole business of which is to hold investments and the entire share capital of which is owned by one or more individuals, each of whom is an accredited investor, the
securities (as defined in Section 239(1) of the SFA) of that corporation shall not be transferable for 6 months after that corporation has acquired the shares under Section 275 of
the SFA except: (1) to an institutional investor under Section 274 of the SFA or to a relevant person (as defined in Section 275(2) of the SFA), (2) where such transfer
arises from an offer in that corporation's securities pursuant to Section 275(1A) of the SFA, (3) where no consideration is or will be given for the transfer, (4) where the
transfer is by operation of law, (5) as specified in Section 276(7) of the SFA, or (6) as specified in Regulation 32 of the Securities and Futures (Offers of Investments)
(Shares and Debentures) Regulations 2005 of Singapore ("Regulation 32").
Where
the shares are subscribed or purchased under Section 275 of the SFA by a relevant person which is a trust (where the trustee is not an accredited investor (as defined in
Section 4A of the SFA)) whose sole purpose is to hold investments and each beneficiary of the trust is an accredited investor, the beneficiaries' rights and interest (howsoever described) in
that trust shall not be transferable for 6 months after that trust has acquired the shares under Section 275 of the SFA except: (1) to an institutional investor under
Section 274 of the SFA or to a relevant person (as defined in Section 275(2) of the SFA), (2) where such transfer arises from an offer that is made on terms that such rights or
interest are acquired at a consideration of not less than S$200,000 (or its equivalent in a foreign currency) for each transaction (whether such amount is to be paid for in cash or by exchange of
securities or other assets), (3) where no consideration is or will be given for the transfer, (4) where the transfer is by operation of law, (5) as specified in
Section 276(7) of the SFA, or (6) as specified in Regulation 32.
Japan
The securities have not been and will not be registered under the Financial Instruments and Exchange Act of Japan (Act No. 25 of 1948, as
amended), or the FIEA. The securities may not be offered or sold, directly or indirectly, in Japan or to or for the benefit of any resident of Japan (including any person resident in Japan or any
corporation or other entity organized under the laws of Japan) or to others for reoffering or resale, directly or indirectly, in Japan or to or for the benefit of any resident of Japan, except
pursuant to an exemption from the registration requirements of the FIEA and otherwise in compliance with any relevant laws and regulations of Japan.
Please note that the solicitation for newly-issued or secondary securities (each as described in Paragraph 2, Article 4 of the
FIEL) in relation to the shares of our common stock constitutes either a "QII only private placement" or a "QII only secondary distribution" (each as described in Paragraph 1,
Article 23-13 of the FIEA). Disclosure regarding any such solicitation, as is otherwise prescribed in Paragraph 1, Article 4 of the FIEA, has not been made in relation to the
shares of our common stock. The shares of our common stock may only be transferred to QIIs.
S-26
Table of Contents
Please note that the solicitation for newly-issued or secondary securities (each as described in Paragraph 2, Article 4 of the
FIEA) in relation to the shares of our common stock constitutes either a "small number private placement" or a "small number private secondary distribution" (each as is described in
Paragraph 4, Article 23-13 of the FIEA). Disclosure regarding any such solicitation, as is otherwise prescribed in Paragraph 1, Article 4 of the FIEA, has not been made in
relation to the shares of our common stock. The shares of our common stock may only be transferred en bloc without subdivision to a single investor.
Canada
The securities may be sold in Canada only to purchasers purchasing, or deemed to be purchasing, as principal that are accredited investors, as
defined in National Instrument 45-106 Prospectus Exemptions or subsection 73.3(1) of the Securities Act (Ontario), and are permitted clients, as defined in National
Instrument 31-103 Registration Requirements, Exemptions, and Ongoing Registrant Obligations. Any resale of the securities must be made in accordance with an exemption form, or in a transaction
not subject to, the prospectus requirements of applicable securities laws.
Securities
legislation in certain provinces or territories of Canada may provide a purchaser with remedies for rescission or damages if this offering memorandum (including any amendment
thereto) contains a misrepresentation, provided that the remedies for rescission or damages are exercised by the purchaser within the time limit prescribed by the securities legislation of the
purchaser's province or territory. The purchaser should refer to any applicable provisions of the securities legislation of the purchaser's province or territory of these rights or consult with a
legal advisor.
Pursuant
to section 3A.3 of National Instrument 33-105 Underwriting Conflicts (NI 33-105), the underwriters are not required to comply with the disclosure
requirements of NI 33-105 regarding underwriter conflicts of interest in connection with this offering.
Australia
No placement document, prospectus, product disclosure statement or other disclosure document has been lodged with the Australian Securities and
Investments Commission ("ASIC"), in relation to the offering. This prospectus does not constitute a prospectus, product disclosure statement or other disclosure document under the Corporations Act
2001 (the "Corporations Act"), and does not purport to include the information required for a prospectus, product disclosure statement or other disclosure document under the Corporations Act.
Any
offer in Australia of the shares may only be made to persons (the "Exempt Investors") who are "sophisticated investors" (within the meaning of section 708(8) of the
Corporations Act), "professional investors" (within the meaning of section 708(11) of the Corporations Act) or otherwise pursuant to one or more exemptions contained in section 708 of
the Corporations Act so that it is lawful to offer the shares without disclosure to investors under Chapter 6D of the Corporations Act.
S-27
Table of Contents
The
shares applied for by Exempt Investors in Australia must not be offered for sale in Australia in the period of 12 months after the date of allotment under the offering, except
in circumstances where disclosure to investors under Chapter 6D of the Corporations Act would not be required pursuant to an exemption under section 708 of the Corporations Act or
otherwise or where the offer is pursuant to a disclosure document which complies with Chapter 6D of the Corporations Act. Any person acquiring shares must observe such Australian on-sale
restrictions.
This
prospectus contains general information only and does not take account of the investment objectives, financial situation or particular needs of any particular person. It does not
contain any
securities recommendations or financial product advice. Before making an investment decision, investors need to consider whether the information in this prospectus is appropriate to their needs,
objectives and circumstances, and, if necessary, seek expert advice on those matters.
Switzerland
The shares may not be publicly offered in Switzerland and will not be listed on the SIX Swiss Exchange ("SIX") or on any other stock exchange or
regulated trading facility in Switzerland. This document has been prepared without regard to the disclosure standards for issuance prospectuses under art. 652a or art. 1156 of the Swiss Code of
Obligations or the disclosure standards for listing prospectuses under art. 27 ff. of the SIX Listing Rules or the listing rules of any other stock exchange or regulated trading facility in
Switzerland. Neither this document nor any other offering or marketing material relating to the shares or the offering may be publicly distributed or otherwise made publicly available in Switzerland.
Neither
this document nor any other offering or marketing material relating to the offering, the Company, the shares have been or will be filed with or approved by any Swiss regulatory
authority. In particular, this document will not be filed with, and the offer of shares will not be supervised by, the Swiss Financial Market Supervisory Authority FINMA (FINMA), and the offer of
shares has not been and will not be authorized under the Swiss Federal Act on Collective Investment Schemes ("CISA"). The investor protection afforded to acquirers of interests in collective
investment schemes under the CISA does not extend to acquirers of shares.
Israel
This document does not constitute a prospectus under the Israeli Securities Law, 5728-1968, or the Securities Law, and has not been filed with
or approved by the Israel Securities Authority. In the State of Israel, this document is being distributed only to, and is directed only at, and any offer of the securities hereunder is directed only
at, (i) a limited number of persons in accordance with the Securities Law and (ii) investors listed in the first addendum, or the Addendum, to the Securities Law, consisting primarily of
joint investment in trust funds, provident funds, insurance companies, banks, portfolio managers, investment advisors, members of the Tel Aviv Stock Exchange, underwriters, venture capital funds,
entities with equity in excess of NIS 50 million and "qualified individuals," each as defined in the Addendum (as it may be amended from time to time), collectively referred to as qualified
investors (in each case purchasing
for their own account or, where permitted under the Addendum, for the accounts of their clients who are investors listed in the Addendum). Qualified investors will be required to submit written
confirmation that they fall within the scope of the Addendum, are aware of the meaning of same and agree to it.
S-28
Table of Contents
LEGAL MATTERS
The validity of the common stock being offered in this offering will be passed upon for us by Morgan, Lewis &
Bockius LLP, Princeton, New Jersey. Certain legal matters related to this offering will be passed upon for the underwriters by Goodwin Proctor LLP, New York, New York.
EXPERTS
The financial statements of Agile Therapeutics, Inc. appearing in Agile Therapeutics, Inc.'s Annual Report
(Form 10-K) for the year ended December 31, 2019 have been audited by Ernst & Young LLP, independent registered public accounting firm, as set forth in their report
thereon, included therein, and incorporated herein by reference. Such financial statements are incorporated herein by reference in reliance upon such report given on the authority of such firm as
experts in accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
This prospectus supplement and the accompanying prospectus form part of a registration statement on Form S-3 that we
filed with the SEC. This prospectus supplement and the accompanying prospectus do not contain all of the information set forth in the registration statement and the exhibits to the registration
statement or the documents incorporated by reference herein and therein. For further information with respect to us and the securities that we are offering under this prospectus supplement, we refer
you to the registration statement and the exhibits and schedules filed as a part of the registration statement and the documents incorporated by reference herein and therein. You should rely only on
the information contained in this prospectus supplement or the accompanying prospectus or incorporated by reference herein or therein. We have not authorized anyone else to provide you with different
information. We are not making an offer of these securities in any state where the offer is not permitted. You should not assume that the information in this prospectus is accurate as of any date
other than the date on the front page of this prospectus supplement, regardless of the time of delivery of this prospectus supplement or any sale of the securities offered hereby. We file annual,
quarterly and current reports, proxy statements and other information with the SEC. The SEC maintains a website that contains reports, proxy statements and other information regarding issuers that
file electronically with the SEC, including Agile Therapeutics. The address of the SEC website is www.sec.gov.
We
maintain a website at www.agiletherapeutics.com. Information contained in or accessible through our website does not constitute a part
of this prospectus.
S-29
Table of Contents
INFORMATION INCORPORATED BY REFERENCE
The SEC allows us to "incorporate by reference" information into this prospectus supplement, which means that we can disclose
important information to you by referring you to another document filed separately with the SEC. The SEC file number for the
documents incorporated by reference in this prospectus is 001-36464. The documents incorporated by reference into this prospectus supplement contain important information that you should read about
us.
The
following documents are incorporated by reference into this document:
-
•
-
our Annual Report on Form 10-K
for the fiscal year ended December 31, 2019 filed with the SEC on February 20, 2020;
-
•
-
those portions of our Definitive
Proxy Statement on Schedule 14A for our 2019 Annual Meeting of Stockholders filed with the SEC on April 25, 2019 that are incorporated by reference into our
Annual Report on Form 10-K for the fiscal year ended December 31,
2018;
-
•
-
the description of our Current Reports on Form 8-K filed with the SEC on
January 8, 2020; and
February 12, 2020; and
-
•
-
the description of our common stock, which is registered under Section 12 of the Exchange Act, in our registration statement on
Form 8-A, filed with the SEC on May 20, 2014, including any
amendments or reports filed for the purpose of updating such description.
We
also incorporate by reference into this prospectus all documents (other than current reports furnished under Item 2.02 or Item 7.01 of Form 8-K and exhibits filed
on such form that are related to such items) that are filed by us with the SEC pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this prospectus supplement
but prior to the termination of the offering. These documents include periodic reports, such as Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on
Form 8-K, as well as proxy statements.
We
will provide to each person, including any beneficial owner, to whom a prospectus is delivered, without charge upon written or oral request, a copy of any or all of the documents that
are incorporated by reference into this prospectus but not delivered with the prospectus, including exhibits which are specifically incorporated by reference into such documents. Requests should be
directed to: Agile Therapeutics, Inc., Attn: Investor Relations, 101 Poor Farm Road, Princeton, New Jersey 08540. Our telephone number is (609) 683-1880.
Any
statement contained herein or in a document incorporated or deemed to be incorporated by reference into this document will be deemed to be modified or superseded for purposes of the
document to the extent that a statement contained in this document or any other subsequently filed document that is deemed to be incorporated by reference into this document modifies or supersedes the
statement.
S-30
PROSPECTUS
$100,000,000
AGILE THERAPEUTICS, INC.
Common Stock
Preferred Stock
Warrants
Debt Securities
Rights to Purchase Common Stock, Preferred Stock,
Debt Securities or Units
Units
We may offer and sell from time to time our shares of common stock, shares of preferred stock, warrants, debt securities and rights to purchase
common stock, preferred stock, debt securities or units, as well as units that include any of these securities. We may sell any combination of these securities in one or more offerings with an
aggregate offering price of up to $100,000,000.
This
prospectus provides you with a general description of the securities we may offer. Each time we offer securities pursuant to this prospectus, we will provide a prospectus supplement
containing specific terms of the particular offering together with this prospectus. You should read this prospectus and the applicable prospectus supplement carefully before you invest in any
securities. The prospectus supplement also may add, update or change information contained in this prospectus. This prospectus may not be used to offer and sell securities unless accompanied by the
applicable prospectus supplement.
Our
common stock is listed on the Nasdaq Global Market under the symbol "AGRX." On November 1, 2018, the closing price of our common stock was $0.92.
The
aggregate market value of our outstanding common shares held by non-affiliates as of November 1, 2018 was approximately $31.2 million based on 34,377,329 shares of
common stock outstanding, of which 33,953,593 were held by non-affiliates, and a closing price on The Nasdaq Global Market of $0.92 (the closing price on November 1, 2018). Pursuant to General
Instruction I.B.6 of Form S-3, in no event will we sell securities registered on this registration statement in a public primary offering with a value exceeding more than one-third of
the aggregate market value of our voting and non-voting common equity held by non-affiliates in any 12-month period so long our public float remains below $75 million. During the 12 calendar
months prior to and including the date hereof, we have not offered any securities pursuant to General Instruction I.B.6 of Form S-3.
Investing in our securities involves significant risks. We strongly recommend that you read carefully the risks we describe in this prospectus and
in any accompanying prospectus supplement, as well as the risk factors that are incorporated by reference into this prospectus from our filings made with the Securities and Exchange Commission. See
"Risk Factors" on page 6 of this prospectus.
We may sell the securities directly or to or through underwriters or dealers, and also to other purchasers or through agents. The names of any
underwriters or agents that are included in a sale of securities to you, and any applicable commissions or discounts, will be stated in an accompanying prospectus supplement. In addition, the
underwriters, if any, may over-allot a portion of the securities.
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or
accuracy of this prospectus. Any representation to the contrary is a criminal offense.
The date of this prospectus is November 14, 2018
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ABOUT THIS PROSPECTUS
|
|
1
|
|
AGILE THERAPEUTICS, INC
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3
|
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FORWARD-LOOKING STATEMENTS
|
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5
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RISK FACTORS
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6
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RATIO OF EARNINGS TO FIXED CHARGES AND PREFERRED STOCK DIVIDEND REQUIREMENTS
|
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6
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USE OF PROCEEDS
|
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6
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DESCRIPTION OF CAPITAL STOCK
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7
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DESCRIPTION OF WARRANTS
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11
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DESCRIPTION OF DEBT SECURITIES
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13
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DESCRIPTION OF RIGHTS
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22
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DESCRIPTION OF UNITS
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24
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PLAN OF DISTRIBUTION
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25
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LEGAL MATTERS
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27
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EXPERTS
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27
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WHERE YOU CAN FIND MORE INFORMATION
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27
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INFORMATION INCORPORATED BY REFERENCE
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28
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ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we filed with the Securities and Exchange Commission, (the "SEC"), using a "shelf"
registration process. Under this shelf registration process, we may offer and sell from time to time any combination of the securities described in this prospectus in one or more offerings in amounts,
at prices and on terms that we determine at the time of the offering, with an aggregate offering price of up to $100,000,000. This prospectus provides you with a general description of the securities
we may offer. Each time we offer securities under this registration statement we will provide a prospectus supplement that describes the terms of the relevant offering. The prospectus supplement also
may add, update or change information contained in this prospectus. Before making an investment decision, you should read carefully both this prospectus and any prospectus supplement together with the
documents incorporated by reference into this prospectus as described below under the heading "Information Incorporated by Reference."
The
registration statement that contains this prospectus, including the exhibits to the registration statement and the information incorporated by reference, provides additional
information about us and our securities. That registration statement can be read at the SEC website (www.sec.gov) or at the SEC public reference room, as discussed below under the heading "Where You
Can Find More Information."
You
should rely only on the information provided in the registration statement, this prospectus and in any prospectus supplement, including the information incorporated by reference. We
have not authorized anyone to provide you with different information. You should not assume that the
information in this prospectus or any supplement to this prospectus is accurate at any date other than the date indicated on the cover page of these documents or the filing date of any document
incorporated by reference, regardless of its time of delivery. We are not making an offer to sell the securities in any jurisdiction where the offer or sale is not permitted.
We
may sell our securities to or through underwriters, initial purchasers, dealers or agents, directly to purchasers or through a combination of any of these methods of sale, as
designated from time to time. We and our agents reserve the sole right to accept or reject in whole or in part any proposed purchase of our securities. An applicable prospectus supplement, which we
will provide each time we offer the securities, will set forth the names of any underwriters, initial purchasers, dealers or agents involved in the sale of our securities, and any related fee,
commission or discount arrangements. See "Plan of Distribution."
The
terms "Agile," the "Company," "our," "us" and "we," as used in this prospectus, refer to Agile Therapeutics, Inc., unless we state otherwise or the context indicates
otherwise.
2
AGILE THERAPEUTICS, INC.
We are a forward-thinking women's healthcare company dedicated to fulfilling the unmet health needs of today's women. Twirla® and
our other current potential product candidates are designed to provide women with contraceptive options that offer greater convenience and facilitate compliance. Our lead product candidate, Twirla,
also known as AG200-15, is a once-weekly prescription contraceptive patch that is at the end of Phase 3 clinical development. Twirla is a combined hormonal contraceptive, or CHC, patch that
contains the active ingredients ethinyl estradiol, or EE, which is a synthetic estrogen, and levonorgestrel, or LNG, which is a type of progestin, a synthetic steroid hormone, both of which have an
established history of efficacy and safety in currently marketed combination low-dose, oral contraceptives.
We
have conducted a comprehensive clinical program, with completed Phase 1, Phase 2, and Phase 3 trials enrolling over 2,100 women, over 1,500 of whom received
Twirla. We have filed a Section 505(b)(2) New Drug Application, or NDA, for approval of Twirla by the U.S. Food and Drug Administration, or FDA, which is required before marketing a new drug in
the United States. Our 505(b)(2) NDA relies in part on clinical trials that we conducted and in part on the FDA's findings of safety and efficacy from investigations for approved products containing
the active ingredients and published scientific literature for which we have not obtained a right of reference. In December 2017, the FDA indicated in a Complete Response Letter, or 2017 CRL, that our
NDA was not sufficient for approval as submitted. In June 2018, we submitted a formal dispute resolution request, or FDRR, with the FDA for Twirla to appeal FDA's determination that concerns
surrounding the in vivo adhesion properties of Twirla prevent the approval of the NDA. In October 2018, OND formally denied our appeal and provided a
path forward for resubmission of the NDA for Twirla that may not require that we reformulate Twirla or conduct a bioequivalence study between formulations, as previously suggested by DBRUP in the
April 2018 Type A meeting. Specifically, OND suggested that we conduct a wear study to evaluate whether Twirla demonstrates a generally similar adhesion performance to Xulane®, the
generic version of the previously marketed Ortho Evra® contraceptive patch, a product the FDA considers to have acceptable adhesion. If this result is demonstrated, OND stated that the
study would support the conclusion of adequate Twirla adhesion. OND has recommended that we first meet with DBRUP to gain agreement on the specific design and success criteria of a wear study for
Twirla. The wear study suggested by OND to address adhesion provides a path forward for resubmission of the NDA for Twirla but is not intended to address efficacy. Rather, if the wear study is
successful, Twirla's safety and efficacy, including the Pearl Index that FDA noted is substantially higher than other previously approved combined hormonal contraceptives, will need to be reviewed by
FDA after we resubmit the NDA for Twirla. This is an issue that the FDA plans to bring to Advisory Committee after the adhesion issue has been resolved. We have submitted a request for a Type A
meeting and plan to discuss the specifics of the proposed wear study with the FDA at that meeting. Our plans to seek approval for Twirla are dependent on our planned meeting with the FDA on the
parameters of the wear study for Twirla and our ability to reach agreement with the FDA on the scope and size of the study. We can make no assurances that we can successfully complete the wear study
suggested by the FDA or that the results will demonstrate adequate adhesion of Twirla. If we are unable to successfully complete a wear trial of Twirla and Xulane to support the conclusion of adequate
Twirla adhesion, the FDA will likely require us to reformulate Twirla and conduct additional clinical or bioequivalence studies before we can resubmit the Twirla NDA.
In
addition to Twirla, we have a potential pipeline of other new transdermal contraceptive products, including AG200-ER, which is a regimen designed to allow a woman to extend the length
of her cycle, AG200-SP, which is a regimen designed to provide a shortened hormone-free interval, and AG890, which is a progestin-only contraceptive patch intended for use by women who are unable or
unwilling to take estrogen.
3
Our
principal executive offices are located at 101 Poor Farm Road, Princeton, New Jersey 08540, and our telephone number is (609) 683-1880. Our website address is
www.agiletherapeutics.com. The information contained on our website is not incorporated by reference into this prospectus, and you should not consider any information contained on, or that can be
accessed through, our website as part of this prospectus or in deciding whether to purchase our common stock.
Our
filings with the SEC are posted on our website at www.agiletherapeutics.com. The information found on our website is not part of this or any other report we file with or furnish to
the SEC. The public can also obtain copies of these filings by visiting the SEC's Public Reference Room at 100 F Street NE, Washington DC 20549, or by calling the SEC at 1-800-SEC-0330
or by accessing the SEC's website at www.sec.gov.
4
FORWARD-LOOKING STATEMENTS
From time to time, in reports filed with the Securities and Exchange Commission (including this prospectus), in press releases and in other
communications to stockholders or the investment community, we may provide forward-looking statements concerning possible or anticipated future results of operations or business developments. These
statements are based on our management's current expectations or predictions of future conditions, events or results based on various assumptions and our management's estimates of trends and economic
factors in the markets in which we are active, as well as our business plans. Words such as "expects," "anticipates," "intends,"
"plans," "believes," "seeks," "estimates," "projects," "forecasts," "may," "should," and variations of such words and similar expressions are intended to identify such forward-looking statements. The
forward-looking statements may include, without limitation, statements regarding product candidate development, product candidate potential, regulatory environment, sales and marketing strategies,
capital resources or operating performance. The forward-looking statements are subject to risks and uncertainties, which may cause results to differ materially from those set forth in the statements.
Forward-looking statements in this prospectus should be evaluated together with the many uncertainties that affect our business and our market, particularly those discussed in the "Risk Factors"
section of our Annual Report on Form 10-K for the year ended December 31, 2017 and our subsequent filings, which are incorporated by reference into this prospectus, to better understand
the risks and uncertainties inherent in our business and underlying any forward-looking statements. Forward-looking statements are not guarantees of future performance, and actual results may differ
materially from those projected. The forward-looking statements are representative only as of the date of this prospectus and except as required by law, we assume no responsibility to update any
forward-looking statements, whether as a result of new information, future events or otherwise.
You
should read this prospectus and the documents that we reference in this prospectus and have been filed as exhibits to the registration statement of which this prospectus is a part
completely and with the understanding that our actual future results may be materially different from what we expect. The information contained in this prospectus is accurate only as of the date of
this prospectus, regardless of the time of delivery of this prospectus or any issuance or sale of our common shares. Except as required by law, we do not assume any obligation to update any
forward-looking statements.
5
RISK FACTORS
Investing in our securities involves risk. You should carefully consider the specific risks discussed or incorporated by reference into the
applicable prospectus supplement, together with all the other information contained in the prospectus supplement or incorporated by reference into this prospectus and the applicable prospectus
supplement. You should also consider the risks, uncertainties and assumptions discussed under the caption "Risk Factors" included in our Annual Report on Form 10-K for the year ended
December 31, 2017 and in subsequent filings, which are incorporated by reference into this prospectus. These risk factors may be amended, supplemented or superseded from time to time by other
reports we file with the SEC in the future or by a prospectus supplement relating to a particular offering of our securities. These risks and uncertainties are not the only risks and uncertainties we
face. Additional risks and uncertainties not presently known to us, or that we currently view as immaterial, may also impair our business. If any of the risks or uncertainties described in our SEC
filings or any prospectus supplement or any additional risks and uncertainties actually occur, our
business, financial condition and results of operations could be materially and adversely affected. In that case, the trading price of our securities could decline and you might lose all or part of
your investment.
RATIO OF EARNINGS TO FIXED CHARGES AND PREFERRED STOCK DIVIDEND REQUIREMENTS
The following table sets forth our ratio of earnings to fixed charges and our ratio of earnings to combined fixed charges and preferred stock
dividends for each of the periods indicated. You should read this table in conjunction with the financial statements and notes incorporated by reference in this registration statement.
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Year Ended
December 31,
2017
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Year Ended
December 31,
2016
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Year Ended
December 31,
2015
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Year Ended
December 31,
2014
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Year Ended
December 31,
2013
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Ratios of earnings to fixed charges(1)(2)
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—
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—
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—
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Ratios of earnings to combined fixed charges and preferred stock dividends(1)(2)
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—
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—
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(1)
-
Due
to our losses for the years ended December 31, 2017, 2016, 2015, 2014 and 2013, the coverage ratio was less than 1:1.
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(2)
-
We
would have needed to generate additional earnings of $28.3 million, $31.8 million, $36.3 million, $19.7 million and
$14.3 million for the years ended December 31, 2017, 2016, 2015, 2014 and 2013, respectively, to cover our fixed charges and our combined fixed charges and preferred stock dividends in
those periods.
USE OF PROCEEDS
Unless otherwise indicated in the applicable prospectus supplement, we will use the net proceeds from the sale of the securities offered hereby
for general corporate purposes, which include, but are not limited to, providing financing for clinical trials, capital expenditures, additions to working capital, seeking regulatory approval for
Twirla, the commercial launch of Twirla, if and when it receives regulatory approval, scaling and validating our manufacturing process for commercial launch of Twirla, development of our product
candidate pipeline including Twirla line extensions, general and administrative expenses or other corporate obligations. We may use a portion of the net proceeds to pay off outstanding indebtedness,
if any, and/or acquire or invest in businesses, products and technologies.
6
DESCRIPTION OF CAPITAL STOCK
The following description is a general summary of the terms of the shares of common stock or shares of preferred stock that we may issue. The
description below and in any prospectus supplement does not include all of the terms of the shares of common stock or shares of preferred stock and should be read together with our Amended Restated
Certificate of Incorporation and Amended and Restated Bylaws, copies of which have been filed previously with the SEC. For more information on how you can obtain copies of our Amended and Restated
Certificate of Incorporation and Amended and Restated Bylaws, see "Where You Can Find More Information."
Common Stock
General
Our Amended and Restated Certificate of Incorporation provides the authority to issue 150,000,000 shares of common stock, par value $0.0001 per
share. At November 1, 2018, there were 34,377,329 shares of common stock outstanding. Each share of our common stock has the same relative rights and is identical in all respects to each other
share of our common stock. The rights, preferences and privileges of holders of our common stock are subject to the rights, preferences and privileges of the holders of shares of any series of
preferred stock that we have issued or may issue in the future.
Voting Rights
The holders of our common stock are entitled to one vote per share on any matter to be voted upon by our stockholders. Our Amended and Restated
Certificate of Incorporation, does not permit cumulative voting in connection with the election of directors.
Dividends
The holders of our common stock are entitled to dividends, if any, as our Board of Directors may declare from time to time from funds legally
available for that purpose, subject to the holders of other classes of stock, if any, at the time outstanding having prior rights as to dividends, if any.
Liquidation Rights
Upon any voluntary or involuntary liquidation, dissolution, or winding up of our affairs, the holders of our common stock are entitled to share
ratably in all assets remaining after the payment of creditors, subject to any prior liquidation distribution rights of holders of other classes of stock, if any, at the time outstanding.
Miscellaneous
Holders of our common stock have no preemptive, conversion, redemption or sinking fund rights. The outstanding shares of our common stock are,
and the shares of common stock to be offered hereby when issued will be, validly issued, fully paid and non-assessable.
Nasdaq Listing
Our common stock is listed on the Nasdaq Global Market under the symbol "AGRX."
Transfer Agent and Registrar
The transfer agent and registrar for our common stock is Broadridge Corporate Issuer Solutions, Inc. whose address is
P.O. Box 1342, Brentwood, NY 11717.
7
Preferred Stock
General
Our Amended and Restated Certificate of Incorporation authorizes the issuance of up to 10,000,000 shares of preferred stock, par value $0.0001
per share, none of which are issued and outstanding as of the date of this prospectus. We may issue, from time to time in one or more series, the terms of which may be determined at the time of
issuance by our board of directors, without further action by our stockholders, shares of preferred stock and such shares may include voting rights, preferences as to dividends and liquidation,
conversion rights, redemption rights and sinking fund provisions. The shares of each series of preferred stock shall have preferences, limitations and relative rights, including voting rights,
identical with those of other shares of the same series and, except to the extent provided in the description of such series, of those of other series of preferred stock.
The
issuance of any preferred stock could adversely affect the rights of the holders of common stock and, therefore, reduce the value of the common stock. The ability of our board of
directors to issue preferred stock could discourage, delay or prevent a takeover or change in control.
The
description of the terms of a particular series of preferred stock in the applicable prospectus supplement will not be complete. You should refer to the applicable certificate of
designation for complete information regarding a series of preferred stock. The prospectus supplement will also contain a description of U.S. federal income tax consequences relating to the preferred
stock, if material.
The
terms of any particular series of preferred stock will be described in the prospectus supplement relating to that particular series of preferred stock, including, where
applicable:
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the series designation, stated value and liquidation preference of such preferred stock and the number of shares offered;
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the offering price;
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the dividend rate or rates (or method of calculation), the date or dates from which dividends shall accrue, and whether such dividends shall be
cumulative or noncumulative and, if cumulative, the dates from which dividends shall commence to cumulate;
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any redemption or sinking fund provisions;
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the amount that shares of such series shall be entitled to receive in the event of our liquidation, dissolution or winding-up;
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the terms and conditions, if any, on which shares of such series shall be convertible or exchangeable for shares of our stock of any other
class or classes, or other series of the same class;
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the voting rights, if any, of shares of such series in addition to those set forth under the caption entitled, "Voting Rights" below;
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the status as to reissuance or sale of shares of such series redeemed, purchased or otherwise reacquired, or surrendered to us on conversion or
exchange;
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the conditions and restrictions, if any, on the payment of dividends or on the making of other distributions on, or the purchase, redemption or
other acquisition by us, of our common stock or of any other class of our stock ranking junior to the shares of such series as to dividends or upon liquidation (including, but not limited to, at such
times as there are arrearages in the payment of dividends or sinking fund installments);
8
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the conditions and restrictions, if any, on the creation of Company indebtedness, or on the issue of any additional stock ranking on a parity
with or prior to the shares of such series as to dividends or upon liquidation; and
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any additional dividend, liquidation, redemption, sinking or retirement fund and other rights, preferences, privileges, limitations and
restrictions of such preferred stock.
If
we issue shares of preferred stock under this prospectus and any related prospectus supplement, the shares will be fully paid and non-assessable and will not have, or be subject to,
any preemptive or similar rights.
Voting Rights
The General Corporation Law of Delaware provides that the holders of preferred stock will have the right to vote separately as a class on any
proposal involving fundamental changes in the rights of holders of that preferred stock. This right is in addition to any voting rights that may be provided for in the applicable certificate of
designation.
Transfer Agent and Registrar
The transfer agent and registrar for any series of preferred stock will be set forth in the applicable prospectus supplement.
Other
Our issuance of preferred stock could decrease the amount of earnings and assets available for distribution to the holders of common stock or
could adversely affect the rights and powers, including voting rights, of the holders of common stock. The issuance of preferred stock could have the effect of decreasing the market price of our
common stock.
Delaware Law and Certain Amended and Restated Certificate of Incorporation and Amended and Restated
Bylaws Provisions
Our Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws to be in effect upon completion of this offering contain
provisions that could delay or prevent a change of control of our company or changes in our board of directors that our stockholders might consider favorable. Some of these
provisions:
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Authorize the issuance of preferred stock which can be created and issued by the board of directors without prior stockholder approval, with
rights senior to those of our common stock;
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Provide for a classified board of directors, with each director serving a staggered three-year term;
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Prohibit our stockholders from filling board vacancies, calling special stockholder meetings or taking action by written consent;
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Provide for the removal of a director only with cause and by the affirmative vote of the holders of 75% or more of the shares then entitled to
vote at an election of our directors;
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Require advance written notice of stockholder proposals and director nominations; and
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Require any action instituted against our officers or directors in connection with their service to the Company to be brought in the state of
Delaware.
In
addition, we are subject to the provisions of Section 203 of the Delaware General Corporation Law, which may prohibit certain business combinations with stockholders owning 15%
or more of our
9
outstanding
voting stock. These and other provisions in our Amended and Restated Certificate of Incorporation, Amended and Restated Bylaws and Delaware law could make it more difficult for
stockholders or potential acquirors to obtain control of our board of directors or initiate actions that are opposed by our then-current board of directors, including a merger, tender offer or proxy
contest involving our company. This provision could have the effect of delaying or preventing a change of control, whether or not it is desired by or beneficial to our stockholders. Any delay or
prevention of a change of control transaction or changes in our board of directors could cause the market price of our common stock to decline.
Our Amended and Restated Certificate of Incorporation contains provisions permitted under the General Corporation Law of Delaware relating to
the liability of directors. The provisions eliminate, to the extent legally permissible, a director's liability for monetary damages for a breach of fiduciary duty, except in circumstances involving
wrongful acts, such as the breach of a director's duty of loyalty or acts or omissions that involve intentional misconduct or a knowing violation of law. The limitation of liability described above
does not alter the liability of our directors and officers under federal securities laws. Furthermore, our Amended and Restated Certificate of Incorporation contains provisions to indemnify our
directors and officers to the fullest extent permitted by the General Corporation Law of Delaware. These provisions do not limit or eliminate our right or the right of any stockholder of ours to seek
non-monetary relief, such as an injunction or rescission in the event of a breach by a director or an officer of his duty of care to us. We believe that these provisions assist us in attracting and
retaining qualified individuals to serve as directors.
10
DESCRIPTION OF WARRANTS
We may issue warrants for the purchase of shares of our common stock, shares of our preferred stock or debt securities. The following
description sets forth certain general terms and
provisions of the warrants that we may offer pursuant to this prospectus. The particular terms of the warrants and the extent, if any, to which the general terms and provisions may apply to the
warrants so offered will be described in the applicable prospectus supplement.
Warrants
may be issued independently or together with other securities and may be attached to or separate from any offered securities. Each series of warrants will be issued under a
separate warrant agreement to be entered into between us and a bank or trust company, as warrant agent. The warrant agent will act solely as our agent in connection with the warrants and will not have
any obligation or relationship of agency or trust for or with any holders or beneficial owners of warrants.
A
copy of the forms of the warrant agreement and the warrant certificate relating to any particular issue of warrants will be filed with the SEC each time we issue warrants, and you
should read those documents for provisions that may be important to you. For more information on how you can obtain copies of the forms of the warrant agreement and the related warrant certificate,
see "Where You Can Find More Information."
Stock Warrants
The prospectus supplement relating to a particular issue of warrants to issue shares of our common stock or shares of our preferred stock will
describe the terms of the common share warrants and preferred share warrants, including the following:
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the title of the warrants;
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the offering price for the warrants, if any;
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the aggregate number of the warrants;
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the designation and terms of the shares of common stock or shares of preferred stock that may be purchased upon exercise of the warrants;
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the terms for changes or adjustments to the exercise price of the warrants;
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if applicable, the designation and terms of the securities that the warrants are issued with and the number of warrants issued with each
security;
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if applicable, the date from and after which the warrants and any securities issued with the warrants will be separately transferable;
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the number of shares of common stock or shares of preferred stock that may be purchased upon exercise of a warrant and the price at which the
shares may be purchased upon exercise;
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the dates on which the right to exercise the warrants commence and expire;
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if applicable, the minimum or maximum amount of the warrants that may be exercised at any one time;
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the currency or currency units in which the offering price, if any, and the exercise price are payable;
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if applicable, a discussion of material United States federal income tax considerations;
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anti-dilution provisions of the warrants, if any;
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redemption or call provisions, if any, applicable to the warrants;
11
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any additional terms of the warrants, including terms, procedures and limitations relating to the exchange and exercise of the warrants; and
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any other information we think is important about the warrants.
Debt Warrants
The prospectus supplement relating to a particular issue of warrants to issue debt securities will describe the terms of those warrants,
including the following:
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the title of the warrants;
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the offering price for the warrants, if any;
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the aggregate number of the warrants;
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the designation and terms of the debt securities purchasable upon exercise of the warrants;
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the terms for changes or adjustments to the exercise price of the warrants;
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if applicable, the designation and terms of the debt securities that the warrants are issued with and the number of warrants issued with each
debt security;
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if applicable, the date from and after which the warrants and any debt securities issued with them will be separately transferable;
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the principal amount of debt securities that may be purchased upon exercise of a warrant and the price at which the debt securities may be
purchased upon exercise;
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the dates on which the right to exercise the warrants will commence and expire;
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if applicable, the minimum or maximum amount of the warrants that may be exercised at any one time;
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whether the warrants represented by the warrant certificates or debt securities that may be issued upon exercise of the warrants will be issued
in registered or bearer form;
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information relating to book-entry procedures, if any;
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the currency or currency units in which the offering price, if any, and the exercise price are payable;
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if applicable, a discussion of material United States federal income tax considerations;
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anti-dilution provisions of the warrants, if any;
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redemption or call provisions, if any, applicable to the warrants;
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any additional terms of the warrants, including terms, procedures and limitations relating to the exchange and exercise of the warrants; and
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any other information we think is important about the warrants.
Exercise of Warrants
Each warrant will entitle the holder of the warrant to purchase at the exercise price set forth in the applicable prospectus supplement the
number of shares of common stock, shares of preferred stock or the principal amount of debt securities being offered. Holders may exercise warrants at any time up to the close of business on the
expiration date set forth in the applicable prospectus supplement. After the close of business on the expiration date, unexercised warrants are void. Holders may exercise warrants as set forth in the
prospectus supplement relating to the warrants being offered.
Until
a holder exercises the warrants to purchase our shares of common stock, shares of preferred stock or debt securities, the holder will not have any rights as a holder of our shares
of common stock, shares of preferred stock or debt securities, as the case may be, by virtue of ownership of warrants.
12
DESCRIPTION OF DEBT SECURITIES
The following is a general description of the terms of debt securities we may issue from time to time unless we provide otherwise in the
applicable prospectus supplement. Particular terms of any debt securities we offer will be described in the prospectus supplement relating to such debt securities.
As
required by Federal law for all bonds and notes of companies that are publicly offered, any debt securities we issue will be governed by a document called an "indenture," the form of
which is filed as an exhibit to the registration statement of which this prospectus forms a part. We have summarized the general features of the debt securities to be governed by the indenture.
The summary is not complete. An indenture is a contract between us and a financial institution acting as trustee on behalf of the holders of the debt securities, and is subject to and governed by the
Trust Indenture Act of 1939, as amended. The trustee has two main roles. First, the trustee can enforce holders' rights against us if we default. There are some limitations on the extent to which the
trustee acts on holders' behalf, described in the second paragraph under "Description of Debt Securities—Events of Default." Second, the trustee performs certain administrative duties,
such as sending interest and principal payments to holders.
Because
this section is a summary, it does not describe every aspect of any debt securities we may issue or the indenture governing any such debt securities. Particular terms of any debt
securities we offer will be described in the prospectus supplement relating to such debt securities, and we urge you to read the
applicable executed indenture, which will be filed with the SEC at the time of any offering of debt securities, because it, and not this description, will define the rights of holders of such debt
securities.
A
prospectus supplement will describe the particular terms of any series of debt securities we may issue, including some or all of the
following:
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the designation or title of the series of debt securities;
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the total principal amount of the series of debt securities, the denominations in which the offered debt securities will be issued and whether
the offering may be reopened for additional securities of that series and on what terms;
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the percentage of the principal amount at which the series of debt securities will be offered;
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the date or dates on which principal will be payable;
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the rate or rates (which may be either fixed or variable) and/or the method of determining such rate or rates of interest, if any;
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the date or dates from which any interest will accrue, or the method of determining such date or dates, and the date or dates on which any
interest will be payable;
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the terms for redemption, extension or early repayment, if any;
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the currencies in which the series of debt securities are issued and payable;
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whether the amount of payments of principal, interest or premium, if any, on a series of debt securities will be determined with reference to
an index, formula or other method and how these amounts will be determined;
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the place or places of payment, transfer, conversion and/or exchange of the debt securities;
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the provision for any sinking fund;
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any restrictive covenants;
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events of default;
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whether the series of debt securities are issuable in certificated form;
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any provisions for legal defeasance or covenant defeasance;
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whether and under what circumstances we will pay additional amounts in respect of any tax, assessment or governmental charge and, if so,
whether we will have the option to redeem the debt securities rather than pay the additional amounts (and the terms of this option);
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any provisions for convertibility or exchangeability of the debt securities into or for any other securities;
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whether the debt securities are subject to subordination and the terms of such subordination;
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any listing of the debt securities on any securities exchange;
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if applicable, a discussion of certain U.S. Federal income tax considerations, including those related to original issue discount, if
applicable; and
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any other material terms.
The
debt securities may be secured or unsecured obligations. Unless the prospectus supplement states otherwise, principal, interest and premium, if any, will be paid by us in immediately
available funds.
General
The indenture may provide that any debt securities proposed to be sold under this prospectus and the applicable prospectus supplement relating
to such debt securities ("offered debt securities") and any debt securities issuable upon conversion or exchange of other offered securities ("underlying debt securities") may be issued under the
indenture in one or more series.
For
purposes of this prospectus, any reference to the payment of principal of, or interest or premium, if any, on, debt securities will include additional amounts if required by the
terms of the debt securities.
Debt
securities issued under an indenture, when a single trustee is acting for all debt securities issued under the indenture, are called the "indenture securities." The indenture may
also provide that there may be more than one trustee thereunder, each with respect to one or more different series of securities issued thereunder. See "Description of Debt
Securities—Resignation of Trustee" below. At a time when two or more trustees are acting under an indenture, each with respect to only certain series, the term "indenture securities" means
the one or more series of debt securities with respect to which each respective trustee is acting. In the event that there is more than one trustee under an indenture, the powers and trust obligations
of each trustee described in this prospectus will extend only to the one or more series of indenture securities for which it is trustee. If two or more trustees are acting under an indenture, then the
indenture securities for which each trustee is acting would be treated as if issued under separate indentures.
We
refer you to the applicable prospectus supplement relating to any debt securities we may issue from time to time for information with respect to any deletions from, modifications of
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, that will be applicable
with respect to such debt securities.
We
have the ability to issue indenture securities with terms different from those of indenture securities previously issued and, without the consent of the holders thereof, to reopen a
previous issue of a series of indenture securities and issue additional indenture securities of that series unless the reopening was restricted when that series was created.
14
Conversion and Exchange
If any debt securities are convertible into or exchangeable for other securities, the related prospectus supplement will explain the terms and
conditions of the conversion or exchange, including the conversion price or exchange ratio (or the calculation method), the conversion or exchange period (or how the period will be determined), if
conversion or exchange will be mandatory or at the option of the holder or us, provisions for adjusting the conversion price or the exchange ratio and provisions affecting conversion or exchange in
the event of the redemption of the underlying debt securities. These terms may also include provisions under which the number or amount of other securities to be received by the holders of the debt
securities upon conversion or exchange would be calculated according to the market price of the other securities as of a time stated in the prospectus supplement.
Payment and Paying Agents
We will pay interest to the person listed in the applicable trustee's records as the owner of the debt security at the close of business on a
particular day in advance of each due date for interest, even if that person no longer owns the debt security on the interest due date. That day, often approximately two weeks in advance of the
interest due date, is called the "record date." Because we will pay all the interest for an interest period to the holders on the record date, holders buying and selling debt securities must work out
between themselves the appropriate purchase price. The most common manner is to adjust the sales price of the debt securities to prorate interest fairly between buyer and seller based on their
respective ownership periods within the particular interest period. This prorated interest amount is called "accrued interest."
Events of Default
Holders of debt securities of any series will have rights if an Event of Default occurs in respect of the debt securities of such series and is
not cured, as described later in this subsection. The term "Event of Default" in respect of the debt securities of any series means any of the following:
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we do not pay the principal of, or any premium on, a debt security of the series on its due date;
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we do not pay interest on a debt security of the series within 30 days of its due date;
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we do not deposit any sinking fund payment in respect of debt securities of the series on its due date and we do not cure this default within
five days;
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we remain in breach of a covenant in respect of debt securities of the series for 90 days after we receive a written notice of default
stating we are in breach. The notice must be sent by either the trustee or holders of at least 25% of the principal amount of debt securities of the series;
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we file for bankruptcy or certain other events of bankruptcy, insolvency or reorganization occur; and
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any other Event of Default occurs in respect of debt securities of the series described in the prospectus supplement.
An
Event of Default for a particular series of debt securities does not necessarily constitute an Event of Default for any other series of debt securities issued under the same or any
other indenture. The trustee may withhold notice to the holders of debt securities of any default, except in the payment of principal, premium or interest, if it considers the withholding of notice to
be in the best interests of the holders.
15
If an Event of Default has occurred and has not been cured or waived, the trustee or the holders of not less than 25% in principal amount of the
debt securities of the affected series may declare the entire principal amount of all the debt securities of that series to be due and immediately payable. This is called a declaration of acceleration
of maturity. A declaration of acceleration of maturity may be canceled by the holders of a majority in principal amount of the debt securities of the affected series if the default is cured or waived
and certain other conditions are satisfied.
Except
in cases of default, where the trustee has some special duties, the trustee typically is not required to take any action under an indenture at the request of any holders unless
the holders offer the trustee reasonable protection from expenses and liability (called an "indemnity"). If reasonable indemnity is provided, the holders of a majority in principal amount of the
outstanding debt securities of the relevant series may direct the time, method and place of conducting any lawsuit or other formal legal action seeking any remedy available to the trustee. The trustee
may refuse to follow those directions in certain circumstances.
Before
a holder is allowed to bypass the trustee and bring its own lawsuit or other formal legal action or take other steps to enforce its rights or protect its interests relating to any
debt securities, the following must occur:
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the holder must give the trustee written notice that an Event of Default has occurred and remains uncured;
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the holders of at least 25% in principal amount of all outstanding debt securities of the relevant series must make a written request that the
trustee take action because of the default and must offer reasonable indemnity to the trustee against the cost and other liabilities of taking that action;
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the trustee must not have taken action for 60 days after receipt of the above notice and offer of indemnity; and
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the holders of a majority in principal amount of the debt securities must not have given the trustee a direction inconsistent with the above
notice during that 60-day period.
However,
a holder is entitled at any time to bring a lawsuit for the payment of money due on its debt securities on or after the due date. Each year, we will furnish to each trustee a
written statement of certain of our officers certifying that to their knowledge we are in compliance with the indenture and the debt securities, or else specifying any default.
The holders of a majority in principal amount of the relevant series of debt securities may waive a default for all such series of debt
securities. If this happens, the default will be treated as if it had not occurred. No one can waive a payment default on a holder's debt security, however, without the holder's approval.
Merger or Consolidation
Under the terms of an indenture, we may be permitted to consolidate or merge with another entity. We may also be permitted to sell all or
substantially all of our assets to another entity. However, typically we may not take any of these actions unless all the following conditions are met:
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if we do not survive such transaction or we convey, transfer or lease our properties and assets substantially as an entirety, the acquiring
company must be a corporation, limited liability company, partnership or trust, or other corporate form, organized under the laws of any state of
16
the
United States or the District of Columbia, and such company must agree to be legally responsible for our debt securities, and, if not already subject to the jurisdiction of any state of the United
States or the District of Columbia, the new company must submit to such jurisdiction for all purposes with respect to the debt securities and appoint an agent for service of process;
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alternatively, we must be the surviving company;
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immediately after the transaction no Event of Default will exist;
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we must deliver certain certificates and documents to the trustee; and
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we must satisfy any other requirements specified in the prospectus supplement relating to a particular series of debt securities.
Modification or Waiver
There are three types of changes we may make to an indenture and the debt securities issued thereunder.
First, there are changes that we cannot make to debt securities without specific approval of all of the holders. The following is a list of the
types of changes that may require specific approval:
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change the stated maturity of the principal of or rate of interest on a debt security;
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reduce any amounts due on a debt security;
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reduce the amount of principal payable upon acceleration of the maturity of a security following a default;
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at any time after a change of control has occurred, reduce any premium payable upon a change of control;
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change the place or currency of payment on a debt security (except as otherwise described in the prospectus or prospectus supplement);
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impair the right of holders to sue for payment;
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adversely affect any right to convert or exchange a debt security in accordance with its terms;
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reduce the percentage of holders of debt securities whose consent is needed to modify or amend the indenture;
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reduce the percentage of holders of debt securities whose consent is needed to waive compliance with certain provisions of the indenture or to
waive certain defaults;
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modify any other aspect of the provisions of the indenture dealing with supplemental indentures, modification and waiver of past defaults,
changes to the quorum or voting requirements or the waiver of certain covenants; and
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change any obligation we have to pay additional amounts.
The second type of change does not require any vote by the holders of the debt securities. This type is limited to clarifications and certain
other changes that would not adversely affect holders of the outstanding debt securities in any material respect, including the addition of covenants and guarantees. We also do not need any approval
to make any change that affects only debt securities to be issued under the indenture after the change takes effect.
17
Any other change to the indenture and the debt securities may require the following approval:
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if the change affects only one series of debt securities, it must be approved by the holders of a majority in principal amount of that series;
and
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if the change affects more than one series of debt securities issued under the same indenture, it must be approved by the holders of a majority
in principal amount of all of the series affected by the change, with all affected series voting together as one class for this purpose.
The
holders of a majority in principal amount of all of the series of debt securities issued under an indenture, voting together as one class for this purpose, may waive our compliance
obligations with respect to some of our covenants in that indenture. However, we cannot obtain a waiver of a payment default or of any of the matters covered by the bullet points included above under
"Description of Debt Securities—Modification or Waiver—Changes Requiring Approval."
When taking a vote on proposed changes to the indenture and the debt securities, we expect to use the following rules to decide how much
principal to attribute to a debt security:
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for original issue discount securities, we will use the principal amount that would be due and payable on the voting date if the maturity of
these debt securities were accelerated to that date because of a default;
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for debt securities whose principal amount is not known (for example, because it is based on an index), we will use a special rule for that
debt security described in the related prospectus supplement; and
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for debt securities denominated in one or more foreign currencies, we will use the U.S. dollar equivalent.
Debt
securities will not be considered outstanding, and therefore not eligible to vote, if we have deposited or set aside in trust money for their payment or redemption. Debt securities
will also not be eligible to vote if they have been fully defeased as described later under "Description of Debt Securities—Defeasance—Legal Defeasance."
We
generally will be entitled to set any day as a record date for the purpose of determining the holders of outstanding indenture securities that are entitled to vote or take other
action under the indenture. If we set a record date for a vote or other action to be taken by holders of one or more series, that vote or action may be taken only by persons who are holders of
outstanding indenture securities of those series on the record date and must be taken within 11 months following the record date.
Book-entry
and other indirect holders will need to consult their banks or brokers for information on how approval may be granted or denied if we seek to change the indenture or the debt
securities or request a waiver.
Defeasance
The following provisions will be applicable to each series of debt securities unless we state in the applicable prospectus supplement that the
provisions of covenant defeasance and legal defeasance will not be applicable to that series.
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We can make the deposit described below and be released from some of the restrictive covenants in the indenture under which the particular
series was issued. This is called "covenant defeasance." In that event, the holders would lose the protection of those restrictive covenants but would gain the protection of having money and
government securities set aside in trust to repay holders' debt securities. If applicable, a holder also would be released from the subordination provisions described under "Description of Debt
Securities—Indenture
Provisions—Subordination" below. In order to achieve covenant defeasance, we must do the following:
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If the debt securities of the particular series are denominated in U.S. dollars, we must deposit in trust for the benefit of all holders of
such debt securities a combination of money and U.S. government or U.S. government agency notes or bonds that will generate enough cash to make interest, principal and any other payments on the debt
securities on their various due dates;
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We may be required to deliver to the trustee a legal opinion of our counsel confirming that, under current U.S. Federal income tax law, we may
make the above deposit without causing the holders to be taxed on the debt securities any differently than if we did not make the deposit and just repaid the debt securities ourselves at maturity; and
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We must deliver to the trustee certain documentation stating that all conditions precedent to covenant defeasance have been complied with.
If
we accomplish covenant defeasance, holders can still look to us for repayment of the debt securities if there were a shortfall in the trust deposit or the trustee is prevented from
making payment. In fact, if one of the remaining Events of Default occurred (such as our bankruptcy) and the debt securities became immediately due and payable, there might be a shortfall. Depending
on the event causing the default, holders may not be able to obtain payment of the shortfall.
As described below, we can legally release ourselves from all payment and other obligations on the debt securities of a particular series
(called "legal defeasance"), (1) if there is a change in U.S. Federal tax law that allows us to effect the release without causing the holders to be taxed any differently than if the release
had not occurred, and (2) if we put in place the following other arrangements for holders to be repaid:
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If the debt securities of the particular series are denominated in U.S. dollars, we must deposit in trust for the benefit of all holders of
such debt securities a combination of money and U.S. government or U.S. government agency notes or bonds that will generate enough cash to make interest, principal and any other payments on the debt
securities on their various due dates;
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We may be required to deliver to the trustee a legal opinion confirming that there has been a change in current U.S. Federal tax law or an
Internal Revenue Service ruling that allows us to make the above deposit without causing the holders to be taxed on the debt securities any differently than if we did not make the deposit and just
repaid the debt securities ourselves at maturity. Under current U.S. Federal tax law, the deposit and our legal release from the debt securities would be treated as though we paid each holder its
share of the cash and notes or bonds at the time the cash and notes or bonds were deposited in trust in exchange for its debt securities and holders would recognize gain or loss on the debt securities
at the time of the deposit; and
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We must deliver to the trustee a legal opinion and officers' certificate stating that all conditions precedent to legal defeasance have been
complied with.
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If
we ever did accomplish legal defeasance, as described above, holders would have to rely solely on the trust deposit for repayment of the debt securities. Holders could not look to us
for repayment in the unlikely event of any shortfall. Conversely, the trust deposit would most likely be protected from claims of our lenders and other creditors if we ever became bankrupt or
insolvent. If applicable, holders would also be released from the subordination provisions described later under "Description of Debt Securities—Indenture
Provisions—Subordination."
Resignation of Trustee
Each trustee may resign or be removed with respect to one or more series of indenture securities provided that a successor trustee is appointed
to act with respect to such series. In the event that two or more persons are acting as trustee with respect to different series of indenture securities under the indenture, each of the trustees will
be a trustee of a trust separate and apart from the trust administered by any other trustee.
Indenture Provisions—Subordination
Upon any distribution of our assets upon our dissolution, winding up, liquidation or reorganization, the payment of the principal of (and
premium, if any) and interest on any indenture securities denominated as subordinated debt securities is to be subordinated to the extent provided in the indenture in right of payment to the prior
payment in full of all Senior Indebtedness (defined below), but our obligation to holders to make payment of the principal of (and premium, if any) and interest on such subordinated debt securities
will not otherwise be affected. In addition, no payment on account of principal (or premium, if any), interest or sinking fund, if any, may be made on such subordinated debt securities at any time
unless full payment of all amounts due in respect of the principal (and premium, if any), interest and sinking fund, if any, on Senior Indebtedness has been made or duly provided for in money or
money's worth.
In
the event that, notwithstanding the foregoing, any payment from us is received by the trustee in respect of subordinated debt securities or by the holders of any of such subordinated
debt securities before all Senior Indebtedness is paid in full, the payment or distribution must be paid over to the holders of the Senior Indebtedness or on their behalf for application to the
payment of all the Senior Indebtedness remaining unpaid until all the Senior Indebtedness has been paid in full, after giving effect to any concurrent payment or distribution to the holders of the
Senior Indebtedness. Subject to the payment in full of all Senior Indebtedness, the holders of such subordinated debt securities will be subrogated to the rights of the holders of the Senior
Indebtedness to the extent of payments made to the holders of the Senior Indebtedness out of the distributive share of such subordinated debt securities.
By
reason of this subordination, in the event of a distribution of our assets upon our insolvency, certain of our senior creditors may recover more, ratably, than holders of any
subordinated debt securities. The related indenture will provide that these subordination provisions will not apply to money and securities held in trust under the defeasance provisions of the
indenture.
"Senior
Indebtedness" will be defined in an applicable indenture as the principal of (and premium, if any) and unpaid interest on:
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our indebtedness (including indebtedness of others guaranteed by us), whenever created, incurred, assumed or guaranteed, for money borrowed
(other than indenture securities issued under the indenture and denominated as subordinated debt securities), unless in the instrument creating or evidencing the same or under which the same is
outstanding it is provided that this indebtedness is not senior or prior in right of payment to the subordinated debt securities; and
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renewals, extensions, modifications and refinancings of any of such indebtedness.
20
The
prospectus supplement accompanying any series of indenture securities denominated as subordinated debt securities will set forth the approximate amount of our Senior Indebtedness
outstanding as of a recent date.
Trustee
We intend to name the indenture trustee for each series of indenture securities in the related prospectus supplement.
Certain Considerations Relating to Foreign Currencies
Debt securities denominated or payable in foreign currencies may entail significant risks. These risks include the possibility of significant
fluctuations in the foreign currency markets, the imposition or modification of foreign exchange controls and potential illiquidity in the secondary market. These risks will vary depending upon the
currency or currencies involved and will be more fully described in the applicable prospectus supplement.
21
DESCRIPTION OF RIGHTS
The following is a general description of the terms of the rights we may issue from time to time unless we provide otherwise in the applicable
prospectus supplement. Particular terms of any rights we offer will be described in the prospectus supplement relating to such rights.
General
We may issue rights to purchase common stock, preferred stock, debt securities or units. Rights may be issued independently or together with
other securities and may or may not be transferable by the person purchasing or receiving the rights. In connection with any rights offering to our stockholders, we may enter into a standby
underwriting, backstop or other arrangement with one or more underwriters or other persons pursuant to which such underwriters or other persons would purchase any offered securities remaining
unsubscribed for after such rights offering. In connection with a rights offering to our stockholders, we would distribute certificates evidencing the rights and a prospectus supplement to our
stockholders on or about the record date that we set for receiving rights in such rights offering.
The
applicable prospectus supplement will describe the following terms of any rights we may issue, including some or all of the following:
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the title and aggregate number of the rights;
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the subscription price or a formula for the determination of the subscription price for the rights and the currency or currencies in which the
subscription price may be payable;
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if applicable, the designation and terms of the securities with which the rights are issued and the number of rights issued with each such
security or each principal amount of such security;
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the number or a formula for the determination of the number of the rights issued to each stockholder;
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the extent to which the rights are transferable;
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in the case of rights to purchase debt securities, the principal amount of debt securities purchasable upon exercise of one right;
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in the case of rights to purchase common stock or preferred stock, the type of stock and number of shares of stock purchasable upon exercise of
one right;
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the date on which the right to exercise the rights will commence, and the date on which the rights will expire (subject to any extension);
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if applicable, the minimum or maximum amount of the rights that may be exercised at any one time;
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the extent to which such rights include an over-subscription privilege with respect to unsubscribed securities;
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if applicable, the procedures for adjusting the subscription price and number of shares of common stock or preferred stock purchasable upon the
exercise of each right upon the occurrence of certain events, including stock splits, reverse stock splits, combinations, subdivisions or reclassifications of common stock or preferred stock;
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the effect on the rights of any merger, consolidation, sale or other disposition of our business;
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the terms of any rights to redeem or call the rights;
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information with respect to book-entry procedures, if any;
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the terms of the securities issuable upon exercise of the rights;
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if applicable, the material terms of any standby underwriting, backstop or other purchase arrangement that we may enter into in connection with
the rights offering;
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if applicable, a discussion of certain U.S. Federal income tax considerations; and
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any other terms of the rights, including terms, procedures and limitations relating to the exchange and exercise of the rights.
Exercise of Rights
Each right will entitle the holder to purchase for cash or other consideration such shares of stock or principal amount of securities at the
subscription price as shall in each case be set forth in, or be determinable as set forth in, the prospectus supplement relating to the rights offered thereby. Rights may be exercised as set forth in
the applicable prospectus supplement beginning on the date specified therein and continuing until the close of business on the expiration date set forth in the prospectus supplement relating to the
rights offered thereby. After the close of business on the expiration date, unexercised rights will become void.
Upon
receipt of payment and a subscription certificate properly completed and duly executed at the corporate trust office of the subscription agent or any other office indicated in the
prospectus supplement, we will, as soon as practicable, forward the securities purchasable upon such exercise. If less than all of the rights represented by such subscription certificate are
exercised, a new subscription certificate will be issued for the remaining rights. If we so indicate in the applicable prospectus supplement, holders of the rights may surrender securities as all or
part of the exercise price for rights.
We
may determine to offer any unsubscribed offered securities directly to stockholders, persons other than stockholders, to or through agents, underwriters or dealers or through a
combination of such methods, including pursuant to standby underwriting, backstop or other arrangements, as set forth in the applicable prospectus supplement.
Prior
to exercising their rights, holders of rights will not have any of the rights of holders of the securities purchasable upon subscription, including, in the case of rights to
purchase common stock or preferred stock, the right to receive dividends, if any, or payments upon our liquidation, dissolution or winding up or to exercise any voting rights or, in the case of rights
to purchase debt securities, the right to receive principal, premium, if any, or interest payments, on the debt securities purchasable upon exercise or to enforce covenants in the applicable
indenture.
23
DESCRIPTION OF UNITS
We may issue units comprising one or more securities described in this prospectus in any combination. The following description sets forth
certain general terms and provisions of the units that we may offer pursuant to this prospectus. The particular terms of the units and the extent, if any, to which the general terms and provisions may
apply to the units so offered will be described in the applicable prospectus supplement.
Each
unit will be issued so that the holder of the unit also is the holder of each security included in the unit. Thus, the unit will have the rights and obligations of a holder of each
included security. Units will be issued pursuant to the terms of a unit agreement, which may provide that the securities included in the unit may not be held or transferred separately at any time or
at any time before a specified date. A copy of the forms of the unit agreement and the unit certificate relating to any particular issue of units
will be filed with the SEC each time we issue units, and you should read those documents for provisions that may be important to you. For more information on how you can obtain copies of the forms of
the unit agreement and the related unit certificate, see "Where You Can Find More Information."
The
prospectus supplement relating to any particular issuance of units will describe the terms of those units, including, to the extent applicable, the
following:
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the designation and terms of the units and the securities comprising the units, including whether and under what circumstances those securities
may be held or transferred separately;
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any provision for the issuance, payment, settlement, transfer or exchange of the units or of the securities comprising the units; and
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whether the units will be issued in fully registered or global form.
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PLAN OF DISTRIBUTION
We may sell the securities offered by this prospectus in any one or more of the following ways from time to
time:
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to or through one or more underwriters, initial purchasers, brokers or dealers;
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through agents to investors or the public;
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in short or long transactions;
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through put or call option transactions relating to our common stock;
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directly to agents or other purchasers;
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in "at the market offerings" within the meaning of Rule 415(a)(4) of the Securities Act, to or through a market maker or into an
existing trading market, on an exchange or otherwise;
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though a combination of any such methods of sale; or
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through any other method described in the applicable prospectus supplement.
The
applicable prospectus supplement will set forth the terms of the offering and the method of distribution and will identify any firms acting as underwriters, initial purchasers,
dealers or agents in connection with the offering, including:
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the terms of the offering;
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the names of any underwriters, dealers or agents;
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the name or names of any managing underwriter or underwriters;
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the purchase price of the securities and the proceeds to us from the sale;
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any over-allotment options under which the underwriters may purchase additional shares of common stock from us;
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any underwriting discounts, concessions, commissions or agency fees and other items constituting compensation to underwriters, dealers or
agents;
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any delayed delivery arrangements;
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any public offering price;
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any discounts or concessions allowed or re-allowed or paid by underwriters or dealers to other dealers; or
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any securities exchange or market on which the common stock offered in the prospectus supplement may be listed.
If
we use underwriters for a sale of securities, the underwriters will acquire the securities for their own account for resale to the public, either on a firm commitment basis or a best
efforts basis. The underwriters may resell the securities in one or more transactions, including negotiated transactions, at a fixed public offering price or at varying prices determined at the time
of sale. Underwriters may offer the securities to the public either through underwriting syndicates represented by one or more managing underwriters or directly by one or more firms acting as
underwriters. If an underwriter or underwriters are used in the sale of securities hereunder, an underwriting agreement will be executed with the underwriter or underwriters at the time an agreement
for sale is reached. Unless we inform you otherwise in the applicable prospectus supplement, the obligations of the underwriters to purchase the securities will be subject to certain conditions. We
may change from time to time any public offering price and any discounts or concessions the underwriters allow or pay to dealers.
25
During
and after an offering through underwriters, the underwriters may purchase and sell the securities in the open market. These transactions may include overallotment and stabilizing
transactions and purchases to cover syndicate short positions created in connection with the offering. The underwriters may also impose a penalty bid, which means that selling concessions allowed to
syndicate members or other broker-dealers for the offered securities sold for their account may be reclaimed by the syndicate if the offered securities are repurchased by the syndicate in stabilizing
or covering transactions. These activities may stabilize, maintain or otherwise affect the market price of the offered securities, which may be higher than the price that might otherwise prevail in
the open market. If commenced, the underwriters may discontinue these activities at any time.
Some
or all of the securities that we offer though this prospectus may be new issues of securities with no established trading market. Any underwriters to whom we sell our securities for
public offering and sale may make a market in those securities, but they will not be obligated to do so and they may discontinue any market making at any time without notice. Accordingly, we cannot
assure you of the liquidity of, or continued trading markets for, any securities that we offer.
If
dealers are used for the sale of securities, we, or an underwriter, will sell the securities to them as principals. The dealers may then resell those securities to the public at
varying prices determined by the dealers at the time of resale. We will include in the applicable prospectus supplement the names of the dealers and the terms of the transaction.
We
may also sell the securities through agents designated from time to time. In the applicable prospectus supplement, we will name any agent involved in the offer or sale of the offered
securities, and we will describe any commissions payable to the agent. Unless we inform you otherwise in the applicable prospectus supplement, any agent will agree to use its reasonable best efforts
to solicit purchases for the period of its appointment.
We
may sell the securities directly in transactions not involving underwriters, dealers or agents.
We
may sell the securities directly to institutional investors or others who may be deemed to be underwriters within the meaning of the Securities Act with respect to any sale of those
securities. We will describe the terms of any such sales in the prospectus supplement.
Underwriters,
dealers and agents that participate in the distribution of the securities may be underwriters as defined in the applicable securities laws and any discounts or commissions
they receive from us and any profit on their resale of the securities may be treated as underwriting discounts and commissions under the applicable securities laws. We will identify in the applicable
prospectus supplement any underwriters, dealers or agents and will describe their compensation. We may have agreements with the underwriters, dealers and agents to indemnify them against specified
civil liabilities, including liabilities under the applicable securities laws.
Underwriters,
dealers and agents may engage in transactions with or perform services for us in the ordinary course of their businesses for which they may receive customary fees and
reimbursement of expenses.
We
may use underwriters with whom we have a material relationship. We will describe the nature of such relationship in the applicable prospectus supplement.
Under
the securities laws of some states, the securities offered by this prospectus may be sold in those states only through registered or licensed brokers or dealers.
We
may enter into hedging transactions with broker-dealers and the broker-dealers may engage in short sales of the securities in the course of hedging the positions they assume with us,
including, without limitation, in connection with distributions of the securities by those broker-dealers. We may enter into option or other transactions with broker-dealers that involve the delivery
of the securities offered hereby to the broker-dealers, who may then resell or otherwise transfer those securities. We may also loan or pledge the securities offered hereby to a broker-dealer and the
broker-dealer may sell the securities offered hereby so loaned or upon a default may sell or otherwise transfer the pledged securities offered hereby.
26
LEGAL MATTERS
The validity of the securities being offered hereby will be passed upon for us by Morgan, Lewis & Bockius LLP, Princeton, New
Jersey.
EXPERTS
Ernst & Young LLP, independent registered public accounting firm, has audited our financial statements included in our Annual
Report on Form 10-K for the year ended December 31, 2017, as set forth in their report, which is incorporated by reference in this prospectus and elsewhere in the registration statement.
Our financial statements are incorporated by reference in reliance on Ernst & Young LLP's report, given on their authority as experts in accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and other reports, proxy and information statements and other information with the Securities and Exchange Commission.
Copies of these materials may be inspected and copied at the public reference facilities maintained by the SEC at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at
1-800-SEC-0330 for further information on the operation of its public reference room. The SEC maintains a website that contains reports, proxy statements and other information regarding us. The
address of the SEC website is http://www.sec.gov. We maintain a website at www.agiletherapeutics.com. Information contained on our website is not incorporated into this prospectus and you should not
consider information contained on our website to be part of this prospectus or any prospectus supplement.
27
INFORMATION INCORPORATED BY REFERENCE
The SEC allows us to "incorporate by reference" into this prospectus the information contained in documents that we file with them, which means
that we can disclose important information to you by referring you to those documents. The information incorporated by reference is considered to be part of this prospectus. Information in this
prospectus supersedes information incorporated by reference that we filed with the SEC before the date of this prospectus, while information that we file later with the SEC will automatically update
and supersede prior information. Any information so updated and superseded shall not be deemed, except as so updated and superseded, to constitute a part of this prospectus. We incorporate by
reference the documents listed below and any future filings we will make with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as amended, prior to the
termination of the offering. Notwithstanding the foregoing, unless specifically stated to the contrary, none of the information that is not deemed "filed" with the SEC, including information furnished
under Items 2.02 or 7.01 of any Current Report on Form 8-K, will be incorporated by reference into, or otherwise included in, this prospectus:
-
1.
-
our
annual report on Form 10-K for the fiscal year
ended December 31, 2017 filed with the SEC on March 12, 2018 (the "Form 10-K");
-
2.
-
the information contained in our definitive proxy statement
on Schedule 14A for our 2018 annual meeting of stockholders filed with the SEC on April 25, 2018, to the extent incorporated by reference in Part III of the
Form 10-K;
-
3.
-
our quarterly report on Form 10-Q for the quarter
ended March 31, 2018 filed with the SEC on May 7, 2018;
-
4.
-
our quarterly report on Form 10-Q for the quarter
ended June 30, 2018 filed with the SEC on August 3, 2018;
-
5.
-
our quarterly report on Form 10-Q for the quarter
ended September 30, 2018 filed with the SEC on November 2, 2018;
-
6.
-
our
current reports on Form 8-K filed with the SEC on
January 26, 2018
(two filings),
April 27, 2018,
May 4, 2018,
May 18, 2018,
June 7, 2018,
June 21, 2018,
July 9, 2018,
July 24, 2018,
October 5, 2018,
October 9, 2018,
October 24, 2018 and
November 1, 2018; and
-
7.
-
our
description of our common stock contained in the
registration statement on Form 8-A, filed on May 20, 2014, and all amendments and reports updating such description.
We
make available, free of charge, through our website our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to
those reports filed or furnished pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act as soon as reasonably practicable after we electronically file such material with, or furnish
it to, the SEC. You may also obtain, free of charge, a copy of any of these documents (other than exhibits to these documents unless the exhibits are specifically incorporated by reference into these
documents or referred to in this prospectus) by writing or calling us at the following address and telephone number:
Agile
Therapeutics, Inc.
101 Poor Farm Road
Princeton, NJ 08540
(609) 683-1880
28
Table of Contents
Shares of Common Stock
Prospectus Supplement
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RBC CAPITAL MARKETS
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WILLIAM BLAIR
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OPPENHEIMER & CO.
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H.C. WAINWRIGHT & CO.
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MAXIM GROUP LLC
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JANNEY MONTGOMERY SCOTT
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The
date of this prospectus supplement is February , 2020.
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