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TABLE OF CONTENTS
Table of Contents
Filed pursuant to Rule 424(b)(5)
Registration No. 333-237351
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Prospectus Supplement
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(To Prospectus dated August 5, 2020)
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Up to $25,000,000
Common Stock
We have entered into a sales agreement with Cowen and Company, LLC, or Cowen, relating to shares of our common stock, $0.00001 par value per share,
offered by this prospectus supplement and the accompanying prospectus. In accordance with the terms of the sales agreement, we may offer and sell shares of our common stock having an aggregate
offering price of up to $25,000,000 from time to time through or to Cowen acting as our agent or principal.
Our
common stock is listed on The Nasdaq Global Select Market under the symbol CFMS. On August 4, 2020, the last reported sale price of our common stock was $0.76 per share.
Sales
of our common stock, if any, under this prospectus supplement and the accompanying prospectus will be made in sales deemed to be "at the market offerings" as defined in Rule 415
promulgated under the Securities Act of 1933, as amended, or the Securities Act, including sales made directly on or through The Nasdaq Global Select Market, the existing trading market for our common
stock, on any other existing trading market for our common stock or through a market maker in a transaction consummated other than on an exchange, and/or any other method permitted by law, including
in privately negotiated transactions. Cowen is not required to sell any specific number or dollar amount of securities, but will act as our sales agent on a best efforts basis and use commercially
reasonable efforts to sell on our behalf all of the shares of common stock requested to be sold by us, consistent with its normal trading and sales practices, on mutually agreed terms between Cowen
and us. There is no arrangement for funds to be received in any escrow, trust or similar arrangement.
Under
the sales agreement, we may also sell shares of common stock to Cowen as principal for its own account, at a price to be agreed upon at the time of sale. If we sell shares to a Cowen as
principal, we will enter into a separate terms agreement with Cowen, and we will describe the agreement in a separate prospectus supplement or pricing supplement.
The
compensation to Cowen for sales of common stock sold pursuant to the sales agreement will be an amount equal to 3% of the gross proceeds of any shares of common stock sold under the sales
agreement. In connection with the sale of the common stock on our behalf, Cowen will be deemed to be an "underwriter" within the meaning of the Securities Act and the compensation of Cowen will be
deemed to be underwriting commissions or discounts. See "Plan of Distribution" on page S-12 of this prospectus supplement. We have also agreed to provide indemnification and contribution to
Cowen with respect to certain liabilities, including liabilities under the Securities Act or the Exchange Act of 1934, as amended.
Our business and an investment in our common stock involve significant risks. These risks are described under the caption "Risk Factors" beginning on page S-4 of this
prospectus supplement and on page 1 of the accompanying prospectus, as well as the information under the caption "Risk Factors" in our
Annual Report on Form 10-K for the year ended December 31, 2019 and
in the other documents incorporated by reference into this prospectus supplement and the accompanying prospectus.
Neither
the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the accuracy or adequacy of this prospectus or the
accompanying prospectus. Any representation to the contrary is a criminal offense.
Cowen
The date of this prospectus supplement is August 5, 2020.
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TABLE OF CONTENTS
Prospectus Supplement
Prospectus
Neither we nor Cowen have authorized anyone to provide any information or to make any representations other than those contained or incorporated by reference in
this prospectus supplement or the accompanying prospectus. Neither we nor Cowen take 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 are an offer to sell only the shares offered hereby, but only in jurisdictions where it is lawful to do so. The information
contained in this prospectus supplement, the accompanying prospectus and the documents incorporated by reference is accurate only as of their respective dates. Our business, financial condition,
results of operations and prospects may have changed materially since those dates.
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For investors outside the United States: We have not, and Cowen has not, done anything that would permit this offering or possession or distribution of this
prospectus supplement or the accompanying prospectus in any jurisdiction where action for that purpose is required, other than in the United States. Persons outside the United States who come into
possession of this prospectus supplement or the accompanying prospectus must inform themselves about, and observe any restrictions relating to, the offering of the shares of common stock and the
distribution of this prospectus supplement and the accompanying prospectus outside the United States.
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ABOUT THIS PROSPECTUS SUPPLEMENT
This document is in two parts. The first part is this prospectus supplement, which describes the specific terms of the offering and also
supplements, adds to and updates information contained in the accompanying prospectus and the documents incorporated by reference into the accompanying prospectus. The second part is the accompanying
prospectus, which provides more general information, some of which may not apply to this offering. You should read this entire document, including the prospectus supplement, the accompanying
prospectus and the documents incorporated herein by reference. In the event that the description of this offering varies between this prospectus supplement and the accompanying prospectus, you should
rely on the information contained in this prospectus supplement. To the extent the information included or incorporated by reference in this prospectus supplement differs or varies from the
information included or incorporated by reference in the accompanying prospectus, the information included or incorporated by reference in this prospectus supplement updates and supersedes such
information.
This
prospectus supplement contains summaries of certain provisions contained in some of the documents described herein and therein, 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 filed, will be filed or will be
incorporated by reference as exhibits to the registration statement of which this prospectus supplement is a part, and you may obtain copies of those documents as described below under the section
entitled "Where You Can Find More Information."
This
prospectus supplement and the accompanying prospectus contain, or incorporate by reference, forward-looking statements. Such forward-looking statements should be considered together
with the cautionary statements and important factors included or referred to in this prospectus supplement, the accompanying prospectus and the documents incorporated herein and therein by reference.
Please see "Cautionary Statement Regarding Forward-Looking Statements" in this prospectus supplement and "Forward-Looking Statements" in the accompanying prospectus.
For purposes of this prospectus supplement and the accompanying prospectus, references to the terms "we," "us," "our," "Conformis," and "the Company" refer to
Conformis, Inc., a Delaware corporation, and its consolidated subsidiaries, unless the context otherwise requires.
MARKET, INDUSTRY AND OTHER DATA
This prospectus supplement and the accompanying prospectus, including the information incorporated by reference herein and therein, contain
estimates, projections and other information concerning our industry, our business, and the markets for certain products, including data regarding the estimated size of those markets, their projected
growth rates and the incidence of certain medical conditions. Information that is based on estimates, forecasts, projections or similar methodologies is based on a number of assumptions and is
inherently subject to uncertainties, including those described in "Risk Factors" and elsewhere in this prospectus supplement, the accompanying prospectus and the documents incorporated by reference
herein and therein, and actual events or circumstances may differ materially from events and circumstances reflected in this information. You are cautioned not to give undue weight to such estimates,
projections and other information.
Unless
otherwise expressly stated, we obtained this industry, business, market and other data from reports, research surveys, studies and similar data prepared by third parties,
industry, medical and general publications, government data and similar sources. In some cases, we do not expressly refer to the sources from which this data is derived. In that regard, when we refer
to one or more sources of this type of data in any paragraph, you should assume that other data of this type appearing in the same paragraph is derived from the same sources, unless otherwise
expressly stated or the context otherwise requires.
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PROSPECTUS SUPPLEMENT SUMMARY
This summary highlights selected information contained elsewhere in this prospectus supplement, or the accompanying
prospectus or incorporated by reference in this prospectus supplement and the accompanying prospectus. This summary is not complete and does not contain all of the information that you should consider
before investing in our common stock. You should read the entire prospectus supplement, the accompanying prospectus and the documents incorporated in this prospectus supplement and the accompanying
prospectus carefully, before making an investment decision.
Our Business
We are a medical technology company that uses our proprietary iFit Image-to-Implant technology platform to develop, manufacture and sell joint
replacement implants that are individually sized and shaped, which we refer to as personalized, individualized, or sometimes as customized, to fit each patient's unique anatomy. We offer a broad line
of personalized knee and hip implants and single-use instruments delivered to hospitals. Our proprietary iFit technology platform is potentially applicable to all major joints in this market. We have
sold a total of more than 110,000 knee implants worldwide, including more than 87,000 total knee implants and 22,000 partial knee implants. In multiple clinical studies, iTotal CR, our
cruciate-retaining total knee replacement implant and best-selling product, demonstrated superior clinical outcomes, including better function, including kinematics and objective functional measures,
and greater patient satisfaction compared to those of standard, or "off-the-shelf," implants that it was tested against. In 2016, we initiated the broad commercial launch of the iTotal PS, our
posterior-stabilized total knee replacement implant which addresses the largest segment of the knee replacement market. In July 2018, our first Conformis Hip Systems were implanted in a limited
commercial launch. On November 11, 2019, we entered full commercial launch of the Conformis Hip System.
Our Corporate Information
We were incorporated under the laws of the State of Delaware in 2004. Our principal executive offices are located at 600 Technology Park Drive,
Billerica, MA 01821, and our telephone number is (781) 374-5598. Our website is http://www.conformis.com. The information on, or that can be accessed through, our web site is not part of this
prospectus supplement.
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THE OFFERING
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Common stock offered by us
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Shares of our common stock with aggregate gross sale proceeds of up to $25,000,000.
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Common stock to be outstanding after this offering
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Up to 108,787,616 (as more fully described in the notes following this table), assuming sales of 32,684,011 shares of our common stock in this offering at an offering price of $0.76 per share, which
was the last reported sale price of our common stock on The Nasdaq Global Select Market on August 4, 2020. The actual number of shares issued will vary depending on the sales price under this offering.
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Use of proceeds
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We currently intend to use the net proceeds of this offering for general corporate purposes, which may include research and development costs, sales and marketing costs, clinical studies, manufacturing
development, the acquisition or licensing of other businesses or technologies, repayment and refinancing of debt, working capital and capital expenditures. See "Use of Proceeds" on page S-10 of this prospectus supplement.
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Manner of offering
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"At the market" offering that may be made from time-to-time through our sales agent, Cowen and Company, LLC. See "Plan of Distribution" on page S-12 of this prospectus supplement.
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Risk factors
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Investing in our common stock involves significant risks. Please see "Risk Factors" on page S-7 of this prospectus supplement and on page 1 of the accompanying prospectus, as well as the
discussion of risk factors contained in our annual, quarterly and current reports filed with the Securities and Exchange Commission, or SEC, under the Exchange Act, which are incorporated by reference into this prospectus supplement and the
accompanying prospectus.
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Nasdaq Global Select Market Symbol
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"CFMS"
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The
number of shares of our common stock that will be outstanding immediately after this offering as shown above is based on 76,103,605 shares outstanding as of June 30, 2020. The
number of shares outstanding as of June 30, 2020 as used throughout this prospectus supplement, unless otherwise indicated, excludes as of such
date:
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28,926 shares of our common stock issuable upon the exercise of warrants outstanding, at
a weighted average exercise price of $9.80 per share; and
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1,642,192 shares of our common stock issuable upon the exercise of stock options
outstanding, at a weighted average exercise price of $5.83 per share.
Unless
otherwise stated, all information contained in this prospectus supplement reflects an assumed public offering price of $0.76 per share, which was the last reported sale price of
our common stock on The Nasdaq Global Select Market on August 4, 2020.
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RISK FACTORS
Investing in our common stock involves significant risks. Before you decide to invest in our common stock offered by
this prospectus supplement, you should carefully consider the risks and uncertainties described in this prospectus supplement and in the accompanying prospectus, together with the risk factors set
forth in filings with the SEC that are incorporated by reference herein and therein, including the risk factors contained in our annual, quarterly and current reports, as well as any amendments
thereto, as filed with the SEC under the Exchange Act, in particular the risk factors included in Item 1A of our
Annual Report on Form 10-K for the fiscal year ended December 31,
2019, Part II, Item 1A of our Quarterly Report on
Form 10-Q for the quarter ended March 31, 2020 and Part II, Item 1A of our Quarterly Report on Form 10-Q for the quarter ended June 30, 2020.
Additional risks and uncertainties that are not yet identified may also materially harm our business, operating results and financial condition and could result in a complete loss of your
investment.
Risks Related to this Offering
Our management team may invest or spend the proceeds of this offering in ways with which you may not agree or
in ways which may not yield a significant return.
Our management will have broad discretion over the use of proceeds from this offering. The net proceeds from this offering will be used for
general corporate purposes, which may include research and development costs, sales and marketing costs, clinical studies, manufacturing development, the acquisition or licensing of other businesses
or technologies, repayment and refinancing of debt, working capital and capital expenditures. Our management will have considerable discretion in the application of the net proceeds, and you will not
have the opportunity, as part of your investment decision, to assess whether the proceeds are being used appropriately. The net proceeds may be used for corporate purposes that do not increase our
operating results or enhance the value of our common stock.
You may experience immediate and substantial dilution.
The offering price per share in this offering may exceed the net tangible book value per share of our common stock outstanding prior to this
offering. Assuming that an aggregate of 32,684,011 shares of our common stock are sold at a price of $0.76 per share, the last reported sale price of our common stock on The Nasdaq Global Select
Market on August 4, 2020, for aggregate gross proceeds of $25 million, after deducting commissions and estimated aggregate offering expenses payable by us, you will experience immediate
dilution of $0.46 per share, representing the difference between our as-adjusted net tangible book value per share as of June 30, 2020, after giving effect to this offering and the assumed
offering price. The exercise of outstanding stock options and warrants may result in further dilution of your investment. See the section entitled "Dilution" below for a more detailed illustration of
the dilution you would incur if you participate in this offering.
You may experience future dilution as a result of future equity offerings.
In order to raise additional capital, we may in the future offer additional shares of our common stock or other securities convertible into or
exchangeable for our common stock at prices that may not be the same as the price per share in this offering. We may sell shares or other securities in any other offering at a price per share that is
less than the price per share paid by investors in this offering, and investors purchasing shares or other securities in the future could have rights superior to existing stockholders. The price per
share at which we sell additional shares of our common stock, or securities convertible or exchangeable into common stock, in future transactions may be higher or lower than the price per share paid
by investors in this offering.
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Because we do not anticipate paying any cash dividends on our shares of common stock in the foreseeable
future, you must rely on appreciation of the value of our common stock for any return on your investment.
We have never declared or paid cash dividends on our capital stock. We currently intend to retain all of our future earnings, if any, to finance
the operation, development and growth of our business. Furthermore, our current debt facility does and any future debt agreements may also preclude us from paying or place restrictions on our ability
to pay dividends. As a result, capital appreciation, if any, of our common stock will be your sole source of gain with respect to your investment for the foreseeable future.
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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This prospectus supplement, the accompanying prospectus and the information incorporated by reference herein and therein include
"forward-looking statements" within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act that involve substantial risks and uncertainties. Any
forward-looking statements presented in this prospectus supplement, the accompanying prospectus or the information incorporated by reference herein and therein, or which management may make orally or
in writing from time to time, are based on management's beliefs and assumptions made by, and information currently available to, management. All statements, other than statements of historical facts,
contained or incorporated by reference in this prospectus supplement and the accompanying prospectus, including statements regarding our strategy, future operations, future financial position, future
revenue, projected costs, prospects, our ability to raise additional funds, plans and objectives of management, effects of pandemics or other widespread health problems such as the ongoing COVID-19
pandemic on our business, and expected market growth, are forward-looking statements, are forward-looking statements.
The
words "anticipate," "believe," "continue," "could," "estimate," "expect," "intend," "may," "might," "plan," "potential," "predict," "project," "should," "target," "will," or "would"
or the negative of these terms or other similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words.
These
forward-looking statements include, but are not limited to, statements regarding:
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the factors included in our Annual Report on Form 10-K filed with the SEC on
March 2, 2020, our Quarterly Report on Form 10-Q filed with the SEC on May 11, 2020, and our Quarterly Report on Form 10-Q filed with the SEC on August 5, 2020,
including those set forth under the headings "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations," the factors included in our other public
filings, the factors beginning on page S-7 of this prospectus supplement and on page 1 of the accompanying prospectus under the heading "Risk Factors";
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our
estimates regarding the potential market opportunity and timing of estimated
commercialization for our current and future products, including our iUni, iDuo, iTotal CR, iTotal PS, iTotal Identity and Conformis Hip System;
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our expectations
regarding our sales, expenses, gross margin and other results of
operations;
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our strategies for growth and sources of new sales;
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maintaining and
expanding our customer base and our relationships with our independent
sales representatives and distributors;
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our current and future products and plans to promote them;
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the anticipated trends and challenges in our business and in the markets in which we
operate;
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the implementation of our business model, strategic plans for our business, products,
product candidates and technology;
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our ability to achieve anticipated milestones under our collaborations;
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the anticipated timing of our product launches;
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the future availability of raw materials used to manufacture, and finished components
for, our products from third-party suppliers, including single source suppliers;
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product liability claims;
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patent infringement claims;
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our ability to retain and hire necessary employees and to staff our operations
appropriately;
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our ability to compete in our industry and with innovations by our competitors;
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potential
reductions in reimbursement levels by third-party payors and cost containment
efforts of accountable care organizations;
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our ability to obtain reimbursement or direct payment for our products and services;
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our ability to protect proprietary technology and other intellectual property and
potential claims against us for infringement of the intellectual property rights of third parties;
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potential challenges relating to changes in and compliance with
governmental laws and
regulations affecting our U.S. and international businesses, including regulations of the U.S. Food and Drug Administration and foreign government regulators, such as more stringent requirements for
regulatory clearance of our products;
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the anticipated adequacy of our capital resources to meet the needs of our business or
our ability to raise any additional capital;
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anticipated negative impacts related to the COVID-19 pandemic and the actions that we
are taking and planning in response, including our ability to continue production, the reliability of our supply chain, our ability to meet obligations under our loan agreements, the duration of
decreased demand for our products, our ability to recall employees, and whether or when the demand for procedures will increase;
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our ability to continue as a going
concern; and
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our expectations regarding the time during which we will be an emerging growth company
under the JOBS Act.
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 factors in the cautionary
statements included in this prospectus supplement, accompanying prospectus and the information incorporated herein and therein that could cause actual results or events to differ materially from the
forward-looking statements that we make. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, collaborations, joint ventures or
investments that we may make or enter into.
Investors
should also refer to our annual reports on Form 10-K, quarterly reports on Form 10-Q for future periods and current reports on Form 8-K as we file them
with the SEC, and to other materials we may furnish to the public from time-to-time through Form 8-Ks or otherwise, with the understanding that our actual future results may be materially
different from what we expect. We do not assume any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
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USE OF PROCEEDS
We may issue and sell shares of our common stock having aggregate sales proceeds of up to $25,000,000 from time to time. The amount of proceeds
from this offering will depend upon the number of shares of our common stock sold and the market price at which they are sold. There can be no assurance that we will be able to sell any shares under
or fully utilize the Sales Agreement with Cowen as a source of financing. Because there is no minimum offering amount required as a condition to close this offering, the actual total public offering
amount, commissions and proceeds to us, if any, are not determinable at this time.
We
intend to use the net proceeds of this offering for general corporate purposes, which may include research and development costs, sales and marketing costs, clinical studies,
manufacturing development, the acquisition or licensing of other businesses or technologies, repayment and refinancing of debt, working capital and capital expenditures. We may temporarily invest the
net proceeds in a variety of capital preservation instruments, including short-term, investment grade, interest bearing instruments and U.S. government securities, until they are used for their stated
purpose.
We
may also use a portion of the net proceeds to repay outstanding borrowings under our $30 million secured loan facility with Innovatus Life Sciences Lending Fund I, LP,
East West Bank (the "Bank") and the other lenders party thereto from time to time, which consists of term loans and a revolving credit facility (collectively, the "2019 Secured Loan Facility"). We
used the proceeds from the 2019 Secured Loan Facility to pay off the $15 million term loan from Oxford Finance LLC. The 2019 Secured Loan Facility matures on June 1, 2024. As of
the date of this prospectus supplement, we have $20 million outstanding. The term loan under the 2019 Secured Loan Facility bears interest at a floating annual rate calculated at the greater of
the variable rate of interest as most recently
announced by the Bank as prime or 5.50%, plus 3.75%. Advances under the revolving credit facility bear interest at a rate of 0.50% above the greater of the Bank's prime rate or 5.50%.
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DIVIDEND POLICY
We have never declared or paid cash dividends on our capital stock. We currently intend to retain all of our future earnings, if any, to finance
the operation, development and growth of our business. Furthermore, our current debt facility and any future debt agreements may also preclude us from paying or place restrictions on our ability to
pay dividends.
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DILUTION
Purchasers of common stock offered by this prospectus supplement and the accompanying prospectus will suffer immediate and substantial dilution
in the net tangible book value per share of common stock. Our net tangible book value as of June 30, 2020, was approximately $8.4 million or approximately $0.11 per share of common
stock. Net tangible book value per share represents the amount of total tangible assets (total assets less intangible assets) less total liabilities, divided by the number of shares of our common
stock outstanding as of June 30, 2020.
Dilution
in net tangible book value per share represents the difference between the amount per share paid by purchasers in this offering and the net tangible book value per share of our
common stock immediately after this offering. After giving effect to the assumed sale of shares of our common stock in the aggregate amount of approximately $25 million at an assumed offering
price of $0.76 per share, the last reported sale price of our common stock on August 4, 2020, and after
deduction of commissions and estimated offering expenses payable by us, our as adjusted net tangible book value as of June 30, 2020 would have been approximately $32.4 million, or $0.30
per share of common stock. This represents an immediate increase in net tangible book value of $0.19 per share of common stock to our existing stockholders and an immediate dilution in net tangible
book value of $0.46 per share of common stock to investors participating in this offering at an assumed offering price of $0.76 per share. The following table illustrates this per share dilution:
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Assumed public offering price per share
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$
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0.76
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Net tangible book value per share as of June 30, 2020
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$
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0.11
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Increase in net tangible book value per share attributable to this offering
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$
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0.19
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As adjusted net tangible book value per share as of June 30, 2020, after giving effect to this offering
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0.30
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Dilution per share to new investors purchasing shares in this offering
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$
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0.46
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The
table above assumes for illustrative purposes that an aggregate of 32,684,011 shares of our common stock are sold at a price of $0.76 per share, the last reported sale price of our
common stock on The Nasdaq Global Select Market on August 4, 2020, for aggregate gross proceeds of $25,000,000. The shares sold in this offering, if any, will be sold from time to time at
various prices. An increase of $1.00 per share in the price at which the shares are sold from the assumed offering price of $0.76 per share shown in the table above, assuming all of our common stock
in the aggregate amount of $25,000,000 is sold at that price, would increase our adjusted net tangible book value per share after the offering to $0.59 per share and would increase the dilution in net
tangible book value per share to new investors in this offering to $1.18 per share, after deducting commissions and estimated aggregate offering expenses payable by us. A decrease of $1.00 per share
in the price at which the shares are sold from the assumed offering price of $0.76 per share shown in the table above, assuming all of our common stock in the aggregate amount of $25,000,000 is sold
at that price, would decrease our adjusted net tangible book value per share after the offering to $0.01 per share and would decrease the dilution in net tangible book value per share to new investors
in this offering to $(0.24) per share, after deducting commissions and estimated aggregate offering expenses payable by us. This information is supplied for illustrative purposes only, and will adjust
based on the actual offering prices, the actual number of shares that we offer and sell in this offering and other terms of each sale of shares in this offering.
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The
information above and in the foregoing table is based upon 76,103,605 shares of our common stock outstanding as of June 30, 2020. The information above and in the foregoing
table excludes as of June 30, 2020:
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28,926 shares of our common stock issuable upon the exercise of warrants outstanding, at
a weighted average exercise price of $9.80 per share; and
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1,642,192 shares of our common stock issuable upon the exercise of stock options
outstanding, at a weighted average exercise price of $5.83 per share.
Furthermore, we may choose to raise additional capital through the sale of equity or equity-linked securities due to market conditions or strategic
considerations, even if we believe we have sufficient funds for our current or future operating plans. To the extent that any of our outstanding warrants or options are exercised, new equity awards
are issued under our 2015 stock incentive plan or we issue additional shares of common stock or other equity or equity-linked securities in the future, there may be further dilution to investors
participating in this offering.
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PLAN OF DISTRIBUTION
We have entered into a sales agreement with Cowen, under which we may issue and sell from time to time up to $25,000,000 of our common stock
through or to Cowen as our sales agent or principal. Sales of our common stock, if any, will be made at market prices by any method that is deemed to be an "at the market offering" as defined in
Rule 415 under the Securities Act.
Cowen
will offer our common stock subject to the terms and conditions of the sales agreement on a daily basis or as otherwise agreed upon by us and Cowen. We will designate the maximum
amount of common stock to be sold through Cowen on a daily basis or otherwise determine such maximum amount together with Cowen. Subject to the terms and conditions of the sales agreement, Cowen will
use its commercially reasonable efforts to sell on our behalf all of the shares of common stock requested to be sold by us. We may instruct Cowen not to sell common stock if the sales cannot be
effected at or above the price designated by us in any such instruction. Cowen or we may suspend the offering of our common stock being made through Cowen under the sales agreement upon proper notice
to the other party. Cowen and we each have the right, by giving written notice as specified in the sales agreement, to terminate the sales agreement in each party's sole discretion at any time.
The
aggregate compensation payable to Cowen as sales agent equals 3.0% of the gross sales price of the shares sold through it pursuant to the sales agreement. We have also agreed to
reimburse Cowen up to $50,000 of Cowen's actual outside legal expenses incurred by Cowen in connection with this offering. We estimate that the total expenses of the offering payable by us, excluding
commissions payable to Cowen under the sales agreement, will be approximately $323,810.
The
remaining sales proceeds, after deducting any expenses payable by us and any transaction fees imposed by any governmental, regulatory, or self-regulatory organization in connection
with the sales, will equal our net proceeds for the sale of such common stock.
Cowen
will provide written confirmation to us following the close of trading on The Nasdaq Global Select Market on each day in which common stock is sold through it as sales agent under
the sales agreement. Each confirmation will include the number of shares of common stock sold through it as sales agent on that day, the volume weighted average price of the shares sold, the
percentage of the daily trading volume and the net proceeds to us.
We
will report at least quarterly the number of shares of common stock sold through Cowen under the sales agreement, the net proceeds to us and the compensation paid by us to Cowen in
connection with the sales of common stock.
Settlement
for sales of common stock will occur, unless the parties agree otherwise, on the second business day that is also a trading day following the date on which any sales were made
in return for payment of the net proceeds to us. There is no arrangement for funds to be received in an escrow, trust or similar arrangement.
Under
the sales agreement, we may also sell shares of common stock to Cowen as principal for its own account, at a price to be agreed upon at the time of sale. If we sell shares to a
Cowen as principal, we will enter into a separate terms agreement with Cowen, and we will describe the agreement in a separate prospectus supplement or pricing supplement.
S-12
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In
connection with the sales of our common stock on our behalf, Cowen will be deemed to be an "underwriter" within the meaning of the Securities Act, and the compensation paid to Cowen
will be deemed to be underwriting commissions or discounts. We have agreed in the sales agreement to provide indemnification and contribution to Cowen against certain liabilities, including
liabilities under the Securities Act. As sales agent, Cowen will not engage in any transactions that stabilizes our common stock.
Our
common stock is listed on The Nasdaq Global Select Market and trades under the symbol "CFMS." The transfer agent of our common stock is American Stock Transfer & Trust
Company.
Cowen
and/or its affiliates have provided, and may in the future provide, various investment banking and other financial services for us for which services they have received and, may in
the future receive, customary fees.
S-13
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LEGAL MATTERS
The validity of the common stock offered hereby will be passed upon for us by Wilmer Cutler Pickering Hale and Dorr LLP, Boston,
Massachusetts. Cowen is being represented in connection with this offering by Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C., Boston, Massachusetts.
EXPERTS
The audited consolidated financial statements incorporated by reference in this prospectus supplement and the accompanying prospectus have been
so incorporated by reference in reliance upon the report of Grant Thornton LLP, independent registered public accountants, upon the authority of said firm as an expert in accounting and
auditing.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and current reports, proxy statements and other information with the SEC. Our SEC filings are available to the public
over the Internet at the SEC's website at www.sec.gov. Copies of certain information filed by us with the SEC are also available on our website at www.conformis.com. The information found on, or
otherwise accessible through, our website is not incorporated into, and does not form a part of, this prospectus supplement, the accompanying prospectus or any other report or documents we file
with or furnish to the SEC.
We
have filed with the SEC a registration statement on Form S-3 (File No. 333-237351) under the Securities Act with respect to the common stock offered by this prospectus
supplement. When used in this prospectus supplement, the term "registration statement" includes amendments to the registration statement as well as the exhibits, schedules, financial statements and
notes filed as part of the registration statement or incorporated by reference therein. This prospectus supplement, which constitutes a part of the registration statement, omits some information
contained in the registration statement in accordance with SEC rules and regulations. You should review the information and exhibits in the registration statement for further information on us and our
consolidated subsidiaries and the common stock we are offering by this prospectus supplement. Statements herein concerning any document we filed as an exhibit to the registration statement or that we
otherwise filed with the SEC are not intended to be comprehensive and are qualified by reference to these filings. You should review the complete document to evaluate these statements. You can obtain
a copy of the registration statement from the SEC's website.
S-14
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INCORPORATION OF DOCUMENTS BY REFERENCE
The SEC allows us to incorporate by reference much of the information we file with the SEC, which means that we can disclose important
information to you by referring you to those publicly available documents. The information that we incorporate by reference in this prospectus supplement is considered to be part of this prospectus
supplement. Because we are incorporating by reference future filings with the SEC, this prospectus supplement is continually updated and those future filings may modify or supersede some of the
information included or incorporated in this prospectus supplement. This means that you must look at all of the SEC filings that we incorporate by reference to determine if any of the statements in
this prospectus supplement or in any document previously incorporated by reference have been modified or superseded. This prospectus supplement incorporates by reference the documents listed below and
any future filings we make with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act (in each case, other than those documents or the portions of those documents not deemed to
be filed) after the date of this prospectus supplement until the termination of this offering:
-
§
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Annual Report on Form 10-K for the year ended December 31, 2019,
including the information specifically incorporated by reference into the Annual Report on Form 10-K from our definitive proxy statement (other than information furnished rather than filed) for
the Company's 2020 Annual Meeting of Stockholders which was filed with the SEC on March 13,
2020;
-
§
-
Quarterly Report on Form 10-Q for the quarter ended
March 31, 2020, filed with the SEC on May 11, 2020;
-
§
-
Quarterly Report on Form 10-Q for the quarter ended June 30,
2020, filed with the SEC on August 5, 2020;
-
§
-
Current Reports on Form 8-K filed with the SEC on
February 5, 2020,
March 23, 2020 (other than with respect to Item 7.01),
April 17, 2020,
April 20, 2020,
April 30, 2020,
May 28, 2020 and
July 6, 2020; and
-
§
-
the description of our common stock contained in our registration
statement on Form 8-A filed on June 25, 2015, including any amendments or reports filed for the purpose of updating such description.
You
can obtain a copy of any documents which are incorporated by reference in this prospectus supplement, except for exhibits which are specifically incorporated by reference into those
documents, at no cost, by writing or telephoning us at:
Conformis, Inc.
600 Technology Pk. Drive
Billerica, MA 01821
Attn: Investor Relations
Phone: (781) 374-5598
E-mail: ir@conformis.com
S-15
PROSPECTUS
$200,000,000
Conformis, Inc.
Common Stock
Preferred Stock
Debt Securities
Warrants
Units
We may offer and sell securities from time to time in one or more offerings of up to $200,000,000 in aggregate dollar amount. This prospectus
describes the general terms of these securities and the general manner in which these securities will be offered. We will provide the specific terms of these securities in one or more supplements to
this prospectus. The prospectus supplements will also describe the specific manner in which these securities will be offered and may also supplement, update or amend information contained in this
document. You should read this prospectus and any applicable prospectus supplement or amendment carefully before you invest in our securities.
We
may offer these securities in amounts, at prices and on terms determined at the time of offering. The securities may be sold directly to you, through agents, or through underwriters
and dealers. If
agents, underwriters or dealers are used to sell the securities, we will name them and describe their compensation in a prospectus supplement.
Our
common stock is listed on The NASDAQ Global Select Market under the symbol "CFMS."
Investing in these securities involves significant risks. See "Risk Factors" included in any accompanying prospectus supplement and in the
documents incorporated by reference in this prospectus for a discussion of the factors you should carefully consider before deciding to purchase these 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 August 5, 2020
Table of Contents
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ABOUT THIS PROSPECTUS
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RISK FACTORS
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WHERE YOU CAN FIND MORE INFORMATION
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INCORPORATION BY REFERENCE
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FORWARD-LOOKING STATEMENTS
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ABOUT CONFORMIS, INC.
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USE OF PROCEEDS
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DILUTION
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DESCRIPTION OF CAPITAL STOCK
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DESCRIPTION OF DEBT SECURITIES
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DESCRIPTION OF WARRANTS
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DESCRIPTION OF UNITS
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FORMS OF SECURITIES
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PLAN OF DISTRIBUTION
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LEGAL MATTERS
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EXPERTS
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ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we filed with the Securities and Exchange Commission, which we refer to as the SEC,
utilizing a "shelf" registration process. Under this shelf registration process, we may from time to time sell any combination of the securities described in this prospectus in one or more offerings
for an aggregate initial offering price of up to $200,000,000.
This
prospectus provides you with a general description of the securities we may offer. Each time we sell securities, we will provide one or more prospectus supplements that will contain
specific information about the terms of the offering. The prospectus supplement may also add, update or change information contained in this prospectus. You should read both this prospectus and the
accompanying prospectus supplement together with the additional information described under the heading "Where You Can Find More Information."
You
should rely only on the information contained in or incorporated by reference in this prospectus, any accompanying prospectus supplement or in any related free writing prospectus
filed by us with the SEC. We have not authorized anyone to provide you with different information. This prospectus and any accompanying prospectus supplement do not constitute an offer to sell or the
solicitation of an offer to buy any securities other than the securities described in any accompanying prospectus supplement or an offer to sell or the solicitation of an offer to buy such securities
in any circumstances in which such offer or solicitation is unlawful. You should assume that the information appearing in this prospectus, any prospectus supplement, the documents incorporated by
reference and any related free
writing prospectus is accurate only as of their respective dates. Our business, financial condition, results of operations and prospects may have changed materially since those dates.
Unless
otherwise stated, all references in this prospectus to "us," "our," "Conformis," "we," the "Company" and similar designations refer, collectively, to Conformis, Inc., a
Delaware corporation, and its consolidated subsidiaries. Solely for convenience, our trademarks and trade names in this report are referred to without the ® and symbols, but
such references should not be construed as any indicator that we will not assert, to the fullest extent under applicable law, our rights thereto.
RISK FACTORS
Investing in our securities involves significant risks. You should carefully consider the risks and uncertainties described in this prospectus
and any accompanying prospectus supplement, including the risk factors set forth in our filings with the SEC that are incorporated by reference herein, including the risk factors in our Annual Report
on Form 10-K for the fiscal year ended December 31, 2019, and any of
our subsequent filings with the SEC, before making an investment decision pursuant to this prospectus and any accompanying prospectus supplement relating to a specific offering.
Our
business, financial condition and results of operations could be materially and adversely affected by any or all of these risks or by additional risks and uncertainties not presently
known to us or that we currently deem immaterial that may adversely affect us in the future.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and current reports, proxy statements and other information with the SEC. Our SEC filings are available to the public
over the Internet at the SEC's website at www.sec.gov. Copies of certain information filed by us with the SEC are also available on our website at www.Conformis.com. Our website is not a part of this
prospectus and is not incorporated by reference in this prospectus.
This
prospectus is part of a registration statement we filed with the SEC. This prospectus omits some information contained in the registration statement in accordance with SEC rules and
regulations. You should review the information and exhibits in the registration statement for further information on
1
us
and our consolidated subsidiaries and the securities we are offering. Statements in this prospectus concerning any document we filed as an exhibit to the registration statement or that we otherwise
filed with the SEC are not intended to be comprehensive and are qualified by reference to these filings. You should review the complete document to evaluate these statements. You can obtain a copy of
the registration statement from the website.
INCORPORATION BY REFERENCE
The SEC allows us to incorporate by reference much of the information we file with the SEC, which means that we can disclose important
information to you by referring you to those publicly available documents. The information that we incorporate by reference in this prospectus is considered to be part of this prospectus. Because we
are incorporating by reference future filings with the SEC, this prospectus is continually updated and those future filings may modify or supersede some of the information included or incorporated in
this prospectus. This means that you must look at all of the SEC filings that we incorporate by reference to determine if any of the statements in this prospectus or in any document previously
incorporated by reference have been modified or superseded. This prospectus incorporates by reference the documents listed below and any future filings we make with the SEC under
Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as amended, or the Exchange Act (in each case, other than those documents or the portions of those documents not
deemed to be filed) between the date of the initial registration statement and the effectiveness of the registration statement and following the effectiveness of the registration statement until the
offering of the securities under the registration statement is terminated or completed:
You
may request a copy of these filings, at no cost, by contacting us, either orally or in writing, at the following:
Conformis, Inc.
600 Technology Park Drive
Billerica, Massachusetts 01821
Attn: Investor Relations
Phone: (781) 374-5598
E-mail: ir@conformis.com
2
FORWARD-LOOKING STATEMENTS
This prospectus and the information incorporated by reference in this prospectus include, and any prospectus supplement may contain,
"forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Exchange Act. Any forward-looking
statements presented in this prospectus, or which management may make orally or in writing from time to time, are based on management's beliefs and assumptions made by, and information currently
available to, management. All statements, other than statements of historical facts, contained or incorporated by reference in this prospectus, including statements regarding our strategy, future
operations, future financial position, future revenue, projected costs, prospects, our ability to raise additional funds, plans and objectives of management and expected market growth, are
forward-looking statements.
The
words "anticipate," "believe," "continue," "could," "estimate," "expect," "intend," "may," "might," "plan," "potential," "predict," "project," "should," "target," "will," or "would"
or the negative of these terms or other similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words.
These
forward-looking statements include, among other things, statements about:
-
-
our estimates regarding the potential market opportunity and timing of estimated commercialization for our current and future products,
including our iUni, iDuo, iTotal CR, iTotal PS and Conformis Hip System;
-
-
our expectations regarding our sales, expenses, gross margin and other results of operations;
-
-
our strategies for growth and sources of new sales;
-
-
maintaining and expanding our customer base and our relationships with our independent sales representatives and distributors;
-
-
our current and future products and plans to promote them;
-
-
the anticipated trends and challenges in our business and in the markets in which we operate;
-
-
the implementation of our business model, strategic plans for our business, products, product candidates and technology;
-
-
our ability to achieve anticipated milestones under our collaborations;
-
-
the anticipated timing of our product launches;
-
-
the future availability of raw materials used to manufacture, and finished components for, our products from third-party suppliers, including
single source suppliers;
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-
product liability claims;
-
-
patent infringement claims;
-
-
our ability to retain and hire necessary employees and to staff our operations appropriately;
-
-
our ability to compete in our industry and with innovations by our competitors;
-
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potential reductions in reimbursement levels by third-party payors and cost containment efforts of accountable care organizations;
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-
our ability to obtain reimbursement or direct payment for our products and services;
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our ability to protect proprietary technology and other intellectual property and potential claims against us for infringement of the
intellectual property rights of third parties;
3
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-
potential challenges relating to changes in and compliance with governmental laws and regulations affecting our U.S. and international
businesses, including regulations of the U.S. Food and Drug Administration and foreign government regulators, such as more stringent requirements for regulatory clearance or manufacturing of our
products;
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the anticipated adequacy of our capital resources to meet the needs of our business or our ability to raise any additional capital;
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our ability to continue as a going concern;
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the impact of the novel coronavirus pandemic and the response to the pandemic; and
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our expectations regarding the time during which we will be an emerging growth company under the JOBS Act.
Any
forward-looking statements contained or incorporated by reference in this prospectus reflect our current views with respect to future events or to our future financial performance
and involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results,
performance or achievements expressed or implied by these forward-looking statements. See "Risk Factors" for more information. Given these uncertainties, you should not place undue reliance on these
forward-looking statements. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or investments we may make or enter
into. Except as required by law, we assume no obligation to update or revise these forward-looking statements for any reason, whether as a result of new information, future events or otherwise.
ABOUT CONFORMIS, INC.
We are a medical technology company that uses our proprietary iFit Image-to-Implant technology platform to develop, manufacture and sell joint
replacement implants and instruments that are individually sized and shaped, which we refer to as personalized, individualized, or sometimes as customized, to fit each patient's unique anatomy. The
worldwide market for joint replacement products is approximately $18.9 billion annually and growing, and we believe our iFit technology platform is applicable to all major joints in this
market. We offer a broad line of personalized knee implants and instruments designed to restore the natural shape of a patient's knee. To date, we have sold a total of more than 110,000 knee implants
worldwide, including more than 87,000 total knee implants and 22,000 partial knee implants.
Our
principal executive offices are located at 600 Technology Park Drive, Billerica, Massachusetts 01821, and our telephone number is (781) 345-9001. Our website address is
www.conformis.com. The information on our website is not incorporated by reference into this prospectus and should not be considered to be a part of this prospectus.
USE OF PROCEEDS
We intend to use the net proceeds from the sale of any securities offered under this prospectus for general corporate purposes unless the
applicable prospectus supplement provides otherwise. General corporate purposes may include research and development costs, sales and marketing costs, clinical studies, manufacturing development, the
acquisition or licensing of other businesses or technologies, repayment and refinancing of debt, working capital and capital expenditures. We may temporarily invest the net proceeds in a variety of
capital preservation instruments, including short-term, investment grade, interest bearing instruments and U.S. government securities, until they are used for their stated purpose. We have not
determined the amount of net proceeds to be used
specifically for such purposes. As a result, management will retain broad discretion over the allocation of net proceeds.
4
DILUTION
If there is a material dilution of the purchasers' equity interest from the sale of common equity securities offered under this prospectus, we
will set forth in any prospectus supplement the following information regarding any such material dilution of the equity interests of purchasers purchasing securities in an offering under this
prospectus:
-
-
the net tangible book value per share of our equity securities before and after the offering;
-
-
the amount of the increase in such net tangible book value per share attributable to the cash payments made by the purchasers in the offering;
and
-
-
the amount of the immediate dilution from the public offering price which will be absorbed by such purchasers.
5
DESCRIPTION OF CAPITAL STOCK
The following description of our capital stock is intended as a summary only. This description is based upon, and is qualified by reference to,
our restated certificate of incorporation, as amended, or certificate of incorporation, our amended and restated bylaws, or bylaws, and applicable provisions of the Delaware General Corporation Law.
This summary is not intended to be a complete description of our capital stock. You should read our certificate of incorporation and bylaws, which are filed as exhibits to the registration statement
of which this prospectus forms a part, for the provisions that are important to you.
Our
authorized capital stock consists of 200,000,000 shares of common stock, par value $0.00001 per share, and 5,000,000 shares of preferred stock, par value $0.00001 per share, all of
which are undesignated. As of February 28, 2020, 71,558,324 shares of common stock were outstanding, and no shares of preferred stock were outstanding.
Common Stock
Annual Meeting. Annual meetings of our stockholders are held on the date designated in accordance with our bylaws. Written notice must
be mailed to
each stockholder entitled to vote not less than ten nor more than 60 days before the date of the meeting. The presence in person or by proxy of the holders of record of a majority of our issued
and outstanding shares entitled to vote at such meeting
constitutes a quorum for the transaction of business at meetings of the stockholders. Special meetings of the stockholders may be called for any purpose by the board of directors, the chairman of the
board, or the chief executive officer. Except as may be otherwise provided by applicable law, our certificate of incorporation or our bylaws, all elections shall be decided by a plurality, and all
other questions shall be decided by a majority, of the votes cast by stockholders entitled to vote thereon at a duly held meeting of stockholders at which a quorum is present.
Voting Rights. Each holder of common stock is entitled to one vote for each share held on all matters to be voted upon by stockholders.
Dividends. The holders of common stock, after any preferences of holders of any preferred stock, are entitled to receive dividends when
and if
declared by the board of directors out of legally available funds.
Liquidation and Dissolution. If we are liquidated or dissolved, the holders of the common stock will be entitled to share in our assets
available for
distribution to stockholders in proportion to the amount of common stock they own. The amount available for common stockholders is calculated after payment of liabilities. Holders of any preferred
stock will receive a preferential share of our assets before the holders of the common stock receive any assets.
Other Rights. Holders of the common stock have no right to convert the stock into any other security, have the stock redeemed or
purchase additional
stock or to maintain their proportionate ownership interest. The common stock does not have cumulative voting rights. Holders of shares of the common stock are not required to make additional capital
contributions.
NASDAQ Global Select Market. Our common stock is listed on The NASDAQ Global Select Market under the trading symbol "CFMS."
Transfer Agent and Registrar. American Stock Transfer & Trust Company, LLC is the transfer agent and registrar for our
common stock.
6
Preferred Stock
We are authorized to issue "blank check" preferred stock, which may be issued in one or more series upon authorization of our board of
directors. Our board of directors is authorized to fix the designation of the series, the number of authorized shares of the series, dividend rights and terms, conversion rights, voting rights,
redemption rights and terms, liquidation preferences and any other rights, powers, preferences and limitations applicable to each series of preferred stock. The authorized shares of our preferred
stock are available for issuance without further action by our stockholders, unless such action is required by applicable law or the rules of any stock exchange on which our securities may be listed.
If the approval of our stockholders is not required for the issuance of shares of our preferred stock, our board may determine not to seek stockholder approval. The specific terms of any series of
preferred stock offered pursuant to this prospectus will be described in the prospectus supplement relating to that series of preferred stock.
The
preferred stock has the terms described below unless otherwise provided in the prospectus supplement relating to a particular series of preferred stock. You should read the
prospectus supplement relating to the particular series of preferred stock being offered for specific terms, including:
-
-
the designation and stated value per share of the preferred stock and the number of shares offered;
-
-
the amount of liquidation preference per share;
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-
the price at which the preferred stock will be issued;
-
-
the dividend rate, or method of calculation of dividends, the dates on which dividends will be payable, whether dividends will be cumulative or
noncumulative and, if cumulative, the dates from which dividends will commence to accumulate;
-
-
any redemption or sinking fund provisions;
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-
if other than the currency of the United States, the currency or currencies including composite currencies in which the preferred stock is
denominated and/or in which payments will or may be payable;
-
-
any conversion provisions; and
-
-
any other rights, preferences, privileges, limitations and restrictions on the preferred stock.
The
preferred stock will, when issued, be fully paid and nonassessable. Unless otherwise provided in the applicable prospectus supplement, each series of preferred stock will rank
equally as to dividends and liquidation rights in all respects with each other series of preferred stock. The rights of holders of shares of each series of preferred stock will be subordinate to those
of our general creditors.
Rank. Unless otherwise provided in the applicable prospectus supplement, the preferred stock will, with respect to dividend rights and
rights upon
our liquidation, dissolution or winding up of our affairs, rank:
-
-
senior to our common stock and to all equity securities ranking junior to such preferred stock with respect to dividend rights or rights upon
our liquidation, dissolution or winding up of our affairs;
-
-
on a parity with all equity securities issued by us, the terms of which specifically provide that such equity securities rank on a parity with
the preferred stock with respect to dividend rights or rights upon our liquidation, dissolution or winding up of our affairs; and
7
-
-
junior to all equity securities issued by us, the terms of which specifically provide that such equity securities rank senior to the preferred
stock with respect to dividend rights or rights upon our liquidation, dissolution or winding up of our affairs.
The
term "equity securities" does not include convertible debt securities.
Dividends. Holders of the preferred stock of each series will be entitled to receive, when, as and if declared by our board of directors,
cash
dividends at such rates and on such dates described in the prospectus supplement. Different series of preferred stock may be entitled to dividends at different rates or based on different methods of
calculation. The dividend rate may be fixed or variable or both. Dividends will be payable to the holders of record as they appear on our stock books on record dates fixed by our board of directors,
as specified in the applicable prospectus supplement.
Dividends
on any series of preferred stock may be cumulative or noncumulative, as described in the applicable prospectus supplement. If our board of directors does not declare a dividend
payable on a dividend payment date on any series of noncumulative preferred stock, then the holders of that noncumulative preferred stock will have no right to receive a dividend for that dividend
payment date, and we will have no obligation to pay the dividend accrued for that period, whether or not dividends
on that series are declared payable on any future dividend payment dates. Dividends on any series of cumulative preferred stock will accrue from the date we initially issue shares of such series or
such other date specified in the applicable prospectus supplement.
No
dividends may be declared or paid or funds set apart for the payment of any dividends on any parity securities unless full dividends have been paid or set apart for payment on the
preferred stock. If full dividends are not paid, the preferred stock will share dividends pro rata with the parity securities.
No
dividends may be declared or paid or funds set apart for the payment of dividends on any junior securities unless full dividends for all dividend periods terminating on or prior to
the date of the declaration or payment will have been paid or declared and a sum sufficient for the payment set apart for payment on the preferred stock.
Liquidation Preference. Upon any voluntary or involuntary liquidation, dissolution or winding up of our affairs, then, before we make
any
distribution or payment to the holders of any common stock or any other class or series of our capital stock ranking junior to the preferred stock in the distribution of assets upon any liquidation,
dissolution or winding up of our affairs, the holders of each series of preferred stock shall be entitled to receive out of assets legally available for distribution to stockholders, liquidating
distributions in the amount of the liquidation preference per share set forth in the prospectus supplement, plus any accrued and unpaid dividends thereon. Such dividends will not include any
accumulation in respect of unpaid noncumulative dividends for prior dividend periods. Unless otherwise provided in the applicable prospectus supplement, after payment of the full amount of their
liquidating distributions, the holders of preferred stock will have no right or claim to any of our remaining assets. Upon any such voluntary or involuntary liquidation, dissolution or winding up, if
our available assets are insufficient to pay the amount of the liquidating distributions on all outstanding preferred stock and the corresponding amounts payable on all other classes or series of our
capital stock ranking on parity with the preferred stock and all other such classes or series of shares of capital stock ranking on parity with the preferred stock in the distribution of assets, then
the holders of the preferred stock and all other such classes or series of capital stock will share ratably in any such distribution of assets in proportion to the full liquidating distributions to
which they would otherwise be entitled.
Upon
any such liquidation, dissolution or winding up and if we have made liquidating distributions in full to all holders of preferred stock, we will distribute our remaining assets
among the holders of any other classes or series of capital stock ranking junior to the preferred stock according to their respective rights and preferences and, in each case, according to their
respective number of shares. For
8
such
purposes, our consolidation or merger with or into any other corporation, trust or entity, or the sale, lease or conveyance of all or substantially all of our property or assets will not be
deemed to constitute a liquidation, dissolution or winding up of our affairs.
Redemption. If so provided in the applicable prospectus supplement, the preferred stock will be subject to mandatory redemption or
redemption at our
option, as a whole or in part, in each case upon the terms, at the times and at the redemption prices set forth in such prospectus supplement.
The
prospectus supplement relating to a series of preferred stock that is subject to mandatory redemption will specify the number of shares of preferred stock that shall be redeemed by
us in each year commencing after a date to be specified, at a redemption price per share to be specified, together with an amount equal to all accrued and unpaid dividends thereon to the date of
redemption. Unless the shares have a cumulative dividend, such accrued dividends will not include any accumulation in respect of unpaid dividends for prior dividend periods. We may pay the redemption
price in cash or other property, as specified in the applicable prospectus supplement. If the redemption price for preferred stock of any series is payable only from the net proceeds of the issuance
of shares of our capital stock, the terms of such preferred stock may provide that, if no such shares of our capital stock shall have been issued or to the extent the net proceeds from any issuance
are insufficient to pay in full the aggregate redemption price then due, such preferred stock shall automatically and mandatorily be converted into the applicable shares of our capital stock pursuant
to conversion provisions specified in the applicable prospectus supplement. Notwithstanding the foregoing, we will not redeem any preferred stock of a series
unless:
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if that series of preferred stock has a cumulative dividend, we have declared and paid or contemporaneously declare and pay or set aside funds
to pay full cumulative dividends on the preferred stock for all past dividend periods and the then current dividend period; or
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if such series of preferred stock does not have a cumulative dividend, we have declared and paid or contemporaneously declare and pay or set
aside funds to pay full dividends for the then current dividend period.
In
addition, we will not acquire any preferred stock of a series unless:
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if that series of preferred stock has a cumulative dividend, we have declared and paid or contemporaneously declare and pay or set aside funds
to pay full cumulative dividends on all outstanding shares of such series of preferred stock for all past dividend periods and the then current dividend period; or
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if that series of preferred stock does not have a cumulative dividend, we have declared and paid or contemporaneously declare and pay or set
aside funds to pay full dividends on the preferred stock of such series for the then current dividend period.
However,
at any time we may purchase or acquire preferred stock of that series (1) pursuant to a purchase or exchange offer made on the same terms to holders of all outstanding
preferred stock of such series or (2) by conversion into or exchange for shares of our capital stock ranking junior to the preferred stock of such series as to dividends and upon liquidation.
If
fewer than all of the outstanding shares of preferred stock of any series are to be redeemed, we will determine the number of shares that may be redeemed pro rata from the holders of
record of such shares in proportion to the number of such shares held or for which redemption is requested by such holder or by any other equitable manner that we determine. Such determination will
reflect adjustments to avoid redemption of fractional shares.
Unless
otherwise provided in the applicable prospectus supplement, we will mail notice of redemption at least 30 days but not more than 60 days before the redemption date
to each holder of
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record
of preferred stock to be redeemed at the address shown on our stock transfer books. Each notice shall state:
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the redemption date;
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the number of shares and series of preferred stock to be redeemed;
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the redemption price;
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the place or places where certificates for such preferred stock are to be surrendered for payment of the redemption price;
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that dividends on the shares to be redeemed will cease to accrue on such redemption date;
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the date on which the holder's conversion rights, if any, as to such shares shall terminate; and
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the specific number of shares to be redeemed from each such holder if fewer than all the shares of any series are to be redeemed.
If
notice of redemption has been given and we have set aside the funds necessary for such redemption in trust for the benefit of the holders of any shares called for redemption, then
from and after the redemption date, dividends will cease to accrue on such shares, and all rights of the holders of such shares will terminate, except the right to receive the redemption price.
Voting Rights. Holders of preferred stock will not have any voting rights, except as required by law or as indicated in the applicable
prospectus
supplement.
Unless
otherwise provided for under the terms of any series of preferred stock, no consent or vote of the holders of shares of preferred stock or any series thereof shall be required for
any amendment to our certificate of incorporation that would increase the number of authorized shares of preferred stock or the number of authorized shares of any series thereof or decrease the number
of authorized shares of preferred stock or the number of authorized shares of any series thereof (but not below the number of authorized shares of preferred stock or such series, as the case may be,
then outstanding).
Conversion Rights. The terms and conditions, if any, upon which any series of preferred stock is convertible into our common stock will
be set forth
in the applicable prospectus supplement relating thereto. Such terms will include the number of shares of common stock into which the shares of preferred stock are convertible, the conversion price,
rate or manner of calculation thereof, the conversion period, provisions as to whether conversion will be at our option or at the option of the holders of the preferred stock, the events requiring an
adjustment of the conversion price and provisions affecting conversion in the event of the redemption.
Transfer Agent and Registrar. The transfer agent and registrar for the preferred stock will be set forth in the applicable prospectus
supplement.
Effects of Authorized but Unissued Stock
We have shares of common stock and preferred stock available for future issuance without stockholder approval, subject to any limitations
imposed by the listing standards of The NASDAQ Global Select Market. We may utilize these additional shares for a variety of corporate purposes, including for future public offerings to raise
additional capital or facilitate corporate acquisitions or for payment as a dividend on our capital stock. The existence of unissued and unreserved common stock and preferred stock may enable our
board of directors to issue shares to persons friendly to current management or to issue preferred stock with terms that could have the effect of making it more difficult for a third party to acquire,
or could discourage a third party from seeking to acquire, a controlling interest in our company by means of a merger, tender offer, proxy contest or otherwise. In
10
addition,
if we issue preferred stock, the issuance could adversely affect the voting power of holders of common stock and the likelihood that such holders will receive dividend payments and payments
upon liquidation.
Provisions of our Certificate of Incorporation and Bylaws and Delaware Law That May Have Anti-takeover
Effects
Our certificate of incorporation and bylaws include a number of provisions that may have the effect of encouraging persons considering
unsolicited tender offers or other unilateral takeover proposals to negotiate with our board of directors rather than pursue non-negotiated takeover attempts. These provisions include the items
described below.
Board Composition and Filling Vacancies. In accordance with our certificate of incorporation, our board is divided into three classes
serving
three-year terms, with one class being elected each year. Our certificate of incorporation also provides that directors may be removed only for cause and then only by the affirmative vote of the
holders of 75% or more of the shares then entitled to vote at an election of directors. Furthermore, any vacancy on our board of directors, however occurring, including a vacancy resulting from an
increase in the size of our board, may only be filled by the affirmative vote of a majority of our directors then in office, even if less than a quorum.
No Written Consent of Stockholders. Our bylaws provide that all stockholder actions are required to be taken by a vote of the
stockholders at an
annual or special meeting, and that stockholders may not take any action by written consent in lieu of a meeting.
Meetings of Stockholders. Our bylaws provide that only a majority of the members of our board of directors then in office, the chairman
of the board,
or the chief executive officer may call special meetings of stockholders and only those matters set forth in the notice of the special meeting may be considered or acted upon at a special meeting of
stockholders. Our bylaws limit the business that may
be conducted at an annual meeting of stockholders to those matters properly brought before the meeting.
Advance Notice Requirements. Our bylaws establish advance notice procedures with regard to stockholder proposals relating to the
nomination of
candidates for election as directors or new business to be brought before meetings of our stockholders. These procedures provide that notice of stockholder proposals must be timely given in writing to
our corporate secretary prior to the meeting at which the action is to be taken. Generally, to be timely, notice must be received at our principal executive offices not less than 90 days or
more than 120 days prior to the first anniversary date of the annual meeting for the preceding year. The notice must contain certain information specified in the bylaws. These provisions may
have the effect of precluding the conduct of certain business at a meeting if the proper procedures are not followed. These provisions may also discourage or deter a potential acquirer from conducting
a solicitation of proxies to elect the acquirer's own slate of directors or otherwise attempting to obtain control of our company.
Amendment to Certificate of Incorporation and Bylaws. As required by the Delaware General Corporation Law, any amendment of our
certificate of
incorporation must first be approved by a majority of our board of directors and, if required by law or our certificate of incorporation, thereafter be approved by a majority of the outstanding shares
entitled to vote on the amendment, and a majority of the outstanding shares of each class entitled to vote thereon as a class, except that the amendment of the provisions relating to stockholder
action, directors, limitation of liability, exclusive jurisdiction of Delaware Courts and the amendment of our bylaws and certificate of incorporation must be approved by not less than 75% of the
outstanding shares entitled to vote on the amendment, and not less than 75% of the outstanding shares of each class entitled to vote thereon as a class. Our bylaws may be amended by the affirmative
vote of a majority of the directors then in office, subject to any limitations
11
set
forth in the bylaws; and may also be amended by the affirmative vote of at least 75% of the outstanding shares entitled to vote on the amendment, or, if the board of directors recommends that the
stockholders approve the amendment, by the affirmative vote of the majority of the outstanding shares entitled to vote on the amendment, in each case voting together as a single class.
Preferred Stock. Our certificate of incorporation provides for 5,000,000 authorized shares of preferred stock. The existence of
authorized but
unissued shares of preferred stock may enable our board of directors to render more difficult or to discourage an attempt to obtain control of us by means of a
merger, tender offer, proxy contest or otherwise. For example, if in the due exercise of its fiduciary obligations, our board of directors were to determine that a takeover proposal is not in the best
interests of us or our stockholders, our board of directors could cause shares of preferred stock to be issued without stockholder approval in one or more private offerings or other transactions that
might dilute the voting or other rights of the proposed acquirer or insurgent stockholder or stockholder group. In this regard, our certificate of incorporation grants our board of directors broad
power to establish the rights and preferences of authorized and unissued shares of preferred stock. The issuance of shares of preferred stock could decrease the amount of earnings and assets available
for distribution to holders of shares of common stock. The issuance may also adversely affect the rights and powers, including voting rights, of these holders and may have the effect of delaying,
deterring or preventing a change in control of us.
Section 203 of the Delaware General Corporation Law. We are subject to the provisions of Section 203 of the Delaware General
Corporation Law. In general, Section 203 prohibits a publicly-held Delaware corporation from engaging in a "business combination" with an "interested stockholder" for a three-year period
following the time that this stockholder becomes an interested stockholder, unless the business combination is approved in a prescribed manner. A "business combination" includes, among other things, a
merger, asset or stock sale or other transaction resulting in a financial benefit to the interested stockholder. An "interested stockholder" is a person who, together with affiliates and associates,
owns, or did own within three years prior to the determination of interested stockholder status, 15% or more of the corporation's voting stock. Under Section 203, a business combination between
a corporation and an interested stockholder is prohibited unless it satisfies one of the following conditions:
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before the stockholder became interested, the board of directors approved either the business combination or the transaction which resulted in
the stockholder becoming an interested stockholder;
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upon consummation of the transaction that resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at
least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, excluding for purposes of determining the voting stock outstanding, shares owned by persons who are
directors and also officers, and employee stock plans, in some instances; or
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at or after the time the stockholder became interested, the business combination was approved by the board of directors of the corporation and
authorized at an annual or special meeting of the stockholders by the affirmative vote of at least two-thirds of the outstanding voting stock that is not owned by the interested stockholder.
A
Delaware corporation may "opt out" of these provisions with an express provision in its original certificate of incorporation or an express provision in its certificate of
incorporation or bylaws resulting from a stockholders' amendment approved by at least a majority of the outstanding voting shares. We have not opted out of these provisions. As a result, mergers or
other takeover or change in control attempts of us may be discouraged or prevented.
12
Exclusive Jurisdiction of Certain Actions. Our certificate of incorporation requires, to the fullest extent permitted by law, that
derivative actions
brought in our name, actions against our directors, officers and employees for breach of fiduciary duty and other similar actions may be brought only in the Court of Chancery in the State of Delaware,
unless we otherwise consent. Although we believe this provision benefits us by providing increased consistency in the application of Delaware law in the types of lawsuits to which it applies, the
provision may have the effect of discouraging lawsuits against our directors and officers.
DESCRIPTION OF DEBT SECURITIES
We may offer debt securities which may be senior or subordinated. We refer to senior debt securities and subordinated debt securities
collectively as debt securities. Each series of debt securities may have different terms. The following description summarizes the general terms and provisions of the debt securities. We will describe
the specific terms of the debt securities and the extent, if any, to which the general provisions summarized below apply to any series of debt securities in the prospectus supplement relating to the
series and any applicable free writing prospectus that we authorize to be delivered. When we refer to "the Company," "we," "our," and "us" in this section, we mean Conformis, Inc. excluding,
unless the context otherwise requires or as otherwise expressly stated, our subsidiaries.
We
may issue senior debt securities from time to time, in one or more series under a senior indenture to be entered into between us and a senior trustee to be named in a prospectus
supplement, which we refer to as the senior trustee. We may issue subordinated debt securities from time to time, in one or more series under a subordinated indenture to be entered into between us and
a subordinated trustee to be named in a prospectus supplement, which we refer to as the subordinated trustee. The forms of senior indenture and subordinated indenture are filed as exhibits to the
registration statement of which
this prospectus forms a part. Together, the senior indenture and the subordinated indenture are referred to as the indentures and, together, the senior trustee and the subordinated trustee are
referred to as the trustees. This prospectus briefly outlines some of the provisions of the indentures. The following summary of the material provisions of the indentures is qualified in its entirety
by the provisions of the indentures, including definitions of certain terms used in the indentures. Wherever we refer to particular sections or defined terms of the indentures, those sections or
defined terms are incorporated by reference in this prospectus or the applicable prospectus supplement. You should review the indentures that are filed as exhibits to the registration statement of
which this prospectus forms a part for additional information. As used in this prospectus, the term "debt securities" includes the debt securities being offered by this prospectus and all other
debt securities issued by us under the indentures.
General
The indentures:
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do not limit the amount of debt securities that we may issue;
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allow us to issue debt securities in one or more series;
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do not require us to issue all of the debt securities of a series at the same time;
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allow us to reopen a series to issue additional debt securities without the consent of the holders of the debt securities of such series; and
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provide that the debt securities will be unsecured, except as may be set forth in the applicable prospectus supplement.
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Unless
otherwise provided in the applicable prospectus supplement, the senior debt securities will be unsubordinated obligations and will rank equally with all of our other unsecured and
unsubordinated indebtedness. Payments on the subordinated debt securities will be subordinated to the prior payment in full of all of our senior indebtedness, as described under
"Subordination" and in the applicable prospectus supplement.
Each
indenture provides that we may, but need not, designate more than one trustee under an indenture. Any trustee under an indenture may resign or be removed and a successor trustee may
be appointed to act with respect to the series of debt securities administered by the resigning or removed trustee. If two or more persons are acting as trustee with respect to different series of
debt securities, each trustee shall be a trustee of a trust under the applicable indenture separate and apart from the trust administered by any other trustee. Except as otherwise indicated in this
prospectus, any action described in this prospectus to be taken by each trustee may be taken by each trustee with respect to, and only with respect to, the one or more series of debt securities for
which it is trustee under the applicable indenture.
The
prospectus supplement for each offering will provide the following terms, where applicable:
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the title of the debt securities and whether they are senior or subordinated;
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the aggregate principal amount of the debt securities being offered, the aggregate principal amount of the debt securities outstanding as of
the most recent practicable date and any limit on their aggregate principal amount, including the aggregate principal amount of debt securities authorized;
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the price at which the debt securities will be issued, expressed as a percentage of the principal and, if other than the principal amount
thereof, the portion of the principal amount thereof payable upon declaration of acceleration of the maturity thereof or, if applicable, the portion of the principal amount of such debt securities
that is convertible into common stock or other securities of ours or the method by which any such portion shall be determined;
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if convertible, the terms on which such debt securities are convertible, including the initial conversion price or rate and the conversion
period and any applicable limitations on the ownership or transferability of common stock or other securities of ours received on conversion;
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the date or dates, or the method for determining the date or dates, on which the principal of the debt securities will be payable;
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the fixed or variable interest rate or rates of the debt securities, or the method by which the interest rate or rates is determined;
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the date or dates, or the method for determining the date or dates, from which interest will accrue;
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the dates on which interest will be payable;
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the record dates for interest payment dates, or the method by which such dates will be determined;
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the persons to whom interest will be payable;
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the basis upon which interest will be calculated if other than that of a 360-day year of twelve 30-day months;
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any make-whole amount, which is the amount in addition to principal and interest that is required to be paid to the holder of a debt security
as a result of any optional redemption or
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15
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the applicability, if any, of the defeasance and covenant defeasance provisions described in this prospectus or in the applicable indenture;
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whether and under what circumstances we will pay any additional amounts on the debt securities in respect of any tax, assessment or
governmental charge and, if so, whether we will have the option to redeem the debt securities in lieu of making such a payment;
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whether and under what circumstances the debt securities being offered are convertible into common stock or other securities of ours, as the
case may be, including the conversion price or rate and the manner or calculation thereof;
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the circumstances, if any, under which beneficial owners of interests in the global security may obtain definitive debt securities and the
manner in which payments on a permanent global debt security will be made if any debt securities are issuable in temporary or permanent global form;
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any provisions granting special rights to holders of securities upon the occurrence of such events as specified in the applicable prospectus
supplement;
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the name of the applicable trustee and the nature of any material relationship with us or any of our affiliates, and the percentage of debt
securities of the class necessary to require the trustee to take action; and
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any other terms of such debt securities not inconsistent with the provisions of the applicable indenture.
We
may issue debt securities that provide for less than the entire principal amount thereof to be payable upon declaration of acceleration of the maturity of the debt securities. We
refer to any such debt securities throughout this prospectus as "original issue discount securities." The applicable prospectus supplement will describe the United States federal income tax
consequences and other relevant considerations applicable to original issue discount securities.
Except
as described under "Merger, Consolidation or Sale of Assets" or as may be set forth in any prospectus supplement, the debt securities will not contain any provisions
that (i) would limit our ability to incur indebtedness or (ii) would afford holders of debt securities protection in the event of (a) a highly leveraged or similar transaction
involving us, or (b) a change of control or reorganization, restructuring, merger or similar transaction involving us that may adversely affect the holders of the debt securities. In the
future, we may enter into transactions, such as the sale of all or substantially all of our assets or a merger or consolidation, that may have an adverse effect on our ability to service our
indebtedness, including the debt securities, by, among other things, substantially reducing or eliminating our assets.
Our
governing instruments do not define the term "substantially all" as it relates to the sale of assets. Additionally, Delaware cases interpreting the term "substantially all" rely upon
the facts and circumstances of each particular case. Consequently, to determine whether a sale of "substantially all" of our assets has occurred, a holder of debt securities must review the financial
and other information that we have disclosed to the public.
We
will provide you with more information in the applicable prospectus supplement regarding any deletions, modifications, or additions to the events of default or covenants that are
described below, including any addition of a covenant or other provision providing event risk or similar protection.
16
Payment
Unless otherwise provided in the applicable prospectus supplement, the principal of, and any premium or make-whole amount, and interest on, any
series of the debt securities will be payable at the corporate trust office of the trustee. We will provide you with the address of the trustee in the applicable prospectus supplement. We may also pay
interest by mailing a check to the address of the person entitled to it as it appears in the applicable register for the debt securities or by wire transfer of funds to that person at an account
maintained within the United States.
All
monies that we pay to a paying agent or a trustee for the payment of the principal of, and any premium or make-whole amount, or interest on, any debt security will be repaid to us if
unclaimed at the end of two years after the obligation underlying payment becomes due and payable. After funds have been returned to us, the holder of the debt security may look only to us for
payment, without payment of interest for the period which we hold the funds.
Denomination, Interest, Registration and Transfer
Unless otherwise provided in the applicable prospectus supplement, the debt securities of any series will be issuable in denominations of $1,000
and integral multiples of $1,000.
Subject
to the limitations imposed upon debt securities that are evidenced by a computerized entry in the records of a depository company rather than by physical delivery of a note, a
holder of debt securities of any series may:
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exchange them for any authorized denomination of other debt securities of the same series and of a like aggregate principal amount and kind
upon surrender of such debt securities at the corporate trust office of the applicable trustee or at the office of any transfer agent that we designate for such purpose; and
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surrender them for registration of transfer or exchange at the corporate trust office of the applicable trustee or at the office of any
transfer agent that we designate for such purpose.
Every
debt security surrendered for registration of transfer or exchange must be duly endorsed or accompanied by a written instrument of transfer satisfactory to the applicable trustee
or transfer agent. Payment of a service charge will not be required for any registration of transfer or exchange of any debt securities, but we or the trustee may require payment of a sum sufficient
to cover any tax or other governmental charge payable in connection therewith. If, in addition to the applicable trustee, the applicable prospectus supplement refers to any transfer agent initially
designated by us for any series of debt securities, we may at any time rescind the designation of any such transfer agent or approve a change in the location through which any such transfer agent
acts, except that we will be required to maintain a transfer agent in each place of payment for such series. We may at any time designate additional transfer agents for any series of debt securities.
Neither
we, nor any trustee, will be required to:
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issue, register the transfer of or exchange debt securities of any series during a period beginning at the opening of business 15 days
before the day that the notice of redemption of any debt securities selected for redemption is mailed and ending at the close of business on the day of such mailing;
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register the transfer of or exchange any debt security, or portion thereof, so selected for redemption, in whole or in part, except the
unredeemed portion of any debt security being redeemed in part; and
17
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issue, register the transfer of or exchange any debt security that has been surrendered for repayment at the option of the holder, except the
portion, if any, of such debt security not to be so repaid.
Merger, Consolidation or Sale of Assets
The indentures provide that we may, without the consent of the holders of any outstanding debt securities, (i) consolidate with,
(ii) sell, lease or convey all or substantially all of our assets to, or (iii) merge with or into, any other entity provided that:
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either we are the continuing entity, or the successor entity, if other than us, assumes the obligations (a) to pay the principal of, and
any premium or make-whole amount, and interest on, all of the debt securities and (b) to duly perform and observe all of the covenants and conditions contained in the applicable indenture;
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after giving effect to the transaction, there is no event of default under the applicable indentures and no event which, after notice or the
lapse of time, or both, would become such an event of default, occurs and continues; and
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an officers' certificate and legal opinion covering such conditions are delivered to each applicable trustee.
Covenants
Existence. Except as described under "Merger, Consolidation or Sale of Assets," the indentures require us to do or cause to be
done all
things necessary to preserve and keep in full force and effect our existence, rights and franchises. However, the indentures do not require us to preserve any right or franchise if we determine that
any right or franchise is no longer desirable in the conduct of our business.
Payment of taxes and other claims. The indentures require us to pay, discharge or cause to be paid or discharged, before they become
delinquent
(i) all taxes, assessments and governmental charges levied or imposed on us, and (ii) all lawful claims for labor, materials and supplies which, if unpaid, might by law become a lien
upon our property. However, we will not be required to pay, discharge or cause to be paid or discharged any such tax, assessment, charge or claim whose amount, applicability or validity is being
contested in good faith by appropriate proceedings.
Provision of financial information. The indentures require us to (i) within 15 days of each of the respective dates by which
we are
required to file our annual reports, quarterly reports and other documents with the SEC, file with the trustee copies of the annual report, quarterly report and other documents that we file with the
SEC under Section 13 or 15(d) of the Exchange Act, (ii) file with the trustee and the SEC any additional information, documents and reports regarding compliance by us with the conditions
and covenants of the indentures, as required, (iii) within 30 days after the filing with the trustee, mail to
all holders of debt securities, as their names and addresses appear in the applicable register for such debt securities, without cost to such holders, summaries of any documents and reports required
to be filed by us pursuant to (i) and (ii) above, and (iv) supply, promptly upon written request and payment of the reasonable cost of duplication and delivery, copies of such
documents to any prospective holder.
Additional covenants. The applicable prospectus supplement will set forth any additional covenants relating to any series of debt
securities.
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Events of Default, Notice and Waiver
Unless the applicable prospectus supplement states otherwise, when we refer to "events of default" as defined in the indentures with respect to
any series of debt securities, we mean:
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default in the payment of any installment of interest on any debt security of such series continuing for 30 days;
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default in the payment of principal of, or any premium or make-whole amount on, any debt security of such series for five business days at its
stated maturity;
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default in making any sinking fund payment as required for any debt security of such series for five business days;
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default in the performance or breach of any covenant or warranty in the debt securities or in the indenture by us continuing for 60 days
after written notice as provided in the applicable indenture, but not of a covenant added to the indenture solely for the benefit of a series of debt securities issued thereunder other than such
series;
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a default under any bond, debenture, note, mortgage, indenture or instrument: (i) having an aggregate principal amount of at least
$30,000,000; or (ii) under which there may be issued, secured or evidenced any existing or later created indebtedness for money borrowed by us, if we are directly responsible or liable as
obligor or guarantor, if the default results in the indebtedness becoming or being declared due and payable prior to the date it otherwise would have, without such indebtedness having been discharged,
or such acceleration having been rescinded or annulled, within 30 days after notice to the issuing company specifying such default. Such notice shall be given to us by the trustee, or to us and
the trustee by the holders of at least 10% in principal amount of the outstanding debt securities of that series. The written notice shall specify such default and require us to cause such
indebtedness to be discharged or cause such acceleration to be rescinded or annulled and shall state that such notice is a "Notice of Default" under such indenture;
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bankruptcy, insolvency or reorganization, or court appointment of a receiver, liquidator or trustee of us; and
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any other event of default provided with respect to a particular series of debt securities.
If
an event of default occurs and is continuing with respect to debt securities of any series outstanding, then the applicable trustee or the holders of 25% or more in principal amount
of the debt securities of that series will have the right to declare the principal amount of all the debt securities of that series to be due and payable. If the debt securities of that series are
original issue discount securities or indexed securities, then the applicable trustee or the holders of 25% or more in principal amount of the debt securities of that series will have the right to
declare the portion of the principal amount as may be specified in the terms thereof to be due and payable. However, at any time after such a declaration of acceleration has been made, but before a
judgment or decree for payment of the money due has been obtained by the applicable trustee, the holders of at least a majority in principal amount of outstanding debt securities of such series or of
all debt securities then outstanding under the applicable indenture may rescind and annul such declaration and its consequences if:
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we have deposited with the applicable trustee all required payments of the principal, any premium or make-whole amount, interest and, to the
extent permitted by law, interest on overdue installment of interest, plus applicable fees, expenses, disbursements and advances of the applicable trustee; and
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all events of default, other than the non-payment of accelerated principal, or a specified portion thereof, and any premium or make-whole
amount, have been cured or waived.
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The
indentures also provide that the holders of at least a majority in principal amount of the outstanding debt securities of any series or of all debt securities then outstanding under
the applicable indenture may, on behalf of all holders, waive any past default with respect to such series and its consequences, except a default:
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in the payment of the principal, any premium or make-whole amount, or interest;
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in respect of a covenant or provision contained in the applicable indenture that cannot be modified or amended without the consent of the
holders of the outstanding debt security that is affected by the default; or
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in respect of a covenant or provision for the benefit or protection of the trustee, without its express written consent.
The
indentures require each trustee to give notice to the holders of debt securities within 90 days of a default unless such default has been cured or waived. However, the trustee
may withhold notice if specified persons of such trustee consider such withholding to be in the interest of the holders of debt securities. The trustee may not withhold notice of a default in the
payment of principal, any premium or interest on any debt security of such series or in the payment of any sinking fund installment in respect of any debt security of such series.
The
indentures provide that holders of debt securities of any series may not institute any proceedings, judicial or otherwise, with respect to such indenture or for any remedy under the
indenture, unless the trustee fails to act for a period of 60 days after the trustee has received a written request to institute proceedings in respect of an event of default from the holders
of 25% or more in principal amount of the outstanding debt securities of such series, as well as an offer of indemnity reasonably satisfactory to the trustee. However, this provision will not prevent
any holder of debt securities from instituting suit for the enforcement of payment of the principal of, and any premium or make-whole amount, and interest on, such debt securities at the respective
due dates thereof.
The
indentures provide that, subject to provisions in each indenture relating to its duties in the case of a default, a trustee has no obligation to exercise any of its rights or powers
at the request or direction of any holders of any series of debt securities then outstanding under the indenture, unless the holders have offered to the trustee reasonable security or indemnity. The
holders of at least a majority in principal amount of the outstanding debt securities of any series or of all debt securities then outstanding under an indenture shall have the right to direct the
time, method and place of conducting any proceeding for any remedy available to the applicable trustee, or of exercising any trust or power conferred upon such trustee. However, a trustee may refuse
to follow any direction which:
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is in conflict with any law or the applicable indenture;
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may involve the trustee in personal liability; or
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may be unduly prejudicial to the holders of debt securities of the series not joining the proceeding.
Within
120 days after the close of each fiscal year, we will be required to deliver to each trustee a certificate, signed by one of our several specified officers, stating whether
or not that officer has knowledge of any default under the applicable indenture. If the officer has knowledge of any default, the notice must specify the nature and status of the default.
Modification of the Indentures
The indentures provide that modifications and amendments may be made only with the consent of the affected holders of a majority in principal
amount of all outstanding debt securities issued under
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that
indenture. However, no such modification or amendment may, without the consent of the holders of the debt securities affected by the modification or
amendment:
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change the stated maturity of the principal of, or any premium or make-whole amount on, or any installment of principal of or interest on, any
such debt security;
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reduce the principal amount of, the rate or amount of interest on, or any premium or make-whole amount payable on redemption of, any such debt
security;
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reduce the amount of principal of an original issue discount security that would be due and payable upon declaration of acceleration of the
maturity thereof or would be provable in bankruptcy, or adversely affect any right of repayment of the holder of any such debt security;
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change the place of payment or the coin or currency for payment of principal of, or any premium or make-whole amount, or interest on, any such
debt security;
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impair the right to institute suit for the enforcement of any payment on or with respect to any such debt security;
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reduce the percentage in principal amount of any outstanding debt securities necessary to modify or amend the applicable indenture with respect
to such debt securities, to waive compliance with particular provisions thereof or defaults and consequences thereunder or to reduce the quorum or voting requirements set forth in the applicable
indenture; and
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modify any of the foregoing provisions or any of the provisions relating to the waiver of particular past defaults or covenants, except to
increase the required percentage to effect such action or to provide that some of the other provisions may not be modified or waived without the consent of the holder of such debt security.
The
holders of a majority in aggregate principal amount of the outstanding debt securities of each series may, on behalf of all holders of debt securities of that series, waive, insofar
as that series is concerned, our compliance with material restrictive covenants of the applicable indenture.
We
and our respective trustee may make modifications and amendments of an indenture without the consent of any holder of debt securities for any of the following
purposes:
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to evidence the succession of another person to us as obligor under such indenture;
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to add to our covenants for the benefit of the holders of all or any series of debt securities or to surrender any right or power conferred
upon us in such indenture;
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to add events of default for the benefit of the holders of all or any series of debt securities;
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to add or change any provisions of an indenture (i) to change or eliminate restrictions on the payment of principal of, or premium or
make-whole amount, or interest on, debt securities in bearer form, or (ii) to permit or facilitate the issuance of debt securities in uncertificated form, provided that such action shall not
adversely affect the interests of the holders of the debt securities of any series in any material respect;
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to change or eliminate any provisions of an indenture, provided that any such change or elimination shall become effective only when there are
no debt securities outstanding of any series created prior thereto which are entitled to the benefit of such provision;
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to secure the debt securities;
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to establish the form or terms of debt securities of any series;
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to provide for the acceptance of appointment by a successor trustee or facilitate the administration of the trusts under an indenture by more
than one trustee;
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to cure any ambiguity, defect or inconsistency in an indenture, provided that such action shall not adversely affect the interests of holders
of debt securities of any series issued under such indenture; and
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to supplement any of the provisions of an indenture to the extent necessary to permit or facilitate defeasance and discharge of any series of
such debt securities, provided that such action shall not adversely affect the interests of the holders of the outstanding debt securities of any series.
Voting
The indentures provide that in determining whether the holders of the requisite principal amount of outstanding debt securities of a series have
given any request, demand, authorization, direction, notice, consent or waiver under the indentures or whether a quorum is present at a meeting of holders of debt
securities:
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the principal amount of an original issue discount security that shall be deemed to be outstanding shall be the amount of the principal thereof
that would be due and payable as of the date of such determination upon declaration of acceleration of the maturity thereof;
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the principal amount of any debt security denominated in a foreign currency that shall be deemed outstanding shall be the United States dollar
equivalent, determined on the issue date for such debt security, of the principal amount or, in the case of an original issue discount security, the United States dollar equivalent on the issue date
of such debt security of the amount determined as provided in the preceding bullet point;
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the principal amount of an indexed security that shall be deemed outstanding shall be the principal face amount of such indexed security at
original issuance, unless otherwise provided for such indexed security under such indenture; and
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debt securities owned by us or any other obligor upon the debt securities or by any affiliate of ours or of such other obligor shall be
disregarded.
The
indentures contain provisions for convening meetings of the holders of debt securities of a series. A meeting will be permitted to be called at any time by the applicable trustee,
and also, upon request, by us or the holders of at least 25% in principal amount of the outstanding debt securities of such series, in any such case upon notice given as provided in such indenture.
Except for any consent that must be given by the holder of each debt security affected by the modifications and amendments of an indenture described above, any resolution presented at a meeting or
adjourned meeting duly reconvened at which a quorum is present may be adopted by the affirmative vote of the holders of a majority of the aggregate principal amount of the outstanding debt securities
of that series represented at such meeting.
Notwithstanding
the preceding paragraph, except as referred to above, any resolution relating to a request, demand, authorization, direction, notice, consent, waiver or other action that
may be made, given or taken by the holders of a specified percentage, which is less than a majority of the aggregate principal amount of the outstanding debt securities of a series, may be adopted at
a meeting or adjourned meeting duly reconvened at which a quorum is present by the affirmative vote of such specified percentage.
Any
resolution passed or decision taken at any properly held meeting of holders of debt securities of any series will be binding on all holders of such series. The quorum at any meeting
called to adopt a resolution, and at any reconvened meeting, will be persons holding or representing a majority in principal amount of the outstanding debt securities of a series. However, if any
action is to be taken relating to a consent or waiver which may be given by the holders of at least a specified percentage in
22
principal
amount of the outstanding debt securities of a series, the persons holding such percentage will constitute a quorum.
Notwithstanding
the foregoing provisions, the indentures provide that if any action is to be taken at a meeting with respect to any request, demand, authorization, direction, notice,
consent, waiver or other action that such indenture expressly provides may be made, given or taken by the holders of a specified percentage in principal amount of all outstanding debt securities
affected by such action, or of the holders of such series and one or more additional series:
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there shall be no minimum quorum requirement for such meeting; and
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the principal amount of the outstanding debt securities of such series that vote in favor of such request, demand, authorization, direction,
notice, consent, waiver or other action shall be taken account in determining whether such request, demand, authorization, direction, notice, consent, waiver or other action has been made, given or
taken under such indenture.
Subordination
Unless otherwise provided in the applicable prospectus supplement, subordinated debt securities will be subject to the following subordination
provisions.
Upon
any distribution to our creditors in a liquidation, dissolution or reorganization, the payment of the principal of and interest on any subordinated debt securities will be
subordinated to the extent provided in the applicable indenture in right of payment to the prior payment in full of all senior debt. However, our obligation to make payments of the principal of and
interest on such subordinated debt securities otherwise will not be affected. No payment of principal or interest will be permitted to be made on subordinated debt securities at any time if a default
on senior debt exists that permits the holders of such senior debt to accelerate its maturity and the default is the subject of judicial proceedings or we receive notice of the default. After all
senior debt is paid in full and until the
subordinated debt securities are paid in full, holders of subordinated debt securities will be subrogated to the rights of holders of senior debt to the extent that distributions otherwise payable to
holders of subordinated debt securities have been applied to the payment of senior debt. The subordinated indenture will not restrict the amount of senior debt or other indebtedness of ours and our
subsidiaries. As a result of these subordination provisions, in the event of a distribution of assets upon insolvency, holders of subordinated debt securities may recover less, ratably, than our
general creditors.
The
term "senior debt" will be defined in the applicable indenture as the principal of and interest on, or substantially similar payments to be made by us in respect of, other
outstanding indebtedness, whether outstanding at the date of execution of the applicable indenture or subsequently incurred, created or assumed. The prospectus supplement may include a description of
additional terms implementing the subordination feature.
No
restrictions will be included in any indenture relating to subordinated debt securities upon the creation of additional senior debt.
If
this prospectus is being delivered in connection with the offering of a series of subordinated debt securities, the accompanying prospectus supplement or the information incorporated
in this prospectus by reference will set forth the approximate amount of senior debt outstanding as of the end of our most recent fiscal quarter.
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Discharge, Defeasance and Covenant Defeasance
Unless otherwise provided in the applicable prospectus supplement, the indentures allow us to discharge our obligations to holders of any series
of debt securities issued under any indenture when:
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either (i) all securities of such series have already been delivered to the applicable trustee for cancellation; or (ii) all
securities of such series have not already been delivered to the applicable trustee for cancellation but (a) have become due and payable, (b) will become due and payable within one year,
or (c) if redeemable at our option, are to be redeemed within one year, and we have irrevocably deposited with the applicable trustee, in trust, funds in such currency or currencies, currency
unit or units or composite currency or currencies in which such debt securities are payable, an amount sufficient to pay the entire indebtedness on such debt securities in respect of principal and any
premium or make-whole amount, and interest to the date of such deposit if such debt securities have become due and payable or, if they have not, to the stated maturity or redemption date;
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we have paid or caused to be paid all other sums payable; and
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an officers' certificate and an opinion of counsel stating the conditions to discharging the debt securities have been satisfied has been
delivered to the trustee.
Unless
otherwise provided in the applicable prospectus supplement, the indentures provide that, upon our irrevocable deposit with the applicable trustee, in trust, of an amount, in such
currency or currencies, currency unit or units or composite currency or currencies in which such debt securities are payable at stated maturity, or government obligations, or both, applicable to such
debt securities, which through the scheduled payment of principal and interest in accordance with their terms will provide money in an amount sufficient to pay the principal of, and any premium or
make-whole amount, and interest on, such debt securities, and any mandatory sinking fund or analogous payments thereon, on the scheduled due dates therefor, the issuing company may elect
either:
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to defease and be discharged from any and all obligations with respect to such debt securities; or
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to be released from its obligations with respect to such debt securities under the applicable indenture or, if provided in the applicable
prospectus supplement, its obligations with respect to any other covenant, and any omission to comply with such obligations shall not constitute an event of default with respect to such debt
securities.
Notwithstanding
the above, we may not elect to defease and be discharged from the obligation to pay any additional amounts upon the occurrence of particular events of tax, assessment or
governmental charge with respect to payments on such debt securities and the obligations to register the transfer or exchange of such debt securities, to replace temporary or mutilated, destroyed,
lost or stolen debt securities, to maintain an office or agency in respect of such debt securities, or to hold monies for payment in trust.
The
indentures only permit us to establish the trust described in the paragraph above if, among other things, we have delivered to the applicable trustee an opinion of counsel to the
effect that the holders of such debt securities will not recognize income, gain or loss for United States federal income tax purposes as a result of such defeasance or covenant defeasance and will be
subject to United States federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such defeasance or covenant defeasance had not occurred. Such
opinion of counsel, in the case of defeasance, will be required to refer to and be based upon a ruling received from or published by the Internal Revenue Service or a change in applicable United
States federal income tax law occurring after the date of the indenture. In the event of such defeasance, the holders of such debt securities would be able to look only to such trust fund for payment
of principal, any premium or make-whole amount, and interest.
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When
we use the term "government obligations," we mean securities that are:
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direct obligations of the United States or the government that issued the foreign currency in which the debt securities of a particular series
are payable, for the payment of which its full faith and credit is pledged; or
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obligations of a person controlled or supervised by and acting as an agency or instrumentality of the United States or other government that
issued the foreign currency in which the debt securities of such series are payable, the payment of which is unconditionally guaranteed as a full faith and credit obligation by the United States or
such other government, which are not callable or redeemable at the option of the issuer thereof and shall also include a depository receipt issued by a bank or trust company as custodian with respect
to any such government obligation or a specific payment of interest on or principal of any such government obligation held by such custodian for the account of the holder of a depository receipt.
However, except as required by law, such custodian is not authorized to make any deduction from the amount payable to the holder of such depository receipt from any amount received by the custodian in
respect of the government obligation or the specific payment of interest on or principal of the government obligation evidenced by such depository receipt.
Unless
otherwise provided in the applicable prospectus supplement, if after we have deposited funds and/or government obligations to effect defeasance or covenant defeasance with respect
to debt securities of any series, (i) the holder of a debt security of such series is entitled to, and does, elect under the terms of the applicable indenture or the terms of such debt security
to receive payment in a currency, currency unit or composite currency other than that in which such deposit has been made in respect of such debt security, or (ii) a conversion event occurs in
respect of the currency, currency unit or composite currency in which such deposit has been made, the indebtedness represented by such debt security will be deemed to have been, and will be, fully
discharged and satisfied through the payment of the principal of, and premium or make-whole amount, and interest on, such debt security as they become due out of the proceeds yielded by converting the
amount so deposited in respect of such debt security into the currency, currency unit or composite currency in which such debt security becomes payable as a result of such election or such cessation
of usage based on the applicable market exchange rate.
When
we use the term "conversion event," we mean the cessation of use of:
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a currency, currency unit or composite currency both by the government of the country that issued such currency and for the settlement of
transactions by a central bank or other public institutions of or within the international banking community;
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the European Currency Unit both within the European Monetary System and for the settlement of transactions by public institutions of or within
the European Communities; or
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any currency unit or composite currency other than the European Currency Unit for the purposes for which it was established.
Unless
otherwise provided in the applicable prospectus supplement, all payments of principal of, and any premium or make-whole amount, and interest on, any debt security that is payable
in a foreign currency that ceases to be used by its government of issuance shall be made in United States dollars.
In
the event that (i) we effect covenant defeasance with respect to any debt securities and (ii) those debt securities are declared due and payable because of the
occurrence of any event of default, the amount in the currency, currency unit or composite currency in which such debt securities are payable, and government obligations on deposit with the applicable
trustee, will be sufficient to pay amounts due on such debt securities at the time of their stated maturity but may not be sufficient to pay amounts due on such debt securities at the time of the
acceleration resulting from such event of
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default.
However, the issuing company would remain liable to make payments of any amounts due at the time of acceleration.
The
applicable prospectus supplement may further describe the provisions, if any, permitting such defeasance or covenant defeasance, including any modifications to the provisions
described above, with respect to the debt securities of or within a particular series.
Conversion Rights
The terms and conditions, if any, upon which the debt securities are convertible into common stock or other securities of ours will be set forth
in the applicable prospectus supplement. The terms will include whether the debt securities are convertible into shares of common stock or other securities of ours, the conversion price, or manner of
calculation thereof, the conversion period, provisions as to whether conversion will be at the issuing company's option or the option of the holders, the events requiring an adjustment of the
conversion price and provisions affecting conversion in the event of the redemption of the debt securities and any restrictions on conversion.
No Recourse
No recourse shall be had under any obligation, covenant or agreement of ours in the senior indenture or any supplemental indenture, or in any of
the debt securities or because of the creation of any indebtedness represented thereby, against any of our incorporators, stockholders, officers or directors, past, present or future, or of any
predecessor or successor entity thereof under any law, statute or constitutional provision or by the enforcement of any assessment or by any legal or equitable proceeding or otherwise. Each holder, by
accepting the debt securities, waives and releases all such liability.
DESCRIPTION OF WARRANTS
We may issue warrants to purchase debt securities, common stock, or preferred stock. We may offer warrants separately or together with one or
more additional warrants, debt securities, common stock, or preferred stock, or any combination of those securities in the form of units, as described in the applicable prospectus supplement. If we
issue warrants as part of a unit, the accompanying prospectus supplement will specify whether those warrants may be separated from the other securities in the unit prior to the expiration date of the
warrants. The applicable prospectus supplement will also describe the following terms of any warrants:
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the specific designation and aggregate number of, and the offering price at which we will issue, the warrants;
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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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the date on which the right to exercise the warrants will begin and the date on which that right will expire or, if you may not continuously
exercise the warrants throughout that period, the specific date or dates on which you may exercise the warrants;
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whether the warrants are to be sold separately or with other securities as parts of units;
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whether the warrants will be issued in definitive or global form or in any combination of these forms, although, in any case, the form of a
warrant included in a unit will correspond to the form of the unit and of any security included in that unit;
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any applicable material U.S. federal income tax consequences;
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the identity of the warrant agent for the warrants and of any other depositaries, execution or paying agents, transfer agents, registrars or
other agents;
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the proposed listing, if any, of the warrants or any securities purchasable upon exercise of the warrants on any securities exchange;
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the designation and terms of any equity securities purchasable upon exercise of the warrants;
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the designation, aggregate principal amount, currency and terms of any debt securities that may be purchased upon exercise of the warrants;
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if applicable, the designation and terms of the debt securities, common stock, or preferred stock with which the warrants are issued and, the
number of warrants issued with each security;
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if applicable, the date from and after which any warrants issued as part of a unit and the related debt securities, common stock, or preferred
stock will be separately transferable;
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the number of shares of common stock or preferred stock purchasable upon exercise of a warrant and the price at which those shares may be
purchased;
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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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information with respect to book-entry procedures, if any;
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the antidilution provisions of, and other provisions for changes to or adjustment in the exercise price of, the warrants, if any;
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any redemption or call provisions; and
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any additional terms of the warrants, including terms, procedures and limitations relating to the exchange or exercise of the warrants.
Specific
warrant agreements will contain additional important terms and provisions and will be incorporated by reference as an exhibit to the registration statement of which this prospectus
forms a part.
DESCRIPTION OF UNITS
The following description, together with the additional information that we include in any applicable prospectus supplements and in any related
free writing prospectuses, summarizes the material terms and provisions of the units that we may offer under this prospectus. While the terms we have summarized below will apply generally to any units
that we may offer under this prospectus, we will describe the particular terms of any series of units in more detail in the applicable prospectus supplement. The terms of any units offered under a
prospectus supplement may differ from the terms described below.
We
will file as exhibits to the registration statement of which this prospectus is a part, or will incorporate by reference from reports that we file with the SEC, the form of unit
agreement that describes the terms of the series of units we are offering, and any supplemental agreements, before the issuance of the related series of units. The following summaries of material
terms and provisions of the units are subject to, and qualified in their entirety by reference to, all the provisions of the unit agreement and any supplemental agreements applicable to a particular
series of units. We urge you to read the applicable prospectus supplements related to the particular series of units that we may offer under this prospectus, as well as any related free writing
prospectuses and the complete unit agreement and any supplemental agreements that contain the terms of the units.
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General
We may issue units comprised of shares of common stock, preferred stock, debt securities, warrants and units in any combination. Each unit will
be issued so that the holder of the unit is also the holder of each security included in the unit. Thus, the holder of a unit will have the rights and obligations of a holder of each included
security. The unit agreement under which a unit is issued may provide that the securities included in the unit may not be held or transferred separately, at any time or at any time before a specified
date.
We
will describe in the applicable prospectus supplement the terms of the series of units, including:
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the designation and terms of the units, including whether and under what circumstances the securities comprising the units may be held or
transferred separately;
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any provisions of the governing unit agreement that differ from those described below; and
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any provisions for the issuance, payment, settlement, transfer or exchange of the units or of the securities comprising the units.
The
provisions described in this section, as well as those described under "Description of Capital Stock," "Description of Debt Securities" and "Description of Warrants," will apply to
each unit and to the common stock, preferred stock, debt securities and warrants included in each unit, respectively.
Issuance in Series
We may issue units in such amounts and in such numerous distinct series as we determine.
Enforceability of Rights by Holders of Units
Each unit agent will act solely as our agent under the applicable unit agreement and will not assume any obligation or relationship of agency or
trust with any holder of any unit. A single bank or trust company may act as unit agent for more than one series of units. A unit agent will have no duty or responsibility in case of any default by us
under the applicable unit agreement or unit, including any duty or responsibility to initiate any proceedings at law or otherwise, or to make any demand upon us.
Any
holder of a unit may, without the consent of the related unit agent or the holder of any other unit, enforce by appropriate legal action its rights as holder under any security
included in the unit.
Title
We, the unit agent and any of its agents, may treat the registered holder of any unit certificate as an absolute owner of the units evidenced by
that certificate for any purpose and as the person entitled to exercise the rights attaching to the units so requested, despite any notice to the contrary.
FORMS OF SECURITIES
Each debt security, warrant and unit will be represented either by a certificate issued in definitive form to a particular investor or by one or
more global securities representing the
entire issuance of securities. Unless otherwise provided in the applicable prospectus supplement, certificated securities in definitive form and global securities will be issued in registered form.
Definitive securities name you or your nominee as the owner of the security, and in order to transfer or exchange these securities or to receive payments other than interest or other interim payments,
you or your nominee must physically deliver the securities to the trustee, registrar, paying agent or other agent, as applicable. Global securities name a depositary or its nominee as the owner of the
debt securities, warrants or units represented by these global securities. The depositary maintains a computerized system that will reflect
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each
investor's beneficial ownership of the securities through an account maintained by the investor with its broker/dealer, bank, trust company or other representative, as we explain more fully
below.
Registered Global Securities
We may issue the registered debt securities, warrants and units in the form of one or more fully registered global securities that will be
deposited with a depositary or its nominee identified in the applicable prospectus supplement and registered in the name of that depositary or nominee. In those cases, one or more registered global
securities will be issued in a denomination or aggregate denominations equal to the portion of the aggregate principal or face amount of the securities to be represented by registered global
securities. Unless and until it is exchanged in whole for securities in definitive registered form, a registered global security may not be transferred except as a whole by and among the depositary
for the registered global security, the nominees of the depositary or any successors of the depositary or those nominees.
If
not described below, any specific terms of the depositary arrangement with respect to any securities to be represented by a registered global security will be described in the
prospectus supplement relating to those securities. We anticipate that the following provisions will apply to all depositary arrangements.
Ownership
of beneficial interests in a registered global security will be limited to persons, called participants, that have accounts with the depositary or persons that may hold
interests through participants. Upon the issuance of a registered global security, the depositary will credit, on its book-entry registration and transfer system, the participants' accounts with the
respective principal or face amounts of the securities beneficially owned by the participants. Any dealers, underwriters or agents participating in the distribution of the securities will designate
the accounts to be credited. Ownership of beneficial interests in a registered global security will be shown on, and the transfer of
ownership interests will be effected only through, records maintained by the depositary, with respect to interests of participants, and on the records of participants, with respect to interests of
persons holding through participants. The laws of some states may require that some purchasers of securities take physical delivery of these securities in definitive form. These laws may impair your
ability to own, transfer or pledge beneficial interests in registered global securities.
So
long as the depositary, or its nominee, is the registered owner of a registered global security, that depositary or its nominee, as the case may be, will be considered the sole owner
or holder of the securities represented by the registered global security for all purposes under the applicable indenture, warrant agreement or unit agreement. Except as described below, owners of
beneficial interests in a registered global security will not be entitled to have the securities represented by the registered global security registered in their names, will not receive or be
entitled to receive physical delivery of the securities in definitive form and will not be considered the owners or holders of the securities under the applicable indenture, warrant agreement or unit
agreement. Accordingly, each person owning a beneficial interest in a registered global security must rely on the procedures of the depositary for that registered global security and, if that person
is not a participant, on the procedures of the participant through which the person owns its interest, to exercise any rights of a holder under the applicable indenture, warrant agreement or unit
agreement. We understand that under existing industry practices, if we request any action of holders or if an owner of a beneficial interest in a registered global security desires to give or take any
action that a holder is entitled to give or take under the applicable indenture, warrant agreement or unit agreement, the depositary for the registered global security would authorize the participants
holding the relevant beneficial interests to give or take that action, and the participants would authorize beneficial owners owning through them to give or take that action or would otherwise act
upon the instructions of beneficial owners holding through them.
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Principal,
premium, if any, and interest payments on debt securities, and any payments to holders with respect to warrants, or units, represented by a registered global security
registered in the name of a depositary or its nominee will be made to the depositary or its nominee, as the case may be, as the registered owner of the registered global security. None of us, the
trustees, the warrant agents, the unit agents or any other agent of ours, agent of the trustees or agent of the warrant agents or unit agents will have any responsibility or liability for any aspect
of the records relating to payments made on account of beneficial ownership interests in the registered global security or for maintaining, supervising or reviewing any records relating to those
beneficial ownership interests.
We
expect that the depositary for any of the securities represented by a registered global security, upon receipt of any payment to holders of principal, premium, interest or other
distribution of underlying securities or other property on that registered global security, will immediately credit participants' accounts in amounts proportionate to their respective beneficial
interests in that registered global security as shown on the records of the depositary. We also expect that payments by participants to owners of beneficial interests in a registered global security
held through participants will be governed by standing customer instructions and customary practices, as is now the case with the securities held
for the accounts of customers or registered in "street name," and will be the responsibility of those participants.
If
the depositary for any of the securities represented by a registered global security is at any time unwilling or unable to continue as depositary or ceases to be a clearing agency
registered under the Exchange Act, and a successor depositary registered as a clearing agency under the Exchange Act is not appointed by us within 90 days, we will issue securities in
definitive form in exchange for the registered global security that had been held by the depositary. Any securities issued in definitive form in exchange for a registered global security will be
registered in the name or names that the depositary gives to the relevant trustee, warrant agent, unit agent or other relevant agent of ours or theirs. It is expected that the depositary's
instructions will be based upon directions received by the depositary from participants with respect to ownership of beneficial interests in the registered global security that had been held by the
depositary.
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PLAN OF DISTRIBUTION
We may sell securities through any one or more of the following methods from time to time:
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to or through underwriters, brokers or dealers;
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through agents;
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directly to one or more other purchasers in negotiated sales or competitively bid transactions;
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through a block trade in which the broker or dealer engaged to handle the block trade will attempt to sell the securities as agent, but may
position and resell a portion of the block as principal to facilitate the transaction; or
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through a combination of any of the above methods of sale.
We
may directly solicit offers to purchase securities, or agents may be designated to solicit such offers. We will, in the prospectus supplement relating to such offering, name any agent
that could be viewed as an underwriter under the Securities Act of 1933, as amended, or the Securities Act, and describe any commissions that we must pay. Any such agent will be acting on a best
efforts basis for the period of its appointment or, if indicated in the applicable prospectus supplement, on a firm commitment basis. This prospectus may be used in connection with any offering of our
securities through any of these methods or other methods described in the applicable prospectus supplement.
The
distribution of the securities may be effected from time to time in one or more transactions:
-
-
at a fixed price, or prices, which may be changed from time to time;
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-
at market prices prevailing at the time of sale;
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-
at prices related to such prevailing market prices; or
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-
at negotiated prices.
Each
prospectus supplement will describe the method of distribution of the securities and any applicable restrictions.
The
prospectus supplement with respect to the securities of a particular series will describe the terms of the offering of the securities, including the
following:
-
-
the name of the agent or any underwriters;
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-
the public offering or purchase price;
-
-
any discounts and commissions to be allowed or paid to the agent or underwriters;
-
-
all other items constituting underwriting compensation;
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-
any discounts and commissions to be allowed or paid to dealers; and
-
-
any exchanges on which the securities will be listed.
If
any underwriters or agents are utilized in the sale of the securities in respect of which this prospectus is delivered, we will enter into an underwriting agreement or other agreement
with them at the time of sale to them, and we will set forth in the prospectus supplement relating to such offering the names of the underwriters or agents and the terms of the related agreement with
them.
If
a dealer is utilized in the sale of the securities in respect of which the prospectus is delivered, we will sell such securities to the dealer, as principal. The dealer may then
resell such securities to the public at varying prices to be determined by such dealer at the time of resale.
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If
we offer securities in a subscription rights offering to our existing security holders, we may enter into a standby underwriting agreement with dealers, acting as standby
underwriters. We may pay the standby underwriters a commitment fee for the securities they commit to purchase on a standby basis. If we do not enter into a standby underwriting arrangement, we may
retain a dealer-manager to manage a subscription rights offering for us.
Agents,
underwriters, dealers and other persons may be entitled under agreements which they may enter into with us to indemnification by us against certain civil liabilities, including
liabilities under the Securities Act, and may be customers of, engage in transactions with or perform services for us in the ordinary course of business.
If
so indicated in the applicable prospectus supplement, we will authorize underwriters or other persons acting as our agents to solicit offers by certain institutions to purchase
securities from us pursuant to delayed delivery contracts providing for payment and delivery on the date stated in the prospectus supplement. Each contract will be for an amount not less than, and the
aggregate amount of securities sold pursuant to such contracts shall not be less nor more than, the respective amounts stated in the prospectus supplement. Institutions with whom the contracts, when
authorized, may be made include commercial and savings banks, insurance companies, pension funds, investment companies, educational and charitable institutions and other institutions, but shall in all
cases be subject to our approval. Delayed delivery contracts will not be subject to any conditions except that:
-
-
the purchase by an institution of the securities covered under that contract shall not at the time of delivery be prohibited under the laws of
the jurisdiction to which that institution is subject; and
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-
if the securities are also being sold to underwriters acting as principals for their own account, the underwriters shall have purchased such
securities not sold for delayed delivery. The underwriters and other persons acting as our agents will not have any responsibility in respect of the validity or performance of delayed delivery
contracts.
Certain
agents, underwriters and dealers, and their associates and affiliates may be customers of, have borrowing relationships with, engage in other transactions with, or perform
services, including investment banking services, for us or one or more of our respective affiliates in the ordinary course of business.
In
order to facilitate the offering of the securities, any underwriters may engage in transactions that stabilize, maintain or otherwise affect the price of the securities or any other
securities the prices of which may be used to determine payments on such securities. Specifically, any underwriters may overallot in connection with the offering, creating a short position for their
own accounts. In addition, to cover overallotments or to stabilize the price of the securities or of any such other securities, the underwriters may bid for, and purchase, the securities or any such
other securities in the open market. Finally, in any offering of the securities through a syndicate of underwriters, the underwriting syndicate may reclaim selling concessions allowed to an
underwriter or a dealer for distributing the securities in the offering if the syndicate repurchases previously distributed securities in transactions to cover syndicate short positions, in
stabilization transactions or otherwise. Any of these activities may stabilize or maintain the market price of the securities above independent market levels. Any such underwriters are not required to
engage in these activities and may end any of these activities at any time.
Under
Rule 15c6-1 of the Exchange Act, trades in the secondary market generally are required to settle in two business days, unless the parties to any such trade expressly agree
otherwise. The applicable prospectus supplement may provide that the original issue date for your securities may be more than two scheduled business days after the trade date for your securities.
Accordingly, in such a case, if you wish to trade securities on any date prior to the second business day before the original issue date for your securities, you will be required, by virtue of the
fact that your securities initially are
32
expected
to settle in more than two scheduled business days after the trade date for your securities, to make alternative settlement arrangements to prevent a failed settlement.
The
securities may be new issues of securities and may have no established trading market. The securities may or may not be listed on a national securities exchange. We can make no
assurance as to the liquidity of or the existence of trading markets for any of the securities.
In
compliance with the guidelines of the Financial Industry Regulatory Authority, or FINRA, the aggregate maximum discount, commission or agency fees or other items constituting
underwriting compensation to be received by any FINRA member or independent broker-dealer will not exceed 8% of the proceeds from any offering pursuant to this prospectus and any applicable prospectus
supplement.
LEGAL MATTERS
Unless the applicable prospectus supplement indicates otherwise, the validity of the securities in respect of which this prospectus is being
delivered will be passed upon by Wilmer Cutler Pickering Hale and Dorr LLP.
EXPERTS
The audited consolidated financial statements incorporated by reference in this prospectus and elsewhere in the registration statement have been
so incorporated by reference in reliance upon the report of Grant Thornton LLP, independent registered public accountants, upon the authority of said firm as experts in accounting and auditing.
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Table of Contents
Up to $25,000,000
Common Stock
PROSPECTUS SUPPLEMENT
Cowen
August 5, 2020
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