Pursuant to Rule 424B5
Commission File Number: 333-220326
CALCULATION OF REGISTRATION FEE
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|
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|
|
|
|
|
|
Title of each class of
securities to be registered
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|
Amount
to be
Registered(1)
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Proposed
Maximum
Offering
Price
per Share
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|
Proposed
Maximum
Aggregate
Offering Price(1)(2)
|
|
Amount of
Registration Fee
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Common Stock, no par value
|
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6,900,000
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$12.50
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$86,250,000
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$10,738.13
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|
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(1)
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Assumes exercise in full of the underwriters option to purchase up to 900,000 additional shares of common stock of the Registrant.
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(2)
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Calculated in accordance with Rule 457(r) under the Securities Act of 1933, as amended, and relates to the Registration Statement on
Form S-3
(File
No. 333-220326)
filed by the Registrant on September 1, 2017.
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PROSPECTUS SUPPLEMENT
(To prospectus dated September 1, 2017)
6,000,000 Shares
INTREXON CORPORATION
Common Stock
We are offering 6,000,000
shares of our common stock to be sold in this offering.
Our common stock trades on the New York Stock Exchange under the symbol XON. On
January 12, 2018, the last reported sales price of our common stock on the New York Stock Exchange was $14.71 per share.
Investing in our common
stock involves risks. Before buying any shares, you should read the discussion of material risks of investing in our common stock in
Risk Factors
beginning on page
S-7
of this prospectus supplement, and in the risks discussed in the documents incorporated by reference in this prospectus supplement, as they may be amended, updated or modified periodically in our reports filed with the SEC.
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
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Per
Share
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Total
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Public offering price
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$
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12.50
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$
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75,000,000
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Underwriting discounts and commissions(1)(2)
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$
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0.625
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$
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3,125,000
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Proceeds to us, before expenses
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|
$
|
11.875
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|
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$
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71,875,000
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(1)
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We refer you to Underwriting beginning on page S-20 for additional information regarding total underwriting compensation.
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(2)
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There will be no underwriting discount or commission paid with respect to any shares of common stock Randal J. Kirk or entities affiliated with him purchase in this offering.
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Entities with which Randal J. Kirk, our Chairman and Chief Executive Officer, is affiliated have agreed to purchase 1,000,000 shares of our common stock in
this offering at the public offering price. The underwriters will not receive any underwriting discounts or commissions with respect to this sale.
We
have granted the underwriters an option for a period of 30 days to purchase up to an additional 900,000 shares of our common stock at the public offering price less the underwriting discounts and commissions.
The underwriters expect to deliver the shares on or about January 19, 2018.
JMP Securities
Stifel
Northland Capital Markets
The date of this prospectus supplement is January 17, 2018.
TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
PROSPECTUS
S-i
ABOUT THIS PROSPECTUS SUPPLEMENT
This document is in two parts, both of which are part of a shelf registration statement on
Form S-3
that we filed
with the Securities and Exchange Commission, or the SEC, on September 1, 2017, pursuant to which we may from time to time offer various securities in one or more offerings. The first part of this document is this prospectus supplement, which
describes the terms of this offering and also adds to and updates information contained in the accompanying prospectus and the documents incorporated by reference into this prospectus. The second part is the accompanying prospectus, which gives more
general information about the shares of our common stock and other securities we may offer from time to time under our shelf registration statement, some of which may not apply to the shares of common stock offered by this prospectus. When we refer
to this prospectus, we are generally referring to both parts of this document combined. To the extent there is a conflict between the information contained in this prospectus supplement, on the one hand, and the information contained in
the accompanying prospectus or any document incorporated by reference into this prospectus, on the other hand, you should rely on the prospectus supplement unless the document incorporated by reference has a later date than this prospectus
supplement, in which case you should rely on the document with a later date.
We have not, and the underwriters have not, authorized anyone to provide
any information other than that contained or incorporated by reference in this prospectus supplement or in any free writing prospectus prepared by or on behalf of us. Neither we nor the underwriters take any responsibility for, and can provide no
assurance as to the reliability of, any other information that others may give you. We are not, and the underwriters are not, making an offer to sell these securities in any jurisdiction where the offer or sale is not permitted. You should not
assume that the information contained in this prospectus supplement, the accompanying prospectus or the documents incorporated herein by reference is accurate as of any date other than their respective dates. Our business, financial condition,
results of operations and prospects may have changed since those dates.
We are offering to sell, and seeking offers to buy, shares of our common
stock only in jurisdictions where such offers and sales are permitted.
Market data used in this prospectus supplement has been obtained from
independent industry sources and publications as well as from research reports prepared for other purposes. We have not independently verified the data obtained from these sources, and we cannot assure you of the accuracy or completeness of the
data. Forward-looking information obtained from these sources is subject to the same qualifications and additional uncertainties regarding the other forward-looking statements in this prospectus supplement.
When used in this prospectus, the terms Intrexon, the Company, we, our and us refer to Intrexon
Corporation and its subsidiaries, unless otherwise specified or the context otherwise requires. Intrexon
®
is our registered trademark in the United States. This prospectus and the
information incorporated herein by reference contain references to trademarks, service marks and trade names owned by us or other companies. Solely for convenience, trademarks, service marks and trade names referred to in this prospectus and the
information incorporated herein, including logos, artwork, and other visual displays, may appear without the
®
or symbols, but such references are not intended to indicate, in
any way, that we will not assert, to the fullest extent under applicable law, our rights or the rights of the applicable licensor to these trademarks, service marks and trade names. We do not intend our use or display of other companies trade
names, service marks or trademarks to imply a relationship with, or endorsement or sponsorship of us by, any other companies. Other trademarks, trade names and service marks appearing in this prospectus supplement and any accompanying prospectus or
any related free writing prospectus are the property of their respective owners.
S-ii
PROSPECTUS SUPPLEMENT SUMMARY
The following summary highlights information contained or incorporated by reference in this prospectus supplement and the accompanying prospectus and is
qualified in its entirety by the more detailed information and consolidated financial statements included elsewhere or incorporated by reference in this prospectus supplement. This summary does not contain all of the information that may be
important to you. You should read and carefully consider the following summary together with the entire prospectus supplement and accompanying prospectus, including the documents incorporated by reference herein and therein, before deciding to
invest in our common stock. Some of the statements in this prospectus constitute forward-looking statements that involve risks and uncertainties. See Cautionary Statement Regarding Forward-Looking Statements. Our actual results could
differ materially from those anticipated in such forward-looking statements as a result of certain factors, including those discussed in the Risk Factors and other sections of this prospectus supplement and the accompanying prospectus.
Overview
We believe we are a
leader in the field of synthetic biology, focusing on programming biological systems to alleviate disease, remediate environmental challenges and to provide food and industrial chemicals. Synthetic biology involves the tightly controlled expression
of natural and engineered genes (DNA segments) in a variety of animal, plant and microorganismal hosts. Our historical approach primarily involved an Exclusive Channel Collaboration, or ECC, model in which we served principally as the technology
engine for a partner experienced in a given commercial arena. As our experience has deepened, we have moved our strategy toward more joint ventures and the self-development of projects we view as particularly compelling and within our increasing
areas of expertise.
Synthetic biology is an emerging and rapidly evolving discipline that applies engineering principles to biological systems to enable
rational, design-based control of cellular function for a specific purpose. Using our suite of proprietary and complementary technologies, we design, build and regulate gene programs, which are DNA sequences that consist of key genetic components. A
single gene program or a complex, multi-genic program are fabricated and stored within a DNA vector. Vectors are segments of DNA used as a vehicle to transmit genetic information. DNA vectors can, in turn, be introduced into cells in order to
generate a simple or complex cellular system, which are the basic and complex cellular activities that take place within a cell and the interaction of those systems in the greater cellular environment. It is these genetically modified cell systems
that can be used to produce biological effector molecules, or be employed directly to enable the development of new and improved products and manufacturing processes across a variety of end markets, including health, food, energy, environment, and
consumer. Our synthetic biology capabilities include the ability to precisely control the amount, location and modification of biological molecules to control the function and output of living cells and optimize for desired results at an industrial
scale.
Synthetic biology has applicability across many diverse end markets. To enable us to maximize the number of these markets we could address, we
devised a strategy that allowed us to focus on our core expertise in synthetic biology while developing many different commercial product candidates via collaborations in a broad range of industries or end markets. Historically, we have built our
business primarily around the formation of ECCs. An ECC is an agreement with a collaborator to develop products based on technologies in a specifically defined field. We have sought collaborators with expertise within a specific industry sector and
the commitment to provide resources for the commercialization of products within that industry sector. In our ECCs, we provide expertise in the engineering of gene programs and cellular systems, and our collaborators are responsible for providing
market and product development expertise, as well as sales and marketing capabilities. In addition, we have sometimes executed a research collaboration to develop an early-stage program pursuant to which we received reimbursement for our development
costs but the exclusive commercial rights, and related access fees, were deferred until completion of an initial research program.
S-1
This ECC strategy allowed us to leverage our capabilities and capital across numerous product development
programs and a broader landscape of end markets than we would have been capable of addressing on our own. The strategy also allowed us to participate in the potential upside from products that are enabled by our technologies across an extensive
range of industries, without the need for us to invest considerable resources in bringing individual products to market. We presently are party to a number of these collaborations, which are varying in stages from research and development of product
candidates to monitoring the progress of our collaborator in their further development and, we expect, commercialization of product candidates enabled through our collaboration.
Over time, our strategy has evolved away from ECC-type collaborations to relationships and structures that provide us with more control and ownership over the
development process and commercialization path. In these new relationships and structures, we bear more of the responsibility to fund the projects and execute on product candidate development.
First, in certain strategic circumstances, we may enter into a joint venture, or JV, with a third-party collaborator whereby we may contribute access to our
technology, cash or both into the JV which we will jointly control with our collaborator. Pursuant to a joint venture agreement, we may be required to contribute additional capital to the JV, and we may be able to receive a higher financial return
than we would normally receive from an ECC to the extent that we and our collaborator are successful in developing one or more products. Second, we are increasing the resources we are expending internally on early stage proof of concept programs
where we can leverage our competitive edge in gene program creation and host cell and genome expertise and are seeking to partner with more mature programs and capabilities, some of which may be through ECCs. In this way, we endeavor to leverage of
our capital resources and ultimately hope to realize significant value from mature assets. Our gas-to-liquid platform for bioconversion of methane to higher carbon content compounds, which we refer to as our methanotrophic bioconversion platform, or
MBP, is an example of our implementation of a JV approach. Based on our internally developed work on our MBP technology, we have executed two JV arrangements with related parties for specific end products.
As we consider the broad potential applications of our synthetic biology technologies, and consistent with the evolution of our business strategy, we have
acquired a number of ventures that are already enabling products that benefit from the application of synthetic biology. Our strategy contemplates the continued acquisition of product focused companies that we believe may leverage our technologies
and expertise in order to expand their respective product applications. We believe that the acquisition of these types of companies allows us to develop and commercialize innovative products and create significant value. The integration of
acquisitions, however, entails complex risks to our business and could have an adverse impact on our results of operations and financial condition. Many acquisitions also result in the acquirer recording goodwill and intangible assets. If any
acquisitions for which we record goodwill or intangible assets, or have previously recorded goodwill and intangible assets, are not successful or experience challenges, whether due to the performance of the acquired companies, market conditions,
regulatory actions or delays, or otherwise, those assets may become impaired and have an adverse impact on our financial condition.
Consistent with the
ongoing evolution of our strategy, from principally utilizing ECCs to seeking a more diverse approach to leverage our technology assets, we have been actively considering ways to organize our business and the grouping of our assets to facilitate
strategic opportunities. For example, effective January 1, 2018, we transferred substantially all of our gene and cell therapy assets for human health under a newly-formed wholly owned subsidiary, Precigen, Inc., and we consolidated therapeutic
applications of our proprietary ActoBiotics platform under ActoBio Therapeutics, Inc., another wholly owned subsidiary. Similarly, we have retained a number of financial advisors to counsel us on strategic and financial options for a number of our
business units, including our MBP technology.
S-2
Preferred Stock Equity Facility
On October 16, 2017, we entered into a Preferred Stock Equity Facility Agreement with Kapital Joe, LLC, or Kapital Joe, pursuant to which we may, at our
sole and exclusive option, issue and sell to Kapital Joe, from time to time, and Kapital Joe is required to purchase, up to $100 million of our Series A Redeemable Preferred Stock, no par value per share, or the Series A Preferred Stock, at a
purchase price per share of $100.00, which we refer to in this prospectus supplement as the Preferred Stock Facility. Our ability to require Kapital Joe to purchase Series A Preferred under the Preferred Stock Facility will terminate no later than
April 30, 2019. Kapital Joe is managed by Third Security, LLC, of which our Chairman and Chief Executive Officer, Randal J. Kirk, serves as the Senior Managing Director and Chief Executive Officer and owns all of the outstanding equity
interests.
The Series A Preferred Stock is
non-voting,
accrues dividends of 8% per annum and, subject to limited
exceptions, is senior to our common stock with respect to the rights to the payment of dividends and on parity with our common stock with respect to the distribution of assets in the event of any liquidation, dissolution or winding up or change of
control. The Series A Preferred Stock is also redeemable at our election at any time, or at the election of the holder after December 31, 2020. In November 2017, we filed an amendment to our articles of incorporation to establish the
designations of the Series A Preferred Stock.
The Series A Preferred Stock is convertible into shares of our common stock following the approval of our
shareholders, including a majority of the shares voted by shareholders unaffiliated with Mr. Kirk and, to the extent applicable to Kapital Joe, approval under the Hart-Scot-Rodino Antitrust Improvements Act of 1976, as amended. The conversion
price used for the conversion will be based on a conversion price using
the 20-day volume-weighted
average market price of our common stock as of market closing on the fifth business day prior to the
mailing of the proxy statement soliciting the shareholder approval, subject to adjustment for certain stock splits and similar events. We have agreed to take all reasonable steps necessary to seek shareholder approval on or before the date of our
annual meeting of shareholders in 2019. The Series A Preferred Stock will automatically convert after receipt of shareholder approval, subject to receiving any required regulatory approvals. In addition, prior to conversion, in the event of any
voluntary or involuntary liquidation, dissolution or winding up or change of control, the holders of the Series A Preferred Stock will be entitled to participate with the holders of our common stock on a pro rata,
as-converted
basis, based on a deemed conversion rate of $18.96, which was calculated using the
20-day
volume-weighted average market price of our common stock as of
market closing on October 13, 2017, subject to adjustment for certain stock splits and similar events.
We have not issued any shares of our Series A
Preferred Stock.
Private Placement
On December 29, 2017, we entered into an agreement with the R.J. Kirk Declaration of Trust, an entity affiliated with Mr. Kirk, pursuant to which the R.J. Kirk
Declaration of Trust purchased 1,207,980 shares of our common stock in a private placement, for aggregate gross proceeds of $13.7 million. The number of shares purchased by the R.J. Kirk Declaration of Trust represents just under 1% of the common
stock outstanding prior to the private placement, which is the maximum that an affiliate of Mr. Kirk could purchase from us in the private placement under the rules of the New York Stock Exchange. The price per share in the private placement was
$11.33 per share, which was the closing price of our common stock on the New York Stock Exchange on December 28, 2017.
S-3
Corporate Information
We were founded by Thomas D. Reed, Ph.D., in 1998, as an Ohio limited liability company under the name Genomatix LTD. We were reincorporated as a Virginia
corporation in 2004 and changed our name to Intrexon Corporation in 2005. The principal executive offices of Intrexon are located at 20374 Seneca Meadows Parkway, Germantown, Maryland 20876, and our telephone number is
(301) 556-9900.
Our website is www.dna.com. The information on, or that can be accessed through, our website does not constitute part of this prospectus supplement, and you should not rely on any such
information in making the decision whether to purchase our common stock. Our common stock is traded on the NYSE under the symbol XON.
S-4
THE OFFERING
Common stock offered by us
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6,000,000 shares
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Common stock to be outstanding immediately after this offering
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126,624,346 shares
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Option to purchase additional shares from us
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We have granted the underwriters an option for a period of up to 30 days to purchase up to 900,000 additional shares from us.
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Use of proceeds
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We intend to use the net proceeds from the sale of the securities offered by us pursuant to this prospectus supplement for general corporate purposes and for strategic acquisitions or investments. See Use of Proceeds on page S-15.
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Insider participation
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Entities with which Randal J. Kirk, our Chairman and Chief Executive Officer, is affiliated have agreed to purchase 1,000,000 shares of our common stock in this offering at the public offering price.
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Risk Factors
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In analyzing an investment in the shares of common stock being offered pursuant to this prospectus supplement, you should carefully consider, along with other matters included or incorporated by reference in this prospectus supplement or the
accompanying prospectus, the information set forth under Risk Factors in this prospectus supplement and the risks discussed in the documents incorporated by reference in this prospectus supplement, as they may be amended, updated or
modified periodically in our reports filed with the SEC.
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New York Stock Exchange symbol
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XON
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The number of shares of our common stock to be outstanding after this offering is based on 120,624,346 shares of common stock
outstanding on September 30, 2017 and excludes:
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12,641,770 shares of common stock issuable upon the exercise of outstanding options at a weighted average exercise price of $28.59 per share, of which 5,313,100 options are vested as of September 30, 2017;
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133,264 shares of common stock issuable upon the exercise of warrants outstanding as of September 30, 2017 at a weighted average exercise price of $28.85 per share;
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3,743,187 shares of our common stock available for future issuance under our 2013 Omnibus Incentive Plan as of September 30, 2017;
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$800,000 per month in shares of common stock issuable to Third Security, LLC, following September 30, 2017, in connection with the services agreement we entered into with it in November 2015, as amended;
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$200,000 per month in shares of common stock issuable to Randal J. Kirk, our Chairman and Chief Executive Officer, following September 30, 2017, in connection with the compensation arrangement we entered into with him
in November 2015, as amended;
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S-5
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the issuance of up to $4,000,000 of shares of common stock to the former members of Old EnviroFlight, LLC, or Old EnviroFlight, in connection with a joint venture formed with Old EnviroFlight in February 2016, if
certain commercial milestones are met prior to February 2019; and
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the issuance of 1,207,980 shares of our common stock to the R.J. Kirk Declaration of Trust, an entity affiliated with Mr. Kirk, in a private placement on December 29, 2017.
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Except as otherwise noted, all information in this prospectus assumes no exercise by the underwriters of their option to purchase additional shares of common
stock from us.
S-6
RISK FACTORS
An investment in our shares of common stock involves a high degree of risk. Prior to making a decision about investing in our shares of common stock, you
should carefully consider the risks, uncertainties and assumptions discussed under Item 1A, Risk Factors, in our Annual Report on Form
10-K
for the fiscal year ended December 31, 2016 and any
subsequently filed SEC reports, all of which are incorporated herein by reference and the other information set forth or incorporated by reference in this prospectus supplement and the accompanying prospectus. See the sections of this prospectus
supplement entitled Where You Can Find More Information and Incorporation of Certain Information by Reference. Additional risks and uncertainties not presently known to us, or that we currently see as immaterial, may also
harm our business. If any of these risks occur, our business, financial condition and operating results could be harmed, the trading price of our common stock could decline and you could lose part or all of your investment.
This prospectus supplement also contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from
those anticipated in these forward-looking statements as a result of certain factors, including the risks faced by us described below and elsewhere in this prospectus. See Cautionary Statement Regarding Forward-Looking Statements for
information relating to these forward-looking statements.
Risks related to this offering
If you purchase our common stock in this offering, you will incur immediate and substantial dilution in the book value of your shares.
Investors purchasing common stock in this offering will pay a price per share that substantially exceeds the book value of our tangible assets after
subtracting our liabilities. As a result, investors purchasing common stock in this offering will incur immediate dilution of $10.79 per share (or $10.71 per share if the underwriters exercise their option in full to purchase 900,000 shares of
common stock in this offering at a public offering price of $12.50 per share).
This dilution is due to our investors who purchased shares prior to this
offering having paid substantially less than the price offered to the public in this offering when they purchased their shares. In addition, options to purchase 12,641,770 shares of our common stock at a weighted-average exercise price of $28.59 per
share were outstanding as of September 30, 2017, warrants to purchase 133,264 shares of common stock at a weighted average exercise price of $28.85 per share were outstanding as of September 30, 2017, and 3,743,187 shares of our common stock were
available for future issuance under our 2013 Omnibus Incentive Plan as of September 30, 2017. We also issue $200,000 per month in shares of common stock issuable to Randal J. Kirk, our Chairman and Chief Executive Officer, in connection with
the compensation arrangement we entered into with him in November 2015, as amended, and $800,000 per month in shares of common stock issuable to Third Security, LLC, an entity of which Mr. Kirk serves as the Senior Managing Director and Chief
Executive Officer and owns all of the outstanding equity interests, in connection with the services agreement we entered into with it in November 2015, and could issue up to $4,000,000 of shares of common stock to the former members of Old
EnviroFlight in connection with a joint venture formed with Old EnviroFlight in February 2016 if certain commercial milestones are met prior to February 2019. The exercise of any of these options or the issuance of any of these shares would
result in additional dilution.
In addition, pursuant to our Preferred Stock Facility, we may, at our sole and exclusive option, issue and sell to an
affiliate of Mr. Kirk up to 1,000,000 shares of our Series A Preferred Stock, which will be convertible into shares of our common stock following the approval of our shareholders, including a majority of the shares voted by shareholders
unaffiliated with Mr. Kirk and, subject to regulatory approval. Because if any Series A Preferred Stock is issued it will convert at a price to be determined based on the volume-weighted average of our future market prices, we are unable to
assess the number of shares into which any shares of Series A Preferred Stock is convertible. Any conversion of shares of Series A Preferred Stock into our common stock would result in additional dilution.
S-7
Further, because we will need to raise additional capital to fund our clinical development programs, we may in
the future sell substantial amounts of common stock or securities convertible into or exchangeable for common stock. These future issuances of common stock or common stock-related securities, together with the exercise of outstanding options, any
additional shares issued in connection with acquisitions and the conversion of any shares of our Series A Preferred Stock, if any, may result in dilution to investors. As a result of the dilution to investors purchasing shares in this offering,
investors may receive significantly less than the purchase price paid in this offering, if anything, in the event of our liquidation. For a further description of the dilution that you will experience immediately after this offering, see
Dilution.
We have broad discretion in the use of the net proceeds from this offering and may not use such amounts effectively.
Our management will have broad discretion in the application of the net proceeds from this offering, and you will be relying on the judgment of
our management regarding the application of these proceeds. You will not have the opportunity, as part of your investment decision, to assess whether the proceeds are being used appropriately. Our management might not apply our net proceeds in ways
that ultimately increase the value of your investment. Pending our use of the net proceeds, we may invest the net proceeds from this offering in short-term, interest-bearing investment grade securities, money market funds, certificates of deposit or
direct or guaranteed obligations of the U.S. government. These investments may not yield a favorable return to our stockholders. If we do not invest or apply the net proceeds from this offering in ways that enhance stockholder value, we may fail to
achieve expected financial results, which could cause our stock price to decline.
Risks related to our common stock
The continued evolution of our business strategy and the restructuring of our business and assets may not be a successful strategy and may increase our
capital requirements, increase our costs or otherwise harm our operating results and financial condition.
Our business strategy has evolved, and
continues to evolve, toward relationships and structures that provide us with more control and ownership over the development process and commercialization path. This new strategy or approach entails risks in implementation and operations and there
is no guarantee that it will be successful. Furthermore, the changing focus of our business strategy may require additional capital beyond what we have historically used and what is available and we may incur costs associated with the implementation
and execution of our changing business strategy. In addition, as we perform our annual impairment tests as of December 31, 2017, we will evaluate the impact of changes in our business strategy and, as a result, may incur impairment charges and
write-offs and other related expenses, any of which, if material, could harm our operating results and financial condition.
Our stock price is
volatile and purchasers of our common stock could incur substantial losses.
Our stock price has been, and is likely to continue to be, volatile.
The market price of our common stock could fluctuate significantly for many reasons, including in response to the risks described in this Risk Factors section, or for reasons unrelated to our operations, such as reports by industry
analysts, investor perceptions or negative announcements by our collaborators regarding their own performance, as well as industry conditions and general financial, economic and political instability. From January 1, 2015 through January 12,
2018, our common stock has traded as high as $69.45 per share and as low as $10.26 per share. The stock market in general as well as the market for biopharmaceutical companies in particular has experienced extreme volatility that has often been
unrelated to the operating performance of particular companies. The market price of our common stock may be influenced by many factors, including, among others:
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announcements of acquisitions, collaborations, financings or other transactions by us;
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public concern as to the safety of our products;
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termination or delay of a development program;
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S-8
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the recruitment or departure of key personnel; and
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the other factors described in the Risk Factors sections of our Annual Report on Form
10-K
for the fiscal year ended December 31, 2016 and any subsequent updates
described in our Quarterly Reports on Form
10-Q
and Current Reports on Form
8-K.
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Randal J. Kirk controls approximately 47 percent of our common stock and is able to control or significantly influence corporate actions, which may
result in Mr. Kirk taking actions contrary to the desires of our other shareholders.
We have historically been controlled, managed and
principally funded by Randal J. Kirk, our Chairman and Chief Executive Officer, and affiliates of Mr. Kirk, including Third Security, LLC. Immediately prior to this offering, Mr. Kirk and shareholders affiliated with him beneficially owned
approximately 47 percent of our voting stock, and entities with which Mr. Kirk is affiliated have agreed to purchase 1,000,000 shares of our common stock in this offering. If entities with which Mr. Kirk is affiliated purchase 1,000,000 shares
of our common stock in the offering, Mr. Kirk will beneficially own approximately 46 percent of our voting stock after consummation of the offering. In addition, pursuant to our Preferred Stock Facility, we may, at our sole and exclusive
option, issue and sell to an affiliate of Mr. Kirk up to 1,000,000 shares of our Series A Preferred Stock, which will be convertible into shares of our common stock upon the approval of our shareholders, subject to regulatory approval, at a
conversion rate based on future market prices. Mr. Kirk is able to control or significantly influence all matters requiring approval by our shareholders, including the election of directors and the approval of mergers or other business
combination transactions. The interests of Mr. Kirk may not always coincide with the interests of other shareholders, and he may take actions that advance his personal interests and are contrary to the desires of our other shareholders.
A significant portion of our total outstanding shares of common stock may be sold into the market in the near future. This could cause the market price
of our common stock to drop significantly, even if our business is doing well.
Sales of a substantial number of shares of our common stock in the
public market could occur at any time. These sales, or the perception in the market that the holders of a large number of shares of common stock intend to sell shares, could reduce the market price of our common stock. If Mr. Kirk or any of his
affiliates were to sell a substantial portion of the shares they hold, it could cause our stock price to decline.
In addition, as of September 30, 2017,
there were 12,641,770 shares subject to outstanding options that will become eligible for sale in the public market to the extent permitted by any applicable vesting requirements,
lock-up
agreements and Rules
144 and 701 under the Securities Act of 1933, as amended, or the Securities Act. Shares issuable upon the exercise of such options can be freely sold in the public market upon issuance, subject to the
lock-up
periods under any
lock-up
agreements applicable to such shares, including those described in the Underwriting section of this prospectus.
In connection with the Preferred Stock Facility, we have filed an amendment to our articles of incorporation to set the designations of our new Series A
Redeemable Preferred Stock with terms that are preferential to those of our common stock.
Our certificate of incorporation authorizes us to issue,
without the approval of our shareholders, one or more classes or series of preferred stock having such designations, preferences, limitations and relative rights, including preferences over our common stock respecting dividends and distributions, as
our board of directors may determine. In connection with our Preferred Stock Facility, we filed an amendment to our articles of
S-9
incorporation in November 2017 to set the designations of our Series A Preferred Stock, which has certain preferences over our common stock, including accrued dividends of 8% per annum and,
subject to limited exceptions, seniority to our common stock with respect to the rights to the payment of dividends.
After December 31, 2020,
the holder of the Series A Preferred Stock may require us to redeem any or all of the outstanding Preferred Stock.
If we are unable to obtain the
approval of our shareholders to convert any outstanding shares of Series A Preferred Stock prior to December 31, 2020, the holder of the Series A Preferred Stock may require us to redeem any or all of the outstanding shares of Series A
Preferred Stock at the issue price of $100 per share plus any accumulated but unpaid dividends thereon to, but not including, the redemption date, subject to adjustments. The redemption of our Series A Preferred Stock in cash would reduce the cash
that we have available to invest in our business. In the event redemption is required, there can be no assurance that we will have enough cash to redeem the outstanding shares.
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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This prospectus supplement, the accompanying prospectus and the information incorporated herein by reference contain forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995. Any applicable free writing prospectus may also contain these types of forward-looking statements. All statements, other than statements of historical facts, included or incorporated
by reference in this prospectus supplement and the accompanying prospectus, and in any free writing prospectus, regarding our strategies, prospects, financial condition, costs, plans and objectives are forward-looking statements. These
forward-looking statements reflect our beliefs and expectations as to future events and trends affecting our business, our consolidated financial condition and results of operations. These forward-looking statements are based upon our current
expectations concerning future events and discuss, among other things, anticipated future financial performance and future business plans. Forward-looking statements are necessarily subject to risks and uncertainties, many of which are outside our
control, that could cause actual results to differ materially from these statements. Forward-looking statements can be identified by such words as anticipates, believes, plan, assumes,
could, should, estimates, expects, intends, potential, seek, predict, may, will and similar expressions. These forward-looking
statements include, among other things, statements about:
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our strategy and overall approach to our business model;
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our ability to successfully enter new markets or develop additional products, whether with our collaborators or independently;
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our ability to successfully enter into optimal strategic relationships with our subsidiaries and operating companies that we may form in the future;
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competition from existing technologies and products or new technologies and products that may emerge;
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actual or anticipated variations in our operating results;
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our current and future JVs, ECCs, license agreements and other collaborations;
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developments concerning our collaborators and licensees;
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actual or anticipated fluctuations in our competitors or our collaborators and licensees operating results or changes in their respective growth rates;
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market conditions in our industry;
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our ability to protect our intellectual property and other proprietary rights and technologies;
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our ability to adapt to changes in laws or regulations and policies;
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the ability of our collaborators and licensees to adapt to changes in laws or regulations and policies and to secure any necessary regulatory approvals to commercialize any products developed under the ECCs, license
agreements and joint ventures;
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the ability of our collaborators and licensees to protect our intellectual property and other proprietary rights and technologies;
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the ability of our collaborators and licensees to develop and successfully commercialize products enabled by our technologies;
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the rate and degree of market acceptance of any products developed by a collaborator under an ECC or through a joint venture or license under a license agreement;
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our ability to retain and recruit key personnel;
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the result of litigation proceedings that we face currently or may face in the future;
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our expectations related to the use of proceeds from our public offerings and other financing efforts;
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our estimates regarding expenses, future revenue, capital requirements and needs for additional financing; and
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the impact of the Tax Cuts and Jobs Act of 2017 on our current and future operating results.
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We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements,
and you should not place undue reliance on our forward-looking statements. Item 1A, Risk Factors in our Annual Report on Form
10-K,
and Item 1A, Risk Factors in our Quarterly Reports on
Form
10-Q,
which are incorporated by reference into this prospectus supplement, include factors 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, joint ventures or investments that we may make. Forward-looking statements may also concern our expectations relating to our
subsidiaries and other affiliates. We caution you that the foregoing list may not contain all of the forward-looking statements made in this prospectus supplement, the accompanying prospectus and the documents that we incorporate by reference.
You should read this prospectus supplement, the accompanying prospectus and the documents that we incorporate by reference into this prospectus supplement
completely and 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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DILUTION
Purchasers of common stock in this offering will experience immediate dilution to the extent of the difference between the public offering price per share of
common stock and the net tangible book value per share of common stock immediately after this offering.
Our net tangible book value as of
September 30, 2017 was approximately $145.5 million, or $1.21 per share of common stock. Net tangible book value per share is determined by dividing the net of total tangible assets, which excludes intangible assets, less total
liabilities, by the 120,624,346 shares of common stock outstanding as of September 30, 2017. After giving effect to the sale by us of 6,000,000 shares of common stock at a public offering price of $12.50 per share and after deducting the
estimated underwriting discounts and commissions and estimated offering expenses, our net tangible book value as of September 30, 2017 would have been approximately $217.1 million, or $1.71 per share of common stock. This represents an
immediate increase in net tangible book value of $0.50 per share to our existing shareholders and an immediate dilution of $10.79 per share of common stock issued to the new investors purchasing securities in this offering.
The following table illustrates this dilution on a
per-share
basis:
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Public offering price per share of common stock
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$
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12.50
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Net tangible book value per share as of September 30, 2017
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$
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1.21
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Increase per share attributable to new investors
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$
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0.50
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Net tangible book value per share after this offering
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$
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1.71
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Dilution per share to new investors
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$
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10.79
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If the underwriters exercise their option in full to purchase 900,000 additional shares of common stock in this offering at a
public offering price of $12.50 per share, the net tangible book value per share after the offering would be $1.79 per share, the increase in the net tangible book value per share to existing shareholders would be $0.58 per share and the dilution to
new investors purchasing securities in this offering would be $10.71 per share.
The above table excludes:
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12,641,770 shares of common stock issuable upon the exercise of outstanding options at a weighted average exercise price of $28.59 per share, of which 5,313,100 options are vested as of September 30, 2017;
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133,264 shares of common stock issuable upon the exercise of warrants outstanding as of September 30, 2017 at a weighted average exercise price of $28.85 per share;
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3,743,187 shares of our common stock available for future issuance under our 2013 Omnibus Incentive Plan as of September 30, 2017;
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$800,000 per month in shares of common stock issuable to Third Security, LLC, following September 30, 2017, in connection with the services agreement we entered into with it in November 2015, as amended;
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$200,000 per month in shares of common stock issuable to Randal J. Kirk, our Chairman and Chief Executive Officer, following September 30, 2017, in connection with the compensation arrangement we entered into with him
in November 2015, as amended;
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the issuance of up to $4,000,000 of shares of common stock to the former members of Old EnviroFlight in connection with a joint venture formed with Old EnviroFlight in February 2016, if certain commercial milestones are
met prior to February 2019; and
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the issuance of 1,207,980 shares of our common stock to the R.J. Kirk Declaration of Trust, an entity affiliated with Mr. Kirk, in a private placement on December 29, 2017.
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To the extent that options or warrants are exercised, new options are issued under our equity incentive plans, or we issue additional shares of common stock
in the future, there may be further dilution to investors participating in this offering. In addition, we may choose to raise additional capital because of market conditions or strategic considerations, even if we believe that we have sufficient
funds for our current or future operating plans. If we raise additional capital through the sale of equity or convertible debt securities, the issuance of these securities could result in further dilution to our shareholders.
S-14
USE OF PROCEEDS
We estimate that the net proceeds we will receive from this offering will be approximately $71.6 million, after deducting the estimated underwriting discounts
and commissions and estimated offering expenses payable by us. If the underwriters exercise their option to purchase additional shares in full, we estimate that the net proceeds from this offering will be approximately $82.2 million, after deducting
the estimated underwriting discounts and commissions and estimated offering expenses payable by us.
We intend to use the net proceeds from the sale of
the securities offered by us pursuant to this prospectus for general corporate purposes and for strategic acquisitions or investments. General corporate purposes may include additions to working capital, financing of capital expenditures, repayment
or redemption of existing indebtedness or payments to satisfy commitments under our ECCs and joint ventures. In addition, we intend to use the net proceeds for future strategic acquisitions and strategic investment opportunities, but we have not
determined the amount of net proceeds to be used specifically for such purposes, or any particular acquisitions or investments. As a result, management will retain broad discretion over the allocation of net proceeds. Pending the application of net
proceeds, we expect to invest the net proceeds in investment grade, interest-bearing securities.
S-15
MATERIAL U.S. FEDERAL TAX CONSEQUENCES TO
NON-U.S.
HOLDERS OF COMMON STOCK
The following is a summary of the material U.S. federal income tax consequences of
the acquisition, ownership and disposition of shares of our common stock purchased pursuant to this offering by a beneficial owner that is a
non-U.S.
holder. As used in this summary, a
non-U.S.
holder means a beneficial owner of our common stock that is not a partnership (or other entity treated as a partnership for U.S. federal income tax purposes regardless of its place of organization or
formation), an entity that is treated as a disregarded entity for U.S. federal income tax purposes (regardless of its place of organization or formation) or any of the following:
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a citizen or individual resident of the United States;
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a corporation (or other entity treated as a corporation for U.S. federal income tax purposes) created or organized in or under the laws of the United States, any state thereof or the District of Columbia;
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an estate the income of which is subject to U.S. federal income taxation regardless of its source; or
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a trust (1) which is subject to primary supervision by a court situated within the United States and as to which one or more U.S. persons (within the meaning of Section 7701(a)(30) of the Code) have the
authority to control all substantial decisions of the trust or (2) that has a valid election in effect under applicable U.S. Treasury regulations to be treated as a U.S. person for U.S. federal income tax purposes.
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This summary is based on current provisions of the Internal Revenue Code of 1986, as amended, which we refer to as the Code, final, temporary, and proposed
Treasury regulations promulgated under the Code, judicial opinions, and administrative pronouncements and published rulings of the U.S. Internal Revenue Service, or the IRS, all as in effect as of the date of this prospectus supplement. Changes to
any of these authorities after the date of this prospectus supplement may affect the tax consequences described in this summary, or the IRS might interpret the existing authorities differently. In either case, the tax considerations of acquiring,
owning or disposing of our common stock could differ from those described below. We have not requested a ruling from the IRS with respect to the statements made and the conclusions reached in the following summary, and we cannot assure you that the
IRS will agree with those statements and conclusions. This discussion assumes that a
non-U.S.
holder holds our common stock as a capital asset within the meaning of Section 1221 of the Code
(generally, property held for investment).
This summary does not address all aspects of U.S. federal income taxation and does not address any estate or
gift tax issues, the impact of the Medicare contribution tax on net investment income, the alternative minimum tax, or any tax consequences arising under any tax law other than U.S. federal income tax law or under the laws of any state, local or
foreign jurisdiction. Special rules different from those described below may be relevant to
non-U.S.
holders in light of their particular circumstances, such as
non-U.S.
holders subject to special tax treatment under U.S. federal tax laws (including pass-through entities, controlled foreign corporations, passive foreign investment companies, financial institutions and insurance companies,
tax-exempt
organizations or governmental organizations, dealers in securities, holders of securities held as part of a straddle, hedge, conversion transaction or other
risk-reduction transaction, corporations that accumulate earnings to avoid U.S. federal income tax, persons deemed to sell our common stock under the constructive sale provisions of the Code,
tax-qualified
retirement plans and U.S. expatriates and former citizens or residents of the United States). Such
non-U.S.
holders should consult their own tax advisors to determine the U.S. federal and other tax
consequences that may be relevant to them. If a partnership (including any entity treated as a partnership for U.S. federal income tax purposes) is a holder of our common stock, the tax treatment of a partner in the partnership generally will depend
on the status of the partner, the partnerships activities and certain determinations made at the partner level. A holder that is a partnership, and partners in such a partnership, should consult their own tax advisors regarding the tax
consequences of the acquisition, ownership and disposition of shares of our common stock.
THE FOLLOWING DISCUSSION IS INTENDED AS A GENERAL SUMMARY ONLY
AND IS NOT TAX ADVICE. YOU ARE URGED TO CONSULT YOUR OWN TAX ADVISORS AS TO THE SPECIFIC TAX
S-16
CONSEQUENCES OF THE ACQUISITION, OWNERSHIP OR DISPOSITION OF OUR COMMON STOCK, INCLUDING THE APPLICABLE FEDERAL, STATE, LOCAL AND FOREIGN TAX CONSEQUENCES IN LIGHT OF YOUR OWN PARTICULAR TAX
SITUATION AND ANY APPLICABLE TAX TREATY.
Distributions
We do not currently expect to pay dividends on our common stock. If we do make distributions on our common stock, such distributions paid to a
non-U.S.
holder will constitute dividends for U.S. federal income tax purposes to the extent such distributions are paid from our current or accumulated earnings and profits, as determined under U.S. federal income
tax principles. If a distribution exceeds our current and accumulated earnings and profits, the excess will be treated as a
tax-free
return of the
non-U.S.
holders
investment to the extent of the
non-U.S.
holders adjusted tax basis in our common stock, and any remaining excess will be treated as capital gain from the disposition of our common stock. See
Gain on Disposition of Common Stock below for additional information. Any such distributions will also be subject to the discussions below regarding backup withholding and FATCA.
Dividends paid to a
non-U.S.
holder generally will be subject to withholding of U.S. federal income tax at a 30% rate
or such lower rate as may be specified by an applicable income tax treaty. A
non-U.S.
holder of common stock who wishes to claim the benefit of an applicable treaty rate for dividends generally will be
required to submit a completed IRS
Form W-8BEN
or
W-8BEN-E
(or other applicable form) to us or our paying agent and certify,
under penalty of perjury, that the holder is not a U.S. person and is eligible for the benefits with respect to dividends allowed by the treaty. If the holder holds the stock through a financial institution or other agent acting on the holders
behalf, the holder will be required to provide appropriate documentation to the agent. The holders agent then will be required to provide certification to us or our paying agent, either directly or through other intermediaries. In the case of
a
non-U.S.
holder that is an entity, Treasury regulations and the relevant tax treaty provide rules to determine whether, for purposes of determining the applicability of a tax treaty, dividends will be
treated as paid to the entity or to those holding an interest in that entity. If a
non-U.S.
holder is eligible for a reduced rate of U.S. withholding tax pursuant to an income tax treaty, the
non-U.S.
holder should contact its tax advisor regarding the possibility of obtaining a refund or credit of any excess amounts withheld by timely filing an appropriate claim for a refund with the IRS.
The withholding tax generally does not apply to dividends paid to a
non-U.S.
holder who provides a
Form W-8ECI
to us (or if stock is held through a financial institution or other agent, to such agent), certifying that dividends are effectively connected with the
non-U.S.
holders conduct of a trade or business within the United States. Instead, the effectively connected dividends will be subject to U.S. federal income tax on a net income basis at the regular
graduated rates as if the
non-U.S.
person were a U.S. resident. A corporate
non-U.S.
holder also may be subject to an additional branch profits tax, which is
imposed at a rate of 30% (or a lower rate as may be specified by an applicable income tax treaty) on that portion of the holders earnings and profits that is effectively connected with its U.S. trade or business.
Non-U.S.
holders should consult their tax advisors regarding whether an applicable income tax treaty provides for a different result with respect to effectively connected dividends.
Gain on Disposition of Common Stock
Subject to the
discussions below regarding backup withholding and FATCA, a
non-U.S.
holder generally will not be subject to U.S. federal income tax on the gain realized on a sale or other disposition of common stock unless:
the gain is effectively connected with a trade or business of the
non-U.S.
holder in the United States, and, where
a tax treaty applies, is attributable to a U.S. permanent establishment of the
non-U.S.
holder;
the
non-U.S.
holder is a
non-resident
alien individual who is present in the United States for 183 or more days during the taxable year of disposition and meets certain other
requirements; or
S-17
we are or have been a U.S. real property holding corporation within the meaning of
Section 897(c)(2) of the Code, also referred to as a USRPHC, for U.S. federal income tax purposes at any time within the shorter of the five-year period preceding the disposition or the
non-U.S.
holders holding period for the common stock.
Gain recognized on the sale or other disposition of common stock and effectively connected with a U.S.
trade or business (and, if required by an applicable income tax treaty, attributable to a U.S. permanent establishment of the
non-U.S.
holder), is subject to graduated U.S. federal income tax on a net income
basis generally in the same manner as if the
non-U.S.
holder were a U.S. person, as defined under the Code. Under certain circumstances, any such effectively connected gain from the sale or disposition of
common stock received by a corporate
non-U.S.
holder may be subject to an additional branch profits tax at a 30% rate or a lower rate as may be specified by an applicable income tax treaty.
An individual
non-U.S.
holder who is present in the United States for 183 or more days during the taxable year of
disposition generally will be subject to a flat 30% tax imposed on the gain derived from the sale or other disposition of our common stock, which may be offset by certain U.S. source capital losses realized in the same taxable year, provided the
non-U.S.
holder has timely filed U.S. federal income tax returns with respect to such losses.
In general, a corporation
is a USRPHC if the fair market value of its U.S. real property interests equals or exceeds 50% of the sum of the fair market value of its worldwide (domestic and foreign) real property interests and its other assets used or held for use
in a trade or business. For this purpose, real property interests include land, improvements and associated personal property. We believe that we currently are not a USRPHC and we do not anticipate becoming a USRPHC. However, because the
determination of whether we are a USRPHC depends on the fair market value of our U.S. real property interests relative to the fair market value of our
non-U.S.
real property interests and our other
business assets, there can be no assurance we currently are not a USRPHC or will not become one in the future.
If we have been or become a USRPHC, a
non-U.S.
holder nevertheless will not be subject to U.S. federal income tax if our common stock is regularly traded on an established securities market, within the meaning of applicable Treasury regulations, and the
non-U.S.
holder holds no more than 5% of our outstanding common stock, directly, indirectly or constructively, at all times within the shorter of the five-year period preceding the disposition or the
holders holding period. Our common stock is listed on the NYSE and we expect that our common stock may be regularly traded on an established securities market in the United States as long as it is so listed.
Information Reporting and Backup Withholding
We (or the
applicable withholding agent) must report annually to the IRS and to each
non-U.S.
holder the amount of dividends paid to such holder and the tax withheld with respect to those dividends, regardless of whether
withholding was required. Copies of the information returns reporting dividends and withholding also may be made available to the tax authorities in the country in which the
non-U.S.
holder resides under the
provisions of an applicable income tax treaty.
The United States imposes a backup withholding tax on dividends and some other types of payments to U.S.
persons (currently at a rate of 24%). Dividends paid to a
non-U.S.
holder generally will not be subject to backup withholding if proper certification of foreign status on a properly executed IRS
Form W-8BEN
or
W-8BEN-E
(or other applicable form) is provided and the payor does not have actual knowledge or reason to know that
the beneficial owner is a U.S. person, or if the holder is a corporation or one of several types of entities and organizations that qualify for an exemption.
Under current U.S. federal income tax law, U.S. information reporting and backup withholding requirements generally will apply to the proceeds of a
disposition of our common stock effected by or through a U.S. office of any U.S. or foreign broker, except that information reporting and such requirements may be avoided if the holder
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provides a properly executed IRS
Form W-8BEN
or
W-8BEN-E
(or other
applicable form) or otherwise meets documentary evidence requirements for establishing
non-U.S.
holder status, or otherwise establishes an exemption. Generally, U.S. information reporting and backup
withholding requirements will not apply to a payment of disposition proceeds to a
non-U.S.
holder where the transaction is effected outside the United States through a
non-U.S.
office of a
non-U.S.
broker. Information reporting and backup withholding requirements, however, may apply to a payment of disposition proceeds if the broker
has actual knowledge, or reason to know, that the holder is, in fact, a U.S. person. For information reporting purposes, certain brokers with substantial U.S. ownership or operations generally will be treated in a manner similar to U.S. brokers.
Backup withholding is not an additional tax. A
non-U.S.
holder subject to backup withholding should contact the
holders tax advisor regarding the possibility of obtaining a refund or a tax credit and any associated requirements to provide information to the IRS or other relevant tax authority.
Legislation Affecting Taxation of Our Common Stock Held by or Through Foreign Entities
Legislation commonly known as the Foreign Account Tax Compliance Act, or FATCA, imposes a 30% withholding tax on certain types of payments made to
foreign financial institutions and other specified
non-U.S.
entities unless due diligence, reporting, withholding and certification requirements are satisfied.
The Treasury Department and the IRS have issued final regulations under FATCA. As a general matter, FATCA imposes a 30% withholding tax on dividends on, and
gross proceeds from the sale or other disposition of, our common stock if paid to a foreign entity unless:
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the foreign entity is a foreign financial institution that undertakes specified due diligence, reporting, withholding and certification obligations or, in the case of a foreign financial institution that is
a resident in a jurisdiction that has entered into an intergovernmental agreement to implement FATCA, the entity complies with the diligence and reporting requirements of such an agreement;
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the foreign entity is not a foreign financial institution and identifies certain of its U.S. investors; or
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the foreign entity otherwise is exempted under FATCA.
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An intergovernmental agreement between the United
States and an applicable
non-U.S.
government may modify these rules. Withholding is required with respect to dividends on our common stock and, for sales or other dispositions that occur on or after
January 1, 2019, with respect to gross proceeds from a sale or other disposition of our common stock.
If withholding is imposed under FATCA on a
payment related to our common stock, a beneficial owner that is not a foreign financial institution and that otherwise would not be subject to withholding (or that otherwise would be entitled to a reduced rate of withholding) generally may obtain a
refund from the IRS by filing a U.S. federal income tax return (which may entail significant administrative burden). Prospective investors should consult their tax advisors regarding the effect of FATCA in their particular circumstances.
S-19
UNDERWRITING
We are offering the shares of common stock described in this prospectus through a number of underwriters. JMP Securities LLC is acting as sole book-running
manager of the offering. We have entered into an underwriting agreement with JMP Securities LLC on behalf of the underwriters. Subject to the terms and conditions of the underwriting agreement, we have agreed to sell to the underwriters, and each
underwriter has severally agreed to purchase, at the public offering price less the underwriting discounts and commissions set forth on the cover page of this prospectus, the number of shares of common stock listed next to its name in the following
table:
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Name
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Number of shares
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JMP Securities LLC
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3,900,000
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Stifel, Nicolaus & Company, Incorporated
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1,800,000
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Northland Securities, Inc.
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300,000
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Total
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6,000,000
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The underwriters are committed to purchase all the shares of common stock offered by us if they purchase any shares. The
underwriting agreement also provides that if an underwriter defaults, the purchase commitments of
non-defaulting
underwriters may also be increased or the offering may be terminated.
The underwriters propose to offer the shares of common stock directly to the public at the public offering price set forth on the cover page of this
prospectus supplement and to certain dealers at that price less a concession not in excess of $0.375 per share. After the public offering of the shares, the offering price and other selling terms may be changed by the underwriters. Sales of shares
made outside of the United States may be made by affiliates of the underwriters.
The underwriters have an option to buy up to 900,000 additional
shares of common stock from us. The underwriters have 30 days from the date of this prospectus to exercise this option. If any shares are purchased with this option, the underwriters will purchase shares in approximately the same proportion as
shown in the table above. If any additional shares of common stock are purchased, the underwriters will offer the additional shares on the same terms as those on which the shares are being offered.
The underwriting fee is equal to the public offering price per share of common stock less the amount paid by the underwriters to us per share of common stock.
The underwriting fee is $0.625 per share. The following table shows the per share and total underwriting discounts and commissions to be paid to the underwriters assuming both no exercise and full exercise of the underwriters option to
purchase additional shares.
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Without exercise of
Underwriters
options
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With full
exercise
Of
Underwriters
option
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Per Share
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$
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0.625
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$
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0.625
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Total
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$
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3,125,000
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$
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3,687,500
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We estimate that the total expenses of this offering, including registration, filing and listing fees, printing fees and legal
and accounting expenses, but excluding the underwriting discounts and commissions, will be approximately $320,000. We have agreed to reimburse the underwriters for all expenses incurred in connection with the registration or qualification of the
shares issued in this offering under state or foreign or blue sky laws (in an amount not to exceed $30,000).
A prospectus supplement in electronic format
may be made available on the web sites maintained by one or more underwriters, or selling group members, if any, participating in the offering. The underwriters may agree to allocate a number of shares to underwriters and selling group members for
sale to their online brokerage account holders. Internet distributions will be allocated by the representatives to underwriters and selling group members that may make Internet distributions on the same basis as other allocations.
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We have agreed that we will not (i) offer, pledge, sell, contract to sell, sell any option or contract to
purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, or otherwise transfer or dispose of, directly or indirectly, or file with the SEC a registration statement under the Securities Act relating to, any
shares of our common stock or securities convertible into or exchangeable or exercisable for any shares of our common stock, or publicly disclose the intention to make any offer, sale, pledge, disposition or filing (other than filings on Form
S-8
relating to outstanding company stock plans that are disclosed in the Prospectus), or (ii) enter into any swap or other arrangement that transfers all or a portion of the economic consequences associated
with the ownership of any shares of common stock or any such other securities (regardless of whether any such transaction described in (i) or (ii) is to be settled by the delivery of shares of common stock or such other securities, in cash
or otherwise), in each case without the prior written consent of JMP Securities LLC for a period of 90 days after the date of this prospectus, other than the shares of our common stock to be sold hereunder; any equity awards granted under company
stock plans in the ordinary course of business consistent with past practice; any shares of our common stock issued upon the exercise of options granted under company stock plans or outstanding warrants; and the issuance of shares of our common
stock in connection with mergers or acquisitions of businesses, entities, property or other assets, joint ventures or strategic alliances.
Our directors
and certain of our executive officers, and holders of a substantial majority of our common stock and securities convertible into or exchangeable for our common stock have entered into
lock-up
agreements with
the underwriters prior to the commencement of this offering pursuant to which each of these persons or entities, with limited exceptions, for a period of 90 days after the date of this prospectus, may not, without the prior written consent of
JMP Securities LLC, (i) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, or otherwise transfer or dispose of, directly or
indirectly, any shares of our common stock or any securities convertible into or exercisable or exchangeable for our common stock (including, without limitation, common stock or such other securities which may be deemed to be beneficially owned by
such directors, executive officers, shareholders, managers and members in accordance with the rules and regulations of the SEC and securities which may be issued upon exercise of a stock option or warrant), or publicly disclose the intention to make
any offer, sale, pledge or disposition, (ii) enter into any swap or other agreement that transfers, in whole or in part, any of the economic consequences of ownership of the common stock or such other securities, whether any such transaction
described in clause (i) or (ii) above is to be settled by delivery of common stock or such other securities, in cash or otherwise, or (iii) make any demand for or exercise any right with respect to the registration of any shares of
our common stock or any security convertible into or exercisable or exchangeable for our common stock. These
lock-up
restrictions are subject to limited exceptions that are specified in the
lock-up
agreements.
We have agreed to indemnify the underwriters against certain liabilities, including liabilities
under the Securities Act.
Our common stock is listed on the New York Stock Exchange under the symbol XON.
In connection with this offering, the underwriters may engage in stabilizing transactions, which involves making bids for, purchasing and selling shares of
common stock in the open market for the purpose of preventing or retarding a decline in the market price of the common stock while this offering is in progress. These stabilizing transactions may include making short sales of the common stock, which
involves the sale by the underwriters of a greater number of shares of common stock than they are required to purchase in this offering, and purchasing shares of common stock on the open market to cover positions created by short sales. Short sales
may be covered shorts, which are short positions in an amount not greater than the underwriters option referred to above, or may be naked shorts, which are short positions in excess of that amount. The underwriters may
close out any covered short position either by exercising their option, in whole or in part, or by purchasing shares in the open market. In making this determination, the underwriters will consider, among other things, the price of shares available
for purchase in the open market compared to the price at which the underwriters may purchase shares through the option. A naked short position is more likely to be created if the underwriters are concerned that there may be downward pressure on the
price of the common stock in the open market that could adversely
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affect investors who purchase in this offering. To the extent that the underwriters create a naked short position, they will purchase shares in the open market to cover the position.
The underwriters have advised us that, pursuant to Regulation M of the Securities Act, they may also engage in other activities that stabilize, maintain or
otherwise affect the price of the common stock, including the imposition of penalty bids. This means that if the representatives of the underwriters purchase common stock in the open market in stabilizing transactions or to cover short sales, the
representatives can require the underwriters that sold those shares as part of this offering to repay the underwriting discount received by them.
These
activities may have the effect of raising or maintaining the market price of the common stock or preventing or retarding a decline in the market price of the common stock, and, as a result, the price of the common stock may be higher than the price
that otherwise might exist in the open market. If the underwriters commence these activities, they may discontinue them at any time. The underwriters may carry out these transactions on the New York Stock Exchange, in the
over-the-counter
market or otherwise.
In compliance with the guidelines of the
Financial Industry Regulatory Authority, Inc., or FINRA, the maximum aggregate discounts, commissions, agency fees or other items constituting compensation to be received by any FINRA member or independent broker-dealer will not exceed 8% of the
aggregate offering price of the securities offered pursuant to this prospectus supplement.
The underwriters and their respective affiliates are
full-service financial institutions engaged in various activities, which may include securities trading, commercial and investment banking, financial advisory, investment management, investment research, principal investment, hedging, financing and
brokerage activities. Certain of the underwriters and their affiliates have provided in the past to us and our affiliates and may provide from time to time in the future certain commercial banking, financial advisory, investment banking and other
services for us and such affiliates in the ordinary course of their business, for which they have received and may continue to receive customary fees and commissions. In addition, from time to time, certain of the underwriters and their affiliates
may effect transactions for their own account or the account of customers, and hold on behalf of themselves or their customers, long or short positions in our debt or equity securities or loans, and may do so in the future.
We have engaged Griffin Securities, Inc., or Griffin, an independent financial adviser and a member of FINRA, to provide certain financial consulting services
in connection with the offering. We have agreed to pay Griffin an amount equal to approximately $160,000 for their services in connection with the offering. Such amount will reduce the aggregate underwriting fee payable to the underwriters set forth
above.
Selling Restrictions
General
Other than in the United States, no action has been taken by us or the underwriter that would permit a public offering of the securities offered by this
prospectus supplement and the accompanying prospectus in any jurisdiction where action for that purpose is required. The securities offered by this prospectus supplement and the accompanying prospectus may not be offered or sold, directly or
indirectly, nor may this prospectus supplement and the accompanying prospectus or any other offering material or advertisements in connection with the offer and sale of any such securities be distributed or published in any jurisdiction, except
under circumstances that will result in compliance with the applicable rules and regulations of that jurisdiction. Persons into whose possession this prospectus supplement and the accompanying prospectus come are advised to inform themselves about
and to observe any restrictions relating to the offering and the distribution of this prospectus supplement and the accompanying prospectus. This prospectus supplement and the accompanying prospectus do not constitute an offer to sell or a
solicitation of an offer to buy any securities offered by this prospectus supplement and the accompanying prospectus in any jurisdiction in which such an offer or a solicitation is unlawful.
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Notice to Prospective Investors in the European Economic Area
In relation to each Member State of the European Economic Area (each, a Relevant Member State), no offer of shares may be made to the public in
that Relevant Member State other than:
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A.
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to any legal entity which is a qualified investor as defined in the Prospectus Directive;
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B.
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to fewer than 100 or, if the Relevant Member State has implemented the relevant provision of the 2010 PD Amending Directive, 150, natural or legal persons (other than qualified investors as defined in the Prospectus
Directive), as permitted under the Prospectus Directive, subject to obtaining the prior consent of the representatives; or
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C.
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in any other circumstances falling within Article 3(2) of the Prospectus Directive;
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provided that no such
offer of shares shall require the Company or the representatives to publish a prospectus pursuant to Article 3 of the Prospectus Directive or supplement a prospectus pursuant to Article 16 of the Prospectus Directive.
Each person in a Relevant Member State who initially acquires any shares or to whom any offer is made will be deemed to have represented, acknowledged and
agreed that it is a qualified investor within the meaning of the law in that Relevant Member State implementing Article 2(1)(e) of the Prospectus Directive. In the case of any shares being offered to a financial intermediary as that term
is used in Article 3(2) of the Prospectus Directive, each such financial intermediary will be deemed to have represented, acknowledged and agreed that the shares acquired by it in the offer have not been acquired on a
non-discretionary
basis on behalf of, nor have they been acquired with a view to their offer or resale to, persons in circumstances which may give rise to an offer of any shares to the public other than their
offer or resale in a Relevant Member State to qualified investors as so defined or in circumstances in which the prior consent of the representatives has been obtained to each such proposed offer or resale.
The Company, the representatives and their affiliates will rely upon the truth and accuracy of the foregoing representations, acknowledgements and agreements.
This prospectus has been prepared on the basis that any offer of shares in any Relevant Member State will be made pursuant to an exemption under the
Prospectus Directive from the requirement to publish a prospectus for offers of shares. Accordingly any person making or intending to make an offer in that Relevant Member State of shares which are the subject of the offering contemplated in this
prospectus may only do so in circumstances in which no obligation arises for the Company or any of the underwriters to publish a prospectus pursuant to Article 3 of the Prospectus Directive in relation to such offer. Neither the Company nor the
underwriters have authorized, nor do they authorize, the making of any offer of shares in circumstances in which an obligation arises for the Company or the underwriters to publish a prospectus for such offer.
For the purpose of the above provisions, the expression an offer to the public in relation to any shares in any Relevant Member State means the
communication in any form and by any means of sufficient information on the terms of the offer and the shares to be offered so as to enable an investor to decide to purchase or subscribe the shares, as the same may be varied in the Relevant Member
State by any measure implementing the Prospectus Directive in the Relevant Member State and the expression Prospectus Directive means Directive 2003/71/EC (including the 2010 PD Amending Directive, to the extent implemented in the
Relevant Member States) and includes any relevant implementing measure in the Relevant Member State and the expression 2010 PD Amending Directive means Directive 2010/73/EU.
Notice to Prospective Investors in the United Kingdom
In
addition, in the United Kingdom, this document is being distributed only to, and is directed only at, and any offer subsequently made may only be directed at persons who are qualified investors (as defined in the Prospectus Directive)
(i) who have professional experience in matters relating to investments falling within Article 19 (5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended
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(the Order) and/or (ii) who are high net worth companies (or persons to whom it may otherwise be lawfully communicated) falling within Article 49(2)(a) to (d) of the Order
(all such persons together being referred to as relevant persons). This document must not be acted on or relied on in the United Kingdom by persons who are not relevant persons. In the United Kingdom, any investment or investment
activity to which this document relates is only available to, and will be engaged in with, relevant persons.
Notice to Prospective Investors in
Switzerland
The shares may not be publicly offered in Switzerland and will not be listed on the SIX Swiss Exchange (SIX) or on any other
stock exchange or regulated trading facility in Switzerland. This document has been prepared without regard to the disclosure standards for issuance prospectuses under art. 652a or art. 1156 of the Swiss Code of Obligations or the disclosure
standards for listing prospectuses under art. 27 ff. of the SIX Listing Rules or the listing rules of any other stock exchange or regulated trading facility in Switzerland. Neither this document nor any other offering or marketing material relating
to the shares or the offering may be publicly distributed or otherwise made publicly available in Switzerland.
Neither this document nor any other
offering or marketing material relating to the offering, the Company, the shares have been or will be filed with or approved by any Swiss regulatory authority. In particular, this document will not be filed with, and the offer of shares will not be
supervised by, the Swiss Financial Market Supervisory Authority FINMA (FINMA), and the offer of shares has not been and will not be authorized under the Swiss Federal Act on Collective Investment Schemes (CISA). The investor protection afforded to
acquirers of interests in collective investment schemes under the CISA does not extend to acquirers of shares.
Notice to Prospective Investors in the
Dubai International Financial Centre
This prospectus supplement relates to an Exempt Offer in accordance with the Offered Securities Rules of the
Dubai Financial Services Authority (DFSA). This prospectus supplement is intended for distribution only to persons of a type specified in the Offered Securities Rules of the DFSA. It must not be delivered to, or relied on by, any other
person. The DFSA has no responsibility for reviewing or verifying any documents in connection with Exempt Offers. The DFSA has not approved this prospectus supplement nor taken steps to verify the information set forth herein and has no
responsibility for the prospectus supplement. The shares to which this prospectus supplement relates may be illiquid and/or subject to restrictions on their resale. Prospective purchasers of the shares offered should conduct their own due diligence
on the shares. If you do not understand the contents of this prospectus supplement you should consult an authorized financial advisor.
Notice to
Prospective Investors in Australia
No placement document, prospectus, product disclosure statement or other disclosure document has been lodged with
the Australian Securities and Investments Commission (ASIC), in relation to the offering. This prospectus does not constitute a prospectus, product disclosure statement or other disclosure document under the Corporations Act 2001 (the
Corporations Act), and does not purport to include the information required for a prospectus, product disclosure statement or other disclosure document under the Corporations Act.
Any offer in Australia of the shares may only be made to persons (the Exempt Investors) who are sophisticated investors (within the
meaning of section 708(8) of the Corporations Act), professional investors (within the meaning of section 708(11) of the Corporations Act) or otherwise pursuant to one or more exemptions contained in section 708 of the Corporations Act
so that it is lawful to offer the shares without disclosure to investors under Chapter 6D of the Corporations Act.
The shares applied for by Exempt
Investors in Australia must not be offered for sale in Australia in the period of 12 months after the date of allotment under the offering, except in circumstances where disclosure to investors under Chapter 6D of the Corporations Act would not be
required pursuant to an exemption under section 708 of the Corporations Act or otherwise or where the offer is pursuant to a disclosure document which complies with Chapter 6D of the Corporations Act. Any person acquiring shares must observe such
Australian
on-sale
restrictions.
This prospectus contains general information only and does not take account of
the investment objectives, financial situation or particular needs of any particular person. It does not contain any securities
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recommendations or financial product advice. Before making an investment decision, investors need to consider whether the information in this prospectus is appropriate to their needs, objectives
and circumstances, and, if necessary, seek expert advice on those matters.
Notice to Prospective Investors in Hong Kong
The shares have not been offered or sold and will not be offered or sold in Hong Kong, by means of any document, other than (i) to professional
investors as defined in the Securities and Futures Ordinance (Cap. 571) of Hong Kong and any rules made under that Ordinance; or (ii) in other circumstances which do not result in the document being a prospectus as defined in
the Companies Ordinance (Cap. 32) of Hong Kong or which do not constitute an offer to the public within the meaning of that Ordinance. No advertisement, invitation or document relating to the shares has been or may be issued or has been or may be in
the possession of any person for the purposes of issue, whether in Hong Kong or elsewhere, which is directed at, or the contents of which are likely to be accessed or read by, the public of Hong Kong (except if permitted to do so under the
securities laws of Hong Kong) other than with respect to shares which are or are intended to be disposed of only to persons outside Hong Kong or only to professional investors as defined in the Securities and Futures Ordinance and any
rules made under that Ordinance.
Notice to Prospective Investors in Japan
The shares have not been and will not be registered under the Financial Instruments and Exchange Law of Japan (Law No. 25 of 1948, as amended) and,
accordingly, will not be offered or sold, directly or indirectly, in Japan, or for the benefit of any Japanese Person or to others for
re-offering
or resale, directly or indirectly, in Japan or to any Japanese
Person, except in compliance with all applicable laws, regulations and ministerial guidelines promulgated by relevant Japanese governmental or regulatory authorities in effect at the relevant time. For the purposes of this paragraph, Japanese
Person shall mean any person resident in Japan, including any corporation or other entity organized under the laws of Japan.
Notice to
Prospective Investors in Singapore
This prospectus has not been registered as a prospectus with the Monetary Authority of Singapore. Accordingly, this
prospectus and any other document or material in connection with the offer or sale, or invitation for subscription or purchase, of shares may not be circulated or distributed, nor may the shares be offered or sold, or be made the subject of an
invitation for subscription or purchase, whether directly or indirectly, to persons in Singapore other than (i) to an institutional investor under Section 274 of the Securities and Futures Act, Chapter 289 of Singapore (the
SFA), (ii) to a relevant person pursuant to Section 275(1), or any person pursuant to Section 275(1A), and in accordance with the conditions specified in Section 275, of the SFA, or (iii) otherwise pursuant to,
and in accordance with the conditions of, any other applicable provision of the SFA.
Where the shares are subscribed or purchased under Section 275
of the SFA by a relevant person which is:
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(a)
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a corporation (which is not an accredited investor (as defined in Section 4A of the SFA)) the sole business of which is to hold investments and the entire share capital of which is owned by one or more individuals,
each of whom is an accredited investor; or
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(b)
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a trust (where the trustee is not an accredited investor) whose sole purpose is to hold investments and each beneficiary of the trust is an individual who is an accredited investor,
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securities (as defined in Section 239(1) of the SFA) of that corporation or the beneficiaries rights and interest (howsoever described) in that
trust shall not be transferred within six months after that corporation or that trust has acquired the shares pursuant to an offer made under Section 275 of the SFA except:
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to an institutional investor or to a relevant person defined in Section 275(2) of the SFA, or to any person arising from an offer referred to in Section 275(1A) or Section 276(4)(i)(B) of the SFA;
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(b)
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where no consideration is or will be given for the transfer;
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(c)
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where the transfer is by operation of law;
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(d)
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as specified in Section 276(7) of the SFA; or
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(e)
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as specified in Regulation 32 of the Securities and Futures (Offers of Investments) (Shares and Debentures) Regulations 2005 of Singapore.
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LEGAL MATTERS
The validity of the common stock being offered will be passed upon for us by Hogan Lovells US LLP, Baltimore, Maryland. Goodwin Procter LLP, New York,
New York is counsel for the underwriters in connection with this offering.
EXPERTS
The consolidated financial statements of Intrexon Corporation and managements assessment of the effectiveness of internal control over financial
reporting (which is included in Managements Report on Internal Control over Financial Reporting) incorporated in this prospectus by reference to the Annual Report on Form
10-K
for the year ended
December 31, 2016 have been so incorporated in reliance on the report of PricewaterhouseCoopers LLP, an independent registered public accounting firm, given on the authority of said firm as experts in auditing and accounting.
The financial statements of ZIOPHARM Oncology, Inc. as of December 31, 2015 and 2014 and for each of the years in the
two-year
period ended December 31, 2015, incorporated in this prospectus supplement by reference from the Intrexon Corporation Annual Report on Form
10-K
for the
year ended December 31, 2016, have been audited by RSM US LLP, an independent registered public accounting firm, as stated in their report thereon, incorporated herein by reference, and have been incorporated in this prospectus supplement in
reliance upon such report and upon the authority of such firm as experts 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. You can inspect and
copy these reports, proxy statements and other information at the public reference facilities of the SEC at the SECs Public Reference Room located at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at
1-800-SEC-0330
for further information on the operation of the Public Reference Room. The SEC also maintains an internet web site that
contains reports, proxy and information statements and other information regarding registrants that file electronically with the SEC (www.sec.gov). Our internet address is
www.dna.com
. However, the information contained on, or that can be
accessed through, our website is not a part of this prospectus. We have included our website address in this prospectus solely as an inactive textual reference. In addition, you can inspect reports and other information we file at the office of the
NYSE, 11 Wall Street, New York, New York 10005.
Statements contained in this prospectus supplement, the accompanying prospectus and any free writing
prospectus that we have authorized, or that are incorporated by reference into this prospectus supplement or the accompanying prospectus, about the provisions or contents of any agreement or other document are not necessarily complete. If SEC rules
and regulations require that any agreement or document be filed as an exhibit to the registration statement and we file the agreement or document, you should refer to that agreement or document for a complete description of these matters.
We have filed with the SEC a registration statement under the Securities Act with respect to the common stock offered with this prospectus. This prospectus
does not contain all of the information in the registration statement, parts of which we have omitted, as allowed under the rules and regulations of the SEC. You should refer to the registration statement for further information with respect to us
and the common stock. You may inspect the registration statement and exhibits without charge at the office of the SEC at 100 F Street, N.E., Washington, D.C. 20549, and you may obtain copies from the SEC at prescribed rates.
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INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
We are incorporating information into this prospectus supplement and the accompanying prospectus by reference, which means that we are disclosing important
information to you by referring you to another document filed separately with the SEC. The information incorporated by reference is deemed to be part of this prospectus supplement, except to the extent superseded by information contained in this
prospectus supplement.
This prospectus supplement incorporates by reference the documents set forth below that have been previously filed with the SEC
and any additional documents that we may file with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act prior to the termination of the offering covered by this prospectus supplement, other than those documents or portions of
those documents that are deemed not filed, such as information furnished under Items 2.02 and 7.01 of any Current Report on
Form 8-K,
including related exhibits:
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our Annual Report on Form
10-K
for the year ended December 31, 2016, filed on March 1, 2017;
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our Quarterly Reports on Form
10-Q
for the quarters ended March 31, 2017, June 30, 2017 and September 30, 2017, filed on May 10, 2017, August 9, 2017 and
November 9, 2017, respectively;
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our Current Reports on Form
8-K
filed on January 24, 2017, March 10, 2017, March 31, 2017, April 27, 2017, June 16, 2017, June 30, 2017,
October 16, 2017, November 30, 2017 and January 2, 2018; and
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the description of our common stock, no par value, contained in our Form
8-A
filed on August 5, 2013, including any amendment or report filed for the purpose of updating such
description.
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Statements contained in this prospectus supplement, the accompanying prospectus and any document incorporated by reference as
to the contents of any contract, agreement or other document referred to are not necessarily complete, and in each instance reference is made to the copy of the contract, agreement or other document filed as an exhibit to the registration statement
or any incorporated document, each statement being so qualified by this reference.
You may obtain copies of any of these filings by contacting us at the
address and telephone number indicated below or by contacting the SEC as described above under the section entitled Where You Can Find More Information. Documents incorporated by reference are available from us without charge, excluding
all exhibits unless an exhibit has been specifically incorporated by reference into this prospectus supplement, by requesting them in writing or by telephone at:
Corporate Secretary
Intrexon
Corporation
20374 Seneca Meadows Parkway
Germantown, Maryland 20876
(301)
556-9900
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PROSPECTUS
INTREXON CORPORATION
DEBT SECURITIES
COMMON
STOCK
PREFERRED STOCK
WARRANTS
RIGHTS
STOCK PURCHASE CONTRACTS
STOCK PURCHASE UNITS
We or any selling
securityholder may, from time to time, offer and sell in one or more offerings:
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senior or subordinated debt securities;
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shares of our common stock;
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shares of our preferred stock;
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warrants to purchase our debt securities or shares of our common stock or preferred stock, or other securities;
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rights to purchase our debt securities or shares of our common stock or preferred stock, or other securities;
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stock purchase contracts to purchase shares of our common stock or our preferred stock;
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stock purchase units, each representing ownership of a stock purchase contract and any of our debt securities, shares of our common stock or preferred stock, or preferred securities or debt obligations of third parties,
including U.S. Treasury securities, any other securities described in the applicable prospectus supplement, or any combination of the foregoing, securing the holders obligation to purchase shares of our common stock or preferred stock under
the stock purchase contracts; or
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any combination thereof.
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The debt securities may consist of debentures, notes, bonds or other
types of indebtedness. The debt securities, preferred stock, warrants, rights, stock purchase contracts and stock purchase units may be convertible or exercisable or exchangeable for common or preferred stock or other securities of ours.
Our common stock is listed on the New York Stock Exchange under the symbol XON. If we decide to seek a listing of any securities
offered by this prospectus, the applicable prospectus supplement will disclose the exchange or market on which such securities will be listed, if any, or where we have made an application for listing, if any.
We or any selling securityholder may offer and sell our securities to or through one or more underwriters, dealers, agents or other third
parties, or directly to one or more purchasers, on a continuous or delayed basis. These securities also may be resold by securityholders, if so provided in a prospectus supplement hereto. We will provide specific terms of any securities to be
offered, including the amount, prices and other terms of the securities and information about any selling securityholders, in one or more supplements to this prospectus. The prospectus supplement may also add, update or change information contained
in this prospectus. You should read this prospectus and any applicable prospectus supplement carefully before you invest.
This prospectus may not be used to sell securities unless accompanied by a prospectus supplement and/or free writing
prospectus.
INVESTING IN OUR SECURITIES INVOLVES A HIGH DEGREE OF RISK. YOU SHOULD REVIEW CAREFULLY THE RISKS AND UNCERTAINTIES REFERENCED UNDER THE
HEADING
RISK FACTORS
ON PAGE 7 OF THIS PROSPECTUS AS WELL AS THOSE CONTAINED IN THE APPLICABLE PROSPECTUS SUPPLEMENT AND ANY RELATED FREE WRITING PROSPECTUS, AND IN THE OTHER DOCUMENTS THAT ARE INCORPORATED BY
REFERENCE INTO THIS PROSPECTUS OR THE APPLICABLE PROSPECTUS SUPPLEMENT.
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
The date of this prospectus is September 1, 2017.
TABLE OF CONTENTS
We are responsible for the information contained and incorporated by reference in this prospectus, in any accompanying prospectus supplement, and in any
related free writing prospectus we prepare or authorize. We have not authorized anyone to give you any other information, and we take no responsibility for any other information that others may give you. If you are in a jurisdiction where offers to
sell, or solicitations of offers to purchase, the securities offered by this documentation are unlawful, or if you are a person to whom it is unlawful to direct these types of activities, then the offer presented in this document does not extend to
you. The information contained in this document speaks only as of the date of this document, unless the information specifically indicates that another date applies. Our business, financial condition, results of operations and prospectus may have
changed since those dates.
i
ABOUT THIS PROSPECTUS
This prospectus is part of an automatic shelf registration statement on Form S-3 that we filed with the Securities and Exchange Commission
(the SEC), as a well-known seasoned issuer as defined in Rule 405 under the Securities Act of 1933, as amended (the Securities Act). By using a shelf registration statement, we and/or selling securityholders may
offer and sell, at any time and from time to time, in one or more offerings, any combination of the securities described in this prospectus. As allowed by the SEC rules, this prospectus and any prospectus supplement or other offering materials do
not contain all of the information included in the registration statement. For further information, we refer you to the registration statement, including its exhibits. Statements contained in this prospectus and any prospectus supplement or other
offering materials about the provisions or contents of any agreement or other document are not necessarily complete. If the SECs rules and regulations require that an agreement or document be filed as an exhibit to the registration statement,
please see that agreement or document for a complete description of these matters.
This prospectus provides you with a general
description of the securities that we and/or selling securityholders may offer. Each time we and/or selling securityholders sell securities, we will provide a prospectus supplement that contains specific information about the terms of that offering,
including the specific amounts, prices and terms of the securities offered. The prospectus supplement may also add information to this prospectus or update or change information in this prospectus. To the extent that this prospectus is used by any
securityholder to resell any securities, information with respect to the securityholder and the terms of the securities being offered will be contained in a prospectus supplement. You should read this prospectus and any prospectus supplement
together with any additional information you may need to make your investment decision. You should also read and carefully consider the information in the documents we have referred you to in Where You Can Find More Information and
Incorporation by Reference below. Information incorporated by reference after the date of this prospectus is considered a part of this prospectus and may add, update or change information contained in this prospectus. Any information in
such subsequent filings that is inconsistent with this prospectus will supersede the information in this prospectus or any earlier prospectus supplement. You should rely only on the information incorporated by reference or provided in this
prospectus and any supplement. We have not authorized anyone else to provide you with other information.
You should not assume that the
information in this prospectus, any prospectus supplement or any other offering materials is accurate as of any date other than the date on the front of each document. Our business, financial condition, results of operations and prospects may have
changed since then.
When used in this prospectus, the terms Intrexon, the Company, we,
our and us refer to Intrexon Corporation and its subsidiaries, unless otherwise specified or the context otherwise requires. Intrexon
®
is our registered trademark in
the United States. This prospectus and the information incorporated herein by reference contain references to trademarks, service marks and trade names owned by us or other companies. Solely for convenience, trademarks, service marks and trade names
referred to in this prospectus and the information incorporated herein, including logos, artwork, and other visual displays, may appear without the
®
or symbols, but such references are
not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights or the rights of the applicable licensor to these trademarks, service marks and trade names. We do not intend our use or display of
other companies trade names, service marks or trademarks to imply a relationship with, or endorsement or sponsorship of us by, any other companies. Other trademarks, trade names and service marks appearing in this prospectus and any
accompanying prospectus supplement or any related free writing prospectus are the property of their respective owners.
1
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and current reports, proxy statements and other information with the SEC. You can inspect and copy these
reports, proxy statements and other information at the public reference facilities of the SEC at the SECs Public Reference Room located at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further
information on the operation of the Public Reference Room. The SEC also maintains an internet web site that contains reports, proxy and information statements and other information regarding registrants that file electronically with the SEC
(
www.sec.gov
). Our internet address is
www.dna.com
. However, the information contained on, or that can be accessed through, our website is not a part of this prospectus. We have included our website address in this prospectus solely as
an inactive textual reference. In addition, you can inspect reports and other information we file at the office of the New York Stock Exchange, Inc., 20 Broad Street, New York, New York 10005.
We have the authority to designate and issue more than one class or series of stock having various preferences, conversion and other rights,
voting powers, restrictions, limitations as to dividends, qualifications, and terms and conditions of redemption. See Description of Capital Stock Preferred Stock. We will furnish a full statement of the relative rights and
preferences of each class or series of our stock which has been so designated and any restrictions on the ownership or transfer of our stock to any shareholder upon request and without charge. Written requests for such copies should be directed to
20374 Seneca Meadows Parkway, Germantown, Maryland 20876, Attention: Chief Legal Officer, or by telephone request to (301) 556-9900.
We have filed a registration statement and related exhibits with the SEC under the Securities Act. The registration statement contains
additional information about us and the securities we may issue. You may inspect the registration statement and exhibits without charge at the office of the SEC at 100 F Street, N.E., Washington, D.C. 20549, and you may obtain copies from the SEC at
prescribed rates.
INCORPORATION BY REFERENCE
The SEC allows us to incorporate by reference information and reports we file with the SEC into this prospectus, which means that
we can disclose important information to you by referring to those documents. We hereby incorporate by reference the documents listed below, which means that we are disclosing important information to you by referring you to those
documents. The information that we file later with the SEC will automatically update and in some cases supersede this information (other than portions of these documents that are either (1) described in paragraph (e) of Item 201 of
Registration S-K or paragraphs (d)(1)-(3) and (e)(5) of Item 407 of Regulation S-K promulgated by the SEC or (2) furnished under Item 2.02 or Item 7.01 of a Current Report on Form 8-K). Specifically, we incorporate by
reference the following documents or information filed with the SEC (other than, in each case, documents or information deemed to have been furnished and not filed in accordance with SEC rules, unless otherwise indicated):
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Our Annual Report on Form 10-K for the year ended December 31, 2016, filed on March 1, 2017;
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Our Quarterly Reports on Form 10-Q for the quarter
s
ended March 31, 2017 and June 30, 2017, filed on May 10, 2017 and August 9, 2017, respectively;
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Our Current Reports on Form 8-K filed on March 10, 2017 (other than matters furnished under Item 7.01), March 31, 2017, April 27, 2017 and June 30, 2017;
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The description of our common stock, no par value, contained in our Form 8-A filed on August 5, 2013, including any amendment or report filed for the purpose of updating such description; and
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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 (the Exchange Act) on or after the date of this prospectus, until we have sold
all of the offered securities to which this prospectus relates or the offering is otherwise terminated.
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You may request a copy of these filings at no cost by writing or telephoning us at the following
address:
Corporate Secretary
Intrexon Corporation
20374 Seneca
Meadows Parkway
Germantown, Maryland 20876
(301) 556-9900
This prospectus
is part of a registration statement we filed with the SEC. We have incorporated exhibits into this registration statement. You should read the exhibits carefully for provisions that may be important to you.
Neither we nor any selling securityholder have authorized anyone to provide you with information other than what is incorporated by reference
or provided in this prospectus, any prospectus supplement or any free writing prospectus. Neither we nor any selling securityholder are making an offer of these securities in any state where the offer is not permitted. You should not assume that the
information in this prospectus or in the documents incorporated by reference is accurate as of any date other than the date on the front of this prospectus or those documents.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This prospectus, the documents incorporated by reference into this prospectus and our future oral and written statements, may contain
forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 concerning our business, consolidated financial condition and results of operations. All statements other than statements of historical
facts included or incorporated by reference into this prospectus regarding our strategies, prospects, financial condition, costs, plans and objectives are forward-looking statements. The SEC encourages companies to disclose forward-looking
statements so that investors can better understand a companys future prospects and make informed investment decisions. These forward-looking statements reflect our beliefs and expectations as to future events and trends affecting our business,
our consolidated financial condition and results of operations. These forward-looking statements are based upon our current expectations concerning future events and discuss, among other things, anticipated future financial performance and future
business plans. Forward-looking statements are necessarily subject to risks and uncertainties, many of which are outside our control, that could cause actual results to differ materially from these statements. Forward-looking statements can be
identified by such words as anticipates, believes, plan, assumes, could, should, estimates, expects, intends, potential,
seek, predict, may, will and similar expressions.
These forward-looking statements
include, among other things, statements about:
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our current and future exclusive channel collaborations (ECCs), license agreements and other collaborations;
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developments concerning our collaborators and licensees;
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our ability to successfully enter new markets or develop additional products, whether with our collaborators or independently;
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competition from existing technologies and products or new technologies and products that may emerge;
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actual or anticipated variations in our operating results;
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actual or anticipated fluctuations in our competitors or our collaborators and licensees operating results or changes in their respective growth rates;
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market conditions in our industry;
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our ability, and the ability of our collaborators and licensees, to protect our intellectual property and other proprietary rights and technologies;
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our ability, and the ability of our collaborators and licensees, to adapt to changes in laws or regulations and policies;
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the ability of our collaborators and licensees to secure any necessary regulatory approvals to commercialize any products developed under the ECCs, license agreements and joint ventures;
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the ability of our collaborators and licensees to develop and successfully commercialize products enabled by our technologies;
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the rate and degree of market acceptance of any products developed by a collaborator under an ECC or through a joint venture or license under a license agreement;
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our ability to retain and recruit key personnel;
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the result of litigation proceedings that we face currently or may face in the future;
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our expectations related to the use of proceeds from our public offerings and other financing efforts; and
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our estimates regarding expenses, future revenue, capital requirements and needs for additional financing.
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We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements, and you should not place undue
reliance on our forward-looking statements. Item 1A, Risk Factors in our Annual Report on Form 10-K, and Item 1A, Risk Factors in our Quarterly Reports on Form 10-Q, which are incorporated by reference into this
prospectus, includes factors 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, joint ventures or investments that we may make. Forward-looking statements may also concern our expectations relating to our subsidiaries and other affiliates. We caution you that the foregoing list may not contain all of the
forward-looking statements made in this prospectus.
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.
OVERVIEW
We believe we are a leader in the field of synthetic biology, an emerging and rapidly evolving discipline that applies engineering principles
to biological systems to enable rational, design-based control of cellular function for a specific purpose. Using our suite of proprietary and complementary technologies, we design, build and regulate gene programs, which are DNA sequences that
consist of key genetic components. A single gene program or a complex, multi-genic program are fabricated and stored within a DNA vector. Vectors are segments of DNA used as a vehicle to transmit genetic information. DNA vectors can, in turn, be
introduced into cells in order to generate a simple or complex cellular system, which are the basic and complex cellular activities that take place within a cell and the interaction of those systems in the greater cellular environment. It is these
genetically modified cell systems that can be used to produce biological effector molecules, or be employed directly to enable the development of new and improved products and manufacturing processes across a variety of end markets, including
health, food, energy, environment, and consumer. Our synthetic biology capabilities include the ability to precisely control the amount, location and modification of biological molecules to control the function and output of living cells and
optimize for desired results at an industrial scale.
4
We believe that because synthetic biology has applicability across many diverse end markets, we
cannot take full advantage of synthetic biology with internal development programs alone. To address this, we have devised our business model to allow us to focus on our core expertise in synthetic biology while bringing many different commercial
products to market via collaborations in a broad range of industries or end markets, thus minimizing and leveraging the use of our own capital.
Our business model is built primarily around the formation of exclusive channel collaborations, or ECCs. An ECC is an agreement with a
collaborator to develop products based on technologies in a specifically defined field. We seek collaborators that have expertise within a specific industry sector and the commitment to provide resources for the commercialization of products within
that industry sector. In our ECCs, we provide expertise in the engineering of gene programs and cellular systems, and our collaborators are responsible for providing market and product development expertise, as well as sales and marketing
capabilities.
This business model allows us to leverage our capabilities and capital across numerous product development programs and a
broader landscape of end markets than we would be capable of addressing on our own. Our ECC business model also allows us to participate in the potential upside from products that are enabled by our technologies across an extensive range of
industries, without the need for us to invest considerable resources in bringing individual products to market. Additionally, the flexibility of the business model allows us to collaborate with a range of counterparts, from small innovative
companies to global multinational conglomerates.
Alternatively, we may execute a research collaboration to develop an early-stage program
pursuant to which we receive reimbursement for our development costs but the exclusive commercial rights, and related access fees, are deferred until completion of an initial research program.
In certain strategic circumstances, we may enter into a joint venture, or JV, with a third party collaborator whereby we may contribute access
to our technology, cash or both into the JV which we will jointly control with our collaborator. Pursuant to a JV agreement, we may be required to contribute additional capital to the JV, and we may be able to receive a higher financial return than
we would normally receive from an ECC to the extent that we and our collaborator are successful in developing one or more products.
As we
consider the broad potential applications of our synthetic biology technologies, we have identified a number of ventures that are already enabling products that benefit from the application of such technology. We believe that the strategic
acquisition of certain such companies will allow us to develop and commercialize innovative products and create significant value for us. Our business model therefore includes the acquisition of certain product-focused companies that may leverage
our technologies and expertise in order to expand their respective product applications.
As a means to further the development of our
business model, in June 2015, we entered into an agreement with Harvest Intrexon Enterprise Fund I, LP, or Harvest, an investment fund sponsored by Harvest Capital Strategies, LLC, and a related party based on ownership in the fund by affiliates of
Third Security, LLC or Third Security. Harvest was established to invest in life science research and development opportunities that we offer to Harvest. These are investment proposals that are suitable for pursuit by a start-up venture,
characterized by the agreement as start-up opportunities. For such start-up opportunities, we provide Harvest with exclusive rights of first-look and first negotiation. For any opportunities it decides to pursue, Harvest establishes new
collaboration entities which enter into an ECC with us in a designated field. The terms of such ECCs are negotiated between us and Harvest. In addition, the agreement provides us the right to present to Harvest the opportunity to invest in other
ventures, including investment opportunities with respect to our existing collaborations. Any such opportunities are presented at our discretion on a non-exclusive basis. The agreement with Harvest does not limit our ability to execute other
collaborations and JVs with third parties. As consideration for providing exclusive rights of first-look and first negotiation for start-up opportunities, we receive a portion of the management fee collected by the fund sponsor of Harvest.
5
Pursuant to our business model, we may receive equity in lieu of cash for technology access fees
and milestones and also may participate in capital raises to allow earlier-stage collaborators to focus their resources on product development. However, when such a collaborator develops greater operational or financial resources, its shares become
a financial asset within Intrexon that is independent of our operational or collaborative purposes.
We may augment our suite of
proprietary technologies through mergers or acquisitions of technologies which then become available to new or existing collaborators. Among other things, we pursue technologies that we believe will be generally complementary to our existing
technologies and also meet our desired return on investment and other economic criteria. In certain cases, such technologies may already be applied in the production of products or services and in these cases we may seek to expand the breadth or
efficacy of such products or services through the use of our technologies.
We have and may continue to engage in a variety of
transactions, including ECCs and JVs, with companies in which Randal J. Kirk, our Chairman of the Board and Chief Executive Officer, and affiliates of Mr. Kirk, have a direct or indirect interest. For example, we are party to a services
agreement with Third Security, under which Third Security provides certain services to us in return for a monthly fee of shares of our common stock. Mr. Kirk serves as the Senior Managing Director and Chief Executive Officer of Third Security
and owns 100 percent of the equity interests of Third Security. We believe that each of these transactions was on terms no less favorable to us than terms we could have obtained from unaffiliated third parties, and each of these transactions was
approved by at least a majority of the disinterested members of the audit committee of our board of directors. In addition, subsequent to our consummation of ECCs with certain companies, Mr. Kirk and his affiliates invested in these companies.
Furthermore, as we execute on these ECCs or JVs going forward, a conflict may arise between our interests and those of Mr. Kirk and his affiliates. We will continue to ensure that all future transactions, if any, between us and our officers,
directors, principal shareholders and their affiliates, are approved by the audit committee or a majority of the independent and disinterested members of the board of directors in accordance with our written related person transaction policy, and
are on terms no less favorable to us than those that we could obtain from unaffiliated third parties.
We were founded by Thomas D. Reed,
Ph.D., in 1998, as an Ohio limited liability company under the name Genomatix LTD. We were reincorporated as a Virginia corporation in 2004 and changed our name to Intrexon Corporation in 2005. The principal executive offices of Intrexon are located
at 20374 Seneca Meadows Parkway, Germantown, Maryland 20876, and our telephone number is (301) 556-9900. Our website is www.dna.com. The information on, or that can be accessed through, our website does not constitute part of this prospectus,
and you should not rely on any such information in making the decision whether to purchase our common stock. Our common stock is traded on the NYSE under the symbol XON.
For more information regarding our business, see Item 1 of our Annual Report on Form 10-K for the year ended December 31, 2016, and
the other documents incorporated by reference into this prospectus. For information on how you can view our Annual Report on Form 10-K for the year ended December 31, 2016, and other documents incorporated by reference into this prospectus, see
the section entitled Where You Can Find More Information.
6
RISK FACTORS
Investing in our securities involves a high degree of risk. You should carefully consider the risks described in the documents incorporated by
reference in this prospectus and any prospectus supplement, as well as other information we include or incorporate by reference into this prospectus and any applicable prospectus supplement, before making an investment decision. Our business,
financial condition or results of operations could be materially adversely affected by the materialization of any of these risks. The trading price of our securities could decline due to the materialization of any of these risks, and you may lose
all or part of your investment. This prospectus and the documents incorporated herein by reference also contain forward-looking statements that involve risks and uncertainties. Actual results could differ materially from those anticipated in these
forward-looking statements as a result of certain factors, including the risks described in the documents incorporated herein by reference, including (i) our most recent annual report on Form 10-K which is on file with the SEC and is
incorporated herein by reference, (ii) our most recent quarterly report on Form 10-Q, which is on file with the SEC and is incorporated by reference into this prospectus, and (iii) other documents we file with the SEC that are deemed
incorporated by reference into this prospectus. These risk factors may be amended, supplemented or superseded from time to time by risk factors contained in other Exchange Act reports that we file with the SEC, which will be subsequently
incorporated herein by reference; by any prospectus supplement accompanying this prospectus; or by a post-effective amendment to the registration statement of which this prospectus forms a part. In addition, new risks may emerge at any time and we
cannot predict such risks or estimate the extent to which they may affect our financial performance. For more information, see Where You Can Find More Information, Incorporation By Reference and Cautionary Statement
Regarding Forward-Looking Statements.
7
RATIO OF EARNINGS TO FIXED CHARGES AND RATIO OF EARNINGS TO COMBINED
FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
The following table sets forth our historical ratio of earnings to fixed charges and
ratio of earnings to combined fixed charges and preferred stock dividends for each of the periods indicated. You should read this table in conjunction with our consolidated financial statements and related notes and Managements Discussion and
Analysis of Financial Condition and Results of Operations, which are incorporated by reference in this prospectus. For further information, see Exhibit 12.1 (Computation of Ratio of Earnings to Fixed Charges and Ratio of Earnings to Combined Fixed
Charges and Preferred Stock Dividends) to the registration statement of which this prospectus forms a part.
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Six Months Ended
June 30, 2017
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Year Ended
December 31,
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2016
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2015
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2014
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2013
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2012
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Ratio of earnings (loss) to fixed charges
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Ratio of earnings (loss) to combined fixed charges and preferred stock dividends
(2)
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The historical ratios were prepared on a consolidated basis using amounts calculated in accordance with U.S.
generally accepted accounting principles, or U.S. GAAP, and, therefore, reflect all consolidated earnings, fixed charges and preferred stock dividends. For purposes of calculating the ratios for the six months ended June 30, 2017 and years
ended December 31, 2016, 2015, 2014, 2013 and 2012 above, earnings consist of pre-tax loss from continuing operations before adjustment for loss from equity method investment plus fixed charges. Fixed charges for the six months ended
June 30, 2017 and years ended December 31, 2016, 2015, 2014, 2013 and 2012 include interest expense and an estimate of interest expense within rental expense. Preferred stock dividends for the years ended December 31, 2013 and 2012
include the accretion of dividends on our redeemable convertible preferred stock outstanding during those periods. All outstanding shares of redeemable convertible preferred stock along with cumulative dividends that existed prior to our initial
public offering in August 2013 were converted into shares of common stock in connection with our initial public offering. As of the date hereof, no shares of preferred stock are outstanding.
We did not record earnings for the six months ended June 30, 2017 and the years ended December 31, 2016, 2015, 2014, 2013 and 2012.
Accordingly, during those periods our earnings were insufficient to cover fixed charges in such periods and we are unable to disclose a ratio of earnings to fixed charges for such periods. Due to our losses for the six months ended June 30,
2017 and the years ended December 31, 2016, 2015, 2014, 2013 and 2012, the ratio coverage was less than 1:1. For the six months ended June 30, 2017 and the years ended December 31, 2016, 2015, 2014, 2013 and 2012, we would have needed
to generate additional earnings of $45.1 million, $173.0 million, $78.0 million, $80.5 million, $40.3 million and $81.6 million, respectively, to achieve an earnings to fixed charges coverage ratio of 1:1.
During the six months ended June 30, 2017 and the years ended December 31, 2016, 2015, 2014, 2013 and 2012, our earnings were
insufficient to cover fixed charges and preferred stock dividends in such periods and we are unable to disclose a ratio of earnings to combined fixed charges and preferred stock dividends for such periods. Due to our losses for the six months ended
June 30, 2017 and the years ended December 31, 2016, 2015, 2014, 2013 and 2012, the ratio coverage was less than 1:1. For the six months ended June 30, 2017 and the years ended December 31, 2016, 2015, 2014, 2013 and 2012, we
would have needed to generate additional earnings of $45.1 million, $173.0 million, $78.0 million, $80.5 million, $58.7 million and $103.6 million, respectively, to achieve an earnings to combined fixed charges and preferred stock dividends coverage
ratio of 1:1. We had no preferred stock outstanding during the six months ended June 30, 2017 and the years ended December 31, 2016, 2015 and 2014.
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USE OF PROCEEDS
The securities that may, from time to time, be listed under this prospectus may be sold by us or by selling securityholders
Unless we state otherwise in the accompanying prospectus supplement, we intend to use the net proceeds from the sale of the securities offered
by us pursuant to this prospectus for general corporate purposes. General corporate purposes may include additions to working capital, financing of capital expenditures, repayment or redemption of existing indebtedness, and future acquisitions and
strategic investment opportunities. 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. Additional information on the
use of net proceeds from any sale of securities offered under this prospectus may be set forth in the prospectus supplement or in any related free writing prospectus relating to a specific offering. Pending the application of net proceeds, we expect
to invest the net proceeds in investment grade, interest-bearing securities. From time to time, we may engage in additional public or private financings of a character and amount which we may deem appropriate.
We may file prospectus supplements allowing selling securityholders to sell securities received from us in connection with acquisition
transactions, private offerings or other transactions. Unless otherwise set forth in a prospectus supplement, we will not receive any proceeds from sales by selling securityholders.
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DESCRIPTION OF DEBT SECURITIES
We may offer debt securities which may be senior or subordinated. We refer to the senior debt securities and the subordinated debt securities
collectively as debt securities. 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 Intrexon Corporation, a Virginia corporation, 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.
None of the indentures will limit the amount of
debt securities that we may issue. The applicable indenture will provide that debt securities may be issued up to an aggregate principal amount authorized from time to time by us and may be payable in any currency or currency unit designated by us
or in amounts determined by reference to an index.
General
The senior debt securities will constitute our unsecured and unsubordinated general obligations and will rank pari passu with our other
unsecured and unsubordinated obligations. The subordinated debt securities will constitute our unsecured and subordinated general obligations and will be junior in right of payment to our senior indebtedness (including senior debt securities), as
described under the heading Certain Terms of the Subordinated Debt SecuritiesSubordination.
The debt securities
will be our unsecured obligations. Any secured debt or other secured obligations will be effectively senior to the debt securities of any series to the extent of the value of the assets securing such debt or other obligations.
The applicable prospectus supplement and/or free writing prospectus will include any additional or different terms of the debt securities
being offered, including the following terms:
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the title and type of the debt securities;
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whether the debt securities will be senior or subordinated debt securities, and, with respect to debt securities issued under the subordinated indenture, the terms on which they are subordinated;
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the aggregate principal amount of the debt securities;
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the price or prices at which we will sell the debt securities;
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the maturity date or dates of the debt securities and the right, if any, to extend such date or dates;
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the rate or rates, if any, per year, at which the debt securities will bear interest, or the method of determining such rate or rates;
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the date or dates from which such interest will accrue, the interest payment dates on which such interest will be payable or the manner of determination of such interest payment dates and the related record dates;
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the right, if any, to extend the interest payment periods and the duration of that extension;
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the manner of paying principal and interest and the place or places where principal and interest will be payable;
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provisions for a sinking fund, purchase fund or other analogous fund, if any;
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any redemption dates, prices, obligations and restrictions on the debt securities;
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the currency, currencies or currency units in which the debt securities will be denominated and the currency, currencies or currency units in which principal and interest, if any, on the debt securities may be payable;
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any conversion or exchange features of the debt securities;
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whether and upon what terms the debt securities may be defeased;
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any events of default or covenants in addition to or in lieu of those set forth in the indenture;
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whether the debt securities will be issued in definitive or global form or in definitive form only upon satisfaction of certain conditions;
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whether the debt securities will be guaranteed as to payment or performance;
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any special tax implications of the debt securities; and
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any other material terms of the debt securities.
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When we refer to principal in
this section with reference to the debt securities, we are also referring to premium, if any.
We may from time to time,
without notice to or the consent of the holders of any series of debt securities, create and issue further debt securities of any such series ranking equally with the debt securities of such series in all respects (or in all respects other than
(1) the payment of interest accruing prior to the issue date of such further debt securities or (2) the first payment of interest following the issue date of such further debt securities). Such further debt securities may be consolidated
and form a single series with the debt securities of such series and have the same terms as to status, redemption or otherwise as the debt securities of such series.
A holder may present debt securities for exchange and may present debt securities for transfer in the manner, at the places and subject to the
restrictions set forth in the debt securities and the applicable prospectus supplement. We will provide those services to the holders without charge, although the holder may have to pay any tax or other governmental charge payable in connection with
any exchange or transfer, as set forth in the indenture.
Debt securities may bear interest at a fixed rate or a floating rate. Debt
securities bearing no interest or interest at a rate that at the time of issuance is below the prevailing market rate (original issue discount securities) may be sold at a discount below their stated principal amount. U.S. federal income tax
considerations applicable to any such discounted debt securities or to certain debt securities issued at par that are treated as having been issued at a discount for U.S. federal income tax purposes will be described in the applicable prospectus
supplement.
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We may issue debt securities with the principal amount payable on any principal payment date, or
the amount of interest payable on any interest payment date, to be determined by reference to one or more currency exchange rates, securities or baskets of securities, commodity prices or indices. The holder may receive a payment of principal on any
principal payment date, or a payment of interest on any interest payment date, that is greater than or less than the amount of principal or interest otherwise payable on such dates, depending on the value on such dates of the applicable currency,
security or basket of securities, commodity or index. Information as to the methods for determining the amount of principal or interest payable on any date, the currencies, securities or baskets of securities, commodities or indices to which the
amount payable on such date is linked and certain related tax considerations will be set forth in the applicable prospectus supplement.
Certain Terms
of the Senior Debt Securities
Covenants
. Unless we indicate otherwise in a prospectus supplement, the senior debt securities
will not contain any financial or restrictive covenants, including covenants restricting either us or any of our subsidiaries from incurring, issuing, assuming or guaranteeing any indebtedness secured by a lien on any of our or our
subsidiaries property or capital stock, or restricting either us or any of our subsidiaries from entering into sale and leaseback transactions.
Consolidation, Merger and Sale of Assets.
Unless we indicate otherwise in a prospectus supplement, we may not consolidate with or merge
into any other person in a transaction in which we are not the surviving corporation, or convey, transfer or lease our properties and assets substantially as an entirety to any person, in either case, unless:
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the successor entity, if any, is a U.S. corporation, limited liability company, partnership or trust (subject to certain exceptions provided for in the senior indenture);
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the successor entity assumes our obligations on the senior debt securities and under the senior indenture;
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immediately after giving effect to the transaction, no default or event of default shall have occurred and be continuing; and
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certain other conditions are met.
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No Protection in the Event of a Change in Control
.
Unless we indicate otherwise in a prospectus supplement with respect to a particular series of senior debt securities, the senior debt securities will not contain any provisions that may afford holders of the senior debt securities protection in the
event we have a change in control or in the event of a highly leveraged transaction (whether or not such transaction results in a change in control).
Events of Default.
The following are events of default under the senior indenture for any series of senior debt securities:
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failure to pay interest on any senior debt securities of such series when due and payable, if that default continues for a period of 90 days (or such other period as may be specified for such series);
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failure to pay principal on the senior debt securities of such series when due and payable whether at maturity, upon redemption, by declaration or otherwise (and, if specified for such series, the continuance of such
failure for a specified period);
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default in the performance of or breach of any of our covenants or agreements in the senior indenture applicable to senior debt securities of such series, other than a covenant breach which is specifically dealt with
elsewhere in the senior indenture, and that default or breach continues for a period of 90 days after we receive written notice from the trustee or from the holders of 25% or more in aggregate principal amount of the senior debt securities of such
series;
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certain events of bankruptcy or insolvency, whether or not voluntary; and
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any other event of default provided for in such series of senior debt securities as may be specified in the applicable prospectus supplement.
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The default by us under any other debt, including any other series of debt securities, is not a default under the senior indenture.
If an event of default other than an event of default specified in the fourth bullet point immediately above occurs with respect to a series
of senior debt securities and is continuing under the senior indenture, then, and in each such case, either the trustee or the holders of not less than 25% in aggregate principal amount of such series then outstanding under the senior indenture
(each such series voting as a separate class) by written notice to us and to the trustee, if such notice is given by the holders, may, and the trustee at the request of such holders shall, declare the principal amount of and accrued interest on such
series of senior debt securities to be immediately due and payable, and upon this declaration, the same shall become immediately due and payable.
If an event of default specified in the fourth bullet point immediately above occurs and is continuing, the entire principal amount of and
accrued interest on each series of senior debt securities then outstanding shall become immediately due and payable.
Unless otherwise
specified in the prospectus supplement relating to a series of senior debt securities originally issued at a discount, the amount due upon acceleration shall include only the original issue price of the senior debt securities, the amount of original
issue discount accrued to the date of acceleration and accrued interest, if any.
Upon certain conditions, declarations of acceleration
may be rescinded and annulled and past defaults may be waived by the holders of a majority in aggregate principal amount of all the senior debt securities of such series affected by the default, each series voting as a separate class. Furthermore,
prior to a declaration of acceleration and subject to various provisions in the senior indenture, the holders of a majority in aggregate principal amount of a series of senior debt securities, by notice to the trustee, may waive an existing default
or event of default with respect to such senior debt securities and its consequences, except a default in the payment of principal of or interest on such senior debt securities or in respect of a covenant or provision of the senior indenture which
cannot be modified or amended without the consent of the holders of each such senior debt security. Upon any such waiver, such default shall cease to exist, and any event of default with respect to such senior debt securities shall be deemed to have
been cured, for every purpose of the senior indenture; but no such waiver shall extend to any subsequent or other default or event of default or impair any right consequent thereto.
The holders of a majority in aggregate principal amount of a series of senior debt securities may direct the time, method and place of
conducting any proceeding for any remedy available to the trustee or exercising any trust or power conferred on the trustee with respect to such senior debt securities. However, the trustee may refuse to follow any direction that conflicts with law
or the senior indenture, that may involve the trustee in personal liability or that the trustee determines in good faith may be unduly prejudicial to the rights of holders of such series of senior debt securities not joining in the giving of such
direction and may take any other action it deems proper that is not inconsistent with any such direction received from holders of such series of senior debt securities. A holder may not pursue any remedy with respect to the senior indenture or any
series of senior debt securities unless:
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the holder gives the trustee written notice of a continuing event of default;
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the holders of at least 25% in aggregate principal amount of such series of senior debt securities make a written request to the trustee to pursue the remedy in respect of such event of default;
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the requesting holder or holders offer the trustee indemnity satisfactory to the trustee against any costs, liability or expense;
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the trustee does not comply with the request within 60 days after receipt of the request and the offer of indemnity; and
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during such 60-day period, the holders of a majority in aggregate principal amount of such series of senior debt securities do not give the trustee a direction that is inconsistent with the request.
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These limitations, however, do not apply to the right of any holder of a senior debt security to receive payment of the principal of and
interest on such senior debt security in accordance with the terms of such debt security, or to bring suit for the enforcement of any such payment in accordance with the terms of such debt security, on or after the due date for the senior debt
securities, which right shall not be impaired or affected without the consent of the holder.
The senior indenture requires certain of our
officers to certify, on or before a fixed date in each year in which any senior debt security is outstanding, as to their knowledge of our compliance with all covenants, agreements and conditions under the senior indenture.
Satisfaction and Discharge.
We can satisfy and discharge our obligations to holders of any series of debt securities if:
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we pay or cause to be paid, as and when due and payable, the principal of and any interest on all senior debt securities of such series outstanding under the senior indenture; or
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all senior debt securities of such series have become due and payable or will become due and payable within one year (or are to be called for redemption within one year) and we deposit in trust a combination of cash and
U.S. government or U.S. government agency obligations that will generate enough cash to make interest, principal and any other payments on the debt securities of that series on their various due dates.
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Under current U.S. federal income tax law, the deposit and our legal release from the debt securities would be treated as though we took back
the debt securities and gave the holder their share of the cash and debt securities or bonds deposited in trust. In that event, the holder could recognize gain or loss on the debt securities such holder gives back to us. Purchasers of the debt
securities should consult their own advisers with respect to the tax consequences to them of such deposit and discharge, including the applicability and effect of tax laws other than the U.S. federal income tax law.
Defeasance
. Unless the applicable prospectus supplement provides otherwise, the following discussion of legal defeasance and discharge
and covenant defeasance will apply to any series of debt securities issued under the indentures.
Legal Defeasance.
We can
legally release ourselves from any payment or other obligations on the debt securities of any series (called legal defeasance) if certain conditions are met, including the following:
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We deposit in trust for the benefit of all direct holders of the debt securities of the same series a combination of cash and U.S. government or U.S. government agency obligations that will generate enough cash to make
interest, principal and any other payments on the debt securities of that series on their various due dates.
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There is a change in current U.S. federal income tax law or an IRS ruling that lets us make the above deposit without causing the holder to be taxed on the debt securities any differently than if we did not make the
deposit and instead repaid the debt securities ourselves when due. Under current U.S. federal income tax law, the deposit and our legal release from the debt securities would be treated as though we took back the debt securities and gave the holder
their share of the cash and debt securities or bonds deposited in trust. In that event, the holder could recognize gain or loss on the debt securities such holder gives back to us.
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We deliver to the trustee a legal opinion of our counsel confirming the tax law change or ruling described above.
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If we ever did accomplish legal defeasance, as described above, holders would have to rely solely on the trust deposit for repayment of the
debt securities. The holders could not look to us for repayment in the event of any shortfall.
Covenant Defeasance.
Without any
change of current U.S. federal tax law, we can make the same type of deposit described above and be released from some of the covenants in the debt securities (called covenant defeasance). In that event, the holder would lose the
protection of those covenants but would gain the protection of having money and securities set aside in trust to repay the debt securities. In order to achieve covenant defeasance, we must do the following (among other things):
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We must deposit in trust for the benefit of all direct holders of the debt securities of the same series a combination of cash and U.S. government or U.S. government agency obligations that will generate enough cash to
make interest, principal and any other payments on the debt securities of that series on their various due dates.
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We must deliver to the trustee a legal opinion of our counsel confirming that under current U.S. federal income tax law we may make the above deposit without causing the holders to be taxed on the debt securities any
differently than if we did not make the deposit and instead repaid the debt securities ourselves when due.
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If we accomplish
covenant defeasance, the holders can still look to us for repayment of the debt securities if there were a shortfall in the trust deposit. In fact, if one of the Events of Default occurred (such as our bankruptcy) and the debt securities become
immediately due and payable, there may be such a shortfall. Depending on the events causing the default, the holders may not be able to obtain payment of the shortfall.
Modification and Waiver.
We and the trustee may amend or supplement the senior indenture or the senior debt securities without the
consent of any holder:
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to convey, transfer, assign, mortgage or pledge any assets as security for the senior debt securities of one or more series;
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to evidence the succession of a corporation, limited liability company, partnership or trust to us, and the assumption by such successor of our covenants, agreements and obligations under the senior indenture;
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to add to our covenants such new covenants, restrictions, conditions or provisions for the protection of the holders, and to make the occurrence, or the occurrence and continuance, of a default in any such additional
covenants, restrictions, conditions or provisions an event of default;
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to cure any ambiguity, defect or inconsistency in the senior indenture or in any supplemental indenture or to conform the senior indenture or the senior debt securities to the description of senior debt securities of
such series set forth in this prospectus or any applicable prospectus supplement;
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to provide for or add guarantors with respect to the senior debt securities of any series;
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to establish the form or forms or terms of the senior debt securities as permitted by the senior indenture;
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to evidence and provide for the acceptance of appointment under the senior indenture by a successor trustee, or to make such changes as shall be necessary to provide for or facilitate the administration of the trusts in
the senior indenture by more than one trustee;
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to add to, delete from or revise the conditions, limitations and restrictions on the authorized amount, terms, purposes of issue, authentication and delivery of any series of senior debt securities;
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to make any change to the senior debt securities of any series so long as no senior debt securities of such series are outstanding; or
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to make any change that does not adversely affect the rights of any holder in any material respect.
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Other amendments and modifications of the senior indenture or the senior debt securities issued may be made, and our compliance with any
provision of the senior indenture with respect to any series of senior debt securities may be waived, with the consent of the holders of a majority of the aggregate principal amount of the outstanding senior debt securities of all series affected by
the amendment or modification (voting together as a single class); provided, however, that each affected holder must consent to any modification, amendment or waiver that:
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extends the final maturity of any senior debt securities of such series;
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reduces the principal amount of any senior debt securities of such series;
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reduces the rate or extends the time of payment of interest on any senior debt securities of such series;
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reduces the amount payable upon the redemption of any senior debt securities of such series;
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changes the currency of payment of principal of or interest on any senior debt securities of such series;
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reduces the principal amount of original issue discount securities payable upon acceleration of maturity or the amount provable in bankruptcy;
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waives a default in the payment of principal of or interest on the senior debt securities;
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changes the provisions relating to the waiver of past defaults or changes or impairs the right of holders to receive payment or to institute suit for the enforcement of any payment or conversion of any senior debt
securities of such series on or after the due date therefor;
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modifies any of the provisions of these restrictions on amendments and modifications, except to increase any required percentage or to provide that certain other provisions cannot be modified or waived without the
consent of the holder of each senior debt security of such series affected by the modification; or
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reduces the above-stated percentage of outstanding senior debt securities of such series whose holders must consent to a supplemental indenture or to modify or amend or to waive certain provisions of or defaults under
the senior indenture.
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It shall not be necessary for the holders to approve the particular form of any proposed amendment,
supplement or waiver, but it shall be sufficient if the holders consent approves the substance thereof. After an amendment, supplement or waiver of the senior indenture in accordance with the provisions described in this section becomes
effective, the trustee must give to the holders affected thereby certain notice briefly describing the amendment, supplement or waiver. Any failure by the trustee to give such notice, or any defect therein, shall not, however, in any way impair or
affect the validity of any such amendment, supplemental indenture or waiver.
No Personal Liability of Incorporators, Shareholders,
Officers, Directors
. The senior indenture provides that 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 senior debt securities or because of the
creation of any indebtedness represented thereby, against any of our incorporators, shareholders, 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 senior debt securities, waives and releases all such liability.
Concerning the Trustee
. The senior indenture provides that, except during the continuance of an event of default, the trustee will not
be liable except for the performance of such duties as are specifically set forth in the
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senior indenture. If an event of default has occurred and is continuing, the trustee will exercise such rights and powers vested in it under the senior indenture and will use the same degree of
care and skill in its exercise as a prudent person would exercise under the circumstances in the conduct of such persons own affairs.
The senior indenture and the provisions of the Trust Indenture Act of 1939 incorporated by reference therein contain limitations on the rights
of the trustee thereunder, should it become a creditor of ours or any of our subsidiaries, to obtain payment of claims in certain cases or to realize on certain property received by it in respect of any such claims, as security or otherwise. The
trustee is permitted to engage in other transactions, provided that if it acquires any conflicting interest (as defined in the Trust Indenture Act), it must eliminate such conflict or resign.
We may have normal banking relationships with the senior trustee in the ordinary course of business.
Unclaimed Funds
. All funds deposited with the trustee or any paying agent for the payment of principal, premium, interest or additional
amounts in respect of the senior debt securities that remain unclaimed for two years after the date upon which such principal, premium or interest became due and payable will be repaid to us. Thereafter, any right of any holder of senior debt
securities to such funds shall be enforceable only against us, and the trustee and paying agents will have no liability therefor.
Governing Law
. The senior indenture and the senior debt securities will be governed by, and construed in accordance with, the internal
laws of the State of New York.
Certain Terms of the Subordinated Debt Securities
Other than the terms of the subordinated indenture and subordinated debt securities relating to subordination or otherwise as described in the
prospectus supplement relating to a particular series of subordinated debt securities, the terms of the subordinated indenture and subordinated debt securities are identical in all material respects to the terms of the senior indenture and senior
debt securities.
Additional or different subordination terms may be specified in the prospectus supplement applicable to a particular
series.
Subordination
. The indebtedness evidenced by the subordinated debt securities is subordinate to the prior payment in full
of all of our senior indebtedness, as defined in the subordinated indenture.
During the continuance beyond any applicable grace
period of any default in the payment of principal, premium, interest or any other payment due on any of our senior indebtedness, we may not make any payment of principal of or interest on the subordinated debt securities (except for certain sinking
fund payments). In addition, upon any payment or distribution of our assets upon any dissolution, winding-up, liquidation or reorganization, the payment of the principal of and interest on the subordinated debt securities will be subordinated to the
extent provided in the subordinated indenture in right of payment to the prior payment in full of all our senior indebtedness. Because of this subordination, if we dissolve or otherwise liquidate, holders of our subordinated debt securities may
receive less, ratably, than holders of our senior indebtedness. The subordination provisions do not prevent the occurrence of an event of default under the subordinated indenture.
The term senior indebtedness of a person means with respect to such person the principal of, premium, if any, interest on, and any
other payment due pursuant to any of the following, whether outstanding on the date of the subordinated indenture or incurred by that person in the future:
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all of the indebtedness of that person for money borrowed;
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all of the indebtedness of that person evidenced by notes, debentures, bonds or other securities sold by that person for money;
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all of the lease obligations that are capitalized on the books of that person in accordance with generally accepted accounting principles;
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all indebtedness of others of the kinds described in the first two bullet points immediately above and all lease obligations of others of the kind described in the third bullet point immediately above that the person,
in any manner, assumes or guarantees or that the person in effect guarantees through an agreement to purchase, whether that agreement is contingent or otherwise; and
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all renewals, extensions or refundings of indebtedness of the kinds described in the first, second or fourth bullet points immediately above and all renewals or extensions of leases of the kinds described in the third
or fourth bullet points immediately above;
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unless, in the case of any particular indebtedness, renewal, extension or refunding, the
instrument creating or evidencing it or the assumption or guarantee relating to it expressly provides that such indebtedness, renewal, extension or refunding is not superior in right of payment to the subordinated debt securities. Our senior debt
securities constitute senior indebtedness for purposes of the subordinated debt indenture.
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DESCRIPTION OF CAPITAL STOCK
The following description summarizes information about our capital stock. This information does not purport to be complete and is subject to,
and qualified in its entirety by reference to, the terms of our amended and restated articles of incorporation and amended and restated bylaws, which are included as exhibits to the registration statement of which this prospectus forms a part, and
the applicable provisions of Virginia law, the state in which we are incorporated.
As of August 25, 2017, our authorized capital
stock consisted of 200,000,000 shares of common stock, no par value per share, and 25,000,000 shares of preferred stock, no par value per share.
As of August 25, 2017, there were 120,519,449 shares of common stock outstanding and held of record by approximately 326 shareholders.
The actual number of shareholders is greater than this number of record holders and includes shareholders who are beneficial owners but whose shares are held in street name by brokers and other nominees. This number of holders of record also does
not include shareholders whose shares may be held in trust by other entities. All outstanding shares of common stock are fully paid and nonassessable. There are no shares of preferred stock outstanding.
Common Stock
Shares of our common stock
have the following rights, preferences and privileges:
Voting rights
Each outstanding share of common stock is entitled to one vote on all matters submitted to a vote of our shareholders, including the election
of directors. Holders of our common stock do not have cumulative voting rights in the election of directors, and therefore the holders of a plurality of the shares of common stock voting for the election of directors may elect all of our directors
standing for election.
Dividends
Holders of common stock are entitled to receive dividends if and when dividends are declared by our board of directors out of assets legally
available for the payment of dividends, subject to preferential rights of outstanding shares of preferred stock, if any.
Liquidation
In
the event of a liquidation, dissolution or winding up of the affairs of our Company, whether voluntary or involuntary, after payment of our debts and other liabilities and making provision for the holders of outstanding shares of preferred stock, if
any, we will distribute the remainder of our assets ratably among the holders of shares of common stock.
Rights and preferences
The common stock has no preemptive, redemption, conversion or subscription rights. The rights, powers, preferences and privileges
of holders of common stock are subject to, and may be impaired by, the rights of the holders of shares of any series of preferred stock that we may designate and issue in the future.
Stock options
As
of August 25, 2017, options to purchase 12,662,918 shares of our common stock were outstanding, of which options to purchase 4,950,372 shares of our common stock were exercisable.
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Warrants
As of August 25, 2017, we had outstanding warrants to purchase shares of our common stock that will be exercisable for an aggregate of
133,264 shares of our common stock. Each of these warrants was and remains exercisable in full.
Registration Rights
We have entered into an investors rights agreement with certain of our shareholders who will have the right to require us to register
their shares under the Securities Act under specified circumstances and will have incidental registration rights as described below. After registration pursuant to these rights, these shares will become freely tradable without restriction under the
Securities Act.
Demand registration rights
Certain holders, or Demand Holders, have demand registration rights. Beginning on February 4, 2014, subject to specified limitations set
forth in the investor rights agreement, at any time the Demand Holders who are holders of at least 75 percent of the then-outstanding registrable securities, as defined in the investor rights agreement, of all Demand Holders as a class, acting
together, may demand in writing that we register their registrable securities under the Securities Act. We are not obligated to file a registration statement pursuant to this demand provision on more than two occasions, subject to specified
exceptions.
In addition, subject to specified limitations, the holders of registrable securities may demand in writing that we register
on Form S-3 the registrable securities held by them so long as the total amount of registrable securities being registered has an aggregate offering price of at least $500,000. We are not obligated to file a Form S-3 pursuant to this provision
within 12 months of the effective date of any other Form S-3 registration statement that we may file.
In addition, certain holders who
entered into securities purchase agreements with us on March 26, 2014, or March 2014 Investors, have demand registration rights. Any March 2014 Investor who purchased at least $10.0 million of our common stock in the March 2014 private
placement has the right to require us to register such shares of our common stock on a registration statement on Form S-3, if available for use.
Incidental registration rights
If we propose to file a registration statement to register any of our securities under the Securities Act for our own account, other than
pursuant to a Form S-4 or Form S-8, the holders of our registrable securities are entitled to notice of registration and, subject to specified exceptions, we will be required to register the registrable securities then held by them that they request
that we register. The holders of these registrable securities may be deemed to have such rights with respect to offerings under any prospectus supplement.
Expenses
Pursuant
to the investor rights agreement, we are required to pay all registration expenses, including all registration, filing and qualification fees, printers and accounting fees, fees and expenses incurred in connection with complying with state
securities or blue sky laws, fees and expenses of listing registrable securities on any securities exchange on which shares of our common stock are then listed, fees and disbursements of our counsel, but excluding any underwriting
discounts and commissions, related to any demand or incidental registration. The investor rights agreement contains customary cross-indemnification provisions, pursuant to which we are obligated to indemnify the selling shareholders in the event of
material misstatements or omissions in the registration statement attributable to us, and they are obligated to indemnify us for material misstatements or omissions in the registration statement attributable to them.
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Preferred Stock
As of August 25, 2017, we have no shares of preferred stock issued or outstanding. Our amended and restated articles of incorporation
authorize our board to designate and issue from time to time one or more series of preferred stock without shareholder approval. Our board may fix and determine the preferences, limitations and relative rights of each series of preferred stock
issued. Because our board has the power to establish the preferences and rights of each series of preferred stock, it may afford the holders of any series of preferred stock preferences and rights, voting or otherwise, senior to the rights of
holders of our common stock. It is not possible to state the actual effect of the issuance of any shares of preferred stock upon the rights of holders of common stock until our board determines the specific rights of the holders of preferred stock.
However, the effects might include:
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restricting dividends on our common stock;
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diluting the voting power of our common stock;
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impairing liquidation rights of our common stock; or
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delaying or preventing a change in control of us without further action by our shareholders.
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We have no present plans to issue any shares of preferred stock.
Anti-takeover Effects of Provisions of our Charter and Bylaws and of Virginia Law
Our amended and restated articles of incorporation, bylaws and Virginia law contain provisions that may have the effect of impeding the
acquisition of control of us by means of a tender offer, a proxy contest, open market purchases or otherwise in a transaction not approved by our board of directors. These provisions are designed to reduce, or have the effect of reducing, our
vulnerability to coercive takeover practices and inadequate takeover bids. The existence of these provisions could limit the price that investors might otherwise pay in the future for shares of common stock. In addition, these provisions make it
more difficult for our shareholders to remove our board of directors or management, should they choose to do so.
Articles of
Incorporation and Bylaws
Preferred stock
Our amended and restated articles of incorporation authorize our board to establish one or more series of preferred stock and to determine,
with respect to any series of preferred stock, the preferences, rights and other terms of such series. See Preferred stock above for additional information. Under this authority, our board could create and issue a series of preferred
stock with rights, preferences or restrictions that have the effect of discriminating against an existing or prospective holder of our capital stock as a result of such holder beneficially owning or commencing a tender offer for a substantial amount
of our common stock. One of the effects of authorized but unissued and unreserved shares of preferred stock may be to render it more difficult for, or to discourage an attempt by, a potential acquiror to obtain control of us by means of a merger,
tender offer, proxy contest or otherwise, and thereby protect the continuity of our management. The issuance of shares of preferred stock may have the effect of delaying, deferring or preventing a change in control of our Company without any action
by our shareholders.
Qualification and election of directors
Our bylaws provide that to be eligible to be a nominee for election to our board of directors, a person must submit a written questionnaire
regarding his or her background and qualifications and must agree to other representations as set forth in our bylaws. In addition, we have adopted a director resignation policy. Our bylaws provide that, in uncontested director elections (i.e., an
election where the number of nominees is not greater than the number of directors to be elected), a nominee for director will be elected to the board of directors if the votes
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cast for such nominees election exceed the votes cast against such nominees election. However
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directors will be elected by a plurality of the votes cast at any meeting of the
shareholders for which (i) the Secretary receives a notice that a shareholder has nominated a person for election to the board of directors in compliance with the advance notice requirements for shareholder nominees for director set forth in
the bylaws, and (ii) such nomination has not been withdrawn by such shareholder on or prior to the 10
th
day preceding the date we first mail the notice of meeting for such meeting to the
shareholders (i.e., if there is a contested director election). If directors are to be elected by a plurality of the votes cast, the shareholders may withhold votes, but will not be permitted to vote against a nominee. Our Corporate Governance
Guidelines provide that any nominee for director in an uncontested election who receives a greater number of shareholder votes cast against his or her election than votes for his or her election must promptly tender his or
her resignation to the board of directors for consideration. The Nominating and Governance Committee will then evaluate the best interests of the company and will recommend to the board of directors whether to accept or reject the tendered
resignation. Following the board of directors receipt of this recommendation and determination as to whether to accept the resignation, we will disclose the board of directors decision and an explanation of how the decision was reached.
Board vacancies; removal
Our amended and restated articles of incorporation provide that any vacancy occurring on our board of directors may be filled by a majority of
directors then in office, even if less than a quorum.
Special meetings of shareholders
Our bylaws provide that a special meeting may be called by a vote of 25 percent of shareholders, and that shareholders may only conduct
business at special meetings of shareholders that was specified in the notice of the meeting.
Advance notification of shareholder
nominations and proposals
Our bylaws establish advance notice procedures with respect to shareholder proposals and the nomination
of persons for election as directors, other than nominations made by or at the direction of our board.
Exclusive forum provision
Our bylaws provide that unless we consent in writing to the selection of an alternative forum, the United States District Court
for the Eastern District of Virginia, Alexandria Division, or in the event that court lacks subject matter jurisdiction to hear such action, the Circuit Court of the County of Fairfax, Virginia, will be the sole and exclusive forum for (i) any
derivative action or proceeding brought on our behalf, (ii) any action for breach of duty to the Company or our shareholders by any current or former officer or other employee or agent or director of the Company, (iii) any action against
the Company or any current or former officer or other employee or agent or director of the Company arising pursuant to any provision of the Virginia Stock Corporation Act (as it may be amended from time to time) or our articles of incorporation or
our bylaws (as either may be amended from time to time), or (iv) any action against the Company or any current or former officer or other employee or agent or director of the Company governed by the internal affairs doctrine. Any person or
entity purchasing or otherwise acquiring or holding any interest in shares of our capital stock shall be deemed to have notice of and consented to the forum provisions in our amended and restated bylaws. It is possible that a court of law could rule
that the choice of forum provision contained in our bylaws is inapplicable or unenforceable if it is challenged in a proceeding or otherwise.
Virginia
Anti-takeover Statutes
Affiliated transactions statute
Virginia law contains provisions governing affiliated transactions. In general, these provisions prohibit a Virginia corporation from engaging
in affiliated transactions with any holder of more than 10 percent of any
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class of its outstanding voting shares, or an interested shareholder, for a period of three years following the date that such person became an interested shareholder unless:
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a majority of (but not fewer than two) disinterested directors of the corporation and the holders of two-thirds of the voting shares, other than the shares beneficially owned by the interested shareholder, approve the
affiliated transaction; or
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before or on the date the person became an interested shareholder, a majority of disinterested directors approved the transaction that resulted in the shareholder becoming an interested shareholder.
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Affiliated transactions subject to this approval requirement include mergers, share exchanges, material dispositions of corporate assets not
in the ordinary course of business, any dissolution of the corporation proposed by or on behalf of an interested shareholder or any reclassification, including reverse stock splits, recapitalizations or mergers of the corporation with its
subsidiaries, which increases the percentage of voting shares owned beneficially by an interested shareholder by more than five percent.
Virginia law permits a corporation to exempt itself from this statutory provision by placing a statement to that effect in its articles of
incorporation. Our amended and restated articles of incorporation do not specifically address the Virginia statute regarding affiliated transactions; therefore, we are subject to this provision.
Control share acquisitions statute
Virginia law also contains provisions relating to control share acquisitions, which are transactions causing the voting strength of any person
acquiring beneficial ownership of shares of a Virginia public corporation to meet or exceed certain threshold percentages (20 percent, 33
1
/
3
percent or 50 percent) of the total votes entitled to be cast for the election of directors. Shares acquired in a control share acquisition have no voting rights unless:
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the voting rights are granted by a majority vote of all outstanding shares entitled to vote in the election of directors, other than those held by the acquiring person or any officer or employee director of the
corporation; or
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the articles of incorporation or bylaws of the corporation provide that these Virginia law provisions do not apply to acquisitions of its shares.
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The acquiring person may require that a special meeting of the shareholders be held within 50 days of the corporations receipt of the
acquiring persons request to consider the grant of voting rights to the shares acquired in the control share acquisition. If voting rights are not granted and the corporations articles of incorporation or bylaws permit, the acquiring
persons shares may be repurchased by the corporation, at its option, at a price per share equal to the acquiring persons cost. Virginia law grants dissenters rights to any shareholder who objects to a control share acquisition that
is approved by a vote of disinterested shareholders and that gives the acquiring person control of a majority of the corporations voting shares.
Our amended and restated articles of incorporation provide that this second statutory provision does not apply to our Company; therefore, we
are not subject to this provision.
Indemnification and Limitation of Directors and Officers Liability
The Virginia Stock Corporation Act and our amended and restated articles of incorporation provide for indemnification of our directors and
officers in a variety of circumstances, which may include liabilities under the Securities Act. Virginia law provides that, unless limited by its articles of incorporation, a corporation must indemnify a director or officer who entirely prevails in
the defense of any proceeding to which he was a party because he is or was a director or officer of the corporation against reasonable expenses incurred by him in connection with the proceeding. Virginia law permits a corporation to indemnify, after
a determination has been made that indemnification of the director is permissible in the circumstances because he has met the following
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standard of conduct, an individual made a party to a proceeding because he is or was a director against liability incurred in the proceeding if:
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he conducted himself in good faith;
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he believed in the case of conduct in his official capacity with the corporation, that his conduct was in its best interests and in all other cases that his conduct was at least not opposed to its best interests; and
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in the case of any criminal proceeding, he had no reasonable cause to believe his conduct was unlawful.
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A Virginia corporation may not indemnify a director in connection with a proceeding by or in the right of the corporation in which the
director was adjudged liable to the corporation or in connection with any other proceeding charging improper personal benefit to him, whether or not involving action in his official capacity, in which he was adjudged liable on the basis that
personal benefit was improperly received by him, unless in either case a court orders indemnification and then only for expenses. In addition, the Virginia Stock Corporation Act permits a corporation to advance reasonable expenses to a director or
officer upon the corporations receipt of a written undertaking by the director or on the directors behalf to repay the amount paid or reimbursed by the corporation if it is ultimately determined that the director is not entitled to
indemnification and did not meet the relevant standard of conduct.
In addition, Virginia law permits a corporation to make any further
indemnity, including indemnity with respect to a proceeding by or in the right of the corporation, and to make additional provision for advances and reimbursement of expenses, to any director or officer that may be authorized by the articles of
incorporation or any bylaw made by the shareholders or any resolution adopted by the shareholders, except an indemnity against his willful misconduct or a knowing violation of the criminal law.
In addition, the Virginia Stock Corporation Act permits a Virginia corporation to limit the personal liability of an officer or director in
any proceeding brought by or in the name of the corporation or its shareholders, except if the director or officer engaged in willful misconduct or a knowing violation of the criminal law or any federal or state securities laws, including insider
trading or market manipulation.
Our amended and restated articles of incorporation require indemnification of directors and officers with
respect to certain liabilities, expenses, and other amounts imposed on them by reason of having been a director or officer, except in the case of willful misconduct or a knowing violation of criminal law. Our amended and restated articles of
incorporation also limit the liability of our officers and directors to the extent not prohibited by Virginia law. We also carry insurance on behalf of directors, officers, employees or agents which may cover liabilities under the Securities Act.
Listing on the New York Stock Exchange
Our common stock is listed on the New York Stock Exchange under the symbol XON.
Authorized but Unissued Shares
The
authorized but unissued shares of common stock and preferred stock are available for future issuance without shareholder approval, subject to any limitations imposed by the New York Stock Exchange listing rules. These additional shares may be used
for a variety of corporate finance transactions, acquisitions and employee benefit plans. The existence of authorized but unissued and unreserved common stock and preferred stock could make it more difficult or discourage an attempt to obtain
control of us by means of a proxy contest, tender offer, merger or otherwise.
Transfer Agent and Registrar
The transfer agent and registrar for the common stock is American Stock Transfer & Trust Company, LLC.
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DESCRIPTION OF WARRANTS
We may issue warrants to purchase debt securities, preferred stock, common stock or other securities. We may issue warrants independently or
together with other securities. Warrants sold with other securities may be attached to or separate from the other securities. We will issue warrants under one or more warrant agreements between us and a warrant agent that we will name in the
applicable prospectus supplement. The warrant agent will act solely as our agent in connection with the warrants and will not assume any obligation or relationship of agency or trust for or with any holders or beneficial owners of warrants. Further
terms of the warrants and the applicable warrant agreements will be set forth in the applicable prospectus supplement.
The prospectus
supplement relating to any warrants we offer will include specific terms relating to the offering. These terms will include some or all of the following:
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the title of the warrants;
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the aggregate number of warrants offered;
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the designation, number and terms of the debt securities, preferred stock, common stock or other securities purchasable upon exercise of the warrants and procedures by which those numbers may be adjusted;
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the exercise price of the warrants;
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the dates or periods during which the warrants are exercisable;
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the designation and terms of any securities with which the warrants are issued;
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if the warrants are issued as a unit with another security, the date on and after which the warrants and the other security will be separately transferable;
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if the exercise price is not payable in United States dollars, the foreign currency, currency unit or composite currency in which the exercise price is denominated;
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any minimum or maximum amount of warrants that may be exercised at any one time;
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any terms relating to the modification of the warrants;
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any terms, procedures and limitations relating to the transferability, exchange or exercise of the warrants; and
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any other specific terms of the warrants.
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We and the warrant agent may amend or supplement
the warrant agreement for a series of warrants without the consent of the holders of the warrants issued thereunder to effect changes that are not inconsistent with the provisions of the warrants and that do not materially and adversely affect the
interests of the holders of the warrants.
The description in the applicable prospectus supplement of any warrants that we may offer will
not necessarily be complete and will be qualified in its entirety by reference to the applicable warrant agreement, which will be filed with the SEC.
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DESCRIPTION OF RIGHTS
We may issue rights to purchase debt securities, preferred stock, common stock or other securities. These rights may be issued independently
or together with any other security offered hereby and may or may not be transferable by the shareholder receiving the rights in such offering. The applicable prospectus supplement may add, update or change the terms and conditions of the rights as
described in this prospectus.
The applicable prospectus supplement will describe the specific terms of any offering of rights for which
this prospectus is being delivered, including the following:
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the price, if any, per right;
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the exercise price payable for debt securities, preferred stock, common stock, or other securities upon the exercise of the rights;
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the number of rights issued or to be issued to each shareholder;
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the number and terms of debt securities, preferred stock, common stock, or other securities which may be purchased per right;
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the extent to which the rights are transferable;
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any other terms of the rights, including the terms, procedures and limitations relating to the exchange and exercise of the rights;
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the date on which the holders ability to exercise the rights shall commence, and the date on which the rights shall expire;
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the extent to which the rights may include an over-subscription privilege with respect to unsubscribed securities; and
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if applicable, the material terms of any standby underwriting or purchase arrangement entered into by us in connection with the offering of such rights.
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Holders may exercise rights as described in the applicable prospectus supplement. Upon receipt of payment and the rights certificate properly
completed and duly executed at the corporate trust office of the rights agent or any other office indicated in the prospectus supplement, we will, as soon as practicable, forward the applicable securities purchased upon exercise of the rights. If
less than all of the rights issued in any rights offering are exercised, we may offer any unsubscribed securities directly to persons other than shareholders, to or through agents, underwriters or dealers or through a combination of such methods,
including pursuant to standby arrangements with one or more underwriters or other purchasers, pursuant to which the underwriters or other purchasers may be required to purchase any securities remaining unsubscribed for after such offering, as
described in the applicable prospectus supplement.
The description in the applicable prospectus supplement of any rights that we may
offer will not necessarily be complete and will be qualified in its entirety by reference to the applicable rights certificate, which will be filed with the SEC.
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DESCRIPTION OF STOCK PURCHASE CONTRACTS AND STOCK PURCHASE UNITS
We may issue stock purchase contracts, including contracts obligating holders to purchase from or sell to us, and obligating us to
sell to or purchase from the holders, a specified number of shares of common stock, preferred stock or other securities at a future date or dates, which we refer to in this prospectus as stock purchase contracts. The price per share of the
securities and the number of shares of the securities may be fixed at the time the stock purchase contracts are issued or may be determined by reference to a specific formula set forth in the stock purchase contracts, and may be subject to
adjustment under anti-dilution formulas. The stock purchase contracts may be issued separately or as part of units consisting of a stock purchase contract and our debt securities, shares of our common stock or preferred stock, or preferred
securities or debt obligations of third parties, including U.S. Treasury securities, any other securities described in the applicable prospectus supplement, or any combination of the foregoing, securing the holders obligations to purchase
shares of our common stock or preferred stock under the stock purchase contracts, which we refer to herein as stock purchase units. The stock purchase units may require holders to secure their obligations under the stock purchase contracts in a
specified manner. The stock purchase units also may require us to make periodic payments to the holders of the stock purchase contracts or the stock purchase units, as the case may be, or vice versa, and those payments may be unsecured or pre-funded
on some basis.
The applicable prospectus supplement will describe the terms of the stock purchase contracts or stock purchase units. This
description is not complete and the description in the prospectus supplement will not necessarily be complete, and reference is made to the stock purchase contracts, and, if applicable, collateral or depositary arrangements relating to the stock
purchase contracts or stock purchase units, which will be filed with the SEC each time we issue stock purchase contracts or stock purchase units. If any particular terms of the stock purchase contracts or stock purchase units described in the
prospectus supplement differ from any of the terms described herein, then the terms described herein will be deemed superseded by that prospectus supplement. Material United States federal income tax considerations applicable to the stock purchase
units and the stock purchase contracts will also be discussed in the applicable prospectus supplement.
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SELLING SECURITYHOLDERS
Selling securityholders are persons or entities that, directly or indirectly, have acquired or will from time to time acquire from us our
securities. Such selling securityholders may be parties to registration rights agreements with us, or we otherwise may have agreed or will agree to register their securities for resale. The initial purchasers of our securities, as well as their
transferees, pledges, donees or successors, all of whom we refer to as selling securityholders, may from time to time offer and sell our securities pursuant to this prospectus and any applicable prospectus supplement.
The applicable prospectus supplement or post-effective amendment, or in filings we make with the SEC under the Exchange Act that are
incorporated by reference to such registration statement, will set forth the name of each of the selling securityholders and the number of securities beneficially owned by such selling securityholder that are covered by such prospectus supplement.
The applicable prospectus supplement will also disclose whether any of the selling securityholders has held any position or office with, has been employed by, or otherwise has had a material relationship with us during the three years prior to the
date of the applicable prospectus supplement.
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PLAN OF DISTRIBUTION
We and/or any selling securityholder may sell our securities from time to time in one or more transactions. We and/or any selling
securityholder may sell our securities to or through agents, underwriters, dealers, remarketing firms or other third parties or directly to one or more purchasers or through a combination of any of these methods. In some cases, we and/or any selling
securityholder or dealers acting with us and/or any selling securityholder or on behalf of us and/or any selling securityholder may also purchase our securities and reoffer them to the public. We and/or any selling securityholder may also offer and
sell, or agree to deliver, our securities pursuant to, or in connection with, any option agreement or other contractual arrangement. The securities may or may not be listed on a national securities exchange.
Agents whom we designate may solicit offers to purchase our securities.
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We and/or any selling securityholder will name any agent involved in offering or selling our securities, and disclose any commissions that we will pay to the agent, in the applicable prospectus supplement.
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Unless we and/or any selling securityholder indicate otherwise in the applicable prospectus supplement, agents will act on a best efforts basis for the period of their appointment.
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Agents may be deemed to be underwriters under the Securities Act, of any of our securities that they offer or sell.
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We and/or any selling securityholder may use an underwriter or underwriters in the offer or sale of our securities.
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If we and/or any selling securityholder use an underwriter or underwriters, we will execute an underwriting agreement with the underwriter or underwriters at the time that we reach an agreement for the sale of our
securities.
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We and/or any selling securityholder will include the names of the specific managing underwriter or underwriters, as well as the names of any other underwriters, and the terms of the transactions, including the
compensation the underwriters and dealers will receive, in the applicable prospectus supplement.
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The underwriters will use the applicable prospectus supplement, together with the prospectus, to sell our securities.
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We may use a dealer to sell our securities.
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If we and/or any selling securityholder use a dealer, we will sell our securities to the dealer, as principal.
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The dealer will then sell our securities to the public at varying prices that the dealer will determine at the time it sells our securities.
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We and/or any selling securityholder will include the name of the dealer and the terms of the transactions with the dealer in the applicable prospectus supplement.
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We and/or any selling securityholder may solicit directly offers to purchase our securities, and we may directly sell our securities to
institutional or other investors. We and/or any selling securityholder will describe the terms of direct sales in the applicable prospectus supplement.
We and/or any selling securityholder may engage in at-the-market offerings into an existing trading market in accordance with Rule 415(a)(4)
of the Securities Act.
We and/or any selling securityholder will indemnify agents, underwriters and dealers against certain liabilities,
including liabilities under the Securities Act. Agents, underwriters and dealers, or their affiliates, may be customers of, engage in transactions with or perform services for us or our respective affiliates in the ordinary course of business.
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We and/or any selling securityholder may authorize agents and underwriters to solicit offers by
certain institutions to purchase our securities the public offering price under delayed delivery contracts.
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If we and/or any selling securityholder use delayed delivery contracts, we will disclose that we are using them in the prospectus supplement and will tell you when we will demand payment and when delivery of our
securities will be made under the delayed delivery contracts.
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These delayed delivery contracts will be subject only to the conditions that we describe in the prospectus supplement.
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We and/or any selling securityholder will describe in the applicable prospectus supplement the commission that underwriters and agents soliciting purchases of our securities under delayed delivery contracts will be
entitled to receive.
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Unless otherwise specified in connection with a particular underwritten offering of our securities,
the underwriters will not be obligated to purchase offered securities unless specified conditions are satisfied, and if the underwriters do purchase any offered securities, they will purchase all offered securities.
In connection with underwritten offerings of the offered securities and in accordance with applicable law and industry practice, the
underwriters in certain circumstances are permitted to engage in certain transactions that stabilize the price of our securities. Such transactions consist of bids or purchases for the purpose of pegging, fixing or maintaining the price of our
securities. If the underwriters create a short position in our securities in connection with the offering (i.e., if they sell more securities than are set forth on the cover page of the applicable prospectus supplement), the underwriters may reduce
that short position by purchasing our securities in the open market or as otherwise provided in the applicable prospectus supplement. The underwriters may also impose a penalty bid, whereby selling concessions allowed to dealers participating in the
offering may be reclaimed if the securities sold by them are repurchased in connection with stabilization transactions. In general, purchases of a security for the purpose of stabilization or to reduce a short position could cause the price of the
security to be higher than it might be in the absence of such purchases. The imposition of a penalty bid might also have an effect on the price of our securities to the extent that it were to discourage resales of our securities. The underwriters
are not required to engage in these activities and may end any of these activities at any time.
We and/or any selling securityholder may
effect sales of securities in connection with forward sale, option or other types of agreements with third parties. Any distribution of securities pursuant to any forward sale agreement may be effected from time to time in one or more transactions
that may take place through a stock exchange, including block trades or ordinary brokers transactions, or through broker-dealers acting either as principal or agent, or through privately-negotiated transactions, or through an underwritten
public offering, or through a combination of any such methods of sale, at market prices prevailing at the time of sale, prices relating to such prevailing market prices or at negotiated or fixed prices.
The specific terms of the lock-up provisions, if any, in respect of any given offering will be described in the applicable prospectus
supplement.
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LEGAL MATTERS
The validity of the securities being offered by this prospectus will be passed upon by Troutman Sanders LLP, Richmond, Virginia.
EXPERTS
The consolidated financial statements of Intrexon Corporation and managements assessment of the effectiveness of internal control over
financial reporting (which is included in Managements Report on Internal Control over Financial Reporting) incorporated in this prospectus by reference to the Annual Report on Form
10-K
for the year
ended December 31, 2016 have been so incorporated in reliance on the report of PricewaterhouseCoopers LLP, an independent registered public accounting firm, given on the authority of said firm as experts in auditing and accounting.
The financial statements of ZIOPHARM Oncology, Inc. as of December 31, 2015 and 2014 and for each of the years in the two-year period
ended December 31, 2015, incorporated in this Prospectus by reference from the Intrexon Corporation Annual Report on Form 10-K for the year ended December 31, 2016, have been audited by RSM US LLP, an independent registered public
accounting firm, as stated in their report thereon, incorporated herein by reference, and have been incorporated in this Prospectus in reliance upon such report and upon the authority of such firm as experts in accounting and auditing.
31
6,000,000 Shares
Common Stock
JMP Securities
Stifel
Northland Capital Markets
Intrexon (NASDAQ:XON)
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