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 the SEC, using a
“shelf”
registration process.
Under this shelf process, we may, from time to time, offer or sell
any combination of the securities described in this prospectus in
one or more offerings up to a total dollar amount of
$200,000,000.
This prospectus
provides you with a general description of the securities we may
offer. Each time we sell securities, we will provide a prospectus
supplement that will contain specific information about the terms
of that offering. The prospectus supplement may also add to, update
or change information contained in the prospectus or in the
documents incorporated by reference in the prospectus. To the
extent inconsistent, information in this prospectus is superseded
by the information in the prospectus supplement.
The prospectus
supplement to be attached to the front of this prospectus may
describe, as applicable: the terms of the securities offered; the
initial public offering price; the price paid for the securities;
net proceeds; and the other specific terms related to the offering
of the securities.
You should only rely
on the information contained or incorporated by reference in this
prospectus and any prospectus supplement or issuer free writing
prospectus relating to a particular offering. No person has been
authorized to give any information or make any representations in
connection with this offering other than those contained or
incorporated by reference in this prospectus, any accompanying
prospectus supplement and any related issuer free writing
prospectus in connection with the offering described herein and
therein, and, if given or made, such information or representations
must not be relied upon as having been authorized by us. Neither
this prospectus nor any prospectus supplement nor any related
issuer free writing prospectus shall constitute an offer to sell or
a solicitation of an offer to buy offered securities in any
jurisdiction in which it is unlawful for such person to make such
an offering or solicitation. This prospectus does not contain all
of the information included in the registration statement. For a
more complete understanding of the offering of the securities, you
should refer to the registration statement, including its exhibits.
You should read the entire prospectus and any prospectus supplement
and any related issuer free writing prospectus, as well as the
documents incorporated by reference into this prospectus or any
prospectus supplement or any related issuer free writing
prospectus, before making an investment decision. Neither the
delivery of this prospectus or any prospectus supplement or any
issuer free writing prospectus nor any sale made hereunder shall
under any circumstances imply that the information contained or
incorporated by reference herein or in any prospectus supplement or
issuer free writing prospectus is correct as of any date subsequent
to the date hereof or of such prospectus supplement or issuer free
writing prospectus, as applicable.
PROSPECTUS
SUMMARY
The
following summary highlights information contained in this
prospectus or incorporated by reference. While we have included
what we believe to be the most important information about the
company and this offering, the following summary may not contain
all the information that may be important to you. You should read
this entire prospectus carefully, including the risks of investing
discussed under “Risk Factors” beginning on page 4, the information
to which we refer you and the information incorporated into this
prospectus by reference, for a complete understanding of our
business and this offering. References in this prospectus to “our
company,” “we,” “our,” “Cassava Sciences” and “us” refer to Cassava
Sciences, Inc.
Cassava
Sciences, Inc.
Overview
Cassava Sciences,
Inc. is a clinical stage biotechnology company. Our mission is to
detect and treat neurodegenerative diseases, such as Alzheimer’s
disease. Our novel science is based on stabilizing – but not
removing – a critical protein in the brain.
Over the past 10
years, we have combined state-of-the-art technology with new
insights in neurobiology to develop novel solutions for Alzheimer’s
disease and other neurodegenerative diseases. Our strategy is to leverage our
unique scientific/clinical platform to develop a first-in-class
program for treating neurodegenerative
diseases, such as Alzheimer’s.
We currently have two
clinical-stage biopharmaceutical
assets under
development:
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our
lead therapeutic product candidate, called PTI-125, for the
treatment of Alzheimer’s disease; and
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our
lead investigational diagnostic product candidate, called SavaDx,
to detect Alzheimer’s disease from a small sample of blood,
possibly years before the overt appearance of clinical
symptoms.
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Our
scientific approach for the treatment of Alzheimer’s disease seeks
to simultaneously improve both
neurodegeneration
and neuroinflammation. We believe our ability to improve multiple
vital functions in the brain represents a new, different and
crucial approach to address Alzheimer’s disease.
Corporate
Information
We were
incorporated in Delaware in May 1998. Our principal executive
offices are located at 7801 N Capital of Texas Highway, Suite 260,
Austin, TX, 78731 and our telephone number at that address is (512)
501-2444.
The
securities we may offer
We may
offer up to $200 million of common stock, preferred stock,
depositary shares, warrants and debt securities in one or more
offerings and in any combination. This prospectus provides you with
a general description of the securities we may offer. A prospectus
supplement, which we will provide each time we offer securities,
will describe the specific amounts, prices and terms of these
securities.
We may
sell the securities to or through underwriters, dealers or agents
or directly to purchasers or as otherwise set forth below
under “Plan
of Distribution.”
We, as
well as any agents acting on our behalf, reserve the sole right to
accept and to reject in whole or in part any proposed purchase
of securities. Each prospectus supplement will set forth the names
of any underwriters, dealers, agents or other entities involved in
the sale of securities described in that prospectus supplement and
any applicable fee, commission or discount arrangements with
them.
Common
stock
We may
offer shares of our common stock, par value $0.001 per share,
either alone or underlying other registered securities convertible
into our common stock. Holders of our common stock are entitled to
receive dividends
declared by our board
of directors out of funds legally available for the payment of
dividends, subject to rights, if any, of preferred stockholders.
Currently, we do not pay a dividend. Each holder of common stock is
entitled to one vote per share. The holders of common stock have no
preemptive rights.
Preferred
stock and depositary shares
We may issue
preferred stock in one or more series. Our board of directors or a
committee designated by the board will determine the dividend,
voting and conversion rights and other provisions at the time of
sale. Each series of preferred stock will be more fully described
in the particular prospectus supplement that will accompany this
prospectus, including redemption provisions, rights in the event of
liquidation, dissolution or the winding up of Cassava Sciences,
Inc., voting rights and rights to convert into common stock. We may
also issue fractional shares of preferred stock that will be
represented by depositary shares and depositary receipts. Each
particular series of depositary shares will be more fully described
in the prospectus supplement that will accompany this
prospectus.
Warrants
We may issue warrants
for the purchase of common stock, preferred stock or debt
securities. We may issue warrants independently or together with
other securities.
Debt
securities
We may offer secured
or unsecured obligations in the form of one or more series of
senior or subordinated debt. The senior debt securities and the
subordinated debt securities are together referred to in this
prospectus as the “debt
securities.”
The senior debt
securities will have the same rank as all of our other
unsubordinated debt. The subordinated debt securities generally
will be entitled to payment only after payment of our senior debt.
Senior debt generally includes all debt for money borrowed by us,
except debt that is stated in the instrument governing the terms of
that debt to be not senior to, or to have the same rank in right of
payment as, or to be expressly junior to, the subordinated debt
securities. We may issue debt securities that are convertible into
shares of our common stock.
The senior and
subordinated debt securities will be issued under separate
indentures between us and a trustee. We have summarized the general
features of the debt securities to be governed by the indentures.
These indentures have been filed as exhibits to the registration
statement of which this prospectus forms a part. We encourage you
to read these indentures. Instructions on how you can get copies of
these documents are provided under the heading “Where
You Can Find More Information.”
Units
We may offer units
comprised of common stock, preferred stock, depository shares,
warrants, debt
securities, or any combination thereof.
RISK
FACTORS
An investment in our
securities involves a high degree of risk. The prospectus
supplement applicable to each offering of our securities will
contain a discussion of the risks applicable to an investment in
our securities. Prior to making a decision about investing in our
securities, you should carefully consider the specific factors
discussed under the heading “Risk
Factors”
in the applicable
prospectus supplement, together with all of the other information
contained or incorporated by reference in the prospectus supplement
or appearing or incorporated by reference in this prospectus. You
should also consider the risks, uncertainties and assumptions
discussed under Item 1A, “Risk
Factors,”
in our Annual Report
on Form 10-K for the fiscal year ended December 31, 2019 which are
incorporated herein by reference, and may be amended, supplemented
or superseded from time to time by other reports we file with the
SEC in the future and any prospectus supplement related to a
particular offering. The risks and uncertainties we have described
are not the only ones we face. Additional risks and uncertainties
not presently known to us or that we currently deem immaterial may
also affect our operations.
FORWARD-LOOKING
STATEMENTS
This prospectus and
the registration statement of which it forms a part, any prospectus
supplement, any related issuer free writing prospectus and the
documents incorporated by reference into these documents contain
forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange
Act of 1934. Forward-looking statements deal with our current
plans, intentions, beliefs and expectations and statements of
future economic performance. Statements containing terms such
as “believe,” “do
not believe,” “plan,” “expect,” “intend,” “estimate,” “anticipate”
and other phrases of
similar meaning are considered to contain uncertainty and are
forward-looking statements. In addition, from time to time we or
our representatives have made or will make forward-looking
statements orally or in writing. Furthermore, such forward-looking
statements may be included in various filings that we make with the
SEC, or press releases or oral statements made by or with the
approval of one of our authorized executive officers. These
forward-looking statements are subject to certain known and unknown
risks and uncertainties, as well as assumptions that could cause
actual results to differ materially from those reflected in these
forward-looking statements. Factors that might cause actual results
to differ include, but are not limited to, those set forth under
Item 1A, “Risk
Factors,”
and Item 7,
“Management’s
Discussion and Analysis of Financial Condition and Results of
Operation,”
in our most recent
Annual Report on Form 10-K and in our future filings made with the
SEC. Readers are cautioned not to place undue reliance on any
forward-looking statements contained in this prospectus, any
prospectus supplement or any related issuer free writing
prospectus, which reflect management’s
opinions only as of their respective dates. Except as required by
law, we undertake no obligation to revise or publicly release the
results of any revisions to any forward-looking statements. You are
advised, however, to consult any additional disclosures we have
made or will make in our reports to the SEC on Forms 10-K, 10-Q and
8-K. All subsequent written and oral forward-looking statements
attributable to us or persons acting on our behalf are expressly
qualified in their entirety by the cautionary statements contained
in this prospectus, any prospectus supplement or any related issuer
free writing prospectus.
Unless otherwise
indicated in the prospectus supplement, the net proceeds from the
sale of securities offered by this prospectus will be used for
general corporate purposes and working capital requirements, which
may include, among other things, the repayment or repurchase of
debt obligations and other capital expenditures. We may also use a
portion of the net proceeds for licensing or acquiring intellectual
property or technologies to incorporate into our products and
product candidates or our research and development programs,
capital expenditures, to fund possible investments in and
acquisitions of complementary businesses or partnerships. We have
not determined the amounts we plan to spend on the areas listed
above or the timing of these expenditures, and we have no current
plans with respect to acquisitions as of the date of this
prospectus. As a result, unless otherwise indicated in the
prospectus supplement, our management will have broad discretion to
allocate the net proceeds of the offerings. Pending their ultimate
use, we intend to invest the net proceeds in a variety of
securities, including commercial paper, government and
non-government debt securities and/or money market funds that
invest in such securities.
Other than our special
nondividend distributions in December 2012 and December 2010, we
have not paid cash dividends on our common stock. We do not
anticipate paying periodic cash dividends on our common stock for
the foreseeable future. We intend to use all available cash and
liquid assets in the operation and growth of our business. Any
future determination about the payment of dividends will be made at
the discretion of our board of directors and will depend upon our
earnings, if any, capital requirements, operating and financial
conditions and on such other factors as our board of directors
deems relevant.
DESCRIPTION
OF CAPITAL STOCK
General
As of the date of
this prospectus, our authorized capital stock consists of
130,000,000 shares. Those shares consist of 120,000,000 shares
designated as common stock, $0.001 par value, and 10,000,000 shares
designated as preferred stock, $0.001 par value. The only equity
securities currently outstanding are shares of common stock. As of
December 31, 2019, there were 21,841,810 shares of common stock
issued and outstanding.
The following is a
summary of the material provisions of the common stock and
preferred stock provided for in our amended and restated
certificate of incorporation (including the certificate of
designation relating to the Series A Preferred) and bylaws. For
additional detail about our capital stock, please refer to our
amended and restated certificate of incorporation (including the
certificate of designation relating to the Series A Preferred), and
bylaws, each as amended, copies of which are incorporated by
reference into the registration statement to which this prospectus
relates.
Common
stock
The holders of common
stock are entitled to one vote per share on all matters to be voted
upon by the stockholders. Subject to preferences that may be
applicable to any outstanding preferred stock, the holders of
common stock are entitled to receive ratably any dividends that may
be declared from time to time by the board of directors out of
funds legally available for that purpose. However, we are not
currently paying any dividends. In the event of our liquidation,
dissolution or winding up, the holders of common stock are entitled
to share ratably in all assets remaining after payment of
liabilities, subject to prior distribution rights of preferred
stock then outstanding. The common stock has no preemptive or
conversion rights or other subscription rights. There are no
redemption or sinking fund provisions applicable to the common
stock. The outstanding shares of common stock are fully paid and
non-assessable, and any shares of common stock to be issued upon an
offering pursuant to this prospectus and the related prospectus
supplement will be fully paid and nonassessable upon
issuance.
Our common stock is
listed on the Nasdaq Capital Market under the symbol
“SAVA.”
The transfer agent
and registrar for the common stock is Computershare Shareowner Services
LLC. Its address is 330 N Brand Boulevard, Suite 701, Glendale,
California, 91203-2389.
Preferred
stock
The following
description of preferred stock and the description of the terms of
any particular series of preferred stock that we choose to issue
hereunder and that will be set forth in the related prospectus
supplement are not complete. These descriptions are qualified in
their entirety by reference to our amended and restated certificate
of incorporation and the certificate of designation relating to
that series. The rights, preferences, privileges and restrictions
of the preferred stock of each series will be fixed by the
certificate of designation relating to that series. The prospectus
supplement also will contain a description of certain U.S. federal
income tax consequences relating to the purchase and ownership of
the series of preferred stock that is described in the prospectus
supplement.
We currently have no
shares of preferred stock outstanding. Our board of directors has
the authority, without further action by the stockholders, to issue
up to 10,000,000 shares of preferred stock in one or more series
and to fix the rights, preferences, privileges and restrictions
granted to or imposed upon the preferred stock. Any or all of these
rights may be greater than the rights of the common
stock.
The board of
directors, without stockholder approval, can issue preferred stock
with voting, conversion or other rights that could negatively
affect the voting power and other rights of the holders of common
stock. Preferred stock could thus be issued quickly with terms
calculated to delay or prevent a change in control of us or make it
more difficult to remove our management. Additionally, the issuance
of preferred stock may have the effect of decreasing the market
price of the common stock.
The prospectus
supplement for a series of preferred stock will specify:
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the maximum number of
shares;
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the designation of
the shares;
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the annual dividend
rate, if any, whether the dividend rate is fixed or variable, the
date or dates on which dividends will accrue, the dividend payment
dates, and whether dividends will be cumulative;
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the price and the
terms and conditions for redemption, if any, including redemption
at our option or at the option of the holders, including the time
period for redemption, and any accumulated dividends or
premiums;
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the liquidation
preference, if any, and any accumulated dividends upon the
liquidation, dissolution or winding up of our affairs;
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any sinking fund or
similar provision, and, if so, the terms and provisions relating to
the purpose and operation of the fund;
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the terms and
conditions, if any, for conversion or exchange of shares of any
other class or classes of our capital stock or any series of any
other class or classes, or of any other series of the same class,
or any other securities or assets, including the price or the rate
of conversion or exchange and the method, if any, of
adjustment;
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the voting rights;
and
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any or all other
preferences and relative, participating, optional or other special
rights, privileges or qualifications, limitations or
restrictions.
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Preferred stock will
be fully paid and nonassessable upon issuance.
Anti-takeover
effects of some provisions of Delaware law
Provisions of
Delaware law and our currently in effect amended and restated
certificate of incorporation and amended bylaws could make the
acquisition of our company through a tender offer, a proxy contest
or other means more difficult and could make the removal of
incumbent officers and directors more difficult. We expect these
provisions to discourage coercive takeover practices and inadequate
takeover bids and to encourage persons seeking to acquire control
of our company to first negotiate with our board of directors. We
believe that the benefits provided by our ability to negotiate with
the proponent of an unfriendly or unsolicited proposal outweigh the
disadvantages of discouraging these proposals. We believe the
negotiation of an unfriendly or unsolicited proposal could result
in an improvement of its terms.
We are subject to
Section 203 of the Delaware General Corporation Law, an
anti-takeover law. In general, Section 203 prohibits a publicly
held Delaware corporation from engaging in a “business
combination”
with an
“interested
stockholder”
for a period of three
years following the date 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 stockholder owned
at least 85% of the voting stock of the corporation outstanding at
the time the transaction commenced, excluding for purposes of
determining the number of shares outstanding (a) shares owned by
persons who are directors and also officers, and (b) 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 date 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 two-thirds of the outstanding voting stock that is not
owned by the interested stockholder.
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Generally, a
“business
combination”
includes a merger,
asset or stock sale, or other transaction resulting in a financial
benefit to the interested stockholder. An “interested
stockholder”
is a person who,
together with affiliates and associates, owns or, within three
years prior to the determination of interested stockholder status,
did own 15% or more of a corporation’s
outstanding voting securities. We expect the existence of this
provision to have an anti-takeover effect with respect to
transactions our board of directors does not approve in advance. We
also anticipate that Section 203 may also discourage attempts that
might result in a premium over the market price for the shares of
common stock held by stockholders.
Anti-takeover
effects of provisions of our charter documents
Our amended and
restated certificate of incorporation provides for our board of
directors to be divided into three classes serving staggered terms.
Approximately one-third of the board of directors will be elected
each year. The provision for a classified board could prevent a
party who acquires control of a majority of the outstanding voting
stock from obtaining control of the board of directors until the
second annual stockholders meeting following the date the acquirer
obtains the controlling stock interest. The classified board
provision could discourage a potential acquirer from making a
tender offer or otherwise attempting to obtain control of our
company and could increase the likelihood that incumbent directors
will retain their positions. Our amended and restated certificate
of incorporation provides that directors may be removed with cause
by the affirmative vote of the holders of the outstanding shares of
common stock.
Our amended and
restated certificate of incorporation requires that certain
amendments of the amended and restated certificate of incorporation
and certain amendments by the stockholders of our bylaws require
the approval of at least 66 2/3% of the voting power of all
outstanding stock. These provisions could discourage a potential
acquirer from making a tender offer or otherwise attempting to
obtain control of our company and could delay changes in our
management.
Our amended bylaws
establish an advance notice procedure for stockholder proposals to
be brought before an annual meeting of our stockholders, including
proposed nominations of persons for election to the board of
directors. At an annual meeting, stockholders may only consider
proposals or nominations specified in the notice of meeting or
brought before the meeting by or at the direction of the board of
directors. Stockholders may also consider a proposal or nomination
by a person who was a stockholder of record on the record date for
the meeting, who is entitled to vote at the meeting and who has
given to our Secretary timely written notice, in proper form, of
his or her intention to bring that business before the meeting. The
amended bylaws do not give the board of directors the power to
approve or disapprove stockholder nominations of candidates or
proposals regarding other business to be conducted at a special or
annual meeting of the stockholders. However, our bylaws may have
the effect of precluding the conduct of business at a meeting if
the proper procedures are not followed. These provisions may also
discourage or deter a potential acquirer from conducting a
solicitation of proxies to elect the acquirer’s
own slate of directors or otherwise attempting to obtain control of
our company.
Our amended bylaws
provide that only our board of directors, the chairman of the
board, the president or the chief executive officer may call a
special meeting of stockholders. Because our stockholders do not
have the right to call a special meeting, a stockholder could not
force stockholder consideration of a proposal over the opposition
of the board of directors by calling a special meeting of
stockholders prior to such time as a majority of the board of
directors believed or the chief executive officer believed the
matter should be considered or until the next annual meeting
provided that the requestor met the notice requirements. The
restriction on the ability of stockholders to call
a special meeting
means that a proposal to replace the board also could be delayed
until the next annual meeting.
Our amended and
restated certificate of incorporation does not allow stockholders
to act by written consent without a meeting. Without the
availability of stockholder’s
actions by written consent, a holder controlling a majority of our
capital stock would not be able to amend our bylaws or remove
directors without holding a stockholders’
meeting. The holder
would have to obtain the consent of a majority of the board of
directors, the chairman of the board or the chief executive officer
to call a stockholders’
meeting and satisfy
the notice periods determined by the board of directors.
DESCRIPTION
OF THE DEPOSITARY SHARES
General
At our option, we may
elect to offer fractional shares of preferred stock, rather than
full shares of preferred stock. If we do elect to offer fractional
shares of preferred stock, we will issue receipts for depositary
shares and each of these depositary shares will represent a
fraction of a share of a particular series of preferred stock, as
specified in the applicable prospectus supplement. Each owner of a
depositary share will be entitled, in proportion to the applicable
fractional interest in shares of preferred stock underlying that
depositary share, to all rights and preferences of the preferred
stock underlying that depositary share. These rights may include
dividend, voting, redemption and liquidation rights.
The shares of
preferred stock underlying the depositary shares will be deposited
with a bank or trust company selected by us to act as depositary,
under a deposit agreement by and among us, the depositary and the
holders of the depositary receipts. The depositary will be the
transfer agent, registrar and dividend disbursing agent for the
depositary shares.
The depositary shares
will be evidenced by depositary receipts issued pursuant to the
depositary agreement. Holders of depositary receipts agree to be
bound by the deposit agreement, which requires holders to take
certain actions such as filing proof of residence and paying
certain charges.
The summary of terms
of the depositary shares contained in this prospectus is not
complete, and is subject to modification in any prospectus
supplement for any issuance of depositary shares. You should refer
to the forms of the deposit agreement, our amended and
restated certificate of incorporation and the certificate of
designation that are, or will be, filed with the SEC for the
applicable series of preferred stock.
Dividends
The depositary will
distribute cash dividends or other cash distributions, if any,
received in respect of the series of preferred stock underlying the
depositary shares to the record holders of depositary receipts in
proportion to the number of depositary shares owned by those
holders on the relevant record date. The relevant record date for
depositary shares will be the same date as the record date for the
preferred stock.
In the event of a
distribution other than in cash, the depositary will distribute
property received by it to the record holders of depositary
receipts that are entitled to receive the distribution, unless the
depositary determines that it is not feasible to make the
distribution. If this occurs, the depositary, with our approval,
may adopt another method for the distribution, including selling
the property and distributing the net proceeds to the
holders.
Liquidation
preference
If a series of
preferred stock underlying the depositary shares has a liquidation
preference, in the event of our voluntary or involuntary
liquidation, dissolution or winding up, holders of depositary
shares will be entitled to receive the fraction of the liquidation
preference accorded each share of the applicable series of
preferred stock, as set forth in the applicable prospectus
supplement.
Redemption
If a series of
preferred stock underlying the depositary shares is subject to
redemption, the depositary shares will be redeemed from the
proceeds received by the depositary resulting from the redemption,
in whole or in part, of the preferred stock held by the depositary.
Whenever we redeem any preferred stock held by the depositary, the
depositary will redeem, as of the same redemption date, the number
of depositary shares representing the preferred stock
so redeemed. The depositary will mail the notice of redemption
to the record holders of the depositary receipts promptly upon
receiving the notice from us and not fewer than 20 or more than 60
days, unless otherwise provided in the applicable prospectus
supplement, prior to the date fixed for redemption of the preferred
stock.
Voting
Upon receipt of
notice of any meeting at which the holders of preferred stock are
entitled to vote, the depositary will mail the information
contained in the notice of meeting to the record holders of the
depositary receipts underlying the preferred stock. Each record
holder of those depositary receipts on the record date will be
entitled to instruct the depositary as to the exercise of the
voting rights pertaining to the amount of preferred stock
underlying that holder’s
depositary shares. The record date for the depositary will be the
same date as the record date for the preferred stock. The
depositary will, to the extent practicable, vote the preferred
stock underlying the depositary shares in accordance with these
instructions. We will agree to take all action that may be deemed
necessary by the depositary in order to enable the depositary to
vote the preferred stock in accordance with these instructions. The
depositary will not vote the preferred stock to the extent that it
does not receive specific instructions from the holders of
depositary receipts.
Withdrawal
of preferred stock
Owners of depositary
shares will be entitled to receive upon surrender of depositary
receipts at the principal office of the depositary and payment of
any unpaid amount due to the depositary, the number of whole shares
of preferred stock underlying their depositary shares.
Partial shares of
preferred stock will not be issued. Holders of preferred stock will
not be entitled to deposit the shares under the deposit agreement
or to receive depositary receipts evidencing depositary shares for
the preferred stock.
Amendment
and termination of the deposit agreement
The form of
depositary receipt evidencing the depositary shares and any
provision of the deposit agreement may be amended by agreement
between the depositary and us. However, any amendment which
materially and adversely alters the rights of the holders of
depositary shares, other than fee changes, will not be effective
unless the amendment has been approved by at least a majority of
the outstanding depositary shares. The deposit agreement may be
terminated by the depositary or us only if:
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all outstanding
depositary shares have been redeemed; or
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there has been a
final distribution of the preferred stock in connection with our
dissolution and such distribution has been made to all the holders
of depositary shares.
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Charges
of depositary
We will pay all
transfer and other taxes and governmental charges arising solely
from the existence of the depositary arrangement. We will also pay
charges of the depositary in connection with:
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the initial deposit
of the preferred stock;
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the initial issuance
of the depositary shares;
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any redemption of the
preferred stock; and
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all withdrawals of
preferred stock by owners of depositary shares.
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Holders of depositary
receipts will pay transfer, income and other taxes and governmental
charges and other specified charges as provided in the deposit
agreement for their accounts. If these charges have not been paid,
the depositary may:
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refuse to transfer
depositary shares;
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withhold dividends
and distributions; and
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sell the depositary
shares evidenced by the depositary receipt.
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Miscellaneous
The depositary will
forward to the holders of depositary receipts all reports and
communications we deliver to the depositary that we are required to
furnish to the holders of the preferred stock. In addition, the
depositary will make available for inspection by holders of
depositary receipts at the principal office of the depositary, and
at such other places as it may from time to time deem advisable,
any reports and communications we deliver to the depositary as the
holder of preferred stock.
Neither the
depositary nor we will be liable if either the depositary or we are
prevented or delayed by law or any circumstance beyond the control
of either the depositary or us in performing our respective
obligations under the deposit agreement. Our obligations and the
depositary’s
obligations will be limited to the performance in good faith of our
or the depositary’s
respective duties under the deposit agreement. Neither the
depositary nor we will be obligated to prosecute or defend any
legal proceeding in respect of any depositary shares or preferred
stock unless satisfactory indemnity is furnished. The depositary
and we may rely on:
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written advice of
counsel or accountants;
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information provided
by holders of depositary receipts or other persons believed in good
faith to be competent to give such information; and
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documents believed to
be genuine and to have been signed or presented by the proper party
or parties.
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Resignation
and removal of depositary
The depositary may
resign at any time by delivering a notice to us. We may remove the
depositary at any time. Any such resignation or removal will take
effect upon the appointment of a successor depositary and its
acceptance of such appointment. The successor depositary must be
appointed within 60 days after delivery of the notice for
resignation or removal. The successor depositary must be a bank and
trust company having its principal office in the United States of
America and having a combined capital and surplus of at least
$50,000,000.
Federal
income tax consequences
Owners of the
depositary shares will be treated for U.S. federal income tax
purposes as if they were owners of the preferred stock underlying
the depositary shares. As a result, owners will be entitled to take
into account for U.S. federal income tax purposes and deductions to
which they would be entitled if they were holders of such preferred
stock. No gain or loss will be recognized for U.S. federal income
tax purposes upon the withdrawal of preferred stock in exchange for
depositary shares. The tax basis of each share of preferred stock
to an exchanging owner of depositary shares will, upon such
exchange, be the same as the aggregate tax basis of the depositary
shares exchanged. The holding period for preferred stock in the
hands of an exchanging owner of depositary shares will include the
period during which such person owned such depositary
shares.
DESCRIPTION
OF THE WARRANTS
General
We may issue warrants
for the purchase of our debt securities, preferred stock or common
stock, or any combination thereof. Warrants may be issued
independently or together with our debt securities, preferred stock
or common stock and may be attached to or separate from any offered
securities. Each series of warrants will be issued under a separate
warrant agreement to be entered into between us and a bank or trust
company, as warrant agent. The warrant agent will act solely as our
agent in connection with the warrants. The warrant agent will not
have any obligation or relationship of agency or trust for or with
any holders or beneficial owners of warrants. This summary of
certain provisions of the warrants is not complete. For the terms
of a particular series of warrants, you should refer to the
prospectus supplement for that series of warrants and the warrant
agreement for that particular series.
Debt
warrants
The prospectus
supplement relating to a particular issue of warrants to purchase
debt securities will describe the terms of the debt warrants,
including the following:
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the title of the debt
warrants;
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the offering price
for the debt warrants, if any;
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the aggregate number
of the debt warrants;
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the designation and
terms of the debt securities, including any conversion rights,
purchasable upon exercise of the debt warrants;
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if applicable, the
date from and after which the debt warrants and any debt securities
issued with them will be separately transferable;
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the principal amount
of debt securities that may be purchased upon exercise of a debt
warrant and the exercise price for the warrants, which may be
payable in cash, securities or other property;
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the dates on which
the right to exercise the debt warrants will commence and
expire;
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if applicable, the
minimum or maximum amount of the debt warrants that may be
exercised at any one time;
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whether the debt
warrants represented by the debt warrant certificates or debt
securities that may be issued upon exercise of the debt warrants
will be issued in registered or bearer form;
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information with
respect to book-entry procedures, if any; the currency or currency
units in which the offering price, if any, and the exercise price
are payable;
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if applicable, a
discussion of material U.S. federal income tax
considerations;
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the antidilution
provisions of the debt warrants, if any;
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the redemption or
call provisions, if any, applicable to the debt
warrants;
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any provisions with
respect to the holder’s
right to require us to repurchase the warrants upon a change in
control or similar event; and
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any additional terms
of the debt warrants, including procedures, and limitations
relating to the exchange, exercise and settlement of the debt
warrants.
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Debt warrant
certificates will be exchangeable for new debt warrant certificates
of different denominations. Debt warrants may be exercised at the
corporate trust office of the warrant agent or any other office
indicated in the prospectus supplement. Prior to the exercise of
their debt warrants, holders of debt warrants will not have any of
the rights of holders of the debt securities purchasable upon
exercise and will not be entitled to payment of principal or any
premium, if any, or interest on the debt securities purchasable
upon exercise.
Equity
warrants
The prospectus
supplement relating to a particular series of warrants to purchase
our common stock or preferred stock, including preferred stock
underlying depositary shares, will describe the terms of the
warrants, including the following:
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the title of the
warrants;
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the offering price
for the warrants, if any;
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the aggregate number
of warrants;
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the designation and
terms of the common stock or preferred stock that may be purchased
upon exercise of the warrants;
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if applicable, the
designation and terms of the securities with which the warrants are
issued and the number of warrants issued with each
security;
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if applicable, the
date from and after which the warrants and any securities issued
with the warrants will be separately transferable;
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the number of shares
of common stock or preferred stock that may be purchased upon
exercise of a warrant and the exercise price for the
warrants;
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the dates on which
the right to exercise the warrants shall commence and
expire;
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if applicable, the
minimum or maximum amount of the warrants that may be exercised at
any one time;
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the currency or
currency units in which the offering price, if any, and the
exercise price are payable;
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if applicable, a
discussion of material U.S. federal income tax
considerations;
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the antidilution
provisions of the warrants, if any;
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the redemption or
call provisions, if any, applicable to the warrants;
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any provisions with
respect to the holder’s
right to require us to repurchase the warrants upon a change in
control or similar event; and
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any additional terms
of the warrants, including procedures, and limitations relating to
the exchange, exercise and settlement of the warrants.
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Holders of equity
warrants will not be entitled:
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to vote, consent or
receive dividends;
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receive notice as
stockholders with respect to any meeting of stockholders for the
election of our directors or any other matter; or
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exercise any rights
as stockholders of us.
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DESCRIPTION
OF THE DEBT SECURITIES
The debt securities
may be either secured or unsecured and will either be our senior
debt securities or our subordinated debt securities. The debt
securities will be issued under one or more separate indentures
between us and a trustee to be specified in an accompanying
prospectus supplement. Senior debt securities will be issued under
a senior indenture and subordinated debt securities will be issued
under a subordinated indenture. Together, the senior indenture and
the subordinated indenture are called indentures in this
description. This prospectus, together with the applicable
prospectus supplement, will describe the terms of a particular
series of debt securities.
The following is a
summary of selected provisions and definitions of the indentures
and debt securities to which any prospectus supplement may relate.
The summary of selected provisions of the indentures and the debt
securities appearing below is not complete and is subject to, and
qualified entirely by reference to, all of the provisions of the
applicable indenture and certificates evidencing the applicable
debt securities. For additional information, you should look at the
applicable indenture and the certificate evidencing the applicable
debt security that is filed as an exhibit to the registration
statement that includes the prospectus. In this description of the
debt securities, the words “Cassava
Sciences,” “we,” “us,”
or
“our”
refer only to Cassava
Sciences, Inc. and not to any of our subsidiaries, unless we
expressly state or the context otherwise requires.
The following
description sets forth selected general terms and provisions of the
applicable indenture and debt securities to which any prospectus
supplement may relate. Other specific terms of the applicable
indenture and debt securities will be described in the applicable
prospectus supplement. If any particular terms of the indenture or
debt securities described in a prospectus supplement differ from
any of the terms described below, then the terms described below
will be deemed to have been superseded by that prospectus
supplement.
General
Debt securities may
be issued in separate series without limitation as to aggregate
principal amount. We may specify a maximum aggregate principal
amount for the debt securities of any series.
We are not limited as
to the amount of debt securities we may issue under the indentures.
Unless otherwise provided in a prospectus supplement, a series of
debt securities may be reopened to issue additional debt securities
of such series.
The prospectus
supplement relating to a particular series of debt securities will
set forth:
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whether the debt
securities are senior or subordinated;
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the offering
price;
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the title;
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any limit on the
aggregate principal amount;
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the person who shall
be entitled to receive interest, if other than the record holder on
the record date;
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the date or dates the
principal will be payable;
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the interest rate or
rates, which may be fixed or variable, if any, the date from which
interest will accrue, the interest payment dates and the regular
record dates, or the method for calculating the dates and
rates;
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the place where
payments may be made;
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any mandatory or
optional redemption provisions or sinking fund provisions and any
applicable redemption or purchase prices associated with these
provisions;
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if issued other than
in denominations of U.S. $1,000 or any multiple of U.S. $1,000, the
denominations in which the debt securities shall be
issuable;
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if applicable, the
method for determining how the principal, premium, if any, or
interest will be calculated by reference to an index or
formula;
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if other than U.S.
currency, the currency or currency units in which principal,
premium, if any, or interest will be payable and whether we or a
holder may elect payment to be made in a different
currency;
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the portion of the
principal amount that will be payable upon acceleration of
maturity, if other than the entire principal amount;
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if the principal
amount payable at stated maturity will not be determinable as of
any date prior to stated maturity, the amount or method for
determining the amount which will be deemed to be the principal
amount;
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if applicable,
whether the debt securities shall be subject to the defeasance
provisions described below under “Satisfaction
and discharge; defeasance”
or such other
defeasance provisions specified in the applicable prospectus
supplement for the debt securities;
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any conversion or
exchange provisions;
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whether the debt
securities will be issuable in the form of a global
security;
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any subordination
provisions applicable to the subordinated debt securities if
different from those described below under “Subordinated
debt securities;”
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any paying agents,
authenticating agents, security registrars or other agents for the
debt securities, if other than the trustee;
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any provisions
relating to any security provided for the debt securities,
including any provisions regarding the circumstances under which
collateral may be released or substituted;
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any deletions of, or
changes or additions to, the events of default, acceleration
provisions or covenants;
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any provisions
relating to guaranties for the securities and any circumstances
under which there may be additional obligors; and
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any other specific
terms of such debt securities.
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Unless otherwise
specified in the prospectus supplement, the debt securities will be
registered debt securities. Debt securities may be sold at a
substantial discount below their stated principal amount, bearing
no interest or interest at a rate which, at the time of issuance,
is below market rates. The U.S. federal income tax considerations
applicable to debt securities sold at a discount will be described
in the applicable prospectus supplement.
Exchange
and transfer
Debt securities may
be transferred or exchanged at the office of the security registrar
or at the office of any
transfer agent
designated by us.
We will not impose a
service charge for any transfer or exchange, but we may require
holders to pay any tax or other governmental charges associated
with any transfer or exchange.
In the event of any
partial redemption of debt securities of any series, we will not be
required to:
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issue, register the
transfer of, or exchange, any debt security of that series during a
period beginning at the opening of business 15 days before the day
of mailing of a notice of redemption and ending at the close of
business on the day of the mailing; or
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register the transfer
of or exchange any debt security of that series selected for
redemption, in whole or in part, except the unredeemed portion
being redeemed in part.
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We will appoint the
trustee as the initial security registrar. Any transfer agent, in
addition to the security registrar initially designated by us, will
be named in the prospectus supplement. We may designate additional
transfer agents or change transfer agents or change the office of
the transfer agent. However, we will be required to maintain a
transfer agent in each place of payment for the debt securities of
each series.
Global
securities
The debt securities
of any series may be represented, in whole or in part, by one or
more global securities. Each global security will:
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be registered in the
name of a depositary, or its nominee, that we will identify in a
prospectus supplement;
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be deposited with the
depositary or nominee or custodian; and
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bear any required
legends.
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No global security
may be exchanged in whole or in part for debt securities registered
in the name of any person other than the depositary or any nominee
unless:
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the depositary has
notified us that it is unwilling or unable to continue as
depositary or has ceased to be qualified to act as
depositary;
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an event of default
is continuing with respect to the debt securities of the applicable
series; or
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any other
circumstance described in a prospectus supplement has occurred
permitting or requiring the issuance of any such
security.
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As long as the
depositary, or its nominee, is the registered owner of a global
security, the depositary or nominee will be considered the sole
owner and holder of the debt securities represented by the global
security for all purposes under the indentures. Except in the above
limited circumstances, owners of beneficial interests in a global
security will not be:
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entitled to have the
debt securities registered in their names;
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entitled to physical
delivery of certificated debt securities; or
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considered to be
holders of those debt securities under the indenture.
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Payments on a global
security will be made to the depositary or its nominee as the
holder of the global security. Some jurisdictions have laws that
require that certain purchasers of securities take physical
delivery of such securities in definitive form. These laws may
impair the ability to transfer beneficial interests in a global
security.
Institutions that
have accounts with the depositary or its nominee are referred to
as “participants.”
Ownership of
beneficial interests in a global security will be limited to
participants and to persons that may hold beneficial interests
through participants. The depositary will credit, on its book-entry
registration and transfer system, the respective principal amounts
of debt securities represented by the global security to the
accounts of its participants.
Ownership of
beneficial interests in a global security will be shown on and
effected through records maintained by the depositary, with respect
to participants’
interests, or any
participant, with respect to interests of persons held by
participants on their behalf.
Payments, transfers
and exchanges relating to beneficial interests in a global security
will be subject to policies and procedures of the depositary. The
depositary policies and procedures may change from time to time.
Neither any trustee nor we will have any responsibility or
liability for the depositary’s
or any participant’s
records with respect to beneficial interests in a global
security.
Payment
and paying agents
Unless otherwise
indicated in a prospectus supplement, the provisions described in
this paragraph will apply to the debt securities. Payment of
interest on a debt security on any interest payment date will be
made to the person in whose name the debt security is registered at
the close of business on the regular record date. Payment on debt
securities of a particular series will be payable at the office of
a paying agent or paying agents designated by us. However, at our
option, we may pay interest by mailing a check to the record
holder. The trustee will be designated as our initial paying
agent.
We may also name any
other paying agents in a prospectus supplement. We may designate
additional paying agents, change paying agents or change the office
of any paying agent. However, we will be required to maintain a
paying agent in each place of payment for the debt securities of a
particular series.
All moneys paid by us
to a paying agent for payment on any debt security that remain
unclaimed for a period ending the earlier of:
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10 business days
prior to the date the money would be turned over to the applicable
state; or
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at the end of two
years after such payment was due,
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will be repaid to us
thereafter. The holder may look only to us for such
payment.
No
protection in the event of a change of control
Unless otherwise
indicated in a prospectus supplement with respect to a particular
series of debt securities, the debt securities will not contain any
provisions that may afford holders of the debt securities
protection in the event we have a change in control or in the event
of a highly leveraged transaction, whether or not such transaction
results in a change in control.
Covenants
Unless otherwise
indicated in a prospectus supplement with respect to a particular
series of debt securities, the debt securities will not contain any
financial or restrictive covenants.
Consolidation,
merger and sale of assets
Unless we indicate
otherwise in a prospectus supplement with respect to a particular
series of debt securities, we may not consolidate with or merge
into any other person (other than a subsidiary of us), in a
transaction in which we are not the surviving corporation, or
convey, transfer or lease our properties and assets substantially
as an entirety to, any person (other than a subsidiary of us),
unless:
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the successor entity,
if any, is a U.S. corporation, limited liability company,
partnership, trust or other business entity;
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the successor entity
assumes our obligations on the debt securities and under the
indentures;
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immediately after
giving effect to the transaction, no default or event of default
shall have occurred and be continuing; and
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certain other
conditions specified in the indenture are met.
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Events
of default
Unless we indicate
otherwise in a prospectus supplement, the following will be events
of default for any series of debt securities under the
indentures:
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(1)
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we fail
to pay principal of or any premium on any debt security of that
series when due;
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(2)
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we fail
to pay any interest on any debt security of that series for 60 days
after it becomes due;
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(3)
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we fail
to deposit any sinking fund payment when due;
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(4)
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we fail
to perform any other covenant in the indenture and such failure
continues for 90 days after we are given the notice required in the
indentures; and
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(5)
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certain
events involving our bankruptcy, insolvency or
reorganization.
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Additional or
different events of default applicable to a series of debt
securities may be described in a prospectus supplement. An event of
default of one series of debt securities is not necessarily an
event of default for any other series of debt
securities.
The
trustee may withhold notice to the holders of any default, except
defaults in the payment of principal, premium, if any, interest,
any sinking fund installment on, or with respect to any conversion
right of, the debt securities of such series. However, the trustee
must consider it to be in the interest of the holders of the debt
securities of such series to withhold this notice.
Unless
we indicate otherwise in a prospectus supplement, if an event of
default, other than an event of default described in clause (5)
above, shall occur and be continuing with respect to any series of
debt securities, either the trustee or the holders of at least a 25
percent in aggregate principal amount of the outstanding securities
of that series may declare the principal amount and premium, if
any, of the debt securities of that series, or if any debt
securities of that series are original issue discount securities,
such other amount as may be specified in the applicable prospectus
supplement, in each case together with accrued and unpaid interest,
if any, thereon, to be due and payable immediately.
Unless
we indicate otherwise in a prospectus supplement, if an event of
default described in clause (5) above shall occur, the principal
amount and premium, if any, of all the debt securities of that
series, or if any debt securities of that series are original issue
discount securities, such other amount as may be specified in the
applicable prospectus supplement, in each case together with
accrued and unpaid interest, if any, thereon, will automatically
become immediately due and payable. Any payment by us on the
subordinated debt securities following any such acceleration will
be subject to the subordination provisions described below
under “Subordinated
debt securities.”
Notwithstanding the
foregoing, each indenture will provide that we may, at our option,
elect that the sole remedy for an event of default relating to our
failure to comply with our obligations described under the section
entitled “Reports”
below
or our failure to comply with the requirements of Section 314(a)(1)
of the Trust Indenture Act will
for the first 180
days after the occurrence of such an event of default consist
exclusively of the right to receive additional interest on the
relevant series of debt securities at an annual rate equal to (i)
0.25% of the principal amount of such series of debt securities for
the first 90 days after the occurrence of such event of default and
(ii) 0.50% of the principal amount of such series of debt
securities from the 91st day to, and including, the 180th day after
the occurrence of such event of default, which we call
“additional
interest.”
If we so elect, the
additional interest will accrue on all outstanding debt securities
from and including the date on which such event of default first
occurs until such violation is cured or waived and shall be payable
on each relevant interest payment date to holders of record on the
regular record date immediately preceding the interest payment
date. On the 181st day after such event of default (if such
violation is not cured or waived prior to such 181st day), the debt
securities will be subject to acceleration as provided above. In
the event we do not elect to pay additional interest upon any such
event of default in accordance with this paragraph, the debt
securities will be subject to acceleration as provided
above.
In order to elect to
pay the additional interest as the sole remedy during the first 180
days after the occurrence of any event of default relating to the
failure to comply with the reporting obligations in accordance with
the preceding paragraph, we must notify all holders of debt
securities and the trustee and paying agent of such election prior
to the close of business on the first business day following the
date on which such event of default occurs. Upon our failure to
timely give such notice or pay the additional interest, the debt
securities will be immediately subject to acceleration as provided
above.
After acceleration,
the holders of a majority in aggregate principal amount of the
outstanding securities of that series may, under certain
circumstances, rescind and annul such acceleration if all events of
default, other than the non-payment of accelerated principal, or
other specified amounts or interest, have been cured or
waived.
Other than the duty
to act with the required care during an event of default, the
trustee will not be obligated to exercise any of its rights or
powers at the request of the holders unless the holders shall have
offered to the trustee reasonable indemnity. Generally, the holders
of a majority in aggregate principal amount of the outstanding debt
securities of any series will have the right to direct the time,
method and place of conducting any proceeding for any remedy
available to the trustee or exercising any trust or power conferred
on the trustee.
A holder of debt
securities of any series will not have any right to institute any
proceeding under the indentures, or for the appointment of a
receiver or a trustee, or for any other remedy under the
indentures, unless:
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(1)
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the
holder has previously given to the trustee written notice of a
continuing event of default with respect to the debt securities of
that series;
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(2)
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the
holders of at least 25 percent in aggregate principal amount of the
outstanding debt securities of that series have made a written
request and have offered reasonable indemnity to the trustee to
institute the proceeding; and
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(3)
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the
trustee has failed to institute the proceeding and has not received
direction inconsistent with the original request from the holders
of a majority in aggregate principal amount of the outstanding debt
securities of that series within 60 days after the original
request.
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Holders
may, however, sue to enforce the payment of principal, premium or
interest on any debt security on or after the due date or to
enforce the right, if any, to convert any debt security (if the
debt security is convertible) without following the procedures
listed in (1) through (3) above.
We will
furnish the trustee an annual statement from our officers as to
whether or not we are in default in the performance of the
conditions and covenants under the indenture and, if so, specifying
all known defaults.
Modification
and waiver
Unless
we indicate otherwise in a prospectus supplement, the applicable
trustee and we may make modifications and amendments to an
indenture with the consent of the holders of a majority in
aggregate principal amount of the outstanding securities of each
series affected by the modification or amendment.
We may
also make modifications and amendments to the indentures for the
benefit of holders without their consent, for certain purposes
including, but not limited to:
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providing for our
successor to assume the covenants under the indenture;
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adding covenants or
events of default;
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making certain
changes to facilitate the issuance of the securities;
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securing the
securities;
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providing for a
successor trustee or additional trustees;
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curing any
ambiguities or inconsistencies;
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providing for
guaranties of, or additional obligors on, the
securities;
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permitting or
facilitating the defeasance and discharge of the securities;
and
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other changes
specified in the indenture.
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However, neither the
trustee nor we may make any modification or amendment without the
consent of the holder of each outstanding security of that series
affected by the modification or amendment if such modification or
amendment would:
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change the stated
maturity of any debt security;
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reduce the principal,
premium, if any, or interest on any debt security or any amount
payable upon redemption or repurchase, whether at our option or the
option of any holder, or reduce the amount of any sinking fund
payments;
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reduce the principal
of an original issue discount security or any other debt security
payable on acceleration of maturity;
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change the place of
payment or the currency in which any debt security is
payable;
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impair the right to
enforce any payment after the stated maturity or redemption
date;
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if subordinated debt
securities, modify the subordination provisions in a materially
adverse manner to the holders;
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adversely affect the
right to convert any debt security if the debt security is a
convertible debt security; or
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change the provisions
in the indenture that relate to modifying or amending the
indenture.
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Satisfaction
and discharge; defeasance
We may be discharged
from our obligations on the debt securities, subject to limited
exceptions, of any series that have matured or will mature or be
redeemed within one year if we deposit enough money with the
trustee to pay all the principal, interest and any premium due to
the stated maturity date or redemption date of the debt
securities.
Each indenture
contains a provision that permits us to elect either or both of the
following:
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we may elect to be
discharged from all of our obligations, subject to limited
exceptions, with respect to any series of debt securities then
outstanding. If we make this election, the holders of the debt
securities of the series will not be entitled to the benefits of
the indenture, except for the rights of holders to receive payments
on debt securities or the registration of transfer and exchange of
debt securities and replacement of lost, stolen or mutilated debt
securities.
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we may elect to be
released from our obligations under some or all of any financial or
restrictive covenants applicable to the series of debt securities
to which the election relates and from the consequences of an event
of default resulting from a breach of those covenants.
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To make either of the
above elections, we must irrevocably deposit in trust with the
trustee enough money to pay in full the principal, interest and
premium on the debt securities. This amount may be made in cash
and/or U.S. government obligations or, in the case of debt
securities denominated in a currency other than U.S. dollars, cash
in the currency in which such series of securities is denominated
and/or foreign government obligations. As a condition to either of
the above elections, for debt securities denominated in U.S.
dollars we must deliver to the trustee an opinion of counsel that
the holders of the debt securities will not recognize income, gain
or loss for U.S. federal income tax purposes as a result of the
action.
With respect to debt
securities of any series that are denominated in a currency other
than United States dollars, “foreign
government obligations”
means:
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direct obligations of
the government that issued or caused to be issued the currency in
which such securities are denominated and for the payment of which
obligations its full faith and credit is pledged, or, with respect
to debt securities of any series which are denominated in Euros,
direct obligations of certain members of the European Union for the
payment of which obligations the full faith and credit of such
members is pledged, which in each case are not callable or
redeemable at the option of the issuer thereof; or
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obligations of a
person controlled or supervised by or acting as an agency or
instrumentality of a government described in the bullet above the
timely payment of which is unconditionally guaranteed as a full
faith and credit obligation by such government, which are not
callable or redeemable at the option of the issuer
thereof.
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Reports
The indentures
provide that any reports or documents that we file with the SEC
pursuant to Section 13 or 15(d) of the Exchange Act will be filed
with the trustee within 15 days after the same is filed with the
SEC. Documents filed by us with the SEC via the EDGAR system will
be deemed filed with the trustee as of the time such documents are
filed with the SEC.
Notices
Notices to holders
will be given by mail to the addresses of the holders in the
security register.
Governing
law
The indentures and
the debt securities will be governed by, and construed under, the
laws of the State of New York.
No
personal liability of directors, officers, employees and
stockholders
No incorporator,
stockholder, employee, agent, officer, director or subsidiary of
ours will have any liability for any obligations of ours, or
because of the creation of any indebtedness under the debt
securities, the indentures or supplemental indentures. The
indentures provide that all such liability is expressly waived and
released as a condition of, and as a consideration for, the
execution of such indentures and the issuance of the debt
securities.
Regarding
the trustee
The indentures limit
the right of the trustee, should it become our creditor, to obtain
payment of claims or secure its claims.
The trustee will be
permitted to engage in certain other transactions with us. However,
if the trustee acquires any conflicting interest, and there is a
default under the debt securities of any series for which it is
trustee, the trustee must eliminate the conflict or
resign.
Subordinated
debt securities
The following
provisions will be applicable with respect to each series of
subordinated debt securities, unless otherwise stated in the
prospectus supplement relating to that series of subordinated debt
securities.
The indebtedness
evidenced by the subordinated debt securities of any series is
subordinated, to the extent provided in the subordinated indenture
and the applicable prospectus supplement, to the prior payment in
full, in cash or other payment satisfactory to the holders of
senior debt, of all senior debt, including any senior debt
securities.
Upon any distribution
of our assets upon any dissolution, winding up, liquidation or
reorganization, whether voluntary or involuntary, marshalling of
assets, assignment for the benefit of creditors, or in bankruptcy,
insolvency, receivership or other similar proceedings, payments on
the subordinated debt securities will be subordinated in right of
payment to the prior payment in full in cash or other payment
satisfactory to holders of senior debt of all senior
debt.
In the event of any
acceleration of the subordinated debt securities of any series
because of an event of default with respect to the subordinated
debt securities of that series, holders of any senior debt would be
entitled to payment in full in cash or other payment satisfactory
to holders of senior debt of all senior debt before the holders of
subordinated debt securities are entitled to receive any payment or
distribution.
In addition, the
subordinated debt securities will be structurally subordinated to
all indebtedness and other liabilities of our subsidiaries,
including trade payables and lease obligations. This occurs because
our right to receive any assets of our subsidiaries upon their
liquidation or reorganization, and your right to participate in
those assets, will be effectively subordinated to the claims of
that subsidiary’s
creditors, including trade creditors, except to the extent that we
are recognized as a creditor of such subsidiary. If we are
recognized as a creditor of that subsidiary, our claims would still
be subordinate to any security interest in the assets of the
subsidiary and any indebtedness of the subsidiary senior to
us.
We are required to
promptly notify holders of senior debt or their representatives
under the subordinated indenture if payment of the subordinated
debt securities is accelerated because of an event of
default.
Under the
subordinated indenture, we may also not make payment on the
subordinated debt securities if:
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a default in our
obligations to pay principal, premium, if any, interest or other
amounts on our senior debt occurs and the default continues beyond
any applicable grace period, which we refer to as a payment
default; or
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any other default
occurs and is continuing with respect to designated senior debt
that permits holders of designated senior debt to accelerate its
maturity, which we refer to as a non-payment default, and the
trustee receives a payment blockage notice from us or some other
person permitted to give the notice under the subordinated
indenture.
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We will resume
payments on the subordinated debt securities:
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in case of a payment
default, when the default is cured or waived or ceases to exist,
and
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in case of a
nonpayment default, the earlier of when the default is cured or
waived or ceases to exist or 179 days after the receipt of the
payment blockage notice.
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No new payment
blockage period may commence on the basis of a nonpayment default
unless 365 days have elapsed from the effectiveness of the
immediately prior payment blockage notice. No nonpayment default
that existed or was continuing on the date of delivery of any
payment blockage notice to the trustee shall be the basis for a
subsequent payment blockage notice.
As a result of these
subordination provisions, in the event of our bankruptcy,
dissolution or reorganization, holders of senior debt may receive
more, ratably, and holders of the subordinated debt securities may
receive less, ratably, than our other creditors. The subordination
provisions will not prevent the occurrence of any event of default
under the subordinated indenture.
The subordination
provisions will not apply to payments from money or government
obligations held in trust by the trustee for the payment of
principal, interest and premium, if any, on subordinated debt
securities pursuant to the provisions described under the section
entitled “Satisfaction
and discharge; defeasance,”
if the subordination
provisions were not violated at the time the money or government
obligations were deposited into trust.
If the trustee or any
holder receives any payment that should not have been made to them
in contravention of subordination provisions before all senior debt
is paid in full in cash or other payment satisfactory to holders of
senior debt, then such payment will be held in trust for the
holders of senior debt.
Senior debt
securities will constitute senior debt under the subordinated
indenture.
Additional or
different subordination provisions may be described in a prospectus
supplement relating to a particular series of debt
securities.
Definitions
“Designated
senior debt”
means our obligations
under any particular senior debt in which the instrument creating
or evidencing the same or the assumption or guarantee thereof, or
related agreements or documents to which we are a party, expressly
provides that such indebtedness shall be designated senior debt for
purposes of the subordinated indenture. The instrument, agreement
or other document evidencing any designated senior debt may place
limitations and conditions on the right of such senior debt to
exercise the rights of designated senior debt.
“Indebtedness”
means the following,
whether absolute or contingent, secured or unsecured, due or to
become due, outstanding on the date of the indenture for such
series of securities or thereafter created, incurred or
assumed:
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our indebtedness
evidenced by a credit or loan agreement, note, bond, debenture or
other written obligation;
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all of our
obligations for money borrowed;
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all of our
obligations evidenced by a note or similar instrument given in
connection with the acquisition of any businesses, properties or
assets of any kind,
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our
obligations:
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as lessee under
leases required to be capitalized on the balance sheet of the
lessee under generally accepted accounting principles,
or
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as lessee under
leases for facilities, capital equipment or related assets, whether
or not capitalized, entered into or leased for financing
purposes;
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all of our
obligations under interest rate and currency swaps, caps, floors,
collars, hedge agreements, forward contracts or similar agreements
or arrangements;
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all of our
obligations with respect to letters of credit,
bankers’
acceptances and
similar facilities, including reimbursement obligations with
respect to the foregoing;
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all of our
obligations issued or assumed as the deferred purchase price of
property or services, but excluding trade accounts payable and
accrued liabilities arising in the ordinary course of
business;
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all obligations of
the type referred to in the above clauses of another person, the
payment of which, in either case, we have assumed or guaranteed,
for which we are responsible or liable, directly or indirectly,
jointly or severally, as obligor, guarantor or otherwise, or which
are secured by a lien on our property; and
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renewals, extensions,
modifications, replacements, restatements and refundings of, or any
indebtedness or obligation issued in exchange for, any such
indebtedness or obligation described in the above clauses of this
definition.
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“Senior
debt”
means the principal
of, premium, if any, and interest, including all interest accruing
subsequent to the commencement of any bankruptcy or similar
proceeding, whether or not a claim for post-petition interest is
allowable as a claim in any such proceeding, and rent payable on or
in connection with, and all fees and other amounts payable in
connection with, our indebtedness. However, senior debt shall not
include:
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any debt or
obligation if its terms or the terms of the instrument under which
or pursuant to which it is issued expressly provide that it shall
not be senior in right of payment to the subordinated debt
securities or expressly provide that such indebtedness is on the
same basis or “junior”
to the subordinated
debt securities; or
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debt to any of our
subsidiaries, a majority of the voting stock of which is owned,
directly or indirectly, by us.
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“Subsidiary”
means a corporation
more than 50% of the outstanding voting stock of which is owned,
directly or indirectly, by us or by one or more or our other
subsidiaries or by a combination of us and our other subsidiaries.
For purposes of this definition, “voting
stock”
means stock or other
similar interests which ordinarily has or have voting power for the
election of directors, or persons performing similar functions,
whether at all times or only so long as no senior class of stock or
other interests has or have such voting power by reason of any
contingency.
DESCRIPTION OF
THE UNITS
General
At our option, we may
elect to issue
units comprised of common stock, preferred stock,
depository shares,
warrants, debt
securities, or any combination thereof. Each unit will be issued so
that the holder of the unit is also the holder of each security
included in the unit. Thus, the holder of a unit will have the
rights and obligations of a holder of each included security. The
unit agreement under which a unit is issued may provide that the
securities included in the unit may not be held or transferred
separately, at any time or at any time before a specified
date.
The summary of terms
of the units contained in this section of the prospectus is not
complete, and is subject to modification in any prospectus
supplement for any issuance of units. We will describe in the
applicable prospectus supplement the terms of the series of units,
including:
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the designation and
terms of the units and of the securities comprising the units,
including whether and under what circumstances those securities may
be held or transferred separately;
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Any provisions of the
governing unit agreement that differ from those described below;
and
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Any provisions for
the issuance, settlement, transfer or exchange of the units or of
the securities comprising the units.
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In addition,
the provisions described under
“Description of Capital Stock,” “Description of the Depositary
Shares,” “Description of
the
Warrants”
and
“Description
of the
Debt Securities” will
apply to each unit and to any common stock, preferred stock, debt
security or warrants included in each unit,
respectively.
Issuance in
Series
We may issue units in
such amounts and in such numerous distinct series as we
determine.
Enforceability
of Rights by Holders of Units
Any unit agent will
act solely as our agent under the applicable unit agreement and
will not assume any obligation or relationship of agency or trust
with any holder of any unit. A single bank or trust company may act
as unit agent for more than one series of units. A unit agent will
have no duty or responsibility in case of any default by us under
the applicable unit agreement or unit, including any duty or
responsibility to initiate any proceedings at law or otherwise, or
to make any demand upon us. Any holder of a unit may, without the
consent of the related unit agent or the holder of any other unit,
enforce by appropriate legal action its rights as holder under any
security included in the unit.
Title
We, any unit agents
and any of their agents may treat the registered holder of any unit
certificate as an absolute owner of the units evidenced by that
certificate for any purpose and as the person entitled to exercise
the rights attaching to the units so requested, despite any
notice to the
contrary.
Outstanding
Units
We have no
outstanding units.
PLAN
OF DISTRIBUTION
We may sell the
securities offered through this prospectus (1) to or through
underwriters or dealers, (2) directly to purchasers, including our
affiliates, (3) through agents, or (4) through a combination of any
these methods. The securities may be distributed at a fixed price
or prices, which may be changed, market prices prevailing at the
time of sale, prices related to the prevailing market prices, or
negotiated prices. The prospectus supplement will include the
following information:
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the terms of the
offering;
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the names of any
underwriters or agents;
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the name or names of
any managing underwriter or underwriters;
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the purchase price of
the securities;
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the net proceeds from
the sale of the securities;
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any delayed delivery
arrangements;
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any underwriting
discounts, commissions and other items constituting
underwriters’
compensation;
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any initial public
offering price;
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any discounts or
concessions allowed or reallowed or paid to dealers; and
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any commissions paid
to agents.
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Sale
through underwriters or dealers
If underwriters are
used in the sale, the underwriters will acquire the securities for
their own account, including through underwriting, purchase,
security lending or repurchase agreements with us. The underwriters
may resell the securities from time to time in one or more
transactions, including negotiated transactions. Underwriters may
sell the securities in order to facilitate transactions in any of
our other securities (described in this prospectus or otherwise),
including other public or private transactions and short sales.
Underwriters may offer securities to the public either through
underwriting syndicates represented by one or more managing
underwriters or directly by one or more firms acting as
underwriters. Unless otherwise indicated in the prospectus
supplement, the obligations of the underwriters to purchase the
securities will be subject to certain conditions, and the
underwriters will be obligated to purchase all the offered
securities if they purchase any of them. The underwriters may
change from time to time any initial public offering price and any
discounts or concessions allowed or reallowed or paid to
dealers.
If dealers are used
in the sale of securities offered through this prospectus, we will
sell the securities to them as principals. They may then resell
those securities to the public at varying prices determined by the
dealers at the time of resale. The prospectus supplement will
include the names of the dealers and the terms of the
transaction.
Direct
sales and sales through agents
We may sell the
securities offered through this prospectus directly. In this case,
no underwriters or agents would be involved. Such securities may
also be sold through agents designated from time to time. The
prospectus supplement will name any agent involved in the offer or
sale of the offered securities and will describe any commissions
payable to the agent. Unless otherwise indicated in the prospectus
supplement, any agent will agree to use its reasonable best efforts
to solicit purchases for the period of its appointment.
We may sell the
securities directly to institutional investors or others who may be
deemed to be underwriters
within the meaning of
the Securities Act with respect to any sale of those securities.
The terms of any such sales will be described in the prospectus
supplement.
Underwriter,
dealer or agent discounts and commissions
Underwriters, dealers
or agents may receive compensation in the form of discounts,
concessions or commissions from us or our purchasers as their
agents in connection with the sale of securities. These
underwriters, dealers or agents may be considered to be
underwriters under the Securities Act. As a result, discounts,
commissions, or profits on resale received by the underwriters,
dealers or agents may be treated as underwriting discounts and
commissions. Each prospectus supplement will identify any such
underwriter, dealer or agent, and describe any compensation
received by them from us. Any initial public offering price and any
discounts or concessions allowed or reallowed or paid to dealers
may be changed from time to time. The maximum commission or
discount to be received by any underwriter, dealer or agent will
not be greater than eight percent (8%) of the maximum gross
proceeds of the securities that may be sold under this
prospectus.
Delayed
delivery contracts
If the prospectus
supplement indicates, we may authorize agents, underwriters or
dealers to solicit offers from certain types of institutions to
purchase securities at the public offering price under delayed
delivery contracts. These contracts would provide for payment and
delivery on a specified date in the future. The contracts would be
subject only to those conditions described in the prospectus
supplement. The applicable prospectus supplement will describe the
commission payable for solicitation of those contracts.
Market
making, stabilization and other transactions
Unless the applicable
prospectus supplement states otherwise, each series of offered
securities will be a new issue and will have no established trading
market. We may elect to list any series of offered securities on an
exchange. Any underwriters that we use in the sale of offered
securities may make a market in such securities, but may
discontinue such market making at any time without notice.
Therefore, we cannot assure you that the securities will have a
liquid trading market.
Any underwriter may
also engage in stabilizing transactions, syndicate covering
transactions and penalty bids in accordance with Rule 104 under the
Securities Exchange Act. Stabilizing transactions involve bids to
purchase the underlying security in the open market for the purpose
of pegging, fixing or maintaining the price of the securities.
Syndicate covering transactions involve purchases of the securities
in the open market after the distribution has been completed in
order to cover syndicate short positions.
Penalty bids permit
the underwriters to reclaim a selling concession from a syndicate
member when the securities originally sold by the syndicate member
are purchased in a syndicate covering transaction to cover
syndicate short positions. Stabilizing transactions, syndicate
covering transactions and penalty bids may cause the price of the
securities to be higher than it would be in the absence of the
transactions. The underwriters may, if they commence these
transactions, discontinue them at any time.
Derivative
transactions and hedging
We, the underwriters
or other agents may engage in derivative transactions involving the
securities. These derivatives may consist of short sale
transactions and other hedging activities. The underwriters or
agents may acquire a long or short position in the securities, hold
or resell securities acquired and purchase options or futures on
the securities and other derivative instruments with returns
linked to or related to changes in the price of the securities. In
order to facilitate these derivative transactions, we may enter
into security lending or repurchase agreements with the
underwriters or agents. The underwriters or agents may affect the
derivative transactions through sales of the securities to the
public, including short sales, or by lending the securities in
order to facilitate short sale transactions by others. The
underwriters or agents may also use the securities purchased or
borrowed from us or others (or, in the case of derivatives,
securities received from us in settlement of those derivatives) to
directly or indirectly settle sales of the securities or close out
any related open borrowings of the securities.
Electronic
auctions
We may also make
sales through the Internet or through other electronic
means. Since
we may from time to time elect to offer securities directly to the
public, with or without the involvement of agents, underwriters or
dealers, while utilizing the Internet or other forms of electronic
bidding or ordering systems for the pricing and allocation of such
securities, you should pay particular attention to the description
of that system we will provide in a prospectus
supplement.
Such electronic
system may allow bidders to directly participate, through
electronic access to an auction site, by submitting conditional
offers to buy that are subject to acceptance by us, and which may
directly affect the price or other terms and conditions at which
such securities are sold. These bidding or ordering systems may
present to each bidder, on a so-called “real-time”
basis, relevant
information to assist in making a bid, such as the clearing spread
at which the offering would be sold, based on the bids submitted,
and whether a bidder’s
individual bids would be accepted, prorated or rejected. For
example, in the case of a debt security, the clearing spread could
be indicated as a number of “basis
points”
above an index
treasury note. Of course, many pricing methods can and may also be
used.
Upon completion of
such an electronic auction process, securities will be allocated
based on prices bid, terms of bid or other factors. The final
offering price at which securities would be sold and the allocation
of securities among bidders would be based in whole or in part on
the results of the Internet or other electronic bidding process or
auction.
General
information
Agents, underwriters,
and dealers may be entitled, under agreements entered into with us,
to indemnification by us against certain liabilities, including
liabilities under the Securities Act.
The validity of the
securities offered by this prospectus will be passed upon by
Morrison & Foerster LLP, San Francisco, California.
The financial
statements of Cassava Sciences, Inc. appearing in its Annual Report
(Form 10-K) for the year ended December 31, 2019 have been audited
by Ernst & Young LLP, independent registered public accounting
firm, as set forth in their report thereon, included therein, and
incorporated herein by reference. Such financial statements as of
December 31, 2019 have been incorporated herein by reference in
reliance upon such report given on the authority of such firm as
experts in accounting and auditing.
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WHERE
YOU CAN FIND MORE INFORMATION
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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, N.E., Washington, D.C.
20549. Please call the SEC at 1-800-SEC-0330 for further
information on the Public Reference Room. 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 through the Internet. These filings will be
available as soon as reasonably practicable after we electronically
file such material with, or furnish it to, the SEC. Information
contained on our website is not part of this prospectus.
INFORMATION
INCORPORATED BY REFERENCE
The SEC allows us to
incorporate by reference into this prospectus certain information
we file with it, which means that we can disclose important
information by referring you to those documents. The information
incorporated by reference is considered to be a part of this
prospectus, and information that we file later with the SEC will
automatically update and supersede information contained in this
prospectus and any accompanying prospectus supplement. We
incorporate by reference the documents listed below that we have
previously filed with the SEC (excluding any portions of any Form
8-K that are not deemed “filed”
pursuant to the
General Instructions of Form 8-K):
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our Annual Report on
Form 10-K for the fiscal year ended December 31, 2019, filed on
March 26, 2020; and
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the description of
our common stock contained in our Registration Statement on Form
8-A as filed with the SEC on March 15, 2000, and any further
amendment or report filed hereafter for the purpose of updating
such description pursuant to Section 12(b) of the Exchange
Act.
|
We also incorporate
by reference into this prospectus additional documents that we may
file with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the
Exchange Act prior to the completion or termination of the
offering, including all such documents we may file with the SEC
after the date of the initial registration statement and prior to
the effectiveness of the registration statement, but excluding any
information deemed furnished and not filed with the SEC. Any
statements contained in a previously filed document incorporated by
reference into this prospectus is deemed to be modified or
superseded for purposes of this prospectus to the extent that a
statement contained in this prospectus, or in a subsequently filed
document also incorporated by reference herein, modifies or
supersedes that statement.
You may request a
copy of these filings, at no cost to you, by telephoning us at
(512) 501-2444 or by writing us at the following
address:
Cassava Sciences,
Inc.
7801 N Capital of
Texas Highway, Suite 260
Austin, TX
78731
United States of
America
Attn: Investor
Relations
STATEMENT
REGARDING FORWARD-LOOKING INFORMATION
This prospectus and
the documents incorporated by reference in this prospectus include
statements about future events and expectations that constitute
forward-looking statements. Such forward-looking statements
include, without limitation, statements concerning regulatory
filings, development activity and capital expenditures, and capital
raising activities. Words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates,”
and variations of
such words and similar expressions are intended to identify such
forward-looking statements. Such statements involve known and
unknown risks, uncertainties and other factors which may cause the
actual results, performance or achievements to be materially
different from the results of operations or plans expressed or
implied by such forward-looking statements. Such factors include,
among other things, unanticipated adverse business developments and
adverse changes in general and local economies and business
conditions. Although we believe that the assumptions underlying
such forward-looking statements are reasonable, any of the
assumptions could be inaccurate, and therefore such statements may
not prove to be accurate. In light of the significant uncertainties
inherent in the forward-looking statements included herein, the
inclusion of such information should not be regarded as a
representation by us or any other person that the results or
conditions described in such statements or our objectives and plans
will be achieved.
The following
factors, among others, could cause our future results to differ
materially from those expressed in the forward-looking
statements:
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·
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Our
ability to initiate, conduct or analyze studies with
PTI-125 or SavaDx (formerly
referred to as PTI-125Dx),
our lead product candidates targeted at Alzheimer’s disease and
other neurodegenerative diseases;
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·
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our
estimated timeline for announcing top-line results of a Phase 2b
study of PTI-125;
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·
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our
estimated timeline for testing clinical samples with
SavaDx,
our investigational blood-based diagnostic;
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·
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our
intention to conduct additional clinical studies of PTI-125 or
SavaDx, the anticipated scope of such studies and our estimated
timeline for doing so;
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·
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the
beneficial characteristics,
safety, efficacy, and therapeutic effects of our product
candidates, such as PTI-125 or SavaDx;
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·
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the
utility of protection, or the sufficiency, of our intellectual
property;
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·
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our
potential competitors or competitive products;
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·
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expected future
sources of revenue and capital and increasing cash
needs;
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·
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our
continued reliance on third parties to conduct additional
clinical studies
of our product candidates, and for the manufacture of our product
candidates;
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·
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expectations
regarding trade secrets, technological innovations, licensing
agreements and outsourcing of certain business
functions;
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·
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our
expenses increasing or fluctuations in our financial or operating
results;
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·
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our
operating losses and anticipated operating and capital
expenditures;
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·
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expectations
regarding the issuance of shares of common stock to employees
pursuant to equity compensation awards, net of employment
taxes;
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·
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our
ability to maintain compliance with the ongoing listing
requirements for the Nasdaq Capital Market;
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·
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the
development and maintenance of our internal systems and
infrastructure;
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·
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our
need to hire additional personnel and our ability to attract and
retain such personnel;
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·
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existing
regulations and regulatory developments in the United States and
other jurisdictions;
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·
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the
sufficiency of our current resources to continue to fund our
operations;
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·
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the
accuracy of our estimates regarding expenses, capital requirements,
and needs for additional financing; and
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·
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assumptions and
estimates used for our disclosures regarding stock-based
compensation.
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Such
forward-looking statements involve risks and uncertainties,
including, but not limited to, those risks and uncertainties
relating to:
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·
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difficulties or
delays in development, testing, pre-clinical
studies, clinical trials
(including patient enrollment), regulatory authorization or
approval, manufacturing
and
commercialization of our drug candidates;
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·
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unexpected adverse
side effects or inadequate therapeutic efficacy of our drug
candidates that could slow or prevent product approval (including
the risk that current and past results of clinical trials are not
indicative of future results of clinical trials) or potential
post-approval market acceptance;
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·
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significant
issues
that
may arise related to outsourcing of pre-clinical studies, clinical
trials, and formation and manufacturing
activities;
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·
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discussions with
potential strategic partners for the development and
commercialization of PTI-125 and SavaDx;
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·
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the
successful development of other drug candidates, independently as
well as pursuant to our other collaboration agreements, and the
continuation of such agreements;
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·
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the
uncertainty of protection of our intellectual property rights or
trade secrets;
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·
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potential
infringement of the intellectual property rights of third
parties;
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·
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pursuing in-license
and acquisition opportunities;
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·
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maintenance or
third party funding of our collaboration and license
agreements;
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·
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legislation or
regulatory actions affecting product pricing, reimbursement or
access;
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·
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significant
breakdown or interruption of our information technology and
infrastructure;
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·
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hiring
and retaining personnel; and
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·
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our
financial position and our ability to obtain additional financing
if necessary.
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Please
also refer to the section entitled “Risk
Factors”
in our
Annual Report on Form 10-K for the fiscal year ended December 31,
2019 for further information on these and other risks affecting
us.
We
caution you not to place undue reliance on forward-looking
statements because our future results may
differ materially
from those expressed or implied by them. We do not intend to update
any forward-looking statement, whether written or oral, relating to
the matters discussed in this prospectus, except as required by
law.
PROSPECTUS
SUPPLEMENT SUMMARY
This
summary highlights information contained elsewhere in this
prospectus or incorporated by reference in this prospectus. This
summary does not contain all of the information that you should
consider before making an investment decision. Before making an
investment decision, you should read carefully in its entirety this
prospectus, including the matters discussed in “Risk Factors” in
this prospectus and our Annual Report on Form 10-K for the fiscal
year ended December 31, 2019, as such risk factors may be amended,
updated or modified periodically in our reports filed with the SEC
and the financial data and related notes and the reports
incorporated by reference in this prospectus.
Company
Overview
Cassava Sciences,
Inc. is a clinical stage biotechnology company. Our mission is to
detect and treat neurodegenerative diseases, such as Alzheimer’s
disease. Our novel science is based on stabilizing – but not
removing – a critical protein in the brain.
Over the past 10
years, we have combined state-of-the-art technology with new
insights in neurobiology to develop novel solutions for Alzheimer’s
disease and other neurodegenerative diseases. Our strategy is to leverage our
unique scientific/clinical platform to develop a first-in-class
program for treating neurodegenerative
diseases, such as Alzheimer’s.
We currently have two
clinical-stage biopharmaceutical assets under
development:
•our lead therapeutic product
candidate, called PTI-125, for the treatment of Alzheimer’s
disease; and
•our lead investigational
diagnostic product candidate, called SavaDx, to detect Alzheimer’s disease
from a small sample of blood, possibly years before the overt
appearance of clinical symptoms.
Our scientific
approach for the treatment of Alzheimer’s disease seeks to
simultaneously improve both neurodegeneration and
neuroinflammation. We believe our ability to improve multiple vital
functions in the brain represents a new, different and crucial
approach to address Alzheimer’s disease.
Corporate
Information
We were incorporated
in Delaware in May 1998. Our principal executive offices are
located at 7801 N Capital of Texas Highway, Suite 260, Austin, TX,
78731 and our telephone number at that address is (512)
501-2444.
Additional
information regarding our company is set forth in documents on file
with the SEC and incorporated by reference in this prospectus, as
described below under the sections entitled “Where
You Can Find More Information”
and
“Incorporation
of Certain Documents by Reference.”
The
Offering
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Issuer
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Cassava Sciences,
Inc., a Delaware corporation.
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Common stock
offered
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Up to $100 million of
our common stock, par value $0.001 per share.
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Common stock to be
outstanding immediately after this offering(1)
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Up to
42,675,143
shares, assuming
sales of 20,833,333 shares of our common stock in
this offering at an offering price of $4.80 per share, which was the last
reported sale price of our common stock on the Nasdaq Capital
Market on April 3, 2020. The actual number of
shares issued will vary depending on how many shares of our common
stock we choose to sell and the prices at which such sales
occur.
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Plan of
Distribution
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“At the market
offering” that may be made from time to time on the Nasdaq Capital
Market or other existing trading market for our common stock
through or to the Agent, as sales agent or principal. See “Plan of
Distribution”.
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Use of
Proceeds
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|
We intend to use the
net proceeds, if any, from the sale of the
shares that we may offer under this prospectus, after deducting
commissions and estimated offering expenses, for general corporate
purposes and working capital requirements. We may also use a
portion of the net proceeds for licensing or acquiring intellectual
property or technologies to incorporate into our products and
product candidates or our research and development programs,
capital expenditures, to fund possible investments in and
acquisitions of complementary businesses or partnerships. Pending
their ultimate use, we intend to invest the net proceeds in a
variety of securities, including commercial paper, government and
non-government debt securities and/or money market funds that
invest in such securities. See “Use
of Proceeds.”
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|
|
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Risk
Factors
|
|
Before deciding to
invest in shares of our common stock, you should read carefully the
risks set forth under the caption “Risk
Factors”
beginning on page S-5
of this prospectus supplement and page 4 of the accompanying
prospectus, and the risks set forth under the caption
“Item
1A. Risk Factors”
included in our
Annual Report on Form 10-K for the fiscal year ended December 31,
2019 and in the documents that are incorporated by reference into
this prospectus for certain considerations relevant to an
investment in our common stock.
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Nasdaq Capital Market
symbol
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SAVA
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Transfer agent and
registrar
|
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Computershare
Shareowner Services LLC
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___________
|
(1)
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|
Based
on 21,841,810 shares of our common stock outstanding as of December
31, 2019, and excludes, as of that date, the
following:
|
|
·
|
|
4,504,091 shares
of common stock issuable upon exercise of outstanding warrants
having a weighted-average exercise price of $1.25 per
share;
|
|
·
|
|
3,210,965 shares of
common stock issuable upon exercise of outstanding options having a
weighted-average exercise price of $12.27 per share;
|
|
·
|
|
138,055
shares of common stock issuable upon the vesting and settlement of
outstanding restricted stock units;
|
|
·
|
|
277,500
shares of common stock reserved for issuance and available for
future grant under our 2018 Omnibus Incentive Plan; and
|
|
·
|
|
58,017
shares of common stock reserved for issuance and available for
future grant under our Employee Stock Purchase Plan.
|
RISK
FACTORS
An
investment in our common stock is subject to risk. Our business,
financial condition, and results of operations could be materially
adversely affected by any of these risks. The trading price of our
common stock could decline due to any of these risks, and you may
lose all or part of your investment. Before you decide to invest in
our common stock, you should carefully consider the risks described
in our Annual Report on Form 10-K for the fiscal year ended
December 31, 2019, as such risks may be amended, updated or
modified periodically in our reports filed with the SEC, as well as
the other information included in and incorporated by reference in
this prospectus.
A
substantial number of shares may be sold in the market following
this offering, which may depress the market price for our common
stock.
Sales
of a substantial number of shares of our common stock in the public
market following this offering could cause the market price of our
common stock to decline. Although there can be no assurance
that any of the
$100,000,000
of shares being offered under this prospectus will be sold or the
price at which any such shares might be sold, assuming that an
aggregate of 20,833,333
shares
of our common stock are sold during the term of the sales agreement
with SVB Leerink
LLC,
at a price of $4.80
per
share, the last reported sale price of our common stock on
the Nasdaq
Capital Market on
April
3, 2020, upon completion
of this offering, based on our shares outstanding as of
December 31,
2019, we will have
outstanding an aggregate of 42,675,143
shares
of common stock, assuming no exercise of outstanding
warrants or
stock
options and no purchases of stock under our employee stock purchase
plan. A substantial majority of the outstanding shares of our
common stock are, and all of the shares sold in this offering upon
issuance will be, freely tradable without restriction or further
registration under the Securities Act of 1933, as amended, or the
Securities Act, unless these shares are owned or purchased by
“affiliates” as that term is defined in Rule 144 under the
Securities Act.
We
have broad discretion in the use of the net proceeds from this
offering and may not use them effectively.
Our management has
broad discretion in the application of the net proceeds from this
offering, and you will not have the opportunity as part of your
investment decision to assess whether the net proceeds are being
used appropriately. Our management could spend the net proceeds
from this offering in ways that do not improve our results of
operations or enhance the value of our common stock. The failure by
our management to apply these funds effectively could result in
financial losses that could have a material adverse effect on our
business, cause the price of our common stock to decline and delay
the development of our product candidates. Pending their use, we
may invest the net proceeds from this offering in a manner that
does not produce income or that loses value.
If
you purchase shares of common stock sold in this offering, you will
incur immediate and substantial dilution.
If you purchase
shares of our common stock in this offering, you will experience
substantial and immediate dilution in the pro forma net tangible
book value per share after giving effect to this offering, based on
the assumed public offering price of $4.80 per share, which is the last
reported sale price of our common stock on The Nasdaq Capital
Market on April 3, 2020, because the price that
you pay will be substantially greater than the pro forma net
tangible book value per share of the common stock that you acquire.
This dilution in pro forma net tangible book value is due in large
part to the fact that certain of our earlier investors paid
substantially less than the offering price when they purchased
shares of our capital stock. For more information, see
“Dilution.”
You
may experience future dilution as a result of future equity
offerings or other equity issuances.
In
order to raise additional capital, we may in the future offer and
issue additional shares of our common stock or other securities
convertible into or exchangeable for our common stock. We cannot
assure you that we will be able to sell shares or other securities
in any other offering at a price per share that is equal to or
greater than the price per share paid by investors in this
offering, and investors purchasing shares or other securities in
the future could have rights superior to existing stockholders. The
price per share at which we sell additional shares of our common
stock or other securities convertible into or exchangeable for our
common stock in future transactions may be higher or lower than the
price per share in this offering. In addition, we have also
registered all of the shares of common stock
that we
may issue under our stock option and employee stock purchase plans,
and as of December 31,
2019,
3,210,965
shares
of common stock were issuable upon the exercise of stock options
outstanding under our stock option plans at a weighted average
exercise price of $12.27
per
share, 277,500
additional shares
of common stock were reserved for potential future issuance under
our stock option plan, and an
aggregate of 58,017 shares
of common stock were reserved for potential future issuance under
our 2000 Employee Stock Purchase Plan. Further,
our Board of Directors has approved, and also recommended approval
by our stockholders at the 2020 Annual Meeting of Stockholders to
be held on May 7, 2020, an increase of 2,000,000 shares available
for issuance under our stock option plan. You will incur
dilution upon the grant of any shares pursuant to such plan, upon
vesting of any stock awards under any such plan, or upon exercise
of any such outstanding options or
warrants.
USE
OF PROCEEDS
We intend to use the
net proceeds,
if any, from
the sale of the shares that we may offer under this prospectus,
after deducting commissions and estimated offering expenses, for
general corporate purposes and working capital requirements. We may
also use a portion of the net proceeds for licensing or acquiring
intellectual property or technologies to incorporate into our
products and product candidates or our research and development
programs, capital expenditures, to fund possible investments in and
acquisitions of complementary businesses or partnerships. We have
not determined the amounts we plan to spend on the areas listed
above or the timing of these expenditures, and we have no current
plans with respect to acquisitions as of the date of this
prospectus. As a result, our management will have broad discretion
to allocate the net proceeds from the sale of the shares that we
may offer under this prospectus. Pending their ultimate use, we
intend to invest the net proceeds in a variety of securities,
including commercial paper, government and non-government debt
securities and/or money market funds that invest in such
securities.
DILUTION
If you invest in our
common stock, your interest will be diluted to the extent of the
difference between the public offering price per share you pay in
this offering and the net tangible book value per share of our
common stock immediately after this offering.
Net tangible book
value per share is determined by subtracting our total liabilities
from our total tangible assets, which is total assets less
intangible assets, and dividing this amount by the number of shares
of common stock outstanding. The historical net tangible book value
of our common stock, as of December 31, 2019, was approximately
$22.1 million, or $1.01 per share, based on 21,841,810 shares of
our common stock outstanding as of December 31, 2019 as reported in
our Annual Report on Form 10-K for the fiscal year ended December
31, 2019. Dilution in net tangible book
value per share represents the difference between the amount per
share paid by purchasers of shares of common stock in this offering
and the net tangible book value per share of our common stock
immediately after this offering.
After giving effect
to the sale of shares of common stock in this offering at an
assumed offering price of $4.80
per share, and after
deducting estimated commissions and offering expenses payable by
us, our as adjusted net tangible book value at December 31, 2019
would have been approximately $118.9
million, or
$2.79 per
share. This represents an immediate dilution of $2.01
per share to new
investors purchasing shares of common stock in this offering. The
following table illustrates this dilution:
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Assumed offering
price per share
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$
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4.80
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Net tangible book
value per share as of December 31, 2019
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$
|
1.01
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Increase in net
tangible book value per share attributable to investors
participating in this offering
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$
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1.78
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|
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As adjusted net
tangible book value per share after giving effect to this
offering
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$
|
2.79
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|
|
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|
As adjusted
dilution per share to investors
participating in this offering
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|
$
|
2.01
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|
The above
illustration of dilution per share to investors
participating in this offering assumes no exercise of outstanding
options to purchase our common stock or outstanding warrants to
purchase shares of our common stock. To the extent that any of
these outstanding warrants or options are exercised or we issue
additional shares under our equity incentive plans, there will be
further dilution to new investors. In addition, we
may choose to raise additional capital due to market conditions or
strategic considerations even if we believe we have sufficient
funds for our current or future operating plans. To the extent that
additional capital is raised through the sale of equity or
convertible debt securities, the issuance of these securities could
result in further dilution to our shareholders.
The above discussion
and table are based on 21,841,810 shares of our common stock
outstanding as of December 31, 2019 and excludes, as of that date,
the following:
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·
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|
4,504,091 shares
of common stock issuable upon exercise of outstanding warrants
having a weighted-average exercise price of $1.25 per
share;
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·
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|
3,210,965 shares of
common stock issuable upon exercise of outstanding options having a
weighted-average exercise price of $12.27 per share;
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·
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138,055
shares of common stock issuable upon the vesting and settlement of
outstanding restricted stock units;
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·
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277,500
shares of common stock reserved for issuance and available for
future grant under our 2018 Omnibus Incentive Plan; and
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·
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58,017
shares of common stock reserved for issuance and available for
future grant under our Employee Stock Purchase Plan.
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PRICE
RANGE OF OUR COMMON STOCK
Our common stock has
been traded on the Nasdaq Capital Market under the symbol
“SAVA”
since March 28, 2019,
and previously traded under the symbol “PTIE”. The following table
sets forth, for the periods indicated, the high and low sales
prices for our common stock as reported by the Nasdaq Capital
Market.
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Common
Stock
Price
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Year
ended December 31, 2018
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Low
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High
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First
Quarter
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$
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3.88 |
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$
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12.80 |
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Second
Quarter
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2.04 |
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10.87 |
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Third
Quarter
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0.81 |
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2.92 |
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Fourth
Quarter
|
|
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0.76 |
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|
2.99 |
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Year
ended December 31, 2019
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First
Quarter
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$
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0.84 |
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1.37 |
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Second
Quarter
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1.00 |
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1.40 |
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Third
Quarter
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1.03 |
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1.49 |
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Fourth
Quarter
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1.05 |
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7.20 |
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Year
ending December 31, 2020
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First
Quarter
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$
|
3.10 |
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|
10.95 |
|
Second Quarter
(through April 3, 2020)
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3.85 |
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5.27 |
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The closing sale
price of our common stock as reported on the Nasdaq Capital Market on
April
3, 2020 was
$4.80 per share. As of that date there
were approximately 33 holders of record of the common
stock. This does not include the number of persons whose stock is
in nominee or “street name” accounts through brokers. The market
price of our common stock has been and may continue to be subject
to wide fluctuations in response to a number of events and factors,
such as progress in our development programs, quarterly variations
in our operating results, announcements of technological
innovations or new products by us or our competitors, changes in
financial estimates and recommendations by securities analysts, the
operating and stock performance of other companies that investors
may deem comparable to us, and news reports relating to trends in
our markets. These fluctuations, as well as general economic and
market conditions, may adversely affect the market price for our
common stock.
PLAN
OF DISTRIBUTION
We have entered into
a sales agreement with the Agent under which we may issue and sell
from time to time shares of our common stock through the Agent,
acting as sales agent or principal. Sales of the shares to which
this prospectus relates, if any, will be made by any method deemed
to be an “at
the market offering”
as defined in Rule
415 promulgated under the Securities Act. As our sales agent, the
Agent will not engage in any transactions that stabilize our common
stock.
The Agent will offer
the shares of our common stock subject to the terms and conditions
of the sales agreement on a daily basis or as otherwise agreed upon
by us and the Agent. We will designate the maximum number of shares
or dollar value of common stock to be sold through the Agent on a
daily basis or otherwise determine such maximum number together
with the Agent. Subject to the terms and conditions of the sales
agreement, the Agent will use its commercially reasonable efforts
to sell on our behalf all of the shares of common stock so
designated or determined. We may instruct the Agent not to sell
shares of common stock if the sales cannot be effected at or above
the price designated by us in any such instruction. We or the Agent
may suspend the offering of shares of common stock being made
through the Agent under the sales agreement upon proper notice to
the other party.
For its service as
sales agent in connection with the sale of shares of our common
stock that may be offered hereby, we will pay the Agent an amount
equal to 3.0% of the aggregate sales price received by the Agent
from each sale of shares sold through it acting as our sales agent.
The remaining sales proceeds, after deducting any expenses payable
by us and any transaction fees imposed by any governmental,
regulatory, or self-regulatory organization in connection with the
sales, will equal our net proceeds for the sale of such shares. We
have also agreed to reimburse the Agent for certain specified
expenses, including the fees and disbursements of its legal counsel
in an amount not to exceed $50,000, as provided in the sales
agreement.
The Agent will
provide written confirmation to us following the close of trading
on the Nasdaq Capital Market each day in which shares of common
stock are sold by it for us under the sales agreement. Each
confirmation will include the number of shares sold on that day,
the gross sales price per share, the compensation payable by us to
the Agent and the proceeds to us net of such
compensation.
Settlement for sales
of common stock will occur, unless the parties agree otherwise, on
the second business day following the date on which any sales were
made in return for payment of the proceeds to us net of
compensation paid by us to the Agent. There is no arrangement for
funds to be received in an escrow, trust or similar
arrangement.
We will deliver to
the Nasdaq Capital Market copies of this prospectus pursuant to the
rules of the Nasdaq Capital Market. Unless otherwise required, we
will report at least quarterly the number of shares of common stock
sold through the Agent under the sales agreement, the net proceeds
to us and the compensation paid by us to the Agent in connection
with the sales of common stock.
In connection with
the sale of the common stock on our behalf, the Agent will be
deemed to be an “underwriter”
within the meaning of
the Securities Act and the compensation paid to the Agent will be
deemed to be underwriting commissions or discounts. We have agreed
in the sales agreement to provide indemnification and contribution
to the Agent against certain civil liabilities, including
liabilities under the Securities Act.
In the ordinary
course of their business, the Agent and/or its affiliates may
perform, investment banking, broker dealer, lending, financial
advisory or other services for us for which they have received, or
may receive, separate fees.
We estimate that the
total expenses of the offering payable by us, excluding discounts
and commissions payable to the Agent under the sales agreement,
will be approximately $180,000.
The offering of
common stock pursuant to the sales agreement will terminate upon
the earlier of (1) the sale of all of our shares of common stock
provided for in the sales agreement or (2) the termination of the sales
agreement, pursuant to its terms, by either the Agent or
us.
WHERE
YOU CAN FIND MORE 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, N.E., Washington, D.C.
20549. Please call the SEC at 1-800-SEC-0330 for further
information on the Public Reference Room. 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 Securities Exchange Act of 1934, as
amended, or the Exchange Act, can also be accessed free of charge
through the Internet. These filings will be available as soon as
reasonably practicable after we electronically file such material
with, or furnish it to, the SEC.
We maintain a web
site at www.cassavasciences.com. Information contained on our
website is not part of this prospectus or any other document we
file with or furnish to the SEC.
INCORPORATION
OF CERTAIN DOCUMENTS BY REFERENCE
The SEC allows us to
incorporate by reference into this prospectus certain information
we file with it, which means that we can disclose important
information by referring you to those documents. The information
incorporated by reference is considered to be a part of this
prospectus, and information that we file later with the SEC will
automatically update and supersede information contained in this
prospectus. We incorporate by reference the documents listed below
that we have previously filed with the SEC (excluding any portions
of any Form 8-K that are not deemed “filed”
pursuant to the
General Instructions of Form 8-K):
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our Annual Report on
Form 10-K for the fiscal year ended December 31, 2019, filed on
March 26, 2020; and
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the description of
our common stock contained in our Registration Statement on Form
8-A as filed with the SEC on March 15, 2000, and any further
amendment or report filed hereafter for the purpose of updating
such description pursuant to Section 12(b) of the Exchange
Act.
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We also incorporate
by reference into this prospectus additional documents that we may
file with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the
Exchange Act prior to the completion or termination of the
offering, including all such documents we may file with the SEC
after the date of the initial registration statement and prior to
the effectiveness of the registration statement, but excluding any
information deemed furnished and not filed with the SEC. Any
statements contained in a previously filed document incorporated by
reference into this prospectus is deemed to be modified or
superseded for purposes of this prospectus to the extent that a
statement contained in this prospectus, or in a subsequently filed
document also incorporated by reference herein, modifies or
supersedes that statement.
As explained above
in “Where
You Can Find More Information,”
these incorporated
documents (as well as other documents filed by us under the
Exchange Act) are available at the SEC and may be accessed in a
number of ways, including online via the Internet.
You may request a
copy of any of the documents described above, at no cost to you, by
telephoning us at (512) 501-2444 or by writing us at the following
address:
Cassava Sciences,
Inc.
7801 N Capital of
Texas Highway, Suite 260
Austin, TX
78731
United States of
America
Attn: Investor
Relations
LEGAL
MATTERS
Certain legal matters
in connection with this offering will be passed upon for us by
Morrison & Foerster LLP, San Francisco, California. Certain
legal matters in connection with this offering will be passed upon
for the Agent by Duane Morris LLP, New York, New
York.
EXPERTS
The financial
statements of Cassava Sciences, Inc. appearing in its Annual Report
(Form 10-K) for the year ended December 31, 2019 have been audited
by Ernst & Young LLP, independent registered public accounting
firm, as set forth in their report thereon, included therein, and
incorporated herein by reference. Such financial statements as of
December 31, 2019 have been incorporated herein by reference in
reliance upon such report given on the authority of such firm as
experts in accounting and auditing.