Filed Pursuant to Rule 424(b)(5)
Registration No. 333-223048
The information in this prospectus is not complete and may be
changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and we are not soliciting offers to buy these
securities in any jurisdiction where the offer or sale is not permitted.
PROSPECTUS SUPPLEMENT (Subject to Completion)
(To Prospectus dated February 15, 2018)
2,300,000 Shares
COMMON STOCK
We are offering up to 2,300,000
shares of our shares of common stock.
Our common stock is listed on
the New York Stock Exchange under the symbol “INST.” On February 14, 2018, the last reported sale price of our common stock on the New York Stock Exchange was $42.05 per share.
Investing in our common stock involves risks. See “
Risk Factors
” beginning on page
S-4
of this prospectus supplement and in our Annual Report on Form
10-K
for the year ended December 31, 2017, which has been filed with the Securities and Exchange
Commission and is incorporated by reference in this prospectus supplement and the accompanying prospectus.
PRICE $ A SHARE
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Price to
Public
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Underwriting
Discounts and
Commissions
(1)
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Proceeds to
Instructure
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Per Share
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$
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$
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$
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Total
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$
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$
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$
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(1)
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See “Underwriters” for a description of the compensation payable to the underwriters.
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We
have granted the underwriters
a 30-day option
to purchase up to an additional 345,000 shares of common stock at the public offering price less underwriting discounts and commissions.
The Securities and Exchange Commission and state securities regulators have not approved or disapproved of these securities, or determined if this
prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
The underwriters expect to deliver the shares of
common stock to purchasers on , 2018.
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MORGAN STANLEY
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CREDIT SUISSE
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, 2018
TABLE OF CONTENTS
You should rely
only on the information contained in or incorporated by reference in this prospectus supplement, the accompanying prospectus and in any free writing prospectus that we have authorized for use in connection with this offering. We have not, and the
underwriters have not, authorized anyone to provide you with information that is different. We and the underwriters are offering to sell shares of common stock and seeking offers to buy shares of common stock only in jurisdictions where offers and
sales are permitted. The information appearing in this prospectus supplement, the accompanying prospectus, 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, regardless of the time of delivery of those respective documents or sale of our common stock.
For investors outside the United States: we have not, and the underwriters have not, done anything that would permit this offering or
possession or distribution of this prospectus supplement, the accompanying prospectus and in any free writing prospectus that we have authorized for use in connection with this offering in any jurisdiction where action for that purpose is required,
other than in the United States. Persons outside the United States who come into possession of this prospectus supplement, the accompanying prospectus and any free writing prospectus that we have authorized for use in connection with this offering
must inform themselves about, and observe any restrictions relating to, the offering of the shares of common stock and the distribution of this prospectus supplement, the accompanying prospectus and any free writing prospectus that we have
authorized for use in connection with this offering outside the United States.
i
ABOUT THIS PROSPECTUS SUPPLEMENT
This document consists of two parts. The first part is this prospectus supplement, which describes the terms of this offering of common stock
and also adds to and updates information contained in the accompanying prospectus and the documents incorporated by reference into this prospectus supplement. The second part is the accompanying prospectus dated February 15, 2018, which
includes the documents incorporated by reference therein and provides more general information. To the extent the information contained in this prospectus supplement differs or varies from the information contained in the accompanying prospectus or
the documents incorporated by reference herein or therein, you should rely on the information in this prospectus supplement. Generally, when we refer to the prospectus, we are referring to this prospectus supplement and the accompanying prospectus
combined. You should read both this prospectus supplement and the accompanying prospectus, together with additional information described under the heading “Where You Can Find More Information.”
ii
PROSPECTUS SUPPLEMENT SUMMARY
This summary highlights certain information about us, this offering and selected information contained elsewhere in or incorporated by
reference into this prospectus supplement. This summary provides an overview of selected information and does not contain all of the information you should consider before deciding whether to invest in our common stock. Therefore, you should read
the entire prospectus supplement and the accompanying prospectus carefully (including the documents incorporated by reference herein and therein), especially the “Risk Factors” section beginning on
page S-4
and in the documents incorporated by reference and our consolidated financial statements (which we refer to as our “Financial Statements”) and the related notes incorporated by
reference in this prospectus supplement and the accompanying prospectus, before deciding to invest in our common stock. Unless the context otherwise requires, we use the terms “Instructure,” “Company,” “we,”
“us” and “our” in this prospectus supplement and the accompanying prospectus to refer to Instructure, Inc. and, where appropriate, our consolidated subsidiaries.
Company Overview
In today’s
dynamic, knowledge-driven economy, quality education and constant learning are critical to the success of people and organizations. Academic institutions recognize that for students to reach their maximum potential, they require an interactive and
accessible learning environment. Similarly, companies strive to compete by delivering continuous learning and feedback to better attract, develop, retain and promote the best people. Organizations in both markets—education and
corporate—also require actionable data to measure, track and improve individual and organizational performance.
With applications
for learning, assessment and performance management, Instructure enables organizations worldwide to develop, deliver, manage and track engaging academic and employee development programs. Built on our innovative, cloud-based platform, our
applications combine powerful, elegant and
easy-to-use
functionality with the reliability, security, scalability and support our customers require. They include:
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Canvas
. Learning management system, or LMS, for K–12 and higher education;
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Bridge
. Learning and performance management suite for businesses;
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Arc
. Next-generation online video learning platform for academic and corporate learning; and
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Gauge
. Assessment management system, or AMS, for K–12.
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For the millions of
students, teachers and employees who use our applications to achieve their educational and professional goals, we provide an engaging and intuitive user experience designed for frequent and open interactions, a streamlined workflow and the creation
and sharing of content, with anytime, anywhere access to information. Our modern, native-cloud architecture enables users to teach, learn and engage across a wide variety of application environments, operating systems, devices and locations. Our
open standards allow for integration with third-party publishers and software providers to deliver additional learning content and applications. We also provide data analytics capabilities, enabling real-time reaction to information and benchmarking
in order to personalize curricula and goal setting; and to increase the efficacy of the learning, assessment and performance management processes.
We deliver our applications through a
Software-as-a-Service,
or SaaS, business model. Customers can rapidly deploy our systems with minimal upfront implementation.
They also benefit from regular software updates with 99.9% uptime. Our SaaS business model substantially reduces the need for our customers to buy and support a broad range of IT infrastructure, and significantly reduces the cost, complexity and
disruptions associated with implementations and upgrades of
on-premise
software.
S-1
Corporate Information
We were incorporated in Delaware in September 2008. Our principal executive offices are located at 6330 South 3000 East, Suite 700, Salt Lake
City, UT 84121 and our telephone number is (800)
203-6755.
Our corporate website address is www.instructure.com. Information contained on or accessible through our website is not a part of this prospectus, and
the inclusion of our website address in this prospectus is an inactive textual reference only.
Instructure, Canvas, the Instructure logo,
Canvas logo and Bridge logo are trademarks of Instructure, Inc. We do not intend our use or display of other companies’ trade names or trademarks to imply a relationship with, or endorsement or sponsorship of us by, any other companies.
S-2
THE OFFERING
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Common stock offered by us
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2,300,000 shares
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Common stock to be outstanding after this offering
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33,160,241 shares
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Option to purchase additional shares
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345,000 shares
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Use of proceeds
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We estimate that the net proceeds from this offering will be approximately $93.4 million (or approximately $107.5 million if the
underwriters exercise in full their option to purchase additional shares), after deducting underwriting discounts and commissions and estimated offering expenses payable by us.
We intend to use the net proceeds to us from this offering primarily for general
corporate purposes, including working capital, sales and marketing activities, research and development activities, general and administrative matters and capital expenditures. We may also use a portion of the net proceeds from this offering for
acquisitions of, or investments in, technologies, solutions or businesses that complement our business, although we have no present commitments or agreements to enter into any such acquisitions or investments. See “Use of Proceeds” for
additional information.
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New York Stock Exchange symbol
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“INST”
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The number of shares of common stock to be outstanding after this offering is based on 30,860,241 shares of
common stock outstanding as of December 31, 2017, and excludes:
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2,010,500 shares of common stock issuable upon the exercise of outstanding stock options as of December 31, 2017, with a weighted-average exercise price of $9.09 per share;
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1,515,470 shares of common stock issuable upon the vesting of restricted stock units outstanding as of December 31, 2017;
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16,666 shares of common stock issuable upon the exercise of outstanding warrants as of December 31, 2017, with a weighted-average exercise price of $4.47 per share;
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1,926,822 shares of common stock reserved for future issuance under our 2015 Equity Incentive Plan, as well as any automatic increases in the number of shares of common stock reserved for future issuance under this
plan; and
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352,631 shares of common stock reserved for future issuance under our 2015 Employee Stock Purchase Plan, as well as any automatic increases in the number of shares of common stock reserved for future issuance under this
plan.
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Unless otherwise indicated, all information in this prospectus supplement assumes no exercise of the
underwriters’ option to purchase additional shares of common stock.
S-3
RISK FACTORS
Investing in our common stock involves high degrees of significant risk. You should carefully consider the following risks, the risks
described in our Annual Report
on Form 10-K for
the year ended December 31, 2017, as well as other information in this prospectus supplement and the accompanying prospectus, including
information incorporated by reference herein and therein, and any free writing prospectus that we have authorized for use in connection with this offering, before you invest in our common stock. If any of these risks actually materializes, our
operating results, financial condition and liquidity could be materially adversely affected. As a result, the trading price of our common stock could decline, and you may lose all or part of your investment.
Risks Related to this Offering
We have broad
discretion in the use of the net proceeds from this offering and may not use them effectively.
Our management will have broad
discretion in the application of the balance of the net proceeds from this offering and could spend the proceeds in ways that do not improve our business, financial condition or results of operations or enhance the value of our common stock. We
intend to use the proceeds from this offering primarily for general corporate purposes, including working capital, sales and marketing activities, research and development activities, general and administrative matters and capital expenditures. We
may also use a portion of the net proceeds from the sale of common stock under this prospectus for the acquisition of, or investment in, technologies, solutions or businesses that complement our business, although we have no present commitments or
agreements to enter into any such acquisitions or investments.
The failure by our management to apply these funds effectively could
result in financial losses that could harm our business and cause the price of our common stock to decline. Pending their use, we may invest the net proceeds from this offering in a manner that does not produce income or that loses value.
Purchasers in this offering will experience immediate and substantial dilution in the tangible net book value of their investment.
If you purchase our common stock in this offering, you will incur an immediate dilution of $39.75 in net tangible book value per share from the
price you paid, based on an assumed public offering price of $42.05 per share, which is the last reported sale price of our common stock on the New York Stock Exchange on February 14, 2018. The exercise of outstanding options will result in
further dilution. For a further description of the dilution that you will experience immediately after this offering, see the section of this prospectus supplement titled “Dilution.”
S-4
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus supplement, the accompanying prospectus, the documents incorporated by reference into this prospectus supplement and the
accompanying prospectus and any free writing prospectus that we have authorized for use in connection with this offering and therein contain forward-looking statements that are based on our beliefs and assumptions and on information currently
available to our management. Discussions containing these forward-looking statements may be found, among other places, in this prospectus supplement, the accompanying prospectus in any free writing prospectus we may authorize for use in connection
with a this offering, in the sections titled “Business,” “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” incorporated by reference from our most recent
Annual Report on
Form 10-K
and in our most recent Quarterly Report on
Form 10-Q,
as well as any amendments thereto reflected in subsequent filings with the
Securities and Exchange Commission, or SEC.
Forward-looking statements may include, but are not limited to, statements about:
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our ability to grow and retain our customer base, both domestically and internationally;
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our ability to increase revenue from our customer base by selling additional applications and services, including Arc, Gauge and Practice;
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our ability to provide effective customer support and induce our customers to renew and upgrade their subscriptions;
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our ability to expand our sales organization to address effectively the new industries, geographies and types of organizations we intend to target;
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our ability to forecast and maintain an adequate rate of revenue growth and appropriately plan our expenses;
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our ability to displace existing products addressing learning management applications, along with continued acceptance of SaaS as an effective method for delivering our applications;
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the effects of seasonal and cyclical trends on our results of operations;
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the attraction and retention of qualified employees and key personnel;
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our ability to protect and enhance our brands and intellectual property;
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costs related to defending intellectual property infringement and other claims;
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the effects of increased competition and alternatives to our platform and applications and our ability to successfully differentiate our platform and applications;
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our expectations concerning our relationships and actions with third parties;
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future regulatory, judicial and legislative changes in our industry; and
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future arrangements with, or investments in, other entities or associations, products, services or technologies.
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In some cases, you can identify forward-looking statements by terminology such as “anticipate,” “believe,”
“continue,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “potential,” “predict,” “project,” “should,” and “will,” or
the negative of terms like these or other comparable terminology, and other words or terms of similar meaning. These statements reflect our current views with respect to future events, are based on assumptions and are subject to risks and
uncertainties. Given these risks and uncertainties, you should not place undue reliance on these forward-looking statements. We discuss in greater detail, and incorporate by reference into this prospectus in their entirety, many of these risks and
uncertainties under the section titled “Risk Factors” contained in the applicable prospectus supplement, in any free writing prospectus we may authorize for use in connection with a specific offering, and in our most recent Annual Report
on Form
10-K,
as well as any
S-5
amendments thereto reflected in subsequent filings with the SEC. Also, these forward-looking statements represent our estimates and assumptions only as of the date of the document containing the
applicable statement. Unless required by law, we undertake no obligation to update or revise any forward-looking statements to reflect new information or future events or developments. Thus, you should not assume that our silence over time means
that actual events are bearing out as expressed or implied in such forward-looking statements. You should read this prospectus, the applicable prospectus supplement, together with the documents we have filed with the SEC that are incorporated by
reference and any free writing prospectus we have authorized for use in connection with a specific offering completely and with the understanding that our actual future results may be materially different from what we expect. We qualify all of the
forward-looking statements in the foregoing documents by these cautionary statements.
In addition, statements that “we believe”
and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this prospectus, and while we believe such information forms a reasonable basis for such
statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are
inherently uncertain and investors are cautioned not to unduly rely upon these statements.
S-6
USE OF PROCEEDS
We estimate that the net proceeds from the sale of shares of common stock in this offering will be approximately $93.4 million, after
deducting underwriting discounts and commissions and estimated offering expenses payable by us. If the underwriters exercise in full their option to purchase additional shares, we estimate that the net proceeds will be approximately
$107.5 million, after deducting underwriting discounts and commissions and estimated offering expenses payable by us.
As of the date
of this prospectus supplement, we cannot specify with certainty all of the particular uses for the net proceeds to us from this offering. However, we currently intend to use the net proceeds to us from this offering primarily for general corporate
purposes, including working capital, sales and marketing activities, research and development activities, general and administrative matters and capital expenditures. We may also use a portion of the net proceeds from this offering for the
acquisition of, or investment in, technologies, solutions or businesses that complement our business, although we have no present commitments or agreements to enter into any such acquisitions or investments. We will have broad discretion over the
uses of the net proceeds from this offering and investors will be relying on the judgment of our management regarding the application of the net proceeds from this offering. Pending these uses, we plan to invest the net proceeds that we receive in
this offering in short-term and intermediate-term interest-bearing obligations, investment-grade investments, certificates of deposit, or direct or guaranteed obligations of the U.S. government.
S-7
MARKET PRICE OF COMMON STOCK
Our common stock is traded on the New York Stock Exchange under the symbol “INST.” The following table sets forth, for the periods
indicated, the high and low sales price for our common stock as reported on the New York Stock Exchange.
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2018
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High
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Low
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First quarter (through February 14, 2018)
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$
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43.80
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$
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32.60
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2017
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High
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Low
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First quarter
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$
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25.05
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$
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19.80
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Second quarter
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29.95
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22.40
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Third quarter
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34.05
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28.60
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Fourth quarter
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36.40
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32.05
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2016
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High
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Low
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First quarter
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$
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22.38
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$
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13.79
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Second quarter
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21.88
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16.73
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Third quarter
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25.66
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18.58
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Fourth quarter
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26.66
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18.65
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As of February 12, 2018, there were 66 holders of record of our common stock. The actual number of
stockholders is greater than this number of record holders and includes stockholders who are beneficial owners but whose shares are held in street name by brokers and other nominees.
S-8
DIVIDEND POLICY
We have never declared or paid cash dividends on our capital stock. We intend to retain all available funds and future earnings, if any, to
fund the development and expansion of our business and we do not anticipate paying any cash dividends in the foreseeable future. The terms of our credit facility also restrict our ability to pay dividends, and we may also enter into debt instruments
in the future that will restrict our ability to declare or pay cash dividends on our common stock. Any future determination related to dividend policy will be made at the discretion of our board of directors and will be dependent on a number of
factors, including our earnings, capital requirements and overall financial condition.
S-9
DILUTION
Dilution is the amount by which the price paid by the purchasers of the shares of common stock sold in the offering exceeds the net tangible
book value per share of common stock after the offering. Net tangible book value per share is determined by subtracting our total liabilities from the total book value of our tangible assets and dividing the difference by the number of shares of
common stock deemed to be outstanding at that date.
Our historical net tangible book value as of December 31, 2017 was
$(17.2) million, or $(0.56) per share.
After giving effect to the sale of 2,300,000 shares of common stock in this offering at the
assumed public offering price of $42.05 per share, which is the last reported sale price of our common stock on the New York Stock Exchange on February 14, 2018, after deducting underwriting discounts and commissions and estimated offering
expenses payable by us, our as adjusted net tangible book value as of December 31, 2017, would have been $76.2 million, or $2.30 per share. This represents an immediate increase in as adjusted net tangible book value of $2.86 per share to
our existing stockholders and immediate dilution of $39.75 per share to new investors purchasing common stock in this offering.
The
following table illustrates this dilution on a per share basis to new investors:
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Assumed public offering price per share
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$
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42.05
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Historical net tangible book value per share as of December 31, 2017
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$
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(0.56
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Increase in as adjusted net tangible book value per share attributable to new investors in this
offering
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2.86
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As adjusted net tangible book value per share after this offering
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2.30
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Dilution in net tangible book value per share to new investors in this offering
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$
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39.75
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If the underwriters exercises in full their option to purchase an additional 345,000 shares of our common
stock at an assumed public offering price of $42.05 per share, which is the last reported sale price of our common stock on the New York Stock Exchange on February 14, 2018, the as adjusted net tangible book value per share after giving
effect to this offering would be $2.69 per share, representing an immediate increase to existing stockholders of $3.25 per share, and immediate dilution to new investors in this offering of $39.36 per share.
The outstanding share information in the table above is based on 30,860,241 shares of common stock outstanding as of December 31, 2017,
and excludes:
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2,010,500 shares of common stock issuable upon the exercise of outstanding stock options as of December 31, 2017, with a weighted-average exercise price of $9.09 per share;
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1,515,470 shares of common stock issuable upon the vesting of restricted stock units outstanding as of December 31, 2017;
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16,666 shares of common stock issuable upon the exercise of outstanding warrants as of December 31, 2017, with a weighted-average exercise price of $4.47 per share;
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1,926,822 shares of common stock reserved for future issuance under our 2015 Equity Incentive Plan, as well as any automatic increases in the number of shares of common stock reserved for future issuance under this
plan; and
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352,631 shares of common stock reserved for future issuance under our 2015 Employee Stock Purchase Plan, as well as any automatic increases in the number of shares of common stock reserved for future issuance under this
plan.
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S-10
MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES
TO NON-U.S. HOLDERS
OF COMMON STOCK
The following summary describes the material U.S.
federal income tax consequences of the acquisition, ownership and disposition of our common stock acquired in this offering
by Non-U.S. Holders
(as defined below). This discussion is not a
complete analysis of all potential U.S. federal income tax consequences relating thereto, and does not deal with foreign, state and local consequences that may be relevant
to Non-U.S. Holders
in
light of their particular circumstances, nor does it address U.S. federal tax consequences (such as gift and estate taxes) other than income taxes. Special rules different from those described below may apply to
certain Non-U.S. Holders
that are subject to special treatment under the Internal Revenue Code of 1986, as amended (or the Code), such as financial institutions, insurance
companies, tax-exempt organizations,
broker-dealers and traders in securities, U.S. expatriates, “controlled foreign corporations,” “passive foreign investment companies,” corporations
that accumulate earnings to avoid U.S. federal income tax, corporations organized outside of the United States, any state thereof or the District of Columbia that are nonetheless treated as United States income taxpayers for United States federal
tax purposes, persons that hold our common stock as part of a “straddle,” “hedge,” “conversion transaction,” “synthetic security” or integrated investment or other risk reduction strategy, persons who acquire
our common stock through the exercise of an option or otherwise as compensation, persons subject to the alternative minimum tax or federal Medicare contribution tax on net investment income, partnerships and other pass-through entities or
arrangements, and investors in such pass-through entities or arrangements.
Such Non-U.S.
Holders are urged to consult their own tax advisors to determine the U.S. federal, state, local and other tax
consequences that may be relevant to them. Furthermore, the discussion below is based upon the provisions of the Code, and Treasury regulations, rulings and judicial decisions thereunder as of the date hereof, and such authorities may be
repealed, revoked or modified, perhaps retroactively, so as to result in U.S. federal income tax consequences different from those discussed below. We have not requested a ruling from the U.S. Internal Revenue Service, or IRS, with respect to
the statements made and the conclusions reached in the following summary, and there can be no assurance that the IRS will agree with such statements and conclusions. This discussion assumes that
the Non-U.S. Holder
holds our common stock as a “capital asset” within the meaning of Section 1221 of the Code (generally, property held for investment).
Persons considering the purchase of our common stock pursuant to this offering should consult their own tax advisors concerning the U.S.
federal income, estate and other tax consequences of acquiring, owning and disposing of our common stock in light of their particular situations as well as any consequences arising under the laws of any other taxing jurisdiction, including any
state, local or foreign tax consequences.
For the purposes of this discussion,
a “Non-U.S. Holder”
is, for U.S. federal income tax purposes, a beneficial owner of common stock that is neither a U.S. Holder, nor a partnership (or other entity treated as a partnership
for U.S. federal income tax purposes regardless of its place of organization or formation). A “U.S. Holder” means a beneficial owner of our common stock that is for U.S. federal income tax purposes any of the following:
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an individual who is a citizen or resident of the United States;
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a corporation or other entity treated as a corporation for U.S. federal income tax purposes created or organized in or under the laws of the U.S., any state thereof or the District of Columbia;
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an estate the income of which is subject to U.S. federal income taxation regardless of its source; or
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a trust if it (1) is subject to the primary supervision of a court within the U.S. and one or more U.S. persons have the authority to control all substantial decisions of the trust or (2) has a valid election
in effect under applicable U.S. Treasury regulations to be treated as a U.S. person.
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S-11
Distributions
Distributions, if any, made on our common stock to
a Non-U.S. Holder
to the extent made out
of our current or accumulated earnings and profits (as determined under U.S. federal income tax principles) generally will constitute dividends for U.S. tax purposes and will be subject to withholding tax at a 30% rate or such lower rate as may be
specified by an applicable income tax treaty, subject to the discussion below regarding foreign accounts. To obtain a reduced rate of withholding under a treaty,
a Non-U.S. Holder
generally will
be required to provide us with a properly executed
IRS Form W-8BEN (in
the case of individuals) or IRS
Form W-8BEN-E (in
the case of entities), or other appropriate form, including a U.S. taxpayer identification number, or in certain circumstances, a foreign tax
identifying number, and certifying
the Non-U.S. Holder’s
entitlement to benefits under that treaty. This certification must be provided to us or our paying agent prior to the payment of
dividends and must be updated periodically. In the case of
a Non-U.S. Holder
that is an entity, Treasury Regulations and the relevant tax treaty provide rules to determine whether, for purposes of
determining the applicability of a tax treaty, dividends will be treated as paid to the entity or to those holding an interest in that entity. If
a Non-U.S. Holder
holds stock through a
financial institution or other agent acting on the holder’s behalf, the holder will be required to provide appropriate documentation to such agent. The holder’s agent will then be required to provide certification to us or our paying
agent, either directly or through other intermediaries. If you are eligible for a reduced rate of U.S. federal withholding tax under an income tax treaty and you do not timely file the required certification, you may be able to obtain a refund
or credit of any excess amounts withheld by timely filing an appropriate claim for a refund with the IRS.
We generally are not required
to withhold tax on dividends paid to
a Non-U.S. Holder
that are effectively connected with
the Non-U.S. Holder’s
conduct of a trade or business
within the United States (and, if required by an applicable income tax treaty, are attributable to a permanent establishment that such holder maintains in the United States) if a properly executed
IRS Form W-8ECI, stating
that the dividends are so connected, is furnished to us (or, if stock is held through a financial institution or other agent, to such agent). In general, such
effectively connected dividends will be subject to U.S. federal income tax, on a net income basis at the regular graduated rates applicable to U.S. residents. A
corporate Non-U.S. Holder
receiving effectively connected dividends may also be subject to an additional “branch profits tax,” which is imposed, under certain circumstances, at a rate of 30% (or such lower rate as may be specified by an applicable treaty) on the
corporate Non-U.S. Holder’s
effectively connected earnings and profits, subject to certain
adjustments. Non-U.S. Holders
should consult their tax
advisors regarding any applicable income tax treaties that may provide for different rules.
To the extent distributions on our common
stock, if any, exceed our current and accumulated earnings and profits, they will first reduce
the Non-U.S.
Holder’s adjusted basis in our common stock, but not below zero, and then will be treated
as gain to the extent of any excess, and taxed in the same manner as gain realized from a sale or other disposition of common stock as described in the next section.
Gain on Disposition of Our Common Stock
Subject to the discussion below regarding backup withholding and foreign accounts,
a Non-U.S. Holder
generally will not be subject to U.S. federal income tax with respect to gain realized on a sale or other disposition of our common stock unless (a) the gain is effectively
connected with a trade or business of such holder in the United States (and, if required by an applicable income tax treaty, is attributable to a permanent establishment that such holder maintains in the United States),
(b) the Non-U.S. Holder
is a nonresident alien individual and is present in the United States for 183 or more days in the taxable year of the disposition and certain other conditions are met or
(c) we are or have been a “United States real property holding corporation” within the meaning of Code Section 897(c)(2) at any time within the shorter of the five-year period preceding such disposition or such holder’s
holding period. In general, we would be a U.S. real property holding corporation if interests in U.S. real estate comprise (by fair market value) at least half of our business assets. We believe that we have not been and we are not, and do
not anticipate becoming, a U.S. real property holding corporation. Even if we are treated as a U.S. real property holding corporation, gain realized by
a Non-U.S. Holder
on a disposition
S-12
of our common stock will not be subject to U.S. federal income tax so long as
(1) the Non-U.S. Holder
owned, directly, indirectly and
constructively, no more than five percent of our common stock at all times within the shorter of (i) the five-year period preceding the disposition or (ii) the holder’s holding period and (2) our common stock is regularly traded
on an established securities market. There can be no assurance that our common stock will continue to qualify as regularly traded on an established securities market. If any gain on your disposition is taxable because we are a United States real
property holding corporation and your ownership of our common stock exceeds 5%, you will be taxed on such disposition generally in the manner applicable to U.S. persons.
If you are
a Non-U.S. Holder
described in (a) above, you will be required to pay tax on
the net gain derived from the sale at regular graduated U.S. federal income tax rates, and
corporate Non-U.S. Holders
described in (a) above may be subject to the additional branch profits tax
at a 30% rate or such lower rate as may be specified by an applicable income tax treaty. Gain described in (b) above will be subject to U.S. federal income tax at a flat 30% rate or such lower rate as may be specified by an applicable
income tax treaty, which gain may be offset by certain U.S.-source capital losses (even though you are not considered a resident of the U.S.), provided that
the Non-U.S. Holder
has timely filed U.S.
federal income tax returns with respect to such losses.
Information Reporting Requirements and Backup Withholding
Generally, we must report information to the IRS with respect to any dividends we pay on our common stock (even if the payments are exempt from
withholding), including the amount of any such dividends, the name and address of the recipient, and the amount, if any, of tax withheld. A similar report is sent to the holder to whom any such dividends are paid. Pursuant to tax treaties
or certain other agreements, the IRS may make its reports available to tax authorities in the recipient’s country of residence.
Dividends paid by us (or our paying agents) to
a Non-U.S. Holder
may also be subject to U.S.
backup withholding. U.S. backup withholding generally will not apply to
a Non-U.S. Holder
who provides a properly executed
IRS Form W-8BEN, IRS
Form W-8BEN-E, or
IRS
Form W-ECI, or
otherwise establishes an exemption. Notwithstanding the foregoing, backup withholding may apply if the payor has actual knowledge, or reason to know, that the holder is a U.S. person
who is not an exempt recipient.
U.S. information reporting and backup withholding requirements generally will apply to the proceeds of a
disposition of our common stock effected by or through a U.S. office of any broker, U.S. or foreign, except that information reporting and such requirements may be avoided if the holder provides a properly executed
IRS Form W-8BEN or
IRS
Form W-8BEN-E or
otherwise meets documentary evidence requirements for
establishing non-U.S.
person status or otherwise establishes an exemption. Generally, U.S. information reporting and backup withholding requirements will not apply to a payment of disposition proceeds to
a Non-U.S. Holder
where the transaction is effected outside the U.S. through
a non-U.S. office
of
a non-U.S.
broker. Information reporting and backup withholding requirements may, however, apply to a payment of disposition proceeds if the broker has actual knowledge, or reason to know, that the holder is, in fact, a U.S. person. For information
reporting purposes, certain brokers with substantial U.S. ownership or operations will generally be treated in a manner similar to U.S. brokers.
Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules may be credited against the tax liability
of persons subject to backup withholding, provided that the required information is timely furnished to the IRS.
Foreign Accounts
Sections 1471 through 1474 of the Code (commonly referred to as FATCA) impose a U.S. federal withholding tax of 30% on certain payments,
including dividends paid on and the gross proceeds of a disposition of our common stock paid to a foreign financial institution (as specifically defined by applicable rules) unless
S-13
such institution enters into an agreement with the U.S. government to withhold on certain payments and to collect and provide to the U.S. tax authorities substantial information regarding U.S.
account holders of such institution (which includes certain equity holders of such institution, as well as certain account holders that are foreign entities with U.S. owners). FATCA also generally imposes a federal withholding tax of 30% on
certain payments, including dividends paid on and the gross proceeds of a disposition of our common stock to
a non-financial foreign
entity unless such entity provides the withholding agent with
either a certification that it does not have any substantial direct or indirect U.S. owners or provides information regarding substantial direct and indirect U.S. owners of the entity. An intergovernmental agreement between the United States
and an applicable foreign country may modify those requirements. The withholding tax described above will not apply if the foreign financial institution
or non-financial foreign
entity otherwise
qualifies for an exemption from the rules. Holders are encouraged to consult with their own tax advisors regarding the possible implications of FATCA on their investment in our common stock.
The withholding provisions described above currently apply to payments of dividends, and will apply to payments of gross proceeds from a sale
or other disposition of common stock on or after January 1, 2019.
EACH PROSPECTIVE INVESTOR SHOULD CONSULT ITS OWN TAX ADVISOR REGARDING THE TAX
CONSEQUENCES OF PURCHASING, HOLDING AND DISPOSING OF OUR COMMON STOCK, INCLUDING THE CONSEQUENCES OF ANY RECENT CHANGE IN APPLICABLE LAW.
S-14
UNDERWRITERS
Under the terms and subject to the conditions in an underwriting agreement dated the date of this prospectus supplement, the underwriters
listed below, for whom Morgan Stanley & Co. LLC and Credit Suisse Securities (USA) LLC are acting as representatives, have severally agreed to purchase, and we have agreed to sell to them, severally, the number of shares indicated below:
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Name
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Number of
Shares
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Morgan Stanley & Co. LLC
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Credit Suisse Securities (USA) LLC
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Total:
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2,300,000
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The underwriters and the representatives are collectively referred to as the “underwriters” and the
“representatives,” respectively. The underwriters are offering the shares of common stock subject to their acceptance of the shares from us and subject to prior sale. The underwriting agreement provides that the obligations of the
underwriters to pay for and accept delivery of the shares of common stock offered by this prospectus supplement are subject to the approval of certain legal matters by their counsel and to certain other conditions. The underwriters are obligated to
take and pay for all of the shares of common stock offered by this prospectus supplement if any such shares are taken. However, the underwriters are not required to take or pay for the shares covered by the underwriters’ option to purchase
additional shares described below.
The underwriters initially propose to offer part of the shares of common stock directly to the public
at the offering price listed on the cover page of this prospectus supplement and part to certain dealers at a price that represents a concession not in excess of $ per share under the public offering price. After the initial
offering of the shares of common stock, the offering price and other selling terms may from time to time be varied by the representatives.
We have granted to the underwriters an option, exercisable for 30 days from the date of this prospectus supplement, to purchase up to 345,000
additional shares of common stock at the public offering price listed on the cover page of this prospectus supplement less underwriting discounts and commissions. To the extent the option is exercised, each underwriter will become obligated, subject
to certain conditions, to purchase about the same percentage of the additional shares of common stock as the number listed next to the underwriter’s name in the preceding table bears to the total number of shares of common stock listed next to
the names of all underwriters in the preceding table.
The following table shows the per share and total public offering price,
underwriting discounts and commissions, and proceeds before expenses to us. These amounts are shown assuming both no exercise and full exercise of the underwriters’ option to purchase up to an additional 345,000 shares of common stock.
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Total
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Per
Share
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No
Exercise
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Full
Exercise
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Public offering price
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$
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$
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$
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Underwriting discounts and commissions to be paid by us
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$
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$
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$
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Proceeds, before expenses, to us
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$
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$
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$
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The estimated offering expenses payable by us, exclusive of the underwriting discounts and commissions, are
approximately $400,000. We have agreed to reimburse the underwriters for expense relating to clearance of this offering with the Financial Industry Regulatory Authority up to $20,000.
Our common stock has been approved for listing on the New York Stock Exchange under the trading symbol “INST.”
S-15
We and all our directors and officers have agreed that, without the prior written consent of
Morgan Stanley & Co. LLC and Credit Suisse Securities (USA) LLC, on behalf of the underwriters, we and they will not, during the period ending 90 days after the date of this prospectus supplement (the “restricted period”):
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offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend or otherwise transfer or dispose of, directly
or indirectly, any shares of common stock or any securities convertible into or exercisable or exchangeable for shares of common stock;
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file any registration statement with the Securities and Exchange Commission relating to the offering of any shares of common stock or any securities convertible into or exercisable or exchangeable for common stock; or
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enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of the common stock.
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whether any such transaction described above is to be settled by delivery of common stock or such other securities, in cash or otherwise. In
addition, we and each such person agrees that, without the prior written consent of Morgan Stanley & Co. LLC and Credit Suisse Securities (USA) LLC, on behalf of the underwriters, we or such other person will not, during the restricted
period, make any demand for, or exercise any right with respect to, the registration of any shares of common stock or any security convertible into or exercisable or exchangeable for common stock.
The restrictions described in the immediately preceding paragraph to do not apply to:
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(1)
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transactions relating to shares of our common stock or other securities acquired in this offering or in open market transactions after the completion of this offering;
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(2)
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transfers of shares of our common stock or any security convertible into our common stock as a bona fide gift or charitable contribution;
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(3)
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transfers of shares of our common stock or any security convertible into our common stock to an immediate family member or a trust for the direct or indirect benefit of the party subject to the lockup agreement or such
immediate family member of the party subject to the
lock-up
agreement (for purposes of the
lock-up
agreement, “immediate family” shall mean any relationship by
blood, marriage or adoption, not more remote than first cousin); or
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(4)
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transfers of shares of our common stock or any security convertible into our common stock by will or intestacy;
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(5)
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transfers of shares of our common stock or any security convertible into our common stock pursuant to a domestic relations order, divorce decree or court order;
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(6)
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transfers or distributions of shares of our common stock or any securities convertible into or exercisable or exchangeable for our common stock by a stockholder that is a trust to a trustor or beneficiary of the trust
or to the estate of a beneficiary of such trust;
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(7)
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transfers to us in connection with the repurchase of our common stock in connection with the termination of the employment with us of the party subject to the
lock-up
agreement
pursuant to contractual agreements with us;
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(8)
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the disposition of shares of our common stock to us, or the withholding of shares of our common stock by us, in a transaction exempt from Section 16(b) of the Exchange Act solely in connection with the payment of
taxes due with respect to the vesting of restricted stock granted under a stock incentive plan, stock purchase plan or pursuant to a contractual employment arrangement described in this prospectus, insofar as such restricted stock is outstanding as
of the date of this prospectus;
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(9)
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the exercise of a stock option granted under a stock incentive plan or stock purchase plan described in this
prospectus by the party subject to the
lock-up
agreement, and the receipt by the party subject to the
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S-16
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lock-up
agreement of shares of our common stock from us upon such exercise, insofar as such option is outstanding as of the date of this prospectus,
provided that the underlying shares shall continue to be subject to the restrictions on transfer set forth in the
lock-up
agreement and, provided, further that, if required, any public report or filing under
Section 16 of the Exchange Act shall clearly indicate in the footnotes thereto that the filing relates to the exercise of a stock option, that no shares were sold by the reporting person and that the shares received upon exercise of the stock
option are subject to a
lock-up
agreement with the underwriters of this offering;
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(10)
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a merger, consolidation or other similar transaction involving a change of control that has been approved by our board of directors, provided that, in the event that such change of control transaction is not completed,
this clause (10) shall not be applicable and the shares of the party subject to the
lock-up
agreement shall remain subject to the restrictions contained in the
lock-up
agreement;
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(11)
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the establishment of a trading plan pursuant to Rule
10b5-1
under the Exchange Act for the transfer of shares of our common stock provided that (a) such plan does not provide
for the transfer of our common stock during the restricted period and (b) to the extent a public announcement or filing under the Exchange Act, if any, is required of or voluntarily made by or on behalf of the party subject to the
lock-up
agreement or us regarding the establishment of such plan, such announcement or filing shall include a statement to the effect that no transfer of our common stock may be made under such plan during the
restricted period;
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(12)
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the transfer pursuant to a trading plan pursuant to Rule 10b5-1 under the Exchange Act that is existing as of the date hereof, provided that to the extent a public announcement or filing under the Exchange Act is
required of us or on of our officers or directors regarding the sale, such announcement or filing shall include a statement to the effect that the sale occurred pursuant to such trading plan pursuant to Rule 10b5-1;
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(13)
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the sale or issuance of or entry into an agreement to sell or issues shares of common stock in connection with our acquisition of one of one or more businesses, products or technologies (whether by means of merger,
stock purchase, asset purchase or otherwise) or in connection with joint ventures, commercial relationships or other strategic transactions;
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(14)
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the issuance by us of shares of common stock upon the exercise of an option or warrant or the conversion of a security outstanding on the date hereof and disclosed in the prospectus for this offering, or the issuance by
us of shares of, or options to purchase shares of, common stock or restricted stock units to employees, officers, directors, advisors or consultants pursuant to employee benefit plans in effect on the date hereof and described in the prospectus for
this offering;
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(15)
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the disposition of up to 39,000 shares of common stock in the aggregate by our non-employee directors;
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provided, that, in the case of clauses (2), (3), (4), (5) or (6) above each transferee, donee or distributee shall sign and deliver a
lock-up
agreement; and, provided, further that in the case of clauses (1), (2), (3), (4), (5), (6), (7) or (8) above no filing under Section 16(a) of the Exchange Act, reporting a reduction in beneficial
ownership of shares of our common stock, shall be required or shall be voluntarily made during the restricted period; and provided, further, that, the aggregate number of shares of common stock that we may sell or issue or agree to sell or issue
pursuant to clause (13) above will not exceed 5% of the total number of shares of common stock issued and outstanding immediately following the completion of this offering. A “change of control” means the transfer (whether by tender offer,
merger, consolidation or other similar transaction), in one transaction or a series of related transactions, to a person or group of affiliated persons (other than an underwriter pursuant to this offering), of our voting securities if, after such
transfer, such person or group of affiliated persons would hold at least 90% of our (or the surviving entity’s) outstanding voting securities and for the avoidance of doubt, this offering is not a change of control.
Morgan Stanley & Co. LLC and Credit Suisse Securities (USA) LLC may release the common stock and other securities subject to the
lock-up
agreements described above in whole or in part at any time.
S-17
In order to facilitate the offering of the common stock, the underwriters may engage in
transactions that stabilize, maintain or otherwise affect the price of the common stock. Specifically, the underwriter may sell more shares than they are obligated to purchase under the underwriting agreement, creating a short position. A short sale
is covered if the short position is no greater than the number of shares available for purchase by the underwriters under the option. The underwriters can close out a covered short sale by exercising the option or purchasing shares in the open
market. In determining the source of shares to close out a covered short sale, the underwriters will consider, among other things, the open market price of shares compared to the price available under the option. The underwriters may also sell
shares in excess of the option, creating a naked short position. The underwriters must close out any naked short position by purchasing shares in the open market. A naked short position is more likely to be created if the underwriters are concerned
that there may be downward pressure on the price of the common stock in the open market after pricing that could adversely affect investors who purchase in this offering. As an additional means of facilitating this offering, the underwriters may bid
for, and purchase, shares of common stock in the open market to stabilize the price of the common stock. These activities may raise or maintain the market price of the common stock above independent market levels or prevent or retard a decline in
the market price of the common stock. The underwriters are not required to engage in these activities and may end any of these activities at any time.
We and the underwriters have agreed to indemnify each other against certain liabilities, including liabilities under the Securities Act.
A prospectus supplement in electronic format may be made available on websites maintained by one or more underwriters or selling group
members, if any, participating in the offering. The representatives may agree to allocate a number of shares of common stock to underwriters for sale to their online brokerage account holders. Internet distributions will be allocated by the
representatives to underwriters that may make Internet distributions on the same basis as other allocations.
The underwriters and 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. Certain of the underwriters and their respective affiliates have, from time to time, performed, and may in the future perform, various financial advisory and investment banking services for us, for which they
received or will receive customary fees and expenses.
In addition, in the ordinary course of their various business activities, the
underwriters and their affiliates may make or hold a broad array of investments and actively trade debt and equity securities (or related derivative securities) and financial instruments (including bank loans) for their own account and for the
accounts of their customers and may at any time hold long and short positions in such securities and instruments. Such investment and securities activities may involve our securities and instruments. The underwriters and their affiliates may also
make investment recommendations 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 or short positions in such securities and
instruments.
Selling Restrictions
Canada
The shares
of our common stock 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 of our common stock must be made in accordance with an exemption from, or in a transaction not subject to, the prospectus requirements of applicable securities laws.
S-18
Securities legislation in certain provinces or territories of Canada may provide a purchaser with
remedies for rescission or damages if this prospectus (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 shares of our common stock may not be made in that Relevant Member State, except that an offer to the public in that Relevant Member State of any shares of our common stock may be made at any time under the
following exemptions under the Prospectus Directive, if they have been implemented in that Relevant Member State:
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to any legal entity which is a qualified investor as defined in the Prospectus Directive;
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to fewer than 100 or, if the Relevant Member State has implemented the relevant provision of the 2010 PD Amending Directive, 150, natural or legal persons (other than qualified investors as defined in the Prospectus
Directive), as permitted under the Prospectus Directive, subject to obtaining the prior consent of the representatives for any such offer; or
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in any other circumstances falling within Article 3(2) of the Prospectus Directive, provided that no such offer of shares of our common stock shall result in a requirement for the publication by us or any underwriter of
a prospectus pursuant to Article 3 of the Prospectus Directive.
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For the purposes of this provision, the expression an “offer to the
public” in relation to any shares of our common stock 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 shares of our common stock to be offered so as
to enable an investor to decide to purchase any shares of our common stock, as the same may be varied in that Member State by any measure implementing the Prospectus Directive in that Member State, the expression “Prospectus Directive”
means Directive 2003/71/EC (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 the Relevant Member State, and the
expression “2010 PD Amending Directive”
means
Directive 2010/73/EU.
United Kingdom
Each underwriter has represented and agreed that:
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it has only communicated or caused to be communicated and will only communicate or cause to be communicated an invitation or inducement to engage in investment activity (within the meaning of Section 21 of the
Financial Services and Markets Act 2000 (“FSMA”) received by it in connection with the issue or sale of the shares of our common stock in circumstances in which Section 21(1) of the FSMA does not apply to us; and
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it has complied and will comply with all applicable provisions of the FSMA with respect to anything done by it in relation to the shares of our common stock in, from or otherwise involving the United Kingdom.
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S-19
LEGAL MATTERS
The validity of the shares of common stock being offered by this prospectus will be passed upon for us by Cooley LLP, Palo Alto, California.
Wilson Sonsini Goodrich & Rosati, Professional Corporation, Seattle, Washington, is counsel for the underwriters in connection with this offering.
EXPERTS
The consolidated financial statements of Instructure, Inc. appearing in Instructure, Inc.’s Annual Report (Form 10-K) for the year ended
December 31, 2017, and the effectiveness of Instructure, Inc.’s internal control over financial reporting as of December 31, 2017 have been audited by Ernst & Young LLP, independent registered public accounting firm, as set forth in their
reports thereon, included therein, and incorporated herein by reference. Such consolidated financial statements are incorporated herein by reference in reliance upon such reports given on the authority of such firm as experts in accounting and
auditing.
WHERE YOU CAN FIND ADDITIONAL INFORMATION
We file annual, quarterly and other reports, proxy statements and other information with the SEC. Our SEC filings are available to the public
over the Internet at the SEC’s website at http://www.sec.gov. You may also read and copy any document we file at the SEC’s Public Reference Room at 100 F Street, NE, Washington, D.C. 20549. You may obtain information on the operation of
the public reference rooms by calling the SEC at
1-800-SEC-0330.
The SEC also maintains an Internet website that contains
reports, proxy statements, and other information about issuers, like us, that file electronically with the SEC. The address of that website is www.sec.gov.
Our Annual Report on Form
10-K,
Quarterly Reports on Form
10-Q
and Current Reports on Form
8-K,
including any amendments to those reports, and other information that we file with or furnish to the SEC pursuant to Section 13(a) or 15(d) of the Exchange Act can also be
accessed free of charge on the Investor section of our website, which is located at investor.instructure.com. These filings will be available as soon as reasonably practicable after we electronically file such material with, or furnish it to, the
SEC. The information contained in, or that can be accessed through, our website is not incorporated by reference into this prospectus supplement.
S-20
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The SEC allows us to “incorporate by reference” information from other documents that we file with it, which means that we can
disclose important information to you by referring you to those documents. The information incorporated by reference is considered to be part of this prospectus. Information in this prospectus supersedes information incorporated by reference that we
filed with the SEC prior to the date of this prospectus, while information that we file later with the SEC will automatically update and supersede the information in this prospectus. We incorporate by reference into this prospectus and the
registration statement of which this prospectus is a part the information or documents listed below that we have filed with the SEC (Commission File
No. 001-37629):
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our Annual Report
on Form 10-K for
the year ended December 31, 2017, which was filed on February 15, 2018;
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our Current Report on
Form 8-K, which
was filed on January 24, 2018; and
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the description of our common stock in our registration statement on
Form 8-A filed
with the SEC on November 10, 2015, including all amendments and reports filed
for the purpose of updating such description.
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We also incorporate by reference any future filings (other than current
reports furnished under Item 2.02 or Item 7.01
of Form 8-K and
exhibits filed on such form that are related to such items unless such
Form 8-K expressly
provides to the contrary) made with the SEC pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act until we file a post-effective amendment that indicates the
termination of the offering of the securities made by this prospectus and will become a part of this prospectus from the date that such documents are filed with the SEC. Information in such future filings updates and supplements the information
provided in this prospectus. Any statements in any such future filings will automatically be deemed to modify and supersede any information in any document we previously filed with the SEC that is incorporated or deemed to be incorporated herein by
reference to the extent that statements in the later filed document modify or replace such earlier statements.
We will furnish without
charge to each person, including any beneficial owner, to whom a prospectus is delivered, upon written or oral request, a copy of any or all of the documents incorporated by reference, including exhibits to these documents. Any such request may be
made by writing or telephoning us at the following address or phone number:
Instructure, Inc.
Attn: Investor Relations
6330
South 3000 East, Suite 700,
Salt Lake City, UT 84121
(800) 203-6755
S-21
PROSPECTUS
$115,000,000
Common Stock
We may, from time to time,
offer and sell up to $115,000,000 of shares of our common stock in amounts, at prices and on terms described in one or more supplements to this prospectus. We may also authorize one or more free writing prospectuses to be provided to you in
connection with these offerings.
This prospectus describes some of the general terms that may apply to an offering of our common stock. The specific
terms and any other information relating to a specific offering will be set forth in a post-effective amendment to the registration statement of which this prospectus is a part, in a supplement to this prospectus or in a free writing prospectus, or
may be set forth in one or more documents incorporated by reference in this prospectus. You should read this prospectus, the information incorporated by reference into this prospectus and any applicable prospectus supplement or free writing
prospectus carefully before you invest.
Shares of our common stock may be sold by us to or through underwriters or dealers, directly to purchasers or
through agents designated from time to time. For additional information on the methods of sale, you should refer to the section titled “Plan of Distribution” in this prospectus and in the applicable prospectus supplement. If any
underwriters are involved in the sale of any common stock with respect to which this prospectus is being delivered, the names of such underwriters and any applicable discounts or commissions and options to purchase additional shares will be set
forth in a prospectus supplement. The price to the public of such securities and the net proceeds we expect to receive from such sale will also be set forth in a prospectus supplement.
Our common stock is listed on the New York Stock Exchange under the symbol “INST.” On February 14, 2018, the last reported sale price of our
common stock on the New York Stock Exchange was $42.05 per share.
Investing in our common
stock involves a high degree of risk. See “Risk Factors” on page 2 of this prospectus and as updated in our future filings made with the Securities and Exchange Commission that are incorporated by reference into this prospectus.
This prospectus may not be used to offer or sell any securities unless accompanied by a prospectus supplement. The Securities and Exchange
Commission and state securities regulators have not approved or disapproved of these securities, or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
The date of this prospectus is February 15, 2018.
TABLE OF CONTENTS
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement on Form
S-3
that we filed with the Securities and Exchange
Commission, or SEC, using a “shelf” registration process as a “well-known seasoned issuer,” as defined in Rule 405 under the Securities Act of 1933, as amended, or the Securities Act. Under this shelf registration statement, we
may sell from time to time in one or more offerings the common stock described in this prospectus.
Each time we offer common stock under this prospectus,
we will provide a prospectus supplement that will contain more specific information about the terms of that offering. We may also authorize one or more free writing prospectuses to be provided to you that may contain material information relating to
these offerings. The prospectus supplement and any related free writing prospectus that we may authorize to be provided to you may also add, update or change any of the information contained in this prospectus or in the documents that we have
incorporated by reference into this prospectus. We urge you to read carefully this prospectus, any applicable prospectus supplement and any free writing prospectuses we have authorized for use in connection with a specific offering, together with
the information incorporated herein by reference as described under the heading “Incorporation of Certain Information by Reference,” before buying any of the securities being offered.
You should rely only on the information contained in, or incorporated by reference into, this prospectus and the applicable prospectus supplement, along with
the information contained in any free writing prospectuses we have authorized for use in connection with a specific offering. We have not authorized anyone to provide you with different or additional information. This prospectus is an offer to sell
only the common stock offered hereby, but only under circumstances and in jurisdictions where it is lawful to do so.
The information appearing in this
prospectus, any applicable prospectus supplement and any related free writing prospectus is accurate only as of the date on the front of the document and any information we have incorporated by reference is accurate only as of the date of the
document incorporated by reference, regardless of the time of delivery of this prospectus, the applicable prospectus supplement or any related free writing prospectus, or any sale of a security. Our business, financial condition, results of
operations and prospects may have changed since those dates.
This prospectus contains summaries of certain provisions contained in some of the documents
described herein, but reference is made to the actual documents for complete information. All of the summaries are qualified in their entirety by the actual documents. Copies of some of the documents referred to herein have been filed, will be filed
or will be incorporated by reference as exhibits to the registration statement of which this prospectus is a part, and you may obtain copies of those documents as described below under the section titled “Where You Can Find More
Information.”
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Instructure, Canvas, the Instructure logo, Canvas logo and Bridge logo are trademarks of Instructure, Inc. We do
not intend our use or display of other companies’ trade names or trademarks to imply a relationship with, or endorsement or sponsorship of us by, any other companies.
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THE COMPANY
Company Overview
In today’s dynamic,
knowledge-driven economy, quality education and constant learning are critical to the success of people and organizations. Academic institutions recognize that for students to reach their maximum potential, they require an interactive and accessible
learning environment. Similarly, companies strive to compete by delivering continuous learning and feedback to better attract, develop, retain and promote the best people. Organizations in both markets—education and corporate—also require
actionable data to measure, track and improve individual and organizational performance.
With applications for learning, assessment and
performance management, Instructure enables organizations worldwide to develop, deliver, manage and track engaging academic and employee development programs. Built on our innovative, cloud-based platform, our applications combine powerful, elegant
and
easy-to-use
functionality with the reliability, security, scalability and support our customers require. They include:
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Canvas
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Learning management system, or LMS, for K–12 and higher education;
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Bridge
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Learning and performance management suite for businesses;
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Arc
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Next-generation online video learning platform for academic and corporate learning; and
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Gauge
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Assessment management system, or AMS, for K–12.
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For the millions of
students, teachers and employees who use our applications to achieve their educational and professional goals, we provide an engaging and intuitive user experience designed for frequent and open interactions, a streamlined workflow and the creation
and sharing of content, with anytime, anywhere access to information. Our modern, native-cloud architecture enables users to teach, learn and engage across a wide variety of application environments, operating systems, devices and locations. Our
open standards allow for integration with third-party publishers and software providers to deliver additional learning content and applications. We also provide data analytics capabilities, enabling real-time reaction to information and benchmarking
in order to personalize curricula and goal setting; and to increase the efficacy of the learning, assessment and performance management processes.
We
deliver our applications through a
Software-as-a-Service,
or SaaS, business model. Customers can rapidly deploy our systems with
minimal upfront implementation. They also benefit from regular software updates with 99.9% uptime. Our SaaS business model substantially reduces the need for our customers to buy and support a broad range of IT infrastructure, and significantly
reduces the cost, complexity and disruptions associated with implementations and upgrades of
on-premise
software.
Corporate information
We were incorporated in Delaware
in September 2008. Our principal executive offices are located at 6330 South 3000 East, Suite 700, Salt Lake City, UT 84121 and our telephone number is (800)
203-6755.
Our corporate website address is
www.instructure.com. Information contained on or accessible through our website is not a part of this prospectus, and the inclusion of our website address in this prospectus is an inactive textual reference only.
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RISK FACTORS
Investing in our common stock involves a high degree of risk. Before deciding whether to invest in our common stock, you should consider carefully the risks
and uncertainties described under the heading “Risk Factors” contained in the applicable prospectus supplement and any related free writing prospectus, and discussed under the section titled “Risk Factors” contained in our most
recent Annual Report on
Form 10-K , as
well as any amendments thereto reflected in subsequent filings with the SEC, which are incorporated by reference into this prospectus in their entirety,
together with other information in this prospectus, the documents incorporated by reference and any free writing prospectus that we may authorize for use in connection with a specific offering. These risks are not exhaustive. There may be other
unknown or unpredictable economic, business, competitive or other factors that could have material adverse effects on our future results. Moreover, we operate in a very competitive and rapidly changing environment. New risk factors emerge from time
to time, and it is not possible for our management to predict all risk factors nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially
from those contained in, or implied by, any forward-looking statements. Past financial performance may not be a reliable indicator of future performance, and historical trends should not be used to anticipate results or trends in future periods. If
any of these risks actually occurs, our business, financial condition, results of operations or cash flow could be harmed. This could cause the trading price of our common stock to decline, resulting in a loss of all or part of your investment.
Please also carefully read the section below titled “Special Note Regarding Forward-Looking Statements.”
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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus and the documents we have filed with the SEC that are incorporated by reference contain “forward-looking statements” within the
meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. These statements relate to future events or to our future
operating or financial performance and involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performances or achievements
expressed or implied by the forward-looking statements. Forward-looking statements may include, but are not limited to, statements about:
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our ability to grow and retain our customer base, both domestically and internationally;
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our ability to increase revenue from our customer base by selling additional applications and services, including Arc, Gauge and Practice;
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our ability to provide effective customer support and induce our customers to renew and upgrade their subscriptions;
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our ability to expand our sales organization to address effectively the new industries, geographies and types of organizations we intend to target;
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our ability to forecast and maintain an adequate rate of revenue growth and appropriately plan our expenses;
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our ability to displace existing products addressing learning management applications, along with continued acceptance of SaaS as an effective method for delivering our applications;
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the effects of seasonal and cyclical trends on our results of operations;
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the attraction and retention of qualified employees and key personnel;
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our ability to protect and enhance our brands and intellectual property;
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costs related to defending intellectual property infringement and other claims;
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the effects of increased competition and alternatives to our platform and applications and our ability to successfully differentiate our platform and applications;
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our expectations concerning our relationships and actions with third parties;
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future regulatory, judicial and legislative changes in our industry; and
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future arrangements with, or investments in, other entities or associations, products, services or technologies.
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In some cases, you can identify forward-looking statements by terminology such as “anticipate,” “believe,” “continue,”
“estimate,” “expect,” “intend,” “may,” “might,” “plan,” “potential,” “predict,” “project,” “should,” and “will,” or the negative of terms
like these or other comparable terminology, and other words or terms of similar meaning. These statements reflect our current views with respect to future events, are based on assumptions and are subject to risks and uncertainties. Given these risks
and uncertainties, you should not place undue reliance on these forward-looking statements. We discuss in greater detail, and incorporate by reference into this prospectus in their entirety, many of these risks and uncertainties under the section
titled “Risk Factors” contained in the applicable prospectus supplement, in any free writing prospectus we may authorize for use in connection with a specific offering, and in our most recent Annual Report on Form
10-K,
as well as any amendments thereto reflected in subsequent filings with the SEC. Also, these forward-looking statements represent our estimates and assumptions only as of the date of the document containing the
applicable statement. Unless required by law, we undertake no obligation to update or revise any forward-looking statements to reflect new information or future events or developments. Thus, you should not assume that our silence over time means
that actual events are bearing out as expressed or implied in such forward-looking statements. You should read
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this prospectus, the applicable prospectus supplement, together with the documents we have filed with the SEC that are incorporated by reference and any free writing prospectus we have authorized
for use in connection with a specific offering completely and with the understanding that our actual future results may be materially different from what we expect. We qualify all of the forward-looking statements in the foregoing documents by these
cautionary statements.
In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant
subject. These statements are based upon information available to us as of the date of this prospectus, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our
statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon
these statements.
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USE OF PROCEEDS
Except as described in any prospectus supplement, we currently intend to use the net proceeds from the sale of common stock under this prospectus to increase
our capitalization and financial flexibility. As of the date of this prospectus, we cannot specify with certainty all of the particular uses for the net proceeds to us from the sale of common stock under this prospectus. However, we currently intend
to use the net proceeds to us from the sale of common stock under this prospectus primarily for general corporate purposes, including working capital, sales and marketing activities, research and development activities, general and administrative
matters and capital expenditures. We may also use a portion of the net proceeds from the sale of common stock under this prospectus for the acquisition of, or investment in, technologies, solutions or businesses that complement our business,
although we have no present commitments or agreements to enter into any such acquisitions or investments. We will have broad discretion over the uses of the net proceeds from the sale of common stock under this prospectus and investors will be
relying on the judgment of our management regarding the application of the net proceeds from the sale of common stock under this prospectus.
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DESCRIPTION OF CAPITAL STOCK
General
As of the date of this
prospectus, our authorized capital stock will consist of 210,000,000 shares, all with a par value of $0.0001 per share, of which:
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200,000,000 shares are designated as common stock; and
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10,000,000 shares are designated as preferred stock.
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The following summary describes the
material terms of our capital stock. The description of capital stock is qualified by reference to our amended and restated certificate of incorporation and our amended and restated bylaws, which are incorporated by reference as exhibits into the
registration statement of which this prospectus is a part.
Common Stock
Voting Rights
Each
holder of common stock is entitled to one vote for each share of common stock held on all matters submitted to a vote of stockholders, except as otherwise expressly provided in our amended and restated certificate of incorporation or required by
applicable law. Cumulative voting for the election of directors is not provided for in our amended and restated certificate of incorporation, which means that the holders of a majority of the shares of common stock can elect all of the directors
then standing for election.
Dividends and Distributions
Subject to preferences that may apply to any shares of preferred stock outstanding at the time, the holders of outstanding shares of common
stock are entitled to receive dividends out of funds legally available at the times and in the amounts that our board of directors may determine. We do not anticipate paying any cash dividends in the foreseeable future.
Liquidation Rights
Upon our liquidation, dissolution or
winding-up,
the assets legally available for distribution to our
stockholders would be distributable ratably among the holders of common stock and any participating preferred stock outstanding at that time after payment of liquidation preferences, on any outstanding shares of preferred stock and payment of other
claims of creditors.
The rights, preferences, and privileges of holders of common stock are subject to, and may be adversely affected by,
the rights of holders of shares of any series of preferred stock that we may designate and issue in the future.
Preemptive or
Similar Rights
Our common stock is not entitled to preemptive rights and is not subject to conversion or redemption.
Preferred Stock
Under our amended and
restated certificate of incorporation, our board of directors may, without further action by our stockholders, fix the rights, preferences, privileges and restrictions of up to an aggregate of 10,000,000 shares of preferred stock in one or more
series and authorize their issuance. These rights, preferences and privileges could include dividend rights, conversion rights, voting rights, terms of redemption, liquidation preferences, sinking fund terms and the number of shares constituting any
series or the designation of such series, any or all of which may be greater than the rights of our common stock. The issuance of our preferred stock
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could adversely affect the voting power of holders of our common stock and the likelihood that such holders will receive dividend payments and payments upon liquidation. In addition, the issuance
of preferred stock could have the effect of delaying, deferring or preventing a change of control or other corporate action. As of the date of this prospectus, no shares of preferred stock will be outstanding, and we have no present plan to issue
any shares of preferred stock.
Registration Rights
We are party to an investor rights agreement which provides that holders of our common stock, including certain holders of 5% of our common
stock and entities affiliated with certain of our directors, have certain registration rights, as set forth below. This investor rights agreement was entered into in April 2011 and was subsequently amended and restated from time to time prior to our
initial public offering. The registration of shares of our common stock pursuant to the exercise of registration rights described below would enable the holders to sell these shares without restriction under the Securities Act when the applicable
registration statement is declared effective. We will pay the registration expenses, other than underwriting discounts and selling commissions, of the shares registered pursuant to the demand, piggyback and Form
S-3
registrations described below.
Generally, in an underwritten offering, the managing
underwriter, if any, has the right, subject to specific conditions, to limit the number of shares such holders may include. The demand, piggyback and Form
S-3
registration rights described below will expire in
November 2018, or with respect to any particular stockholder, such time as that stockholder can sell all of its shares under Rule 144 of the Securities Act during any
90-day
period.
Demand Registration Rights
The holders of approximately 2.7 million shares of common stock are entitled to certain demand registration rights and the holders of 75%
of these shares may, on not more than two occasions, request that we file a registration statement having an aggregate offering price to the public of not less than $10,000,000 to register the offer and sale of all or a portion of their shares.
Piggyback Registration Rights
If we propose to register the offer and sale of any of our securities under the Securities Act either for our own account or for the account of
other security holders, the holders of approximately 2.7 million shares of our common stock will be entitled to certain “piggyback” registration rights allowing them to include their shares in such registration, subject to certain
marketing and other limitations. As a result, whenever we propose to file a registration statement under the Securities Act including a registration statement on
Form S-3
as discussed below, other than
with respect to a demand registration or a registration statement on
Forms S-4
or
S-8,
the holders of these shares are entitled to notice of the registration and
have the right, subject to limitations that the underwriters may impose on the number of shares included in the registration, to include their shares in the registration. The necessary percentage of holders have waived their rights to include their
shares of registrable securities in the registration statement of which this prospectus forms a part.
Form
S-3
Registration Rights
The holders of approximately 2.7 million shares of common stock are
entitled to certain
Form S-3
registration rights. Such holders may make a request that we register their shares on
Form S-3
if we are qualified to file a
registration statement on Form
S-3.
Such request for registration on
Form S-3
must cover securities the aggregate offering price of which, before payment of
underwriting discounts and commissions, is at least $500,000.
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Anti-Takeover Provisions
Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws
Among other things, our amended and restated certificate of incorporation and amended and restated bylaws:
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permit our board of directors to issue up to 10,000,000 shares of preferred stock, with any rights, preferences and privileges as they may designate, including the right to approve an acquisition or other change of
control;
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provide that the authorized number of directors may be changed only by resolution of our board of directors;
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provide that, subject to the rights of any series of preferred stock to elect directors, directors may be removed with or without cause, by the holders of at least 66 2/3% of all of our then-outstanding shares of
the capital stock entitled to vote generally at an election of directors;
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provide that all vacancies, including newly created directorships, may, except as otherwise required by law, be filled by the affirmative vote of a majority of directors then in office, even if less than a quorum;
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require that any action to be taken by our stockholders must be effected at a duly called annual or special meeting of stockholders and not be taken by written consent or electronic transmission;
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provide that stockholders seeking to present proposals before a meeting of stockholders or to nominate candidates for election as directors at a meeting of stockholders must provide advance notice in writing, and also
specify requirements as to the form and content of a stockholder’s notice;
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provide that special meetings of our stockholders may be called only by the chairperson of our board of directors, our chief executive officer or by our board of directors pursuant to a resolution adopted by a majority
of the total number of authorized directors; and
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not provide for cumulative voting rights, therefore allowing the holders of a majority of the shares of common stock entitled to vote in any election of directors to elect all of the directors standing for election, if
they should so choose.
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The amendment of any of these provisions would require approval by the holders of at least
66 2/3% of all of our then-outstanding capital stock entitled to vote generally in the election of directors.
The combination of
these provisions will make it more difficult for our existing stockholders to replace our board of directors as well as for another party to obtain control of us by replacing our board of directors. Because our board of directors has the power to
retain and discharge our officers, these provisions could also make it more difficult for existing stockholders or another party to effect a change in management. In addition, the authorization of undesignated preferred stock makes it possible for
our board of directors to issue preferred stock with voting or other rights or preferences that could impede the success of any attempt to change our control.
These provisions are intended to enhance the likelihood of continued stability in the composition of our board of directors and its policies
and to discourage coercive takeover practices and inadequate takeover bids. These provisions are also designed to reduce our vulnerability to hostile takeovers and to discourage certain tactics that may be used in proxy fights. However, such
provisions could have the effect of discouraging others from making tender offers for our shares and may have the effect of delaying changes in our control or management. As a consequence, these provisions may also inhibit fluctuations in the market
price of our stock.
Delaware Anti-Takeover Law
We are subject to Section 203 of the Delaware General Corporation Law, or Section 203. Section 203 generally prohibits a public
Delaware corporation from engaging in a “business combination” with an “interested
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stockholder” for a period of three years after the date of the transaction in which the person became an interested stockholder, unless:
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prior to the date of the transaction, the board of directors of the corporation approved either the business combination or the transaction which resulted in the stockholder becoming an interested stockholder;
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the interested stockholder owned at least 85% of the voting stock of the corporation outstanding upon consummation of the transaction, excluding for purposes of determining the number of shares outstanding
(1) shares owned by persons who are directors and also officers and (2) shares owned by employee stock plans in which employee participants do not have the right to determine confidentially whether shares held subject to the plan will be
tendered in a tender or exchange offer; or
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on or subsequent to the consummation of the transaction, the business combination is approved by the board and authorized at an annual or special meeting of stockholders, and not by written consent, by the affirmative
vote of at least 66 2/3% of the outstanding voting stock which is not owned by the interested stockholder.
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Section 203
defines a business combination to include:
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any merger or consolidation involving the corporation and the interested stockholder;
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any sale, transfer, pledge or other disposition involving the interested stockholder of 10% or more of the assets of the corporation;
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subject to exceptions, any transaction involving the corporation that has the effect of increasing the proportionate share of the stock of any class or series of the corporation beneficially owned by the interested
stockholder;
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subject to exceptions, any transaction that results in the issuance or transfer by the corporation of any stock of the corporation to the interested stockholder; and
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the receipt by the interested stockholder of the benefit of any loans, advances, guarantees, pledges or other financial benefits provided by or through the corporation.
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In general, Section 203 defines an interested stockholder as any entity or person beneficially owning 15% or more of the outstanding
voting stock of the corporation and any entity or person affiliated with or controlling or controlled by the entity or person.
Choice of Forum
Our amended and restated certificate of incorporation provides that the Court of Chancery of the State of Delaware is the exclusive
forum for any derivative action or proceeding brought on our behalf; any action asserting a breach of fiduciary duty; any action asserting a claim against us arising pursuant to the Delaware General Corporation Law, our amended and restated
certificate of incorporation or our amended and restated bylaws; or any action asserting a claim against us that is governed by the internal affairs doctrine. The enforceability of similar choice of forum provisions in other companies’
certificates of incorporation has been challenged in legal proceedings, and it is possible that, in connection with one or more actions or proceedings described above, a court could find the choice of forum provisions contained in our amended and
restated certificate of incorporation to be inapplicable or unenforceable.
Listing
Our common stock is listed on the New York Stock Exchange, or NYSE, under the symbol “INST.”
Transfer Agent and Registrar
The
transfer agent and registrar for our common stock is Computershare Trust Company N.A. The transfer agent and registrar’s address is 250 Royall Street, Canton, Massachusetts 02021. The transfer agent’s telephone number is
(877) 373-6374.
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PLAN OF DISTRIBUTION
We may sell our common stock covered by this prospectus in any of three ways (or in any combination):
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to or through underwriters or dealers;
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directly to one or more purchasers; or
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We may distribute the common stock:
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from time to time in one or more transactions at a fixed price or prices, which may be changed from time to time;
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at market prices prevailing at the time of sale;
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at prices related to the prevailing market prices; or
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Each time we offer and sell shares of our common stock covered by this
prospectus, we will provide a prospectus supplement or supplements that will describe the method of distribution and set forth the terms of the offering, including:
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the name or names of any underwriters, dealers or agents;
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the amounts of securities underwritten or purchased by each of them;
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the purchase price of the common stock and the proceeds we will receive from the sale;
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any option to purchase additional shares under which underwriters may purchase additional common stock from us;
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any underwriting discounts or commissions or agency fees and other items constituting underwriters’ or agents’ compensation;
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the public offering price of the common stock;
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any discounts, commissions or concessions allowed or reallowed or paid to dealers; and
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any securities exchange or market on which the common stock may be listed.
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Any public
offering price and any discounts or concessions allowed or reallowed or paid to dealers may be changed from time to time. We may determine the price or other terms of the common stock offered under this prospectus by use of an electronic auction. We
will describe how any auction will determine the price or any other terms, how potential investors may participate in the auction and the nature of the obligations of the underwriter, dealer or agent in the applicable prospectus supplement.
Underwriters or dealers may offer and sell the offered common stock from time to time in one or more transactions on the NYSE, in the
over-the-counter market, through negotiated transactions or otherwise, at market prices prevailing at the time of sale, at a fixed public offering price, at prices related to prevailing market prices or negotiated prices. If underwriters or dealers
are used in the sale of any common stock, the common stock will be acquired by the underwriters or dealers for their own account and may be resold from time to time in one or more transactions described above. The common stock may be either offered
to the public through underwriting syndicates represented by managing underwriters, or directly by underwriters or dealers. Generally, the underwriters’ or dealers’ obligations to purchase the common stock will be subject to certain
conditions precedent. The underwriters or dealers will be obligated to purchase all of the common stock if they purchase any of the common stock, unless otherwise specified in the prospectus supplement. We may use underwriters with
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whom we have a material relationship. We will describe the nature of any such relationship in the prospectus supplement, naming the underwriter.
We may sell the common stock through agents from time to time. The prospectus supplement will name any agent involved in the offer or sale of
the common stock and any commissions we pay to them. Generally, any agent will be acting on a best efforts basis for the period of its appointment. We may authorize underwriters, dealers or agents to solicit offers by certain purchasers to purchase
the common stock from us at the public offering price set forth in the prospectus supplement pursuant to delayed delivery contracts providing for payment and delivery on a specified date in the future. The contracts will be subject only to those
conditions set forth in the prospectus supplement, and the prospectus supplement will set forth any commissions we pay for solicitation of these contracts.
Agents, dealers and underwriters may be entitled to indemnification by us against certain civil liabilities, including liabilities under the
Securities Act, or to contribution with respect to payments which the agents, dealers or underwriters may be required to make in respect thereof. Agents, dealers and underwriters may be customers of, engage in transactions with, or perform services
for us in the ordinary course of business.
To facilitate the offering of our common stock, underwriters participating in the offering may
engage in overallotment, stabilizing transactions, short covering transactions and penalty bids in accordance with Regulation M under the Exchange Act. Overallotment involves the sale by the underwriters for the offering of more shares than we sold
to them, which create a short position. This short sales position may involve either “covered” short sales or “naked” short sales. Covered short sales are short sales made in an amount not greater than the underwriters’
option to purchase additional shares for the offering. The underwriters may close out any covered short position either by exercising their overallotment option or by purchasing shares in the open market. To determine how they will close the covered
short position, the underwriters will consider, among other things, the price of common stock available for purchase in the open market, as compared to the price at which they may purchase common stock through their overallotment option. Naked short
sales are short sales in excess of the overallotment option. The underwriters must close out any naked short position by purchasing shares in the open market. A naked short position is more likely to be created if the underwriters are concerned
that, in the open market after pricing, there may be downward pressure on the price of the common stock that could adversely affect investors who purchase shares in the offering. Stabilizing transactions permit bids to purchase the underlying
security for the purpose of fixing the price of the security so long as the stabilizing bids do not exceed a specified maximum. Penalty bids permit the underwriters to reclaim a selling concession from a dealer when the securities originally sold by
the dealer are purchased in a covering transaction to cover short positions.
Any underwriters who are qualified market makers on NYSE may
engage in passive market making transactions in our common stock, preferred stock, warrants and debt securities, as applicable, on NYSE in accordance with Rule 103 of Regulation M, during the business day prior to the pricing of the offering, before
the commencement of offers or sales of the securities. Passive market makers must comply with applicable volume and price limitations and must be identified as passive market makers. In general, a passive market maker must display its bid at a price
not in excess of the highest independent bid for such security; if all independent bids are lowered below the passive market maker’s bid, however, the passive market maker’s bid must then be lowered when certain purchase limits are
exceeded.
In compliance with guidelines of the Financial Industry Regulatory Authority, or FINRA, the maximum consideration or discount
to be received by any FINRA member or independent broker dealer may not exceed 8% of the aggregate amount of the securities offered pursuant to this prospectus and any applicable prospectus supplement.
Similar to other purchase transactions, an underwriter’s purchase to cover the syndicate short sales or to stabilize the market price of
our common stock may have the effect of raising or maintaining the market price of
our common stock or preventing or mitigating a decline in the market
price of our common stock. As a result, the
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share price of our common stock may be higher than the price that might otherwise exist in the open market. The imposition of a penalty bid might also have an effect on the price of the common
stock if it discourages resales of the shares.
Neither we nor the underwriters makes any representation or prediction as to the effect
that the transactions described above may have on the price of our common stock. If such transactions are commenced, they may be discontinued without notice at any time.
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LEGAL MATTERS
The validity of the securities offered by this prospectus, and any supplement thereto, will be passed upon for us by Cooley LLP, Palo Alto,
California.
EXPERTS
The consolidated financial statements of Instructure, Inc. appearing in Instructure, Inc.’s Annual Report (Form
10-K)
for the year ended December 31, 2017, and the effectiveness of Instructure, Inc.’s internal control over financial reporting as of December 31, 2017 have been audited by Ernst & Young
LLP, independent registered public accounting firm, as set forth in their reports thereon, included therein, and incorporated herein by reference. Such consolidated financial statements are incorporated herein by reference in reliance upon such
reports given on the authority of such firm as experts in accounting and auditing.
WHERE YOU CAN FIND
ADDITIONAL INFORMATION
This prospectus is part of the registration statement on Form
S-3
we
have filed with the SEC under the Securities Act and does not contain all the information set forth or incorporated by reference in the registration statement. Whenever a reference is made in this prospectus to any of our contracts, agreements or
other documents, the reference may not be complete and you should refer to the exhibits that are a part of the registration statement or the exhibits to the reports or other documents incorporated by reference into this prospectus for a copy of such
contract, agreement or other document. Because we are subject to the information and reporting requirements of the Securities Exchange Act of 1934, as amended, or the Exchange Act, we file annual, quarterly and current reports, proxy statements and
other information with the SEC.
Our SEC filings are available to the public over the Internet at the SEC’s website at
http://www.sec.gov. You may also read and copy any document we file at the SEC’s Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at
1-800-SEC-0330
for further information on the operation of the Public Reference Room.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The SEC allows us to “incorporate by reference” information from other
documents that we file with it, which means that we can disclose important information to you by referring you to those documents. The information incorporated by reference is considered to be part of this prospectus. Information in this prospectus
supersedes information incorporated by reference that we filed with the SEC prior to the date of this prospectus, while information that we file later with the SEC will automatically update and supersede the information in this prospectus. We
incorporate by reference into this prospectus and the registration statement of which this prospectus is a part the information or documents listed below that we have filed with the SEC (Commission File
No. 001-37629):
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our Annual Report
on Form 10-K for
the year ended December 31, 2017, which was filed on February 15, 2018;
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our Current Report on
Form 8-K, which
was filed on January 24, 2018; and
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the description of our common stock in our registration statement on
Form 8-A filed
with the SEC on November 10, 2015, including all amendments and reports filed
for the purpose of updating such description.
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We also incorporate by reference any future filings (other than current
reports furnished under Item 2.02 or Item 7.01
of Form 8-K and
exhibits filed on such form that are related to such items unless such
Form 8-K expressly
provides to the contrary) made with the SEC pursuant to Sections 13(a), 13(c), 14 or 15(d) of
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the Exchange Act until we file a post-effective amendment that indicates the termination of the offering of the securities made by this prospectus and will become a part of this prospectus from
the date that such documents are filed with the SEC. Information in such future filings updates and supplements the information provided in this prospectus. Any statements in any such future filings will automatically be deemed to modify and
supersede any information in any document we previously filed with the SEC that is incorporated or deemed to be incorporated herein by reference to the extent that statements in the later filed document modify or replace such earlier statements.
We will furnish without charge to each person, including any beneficial owner, to whom a prospectus is delivered, upon written or oral
request, a copy of any or all of the documents incorporated by reference, including exhibits to these documents. Any such request may be made by writing or telephoning us at the following address or phone number:
Instructure, Inc.
Attn: Investor
Relations
6330 South 3000 East, Suite 700,
Salt Lake City, UT 84121
(800)
203-6755
14
2,300,000 Shares
COMMON STOCK
PROSPECTUS SUPPLEMENT
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MORGAN STANLEY
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CREDIT SUISSE
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, 2018
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