Filed Pursuant to Rule
424(b)(5)
Registration No.: 333-215404
Prospectus Supplement
(To prospectus dated January 3,
2017)
4,250,000 Shares
Kornit Digital Ltd.
Ordinary Shares
__________________________________________
The selling shareholder identified
in this prospectus supplement is offering 4,250,000 ordinary
shares. We will not receive any of the proceeds from the sale of
shares being offered by the selling shareholder.
Our ordinary shares are listed on
the NASDAQ Global Select Market under the symbol
“KRNT.” On May 12, 2017, the last reported sales price
of our ordinary shares was $22.00 per share.
__________________________________________
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Public offering
price
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$
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20.60
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$
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87,550,000
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Underwriting
discounts and commissions
(1)
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$
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0.43
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$
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1,827,500
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Proceeds to the
selling shareholder, before expenses
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$
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20.17
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$
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85,722,500
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The underwriters may also exercise
their option to purchase up to an additional 637,500 ordinary
shares from the selling shareholder at the public offering price,
less underwriting discounts and commissions, for 30 days after the
date of this prospectus supplement.
We are an “emerging growth
company” as defined under federal securities laws and, as
such, may elect to comply with certain reduced public company
reporting requirements.
Investing in our ordinary shares involves
risks that are described in the “Risk Factors” section
beginning on page S-3 of this prospectus supplement and in the
documents incorporated by reference.
Neither the Securities and Exchange Commission
nor any state securities commission has approved or disapproved of
the securities being offered by this prospectus supplement or
accompanying prospectus, or determined if this prospectus
supplement or accompanying prospectus is truthful or complete. Any
representation to the contrary is a criminal
offense.
__________________________________________
The underwriters expect to deliver
the ordinary shares to purchasers on or about May 19,
2017.
__________________________________________
__________________________________________
The date of this Prospectus
Supplement is May 16, 2017.
Table of Contents
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About this Prospectus Supplement
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S-ii
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Forward-looking statements
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S-ii
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Prospectus supplement summary
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S-1
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The offering
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S-2
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Risk factors
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S-3
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Use of proceeds
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S-5
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Capitalization
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S-6
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Selling shareholder
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S-7
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U.S. and Israeli tax consequences for our
shareholders
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S-8
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Underwriting
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S-15
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Legal matters
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S-20
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Experts
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S-20
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Enforceability of civil liabilities
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S-20
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Where you can find more information
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S-21
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Incorporation of certain documents by
reference
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S-22
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About this Prospectus
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1
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Kornit Digital Ltd.
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1
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Risk Factors
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2
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Offer Statistics and Expected
Timetable
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2
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Forward-Looking Statements
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2
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Ratio of Earnings to Fixed Charges
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3
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Capitalization
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3
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Price Range of Ordinary Shares
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3
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Use of Proceeds
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4
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Selling Shareholders
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4
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Description of Securities
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5
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Description of Ordinary Shares
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5
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Description of Warrants
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11
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Description of Rights
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12
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Description of Debt Securities
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13
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Description of Units
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15
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Plan of Distribution
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16
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Expenses Associated with the
Registration
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19
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Legal Matters
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20
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Experts
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20
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Where You Can Find More Information
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20
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Incorporation of Certain Documents By
Reference
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21
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Enforceability of Civil Liabilities
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22
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S-i
About this Prospectus
Supplement
This prospectus supplement and the accompanying prospectus are part
of a registration statement that we filed with the Securities and
Exchange Commission (the “SEC”), utilizing a
“shelf” registration process. The document is in two
parts. The first part is the prospectus supplement, which describes
the specific terms of this offering. The second part is the
prospectus, which provides more general information about
securities the selling shareholder referred to therein may offer
from time to time, some of which may not apply to this offering.
Generally, when we refer to this prospectus, we are referring to
both parts of this document combined. We urge you to carefully read
this prospectus supplement and the prospectus, and the documents
incorporated by reference herein and therein, before buying any of
the securities being offered under this prospectus supplement. This
prospectus supplement may add or update information contained in
the prospectus and the documents incorporated by reference therein.
To the extent that any statement we make in this prospectus
supplement is inconsistent with statements made in the accompanying
prospectus or any documents incorporated by reference therein that
were filed before the date of this prospectus supplement, the
statements made in this prospectus supplement will be deemed to
modify or supersede those made in the accompanying prospectus and
such documents incorporated by reference therein.
You should rely only on the information contained or incorporated
by reference in this prospectus supplement and the accompanying
prospectus, or contained in any free writing prospectus prepared by
or on our behalf. We have not, and the underwriters have not,
authorized anyone to provide you with different information. The
distribution of this prospectus supplement and sale of these
securities in certain jurisdictions may be restricted by law. The
selling shareholder is not making an offer to sell these securities
in any jurisdiction where the offer or sale is not permitted. This
prospectus supplement and the accompanying prospectus are not, and
under no circumstances are to be construed as, an advertisement or
a public offering of securities in Israel. Any public offer or sale
of securities in Israel may be made only in accordance with the
Israeli Securities Law 1968 (which requires, among other things,
the filing of a prospectus in Israel or an exemption therefrom).
Persons in possession of this prospectus supplement or the
accompanying prospectus are required to inform themselves about and
observe any such restrictions. You should assume that the
information appearing in this prospectus supplement, the
accompanying prospectus and the documents incorporated by reference
in this prospectus supplement and the accompanying prospectus, and
in any free writing prospectus that we have authorized for use in
connection with this offering, is accurate only as of the date of
those respective documents.
Unless otherwise mentioned or unless the context requires
otherwise, all references in this prospectus supplement or
prospectus to the “Company,” “we,”
“us,” “our” and “Kornit” refer
to Kornit Digital Ltd. and its subsidiaries.
Forward-looking
statements
This prospectus supplement, the accompanying prospectus and the
documents incorporated by reference herein and therein contain
forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended (the “Securities
Act”), Section 21E of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”) and the safe harbor
provisions of the U.S. Private Securities Litigation Reform Act of
1995, that are based on our management’s beliefs and
assumptions and on information currently available to our
management. Forward-looking statements include information
concerning our possible or assumed future results of our business,
financial condition, results of operations, liquidity, plans and
objectives. Forward-looking statements include all statements that
are not historical facts and in some cases can be identified by
terminology such as “believe,” “may,”
“estimate,” “continue,”
“anticipate,” “intend,”
“should,” “plan,” “expect,”
“predict,” “potential,” or the negative of
these terms or other similar expressions that convey uncertainty of
future events or outcomes.
Our ability to predict the results of our operations or the effects
of various events on our operating results is inherently uncertain.
Therefore, we caution you to consider carefully the matters
described under the caption “Risk Factors” and certain
other matters discussed in this prospectus supplement, the
accompanying prospectus and the documents incorporated by reference
herein and therein, and other publicly available sources. Such
factors and many other factors beyond the control of our management
could cause our actual results, performance or achievements to
differ materially from any future results, performance or
achievements that may be expressed or implied by the
forward-looking statements. Unless we are required to do so under
U.S. federal securities laws or other applicable laws, we do not
intend to update or revise any forward-looking statements.
S-ii
Prospectus supplement
summary
This summary
highlights selected information contained elsewhere in this
prospectus supplement. This summary does not contain all of the
information you should consider before investing in our ordinary
shares. You should read the entire prospectus supplement and the
accompanying prospectus carefully, including “Risk
Factors” and our consolidated financial statements and notes
to those consolidated financial statements, before making an
investment decision.
Our Company
We develop, design and market innovative digital printing solutions
for the global printed textile industry. Our vision is to
revolutionize this industry by facilitating the transition from
analog processes that have not evolved for decades to digital
methods of production that address contemporary supply, demand and
environmental dynamics. We focus on the rapidly growing high
throughput, direct-to-garment, or DTG, and roll-to-roll, or R2R,
segments of the printed textile industry. Our solutions include our
proprietary digital printing systems, ink and other consumables,
associated software and value added services that allow for large
scale printing of short runs of complex images and designs directly
on finished garments and fabrics. Our solutions are differentiated
from other digital methods of production because they eliminate the
need to pre-treat fabrics prior to printing, thereby offering our
customers the ability to digitally print high quality images and
designs on a variety of fabrics in a streamlined and
environmentally-friendly manner. When compared to analog methods of
production, our solutions also significantly reduce production lead
times and enable customers to more efficiently and cost-effectively
produce smaller quantities of individually printed designs, thereby
mitigating the risk of excess inventory, which is a significant
challenge for the printed textile industry.
Our significant
shareholder
Prior to this offering, entities affiliated with Fortissimo Capital
Fund II (Israel) L.P. (“Fortissimo Capital”),
beneficially owned 26.2% of our outstanding shares in the
aggregate. Upon the completion of this offering, Fortissimo Capital
will beneficially own 13.5% of our outstanding shares in the
aggregate (or 11.6% if the underwriters exercise in full their
option to purchase additional shares).
Corporate
information
Our legal name is Kornit Digital Ltd. and we were incorporated
under the laws of the State of Israel on January 16, 2002. Our
registration number with the Israeli Registrar of Companies is
513195420. Our purpose as set forth in our amended and restated
articles of association is to engage in any lawful activity.
We are subject to the provisions of the Israeli Companies Law,
5759-1999, as amended. Our principal executive offices are located
at 12 Ha’Amal Street, Rosh Ha’Ayin 4809246, Israel, and
our telephone number is +972-3-908-5800. Our website address is
www.kornit.com
(the information contained therein or linked thereto shall not be
considered incorporated by reference in this prospectus supplement
or the accompanying prospectus). Our agent for service of process
in the United States is Kornit Digital North America Inc., located
at 10541-10601 North Commerce Street, Mequon, Wisconsin 53092, and
its telephone number is (262) 518-0200.
S-1
The offering
Ordinary shares being offered by the selling
shareholder
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4,250,000 ordinary shares (or 4,887,500 ordinary shares if the
underwriters exercise in full their option to purchase additional
shares).
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Ordinary shares outstanding before and after
this offering
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33,565,079 ordinary shares.
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Use of proceeds
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We will not receive any of the proceeds from the
sale of shares by the selling shareholder.
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NASDAQ Global Select Market symbol
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“KRNT”
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Risk factors
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See “Risk Factors” and other
information included in this prospectus supplement and the
accompanying prospectus for a discussion of factors you should
carefully consider before deciding to invest in our ordinary
shares.
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Unless otherwise indicated, the number of ordinary shares to be
outstanding after this offering is based on 33,565,079 ordinary
shares outstanding as of March 31, 2017 and excludes 3,859,831
ordinary shares reserved for issuance under our equity incentive
plans as of March 31, 2017 of which we had outstanding options to
purchase 2,460,421 ordinary shares at a weighted average exercise
price of $7.63 per share.
S-2
Risk factors
Investing in our
ordinary shares involves a high degree of risk. You should consider
carefully the risks and uncertainties described below together with
the other information included in this prospectus supplement, the
accompanying prospectus and incorporated by reference herein,
before deciding to purchase our ordinary shares. In addition, you
should carefully consider, among other things, the section entitled
“Risk Factors” beginning on page 5 of our 2016 Form
20-F and in other documents that we subsequently file with the SEC,
all of which are incorporated by reference into this prospectus
supplement. The risks described below and incorporated herein by
reference are those which we believe are the material risks that we
face. The occurrence of any of these risks may materially and
adversely affect our business, financial condition, results of
operations and future prospects. In such an event, the market price
of our ordinary shares could decline, and you could lose part or
all of your investment.
Risks Related to Our
Ordinary Shares and the Offering
Fortissimo Capital has, and upon completion of this offering will
continue to have, a significant influence over matters requiring
shareholder approval, which could delay or prevent a change of
control.
Upon completion of this offering, Fortissimo Capital will
beneficially own 13.5% of our outstanding shares in the aggregate
(or 11.6% if the underwriters exercise in full their option to
purchase additional shares).
As a result, this shareholder can exert significant influence over
our operations and business strategy and over the outcome of
matters requiring shareholder approval. These matters may
include:
•
the composition of our board of directors, which has the authority
to direct our business and to appoint and remove our officers;
•
approving or rejecting a merger, consolidation or other business
combination;
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raising future capital; and
•
amending our articles of association, which govern the rights
attached to our ordinary shares.
This concentration of ownership of our ordinary shares could delay
or prevent proxy contests, mergers, tender offers, open-market
purchase programs or other purchases of our ordinary shares. This
concentration of ownership may also adversely affect our share
price.
The market price of our ordinary shares could be negatively
affected by this offering and future sales of our ordinary
shares.
Future sales by us or our shareholders of a substantial number of
ordinary shares in the public market, or the perception that these
sales might occur, could cause the market price of our ordinary
shares to decline or could impair our ability to raise capital
through a future sale of, or pay for acquisitions using, our equity
securities.
We, the selling shareholder, and our executive officers and
directors have agreed with the underwriters that, subject to
limited exceptions, for a period of 60 days after the date of this
prospectus supplement, we and they will not directly or indirectly
offer, pledge, sell, contract to sell, grant any option to purchase
or otherwise dispose of any ordinary shares or any securities
convertible into or exercisable or exchangeable for ordinary
shares, or in any manner transfer all or a portion of the economic
consequences associated with the ownership of ordinary shares, or
cause a registration statement covering any ordinary shares to be
filed except for the ordinary shares offered in this offering,
without the prior written consent of Barclays Capital Inc. and
Citigroup Global Markets Inc., who may, in their sole discretion
and at any time without notice, release all or any portion of the
shares subject to these lock-up agreements. See
“Underwriting.”
Furthermore, following the closing of this offering, but subject to
the 60-day lock-up agreements entered into with the underwriters,
Fortissimo Capital is entitled to require that we conduct
additional underwritten offerings under the U.S. Securities Act of
1933 with respect to the resale of its shares into the public
markets. In addition, Amazon.com, Inc. (“Amazon”) is
also entitled to certain registration rights starting on January
10, 2018, pursuant to a transaction agreement we entered into with
Amazon on January 10, 2017. All shares sold pursuant to an offering
covered by a registration statement will be freely transferable
except if purchased by an affiliate. See “ITEM 7.B —
Related Party
S-3
Transactions — Investors’ Rights Agreement” and
“ITEM 10.C — Material Contracts — Agreements with
Amazon” in our annual report on Form 20-F for the year ended
December 31, 2016.
In addition, 3,849,831 million ordinary shares are reserved for
issuance under currently exercisable share options granted to
employees and office holders as of March 31, 2017. We have filed
registration statements on Form S-8 under the U.S. Securities Act
of 1933 registering ordinary shares that we may issue under our
share incentive plans, of which as of March 31, 2017 there were
options to purchase 2,460,421 million shares outstanding. Shares
included in such registration statements may be freely sold in the
public market upon issuance, except for shares held by affiliates
who have certain restrictions on their ability to sell.
S-4
Use of
proceeds
We will not receive any of the proceeds from the sale of shares by
the selling shareholder.
S-5
Capitalization
The following table sets forth our cash and cash equivalents,
available for sale marketable securities and total capitalization
as of March 31, 2017.
There has been no material change in our capitalization from debt
or equity issuances, re-capitalizations or special dividends
between March 31, 2017 and the date of this prospectus supplement.
This table should be read in conjunction with “Risk
factors” above, “ITEM 5: Operating and Financial Review
and Prospects,” and our consolidated financial statements and
the related notes incorporated by reference from our Annual Report
on Form 20-F for the year ended December 31, 2016 and our U.S. GAAP
financial information contained in the (i) consolidated statements
of income, (ii) consolidated balance sheets and (iii) consolidated
statement of cash flows for the three months ended March 31, 2017
incorporated by reference from our Current Report on Form 6-K filed
on May 10, 2017. See “Where you can find more
information.”
(in
thousands, except share data)
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Cash and cash equivalents and available for sale
marketable securities
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$
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97,141
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Ordinary shares, NIS 0.01 par value: 200,000,000
shares authorized, 33,565,079 shares issued
and outstanding
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$
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84
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Additional paid-in capital
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132,451
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Accumulated other comprehensive income
(loss)
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(15
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)
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Retained earnings
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10,420
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Total shareholders’ equity
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142,940
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Total capitalization
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$
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142,940
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The preceding table excludes 3,859,831 ordinary shares reserved for
issuance under our equity incentive plans as of March 31, 2017 of
which we had outstanding options to purchase 2,460,421 ordinary
shares at a weighted average exercise price of $7.63 per share.
S-6
Selling
shareholder
The following table sets forth information with respect to the
beneficial ownership of the selling shareholder of our ordinary
shares as of May 1, 2017.
Except as otherwise indicated, to our knowledge, the entity named
in the table below has sole voting and investment power with
respect to all shares of ordinary shares shown as beneficially
owned by it, subject to community property laws, where
applicable.
The number of shares beneficially owned by the selling shareholder
is determined pursuant to Rule 13d-3 promulgated by the SEC under
the Exchange Act. The information does not necessarily indicate
beneficial ownership for any other purpose.
The percentages of shares outstanding provided in the table are
based on a total of 33,615,653 shares of our ordinary shares
outstanding on May 1, 2017.
For more information regarding our relationships with the entity
named below, see “Major Shareholders and Related Party
Transactions” in our Form 20-F filed with the SEC on March
30, 2017.
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Shares
beneficially owned prior to offering
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Number
of shares
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Shares
beneficially owned after offering
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Number
of shares offered pursuant to option granted
by selling
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Shares
beneficially
owned after exercise
of option granted by
selling shareholder
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Fortissimo
Capital Fund II (Israel), L.P.
(1)
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8,802,481
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26.2
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%
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4,250,000
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4,552,481
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13.5
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%
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637,500
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3,914,981
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11.6
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%
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S-7
U.S. and Israeli tax
consequences for our shareholders
The following is a discussion of the material U.S. and Israeli tax
consequences relevant to an investment decision by a U.S. Holder,
as defined below, with respect to our ordinary shares. It is not
intended to constitute a complete analysis of all tax consequences
relating to the acquisition, ownership and disposition of our
ordinary shares. You should consult your own tax advisor concerning
the tax consequences of your particular situation, as well as any
tax consequences that may arise under the laws of any state, local,
foreign or other taxing jurisdiction.
Israeli tax
consequences
This section contains a discussion of material Israeli tax
consequences concerning the ownership and disposition of our
ordinary shares purchased by investors in this offering. This
summary does not discuss all the aspects of Israeli tax law that
may be relevant to a particular investor in light of his or her
personal investment circumstances or to some types of investors
subject to special treatment under Israeli law. Examples of such
investors include residents of Israel or traders in securities who
are subject to special tax regimes not covered in this discussion.
Because parts of this discussion are based on new tax legislation
that has not yet been subject to judicial or administrative
interpretation, we cannot assure you that the appropriate tax
authorities or the courts will accept the views expressed in this
discussion. The discussion below is subject to change, including
due to amendments under Israeli law or changes to the applicable
judicial or administrative interpretations of Israeli law, which
change could affect the tax consequences described below.
Taxation of our shareholders
Capital Gains Taxes
Applicable to Non-Israeli Resident
Shareholders.
Generally, a non-Israeli resident who
derives capital gains from the sale of shares in an Israeli
resident company that were purchased after the company was listed
for trading on a stock exchange outside of Israel should be exempt
from Israeli tax so long as the shares were not held through a
permanent establishment that the non-resident maintains in Israel.
However, non-Israeli corporations will not be entitled to the
foregoing exemption if Israeli residents: (i) have a controlling
interest of more than 25% in such non-Israeli corporation or (ii)
are the beneficiaries of, or are entitled to, 25% or more of the
revenues or profits of such non-Israeli corporation, whether
directly or indirectly. Such exemption is not applicable to a
person whose gains from selling or otherwise disposing of the
shares are deemed to be business income.
Additionally, a sale of shares by a non-Israeli resident may be
exempt from Israeli capital gains tax under the provisions of an
applicable tax treaty. For example, under the United States-Israel
Tax Treaty, the disposition of shares by a shareholder who (i) is a
U.S. resident (for purposes of the treaty), (ii) holds the shares
as a capital asset, and (iii) is entitled to claim the benefits
afforded to such person by the treaty, is generally exempt from
Israeli capital gains tax. Such exemption will not apply if (i) the
capital gain arising from the disposition can be allocated to a
permanent establishment in Israel; (ii) the shareholder holds,
directly or indirectly, shares representing 10% or more of the
voting capital during any part of the 12-month period preceding the
disposition subject to certain conditions; or (iii) such U.S.
resident is an individual and was present in Israel for 183 days or
more during the relevant taxable year. In each case, the sale,
exchange or disposition of our ordinary shares would be subject to
Israeli tax, to the extent applicable; however, under the United
States-Israel Tax Treaty, the taxpayer would be permitted to claim
a credit for such taxes against the U.S. federal income tax imposed
with respect to such sale, exchange or disposition, subject to the
limitations under U.S. law applicable to foreign tax credits. The
United States-Israel Tax Treaty does not relate to U.S. state or
local taxes.
In some instances where our shareholders may be liable for Israeli
tax on the sale of their ordinary shares, the payment of the
consideration may be subject to the withholding of Israeli tax at
source. Shareholders may be required to demonstrate that they are
exempt from tax on their capital gains in order to avoid
withholding at source at the time of sale. Specifically, in
transactions involving a sale of all of the shares of an Israeli
resident company, in the form of a merger or otherwise, the Israel
Tax Authority may require from shareholders who are not liable for
Israeli tax to sign declarations in forms specified by this
authority or obtain a specific exemption from the Israel Tax
Authority to confirm their status as non Israeli resident, and, in
the absence of such declarations or exemptions, may require the
purchaser of the shares to withhold taxes at source.
In addition, with respect to mergers involving an exchange of
shares, Israeli tax law allows for tax deferral in certain
circumstances but makes the deferral contingent on the fulfillment
of a number of conditions, including, in some cases, a holding
period of two years from the date of the transaction during which
sales and dispositions of
S-8
shares of the participating companies are subject to certain
restrictions. Moreover, with respect to certain share swap
transactions in which the sellers receive shares in the acquiring
entity that are publicly traded on a stock exchange, the tax
deferral is limited in time, and when such time expires, the tax
becomes payable even if no disposition of such shares has occurred.
In order to benefit from the tax deferral, a pre-ruling from the
Israel Tax Authority might be required only with respect to
shareholders which cannot demonstrate that they are exempt from tax
on their capital gains from such transaction.
Taxation of
Non-Israeli Shareholders on Receipt of Dividends
.
Non-Israeli residents are generally subject to Israeli
income tax on the receipt of dividends paid on our ordinary shares
at the rate of 25%, unless relief is provided in a treaty between
Israel and the shareholder’s country of residence. With
respect to a person who is a “substantial shareholder”
at the time of receiving the dividend or on any time during the
preceding twelve months, the applicable tax rate is 30%. A
“substantial shareholder” is generally a person who
alone or together with such person’s relative or another
person who collaborates with such person on a permanent basis,
holds, directly or indirectly, at least 10% of any of the
“means of control” of the corporation. “Means of
control” generally include the right to vote, receive
profits, nominate a director or an executive officer, receive
assets upon liquidation, or order someone who holds any of the
aforesaid rights how to act, regardless of the source of such
right. Dividends paid on publicly traded shares, like our ordinary
shares, to non-Israeli residents, although subject to the same tax
rates applicable to dividends paid for non-publicly traded shares,
are generally subject to Israeli withholding tax at a rate of 25%,
so long as the shares are registered with a nominee company
(whether the recipient is a substantial shareholder or not), unless
a lower rate is provided under an applicable tax treaty. However, a
distribution of dividends to non-Israeli residents is subject to
withholding tax at source at a rate of 15% if the dividend is
distributed from income attributed to an Approved Enterprise or a
Benefited Enterprise (and 20% if the dividend is distributed from
income attributed to a Preferred Enterprise), unless a reduced tax
rate is provided under an applicable tax treaty. We cannot assure
you that we will designate the profits that we may distribute in a
way that will reduce shareholders’ tax liability.
For example, under the United States-Israel Tax Treaty, the maximum
rate of tax withheld at source in Israel on dividends paid to a
holder of our ordinary shares who is a U.S. resident (for purposes
of the United States-Israel Tax Treaty) is 25%. However, for
dividends not generated by an Approved Enterprise, a Benefited
Enterprise or a Preferred Enterprise and paid to a U.S. corporation
holding 10% or more of the outstanding voting capital throughout
the tax year in which the dividend is distributed as well as during
the previous tax year, the maximum rate of withholding tax is
generally 12.5%, provided that not more than 25% of the gross
income for such preceding year consists of certain types of
dividends and interest. Notwithstanding the foregoing, dividends
distributed from income attributed to an Approved Enterprise, a
Benefited Enterprise or a Preferred Enterprise are subject to
withholding tax at ’the rate of 15% for such a United States
corporate shareholder, provided that the condition related to our
gross income for the previous year (as set forth in the previous
sentence) is met.
If the dividend is attributable partly to income derived from an
Approved Enterprise, Benefited Enterprise or Preferred Enterprise,
and partly to other sources of income, the withholding rate will be
a blended rate reflecting the relative portions of the two types of
income. U.S. residents who are subject to Israeli withholding tax
on a dividend may be entitled to a credit or deduction for Untied
States federal income tax purposes in the amount of the taxes
withheld, subject to detailed rules contained in U.S. tax
legislation.
A non-Israeli resident who receives dividends from which tax was
withheld is generally exempt from the obligation to file tax
returns in Israel in respect of such income, provided that (i) such
income was not derived from a business conducted in Israel by the
taxpayer, and (ii) the taxpayer has no other taxable sources of
income in Israel with respect to which a tax return is required to
be filed.
Excess tax
Individuals who are subject to tax in Israel are also subject to an
additional tax at a rate of 2% on annual income exceeding NIS
810,720 for 2016, which amount is linked to the annual change in
the Israeli consumer price index, including, but not limited to,
dividends, interest and capital gain, subject to the provisions of
an applicable tax treaty. Pursuant to a new legislation enacted
recently, as of 2017 such tax rate is increased to 3% on annual
income exceeding NIS 640,000 (which amount is linked to the annual
change in the Israeli consumer price index).
Estate and gift tax
Israeli law presently does not impose estate or gift taxes.
S-9
U.S. federal income tax
consequences
The following is a description of the material U.S. federal income
tax consequences relating to the ownership and disposition of our
ordinary shares by a U.S. Holder (as defined below). This
description addresses only the U.S. federal income tax consequences
to U.S. Holders that are initial purchasers of our ordinary shares
pursuant to the offering and that will hold such ordinary shares as
capital assets. This description does not address tax
considerations applicable to U.S. Holders that may be subject to
special tax rules, including, without limitation:
•
banks, financial institutions or insurance companies;
•
real estate investment trusts, regulated investment companies or
grantor trusts;
•
brokers, dealers or traders in securities, commodities or
currencies;
•
tax-exempt entities or organizations, including an
“individual retirement account” or “Roth
IRA” as defined in Section 408 or 408A of the Code,
respectively;
•
certain former citizens or long-term residents of the United
States;
•
persons that receive our shares as compensation for the performance
of services;
•
persons that will hold our shares as part of a
“hedging,” “integrated” or
“conversion” transaction or as a position in a
“straddle” for U.S. federal income tax purposes;
•
partnerships (including entities classified as partnerships for
U.S. federal income tax purposes) or other pass-through entities,
or persons that will hold our shares through such an entity;
•
S-corporations;
•
persons holding our shares in connection with a trade or business
conducted outside the United States;
•
U.S. Holders whose “functional currency” is not the
U.S. Dollar; or
•
persons that own directly, indirectly or through attribution 10.0%
or more of the voting power or value of our shares.
Moreover, this description does not address the United States
federal estate, gift or alternative minimum tax consequences, or
any state, local or foreign tax consequences, of the ownership and
disposition of our ordinary shares.
This description is based on the U.S. Internal Revenue Code of
1986, as amended (the “Code”), existing, proposed and
temporary U.S. Treasury Regulations and judicial and administrative
interpretations thereof, in each case as in effect and available on
the date hereof. All of the foregoing are subject to change, which
change could apply retroactively and could affect the tax
consequences described below. There can be no assurances that the
U.S. Internal Revenue Service (“IRS”) will not take a
different position concerning the tax consequences of the ownership
and disposition of our ordinary shares or that such a position
would not be sustained. U.S. Holders should consult their own tax
advisors concerning the U.S. federal, state, local and foreign tax
consequences of owning and disposing of our ordinary shares in
their particular circumstances.
For purposes of this description, a “U.S. Holder” is a
beneficial owner of our ordinary shares that, for U.S. federal
income tax purposes, is:
•
a citizen or individual resident of the United States;
•
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 or any state thereof, including the
District of Columbia;
•
an estate the income of which is subject to U.S. federal income
taxation regardless of its source; or
•
a trust if such trust has validly elected to be treated as a United
States person for U.S. federal income tax purposes or if (1) a
court within the United States is able to exercise primary
supervision over its administration and (2) one or more United
States persons have the authority to control all of the substantial
decisions of such trust.
S-10
If a partnership (or any other entity treated as a partnership for
U.S. federal income tax purposes) holds our ordinary shares, the
tax treatment of a partner in such partnership will generally
depend on the status of the partner and the activities of the
partnership. Such a partner or partnership should consult its tax
advisor as to the particular U.S. federal income tax consequences
of owning and disposing of our ordinary shares in its particular
circumstance.
You should consult your
tax advisor with respect to the United States federal, state, local
and foreign tax consequences of owning and disposing of our
ordinary shares.
Distributions
Subject to the discussion under “— Passive foreign
investment company considerations” below, any distribution of
cash or property with respect to our ordinary shares (including any
amount of any Israeli tax withheld) will generally be treated as a
dividend to the extent paid out of our current and accumulated
earnings and profits, as determined under U.S. federal income tax
principles, and will be includible in the gross income of a U.S.
Holder on the date the distribution is actually or constructively
received (other than certain pro rata distributions of shares to
all shareholders). The company does not intend to maintain
calculations of its earnings and profits under U.S. federal income
tax principles; therefore, any distribution (including for the
avoidance of doubt any amount of any Israeli withholding tax) will
generally be treated as a “dividend” for U.S. federal
income tax purposes. Any such dividend income will not be eligible
for the dividends-received deduction allowed to corporate U.S.
Holders.
Subject to the discussion under “— Passive foreign
investment company considerations” below, and subject to
certain holding period requirements and other conditions, dividends
paid to non-corporate U.S. Holders, including individual U.S.
Holders, may be eligible for preferential rates of taxation if the
dividends are “qualified dividends” for U.S. federal
income tax purposes. Dividends received with respect to our
ordinary shares will be qualified dividends provided that (i) our
ordinary shares are readily tradable on an established securities
market in the United States or the company is eligible for the
benefits of a comprehensive income tax treaty with the United
States that the IRS has approved for the purposes of the qualified
dividend rules, and (ii) the company was not, in the year prior to
the year in which the dividend was paid, and is not, in the year in
which the dividend is paid, a passive foreign investment company,
or PFIC, for U.S. federal income tax purposes. Although no
assurances can be given, we believe that dividends the company pays
on its ordinary shares generally will be qualified dividends
provided that we are not classified as a PFIC in the last year
prior to the year in which such dividend is paid and the year in
which such dividend is paid.
The amount of any dividend paid in a currency other than the U.S.
dollar, or foreign currency, will be the U.S. dollar amount
calculated by reference to the exchange rate in effect on the date
of receipt, regardless of whether the payment is, in fact,
converted into U.S. dollars. If the dividend is converted into U.S.
dollars on the date of receipt, U.S. Holders generally will not be
required to recognize foreign currency gain or loss in respect of
the dividend income. However, a U.S. Holder may have foreign
currency gain or loss if the dividend is converted into U.S.
dollars after the date of receipt. The gain or loss will be equal
to the difference, if any, between (i) the U.S. dollar value of the
amount included in income when the dividend was received and (ii)
the amount received on the conversion of the foreign currency into
U.S. dollars. Generally, any such gain or loss will be treated as
ordinary income or loss and generally will be treated as U.S.
source income. U.S. Holders are encouraged to consult their tax
advisers regarding the treatment of foreign currency gain or loss
on any foreign currency received that is converted into U.S.
dollars on a date subsequent to the date of receipt.
A dividend distribution will generally be treated as foreign-source
“passive” income for U.S. foreign tax credit purposes.
A U.S. Holder will be treated as having actually received the
amount of Israeli taxes withheld from a dividend distribution and
as having paid such amount to the Israeli taxing authorities. The
amount that the U.S. Holder will include in gross income as a
dividend will be greater than the amount of cash the U.S. Holder
actually receives. A U.S. Holder may be entitled to deduct or
credit any non-refundable Israeli withholding taxes on dividends,
after any reduction in rates available to such U.S. Holder under
the United States-Israel Tax Treaty, in determining its U.S. income
tax liability, subject to certain limitations (including that the
election to deduct or credit foreign taxes applies to all of such
U.S. Holder’s foreign taxes for a particular tax year). The
rules governing the calculation and timing of foreign tax credits
and the deduction of foreign taxes are complex and depend upon a
U.S. Holder’s particular circumstances. U.S. Holders should
consult their tax advisers regarding the availability of the
foreign tax credit in their particular circumstances.
S-11
Sale, exchange, redemption or other taxable disposition of ordinary
shares
Subject to the discussion below under “Passive foreign
investment company considerations,” a U.S. Holder generally
will recognize gain or loss, for U.S. federal income tax purposes,
on the sale, exchange or other taxable disposition of our ordinary
shares, in an amount equal to the difference, if any, between the
amount realized on such sale, exchange or other taxable disposition
and the U.S. Holder’s adjusted tax basis in such ordinary
shares, and such gain or loss will be capital gain or loss, and
will be long-term capital gain or loss if the ordinary shares have
been held for more than one year. The adjusted tax basis in an
ordinary share generally will be equal to the cost of such ordinary
share. If you are a non-corporate U.S. Holder, long-term capital
gain from the sale, exchange or other taxable disposition of
ordinary shares is generally eligible for a preferential rate of
taxation applicable to capital gains. The deductibility of capital
losses for U.S. federal income tax purposes is subject to
limitations under the Code. Any such gain or loss that a U.S.
Holder recognizes generally will be treated as U.S. source income
or loss for foreign tax credit limitation purposes.
Passive foreign investment company considerations
If we were to be classified as a PFIC in any taxable year, a U.S.
Holder would be subject to special rules generally intended to
reduce or eliminate any benefits from the deferral of U.S. federal
income tax that a U.S. Holder could derive from investing in a
non-U.S. company that does not distribute all of its earnings on a
current basis.
A non-U.S. corporation, such as our company, will be classified as
a PFIC for federal income tax purposes in any taxable year in
which, after applying certain look-through rules with respect to
the income and assets of subsidiaries, either:
•
at least 75% of its gross income is “passive income”;
or
•
at least 50% of the average quarterly value of its total gross
assets (the total value of our assets may be measured in part by
the market value of our ordinary shares, which is subject to
change) is attributable to assets that produce “passive
income” or are held for the production of passive income.
Passive income for this purpose generally includes dividends,
interest, royalties, rents, gains from commodities and securities
transactions, the excess of gains over losses from the disposition
of assets which produce passive income, and includes amounts
derived by reason of the temporary investment of funds raised in
offerings of our ordinary shares. If a non-U.S. corporation owns
directly or indirectly at least 25% by value of the stock of
another corporation, the non-U.S. corporation is treated for
purposes of the PFIC tests as owning its proportionate share of the
assets of the other corporation and as receiving directly its
proportionate share of the other corporation’s income. If we
are classified as a PFIC in any year with respect to which a U.S.
Holder owns our ordinary shares, we will generally continue to be
treated as a PFIC with respect to such U.S. Holder in all
succeeding years during which the U.S. Holder owns our ordinary
shares, regardless of whether we continue to meet the tests
described above.
Based on historic and certain estimates of our gross income, gross
assets, and market capitalization (which may fluctuate from time to
time) and the nature of our business, we do not believe that we
were a PFIC for the taxable year ending December 31, 2016 and we do
not expect that we will be classified as a PFIC for the taxable
year ending December 31, 2017. However, because PFIC status is
based on our income, assets and activities for the entire taxable
year, it is not possible to determine whether we will be
characterized as a PFIC for the 2017 taxable year until after the
close of the year. Moreover, we must determine our PFIC status
annually based on tests which are factual in nature, and our status
in future years will depend on our income, assets, market
capitalization and activities in those years. There can be no
assurance that we will not be considered a PFIC for any taxable
year.
Under certain attribution rules, if we are a PFIC, U.S. Holders
will be deemed to own their proportionate share of our PFIC
subsidiaries, such subsidiaries referred to as “lower-tier
PFICs,” and will be subject to U.S. federal income tax in the
manner discussed below on (1) a distribution to us on the shares of
a “lower-tier PFIC” and (2) a disposition by us of
shares of a “lower-tier PFIC,” both as if the U.S.
Holder directly held the shares of such “lower-tier
PFIC.”
If we, or any of our subsidiaries, are treated as a PFIC for any
taxable year during which a U.S. Holder holds (or, as discussed in
the previous paragraph, is deemed to hold) its ordinary shares,
such holder will be subject to adverse U.S. federal income tax
rules. In general, if a U.S. Holder disposes of shares of a PFIC
(including an indirect disposition or a constructive disposition of
shares of a “lower-tier PFIC”), gain recognized or
deemed recognized by such holder would be allocated ratably over
such holder’s holding period for the shares. The amounts
allocated to the
S-12
taxable year of disposition and to years before the entity became a
PFIC, if any, would be treated as ordinary income. The amount
allocated to each other taxable year would be subject to tax at the
highest rate in effect for such taxable year for individuals or
corporations, as appropriate, and an interest charge would be
imposed on the tax attributable to such allocated amounts. Further,
any distribution in respect of shares of a PFIC (or a distribution
by a lower-tier PFIC to its shareholders that is deemed to be
received by a U.S. Holder) in excess of 125% of the average of the
annual distributions on such shares received or deemed to be
received during the preceding three years or the U.S.
Holder’s holding period, whichever is shorter, would be
subject to taxation in the manner described above. In addition,
dividend distributions made to you will not qualify for the
preferential rates of taxation applicable to long-term capital
gains discussed above under “Distributions.”
Where a company that is a PFIC meets certain reporting
requirements, a U.S. Holder can avoid certain adverse PFIC
consequences described above by making a “qualified electing
fund” (“QEF”) election to be taxed currently on
its proportionate share of the PFIC’s ordinary income and net
capital gains. However, we do not intend to provide the information
necessary for a U.S. Holder to make a QEF election if we are
classified as a PFIC.
If we are a PFIC and our ordinary shares are “regularly
traded” on a “qualified exchange,” a U.S. Holder
may make a mark-to-market election with respect to our ordinary
shares (but not the shares of any lower-tier PFICs), which may help
to mitigate the adverse tax consequences resulting from our PFIC
status (but not that of any lower-tier PFICs). Our ordinary shares
will be treated as “regularly traded” in any calendar
year in which more than a de minimis quantity of the ordinary
shares are traded on a qualified exchange on at least 15 days
during each calendar quarter (subject to the rule that trades that
have as one of their principal purposes the meeting of the trading
requirement are disregarded). The NASDAQ Global Select Market is a
qualified exchange for this purpose and, consequently, if the
ordinary shares are regularly traded, the mark-to-market election
will be available to a U.S. Holder; however, there can be no
assurance that trading volumes will be sufficient to permit a
mark-to-market election. In addition, because a mark-to-market
election with respect to us does not apply to any equity interests
in “lower-tier PFICs” that we own, a U.S. Holder
generally will continue to be subject to the PFIC rules with
respect to its indirect interest in any investments held by us that
are treated as equity interests in a PFIC for U.S. federal income
tax purposes.
If a U.S. Holder makes the mark-to-market election, for each year
in which we are a PFIC, such holder will generally include as
ordinary income the excess, if any, of the fair market value of
ordinary shares at the end of the taxable year over their adjusted
tax basis, and will be permitted an ordinary loss in respect of the
excess, if any, of the adjusted tax basis of our ordinary shares
over their fair market value at the end of the taxable year (but
only to the extent of the net amount of previously included income
as a result of the mark-to-market election). If a U.S. Holder makes
the election, such holder’s tax basis in our ordinary shares
will be adjusted to reflect any such income or loss amounts. Any
gain recognized on a sale or other disposition of our ordinary
shares will be treated as ordinary income. Any losses recognized on
a sale or other disposition of our ordinary shares will be treated
as ordinary loss to the extent of any net mark-to-market gains for
prior years. U.S. Holders should consult their own tax advisors
regarding the availability and consequences of making a
mark-to-market election in their particular circumstances. In
particular, U.S. Holders should consider carefully the impact of a
mark-to-market election with respect to our ordinary shares if we
have “lower-tier PFICs” for which such election is not
available. Once made, the mark-to-market election cannot be revoked
without the consent of the IRS unless our ordinary shares cease to
be “regularly traded.”
If a U.S. Holder owns ordinary shares during any year in which we
are a PFIC, the U.S. Holder generally will be required to file an
IRS Form 8621 (Information Return by a Shareholder of a Passive
Foreign Investment Company or Qualified Electing Fund) with respect
to the company, generally with the U.S. Holder’s federal
income tax return for that year. If our company were a PFIC for a
given taxable year, then you should consult your tax advisor
concerning your annual filing requirements.
U.S. Holders should consult their tax advisors regarding the
potential application of the PFIC rules to their investment in our
ordinary shares.
Medicare tax
Certain U.S. Holders that are individuals, estates or trusts are
subject to a 3.8% tax on all or a portion of their “net
investment income,” which may include all or a portion of
their dividend income and net gains from the disposition of
ordinary shares. Each U.S. Holder that is an individual, estate or
trust is urged to consult its tax advisors regarding the
applicability of the Medicare tax to its income and gains in
respect of its investment in our ordinary shares.
S-13
Backup withholding tax and information reporting
requirements
U.S. backup withholding tax and information reporting requirements
may apply to certain payments to certain U.S. Holders of stock.
Information reporting generally will apply to payments of dividends
on, and to proceeds from the sale or redemption of, our ordinary
shares made within the United States, or by a U.S. payor or U.S.
middleman, to a U.S. Holder of our ordinary shares, other than an
exempt recipient. A payor will be required to withhold backup
withholding tax from any payments of dividends on, or the proceeds
from the sale or redemption of, ordinary shares within the United
States, or by a U.S. payor or U.S. middleman, to a U.S. Holder,
other than an exempt recipient, if such holder fails to furnish its
correct taxpayer identification number or otherwise fails to comply
with, or establish an exemption from, such backup withholding tax
requirements. Any amounts withheld under the backup withholding
rules will be allowed as a credit against the beneficial
owner’s U.S. federal income tax liability, if any, and any
excess amounts withheld under the backup withholding rules may be
refunded, provided that the required information is timely
furnished to the IRS.
Foreign asset reporting
Certain U.S. Holders who are individuals (and certain entities) may
be required to report information relating to an interest in our
ordinary shares, subject to certain exceptions (including an
exception for shares held in accounts maintained by U.S. financial
institutions) by filing IRS Form 8938 (Statement of Specified
Foreign Financial Assets) with their federal income tax return.
U.S. Holders are urged to consult their tax advisors regarding
their information reporting obligations, if any, with respect to
their ownership and disposition of our ordinary shares.
S-14
Underwriting
Barclays Capital Inc. and
Citigroup Global Markets Inc. are acting as underwriters of this
offering. Under the terms of an underwriting agreement, dated May
16, 2017, each of the underwriters named below has severally agreed
to purchase from us and the selling shareholder the respective
number of ordinary shares shown opposite its name below:
|
|
|
Barclays Capital Inc.
|
|
2,125,000
|
Citigroup Global Markets Inc.
|
|
2,125,000
|
Total
|
|
4,250,000
|
The underwriters have advised us that they propose initially to
offer the ordinary shares to the public at the public offering
price set forth on the cover page of this prospectus and to dealers
at that price less a concession not in excess of
$0.05 per share. After the initial
offering, the public offering price, concession or any other term
of this offering may be changed.
The following table shows the public offering price, underwriting
discounts and commissions and proceeds to the selling shareholder,
before expenses. The information assumes either no exercise or full
exercise by the underwriters of their option to purchase additional
ordinary shares from the selling shareholder.
|
|
|
|
|
|
|
Price to the public
|
|
$
|
20.60
|
|
$
|
87,550,000
|
|
$
|
100,682,500
|
Underwriting discounts and
commissions
|
|
$
|
0.43
|
|
$
|
1,827,500
|
|
$
|
2,101,625
|
Proceeds to the selling shareholder, before
expenses
|
|
$
|
20.17
|
|
$
|
85,722,500
|
|
$
|
98,580,875
|
The underwriters reserve the right to withdraw, cancel or modify
offers to the public and to reject orders in whole or in part. The
underwriters are obligated to take and pay for all of the ordinary
shares offered by this prospectus if any such shares are taken.
However, the underwriters are not required to take or pay for the
ordinary shares covered by the underwriter’s option to
purchase additional ordinary shares described below.
The underwriting agreement provides that the underwriters’
obligation to purchase ordinary shares depends on the satisfaction
of the conditions contained in the underwriting agreement
including:
•
the obligation to purchase all of the ordinary shares offered
hereby (other than those ordinary shares covered by their option to
purchase additional shares as described below), if any of the
shares are purchased;
•
the representations and warranties made by us and the selling
shareholder to the underwriters are true;
•
there is no material change in our business or the financial
markets; and
•
we and the selling shareholder deliver customary closing documents
to the underwriters.
Expenses
We estimate that our expenses for the offering, excluding
underwriting discounts and commissions, will be approximately $0.2
million. We have also agreed to reimburse the underwriters for
expenses relating to clearance of this offering with the Financial
Industry Regulatory Authority up to $15,000.
Option to Purchase
Additional Shares
The selling shareholder has granted the underwriters an option
exercisable for 30 days after the date of this prospectus
supplement to purchase, from time to time, in whole or in part, up
to an aggregate of 637,500 shares from the selling shareholder at
the public offering price less underwriting discounts and
commissions. To the extent that this option is exercised, each
underwriter will be obligated, subject to certain conditions, to
purchase its pro rata portion of these additional shares based on
the underwriter’s percentage underwriting commitment in the
offering as indicated in the table at the beginning of this
section.
S-15
Lock-Up
Agreements
We, and all of our directors and executive officers and the selling
shareholder, have agreed that, for a period of 60 days after the
date of this prospectus supplement subject to certain limited
exceptions, including those described below, we and they will not
directly or indirectly, without the prior written consent of each
of Barclays Capital Inc. and Citigroup Global Markets Inc., (1)
offer for sale, sell, pledge, or otherwise dispose of (or enter
into any transaction or device that is designed to, or could be
expected to, result in the disposition by any person at any time in
the future of) any ordinary shares (including, without limitation,
ordinary shares that may be deemed to be beneficially owned by us
or them in accordance with the rules and regulations of the SEC and
ordinary shares that may be issued upon exercise of any options) or
securities convertible into or exercisable or exchangeable for
ordinary shares (other than, with respect to us, ordinary shares
issued pursuant to employee benefit plans, qualified share option
plans, or other employee compensation plans existing on the date of
this prospectus supplement), or sell or grant options or rights
with respect to any ordinary shares or securities convertible into
or exchangeable for ordinary shares (other than, with respect to
us, the grant of options pursuant to option plans existing on the
date of this prospectus supplement), (2) enter into any swap or
other derivatives transaction that transfers to another, in whole
or in part, any of the economic benefits or risks of ownership of
ordinary shares, whether any such transaction described in clause
(1) or (2) above is to be settled by delivery of ordinary shares or
other securities, in cash or otherwise, (3) make any demand for or
exercise any right or file or cause to be filed a registration
statement, including any amendments thereto, with respect to the
registration of any ordinary shares or securities convertible into
or exercisable or exchangeable for ordinary shares or any of our
other securities (other than any registration statement on Form
S-8), or (4) publicly disclose the intention to do any of the
foregoing.
Barclays Capital Inc. and Citigroup Global Markets Inc., in their
sole discretion, may release the ordinary shares and other
securities subject to the lock-up agreements described above in
whole or in part at any time. When determining whether or not to
release ordinary shares and other securities from lock-up
agreements, Barclays Capital Inc. and Citigroup Global Markets Inc.
will consider, among other factors, the holder’s reasons for
requesting the release, the number of ordinary shares and other
securities for which the release is being requested and market
conditions at the time.
Indemnification
We and the selling shareholder have agreed to indemnify the
underwriters against certain liabilities, including liabilities
under the Securities Act, and to contribute to payments that the
underwriters may be required to make for these liabilities.
Stabilization, Short
Positions and Penalty Bids
The representatives may engage in stabilizing transactions, short
sales and purchases to cover positions created by short sales, and
penalty bids or purchases for the purpose of pegging, fixing or
maintaining the price of the ordinary shares, in accordance with
Regulation M under the Exchange Act:
•
Stabilizing transactions permit bids to purchase the underlying
security so long as the stabilizing bids do not exceed a specified
maximum.
•
A short position involves a sale by the underwriters of shares in
excess of the number of shares the underwriters are obligated to
purchase in the offering, which creates the syndicate short
position. This short position may be either a covered short
position or a naked short position. In a covered short position,
the number of shares involved in the sales made by the underwriters
in excess of the number of shares they are obligated to purchase is
not greater than the number of shares that they may purchase by
exercising their option to purchase additional shares. In a naked
short position, the number of shares involved is greater than the
number of shares in their option to purchase additional shares. The
underwriters may close out any short position by either exercising
their option to purchase additional shares and/or purchasing shares
in the open market. In determining the source of shares to close
out the short position, the underwriters will consider, among other
things, the price of shares available for purchase in the open
market as compared to the price at which they may purchase shares
through their option to purchase additional shares. A naked short
position is more likely to be created if the underwriters are
concerned that there could be downward pressure on the price of the
shares in the open market after pricing that could adversely affect
investors who purchase in the offering.
S-16
•
Syndicate covering transactions involve purchases of the ordinary
shares in the open market after the distribution has been completed
in order to cover syndicate short positions.
•
Penalty bids permit the representatives to reclaim a selling
concession from a syndicate member when the ordinary shares
originally sold by the syndicate member is purchased in a
stabilizing or syndicate covering transaction to cover syndicate
short positions.
These stabilizing transactions, syndicate covering transactions and
penalty bids may have the effect of raising or maintaining the
market price of our ordinary shares or preventing or retarding a
decline in the market price of the ordinary shares. As a result,
the price of the ordinary shares may be higher than the price that
might otherwise exist in the open market. These transactions may be
effected on the NASDAQ Global Market or otherwise and, if
commenced, may be discontinued at any time.
Neither we nor any of the underwriters make any representation or
prediction as to the direction or magnitude of any effect that the
transactions described above may have on the price of the ordinary
shares. In addition, neither we nor any of the underwriters make
any representation that the representatives will engage in these
stabilizing transactions or that any transaction, once commenced,
will not be discontinued without notice.
Passive Market
Making
In connection with the offering, underwriters and selling group
members may engage in passive market making transactions in the
ordinary shares on the NASDAQ Global Select Market in accordance
with Rule 103 of Regulation M under the Exchange Act during the
period before the commencement of offers or sales of the ordinary
shares and extending through the completion of distribution. A
passive market maker must display its bids at a price not in excess
of the highest independent bid of the security. However, if all
independent bids are lowered below the passive market maker’s
bid that bid must be lowered when specified purchase limits are
exceeded.
Electronic
Distribution
A prospectus in electronic format may be made available on the
Internet sites or through other online services maintained by one
or more of the underwriters participating in this offering, or by
their affiliates. In those cases, prospective investors may view
offering terms online and, depending upon the particular
underwriter or selling group member, prospective investors may be
allowed to place orders online. The underwriters may agree with us
to allocate a specific amount of ordinary shares for sale to online
brokerage account holders.
Other than the prospectus in
electronic format, the information on any underwriter’s web
site and any information contained in any other web site maintained
by an underwriter or selling group member is not part of the
prospectus or the registration statement of which this prospectus
forms a part, has not been approved and/or endorsed by us or any
underwriter or selling group member in its capacity as underwriter
or selling group member and should not be relied upon by
investors.
Listing on the NASDAQ
Global Select Market
Our ordinary shares are listed on the Nasdaq Global Select Market
under the symbol “KRNT.”
Stamp Taxes
If you purchase ordinary shares offered in this prospectus outside
the United States, you may be required to pay stamp taxes and other
charges under the laws and practices of the country of purchase, in
addition to the offering price listed on the cover page of this
prospectus.
Other
Relationships
The underwriters and certain of their 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.
The underwriters and certain of their affiliates may in the future
perform various commercial and investment banking and financial
advisory services for the issuer and its affiliates, for which they
may receive customary fees and expenses.
In the ordinary course of their various business activities, the
underwriters and certain of their affiliates may make or hold a
broad array of investments and actively trade debt and equity
securities (or related derivative securities)
S-17
and financial instruments (including bank loans) for their own
account and for the accounts of their customers, and such
investment and securities activities may involve securities and/or
instruments of the issuer or its affiliates. If the underwriters or
their affiliates have a lending relationship with us, the
underwriters or their affiliates may hedge, their credit exposure
to us consistent with their customary risk management policies.
Typically, the underwriters and their affiliates would hedge such
exposure by entering into transactions which consist of either the
purchase of credit default swaps or the creation of short positions
in our securities or the securities of our affiliates, including
potentially the ordinary shares offered hereby. Any such credit
default swaps or short positions could adversely affect future
trading prices of the ordinary shares offered hereby. The
underwriters and certain of their affiliates may also communicate
independent investment recommendations, market color or trading
ideas and/or publish or express independent research views in
respect of such securities or instruments and may at any time hold,
or recommend to clients that they acquire, long and/or short
positions in such securities and instruments.
Selling Restrictions
Outside the United States
This prospectus supplement does not constitute an offer to sell to,
or a solicitation of an offer to buy from, anyone in any country or
jurisdiction (i) in which such an offer or solicitation is not
authorized, (ii) in which any person making such offer or
solicitation is not qualified to do so or (iii) in which any such
offer or solicitation would otherwise be unlawful. No action has
been taken that would, or is intended to, permit a public offer of
the ordinary shares or possession or distribution of this
prospectus or any other offering or publicity material relating to
the ordinary shares in any country or jurisdiction (other than the
United States) where any such action for that purpose is required.
Accordingly, each underwriter has undertaken that it will not,
directly or indirectly, offer or sell any ordinary shares or have
in its possession, distribute or publish any prospectus, form of
application, advertisement or other document or information in any
country or jurisdiction except under circumstances that will, to
the best of its knowledge and belief, result in compliance with any
applicable laws and regulations and all offers and sales of
ordinary shares by it will be made on the same terms.
Canada
The shares may be sold only to purchasers purchasing, or deemed to
be purchasing, as principal that are accredited investors, as
defined in National Instrument 45-106 Prospectus Exemptions or
subsection 73.3(1) of the Securities Act (Ontario), and are
permitted clients, as defined in National Instrument 31-103
Registration Requirements, Exemptions and Ongoing Registrant
Obligations. Any resale of the shares must be made in accordance
with an exemption from, or in a transaction not subject to, the
prospectus requirements of applicable securities laws.
Securities legislation in
certain provinces or territories of Canada may provide a purchaser
with remedies for rescission or damages if this prospectus
supplement (including any amendment thereto) contains a
misrepresentation, provided that the remedies for rescission or
damages are exercised by the purchaser within the time limit
prescribed by the securities legislation of the purchaser’s
province or territory. The purchaser should refer to any applicable
provisions of the securities legislation of the purchaser’s
province or territory for particulars of these rights or consult
with a legal advisor.
Pursuant to section 3A.3 (or, in the case of securities issued or
guaranteed by the government of a non-Canadian jurisdiction,
section 3A.4) of National Instrument 33-105 Underwriting Conflicts
(NI 33-105), the underwriters are not required to comply with the
disclosure requirements of NI 33-105 regarding underwriter
conflicts of interest in connection with this offering.
European Economic Area
In relation to each Member State of the European Economic Area
which has implemented the Prospectus Directive (each, a
“Relevant Member State”) an offer to the public of any
ordinary shares which are the subject of the offering contemplated
herein may not be made in that Relevant Member State, except that
an offer to the public in that Relevant Member State of any
ordinary shares may be made at any time under the following
exemptions under the Prospectus Directive, if they have been
implemented in that Relevant Member State:
•
to legal entities which are qualified investors as defined under
the Prospectus Directive;
•
by the underwriters to fewer than 100, or, if the Relevant Member
State has implemented the relevant provisions 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 of the underwriters for any
such offer; or
S-18
•
in any other circumstances falling within Article 3(2) of the
Prospectus Directive, provided that no such offer of ordinary
shares shall result in a requirement for us, the selling
shareholder or any underwriter 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 receives any
communication in respect of, or who acquires any ordinary shares
under, the offers contemplated here in this prospectus will be
deemed to have represented, warranted and agreed to and with each
underwriter, the selling shareholder and us that:
•
it is a qualified investor as defined under the Prospectus
Directive; and
•
in the case of any ordinary shares acquired by it as a financial
intermediary, as that term is used in Article 3(2) of the
Prospectus Directive, (i) the ordinary shares acquired by it in the
offering have not been acquired on behalf of, nor have they been
acquired with a view to their offer or resale to, persons in any
Relevant Member State other than qualified investors, as that term
is defined in the Prospectus Directive, or in the circumstances in
which the prior consent of the representatives of the underwriters
has been given to the offer or resale or (ii) where ordinary shares
have been acquired by it on behalf of persons in any Relevant
Member State other than qualified investors, the offer of such
ordinary shares to it is not treated under the Prospectus Directive
as having been made to such persons.
For the purposes of this representation and the provision above,
the expression an “offer of ordinary shares to the
public” in relation to any ordinary 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 any
ordinary shares to be offered so as to enable an investor to decide
to purchase or subscribe for the ordinary shares, as the same may
be varied in that Relevant Member State by any measure implementing
the Prospectus Directive in that Relevant Member State, the
expression “Prospectus Directive” means Directive
2003/71/EC (and amendments thereto, including the 2010 PD Amending
Directive, to the extent implemented in the Relevant Member State),
and includes any relevant implementing measure in each Relevant
Member State and the expression “2010 PD Amending
Directive” means Directive 2010/73/EU.
United Kingdom
This prospectus has only been communicated or caused to have been
communicated and will only be communicated or caused to be
communicated as an invitation or inducement to engage in investment
activity (within the meaning of Section 21 of the Financial
Services and Markets Act of 2000 (the “FSMA”)) as
received in connection with the issue or sale of the ordinary
shares in circumstances in which Section 21(1) of the FSMA does not
apply to us. All applicable provisions of the FSMA will be complied
with in respect to anything done in relation to the ordinary shares
in, from or otherwise involving the United Kingdom.
Israel
This document does not constitute a prospectus under the Israeli
Securities Law, 5728-1968, and has not been filed with or approved
by the Israel Securities Authority. In Israel, this prospectus is
being distributed only to, and is directed only at, investors
listed in the first addendum, or the Addendum, to the Israeli
Securities Law, consisting primarily of joint investment in trust
funds; provident funds; insurance companies; banks; portfolio
managers, investment advisors, members of the Tel Aviv Stock
Exchange Ltd., underwriters, each purchasing for their own account;
venture capital funds; entities with equity in excess of NIS 50
million and “qualified individuals,” each as defined in
the Addendum (as it may be amended from time to time), collectively
referred to as qualified investors. Qualified investors shall be
required to submit written confirmation that they fall within the
scope of the Addendum.
S-19
Legal matters
The validity of the ordinary shares being offered by this
prospectus supplement and other legal matters concerning this
offering relating to Israeli law will be passed upon for us by
Meitar Liquornik Geva Leshem Tal, Ramat Gan, Israel. Certain legal
matters in connection with this offering relating to U.S. law will
be passed upon for us by White & Case LLP, New York, New York.
Certain legal matters in connection with this offering will be
passed upon for the underwriters by Gross, Kleinhendler, Hodak,
Halevy, Greenberg & Co., Tel Aviv, Israel, with respect to
Israeli law, and by Skadden, Arps, Slate, Meagher & Flom LLP,
New York, New York, with respect to U.S. law.
Experts
The consolidated financial statements of Kornit Digital Ltd.
incorporated by reference in this prospectus supplement by
reference to Kornit Digital Ltd.’s annual report on Form 20-F
for the year ended December 31, 2016 have been audited by Kost
Forer Gabbay & Kasierer, a member of Ernst & Young Global,
an independent registered public accounting firm, as set forth in
their report therein, included therein and incorporated herein by
reference. Such consolidated financial statements are incorporated
by reference in reliance upon such report given on the authority of
such firm as experts in accounting and auditing.
Enforceability of civil
liabilities
We are incorporated under the laws of the State of Israel. Service
of process upon us and upon our directors, officers and any Israeli
experts named in this prospectus supplement, substantially all of
whom reside outside of the United States, may be difficult to
obtain within the United States. Furthermore, because substantially
all of our assets and substantially all of our directors and
officers are located outside of the United States, any judgment
obtained in the United States against us or any of our directors
and officers may not be collectible within the United States.
We have been informed by our legal counsel in Israel, Meitar
Liquornik Geva Leshem Tal, that it may be difficult to assert U.S.
securities law claims in original actions instituted in Israel.
Israeli courts may refuse to hear a claim based on an alleged
violation of U.S. securities laws because Israel is not the most
appropriate forum in which to bring such a claim. In addition, even
if an Israeli court agrees to hear a claim, it may determine that
Israeli law and not U.S. law is applicable to the claim. If U.S.
law is found to be applicable, the content of applicable U.S. law
must be proven as a fact, which can be a time-consuming and costly
process. Certain matters of procedure will also be governed by
Israeli law.
We have irrevocably appointed Kornit Digital North America Inc. as
our agent to receive service of process in any action against us in
any United States federal or state court arising out of the
offerings under this prospectus supplement or any purchase or sale
of securities in connection with any such offering(s). Subject to
specified time limitations and legal procedures, Israeli courts may
enforce a United States judgment in a civil matter which, subject
to certain exceptions, is non-appealable, including a judgment
based upon the civil liability provisions of the Securities Act or
the Exchange Act and including a monetary or compensatory judgment
in a non-civil matter, provided that, among other things:
•
the judgment is obtained after due process before a court of
competent jurisdiction, according to the laws of the state in which
the judgment is given and the rules of private international law
prevailing in Israel;
•
the prevailing law of the foreign state in which the judgment is
rendered allows for the enforcement of judgments of Israeli
courts;
•
adequate service of process has been effected and the defendant has
had a reasonable opportunity to be heard and to present his or her
evidence;
•
the judgment is not contrary to public policy of Israel, and the
enforcement of the civil liabilities set forth in the judgment is
not likely to impair the security or sovereignty of Israel;
•
the judgment was not obtained by fraud and does not conflict with
any other valid judgment in the same matter between the same
parties;
S-20
•
an action between the same parties in the same matter was not
pending in any Israeli court at the time at which the lawsuit was
instituted in the foreign court; and
•
the judgment is enforceable according to the laws of Israel and
according to the law of the foreign state in which the relief was
granted.
If a foreign judgment is enforced by an Israeli court, it generally
will be payable in Israeli currency, which can then be converted
into non-Israeli currency and transferred out of Israel. The usual
practice in an action before an Israeli court to recover an amount
in a non-Israeli currency is for the Israeli court to issue a
judgment for the equivalent amount in Israeli currency at the rate
of exchange in force on the date of the judgment, but the judgment
debtor may make payment in foreign currency. Pending collection,
the amount of the judgment of an Israeli court stated in Israeli
currency ordinarily will be linked to the Israeli consumer price
index plus interest at the annual statutory rate set by Israeli
regulations prevailing at the time. Judgment creditors must bear
the risk of unfavorable exchange rates.
Where you can find more
information
We have filed with the SEC a registration statement on Form F-3
under the Securities Act, with respect to the securities offered by
this prospectus supplement. This prospectus supplement and the
accompanying prospectus do not contain all the information
contained in the registration statement, including its exhibits and
schedules. You should refer to the registration statement,
including the exhibits and schedules, for further information about
us and the securities we may offer. Statements we make in this
prospectus supplement and the accompanying prospectus about certain
contracts or other documents are not necessarily complete. When we
make such statements, we refer you to the copies of the contracts
or documents that are filed as exhibits to the registration
statement, because those statements are qualified in all respects
by reference to those exhibits. The registration statement,
including exhibits and schedules, is on file at the office of the
SEC and may be inspected without charge.
We are subject to the information reporting requirements of the
Exchange Act. Under the Exchange Act, we are required to file
annual and special reports and other information with the SEC. As a
foreign private issuer, we are exempt from the rules under the
Exchange Act prescribing the furnishing and content of proxy
statements and our officers, directors and principal shareholders
are exempt from the reporting and short-swing profit recovery
provisions contained in Section 16 of the Exchange Act. In
addition, we are not required under the Exchange Act to file
annual, quarterly and current reports and financial statements as
frequently or as promptly as U.S. companies whose securities are
registered under the Exchange Act. However, we file with the SEC,
within 120 days after the end of each fiscal year, or such
applicable time as required by the SEC, an annual report on Form
20-F containing financial statements audited by an independent
registered public accounting firm, and we submit to the SEC, on
Form 6-K, unaudited quarterly financial information.
You may read and copy the registration statement, including the
related exhibits and schedules, as well as any document we file
with the SEC without charge at the Public Reference Room maintained
by the SEC at 100 F Street, N.E., Washington, D.C. 20549. You may
also obtain copies of this information by mail from the Public
Reference Section of the SEC at prescribed rates. Further
information on the operation of the SEC’s Public Reference
Room in Washington, D.C. can be obtained by calling the SEC at
1-800-SEC-0330. The SEC also maintains a website that contains
reports, proxy and information statements and other information
about issuers, such as us, who file electronically with the SEC.
The address of that website is
http://www.sec.gov
.
We maintain a corporate website at
www.kornit.com
.
Information contained on, or that can be accessed through, our
website does not constitute a part of this prospectus supplement or
the accompanying prospectus. We have included our website address
in this prospectus supplement solely as an inactive textual
reference.
S-21
Incorporation of certain
documents by reference
The SEC allows us to “incorporate by reference” into
this prospectus supplement and the accompanying prospectus the
information in documents we file with it. This means that we can
disclose important information to you by referring you another
document filed by us with the SEC. Each document incorporated by
reference is current only as of the date of such document, and the
incorporation by reference of such documents shall not create any
implication that there has been no change in our affairs since the
date thereof or that the information contained therein is current
as of any time subsequent to its date. The information incorporated
by reference is considered to be a part of this prospectus
supplement and the accompanying prospectus and should be read with
the same care. When we update the information contained in
documents that have been incorporated by reference by making future
filings with the SEC, the information incorporated by reference in
this prospectus supplement and the accompanying prospectus is
considered to be automatically updated and superseded. In other
words, in the case of a conflict or inconsistency between
information contained in this prospectus supplement and the
accompanying prospectus and information incorporated by reference
into this prospectus supplement and the accompanying prospectus,
you should rely on the information contained in the document that
was filed later.
We incorporate by reference into this prospectus supplement and the
accompanying prospectus documents listed below and any future
filings made with the SEC under Sections 13(a), 13(c), 14 or 15(d)
of the Exchange Act, and, to the extent specifically designated
therein, reports on Form 6-K we furnish to the SEC until we
terminate the offering. In addition, we will incorporate by
reference certain future materials furnished to the SEC on Form
6-K, but only to the extent specifically indicated in those
submissions or in a future prospectus supplement.
•
our annual report on Form 20-F for the fiscal year ended December
31, 2016 filed with the SEC on March 30, 2017;
•
our report of foreign private issuer on Form 6-K filed with the SEC
on May 10, 2017 (solely with respect to the portions specified
therein); and
•
the description of our ordinary shares contained under the heading
“Item 1. Description of Registrant’s Securities to be
Registered” in our registration statement on Form 8-A, as
filed with the SEC on March 31, 2015, including any subsequent
amendment or any report filed for the purpose of updating such
description.
Any statement contained herein or in a document all or a portion of
which is incorporated or deemed to be incorporated by reference
herein shall be deemed to be modified or superseded for purposes of
this registration statement to the extent that a statement
contained herein or in any other subsequently filed document which
also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this registration
statement.
Unless expressly incorporated by reference, nothing in this
prospectus supplement and the accompanying prospectus shall be
deemed to incorporate by reference information furnished to, but
not filed with, the SEC. Copies of all documents incorporated by
reference in this prospectus supplement and the accompanying
prospectus, other than exhibits to those documents unless such
exhibits are specially incorporated by reference in this prospectus
supplement and the accompanying prospectus, will be provided at no
cost to each person, including any beneficial owner, who receives a
copy of this prospectus supplement and the accompanying prospectus
on the written or oral request of that person made to:
Kornit Digital Ltd.
Attention: Chief Financial Officer
12 Ha’Amal Street, Afek Park
Rosh Ha’Ayin 4809246, Israel
Tel: +972-3-908-5800
S-22
PROSPECTUS
$100,000,000 of Ordinary Shares,
Warrants, Rights, Debt Securities
and/or Units Offered by the Company
and
Up to 15,127,481 Ordinary Shares Offered by the Selling
Shareholders
Kornit Digital Ltd.
We may offer from time to time in
one or more series or issuances ordinary shares, warrants to
purchase ordinary shares, rights, debt securities consisting of
debentures, notes or other evidences of indebtedness and/or
securities and units comprised of, or other combinations of, the
foregoing securities. We refer to the ordinary shares, warrants,
rights, debt securities and units collectively as
“securities” in this prospectus.
In addition, the selling
shareholders identified in this prospectus may offer up to
15,127,481 ordinary shares. We will not receive any of the proceeds
from the sale of ordinary shares by the selling
shareholders.
Each time we or the selling
shareholders sell securities pursuant to this prospectus, we will
provide a supplement to this prospectus that contains specific
information about the offering and the specific terms of the
securities offered. You should read this prospectus and the
applicable prospectus supplement carefully before you invest in our
securities.
We may, from time to time, offer
the securities and the selling shareholders may, from time to time,
offer the ordinary shares through public or private transactions,
directly or through underwriters, agents or dealers, on or off the
NASDAQ Stock Market at prevailing market prices or at privately
negotiated prices. If any underwriters, agents or dealers are
involved in the sale of any of these securities, the applicable
prospectus supplement will set forth the names of the underwriter,
agent or dealer and any applicable fees, commissions or
discounts.
Our ordinary shares are traded on
the NASDAQ Global Select Market under the symbol
“KRNT.” The closing price of our ordinary shares, as
reported on the NASDAQ Global Select Market on December 30, 2016
was $12.65.
________________________
We are an “emerging growth
company” as defined under U.S. federal securities laws and,
as such, may elect to comply with certain reduced public company
reporting requirements.
________________________
Investing in these securities involves certain
risks. Please carefully consider the “Risk Factors” in
Item 3 of our most recent annual report on Form 20-F incorporated
by reference in this prospectus and in any applicable supplement to
this prospectus, for a discussion of the factors you should
consider carefully before deciding to purchase these
securities.
________________________
Neither the Securities
and Exchange Commission nor any state securities commission has
approved or disapproved of the securities being offered by this
prospectus, or determined if this prospectus is truthful or
complete. Any representation to the contrary is a criminal
offense.
________________________
The date of this prospectus is
January 3, 2017
TABLE OF
CONTENTS
|
|
|
About this Prospectus
|
|
1
|
Kornit Digital Ltd.
|
|
1
|
Risk Factors
|
|
2
|
Offer Statistics and Expected
Timetable
|
|
2
|
Forward-Looking Statements
|
|
2
|
Ratio of Earnings to Fixed Charges
|
|
3
|
Capitalization
|
|
3
|
Price Range of Ordinary Shares
|
|
3
|
Use of Proceeds
|
|
4
|
Selling Shareholders
|
|
4
|
Description of Securities
|
|
5
|
Description of Ordinary Shares
|
|
5
|
Description of Warrants
|
|
11
|
Description of Rights
|
|
12
|
Description of Debt Securities
|
|
13
|
Description of Units
|
|
15
|
Plan of Distribution
|
|
16
|
Expenses Associated with the
Registration
|
|
19
|
Legal Matters
|
|
20
|
Experts
|
|
20
|
Where You Can Find More Information
|
|
20
|
Incorporation of Certain Documents By
Reference
|
|
21
|
Enforceability of Civil Liabilities
|
|
22
|
i
ABOUT THIS
PROSPECTUS
This prospectus is part of a registration statement that we filed
with the Securities and Exchange Commission, or SEC, utilizing a
“shelf” registration process. Under this process, we
may offer and sell our securities under this prospectus and the
selling shareholders referred to in this prospectus and identified
in supplements to this prospectus may also offer and sell our
ordinary shares under this prospectus.
Under this shelf process, we may sell the securities described in
this prospectus in one or more offerings up to a total price to the
public of $100 million. The selling shareholders may sell up to
15,127,481 ordinary shares in one or more offerings. The offer and
sale of securities under this prospectus may be made from time to
time, in one or more offerings, in any manner described under the
section in this prospectus entitled “Plan of
Distribution.”
This prospectus provides you with a general description of the
securities we may offer. Each time we sell securities, we will
provide a prospectus supplement that will contain specific
information about the terms of that offering, if required. The
prospectus supplement may also add, update or change information
contained in this prospectus, and may also contain information
about any material federal income tax considerations relating to
the securities covered by the prospectus supplement. You should
read both this prospectus and any prospectus supplement together
with additional information under the headings “Where You Can
Find More Information” and “Incorporation of Certain
Documents by Reference.”
This summary may not contain all of the information that may be
important to you. You should read this entire prospectus, including
the financial data and related notes incorporated by reference in
this prospectus, before making an investment decision. This summary
contains forward-looking statements that involve risks and
uncertainties. Our actual results may differ significantly from the
results discussed in the forward-looking statements. Factors that
might cause or contribute to such differences include those
discussed in “Risk Factors” and “Forward-Looking
Statements.”
KORNIT DIGITAL
LTD.
Overview
We develop, design and market innovative digital printing solutions
for the global printed textile industry. Our vision is to
revolutionize this industry by facilitating the transition from
analog processes that have not evolved for decades to digital
methods of production that address contemporary supply, demand and
environmental dynamics. We focus on the rapidly growing high
throughput, direct-to-garment, or DTG, and roll-to-roll, or R2R,
segments of the printed textile industry. Our solutions include our
proprietary digital printing systems, ink and other consumables,
associated software and value added services that allow for large
scale printing of short runs of complex images and designs directly
on finished garments and fabrics. Our solutions are differentiated
from other digital methods of production because they eliminate the
need to pre-treat fabrics prior to printing, thereby offering our
customers the ability to digitally print high quality images and
designs on a variety of fabrics in a streamlined and
environmentally-friendly manner. When compared to analog methods of
production, our solutions also significantly reduce production lead
times and enable customers to more efficiently and cost-effectively
produce smaller quantities of individually printed designs, thereby
mitigating the risk of excess inventory, which is a significant
challenge for the printed textile industry.
Corporate
Information
Our legal name is Kornit Digital Ltd. and we were incorporated
under the laws of the State of Israel on January 16, 2002. Our
registration number with the Israeli Registrar of Companies is
513195420. Our purpose as set forth in our amended and restated
articles of association is to engage in any lawful activity.
We are subject to the provisions of the Israeli Companies Law,
5759-1999. Our principal executive offices are located at 12
Ha’Amal Street, Rosh Ha’Ayin 4809246, Israel, and our
telephone number is +972-3-908-5800. Our website address is
www.kornit.com
(the information contained therein or linked thereto shall not be
considered incorporated by reference in this prospectus). Our agent
for service of process in the United States is Kornit Digital North
America Inc., located at 10541-10601 North Commerce Street, Mequon,
Wisconsin 53092, and its telephone number is (262) 518-0200.
1
RISK FACTORS
An investment in our securities involves a high degree of risk. Our
business, financial condition or results of operations could be
adversely affected by any of these risks. If any of these risks
occur, the value of our ordinary shares and our other securities
may decline. You should carefully consider the risk factors
discussed under the caption “Risk Factors” in our
annual report on Form 20-F for the year ended December 31, 2015 and
in any other filings we make with the SEC subsequent to the date of
this prospectus which are incorporated herein by reference, and in
any supplement to this prospectus, before making your investment
decision.
OFFER STATISTICS AND
EXPECTED TIMETABLE
We may sell from time to time pursuant to this prospectus (as may
be detailed in a prospectus supplement) an indeterminate number of
ordinary shares, warrants to purchase ordinary shares, rights
and/or units comprised of any of the foregoing securities as shall
have a maximum aggregate offering price of $100 million. The
selling shareholders may sell from time to time pursuant to this
prospectus up to 15,127,481 ordinary shares. The actual price per
share or per security of the securities that we or the selling
shareholders will offer pursuant hereto will depend on a number of
factors that may be relevant as of the time of offer. See
“Plan of Distribution.”
FORWARD-LOOKING
STATEMENTS
This prospectus and the documents incorporated in it by reference
contain forward-looking statements within the meaning of Section
27A of the Securities Act of 1933, as amended (the
“Securities Act”), Section 21E of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”)
and the safe harbor provisions of the U.S. Private Securities
Litigation Reform Act of 1995, that are based on our
management’s beliefs and assumptions and on information
currently available to our management. Forward-looking statements
include information concerning our possible or assumed future
results of our business, financial condition, results of
operations, liquidity, plans and objectives. Forward-looking
statements include all statements that are not historical facts and
in some cases can be identified by terminology such as
“believe,” “may,” “estimate,”
“continue,” “anticipate,”
“intend,” “should,” “plan,”
“expect,” “predict,”
“potential,” or the negative of these terms or other
similar expressions that convey uncertainty of future events or
outcomes.
Our ability to predict the results of our operations or the effects
of various events on our operating results is inherently uncertain.
Therefore, we caution you to consider carefully the matters
described under the caption “Risk Factors” and certain
other matters discussed in this prospectus, the documents
incorporated by reference in this prospectus, and other publicly
available sources. Such factors and many other factors beyond the
control of our management could cause our actual results, level of
activity, performance or achievements to differ materially from any
future results, level of activity, performance or achievements that
may be expressed or implied by the forward-looking statements.
Unless we are required to do so under U.S. federal securities laws
or other applicable laws, we do not intend to update or revise any
forward-looking statements.
2
RATIO OF EARNINGS TO
FIXED CHARGES
The following table sets forth our ratio of earnings to fixed
charges for the periods indicated. The ratio of earnings to fixed
charges is computed by dividing fixed charges into earnings before
income taxes plus fixed charges.
|
|
|
|
Nine
Months Ended September 30,
|
|
|
|
|
|
|
|
|
|
|
|
Ratio of earnings to fixed charges
(1)
|
|
8.78
|
|
5.54
|
|
7.10
|
|
8.70
|
|
4.09
|
As of the date of this prospectus, we have no preferred shares
outstanding and have neither declared nor paid any dividends on
preferred shares for the periods set forth above.
CAPITALIZATION
Our capitalization will be set forth in a prospectus supplement to
this prospectus or in a report of a foreign private issuer on Form
6-K subsequently furnished to the SEC and specifically incorporated
herein by reference.
PRICE RANGE OF ORDINARY
SHARES
Our ordinary shares have been quoted on the NASDAQ Global Select
Market under the symbol “KRNT” since April 2, 2015.
Prior to that date, there was no public trading market for our
ordinary shares. Our initial public offering was priced at $10.00
per share on April 1, 2015. The following table sets forth for the
periods indicated the high and low closing sales prices per
ordinary share as reported on NASDAQ:
|
|
|
|
|
|
|
(in U.S. dollars)
|
Annual:
|
|
|
|
|
|
|
2016
|
|
$
|
8.10
|
|
$
|
14.70
|
2015 (beginning April 2, 2015)
|
|
|
9.91
|
|
|
17.50
|
Quarterly:
|
|
|
|
|
|
|
Fourth Quarter 2016
|
|
|
9.00
|
|
|
14.70
|
Third Quarter 2016
|
|
|
8.90
|
|
|
11.70
|
Second Quarter 2016
|
|
|
8.10
|
|
|
11.19
|
First Quarter 2016
|
|
|
8.91
|
|
|
12.00
|
Fourth Quarter 2015
|
|
|
9.91
|
|
|
13.80
|
Third Quarter 2015
|
|
|
11.42
|
|
|
15.85
|
Second Quarter 2015
|
|
|
11.76
|
|
|
17.50
|
Most
Recent Six Months (and Most Recent Partial
Month):
|
|
|
|
|
|
|
December 2016 (through December 30,
2016)
|
|
|
11.25
|
|
|
14.70
|
November 2016
|
|
|
9.00
|
|
|
12.30
|
October 2016
|
|
|
9.35
|
|
|
10.60
|
September 2016
|
|
|
8.90
|
|
|
11.37
|
August 2016
|
|
|
9.50
|
|
|
11.70
|
July 2016
|
|
|
9.39
|
|
|
10.46
|
June 2016
|
|
|
8.48
|
|
|
10.49
|
The closing price of our ordinary shares, as reported on NASDAQ on
December 30, 2016, was $12.65.
3
USE OF
PROCEEDS
Unless otherwise indicated in the applicable prospectus supplement,
we intend to use the net proceeds from the sale of securities
offered by us pursuant to this prospectus for general corporate and
working capital purposes. The timing and amount of our actual
expenditures will be based on many factors, including cash flows
from operations and the anticipated growth of our business. As a
result, unless otherwise indicated in the applicable prospectus
supplement, our management will have broad discretion to allocate
the net proceeds of the offerings.
We will not receive any proceeds from the sale of ordinary shares
by the selling shareholders.
SELLING
SHAREHOLDERS
In addition to the securities that may be offered by us from time
to time, this prospectus relates to the possible offering and sale,
from time to time, of up to 15,127,481 ordinary shares by the
selling shareholders.
The following table sets forth: (1) the number and percentage of
our ordinary shares that each selling shareholder beneficially
owned prior to the offering of the shares; (2) the number of our
ordinary shares offered by each selling shareholder from time to
time; and (3) the number and percentage of our ordinary shares to
be beneficially owned by each selling shareholder assuming the sale
of all of the ordinary shares offered by such selling shareholder.
The applicable percentages of beneficial ownership are based on an
aggregate of 30,989,873 ordinary shares outstanding as of December
31, 2016.
|
|
Shares Beneficially Owned Prior to
Offering
|
|
Number of Shares to be Offered
|
|
Shares Beneficially Owned After
Offering
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fortissimo Capital Fund II (Israel),
L.P.
(1)
|
|
15,037,481
|
|
48.5
|
%
|
|
15,037,481
|
|
48.5
|
%
|
|
—
|
|
—
|
|
Gabi Seligsohn
(2)
|
|
528,914
|
|
1.7
|
%
|
|
90,000
|
|
0.3
|
%
|
|
438,914
|
|
1.4
|
%
|
4
DESCRIPTION OF
SECURITIES
The descriptions of the securities contained in this prospectus,
together with the applicable prospectus supplements, summarize the
material terms and provisions of the various types of securities
that we may offer. We will describe in the applicable prospectus
supplement the particular terms of any securities offered by such
prospectus supplement. If we so indicate in the applicable
prospectus supplement, the terms of the securities may differ from
the terms we have summarized below.
We may sell from time to time, in one or more offerings, ordinary
shares, warrants, rights and/or units comprising any combination of
these securities.
DESCRIPTION OF ORDINARY
SHARES
A description of our ordinary shares can be found under the heading
“Item 1. Description of Registrant’s Securities to be
Registered” in our registration statement on Form 8-A as
filed with the SEC on March 31, 2015 and incorporated by reference
herein.
The following description of our share capital and provisions of
our amended and restated articles of association, or our articles
and the Israeli Companies Law, are summaries and do not purport to
be complete.
General
Our authorized share capital consists of 200,000,000 ordinary
shares, par value NIS 0.01 per share, of which 30,989,873 shares
were issued and outstanding as of December 31, 2016. As of December
31, 2016, no preferred shares were authorized under our articles of
association.
All of our outstanding ordinary shares are validly issued, fully
paid and non-assessable. Our ordinary shares are not redeemable and
do not have any preemptive rights.
Our registration number with the Israeli Registrar of Companies is
51-319542-0. Our purpose as set forth in our articles of
association is to engage in any lawful activity.
Voting Rights
All ordinary shares have identical voting and other rights in all
respects.
Transfer of
Shares
Our fully paid ordinary shares are issued in registered form and
may be freely transferred under our articles, unless the transfer
is restricted or prohibited by another instrument, applicable law
or the rules of a stock exchange on which the shares are listed for
trade. The ownership or voting of our ordinary shares by
non-residents of Israel is not restricted in any way by our
articles or the laws of the State of Israel, except for ownership
by nationals of some countries that are, or have been, in a state
of war with Israel.
Election of
Directors
Our ordinary shares do not have cumulative voting rights for the
election of directors. As a result, the holders of a majority of
the voting power represented at a shareholders meeting have the
power to elect all of our directors, subject to the special
approval requirements for external directors.
Under our articles of association, our board of directors must
consist of not less than five but no more than nine directors,
including two external directors as required by the Israeli
Companies Law. Pursuant to our articles, each of our directors,
other than the external directors, for whom special election
requirements apply under the Israeli Companies Law, will be
appointed by a simple majority vote of holders of our voting
shares, participating and voting at an annual general meeting of
our shareholders. In addition, our directors, other than the
external directors, are divided into three classes that are each
elected at the third annual general meeting of our shareholders, in
a staggered fashion (such that one class is elected each annual
general meeting), and serve on our board of directors unless they
are removed by a vote of 65% of the total voting power of our
shareholders at a general meeting of our shareholders or upon the
occurrence of certain events, in accordance with the Israeli
Companies Law and our articles. In addition,
5
our articles allow our board of directors to fill vacancies on the
board of directors or to appoint new directors up to the maximum
number of directors permitted under our articles. Such directors
serve for a term of office equal to the remaining period of the
term of office of the directors(s) whose office(s) have been
vacated or in the case of new directors, for a term of office
according to the class to which such director was assigned upon
appointment. External directors are elected for an initial term of
three years, may be elected for additional terms of three years
each under certain circumstances, and may be removed from office
pursuant to the terms of the Israeli Companies Law.
Dividend and Liquidation
Rights
We may declare a dividend to be paid to the holders of our ordinary
shares in proportion to their respective shareholdings. Under the
Israeli Companies Law, dividend distributions are determined by the
board of directors and do not require the approval of the
shareholders of a company unless the company’s articles of
association provide otherwise. Our articles do not require
shareholder approval of a dividend distribution and provide that
dividend distributions may be determined by our board of
directors.
Pursuant to the Israeli Companies Law, the distribution amount is
limited to the greater of retained earnings or earnings generated
over the previous two years, according to our then last reviewed or
audited financial statements, provided that the end of the period
to which the financial statements relate is not more than six
months prior to the date of the distribution. If we do not meet
such criteria, we may only distribute dividends with court
approval. In each case, we are only permitted to distribute a
dividend if our board of directors and the court, if applicable,
determines that there is no reasonable concern that payment of the
dividend will prevent us from satisfying our existing and
foreseeable obligations as they become due.
In the event of our liquidation, after satisfaction of liabilities
to creditors, our assets will be distributed to the holders of our
ordinary shares in proportion to their shareholdings. This right,
as well as the right to receive dividends, may be affected by the
grant of preferential dividend or distribution rights to the
holders of a class of shares with preferential rights that may be
authorized in the future.
Exchange
Controls
There are currently no Israeli currency control restrictions on
remittances of dividends on our ordinary shares, proceeds from the
sale of the shares or interest or other payments to non-residents
of Israel, except for shareholders who are subjects of countries
that are, or have been, in a state of war with Israel.
Shareholder
Meetings
Under Israeli law, we are required to hold an annual general
meeting of our shareholders once every calendar year that must be
held no later than 15 months after the date of the previous annual
general meeting. All meetings other than the annual general meeting
of shareholders are referred to in our articles as special general
meetings. Our board of directors may call special general meetings
whenever it sees fit, at such time and place, within or outside of
Israel, as it may determine. In addition, the Israeli Companies Law
provides that our board of directors is required to convene a
special general meeting upon the written request of (i) any two of
our directors or one-quarter of the members of our board of
directors or (ii) one or more shareholders holding, in the
aggregate, either (a) 5% or more of our outstanding issued shares
and 1% of our outstanding voting power or (b) 5% or more of our
outstanding voting power.
Subject to the provisions of the Israeli Companies Law and the
regulations promulgated thereunder, shareholders entitled to
participate and vote at general meetings are the shareholders of
record on a date to be decided by the board of directors, which may
be between four and 40 days prior to the date of the meeting.
Furthermore, the Israeli Companies Law requires that resolutions
regarding the following matters must be passed at a general meeting
of our shareholders:
•
amendments to our articles;
•
appointment or termination of our auditors;
•
appointment of external directors;
•
approval of certain related party transactions;
•
increases or reductions of our authorized share capital;
6
•
a merger; and
•
the exercise of our board of director’s powers by a general
meeting, if our board of directors is unable to exercise its powers
and the exercise of any of its powers is required for our proper
management.
The Israeli Companies Law and our articles require that notice of
any annual general meeting or special general meeting be provided
to shareholders at least 21 days prior to the meeting and if the
agenda of the meeting includes, among other matters, the
appointment or removal of directors, the approval of transactions
with office holders or interested or related parties, approval of
the company’s general manager to serve as the chairman of its
board of directors or an approval of a merger, notice must be
provided at least 35 days prior to the meeting.
The Israeli Companies Law allows one or more of our shareholders
holding at least 1% of the voting power of a company to request the
inclusion of an additional agenda item for an upcoming shareholders
meeting, assuming that it is appropriate for debate and action at a
shareholders meeting. Under recently adopted regulations, such a
shareholder request must be submitted within three or, for certain
requested agenda items, seven days following our publication of
notice of the meeting. If the requested agenda item includes the
appointment of director(s), the requesting shareholder must comply
with particular procedural and documentary requirements. If our
board of directors determines that the requested agenda item is
appropriate for consideration by our shareholders, we must publish
an updated notice that includes such item within seven days
following the deadline for submission of agenda items by our
shareholders. The publication of the updated notice of the
shareholders meeting does not impact the record date for the
meeting. In lieu of this process, we may opt to provide pre-notice
of our shareholders meeting at least 21 days prior to publishing
official notice of the meeting. In that case, our 1% shareholders
are given a 14-day period in which to submit proposed agenda items,
after which we must publish notice of the meeting that includes any
accepted shareholder proposals.
Under the Israeli Companies Law and under our articles,
shareholders are not permitted to take action by way of written
consent in lieu of a meeting.
Voting Rights
Quorum requirements
Pursuant to our articles, holders of our ordinary shares have one
vote for each ordinary share held on all matters submitted to a
vote before the shareholders at a general meeting. As a foreign
private issuer, the quorum required for our general meetings of
shareholders consists of at least two shareholders present in
person, by proxy or written ballot who hold or represent between
them at least 25% of the total outstanding voting rights. A meeting
adjourned for lack of a quorum is generally adjourned to the same
day in the following week at the same time and place or to a later
time or date if so specified in the notice of the meeting. At the
reconvened meeting, any number of shareholders present in person or
by proxy shall constitute a quorum, unless a meeting was called
pursuant to a request by our shareholders, in which case the quorum
required is one or more shareholders, present in person or by proxy
and holding the number of shares required to call the meeting.
Vote Requirements
Our articles provide that all resolutions of our shareholders
require a simple majority vote, unless otherwise required by the
Israeli Companies Law or by our articles. Under the Israeli
Companies Law, each of (i) the approval of an extraordinary
transaction with a controlling shareholder, (ii) the terms of
employment or other engagement of the controlling shareholder of
the company or such controlling shareholder’s relative (even
if such terms are not extraordinary) and (iii) approval of certain
compensation-related matters requires the approval of special
majorities by shareholders. Under our articles, the alteration of
the rights, privileges, preferences or obligations of any class of
our shares requires a simple majority of the class so affected (or
such other percentage of the relevant class that may be set forth
in the governing documents relevant to such class), in addition to
the ordinary majority vote of all classes of shares voting together
as a single class at a shareholder meeting. Our articles also
require that the removal of any director from office (other than
our external directors) or the amendment of the provisions of our
articles relating to our staggered board requires the vote of 65%
of the voting power of our shareholders.
Another exception to the simple majority vote requirement is a
resolution for the voluntary winding up, or an approval of a scheme
of arrangement or reorganization, of the company pursuant to
Section 350 of the Israeli Companies Law, which requires the
approval of holders of 75% of the voting rights represented at the
meeting, in person or by proxy and voting on the resolution.
7
Access to Corporate
Records
Under the Israeli Companies Law, shareholders are provided access
to: minutes of our general meetings; our shareholders register and
principal shareholders register, articles of association and annual
audited financial statements; and any document that we are required
by law to file publicly with the Israeli Registrar of Companies or
the Israel Securities Authority. These documents are publicly
available and may be found and inspected at the Israeli Registrar
of Companies. In addition, shareholders may request to be provided
with any document related to an action or transaction requiring
shareholder approval under the related party transaction provisions
of the Israeli Companies Law. We may deny this request if we
believe it has not been made in good faith or if such denial is
necessary to protect our interest or protect a trade secret or
patent.
Modification of Class
Rights
Under the Israeli Companies Law and our articles, the rights
attached to any class of share, such as voting, liquidation and
dividend rights, may be amended by adoption of a resolution by the
holders of a majority of the shares of that class present at a
separate class meeting, or otherwise in accordance with the rights
attached to such class of shares, as set forth in our articles.
Registration
Rights
We are party to an amended and restated investors’ rights
agreement, dated March 18, 2015, or the Investors’ Rights
Agreement, with certain of our shareholders.
Demand Registration
Rights
At any time, Fortissimo Capital Fund II (Israel), L.P., or
Fortissimo Capital, which owns 48.5% of our outstanding shares as
of the date of this prospectus, may request that we file a
registration statement. Upon receipt of such registration request,
we are obligated to use our reasonable commercial efforts to file
the registration statement as soon as possible. We have the right
not to effect such filing during the period that is within 90 days
after we have filed another such registration statement or
completed certain other registered offerings or if we intend to
file a registration statement for our own account within 90 days.
We are not obligated to file more than two registration statements
on Form F-1 pursuant to these demand provisions. Any other holder
of registrable securities has the right to include its registrable
securities in an underwritten registration pursuant to a demand
registration.
Piggyback
Registration Rights
If we propose to offer any of our ordinary shares in a public
offering, the holders of registrable securities are entitled to at
least 15 days’ notice prior to the filing of the relevant
registration statement or prospectus and may include all or a
portion of their shares in the offering subject to becoming party
to a customary underwriting agreement.
Shelf Registration
Rights
If we become eligible to register any of our shares on Form F-3,
Fortissimo Capital may request that we file a shelf registration
statement for an offering to be made on a delayed or continuous
basis pursuant to Rule 415 under the Securities Act registering the
resale from time to time by Fortissimo Capital of registrable
shares. In such event, we are required to give written notice of
such request to all holders of registrable securities, who may
elect to join in such request. Subsequently, upon notice from
Fortissimo Capital or from the holders of a majority of the
outstanding registrable securities, we are required to effect up to
two underwritten takedowns from such shelf registration statement
within any 12-month period. We are not required to effect any
underwritten offering with 90 days of another underwritten
offering.
Other
Provisions
We have the right not to effect any filing or offering if, in the
good faith judgment of our board of directors, it would be
seriously detrimental to us or our stockholders for such filing or
offering to be effected. We may exercise this right twice in any
12-month period for an aggregate of up to 90 days during such
period.
8
We will pay all registration expenses (other than underwriting
discounts and selling commissions) and the reasonable fees and
expenses of a single counsel for the selling shareholders, related
to any demand, piggyback or shelf registration.
The rights of any shareholder who is a party to the
Investors’ Rights Agreement to request registration or
inclusion of registrable securities in any registration pursuant
hereunder shall terminate when such shareholder holds less than 3%
of our outstanding shares and such shareholder’s registrable
securities could be sold without volume restrictions, manner of
sale restrictions or notice requirements pursuant to Rule 144 under
the Securities Act.
Acquisitions under
Israeli Law
Full Tender
Offer
A person wishing to acquire shares of an Israeli public company and
who would as a result hold over 90% of the target company’s
issued and outstanding share capital is required by the Israeli
Companies Law to make a tender offer to all of the company’s
shareholders for the purchase of all of the issued and outstanding
shares of the company. A person wishing to acquire shares of a
public Israeli company and who would as a result hold over 90% of
the issued and outstanding share capital of a certain class of
shares is required to make a tender offer to all of the
shareholders who hold shares of the relevant class for the purchase
of all of the issued and outstanding shares of that class. If the
shareholders who do not accept the offer hold less than 5% of the
issued and outstanding share capital of the company or of the
applicable class, and more than half of the shareholders who do not
have a personal interest in the offer accept the offer, all of the
shares that the acquirer offered to purchase will be transferred to
the acquirer by operation of law. However, a tender offer will also
be accepted if the shareholders who do not accept the offer hold
less than 2% of the issued and outstanding share capital of the
company or of the applicable class of shares.
Upon a successful completion of such a full tender offer, any
shareholder that was an offeree in such tender offer, whether such
shareholder accepted the tender offer or not, may, within six
months from the date of acceptance of the tender offer, petition an
Israeli court to determine whether the tender offer was for less
than fair value and that the fair value should be paid as
determined by the court. However, under certain conditions, the
offeror may include in the terms of the tender offer that an
offeree who accepted the offer will not be entitled to petition the
Israeli court as described above.
If a tender offer is not accepted in accordance with the
requirements set forth above, the acquirer may not acquire shares
from shareholders who accepted the tender offer that will increase
its holdings to more than 90% of the company’s issued and
outstanding share capital or of the applicable class.
Special Tender
Offer
The Israeli Companies Law provides that an acquisition of shares of
an Israeli public company must be made by means of a special tender
offer if as a result of the acquisition the purchaser would become
a holder of 25% or more of the voting rights in the company. This
requirement does not apply if there is already another holder of at
least 25% of the voting rights in the company. Similarly, the
Israeli Companies Law provides that an acquisition of shares in a
public company must be made by means of a special tender offer if
as a result of the acquisition the purchaser would become a holder
of more than 45% of the voting rights in the company, if there is
no other shareholder of the company who holds more than 45% of the
voting rights in the company, subject to certain exceptions.
A special tender offer must be extended to all shareholders of a
company but the offeror is not required to purchase shares
representing more than 5% of the voting power attached to the
company’s outstanding shares, regardless of how many shares
are tendered by shareholders. A special tender offer may be
consummated only if (i) the offeror acquired shares representing at
least 5% of the voting power in the company and (ii) the number of
shares tendered by shareholders who accept the offer exceeds the
number of shares held by shareholders who object to the offer
(excluding the purchaser, controlling shareholders, holders of 25%
or more of the voting rights in the company or any person having a
personal interest in the acceptance of the tender offer, including
their relatives and companies under their control). If a special
tender offer is accepted, the purchaser or any person or entity
controlling it or under common control with the purchaser or such
controlling person or entity may not make a subsequent tender offer
for the purchase of shares of the target company and may not enter
into a merger with the target company for a period of one year from
the date of the offer, unless the purchaser or such person or
entity undertook to effect such an offer or merger in the initial
special tender offer.
9
Merger
The Israeli Companies Law permits merger transactions if approved
by each party’s board of directors and, unless certain
requirements described under the Israeli Companies Law are met, by
a majority vote of each party’s shareholders. In the case of
the target company, approval of the merger further requires a
majority vote of each class of its shares.
For purposes of the shareholder vote, unless a court rules
otherwise, the merger will not be deemed approved if a majority of
the votes of shares represented at the meeting of shareholders that
are held by parties other than the other party to the merger, or by
any person (or group of persons acting in concert) who holds (or
hold, as the case may be) 25% or more of the voting rights or the
right to appoint 25% or more of the directors of the other party,
vote against the merger. If, however, the merger involves a merger
with a company’s own controlling shareholder or if the
controlling shareholder has a personal interest in the merger, then
the merger is instead subject to the same Special Majority approval
that governs all extraordinary transactions with controlling
shareholders.
If the transaction would have been approved by the shareholders of
a merging company but for the separate approval of each class or
the exclusion of the votes of certain shareholders as provided
above, a court may still approve the merger upon the petition of
holders of at least 25% of the voting rights of a company. For such
petition to be granted, the court must find that the merger is fair
and reasonable, taking into account the respective values assigned
to each of the parties to the merger and the consideration offered
to the shareholders of the target company.
Upon the request of a creditor of either party to the proposed
merger, the court may delay or prevent the merger if it concludes
that there exists a reasonable concern that, as a result of the
merger, the surviving company will be unable to satisfy the
obligations of the merging entities, and may further give
instructions to secure the rights of creditors.
In addition, a merger may not be consummated unless at least 50
days have passed from the date on which a proposal for approval of
the merger is filed with the Israeli Registrar of Companies and at
least 30 days have passed from the date on which the merger was
approved by the shareholders of each party.
Anti-takeover Measures
under Israeli Law
The Israeli Companies Law allows us to create and issue shares
having rights different from those attached to our ordinary shares,
including shares providing certain preferred rights with respect to
voting, distributions or other matters and shares having preemptive
rights. No preferred shares are authorized under our articles. In
the future, if we do authorize, create and issue a specific class
of preferred shares, such class of shares, depending on the
specific rights that may be attached to it, may have the ability to
frustrate or prevent a takeover or otherwise prevent our
shareholders from realizing a potential premium over the market
value of their ordinary shares. The authorization and designation
of a class of preferred shares will require an amendment to our
articles, which requires the prior approval of the holders of a
majority of the voting power attaching to our issued and
outstanding shares at a general meeting. The convening of the
meeting, the shareholders entitled to participate and the majority
vote required to be obtained at such a meeting will be subject to
the requirements set forth in the Israeli Companies Law.
Borrowing
Powers
Pursuant to the Israeli Companies Law and our articles, our board
of directors may exercise all powers and take all actions that are
not required under law or under our articles to be exercised or
taken by our shareholders, including the power to borrow money for
company purposes.
Transfer Agent and
Registrar
The transfer agent and registrar for our ordinary shares is
American Stock Transfer & Trust Company, New York, New
York.
Listing
Our ordinary shares are listed on the NASDAQ Global Select Market
under the symbol “KRNT.”
10
DESCRIPTION OF
WARRANTS
We may issue warrants to purchase our ordinary shares in one or
more series together with other securities or separately, as
described in the applicable prospectus supplement. Each series of
warrants will be issued under a separate warrant agreement to be
entered into between us and a warrant agent. The warrant agent will
act solely as our agent and will not assume any obligation or
relationship of agency for or with holders or beneficial owners of
warrants. The terms of any warrants to be issued and a description
of the material provisions of the applicable warrant agreement will
be set forth in the applicable prospectus supplement.
The applicable prospectus supplement will describe the following
terms of any warrants in respect of which this prospectus is being
delivered:
•
the title of such warrants;
•
the aggregate number of such warrants;
•
the price or prices at which such warrants will be issued;
•
the price at which, and the currency or currencies in which, the
securities upon exercise of such warrants may be purchased;
•
the designation, amount and terms of the securities purchasable
upon exercise of such warrants;
•
the date on which the right to exercise such warrants shall
commence and the date on which such right shall expire;
•
if applicable, the minimum or maximum amount of such warrants which
may be exercised at any one time;
•
if applicable, the designation and terms of the securities with
which such warrants are issued and the number of such warrants
issued with each such security;
•
if applicable, the date on and after which such warrants and the
related securities will be separately transferable;
•
information with respect to book-entry procedures, if any;
•
if applicable, any material Israeli and U.S. federal income tax
considerations;
•
the anti-dilution provisions of such warrants, if any; and
•
any other terms of such warrants, including terms, procedures and
limitations relating to the exchange and exercise of such
warrants.
11
DESCRIPTION OF
RIGHTS
General
We may issue subscription rights to purchase our ordinary shares.
Rights may be issued independently or together with any other
offered security and may or may not be transferable by the person
purchasing or receiving the rights. In connection with any rights
offering to our shareholders, we may enter into a standby
underwriting arrangement with one or more underwriters pursuant to
which such underwriters will purchase any offered securities
remaining unsubscribed for after such rights offering. We may also
appoint a rights agent that may act solely as our agent in
connection with the rights that are sold. Any such agent will not
assume any obligation or relationship of agency or trust with any
of the holders of the rights. In connection with a rights offering
to our shareholders, we will distribute certificates evidencing the
rights and a prospectus supplement to our shareholders on the
record date that we set for receiving rights in such rights
offering.
The applicable prospectus supplement will describe the following
terms of rights in respect of which this prospectus is being
delivered:
•
the title of such rights;
•
the exercise price for such rights;
•
the number of such rights issued with respect to each ordinary
share;
•
the extent to which such rights are transferable;
•
if applicable, a discussion of the material Israeli and U.S. income
tax considerations applicable to the issuance or exercise of such
rights;
•
the date on which the right to exercise such rights shall commence,
and the date on which such rights shall expire (subject to any
extension);
•
the extent to which such rights include an over-subscription
privilege with respect to unsubscribed securities;
•
if applicable, the material terms of any standby underwriting or
other purchase arrangement, or any agency agreement, that we may
enter into in connection with the rights offering; and
•
any other terms of such rights, including terms, procedures and
limitations relating to the exchange and exercise of such
rights.
Exercise of
Rights
Each right will entitle the holder of the right to purchase for
cash such number of ordinary shares at such exercise price as shall
in each case be set forth in, or be determinable as set forth in,
the prospectus supplement relating to the rights offered thereby.
Rights may be exercised at any time up to the close of business on
the expiration date for such rights set forth in the prospectus
supplement. After the close of business on the expiration date, all
unexercised rights will become void.
Rights may be exercised as set forth in the prospectus supplement
relating to the rights offered thereby. 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 forward, as soon as
practicable, the securities purchasable upon such exercise. We may
determine to offer any unsubscribed offered 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 underwriting arrangements, as set forth in the
applicable prospectus supplement.
12
DESCRIPTION OF DEBT
SECURITIES
We may issue debt securities together with other securities or
separately, as described in the applicable prospectus supplement,
under an indenture to be entered into between Kornit Digital Ltd.
and the trustee identified in the applicable prospectus supplement.
The terms of the debt securities will include those stated in the
indenture and those made part of the indenture by reference to the
Trust Indenture Act of 1939, as in effect on the date of the
indenture. The indenture will be subject to and governed by the
terms of the Trust Indenture Act of 1939.
We may issue the debt securities in one or more series with the
same or various maturities, at par, at a premium, or at a discount.
We will describe the particular terms of each series of debt
securities in a prospectus supplement relating to that series,
which we will file with the SEC.
The prospectus supplement will set forth, to the extent required,
the following terms of the debt securities in respect of which the
prospectus supplement is delivered:
•
the title of the series;
•
the aggregate principal amount;
•
the issue price or prices, expressed as a percentage of the
aggregate principal amount of the debt securities;
•
any limit on the aggregate principal amount;
•
the date or dates on which principal is payable;
•
the interest rate or rates (which may be fixed or variable) or, if
applicable, the method used to determine such rate or rates;
•
the date or dates from which interest, if any, will be payable and
any regular record date for the interest payable;
•
the terms and conditions upon which we may, or the holders may
require us to, redeem or repurchase the debt securities;
•
the denominations in which such debt securities may be issuable, if
other than denomination of $1,000, or any integral multiple of that
number;
•
whether the debt securities are to be issuable in the form of
certificated debt securities or global debt securities;
•
the portion of principal amount that will be payable upon
declaration of acceleration of the maturity date if other than the
principal amount of the debt securities;
•
the currency of denomination;
•
the designation of the currency, currencies or currency units in
which payment of principal and, if applicable, premium and
interest, will be made;
•
if payments of principal and, if applicable, premium or interest,
on the debt securities are to be made in one or more currencies or
currency units other than the currency of denominations, the manner
in which exchange rate with respect to such payments will be
determined;
•
if amounts of principal and, if applicable, premium and interest
may be determined by reference to an index based on a currency or
currencies, or by reference to a commodity, commodity index, stock
exchange index, or financial index, then the manner in which such
amounts will be determined;
•
the provisions, if any, relating to any collateral provided for
such debt securities;
•
any events of default;
•
the terms and conditions, if any, for conversion into or exchange
for ordinary shares;
13
•
any depositaries, interest rate calculation agents, exchange rate
calculation agents, or other agents; and
•
the terms and conditions, if any, upon which the debt securities
shall be subordinated in right of payment to other indebtedness of
Kornit Digital Ltd.
One or more debt securities may be sold at a substantial discount
below their stated principal amount. We may also issue debt
securities in bearer form, with or without coupons. If we issue
discount debt securities or debt securities in bearer form, we will
describe material U.S. federal income tax considerations and other
material special considerations which apply to these debt
securities in the applicable prospectus supplement.
We may issue debt securities denominated in or payable in a foreign
currency or currencies or a foreign currency unit or units. If we
do, we will describe the restrictions, elections, and general tax
considerations relating to the debt securities and the foreign
currency or currencies or foreign currency unit or units in the
applicable prospectus supplement.
The debt securities of a series may be issued in whole or in part
in the form of one or more global securities that will be deposited
with, or on behalf of, a depositary identified in the prospectus
supplement. Global securities will be issued in registered form and
in either temporary or definitive form. Unless and until it is
exchanged in whole or in part for individual debt securities, a
global security may not be transferred except as a whole by the
depositary for such global security to a nominee of such depositary
or by a nominee of such depositary to such depositary or another
nominee of such depositary or by such depositary or any such
nominee to a successor of such depositary or a nominee of such
successor. The specific terms of the depositary arrangement with
respect to any debt securities of a series and the rights of and
limitations upon owners of beneficial interests in a global
security will be described in the applicable prospectus
supplement.
14
DESCRIPTION OF
UNITS
As specified in the applicable prospectus supplement, we may issue
units consisting of our ordinary shares, warrants, rights, debt
securities and/or any combination of such securities. The
applicable prospectus supplement will describe:
•
the terms of the units and of the ordinary shares, warrants, rights
and/or debt securities comprising the units, including whether and
under what circumstances the securities comprising the units may be
traded separately;
•
a description of the terms of any unit agreement governing the
units or any arrangement with an agent that may act on our behalf
in connection with the unit offering; and
•
a description of the provisions for the payment, settlement,
transfer or exchange of the units.
15
PLAN OF
DISTRIBUTION
We or the selling shareholders may sell the securities included in
this prospectus from time to time in one or more transactions,
including without limitation:
•
through agents;
•
to or through one or more underwriters on a firm commitment or
agency basis;
•
through put or call option transactions relating to the
securities;
•
through broker-dealers (acting as agent or principal);
•
directly to purchasers, through a specific bidding or auction
process, on a negotiated basis or otherwise;
•
through any other method permitted pursuant to applicable law;
or
•
through a combination of any such methods of sale.
At any time a particular offer of the securities covered by this
prospectus is made, a revised prospectus or prospectus supplement,
if required, will be distributed which will set forth the aggregate
amount of securities covered by this prospectus being offered and
the terms of the offering, including the name or names of any
underwriters, dealers, brokers or agents, any discounts,
commissions, concessions and other items constituting compensation
from us and any discounts, commissions or concessions allowed or
reallowed or paid to dealers. Such prospectus supplement, and, if
necessary, a post-effective amendment to the registration statement
of which this prospectus is a part, will be filed with the SEC to
reflect the disclosure of additional information with respect to
the distribution of the securities covered by this prospectus. In
order to comply with the securities laws of certain jurisdictions,
if applicable, the securities sold under this prospectus may only
be sold through registered or licensed brokers or dealers. In
addition, in some states the securities may not be sold unless they
have been registered or qualified for sale in the applicable state
or an exemption from registration or qualification requirements is
available and is complied with.
Any public offering price and any discounts or concessions allowed
or reallowed or paid to dealers may be changed from time to
time.
The distribution of securities may be effected from time to time in
one or more transactions, including block transactions and
transactions on NASDAQ or any other organized market where the
securities may be traded. The securities may be sold at a fixed
price or prices, which may be changed, or at market prices
prevailing at the time of sale, at prices relating to the
prevailing market prices or at negotiated prices. The consideration
may be cash or another form negotiated by the parties. Agents,
underwriters or broker-dealers may be paid compensation for
offering and selling the securities. That compensation may be in
the form of discounts, concessions or commissions to be received
from us or from the purchasers of the securities. Any dealers and
agents participating in the distribution of the securities may be
deemed to be underwriters, and compensation received by them on
resale of the securities may be deemed to be underwriting
discounts. If any such dealers or agents were deemed to be
underwriters, they may be subject to statutory liabilities under
the Securities Act.
Agents may from time to time solicit offers to purchase the
securities. If required, we will name in the applicable prospectus
supplement any agent involved in the offer or sale of the
securities and set forth any compensation payable to the agent.
Unless otherwise indicated in the prospectus supplement, any agent
will be acting on a best efforts basis for the period of its
appointment. Any agent selling the securities covered by this
prospectus may be deemed to be an underwriter, as that term is
defined in the Securities Act, of the securities.
If underwriters are used in a sale, securities will be acquired by
the underwriters for their own account and may be resold from time
to time in one or more transactions, including negotiated
transactions, at a fixed public offering price or at varying prices
determined at the time of sale, or under delayed delivery contracts
or other contractual commitments. Securities may be offered to the
public either through underwriting syndicates represented by one or
more managing underwriters or directly by one or more firms acting
as underwriters. If an underwriter or underwriters are used in the
sale of securities, an underwriting agreement will be executed with
the underwriter or underwriters, as well as any other underwriter
or underwriters, with respect to a particular underwritten offering
of securities, and will set forth the terms of the transactions,
including compensation of the underwriters and dealers and the
public offering price, if applicable. The prospectus and prospectus
supplement will be used by the underwriters to resell the
securities.
16
If a dealer is used in the sale of the securities, we, the selling
shareholders or an underwriter will sell the securities to the
dealer, as principal. The dealer may then resell the securities to
the public at varying prices to be determined by the dealer at the
time of resale. To the extent required, we will set forth in the
prospectus supplement the name of the dealer and the terms of the
transactions.
We or the selling shareholders may directly solicit offers to
purchase the securities and may make sales of securities directly
to institutional investors or others. These persons may be deemed
to be underwriters within the meaning of the Securities Act with
respect to any resale of the securities. To the extent required,
the prospectus supplement will describe the terms of any such
sales, including the terms of any bidding or auction process, if
used.
Agents, underwriters and dealers may be entitled under agreements
which may be entered into with us or the selling shareholders to
indemnification by us against specified liabilities, including
liabilities incurred under the Securities Act, or to contribution
by us or the selling shareholders to payments they may be required
to make in respect of such liabilities. If required, the prospectus
supplement will describe the terms and conditions of the
indemnification or contribution. Some of the agents, underwriters
or dealers, or their affiliates may be customers of, engage in
transactions with or perform services for us or our
subsidiaries.
Any person participating in the distribution of securities
registered under the registration statement that includes this
prospectus will be subject to applicable provisions of the Exchange
Act, and the applicable SEC rules and regulations, including, among
others, Regulation M, which may limit the timing of purchases and
sales of any of our securities by that person. Furthermore,
Regulation M may restrict the ability of any person engaged in the
distribution of our securities to engage in market-making
activities with respect to our securities. These restrictions may
affect the marketability of our securities and the ability of any
person or entity to engage in market-making activities with respect
to our securities.
Certain persons participating in an offering may engage in
over-allotment, stabilizing transactions, short-covering
transactions and penalty bids that stabilize, maintain or otherwise
affect the price of the offered securities. These activities may
maintain the price of the offered securities at levels above those
that might otherwise prevail in the open market, including by
entering stabilizing bids, effecting syndicate covering
transactions or imposing penalty bids, each of which is described
below.
•
A stabilizing bid means the placing of any bid, or the effecting of
any purchase, for the purpose of pegging, fixing or maintaining the
price of a security.
•
A syndicate covering transaction means the placing of any bid on
behalf of the underwriting syndicate or the effecting of any
purchase to reduce a short position created in connection with the
offering.
•
A penalty bid means an arrangement that permits the managing
underwriter to reclaim a selling concession from a syndicate member
in connection with the offering when offered securities originally
sold by the syndicate member are purchased in syndicate covering
transactions.
These transactions may be effected on an exchange, if the
securities are listed on that exchange, or in the over-the-counter
market or otherwise.
In the event that any underwriter or agent acts as principal, or
broker-dealer acts as underwriter, it may engage in certain
transactions that stabilize, maintain or otherwise affect the price
of our securities. We will describe any such activities in the
prospectus supplement relating to the transaction.
If so indicated in the applicable prospectus supplement, we will
authorize agents, underwriters or dealers to solicit offers from
certain types of institutions to purchase offered securities from
us at the public offering price set forth in such prospectus
supplement pursuant to delayed delivery contracts providing for
payment and delivery on a specified date in the future. Such
contracts will be subject only to those conditions set forth in the
prospectus supplement and the prospectus supplement will set forth
the commission payable for solicitation of such contracts.
In addition, ordinary shares may be issued upon conversion of or in
exchange for debt securities or other securities.
Any underwriters to whom offered securities are sold for public
offering and sale may make a market in such offered securities, but
such underwriters will not be obligated to do so and may
discontinue any market making at any
17
time without notice. The offered securities may or may not be
listed on a national securities exchange. No assurance can be given
that there will be a market for the offered securities.
Any securities that qualify for sale pursuant to Rule 144 or
Regulation S under the Securities Act may be sold under Rule 144 or
Regulation S rather than pursuant to this prospectus.
To the extent that we or the selling shareholders make sales to or
through one or more underwriters or agents in at-the-market
offerings, we or the selling shareholders will do so pursuant to
the terms of a distribution agreement between us or the selling
shareholders and the underwriters or agents. If we engage in
at-the-market sales pursuant to a distribution agreement, we or the
selling shareholders will sell our ordinary shares to or through
one or more underwriters or agents, which may act on an agency
basis or on a principal basis. During the term of any such
agreement, we or the selling shareholders may sell ordinary shares
on a daily basis in exchange transactions or otherwise as we agree
with the underwriters or agents. The distribution agreement will
provide that any ordinary shares sold will be sold at prices
related to the then prevailing market prices for our ordinary
shares. Therefore, exact figures regarding proceeds that will be
raised or commissions to be paid cannot be determined at this time
and will be described in a prospectus supplement. Pursuant to the
terms of the distribution agreement, we or the selling shareholders
also may agree to sell, and the relevant underwriters or agents may
agree to solicit offers to purchase, blocks of our ordinary shares
or warrants. The terms of each such distribution agreement will be
set forth in more detail in a prospectus supplement to this
prospectus.
Offers to purchase the securities offered by this prospectus may be
solicited, and sales of the securities may be made, by us or the
selling shareholders directly to institutional investors or others,
who may be deemed to be underwriters within the meaning of the
Securities Act with respect to any re-sales of the securities. The
terms of any offer made in this manner will be included in the
prospectus supplement relating to the offer.
In connection with offerings made through underwriters or agents,
we or the selling shareholders may enter into agreements with such
underwriters or agents pursuant to which we receive our outstanding
securities in consideration for the securities being offered to the
public for cash. In connection with these arrangements, the
underwriters or agents may also sell securities covered by this
prospectus to hedge their positions in these outstanding
securities, including in short sale transactions. If so, the
underwriters or agents may use the securities received from us or
the selling shareholders under these arrangements to close out any
related open borrowings of securities.
We or the selling shareholders may enter into derivative
transactions with third parties or sell securities not covered by
this prospectus to third parties in privately negotiated
transactions. If the applicable prospectus supplement indicates, in
connection with those derivatives, such third parties (or
affiliates of such third parties) may sell securities covered by
this prospectus and the applicable prospectus supplement, including
in short sale transactions. If so, such third parties (or
affiliates of such third parties) may use securities pledged by us
or the selling shareholders or borrowed from us, the selling
shareholders or others to settle those sales or to close out any
related open borrowings of shares, and may use securities received
from us or the selling shareholders in settlement of those
derivatives to close out any related open borrowings of shares. The
third parties (or affiliates of such third parties) in such sale
transactions will be underwriters and, if not identified in this
prospectus, will be identified in the applicable prospectus
supplement (or a post-effective amendment).
We or the selling shareholders may loan or pledge securities to a
financial institution or other third party that in turn may sell
the securities using this prospectus. Such financial institution or
third party may transfer its short position to investors in our
securities or in connection with a simultaneous offering of other
securities offered by this prospectus or in connection with a
simultaneous offering of other securities offered by this
prospectus.
18
EXPENSES ASSOCIATED WITH
THE REGISTRATION
The following is a statement of expenses in connection with the
distribution of the securities registered. All amounts shown are
estimates except the SEC registration fee and the FINRA filing fee.
The estimates do not include expenses related to offerings of
particular securities. Each prospectus supplement describing an
offering of securities will reflect the estimated expenses related
to the offering of securities under that prospectus supplement.
SEC registration fee
|
|
$
|
34,085
|
FINRA filing fee
|
|
|
44,613
|
Legal fees and expenses
|
|
|
25,000
|
Accountants’ fees and expenses
|
|
|
15,000
|
Printing fees
|
|
|
500
|
Miscellaneous
|
|
|
802
|
TOTAL
|
|
$
|
120,000
|
19
LEGAL MATTERS
Certain legal matters with respect to Israeli law and with respect
to the validity of the offered securities under Israeli law will be
passed upon for us by Meitar Liquornik Geva Leshem Tal, Ramat Gan,
Israel. Certain legal matters with respect to New York law and the
validity of the debt securities under New York law will be passed
upon for us by White & Case LLP, New York, New York.
EXPERTS
The consolidated financial statements of Kornit Digital Ltd.
incorporated by reference in this prospectus by reference to Kornit
Digital Ltd.’s annual report on Form 20-F for the year ended
December 31, 2015 have been audited by Kost Forer Gabbay &
Kasierer, a member of Ernst & Young Global, an independent
registered public accounting firm, as set forth in their report
therein, included therein and incorporated herein by reference.
Such consolidated financial statements are incorporated by
reference in reliance upon such report given on the authority of
such firm as experts in accounting and auditing.
WHERE YOU CAN FIND MORE
INFORMATION
We have filed with the SEC a registration statement on Form F-3
under the Securities Act, with respect to the securities offered by
this prospectus. This prospectus and any accompanying prospectus
supplement do not contain all the information contained in the
registration statement, including its exhibits and schedules. You
should refer to the registration statement, including the exhibits
and schedules, for further information about us and the securities
we may offer. Statements we make in this prospectus and any
accompanying prospectus supplement about certain contracts or other
documents are not necessarily complete. When we make such
statements, we refer you to the copies of the contracts or
documents that are filed as exhibits to the registration statement,
because those statements are qualified in all respects by reference
to those exhibits. The registration statement, including exhibits
and schedules, is on file at the office of the SEC and may be
inspected without charge.
We are subject to the information reporting requirements of the
Exchange Act. Under the Exchange Act, we are required to file
annual and special reports and other information with the SEC. As a
foreign private issuer, we are exempt from the rules under the
Exchange Act prescribing the furnishing and content of proxy
statements and our officers, directors and principal shareholders
are exempt from the reporting and short-swing profit recovery
provisions contained in Section 16 of the Exchange Act. In
addition, we are not required under the Exchange Act to file
annual, quarterly and current reports and financial statements as
frequently or as promptly as U.S. companies whose securities are
registered under the Exchange Act. However, we file with the SEC,
within 120 days after the end of each fiscal year, or such
applicable time as required by the SEC, an annual report on Form
20-F containing financial statements audited by an independent
registered public accounting firm, and we submit to the SEC, on
Form 6-K, unaudited quarterly financial information.
You may read and copy the registration statement, including the
related exhibits and schedules, as well as any document we file
with the SEC without charge at the Public Reference Room maintained
by the SEC at 100 F Street, N.E., Washington, D.C. 20549. You may
also obtain copies of this information by mail from the Public
Reference Section of the SEC at prescribed rates. Further
information on the operation of the SEC’s Public Reference
Room in Washington, D.C. can be obtained by calling the SEC at
1-800-SEC-0330. The SEC also maintains a website that contains
reports, proxy and information statements and other information
about issuers, such as us, who file electronically with the SEC.
The address of that website is
http://www.sec.gov
.
We maintain a corporate website at
www.kornit.com.
Information contained on, or that can be accessed through, our
website does not constitute a part of this prospectus. We have
included our website address in this prospectus solely as an
inactive textual reference.
20
INCORPORATION OF CERTAIN
DOCUMENTS BY REFERENCE
The SEC allows us to “incorporate by reference” into
this prospectus the information in documents we file with it. This
means that we can disclose important information to you by
referring you another document filed by us with the SEC. Each
document incorporated by reference is current only as of the date
of such document, and the incorporation by reference of such
documents shall not create any implication that there has been no
change in our affairs since the date thereof or that the
information contained therein is current as of any time subsequent
to its date. The information incorporated by reference is
considered to be a part of this prospectus and should be read with
the same care. When we update the information contained in
documents that have been incorporated by reference by making future
filings with the SEC, the information incorporated by reference in
this prospectus is considered to be automatically updated and
superseded. In other words, in the case of a conflict or
inconsistency between information contained in this prospectus and
information incorporated by reference into this prospectus, you
should rely on the information contained in the document that was
filed later.
We incorporate by reference into this prospectus documents listed
below and any future filings made with the SEC under Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act, and, to the extent
specifically designated therein, reports on Form 6-K we furnish to
the SEC on or after the date on which this registration statement
is first filed with the SEC and until the termination or completion
of that offering under this prospectus:
•
our annual report on Form 20-F for the fiscal year ended December
31, 2015; and
•
our reports of foreign private issuer on Form 6-K furnished to the
SEC on:
•
May 5, 2016 (only the GAAP financial statements with respect to the
quarter ended March 31, 2016 attached to the press release annexed
as Exhibit 99.1 thereto);
•
July 14, 2016;
•
August 3, 2016 (only the GAAP financial statements with respect to
the quarter and six months ended June 30, 2016 attached to the
press release annexed as Exhibit 99.1 thereto);
•
November 9, 2016 (only the GAAP financial statements with respect
to the quarter and nine months ended September 30, 2016 attached to
the press release annexed as Exhibit 99.1 thereto); and
•
January 3, 2017 (including our condensed interim consolidated
financial statements as of, and for the nine months ended,
September 30, 2016, and our management’s Operating and
Financial Review and Prospects for that nine month period appended
as Exhibits 99.1 and 99.2 thereto, respectively).
•
the description of our ordinary shares contained under the heading
“Item 1. Description of Registrant’s Securities to be
Registered” in our registration statement on Form 8-A, as
filed with the SEC on March 31, 2015, including any subsequent
amendment or any report filed for the purpose of updating such
description.
Any statement contained herein or in a document all or a portion of
which is incorporated or deemed to be incorporated by reference
herein shall be deemed to be modified or superseded for purposes of
this registration statement to the extent that a statement
contained herein or in any other subsequently filed document which
also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this registration
statement.
Unless expressly incorporated by reference, nothing in this
prospectus shall be deemed to incorporate by reference information
furnished to, but not filed with, the SEC. Copies of all documents
incorporated by reference in this prospectus, other than exhibits
to those documents unless such exhibits are specially incorporated
by reference in this prospectus, will be provided at no cost to
each person, including any beneficial owner, who receives a copy of
this prospectus on the written or oral request of that person made
to:
Kornit Digital Ltd.
Attention: Chief Financial Officer
12 Ha’Amal Street, Afek Park
Rosh Ha’Ayin 4809246, Israel
Tel: +972-3-908-5800
21
ENFORCEABILITY OF CIVIL
LIABILITIES
We are incorporated under the laws of the State of Israel. Service
of process upon us and upon our directors, officers and any Israeli
experts named in this registration statement, substantially all of
whom reside outside of the United States, may be difficult to
obtain within the United States. Furthermore, because substantially
all of our assets and substantially all of our directors and
officers are located outside of the United States, any judgment
obtained in the United States against us or any of our directors
and officers may not be collectible within the United States.
We have been informed by our legal counsel in Israel, Meitar
Liquornik Geva Leshem Tal, that it may be difficult to assert U.S.
securities law claims in original actions instituted in Israel.
Israeli courts may refuse to hear a claim based on an alleged
violation of U.S. securities laws because Israel is not the most
appropriate forum in which to bring such a claim. In addition, even
if an Israeli court agrees to hear a claim, it may determine that
Israeli law and not U.S. law is applicable to the claim. If U.S.
law is found to be applicable, the content of applicable U.S. law
must be proven as a fact which can be a time-consuming and costly
process. Certain matters of procedure will also be governed by
Israeli law.
We have irrevocably appointed Kornit Digital North America Inc. as
our agent to receive service of process in any action against us in
any United States federal or state court arising out of the
offerings under this prospectus or any purchase or sale of
securities in connection with any such offering(s). Subject to
specified time limitations and legal procedures, Israeli courts may
enforce a United States judgment in a civil matter which, subject
to certain exceptions, is non-appealable, including a judgment
based upon the civil liability provisions of the Securities Act or
the Exchange Act and including a monetary or compensatory judgment
in a non-civil matter, provided that, among other things:
•
the judgment is obtained after due process before a court of
competent jurisdiction, according to the laws of the state in which
the judgment is given and the rules of private international law
prevailing in Israel;
•
the prevailing law of the foreign state in which the judgment is
rendered allows for the enforcement of judgments of Israeli
courts;
•
adequate service of process has been effected and the defendant has
had a reasonable opportunity to be heard and to present his or her
evidence;
•
the judgment is not contrary to public policy of Israel, and the
enforcement of the civil liabilities set forth in the judgment is
not likely to impair the security or sovereignty of Israel;
•
the judgment was not obtained by fraud and does not conflict with
any other valid judgment in the same matter between the same
parties;
•
an action between the same parties in the same matter was not
pending in any Israeli court at the time at which the lawsuit was
instituted in the foreign court; and
•
the judgment is enforceable according to the laws of Israel and
according to the law of the foreign state in which the relief was
granted.
If a foreign judgment is enforced by an Israeli court, it generally
will be payable in Israeli currency, which can then be converted
into non-Israeli currency and transferred out of Israel. The usual
practice in an action before an Israeli court to recover an amount
in a non-Israeli currency is for the Israeli court to issue a
judgment for the equivalent amount in Israeli currency at the rate
of exchange in force on the date of the judgment, but the judgment
debtor may make payment in foreign currency. Pending collection,
the amount of the judgment of an Israeli court stated in Israeli
currency ordinarily will be linked to the Israeli consumer price
index plus interest at the annual statutory rate set by Israeli
regulations prevailing at the time. Judgment creditors must bear
the risk of unfavorable exchange rates.
22
Kornit Digital Ltd.
Ordinary Shares
__________________________________________
Prospectus Supplement
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