As filed with the Securities and Exchange Commission on August 2,
2018
Registration No.
333-
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF
1933
ISSUER DIRECT CORPORATION
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation or
organization)
26-1331503
I.R.S. Employer Identification Number
500 Perimeter Park Drive, Suite 400
Morrisville, North Carolina 27560
(919) 481-4000
(Address, including zip code, and telephone number, including
area code of registrant’s principal executive
offices)
Brian R. Balbirnie
Chief Executive Officer
Issuer Direct Corporation
500 Perimeter Park Drive, Suite 400
Morrisville, North Carolina 27560
(919) 481-4000
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
With a copy to:
Jeffrey M. Quick, Esq.
Quick Law Group PC
1035 Pearl Street, Suite 404
Boulder, Colorado 80302
Phone: (720) 259-3393
Fax: (303) 845-7315
Approximate date of commencement of proposed sale to the public:
From time to time after the effective date of this registration
statement.
If
the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check
the following box. [ ]
If
any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 of
the Securities Act of 1933, other than securities offered only in
connection with dividend or interest reinvestment plans, check the
following box. [X]
If
this form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, please
check the following box and list the Securities Act registration
statement number of the earlier effective registration statement
for the same offering. [ ]
If
this form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list
the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [
]
If
this Form is a registration statement pursuant to General
Instruction I.D. or a post-effective amendment thereto that shall
become effective upon filing with the Commission pursuant to Rule
462(e) under the Securities Act, please check the following box. [
]
If
this Form is a post-effective amendment to a registration statement
filed pursuant to General Instruction I.D. filed to register
additional securities or additional classes of securities pursuant
to Rule 413(b) under the Securities Act, please check the following
box. [ ]
Indicate
by check mark whether the registrant is a large accelerated filer,
an accelerated filer, a non-accelerated filer, or a smaller
reporting company. See the definitions of “large accelerated
filer,” “accelerated filer,” “smaller
reporting company” and “emerging growth company”
in Rule 12b-2 of the Exchange Act. (Check one):
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Large
accelerated filer
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[ ]
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Accelerated
filer
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[ ]
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Non-accelerated
filer
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[ ]
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Smaller
reporting company
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[X]
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(Do
not check if a smaller reporting company)
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|
Emerging growth company
|
[ ]
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If an emerging growth company, indicate by check mark if the
registrant has elected not to use the extended transition period
for complying with any new or revised financial accounting
standards provided pursuant to Section 7(a)(2)(B) of Securities
Act. [ ]
CALCULATION OF REGISTRATION FEE
|
Title of each class of securities
to be registered
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|
Amount to be
Registered
|
Proposed Maximum Offering Price Per
Unit
|
Proposed Maximum Aggregate Offering
Price
|
Amount of Registration Fee
(3)
|
|
Common Stock, par value
$0.001 per share
|
|
(1)
|
(2)
|
(2)
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$—
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Preferred Stock, par
value $0.001 per share
|
|
(1)
|
(2)
|
(2)
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—
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Debt
Securities
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|
(1)
|
(2)
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(2)
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—
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Warrants
|
|
(1)
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(2)
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(2)
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—
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Units
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|
(1)
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(2)
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(2)
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—
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Total
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|
(1)
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(2)
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$30,000,000
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$3,735
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(1)
There
are being registered hereunder such indeterminate number of shares
of common stock and preferred stock, such indeterminate principal
amount of debt securities and such indeterminate number of warrants
and units as shall have an aggregate offering price not to exceed
$30,000,000. If any debt securities are issued at an original issue
discount, then the principal amount of such debt securities shall
be in such greater amount as shall result in an aggregate offering
price not to exceed $30,000,000, less the aggregate dollar amount
of all securities previously issued hereunder. Any securities
registered hereunder may be sold separately or as units with other
securities registered hereunder. The securities registered also
include such indeterminate number of shares of common stock and
preferred stock and amount of debt securities as may be issued upon
conversion of or exchange for preferred stock or debt securities
that provide for conversion or exchange, upon exercise of warrants
or pursuant to the anti-dilution provisions of any such securities.
In addition, pursuant to Rule 416 under the Securities Act of 1933,
as amended (the “Securities Act”), the shares being
registered hereunder include such indeterminate number of shares of
common stock and preferred stock as may be issuable with respect to
the shares being registered hereunder as a result of stock splits,
stock dividends or similar transactions.
(2)
The
proposed maximum aggregate offering price per class of security
will be determined from time to time by the Registrant in
connection with the issuance by the Registrant of the securities
registered hereunder and is not specified as to each class of
security.
(3)
Calculated
pursuant to Rule 457(o) under the Securities Act.
The Registrant hereby amends this registration statement on such
date or dates as may be necessary to delay its effective date until
the registrant shall file a further amendment which specifically
states that this registration statement shall thereafter become
effective in accordance with Section 8(a) of the Securities Act of
1933 or until the registration statement shall become effective on
such date as the Commission, acting pursuant to said section 8(a),
may determine.
The information in this prospectus is not complete and may be
changed. We may not sell these securities until the registration
statement filed with the Securities and Exchange Commission is
effective. This prospectus is not an offer to sell these securities
and it is not soliciting an offer to buy these securities in any
jurisdiction where the offer or sale is not permitted.
|
PROSPECTUS
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SUBJECT TO COMPLETION
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DATED AUGUST 2, 2018
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$30,000,000
Common
Stock
Preferred
Stock
Debt
Securities
Warrants
Units
From
time to time, we may offer and sell, in one or more offerings, up
to $30,000,000 of any combination of the securities described in
this prospectus. We may also offer securities as may be issuable
upon conversion, redemption, repurchase, exchange or exercise of
any securities registered hereunder, including any applicable
anti-dilution provisions.
This
prospectus provides a general description of the securities we may
offer from time to time. Each time we offer securities, we will
provide specific terms of the securities offered in a supplement to
this prospectus. We may also authorize one or more free writing
prospectuses to be provided to you in connection with an offering.
The prospectus supplement and any related free writing prospectus
may also add, update or change information contained in this
prospectus. You should carefully read this prospectus, the
applicable prospectus supplement and any related free writing
prospectus, as well as any documents incorporated by reference,
before you invest in any of the securities being
offered.
Our
common stock is listed on the NYSE American under the symbol
“ISDR”. The last reported sale price of our common
stock on August 1, 2018 was $18.90 per share.
We may
offer and sell our securities to or through one or more agents,
underwriters, dealers or other third parties or directly to one or
more purchasers on a continuous or delayed basis. If agents,
underwriters or dealers are used to sell our securities, we will
name them and describe their compensation in a prospectus
supplement. The price to the public of our securities and the net
proceeds we expect to receive from the sale of such securities will
also be set forth in a prospectus supplement. For additional
information on the methods of sale, you should refer to the section
entitled “Plan of
Distribution” in this prospectus
As of
August 1, 2018, the aggregate market value of our outstanding
common stock held by non-affiliates was approximately $41.6
million, which was calculated based on 2,201,983 shares of
outstanding common stock held by non-affiliates, at a price per
share of $18.90. Pursuant to General Instruction I.B.6 of Form S-3,
in no event will we sell the securities described in this
prospectus in a public primary offering with a value exceeding more
than one-third of the aggregate market value of our common stock
held by non-affiliates in any 12-month period, so long as the
aggregate market value of our outstanding common stock held by
non-affiliates remains below $75 million. During the 12 calendar
months prior to and including the date of this prospectus, we have
not offered or sold any securities pursuant to General Instruction
I.B.6 of Form S-3.
Our
business and investing in shares of our common stock involves
significant risks. You should review carefully the risks and
uncertainties referenced under the heading “Risk Factors” on page 7 of this
prospectus, as well as those contained in the applicable prospectus
supplement and any related free writing prospectus, and in the
other documents that are incorporated by reference into this
prospectus or the applicable prospectus supplement.
Neither
the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or
passed upon the adequacy or accuracy of this prospectus. Any
representation to the contrary is a criminal offense.
The
date of this prospectus is [ ],
2018
ISSUER
DIRECT CORPORATION
TABLE OF CONTENTS
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i
ABOUT THIS PROSPECTUS
This
prospectus is part of a registration statement filed with the
Securities and Exchange Commission (the “SEC”), using a
“shelf” registration process. Under this shelf
registration process, we may sell the securities described in this
prospectus in one or more offerings. This prospectus provides you
with a general description of the securities which may be offered.
Each time we offer securities for sale, we will provide a
prospectus supplement that contains specific information about the
terms of that offering. Any prospectus supplement may also add or
update information contained in this prospectus. You should read
both this prospectus and any prospectus supplement together with
additional information described below under “Where You Can Find More
Information” and “Incorporation of Certain Information by
Reference.”
You
should rely only on the information contained or incorporated by
reference in this prospectus, and in any prospectus supplement. We
have not authorized any other person to provide you with different
information. If anyone provides you with different or inconsistent
information, you should not rely on it. We are not making offers to
sell or solicitations to buy the securities described in this
prospectus in any jurisdiction in which an offer or solicitation is
not authorized, or in which the person making that offer or
solicitation is not qualified to do so or to anyone to whom it is
unlawful to make an offer or solicitation. You should not assume
that the information in this prospectus or any prospectus
supplement, as well as the information we file or previously filed
with the SEC that we incorporate by reference in this prospectus or
any prospectus supplement is accurate as of any date other than its
respective date. Our business, financial condition, results of
operations and prospects may have changed since those
dates.
This
prospectus contains summaries of certain provisions contained in
some of the documents described herein, but reference is made to
the actual documents for complete information. All of the summaries
are qualified in their entirety by the actual documents. Copies of
some of the documents referred to herein have been filed, will be
filed or will be incorporated by reference as exhibits to the
registration statement of which this prospectus is a part, and you
may obtain copies of those documents as described below under the
heading “Where You Can Find
More Information”.
All brand names or trademarks appearing in this report are the
property of their respective holders. Unless the context requires
otherwise, references in this prospectus to “Issuer
Direct,” the “Company,” “we,”
“us,” and “our” refer to Issuer Direct
Corporation, a Delaware corporation.
1
THE
COMPANY
Overview
Issuer
Direct is an industry-leading global communications and compliance
company focusing on the needs of corporate issuers. Issuer Direct's
principal platform, Platform id.™, empowers users by
thoughtfully integrating the most relevant tools, technologies and
products, thus eliminating the complexity associated with producing
and distributing their business communications and financial
information.
We work
with a diverse customer base in the financial services industry,
including brokerage firms, banks and mutual funds. We also sell
products and services to corporate issuers, professional firms,
such as investor relations and public relations firms, and the
accounting and the legal communities. Corporate issuers and their
service providers utilize Platform id. and related services from
document creation all the way to dissemination to regulatory
bodies, platforms and shareholders.
In
order to provide a good representation of our business and reflect
our platform first engagement strategy, we report revenue in two
revenue streams: (i) Platform and Technology and (ii) Services. Due
to the adoption of Accounting Standards Codification
(“ASC”) 606 Revenue from Contracts with Customers as of
January 1, 2018, we reclassified revenue associated with the
Company’s shareholder outreach offering that included both
electronic dissemination and physical delivery of a
customer’s annual report. Historically, revenue from these
bundled contracts was reported in the Services revenue stream
because an allocation between electronic and physical hardcopy
distribution was not made, however, under ASC 606, a portion of the
revenue from these contracts is required to be allocated to the
Platform and Technology revenue stream in accordance with
stand-alone contracts for the shareholder outreach subscription.
Revenue of $186,000 and $393,000 for the three and six months ended
June 30, 2017, respectively, which was previously reported as
Services revenue was reclassified as Platform and Technology
revenue.
Set
forth below is an infographic depicting the modules included in
Platform id. and
the services we provide:
2
Platform and Technology
As we
continue our transition to a cloud-based subscription business, we
expect the Platform and Technology portion of our business to
continue to increase over the next several years, both in terms of
overall revenue and as compared to the Services portion of our
business. Platform and Technology revenue grew to 59% of total
revenue for the second quarter of 2018, compared to 55% of our
revenue for 2017 and approximately 44% of our revenue in 2016. Our
ACCESSWIRE® news business offering represented a majority of
the year over year growth in our Platform and Technology revenue
during 2017 and continues to lead our transition to a full platform
solution.
As part
of our Platform and Technology strategy, we have been working with
several select stock exchanges, whereby we make available certain
parts of our platform, under agreement, to integrate our offerings.
Such partnerships should yield increased exposure to a targeted
customer base that could impact our revenue and overall brand in
the market.
Additionally,
we plan to continue to invest in both our current Platform
id. offering as
well as additional offerings, which we believe provide long term
opportunity. These advancements will leverage our current
application technology framework and give us an opportunity to
further expand our customer and user base.
Platform id.
Platform
id. is our primary
cloud-based subscription platform that efficiently and effectively
helps manage the events of our customers seeking to distribute
their messaging to key constituents, investors, markets and
regulatory systems around the globe. Currently, Platform
id. consists of
several related but distinct shareholder communications and
compliance modules. Certain of these capabilities were historically
part of our disclosure management and shareholder communications
offerings, but are now included into our fully integrated
platform.
Within
most of our target markets, customers require several individual
services and/or software providers to meet their investor
relations, communications and compliance needs. We believe Platform
id. can address all
those needs in a single, secure, cloud-based platform - one that
offers a company control, increases efficiencies, demonstrates a
clear value and, most importantly, delivers consistent and
compliant messaging from one centralized platform.
While
the complete platform is available for a single subscription fee,
companies also have the flexibility to choose one or more of the
specific modules that fit their needs.
Communications Modules
Our
press release offering, which is marketed under the brand,
ACCESSWIRE, is a cost-effective Fair Disclosure, Regulation FD,
news dissemination and media outreach service. The ACCESSWIRE
product offering focuses on press release distribution for both
private and publicly held companies globally. ACCESSWIRE is fast
becoming a competitive alternative to the traditional newswires
because we have been able to integrate customer editing features
and improve our targeting and growing analytics reporting systems,
which we believe will enable us to add new customers for the
remainder of 2018 and beyond. We have also been able to maintain
flexible pricing by offering our customers the option to pay per
release or enter into longer-term subscriptions. Currently,
approximately 60% of our ACCESSWIRE revenue is on a subscription
basis.
On July
3, 2018, we completed the acquisition of Filing Services Canada
Inc. (“FSCwire”), which not only increased our customer
base, but more importantly increased our global footprint,
distribution capabilities and editorial team. Once the integration
of FSCwire is complete it will be rebranded ACCESSWIRE Canada,
which should be completed the by the end of the third quarter of
this year.
We will
continue to brand our press release offerings under the name
ACCESSWIRE, which we believe will solidify our market position in
the newswire business. Our ACCESSWIRE news editing offering is
available within our core Platform id. subscription or as a
stand-alone module.
ACCESSWIRE
is dependent upon several key partners for news distribution, some
of which are also partners that we rely on for other investor
outreach offerings. A disruption in any of these partnerships could
have a materially adverse impact on our business.
Also
included in Platform id. is our targeting and
outreach database and intelligence analytics module. This module is
centered around both our shareholder communications and news
distribution offerings. We anticipate the analytics and peer review
components will become a focal point for Platform id. in the future, as customers
become increasingly interested in peer performance and real-time
alerts to vital data points throughout the day.
We
believe our data-set is an attractive option for both investor
relations and public relations firms and for customers looking for
an alternative to current products in the market, based on price,
as well as data quality and quantity. During the fourth quarter of
2017, our dataset and analytics were integrated into our ACCESSWIRE
offering as a way to add value and expand distribution via highly
targeted lists of professionals from the dataset. We expect this to
increase future ACCESSWIRE revenues per press release as well as
ACCESSWIRE subscriptions throughout 2018.
Over
the past year, we have been focused on refining the model of
digital distribution of our customers’ message to the
investment community and beyond. This has been accomplished by
integrating our shareholder outreach module, formerly known as
Investor Network, into and with Platform id. Most of the customers
subscribing to this module today are historical PrecisionIR
(“PIR”) – Annual Report Service
(“ARS”) users, as well as new customers purchasing the
entire Platform id.
subscription. We have migrated many of the customers from the
traditional ARS business into this new digital subscription
business. However, there can be no assurances these customers will
continue using this digital platform in the long term if market
conditions or shareholder interest is not present.
3
There
are over 5,000 companies in North America conducting earnings
events each quarter that include teleconference, webcast or both as
part of their events. Platform id. incorporates each element
of the earnings event including earnings date/call announcement,
earnings press release and SEC Form 8-K filings. There are a
handful of our competitors that can offer this today. However, we
believe our real-time event setup and integrated approach offers a
more effective way to manage the process as well as attract an
audience of investors.
The
earnings event industry is a highly competitive space with the
majority of the business being driven from practitioners in the
investor relations and communications firms. In the past, we
invested time and financial resources developing and integrating
systems and processes within Platform id. by creating an application
programming interface (“API”) for the webcast
marketplace, that we will begin offering to partners and publishers
for their platforms under license. We believe this offering will
further increase our brand awareness. This API license will allow
publishers to query single or multiple companies' current and past
earnings calls and present those webcasts on their platforms, under
a subscription to Platform id. Additionally, as a
commitment to broadening the reach of our webcast platform, all
events will be broadcast live within our shareholder outreach
module, which will drive new audiences and give companies the
ability to view their analytics and engagement of each event. We
believe these analytics will increase the demand for our webcasting
platform among the corporate issuer community.
Our
investor relations content network is another component of Platform
id., which is used
to create the investor relations’ tab of a public
company’s website. This investor relations content network is
a robust series of data feeds including news feeds, stock feeds,
fundamentals, regulatory filings, corporate governance and many
other components that are aggregated from a majority of the major
exchanges and news distribution outlets around the world. Customers
can subscribe to one or more of these data feeds from us or as a
component of a fully designed and hosted website for pre-IPO,
reporting companies and partners seeking to display our content on
their corporate sites. The clear benefit to our investor relations
module is its integration into and with the rest of Platform
id., meaning
companies can produce content for public distribution and it is
automatically linked to their corporate site, distributed to
targeted groups and placed into and with our data feed
partners.
Compliance Modules
Platform
id.’s
disclosure reporting module is a document conversion, editing and
filing offering, which is designed for reporting companies and
professionals seeking to insource the document drafting, editing
and filing processes to the SEC and SEDAR, which is the Canadian
equivalent of EDGAR. This module is available in both a secure
public cloud within our Platform id. subscription, as well as in
a private cloud option for corporations, mutual funds and the legal
community looking to further enhance their internal document
process. We believe that once this module is fully marketed and
adopted by our customers, we will see a negative impact on our
legacy disclosure conversion services business in the future.
However, the margins associated with our Platform and Technology
business compared to our Services business are higher and align
with our long-term strategy, and as such, we believe this module
will have a positive impact on our compliance
business.
Toward
the latter part of 2017, we completed upgrades to our disclosure
reporting product to include tagging functionality that meets newly
mandated SEC requirements. On June 28, 2018, the SEC voted to adopt
rules mandating the use of Inline XBRL (Inline Extensible Business
Reporting Language or “iXBRL”) for the submission of
financial statement information to the SEC. The new requirements
for iXBRL will have a three-year phase in beginning for large
accelerated filers that use U.S. GAAP to be compliant for fiscal
periods ending on or after June 15, 2019, for accelerated filers to
begin reporting for fiscal periods ending on or after June 15, 2020
and for all other filers to begin reporting for fiscal periods
ending on or after June 15, 2021. These upgrades also include
meeting new SEC mandates for foreign filers that compile financial
statements using International Financial Reporting Standards
(“IFRS”) to be able to utilize our cloud-based
platform. Foreign filers with fiscal year’s ending on or
after December 15, 2017, are now required to begin reporting their
financial statements in XBRL with the SEC in 2018. Issuer Direct's
Platform id. has
adopted the new IFRS taxonomy into and with its new disclosure
upgrade for iXBRL to ensure our customers are able to meet these
new mandates.
Our
whistleblower module is an add-on product within Platform
id. This system
delivers secure notifications and basic incident workflow
management processes that align with a company’s corporate
governance whistleblower policy. As a supported and subsidized
bundle product of the New York Stock Exchange (“NYSE”)
offerings, we hope we will gain relationships with new IPO
customers and other larger cap customers listed on the
NYSE.
A
valued subscription add-on in our Platform id. offering is the ability for
our customers to gain access to real-time information of their
shareholders, stock ledgers, reports, and issue new shares from our
cloud-based stock transfer module. Managing the capitalization
table of a public company or pre-IPO company is the cornerstone of
corporate governance and transparency, and as such companies and
community banks have chosen us to assist with their stock transfer
needs, including bond offerings and dividend management. This is an
industry which has experienced declining overall revenues as it was
affected by the replacement of paper certificates with digital
certificates. However, we have recently been focused on selling
subscriptions of the stock transfer component of our platform,
allowing customers to gain access to our cloud-based system in
order to move shares or query shareholders, which has significantly
changed the long term dynamics for both our customers and
us.
On
October 2, 2017, we completed the acquisition of Interwest Transfer
Company, Inc. (“Interwest”), a company specializing in
stock registrar and transfer agent services. During the fourth
quarter of 2017 and first half of 2018, we have been combining the
stock information of both the legacy Issuer Direct customers and
the acquired customers from Interwest. We have also begun and will
continue to market the other modules of Platform id. and services to these new
customers to help them meet all of their shareholder communication
and compliance needs.
Our
proxy module is marketed as a fully integrated, real-time voting
platform for our customers and their shareholders of record. This
module is utilized for every annual meeting and or special meeting
we manage for our customer base and offers both full-set mailing
and notice of internet availability options.
4
Services
As we
focus on expanding our cloud-based subscription business, we expect
to see a decrease in the overall revenues associated with our
Services business. Typically, Services revenues relate to
activities where substantial resources are required to perform the
work for our customers and or hard goods are utilized as part of
the engagement. To date, most of our Services have been related to
converting and editing SEC documents and XBRL tagging, which has
been our core disclosure business over the last 11 years. Services
also include telecommunications services and print, fulfillment and
delivery of stock certificates, proxy materials or annual reports
depending on each customer’s engagement. Services are not
required, but are optional for customers that utilize our Platform
id.
Our
investor outreach and engagement offering, formerly known as the
ARS, was acquired from PIR. The ARS business has existed for over
20 years primarily as a physical hard copy delivery service of
annual reports and prospectuses. We continue to operate a portion
of this legacy system for those who opt to take advantage of
physical delivery of material. Additionally, we continue to attempt
to migrate the install base over to subscriptions of our digital
outreach engagement module within Platform id. We believe we will continue
to see further attrition of both customers and revenues in this
category as we focus our efforts on our Platform and Technology
business.
Selected Risk Factors
Our
business is subject to substantial risk. Please carefully consider
the section titled “Risk
Factors” on page 7 of this prospectus for a discussion
of the factors you should carefully consider before deciding to
purchase the securities offered by this prospectus. These risks
include, among others:
●
Legislative and
regulatory changes can influence demand for our solutions and could
adversely affect our business.
●
The environment in
which we compete is highly competitive, which creates adverse
pricing pressures and may harm our business and operating results
if we cannot compete effectively.
●
Our revenue growth
rate in the recent period relating to our Platform and Technology
business may not be indicative of this business segment’s
future performance.
●
The success of our
cloud-based software largely depends on our ability to provide
reliable solutions to our customers. If a customer were to
experience a product defect, a disruption in its ability to use our
solutions or a security flaw, demand for our solutions could be
diminished, we could be subject to substantial liability and our
business could suffer.
●
A substantial
portion of our business is derived from our ACCESSWIRE brand, which
is dependent on technology and key partners.
●
Failure to manage
our growth may adversely affect our business or
operations.
●
If we are unable to
retain our key employees and attract and retain other qualified
personnel, our business could suffer.
●
If we fail to keep
our customers’ information confidential or if we handle their
information improperly, our business and reputation could be
significantly and adversely affected.
●
We must adapt to
rapid changes in technology and customer requirements to remain
competitive.
●
Our business could
be materially harmed if we do not successfully manage the
integration of our October 2017 acquisition of Interwest Transfer
Company, Inc.
●
Additionally, our
business could be harmed if we do not successfully manage the
integration of any business that we may acquire in the
future.
●
New issuers seeking
to raise capital and become SEC registrants may choose to utilize
Regulation A+ and we may see a significant decline in the number of
filings as part of our current disclosure management
business.
●
Revenue from
Platform id.
subscriptions and many of our service contracts is recognized
ratably over the term of the contract or subscription period. As a
result, downturns or upturns in sales may not be immediately
reflected in our operating results.
5
●
We cannot
accurately predict subscription renewal or upgrade rates and the
impact these rates may have on our future revenue and operating
results.
●
Although we have generated positive cash flows
from operations for the past ten year, we have
incurred operating losses in the past and may do so again in the
future
●
We continue to
transition our business from a services company to a software as a
service company, which makes it difficult to predict our future
operating results.
●
We are subject to
general litigation and regulatory requirements that may materially
adversely affect us.
●
New and existing
laws make determining our income tax rate complex and subject to
uncertainty.
●
We are subject to
U.S. and foreign data privacy and protection laws and regulations
as well as contractual privacy obligations, and our failure to
comply could subject us to fines and damages and would harm our
reputation and business.
●
Our business may be
affected by factors outside of our control.
●
If potential
customers take a long time to evaluate the use of our products, we
could incur additional selling expenses and require additional
working capital.
●
The seasonality of
business makes it difficult to predict future results based on
specific quarters.
●
If we are unable to
successfully develop and timely introduce new technology-based
products or enhance existing technology-based products, our
business may be adversely affected.
●
The price of our
common stock may fluctuate significantly, which could lead to
losses for stockholders.
●
The trading volume
of our common stock is currently very limited. As such, you may
find it difficult to dispose of our common stock at a price that is
acceptable to you.
●
We have two
non-affiliate stockholders who hold more than 5% but less than 10%
of our outstanding common stock. In the event either of those
stockholders elected to liquidate a substantial portion of their
position, our stock price may decline materially.
●
You may lose your
investment in our shares.
●
Future sales and
issuances of our capital stock or rights to purchase capital stock
could result in additional dilution of the percentage ownership of
our stockholders and could cause our stock price to
decline.
●
We will continue to
incur significantly increased costs and devote substantial
management time as a result of operating as a public
company.
●
A failure to
maintain adequate internal controls over our financial and
management systems could cause errors in our financial reporting,
which could cause a loss of investor confidence and result in a
decline in the price of our common stock.
Additional
risks and uncertainties not presently known to us or that we
currently deem immaterial may also impair our business operations.
You should be able to bear a complete loss of your
investment.
Corporate information
We were
organized in the State of Delaware on February 2006. Our principal
executive offices are located at 500 Perimeter Park Drive, Suite D,
Morrisville NC 27560. Our telephone number is (919) 481-4000. Our
website address is www.issuerdirect.com. The
information contained on our website is not part of this
prospectus. We have included our website address as a factual
reference and do not intend it to be an active link to our
website.
6
RISK FACTORS
An
investment in our securities involves a high degree of risk. You
should consider the risks, uncertainties and assumptions described
under Item 1A, “Risk
Factors,” in our Annual Report on Form 10-K/A for the
fiscal year ended December 31, 2017, as well as subsequently filed
Quarterly Reports on Form 10-Q, which risk factors 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 in our
Annual Report on Form 10-K/A for the fiscal year ended December 31,
2017 and subsequent Quarterly Reports on Form 10-Q 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. The occurrence of any of these known or unknown
risks might cause you to lose all or part of your investment in the
offered securities.
CAUTIONARY NOTES
REGARDING FORWARD-LOOKING STATEMENTS
This
prospectus contains forward-looking statements that involve
substantial risks and uncertainties. All statements contained in
this prospectus and/or any applicable prospectus supplement other
than statements of historical facts, including statements regarding
our strategy, future operations, future financial position, future
revenue, projected costs, prospects, plans, objectives of
management and expected market growth, are forward-looking
statements. These statements involve known and unknown risks,
uncertainties and other important factors that may cause our actual
results, performance or achievements to be materially different
from any future results, performance or achievements expressed or
implied by the forward-looking statements.
The
words “anticipate,” “believe,”
“estimate,” “expect,” “intend,”
“may,” “plan,” “predict,”
“project,” “target,”
“potential,” “will,” “would,”
“could,” “should,” “continue,”
and similar expressions are intended to identify forward-looking
statements, although not all forward-looking statements contain
these identifying words. These forward-looking statements include,
among other things, statements about:
●
our ability to
strategically re-align and invest in our Platform and Technology
sales team;
●
our ability to
continue to expand our customer base, generate profitable,
sustainable growth and generate increase cash flows from
operations;
●
regulatory
developments in the U.S. and foreign countries;
●
our ability to
migrate, integrate and capitalize on our various
acquisitions;
●
our ability to
further expand our ACCESSWIRE distribution and customer
base;
●
the size of the
potential markets for our product offerings and our ability to
serve those markets;
●
our ability to
obtain and maintain intellectual property protection for our core
assets;
●
the success of
competing product offerings by others that are or become available
for the services and products that we offer; and
●
other risks and
uncertainties, including those described under Item 1A,
“Risk Factors,”
in our Annual Report on Form 10-K/A for the fiscal year ended
December 31, 2017 and subsequent Quarterly Reports on Form 10-Q,
which risk factors are incorporated herein by
reference.
These
forward-looking statements are only predictions and we may not
actually achieve the plans, intentions or expectations disclosed in
our forward-looking statements, so you should not place undue
reliance on our forward-looking statements. Actual results or
events could differ materially from the plans, intentions and
expectations disclosed in the forward-looking statements we make.
We have based these forward-looking statements largely on our
current expectations and projections about future events and trends
that we believe may affect our business, financial condition and
operating results. We have included important factors in the
cautionary statements included in this prospectus, as well as
certain information incorporated by reference into this prospectus,
that could cause actual future results or events to differ
materially from the forward-looking statements that we make. Our
forward-looking statements do not reflect the potential impact of
any future acquisitions, mergers, dispositions, joint ventures or
investments we may make.
7
You
should read this prospectus with the understanding that our actual
future results may be materially different from what we expect. We
do not assume any obligation to update any forward-looking
statements whether as a result of new information, future events or
otherwise, except as required by applicable law.
RATIO OF
EARNINGS TO FIXED CHARGES
Our
ratio of earnings to fixed charges for recently completed fiscal
years and any required interim periods will be specified in a
prospectus supplement or in a document that we file with the SEC
and incorporated by reference in the future.
USE OF
PROCEEDS
Unless
otherwise provided in the applicable prospectus supplement, we
intend to use the net proceeds from the sale of the securities
under this prospectus for general corporate purposes and to
in-license, acquire or invest in complementary businesses,
technologies, products or assets. However, we have no current
commitments or obligations to do so. We may set forth additional
information on the use of proceeds from the sale or the securities
we offer under this prospectus in a prospectus supplement relating
to the specific offering. We cannot currently allocate specific
percentages of the net proceeds that we may use for the purposes
specified above. As a result, our management will have broad
discretion in the allocation of the net proceeds. Pending the
application of the net proceeds, we intend to invest the net
proceeds in short- and intermediate-term, interest-bearing
obligations, investment-grade instruments, certificates of deposit
or direct or guaranteed obligations of the U.S.
government.
DESCRIPTION OF OUR CAPITAL
STOCK
General
Our
authorized capital stock consists of 20,000,000 shares of common
stock, $0.001 par value per share, and 1,000,000 shares of
preferred stock, $0.001 par value per share. The following is a
description of our common stock and certain provisions of our
certificate of incorporation, as amended
(“Certificate”), and our amended and restated bylaws
(“Bylaws”), and certain provisions of Delaware
law.
As of
August 2, 2018, there were issued and outstanding or reserved for
issuance:
●
3,106,772 shares of
common stock outstanding held by approximately 144 stockholders of
record;
●
106,413 shares of
common stock reserved for issuance upon exercise of outstanding
stock options under our 2010 Equity Incentive Plan and our 2014
Equity Incentive Plan, as amended, with a weighted average exercise
price of $11.63 per share;
●
45,669 shares of
unvested restricted stock units granted under our 2014 Equity
Incentive Plan, as amended; and
●
61,000 shares of
common stock reserved for future issuance in connection with future
grants under our 2014 Equity Incentive Plan, as
amended.
Common Stock
This section describes the general terms of our common stock that
we may offer from time to time. For more detailed information, a
holder of our common stock should refer to our Certificate and our
Bylaws.
Except
as otherwise expressly provided in our Certificate, or as required
by applicable law, all shares of our common stock have the same
rights and privileges and rank equally, share ratably and are
identical in all respects as to all matters, including, without
limitation, those described below. All outstanding shares of common
stock are fully paid and nonassessable.
Voting Rights
Each
holder of our common stock is entitled to cast one vote for each
share of common stock held on all matters submitted to a vote of
stockholders. Cumulative voting for election of directors is not
allowed under our Certificate, which means that a plurality of the
shares voted can elect all of the directors then outstanding for
election. Except as otherwise provided under Delaware law or our
Certificate, and Bylaws, on matters other than election of
directors, action on a matter is approved if the votes cast
favoring the action exceed the votes cast opposing the
action.
8
Dividend Rights
The
holders of outstanding shares of our common stock are entitled to
receive dividends out of funds legally available, if our board of
directors, in its discretion, determines to issue dividend, and
only at the times and in the amounts that our board of directors
may determine. Our board of directors is not obligated to declare a
dividend.
Liquidation Rights
Upon
our liquidation, dissolution or winding-up, the holders of our
common stock will be entitled to share equally, identically and
ratably in all assets remaining, subject to the prior satisfaction
of all outstanding debt and liabilities and the preferential rights
and payment of liquidation preferences, if any, on any outstanding
shares of preferred stock.
No Preemptive or Similar Rights
Our
common stock is not subject to conversion, redemption, sinking fund
or similar provisions.
Transfer Agent and Registrar
The
transfer agent and registrar for our common stock is Direct
Transfer, LLC, Morrisville, North Carolina, which is a wholly-owned
subsidiary of Issuer Direct.
Preferred Stock
This section describes the general terms and provisions of our
outstanding shares of preferred stock, as well as preferred stock
that we may offer from time to time. The applicable prospectus
supplement will describe the specific terms of the shares of
preferred stock offered through that prospectus supplement, which
may differ from the terms we describe below. We will file a copy of
the certificate of designation that contains the terms of each new
series of preferred stock with the SEC each time we issue a new
series of preferred stock, and these certificates of designation
will be incorporated by reference into the registration statement
of which this prospectus is a part. Each certificate of designation
will establish the number of shares included in a designated series
and fix the designation, powers, privileges, preferences and rights
of the shares of each series as well as any applicable
qualifications, limitations or restrictions. A holder of our
preferred stock should refer to the applicable certificate of
designation, our Certificate and the applicable prospectus
supplement (and any related free writing prospectus that we may
authorize to be provided to you) for more specific
information.
We are
authorized, subject to limitations prescribed by Delaware law, to
issue up to 1,000,000 shares of preferred stock in one or more
series, to establish from time to time the number of shares to be
included in each series and to fix the designation, powers,
preferences and rights of the shares of each series and any of its
qualifications, limitations or restrictions. Our board of directors
can increase or decrease the number of shares of any series, but
not below the number of shares of that series then outstanding,
without any further vote or action by our stockholders. Our board
of directors may authorize the issuance of preferred stock with
voting or conversion rights that could adversely affect the voting
power or other rights of the holders of the common stock. The
issuance of preferred stock, while providing flexibility in
connection with possible acquisitions and other corporate purposes,
could, among other things, have the effect of delaying, deferring
or preventing a change in control of the Company and may adversely
affect the market price of our common stock and the voting and
other rights of the holders of our common stock.
Outstanding Series of Preferred Stock
Currently,
there are no shares of our preferred stock outstanding or
designated.
Shares of Preferred Stock Issuable Pursuant to this
Prospectus
We will
incorporate by reference as an exhibit to the registration
statement, which includes this prospectus, the form of any
certificate of designation that describes the terms of the series
of preferred stock we are offering. This description and the
applicable prospectus supplement will include:
●
the title and
stated value;
●
the number of
shares authorized;
9
●
the liquidation
preference per share;
●
the purchase
price;
●
the dividend rate,
period and payment date, and method of calculation for
dividends;
●
whether dividends
will be cumulative or non-cumulative and, if cumulative, the date
from which dividends will accumulate;
●
the procedures for
any auction and remarketing, if any;
●
the provisions for
a sinking fund, if any;
●
the provisions for
redemption or repurchase, if applicable, and any restrictions on
our ability to exercise such redemption and repurchase
rights;
●
any listing of the
preferred stock on any securities exchange or market;
●
whether the
preferred stock will be convertible into our common stock, and, if
applicable, the conversion price, or how it will be calculated, and
the conversion period;
●
whether the
preferred stock will be exchangeable into debt securities, and, if
applicable, the exchange price, or how it will be calculated, and
the exchange period;
●
voting rights, if
any, of the preferred stock;
●
preemptive rights,
if any;
●
restrictions on
transfer, sale or other assignment, if any;
●
a discussion of any
material United States federal income tax considerations applicable
to the preferred stock;
●
the relative
ranking and preferences of the preferred stock as to dividend
rights and rights if we liquidate, dissolve or wind up our
affairs;
●
any limitations on
issuance of any class or series of preferred stock ranking senior
to or on a parity with the series of preferred stock as to dividend
rights and rights if we liquidate, dissolve or wind up our affairs;
and
●
any other specific
terms, preferences, rights or limitations of, or restrictions on,
the preferred stock.
When we
issue shares of preferred stock under this prospectus, the shares
will fully be paid and nonassessable and will not have, or be
subject to, any preemptive or similar rights.
10
DESCRIPTION OF OUR DEBT
SECURITIES
This section describes the general terms and provisions of debt
securities that we may issue from time to time. We may issue debt
securities, in one or more series, as either senior or subordinated
debt or as senior or subordinated convertible debt. While the terms
we have summarized below will apply generally to any future debt
securities we may offer under this prospectus, the applicable
prospectus supplement or free writing prospectus will describe the
specific terms of any debt securities offered through that
prospectus supplement or free writing prospectus. The terms of any
debt securities we offer under a prospectus supplement or free
writing prospectus may differ from the terms we describe below.
Unless the context requires otherwise, whenever we refer to the
“indentures,” we also are referring to any supplemental
indentures that specify the terms of a particular series of debt
securities.
In the
event that we issue any debt securities, we will issue such senior
debt securities under a senior indenture that we will enter into
with the trustee named in such senior indenture. We will file forms
of these documents as exhibits to the registration statement, of
which this prospectus is a part, and supplemental indentures and
forms of debt securities containing the terms of the debt
securities being offered will be filed as exhibits to the
registration statement of which this prospectus is a part or will
be incorporated by reference from reports that we file with the
SEC.
The
indentures will be qualified under the Trust Indenture Act of 1939,
as amended, (the “Trust Indenture Act”). We use the
term “trustee” to refer to either the trustee under the
senior indenture or the trustee under the subordinated indenture,
as applicable.
The
following summaries of material provisions of potential senior debt
securities, subordinated debt securities and the indentures are
subject to, and qualified in their entirety by reference to, all of
the provisions of the indenture applicable to a particular series
of debt securities. We urge you to read the applicable prospectus
supplement or free writing prospectus and any related free writing
prospectuses related to the debt securities that we may offer under
this prospectus, as well as the complete applicable indenture that
contains the terms of the debt securities. Except as we may
otherwise indicate, the terms of the senior indenture and the
subordinated indenture are identical.
General
We will
describe in the applicable prospectus supplement or free writing
prospectus the terms of the series of debt securities being
offered, including:
●
the
title;
●
the principal
amount being offered, and if a series, the total amount authorized
and the total amount outstanding;
●
any limit on the
amount that may be issued;
●
whether or not we
will issue the series of debt securities in global form, and, if
so, the terms and who the depository will be;
●
the maturity
date;
●
whether and under
what circumstances, if any, we will pay additional amounts on any
debt securities held by a person who is not a United States person
for tax purposes, and whether we can redeem the debt securities if
we have to pay such additional amounts;
●
the annual interest
rate, which may be fixed or variable, or the method for determining
the rate and the date interest will begin to accrue, the dates
interest will be payable and the regular record dates for interest
payment dates or the method for determining such
dates;
●
whether or not the
debt securities will be secured or unsecured, and the terms of any
secured debt;
●
the terms of the
subordination of any series of subordinated debt;
●
the place where
payments will be payable;
11
●
restrictions on
transfer, sale or other assignment, if any;
●
our right, if any,
to defer payment of interest and the maximum length of any such
deferral period; the
date, if any, after which, the conditions upon which, and the price
at which, we may, at our option, redeem the series of debt
securities pursuant to any optional or provisional redemption
provisions and the terms of those redemption
provisions;
●
the date, if any,
on which, and the price at which we are obligated, pursuant to any
mandatory sinking fund or analogous fund provisions or otherwise,
to redeem, or at the holder’s option, to purchase, the series
of debt securities and the currency or currency unit in which the
debt securities are payable;
●
whether the
indenture will restrict our ability or the ability of our
subsidiaries to:
●
incur additional
indebtedness;
●
issue additional
securities;
●
create
liens;
●
pay dividends or
make distributions in respect of our capital stock or the capital
stock of our subsidiaries;
●
redeem capital
stock;
●
place restrictions
on our subsidiaries’ ability to pay dividends, make
distributions or transfer assets;
●
make investments or
other restricted payments;
●
sell or otherwise
dispose of assets;
●
enter into
sale-leaseback transactions;
●
engage in
transactions with stockholders or affiliates;
●
issue or sell stock
of our subsidiaries; or
●
effect a
consolidation or merger;
●
whether the
indenture will require us to maintain any interest coverage, fixed
charge, cash flow-based, asset-based or other financial
ratios;
●
a discussion of
certain material or special United States federal income tax
considerations applicable to the debt securities;
●
information
describing any book-entry features;
●
provisions for a
sinking fund purchase or other analogous fund, if any;
●
the applicability
of the provisions in the indenture on discharge;
●
whether the debt
securities are to be offered at a price such that they will be
deemed to be offered at an “original issue discount” as
defined in paragraph (a) of Section 1273 of the Internal Revenue
Code of 1986, as amended;
12
●
the denominations
in which we will issue the series of debt securities, if other than
denominations of $1,000 and any integral multiple
thereof;
●
the currency of
payment of debt securities if other than U.S. dollars and the
manner of determining the equivalent amount in U.S. dollars;
and
●
any other specific
terms, preferences, rights or limitations of, or restrictions on,
the debt securities, including any additional events of default or
covenants provided with respect to the debt securities, and any
terms that may be required by us or advisable under applicable laws
or regulations or advisable in connection with the marketing of the
debt securities.
Conversion or Exchange Rights
We will
set forth in the applicable prospectus supplement or free writing
prospectus the terms on which a series of debt securities may be
convertible into or exchangeable for our common stock, our
preferred stock or other securities (including securities of a
third-party). We will include provisions as to whether conversion
or exchange is mandatory, at the option of the holder or at our
option. We may include provisions pursuant to which the number of
shares of our common stock, our preferred stock or other securities
(including securities of a third-party) that the holders of the
series of debt securities receive would be subject to
adjustment.
Consolidation, Merger or Sale
Unless
we provide otherwise in the prospectus supplement or free writing
prospectus applicable to a particular series of debt securities,
the indentures will not contain any covenant that restricts our
ability to merge or consolidate, or sell, convey, transfer or
otherwise dispose of all or substantially all of our assets.
However, any successor to or acquirer of such assets must assume
all of our obligations under the indentures or the debt securities,
as appropriate. If the debt securities are convertible into or
exchangeable for other securities of ours or securities of other
entities, the person with whom we consolidate or merge or to whom
we sell all of our property must make provisions for the conversion
of the debt securities into securities that the holders of the debt
securities would have received if they had converted the debt
securities before the consolidation, merger or sale.
Events of Default Under the Indenture
Unless
we provide otherwise in the prospectus supplement or free writing
prospectus applicable to a particular series of debt securities,
the following are events of default under the indentures with
respect to any series of debt securities that we may
issue:
●
if we fail to pay
interest when due and payable and our failure continues for 90 days
and the time for payment has not been extended;
●
if we fail to pay
the principal, premium or sinking fund payment, if any, when due
and payable at maturity, upon redemption or repurchase or
otherwise, and the time for payment has not been
extended;
●
if we fail to
observe or perform any other covenant contained in the debt
securities or the indentures, other than a covenant specifically
relating to another series of debt securities, and our failure
continues for 90 days after we receive notice from the trustee or
holders of at least 25% in aggregate principal amount of the
outstanding debt securities of the applicable series;
and
●
if specified events
of bankruptcy, insolvency or reorganization occur.
We will
describe in each applicable prospectus supplement or free writing
prospectus any additional events of default relating to the
relevant series of debt securities.
If an
event of default with respect to debt securities of any series
occurs and is continuing, other than an event of default specified
in the last bullet point above, the trustee or the holders of at
least 25% in aggregate principal amount of the outstanding debt
securities of that series, by notice to us in writing, and to the
trustee if notice is given by such holders, may declare the unpaid
principal, premium, if any, and accrued interest, if any, due and
payable immediately. If an event of default specified in the last
bullet point above occurs with respect to us, the unpaid principal,
premium, if any, and accrued interest, if any, of each issue of
debt securities then outstanding shall be due and payable without
any notice or other action on the part of the trustee or any
holder.
The
holders of a majority in principal amount of the outstanding debt
securities of an affected series may waive any default or event of
default with respect to the series and its consequences, except
defaults or events of default regarding payment of principal,
premium, if any, or interest, unless we have cured the default or
event of default in accordance with the indenture. Any waiver shall
cure the default or event of default.
13
Subject
to the terms of the indentures, if an event of default under an
indenture shall occur and be continuing, the trustee will be under
no obligation to exercise any of its rights or powers under such
indenture at the request or direction of any of the holders of the
applicable series of debt securities, unless such holders have
offered the trustee reasonable indemnity or security satisfactory
to it against any loss, liability or expense. The holders of a
majority in 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,
with respect to the debt securities of that series, provided
that:
●
the direction so
given by the holder is not in conflict with any law or the
applicable indenture; and
●
subject to its
duties under the Trust Indenture Act, the trustee need not take any
action that might involve it in personal liability or might be
unduly prejudicial to the holders not involved in the
proceeding.
A
holder of the debt securities of any series will have the right to
institute a proceeding under the indentures or to appoint a
receiver or trustee, or to seek other remedies if:
●
the holder has
given written notice to the trustee of a continuing event of
default with respect to that series;
●
the holders of at
least 25% in aggregate principal amount of the outstanding debt
securities of that series have made written request, and such
holders have offered reasonable indemnity to the trustee or
security satisfactory to it against any loss, liability or expense
or to be incurred in compliance with instituting the proceeding as
trustee; and
●
the trustee does
not institute the proceeding, and does not receive from the holders
of a majority in aggregate principal amount of the outstanding debt
securities of that series other conflicting directions within 90
days after the notice, request and offer.
These
limitations do not apply to a suit instituted by a holder of debt
securities if we default in the payment of the principal, premium,
if any, or interest on, the debt securities, or other defaults that
may be specified in the applicable prospectus supplement or free
writing prospectus.
We will
periodically file statements with the trustee regarding our
compliance with specified covenants in the indentures.
Modification of Indenture; Waiver
Subject
to the terms of the indenture for any series of debt securities
that we may issue, we and the trustee may change an indenture
without the consent of any holders with respect to the following
specific matters:
●
to fix any
ambiguity, defect or inconsistency in the indenture;
●
to comply with the
provisions described above under “Description of Our Debt
Securities—Consolidation, Merger or
Sale;”
●
to comply with any
requirements of the SEC in connection with the qualification of any
indenture under the Trust Indenture Act;
●
to add to, delete
from or revise the conditions, limitations, and restrictions on the
authorized amount, terms, or purposes of issue, authentication and
delivery of debt securities, as set forth in the
indenture;
●
to provide for the
issuance of and establish the form and terms and conditions of the
debt securities of any series as provided under “Description of Our Debt
Securities—General ,” to establish the form of
any certifications required to be furnished pursuant to the terms
of the indenture or any series of debt securities, or to add to the
rights of the holders of any series of debt
securities;
●
to evidence and
provide for the acceptance of appointment hereunder by a successor
trustee;
●
to provide for
uncertificated debt securities and to make all appropriate changes
for such purpose;
14
●
to add to our
covenants such new covenants, restrictions, conditions or
provisions for the benefit of the holders, to make the occurrence,
or the occurrence and the continuance, of a default in any such
additional covenants, restrictions, conditions or provisions an
event of default or to surrender any right or power conferred to us
in the indenture; or
●
to change anything
that does not materially adversely affect the interests of any
holder of debt securities of any series.
In
addition, under the indentures, the rights of holders of a series
of debt securities may be changed by us and the trustee with the
written consent of the holders of at least a majority in aggregate
principal amount of the outstanding debt securities of each series
that is affected. However, subject to the terms of the indenture
for any series of debt securities that we may issue or as otherwise
provided in the prospectus supplement or free writing prospectus
applicable to a particular series of debt securities, we and the
trustee may make the following changes only with the consent of
each holder of any outstanding debt securities
affected:
●
extending the
stated maturity of the series of debt securities;
●
reducing the
principal amount, reducing the rate of or extending the time of
payment of interest, or reducing any premium payable upon the
redemption or repurchase of any debt securities; or
●
reducing the
percentage of debt securities, the holders of which are required to
consent to any amendment, supplement, modification or
waiver.
Discharge
Each
indenture provides that, subject to the terms of the indenture and
any limitation otherwise provided in the prospectus supplement or
free writing prospectus applicable to a particular series of debt
securities, we can elect to be discharged from our obligations with
respect to one or more series of debt securities, except for
specified obligations, including obligations to:
●
register the
transfer or exchange of debt securities of the series;
●
replace stolen,
lost or mutilated debt securities of the series;
●
maintain paying
agencies;
●
hold monies for
payment in trust;
●
recover excess
money held by the trustee;
●
compensate and
indemnify the trustee; and
●
appoint any
successor trustee.
In
order to exercise our rights to be discharged, we must deposit with
the trustee money or government obligations sufficient to pay all
the principal of, and any premium and interest on, the debt
securities of the series on the dates payments are
due.
Form, Exchange and Transfer
In the
event that we issue debt securities, we will issue such debt
securities of each series only in fully registered form without
coupons and, unless we otherwise specify in the applicable
prospectus supplement or free writing prospectus, in denominations
of $1,000 and any integral multiple thereof. The indentures provide
that we may issue debt securities of a series in temporary or
permanent global form and as book-entry securities that will be
deposited with, or on behalf of, The Depository Trust Company or
another depository named by us and identified in a prospectus
supplement or free writing prospectus with respect to that
series.
15
At the
option of the holder, subject to the terms of the indentures and
the limitations applicable to global securities described in the
applicable prospectus supplement or free writing prospectus, the
holder of the debt securities of any series can exchange the debt
securities for other debt securities of the same series, in any
authorized denomination and of like tenor and aggregate principal
amount.
Subject
to the terms of the indentures and the limitations applicable to
global securities set forth in the applicable prospectus supplement
or free writing prospectus, holders of the debt securities may
present the debt securities for exchange or for registration of
transfer, duly endorsed or with the form of transfer endorsed
thereon duly executed if so required by us or the security
registrar, at the office of the security registrar or at the office
of any transfer agent designated by us for this purpose. Unless
otherwise provided in the debt securities that the holder presents
for transfer or exchange, we will make no service charge for any
registration of transfer or exchange, but we may require payment of
any taxes or other governmental charges.
We will
name in the applicable prospectus supplement or free writing
prospectus the security registrar, and any transfer agent in
addition to the security registrar that we initially designate for
any debt securities. We may at any time designate additional
transfer agents or rescind the designation of any transfer agent or
approve a change in the office through which any transfer agent
acts, except that we will be required to maintain a transfer agent
in each place of payment for the debt securities of each series. If
we elect to redeem the debt securities of any series, we will not
be required to:
●
issue, register the
transfer of, or exchange any debt securities of that series during
a period beginning at the opening of business 15 days before the
day of mailing of a notice of redemption of any debt securities
that may be selected for redemption and ending at the close of
business on the day of the mailing; or
●
register the
transfer of or exchange any debt securities so selected for
redemption, in whole or in part, except the unredeemed portion of
any debt securities we are redeeming in part.
Information Concerning the Trustee
The
trustee, other than during the occurrence and continuance of an
event of default under an indenture, undertakes to perform only
those duties as are specifically set forth in the applicable
indenture. Upon an event of default under an indenture, the trustee
must use the same degree of care as a prudent person would exercise
or use in the conduct of his or her own affairs.
Subject
to this provision, the trustee is under no obligation to exercise
any of the powers given it by the indentures at the request of any
holder of debt securities unless it is offered reasonable security
and indemnity against the costs, expenses and liabilities that it
might incur.
Payment and Paying Agents
Unless
we otherwise indicate in the applicable prospectus supplement or
free writing prospectus, we will make payment of the interest on
any debt securities on any interest payment date to the person in
whose name the debt securities, or one or more predecessor
securities, are registered at the close of business on the regular
record date for the interest.
We will
pay principal of and any premium and interest on the debt
securities of a particular series at the office of the paying
agents designated by us, except that unless we otherwise indicate
in the applicable prospectus supplement or free writing prospectus,
we will make interest payments by check that we will mail to the
holder or by wire transfer to certain holders. Unless we otherwise
indicate in the applicable prospectus supplement or free writing
prospectus, we will designate the corporate trust office of the
trustee as our sole paying agent for payments with respect to debt
securities of each series. We will name in the applicable
prospectus supplement or free writing prospectus any other paying
agents that we initially designate for the debt securities of a
particular series. We will maintain a paying agent in each place of
payment for the debt securities of a particular
series.
All
money we pay to a paying agent or the trustee for the payment of
the principal of or any premium or interest on any debt securities
that remains unclaimed at the end of two years after such
principal, premium or interest has become due and payable will be
repaid to us, and the holder of the debt security thereafter may
look only to us for payment thereof.
Governing Law
The
indentures and the debt securities will be governed by and
construed in accordance with the laws of the State of Delaware,
except to the extent that the Trust Indenture Act is
applicable.
Ranking of Debt Securities
The
subordinated debt securities will be subordinate and junior in
priority of payment to certain of our other indebtedness to the
extent described in a prospectus supplement or free writing
prospectus. The subordinated indenture does not limit the amount of
subordinated debt securities that we may issue. It also does not
limit us from issuing any other secured or unsecured
debt.
The
senior debt securities will rank equally in right of payment to all
our other senior unsecured debt. The senior indenture does not
limit the amount of senior debt securities that we may issue. It
also does not limit us from issuing any other secured or unsecured
debt.
16
DESCRIPTION OF OUR
WARRANTS
The following description, together with the additional information
we include in any applicable prospectus supplements or free writing
prospectus, summarizes the material terms and provisions of the
warrants that we may offer under this prospectus, which may consist
of warrants to purchase common stock, preferred stock and/or debt
securities in one or more series. Warrants may be offered
independently or together with common stock, preferred stock and/or
debt securities offered by any prospectus supplement or free
writing prospectus, and may be attached to or separate from those
securities. While the terms we have summarized below will generally
apply to any future warrants we may offer under this prospectus, we
will describe the particular terms of any warrants that we may
offer in more detail in the applicable prospectus supplement or
free writing prospectus. The terms of any warrants we offer under a
prospectus supplement or free writing prospectus may differ from
the terms we describe below.
In the
event that we issue warrants, we will issue the warrants under a
warrant agreement which we will enter into with a warrant agent to
be selected by us. Forms of these warrant agreements and forms of
the warrant certificates representing the warrants, and the
complete warrant agreements and forms of warrant certificates
containing the terms of the warrants being offered, will be filed
as exhibits to the registration statement of which this prospectus
is a part or will be incorporated by reference from reports that we
file with the SEC. We use the term “warrant agreement”
to refer to any of these warrant agreements. We use the term
“warrant agent” to refer to the warrant agent under any
of these warrant agreements. The warrant agent will act solely as
an agent of ours in connection with the warrants and will not act
as an agent for the holders or beneficial owners of the
warrants.
The
following summaries of material provisions of the warrants and the
warrant agreements are subject to, and qualified in their entirety
by reference to, all the provisions of the warrant agreement
applicable to a particular series of warrants. We urge you to read
the applicable prospectus supplements or free writing prospectus
related to the warrants that we sell under this prospectus, as well
as the complete warrant agreements that contain the terms of the
warrants.
General
We will
describe in the applicable prospectus supplement or free writing
prospectus the terms relating to a series of warrants. If warrants
for the purchase of debt securities are offered, the prospectus
supplement or free writing prospectus will describe the following
terms, to the extent applicable:
●
the offering price
and the aggregate number of warrants offered;
●
the currencies in
which the warrants are being offered;
●
the designation,
aggregate principal amount, currencies, denominations and terms of
the series of debt securities that can be purchased if a holder
exercises a warrant;
●
the designation and
terms of any series of debt securities with which the warrants are
being offered and the number of warrants offered with each such
debt security;
●
the date on and
after which the holder of the warrants can transfer them separately
from the related series of debt securities;
●
the principal
amount of the series of debt securities that can be purchased if a
holder exercises a warrant and the price at which and currencies in
which such principal amount may be purchased upon
exercise;
●
the terms of any
rights to redeem or call the warrants;
●
the date on which
the right to exercise the warrants begins and the date on which
such right expires;
●
federal income tax
consequences of holding or exercising the warrants;
and
●
any other specific
terms, preferences, rights or limitations of, or restrictions on,
the warrants.
17
If
warrants for the purchase of common stock or preferred stock are
offered, the prospectus supplement or free writing prospectus will
describe the following terms, to the extent
applicable:
●
the offering price
and the aggregate number of warrants offered;
●
the total number of
shares that can be purchased if a holder of the warrants exercises
them and, in the case of warrants for preferred stock, the
designation, total number and terms of the series of preferred
stock that can be purchased upon exercise;
●
the designation and
terms of any series of preferred stock with which the warrants are
being offered and the number of warrants being offered with each
share of common stock or preferred stock;
●
the date on and
after which the holder of the warrants can transfer them separately
from the related common stock or series of preferred
stock;
●
the number of
shares of common stock or preferred stock that can be purchased if
a holder exercises the warrant and the price at which such common
stock or preferred stock may be purchased upon exercise, including,
if applicable, any provisions for changes to or adjustments in the
exercise price and in the securities or other property receivable
upon exercise;
●
the terms of any
rights to redeem or call, or accelerate the expiration of, the
warrants;
●
the date on which
the right to exercise the warrants begins and the date on which
that right expires;
●
federal income tax
consequences of holding or exercising the warrants;
and
●
any other specific
terms, preferences, rights or limitations of, or restrictions on,
the warrants.
Exercise of Warrants
Each
holder of a warrant is entitled to purchase the principal amount of
debt securities or number of shares of common stock or preferred
stock, as the case may be, at the exercise price described in the
applicable prospectus supplement or free writing prospectus. After
the close of business on the day when the right to exercise
terminates (or a later date if we extend the time for exercise),
unexercised warrants will become void.
A
holder of warrants may exercise them by following the general
procedure outlined below:
●
delivering to the
warrant agent the payment required by the applicable prospectus
supplement or free writing prospectus to purchase the underlying
security;
●
properly completing
and signing the reverse side of the warrant certificate
representing the warrants; and
●
delivering the
warrant certificate representing the warrants to the warrant agent
within five business days of the warrant agent receiving payment of
the exercise price.
If you
comply with the procedures described above, your warrants will be
considered to have been exercised when the warrant agent receives
payment of the exercise price, subject to the transfer books for
the securities issuable upon exercise of the warrant not being
closed on such date. After you have completed those procedures and
subject to the foregoing, we will, as soon as practicable, issue
and deliver to you the debt securities, common stock or preferred
stock that you purchased upon exercise. If you exercise fewer than
all of the warrants represented by a warrant certificate, a new
warrant certificate will be issued to you for the unexercised
amount of warrants. Holders of warrants will be required to pay any
tax or governmental charge that may be imposed in connection with
transferring the underlying securities in connection with the
exercise of the warrants.
18
Amendments and Supplements to the Warrant Agreements
We may
amend or supplement a warrant agreement without the consent of the
holders of the applicable warrants to cure ambiguities in the
warrant agreement, to cure or correct a defective provision in the
warrant agreement, or to provide for other matters under the
warrant agreement that we and the warrant agent deem necessary or
desirable, so long as, in each case, such amendments or supplements
do not materially adversely affect the interests of the holders of
the warrants.
Warrant Adjustments
Unless
the applicable prospectus supplement or free writing prospectus
states otherwise, the exercise price of, and the number of
securities covered by, a common stock warrant or preferred stock
warrant will be adjusted proportionately if we subdivide or combine
our common stock or preferred stock, as applicable. In addition,
unless the prospectus supplement or free writing prospectus states
otherwise, if we, without receiving payment:
●
issue capital stock
or other securities convertible into or exchangeable for common
stock or preferred stock, or any rights to subscribe for, purchase
or otherwise acquire any of the foregoing, as a dividend or
distribution to holders of our common stock or preferred
stock;
●
pay any cash to
holders of our common stock or preferred stock other than a cash
dividend paid out of our current or retained earnings or other than
in accordance with the terms of the preferred stock;
●
issue any evidence
of our indebtedness or rights to subscribe for or purchase our
indebtedness to holders of our common stock or preferred stock;
or
●
issue common stock
or preferred stock or additional stock or other securities or
property to holders of our common stock or preferred stock by way
of spinoff, split-up, reclassification, combination of shares or
similar corporate rearrangement,
then
the holders of common stock warrants and preferred stock warrants,
as applicable, will be entitled to receive upon exercise of the
warrants, in addition to the securities otherwise receivable upon
exercise of the warrants and without paying any additional
consideration, the amount of stock and other securities and
property such holders would have been entitled to receive had they
held the common stock or preferred stock, as applicable, issuable
under the warrants on the dates on which holders of those
securities received or became entitled to receive such additional
stock and other securities and property.
Except
as stated above or as otherwise set forth in the applicable
prospectus supplement or free writing prospectus, the exercise
price and number of securities covered by a common stock warrant
and preferred stock warrant, and the amounts of other securities or
property to be received, if any, upon exercise of those warrants,
will not be adjusted or provided for if we issue those securities
or any securities convertible into or exchangeable for those
securities, or securities carrying the right to purchase those
securities or securities convertible into or exchangeable for those
securities.
Holders
of common stock warrants and preferred stock warrants may have
additional rights under the following circumstances:
●
certain
reclassifications, capital reorganizations or changes of the common
stock or preferred stock, as applicable;
●
certain share
exchanges, mergers, or similar transactions involving us and which
result in changes of the common stock or preferred stock, as
applicable; or
●
certain sales or
dispositions to another entity of all or substantially all of our
property and assets.
If one
of the above transactions occurs and holders of our common stock or
preferred stock are entitled to receive stock, securities or other
property with respect to or in exchange for their securities, the
holders of the common stock warrants and preferred stock warrants
then outstanding, as applicable, will be entitled to receive upon
exercise of their warrants the kind and amount of shares of stock
and other securities or property that they would have received upon
the applicable transaction if they had exercised their warrants
immediately before the transaction.
19
DESCRIPTION OF OUR UNITS
This section outlines some of the provisions of the units and the
unit agreements. This information may not be complete in all
respects and is qualified entirely by reference to the unit
agreement with respect to the units of any particular series. The
specific terms of any series of units will be described in the
applicable prospectus supplement or free writing prospectus. If so
described in a particular prospectus supplement or free writing
prospectus, the specific terms of any series of units may differ
from the general description of terms presented below.
As
specified in the applicable prospectus supplement, we may issue
units consisting of one or more shares of common stock, shares of
preferred stock, debt securities, warrants or any combination of
such securities.
The
applicable prospectus supplement will specify the following terms
of any units in respect of which this prospectus is being
delivered:
●
the terms of the
units and of any of the shares of common stock, shares of preferred
stock, debt securities, or warrants comprising the units, including
whether and under what circumstances the securities comprising the
units may be traded separately;
●
a description of
the terms of any unit agreement governing the units;
●
if appropriate, a
discussion of material U.S. federal income tax considerations;
and
●
a description of
the provisions for the payment, settlement, transfer or exchange of
the units.
DESCRIPTION OF OVERALLOTMENT PURCHASE
RIGHTS
We summarize below some of the provisions that will apply to the
overallotment purchase rights unless the applicable prospectus
supplement provides otherwise.
This summary may not contain all information that is important to
you. The complete terms of the overallotment purchase rights will
be contained in the applicable overallotment purchase rights
certificate and overallotment purchase rights agreement. These
documents have been or will be included or incorporated by
reference as exhibits to the registration statement of which this
prospectus is a part. You should read the overallotment purchase
rights certificate and the overallotment purchase rights agreement.
You should also read the prospectus supplement, which will contain
additional information and which may update or change some of the
information below.
General
We may issue, together with common or preferred stock or warrants
as units or separately, overallotment purchase rights for the
purchase of shares of our common or preferred stock or warrants.
The terms of each overallotment purchase right will be discussed in
the applicable prospectus supplement relating to the particular
series of overallotment purchase rights. The form(s) of certificate
representing the overallotment purchase rights and/or the
overallotment purchase right agreement, will be, in each case,
filed with the SEC as an exhibit to a document incorporated by
reference in the registration statement of which this prospectus is
a part on or prior to the date of any prospectus supplement
relating to an offering of the particular overallotment purchase
right. The following summary of material provisions of the
overallotment purchase rights and the overallotment purchase right
agreements is subject to, and qualified in their entirety by
reference to, all the provisions of the overallotment purchase
rights agreement and overallotment purchase rights certificate
applicable to a particular series of overallotment purchase
rights.
The prospectus supplement relating to any series of overallotment
purchase rights that are offered by this prospectus will describe,
among other things, the following terms to the extent they are
applicable to that series of overallotment purchase
rights:
●
the procedures and
conditions relating to the exercise of the overallotment purchase
rights;
●
the number of
shares of our common or preferred stock or warrants, if any, issued
with the overallotment purchase rights;
20
●
the date, if any,
on and after which the overallotment purchase rights and any
related shares of our common or preferred stock or warrants will be
separately transferable;
●
the offering price
of the overallotment purchase rights, if any;
●
the number of
shares of our common or preferred stock or warrants which may be
purchased upon exercise of the overallotment purchase rights and
the price or prices at which the shares or warrants may be
purchased upon exercise;
●
the date on which
the right to exercise the overallotment purchase rights will begin
and the date on which the right will expire;
●
a discussion of the
material United States federal income tax considerations applicable
to the exercise of the overallotment purchase rights;
●
anti-dilution
provisions of the overallotment purchase rights, if
any;
●
call provisions of
the overallotment purchase rights, if any; and
●
any other material
terms of the overallotment purchase rights.
Each overallotment purchase right may entitle the holder to
purchase for cash, or, in limited circumstances, by effecting a
cashless exercise for, the number of shares of our common or
preferred stock or warrants at the exercise price that is described
in the applicable prospectus supplement. Overallotment purchase
rights will be exercisable during the period of time described in
the applicable prospectus supplement. After that period,
unexercised overallotment purchase rights will be void.
Overallotment purchase rights may be exercised in the manner
described in the applicable prospectus supplement.
A holder of an overallotment purchase right will not have any of
the rights of a holder of our common or preferred stock before the
stock is purchased upon exercise of the overallotment purchase
right. Therefore, before an overallotment purchase right is
exercised, the holder of the overallotment purchase right will not
be entitled to receive any dividend payments or exercise any voting
or other rights associated with shares of our common or preferred
stock which may be purchased when the overallotment purchase right
is exercised.
Transfer Agent and Registrar
The transfer agent and registrar, if any, for any overallotment
purchase rights will be set forth in the applicable prospectus
supplement.
21
PLAN OF DISTRIBUTION
We may
sell the securities being offered hereby in one or more of the
following ways from time to time:
●
through agents to
the public or to investors;
●
to underwriters for
resale to the public or to investors;
●
negotiated
transactions;
●
block
trades;
●
directly to
investors; or
●
through a
combination of any of these methods of sale.
As set
forth in more detail below, the securities may be distributed from
time to time in one or more transactions:
●
at a fixed price or
prices, which may be changed;
●
at market prices
prevailing at the time of sale;
●
at prices related
to such prevailing market prices; or
●
at negotiated
prices.
We will
set forth in a prospectus supplement the terms of that particular
offering of securities, including:
●
the name or names
of any agents or underwriters;
●
the purchase price
of the securities being offered and the proceeds we will receive
from the sale;
●
any over-allotment
options under which underwriters may purchase additional securities
from us;
●
any agency fees or
underwriting discounts and other items constituting agents' or
underwriters' compensation;
●
any initial public
offering price;
●
any discounts or
concessions allowed or reallowed or paid to dealers;
and
●
any securities
exchanges or markets on which such securities may be
listed.
22
Only
underwriters named in the prospectus supplement are underwriters of
the securities offered by the prospectus supplement.
If
underwriters are used in an offering, we will execute an
underwriting agreement with such underwriters and will specify the
name of each underwriter and the terms of the transaction
(including any underwriting discounts and other terms constituting
compensation of the underwriters and any dealers) in a prospectus
supplement. The securities may be offered to the public either
through underwriting syndicates represented by managing
underwriters or directly by one or more investment banking firms or
others, as designated. If an underwriting syndicate is used, the
managing underwriter(s) will be specified on the cover of the
prospectus supplement. If underwriters are used in the sale, the
offered securities will be acquired by the underwriters for their
own accounts and may be resold from time to time in one or more
transactions, including negotiated transactions, at a fixed public
offering price or at varying prices determined at the time of sale.
Any public offering price and any discounts or concessions allowed
or reallowed or paid to dealers may be changed from time to time.
Unless otherwise set forth in the prospectus supplement, the
obligations of the underwriters to purchase the offered securities
will be subject to conditions precedent and the underwriters will
be obligated to purchase all of the offered securities if any are
purchased.
We may
grant to the underwriters options to purchase additional securities
to cover over-allotments, if any, at the public offering price,
with additional underwriting commissions or discounts, as may be
set forth in a related prospectus supplement. The terms of any
over-allotment option will be set forth in the prospectus
supplement for those securities.
If we
use a dealer in the sale of the securities being offered pursuant
to this prospectus or any prospectus supplement, we will sell the
securities to the dealer, as principal. The dealer may then
resell the securities to the public at varying prices to be
determined by the dealer at the time of resale. The names of
the dealers and the terms of the transaction will be specified in a
prospectus supplement.
We may
sell the securities directly or through agents we designate from
time to time. We will name any agent involved in the offering
and sale of securities and we will describe any commissions we will
pay the agent in the prospectus supplement. Unless the prospectus
supplement states otherwise, any agent will act on a best-efforts
basis for the period of its appointment.
We may
authorize agents or underwriters to solicit offers by institutional
investors to purchase securities from us at the public offering
price set forth in the prospectus supplement pursuant to delayed
delivery contracts providing for payment and delivery on a
specified date in the future. We will describe the conditions to
these contracts and the commissions we must pay for solicitation of
these contracts in the prospectus supplement.
In
connection with the sale of the securities, underwriters, dealers
or agents may receive compensation from us or from purchasers of
the securities for whom they act as agents in the form of
discounts, concessions or commissions. Underwriters may sell the
securities to or through dealers, and those dealers may receive
compensation in the form of discounts, concessions or commissions
from the underwriters or commissions from the purchasers for whom
they may act as agents. Underwriters, dealers and agents that
participate in the distribution of the securities, and any
institutional investors or others that purchase securities directly
and then resell the securities, may be deemed to be underwriters,
and any discounts or commissions received by them from us and any
profit on the resale of the securities by them may be deemed to be
underwriting discounts and commissions under the Securities
Act.
We may
provide agents and underwriters with indemnification against
particular civil liabilities, including liabilities under the
Securities Act, or contribution with respect to payments that the
agents or underwriters may make with respect to such liabilities.
Agents and underwriters may engage in transactions with, or perform
services for, us in the ordinary course of business.
In
addition, we may enter into derivative transactions with third
parties (including the writing of options), or sell securities not
covered by this prospectus to third parties in privately negotiated
transactions. If the applicable prospectus supplement indicates, in
connection with such a transaction, the third parties may, pursuant
to this prospectus and the applicable prospectus supplement, sell
securities covered by this prospectus and the applicable prospectus
supplement. If so, the third party may use securities borrowed from
us or others to settle such sales and may use securities received
from us to close out any related short positions. We may also loan
or pledge securities covered by this prospectus and the applicable
prospectus supplement to third parties, who may sell the loaned
securities or, in an event of default in the case of a pledge, sell
the pledged securities pursuant to this prospectus and the
applicable prospectus supplement. The third party in such sale
transactions will be an underwriter and will be identified in the
applicable prospectus supplement or in a post-effective
amendment.
To
facilitate an offering of a series of securities, persons
participating in the offering may engage in transactions that
stabilize, maintain, or otherwise affect the market price of the
securities. This may include over-allotments or short sales of the
securities, which involves the sale by persons participating in the
offering of more securities than have been sold to them by us. In
those circumstances, such persons would cover such over-allotments
or short positions by purchasing in the open market or by
exercising the over-allotment option granted to those persons. In
addition, those persons may stabilize or maintain the price of the
securities by bidding for or purchasing securities in the open
market or by imposing penalty bids, whereby selling concessions
allowed to underwriters or dealers participating in any such
offering may be reclaimed if securities sold by them are
repurchased in connection with stabilization transactions. The
effect of these transactions may be to stabilize or maintain the
market price of the securities at a level above that which might
otherwise prevail in the open market. Such transactions, if
commenced, may be discontinued at any time. We make no
representation or prediction as to the direction or magnitude of
any effect that the transactions described above, if implemented,
may have on the price of our securities.
23
Unless
otherwise specified in the applicable prospectus supplement, each
class or series of securities will be a new issue with no
established trading market, other than our common stock, which is
listed on the NYSE American. We may elect to list any other class
or series of securities on any exchange or market, but we are not
obligated to do so. It is possible that one or more underwriters
may make a market in a class or series of securities, but the
underwriters will not be obligated to do so and may discontinue any
market making at any time without notice. We cannot give any
assurance as to the liquidity of the trading market for any of the
securities.
In
order to comply with the securities laws of some states, if
applicable, the securities offered pursuant to this prospectus will
be sold in those states only through registered or licensed brokers
or dealers. In addition, in some states securities may not be sold
unless they have been registered or qualified for sale in the
applicable state or an exemption from the registration or
qualification requirement is available and complied
with.
Any
underwriter may engage in overallotment, stabilizing transactions,
short covering transactions and penalty bids in accordance with the
Exchange Act or Regulation M under the Exchange Act. Overallotment
involves sales in excess of the offering size, which create a short
position. Stabilizing transactions permit bids to purchase the
underlying security so long as the stabilizing bids do not exceed a
specified maximum. Short covering transactions involve purchases of
the securities in the open market after the distribution is
completed to cover short positions. Penalty bids permit the
underwriters to reclaim a selling concession from a dealer when the
securities originally sold by the dealer are purchased in a
covering transaction to cover short positions. Those activities may
cause the price of the securities to be higher than it would
otherwise be. If commenced, the underwriters may discontinue any of
these activities at any time.
Any
underwriters who are qualified market makers on the NYSE American
may engage in passive market making transactions in the securities
on the NYSE American in accordance with Rule 103 of Regulation M,
during the business day prior to the pricing of the offering,
before the commencement of offers or sales of the securities.
Passive market makers must comply with applicable volume and price
limitations and must be identified as passive market makers. In
general, a passive market maker must display its bid at a price not
in excess of the highest independent bid for such security. If all
independent bids are lowered below the passive market maker's bid,
however, the passive market maker's bid must then be lowered when
certain purchase limits are exceeded.
24
LEGAL MATTERS
The
validity of the securities offered by this prospectus will be
passed upon by Quick Law Group PC, Boulder, Colorado. Certain legal
matters will passed upon for any underwriters, dealers or agents by
the law firm identified as counsel to such underwriters, dealers or
agents in the applicable prospectus supplement.
EXPERTS
The
financial statements of the Company incorporated in this prospectus
by reference to the Annual Report on Form 10-K/A for the fiscal
year ended December 31, 2017 have been audited by Cherry Bekaert
LLP, an independent registered public accounting firm, as set forth
in their report thereon, and are
included in reliance upon the report of such firm given upon its
authority as experts in accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
We are
a public company and file annual, quarterly and special reports,
proxy statements and other information with the SEC. You may read
and copy any document we file at the SEC’s public reference
room at 100 F Street, NE, Washington, D.C. 20549. You can request
copies of these documents by writing to the SEC and paying a fee
for the copying cost. Please call the SEC at 1-800-SEC-0330 for
more information about the operation of the public reference room.
Our SEC filings are also available, at no charge, to the public at
the SEC’s website at http://www.sec.gov.
We
announce material financial information to our investors using our
investor relations website, SEC filings, investor events, news and
earnings releases, public conference calls, webcasts and social
media. We use these channels to communicate with our investors and
the public about our company, our products and services and other
related matters. It is possible that information we post on some of
these channels could be deemed to be material information.
Therefore, we encourage investors, the media and others interested
in our company to review the information we post to all of our
channels, including our social media accounts.
INCORPORATION OF CERTAIN
INFORMATION BY REFERENCE
The
following documents filed by us with the SEC are incorporated by
reference in this prospectus:
●
Annual Report on
Form 10-K/A for the fiscal year ended December 31, 2017, filed on
March 5, 2018, including the information specifically incorporated
by reference into the Annual Report on Form 10-K/A from the
Definitive Proxy Statement on Schedule 14A, filed on April 20,
2018;
●
Quarterly Report on
Form 10-Q for the quarter ended March 31, 2018, filed on May 3,
2018;
●
Quarterly Report on
Form 10-Q for the quarter ended June 30, 2018, filed on August 2,
2018
●
Current Report on
Form 8-K, filed on March 1, 2018;
●
Current Report on
Form 8-K, filed on May 3, 2018;
●
Current Report on
Form 8-K filed on June 1, 2018;
●
Current Report on
Form 8-K filed on July 5, 2018;
●
Current Report on
Form 8-K filed on July 9, 2018;
●
Current Report on
Form 8-K filed on August 2, 2018; and
●
The description of
our common stock contained in the Registration Statement on
Amendment No. 1 to Form S-1 filed pursuant to Section 12 of the
Exchange Act on January 29, 2014, including any amendment or report
filed with the SEC for the purpose of updating this
description.
We also
incorporate by reference all documents we file pursuant to Section
13(a), 13(c), 14 or 15 of the Exchange Act (other than any portions
of filings that are furnished rather than filed pursuant to Items
2.02 and 7.01 of a Current Report on Form 8-K) after the date of
the initial registration statement of which this prospectus is a
part and prior to effectiveness of such registration statement. All
documents we file in the future pursuant to Section 13(a), 13(c),
14 or 15(d) of the Exchange Act after the date of this prospectus
and prior to the termination of the offering are also incorporated
by reference and are an important part of this
prospectus.
25
Any
statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or
superseded for the purposes of this registration statement to the
extent that a statement contained herein or in any other
subsequently filed document which also is or deemed to be
incorporated by reference herein modifies or supersedes such
statement. Any statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part
of this registration statement.
We will provide to each person, including any beneficial owner, to
whom a prospectus is delivered, a copy of any or all of the
information that has been incorporated by reference in the
prospectus but not delivered with the prospectus. You may request a
copy of these filings, excluding the exhibits to such filings which
we have not specifically incorporated by reference in such filings,
at no cost, by writing to or calling us at:
Issuer Direct Corporation
Attn: Corporate Secretary
500 Perimeter Park Drive, Suite D
Morrisville, North Carolina 27560
(919) 481-4000
This
prospectus is part of a registration statement we filed with the
SEC. You should only rely on the information or representations
contained in this prospectus and any accompanying prospectus
supplement. We have not authorized anyone to provide information
other than that provided in this prospectus and any accompanying
prospectus supplement. We are not making an offer of the securities
in any state where the offer is not permitted. You should not
assume that the information in this prospectus or any accompanying
prospectus supplement is accurate as of any date other than the
date on the front of the document.
26
PROSPECTUS
$30,000,000
Common Stock
Preferred Stock
Debt Securities
Warrants
Units
, 2018
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The
following table sets forth an estimate of the fees and expenses,
other than the underwriting discounts and commissions, payable by
us in connection with the issuance and distribution of the
securities being registered.
|
|
Amount
|
|
SEC registration
fee
|
$3,735
|
|
NYSE American
supplemental listing fee
|
*
|
|
Accounting fees and
expenses
|
5,000
|
|
Legal fees and
expenses
|
20,000
|
|
Transfer agent and
registrar fees and expenses
|
*
|
|
Trustee fees and
expenses
|
*
|
|
Printing and
miscellaneous fees and expenses
|
*
|
|
Total
|
$*
|
* These
fees are calculated based on the securities offered and the number
of issuances and accordingly cannot be estimated at this
time.
ITEM 15. INDEMNIFICATION OF OFFICERS AND DIRECTORS
Limitations
of liability and indemnification
Subsection
(a) of Section 145 of the General Corporation Law of
Delaware, or the DGCL, empowers a corporation to indemnify any
person who was or is a party or is threatened to be made a party to
any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative (other
than an action by or in the right of the corporation) by reason of
the fact that he is or was a director, employee or agent of the
corporation or is or was serving at the request of the corporation
as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, against
expenses (including attorneys’ fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by him
in connection with such action, suit or proceeding if he acted in
good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the corporation and, with respect
to any criminal action or proceeding, had no reasonable cause to
believe his conduct was unlawful.
Subsection
(b) of Section 145 of the DGCL empowers a corporation to
indemnify any person who was or is a party or is threatened to be
made a party to any threatened, pending or completed action or suit
by or in the right of the corporation to procure a judgment in its
favor by reason of the fact that such person acted in any of the
capacities set forth above, against expenses (including
attorneys’ fees) actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit if
he acted in good faith and in a manner he reasonably believed to be
in or not opposed to the best interests of the corporation and
except that no indemnification may be made with respect to any
claim, issue or matter as to which such person shall have been
adjudged to be liable to the corporation unless and only to the
extent that the Court of Chancery or the court in which such action
or suit was brought shall determine upon application that, despite
the adjudication of liability but in view of all of the
circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses which the Court of Chancery
or such other court shall deem proper.
Section 145
of the DGCL further provides that to the extent a director,
officer, employee or agent of a corporation has been successful on
the merits or otherwise in the defense of any action, suit or
proceeding referred to in subsections (a) and (b) or in
the defense of any claim, issue or matter therein, he shall be
indemnified against expenses (including attorneys’ fees)
actually and reasonably incurred by him in connection therewith;
that indemnification or advancement of expenses provided for by
Section 145 shall not be deemed exclusive of any other rights
to which the indemnified party may be entitled; and empowers the
corporation to purchase and maintain insurance on behalf of a
director, officer, employee or agent of the corporation against any
liability asserted against him or incurred by him in any such
capacity or arising out of his status as such whether or not the
corporation would have the power to indemnify him against such
liabilities under Section 145.
II-1
Reference
is also made to Section 102(b)(7) of the DGCL, which enables a
corporation in its certificate of incorporation to eliminate or
limit the personal liability of a director for monetary damages for
violations of a director’s fiduciary duty, except for
liability (i) for any breach of the director’s duty of
loyalty to the corporation or its stockholders, (ii) for acts
or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, (iii) under
Section 174 of the DGCL (providing for liability of directors
for unlawful payment of dividends or unlawful stock purchases or
redemptions) or (iv) for any transaction from which the
director derived an improper personal benefit. Our Certificate of
Incorporation, as amended, and our indemnity agreements with our
officers and directors provides that we must indemnify our
directors to the fullest extent under applicable law. Pursuant to
Delaware law, this includes elimination of liability for monetary
damages for breach of the directors’ fiduciary duty of care
to Issuer Direct and its stockholders. However, our directors may
be personally liable for liability:
●
for any breach of
duty of loyalty to us or to our stockholders;
●
for acts or
omissions not in good faith or that involve intentional misconduct
or a knowing violation of law;
●
for unlawful
payment of dividends or unlawful stock repurchases or redemptions;
or
●
for any transaction
from which the director derived an improper personal
benefit.
In
addition, our amended and restated bylaws and indemnity agreements
provide that:
●
we are required to
indemnify our directors and executive officers to the fullest
extent not prohibited by Delaware law or any other applicable law,
subject to limited exceptions;
●
we may indemnify
our other officers, employees and other agents as set forth in
Delaware law or any other applicable law;
●
we are required to
advance expenses to our directors and executive officers as
incurred in connection with legal proceedings against them for
which they may be indemnified; and
●
the rights
conferred in the amended and restated bylaws are not
exclusive.
There
is no pending litigation or proceeding naming any of our directors
or officers as to which indemnification is being sought, nor are we
aware of any pending or threatened litigation that may result in
claims for indemnification.
ITEM
16. EXHIBITS
|
1.1*
|
Form of Underwriting Agreement
|
|
Agreement and Plan
of Merger dated August 22, 2013 with the Company, ISDR Acquisition
Corp. and Precision IR Group, Inc. (incorporated by reference to
Exhibit 2.1 to the Form 8-K filed on August 27,
2013)
|
|
|
Asset
Purchase Agreement dated October 2, 2014 with the Company,
Baystreet.ca Media Corp. and Aaron Bodnar (incorporated by reference to Exhibit 2.1 to the
Form 8-K filed on October 7, 2014)
|
|
|
Stock
Purchase Agreement dated July 3, 2018 with the Company, ACCESSWIRE
Canada Ltd. and Fred Gautreau (incorporated by reference to Exhibit 10.1 to the
Form 8-K filed on July 5, 2018)
|
|
|
Certificate of
Incorporation, as amended (incorporated by reference to Exhibit 3.1
to the Form S-3 filed on May 10, 2017)
|
|
|
Amended
and Restated Bylaws (incorporated by reference to Exhibit 3.1 to
the Form 8-K filed on February 12, 2014)
|
|
|
4.1*
|
Form of any certificate of designation with respect to any
preferred stock issued hereunder and the related form of preferred
stock certificate
|
|
4.2*
|
Form of any warrant agreement with respect to each particular
series of warrants issued hereunder
|
|
4.3*
|
Form of any unit agreement with respect to any unit issued
hereunder
|
|
Form of indenture for senior debt securities
|
|
|
Form of indenture for subordinated debt securities
|
|
|
4.6*
|
Form of senior note
|
|
4.7*
|
Form of subordinated note
|
|
4.8*
|
Form of overallotment purchase right
agreement
|
|
Opinion of Quick Law Group PC
|
|
|
12.1*
|
Computation of Ratio of Earnings to Fixed Charges
|
|
Consent of Quick Law Group PC (included with exhibit
5.1)
|
|
|
Consent of Independent Registered Public Accounting Firm –
Cherry Bekaert LLP
|
|
|
Power of Attorney (located on signature page to this Registration
Statement)
|
|
|
25.1**
|
Form T-1 Statement of Eligibility of Trustee for senior indenture
under the Trust Indenture Act of 1939
|
*
To be filed, if
necessary, subsequent to the effectiveness of this registration by
an amendment to this registration statement or incorporation by
reference pursuant to a Current Report on Form 8-K in connection
with an offering of securities.
**
To be
filed as an exhibit to a Current Report on Form 305B2 or pursuant
to Section 305(b)(2) of the Trust Indenture Act of 1939 and
incorporated herein by reference.
II-2
ITEM
17. UNDERTAKINGS
(a)
The undersigned
Registrant hereby undertakes:
(1) To file, during any
period in which offers or sales are being made, a post-effective
amendment to this registration statement:
(i) To include any
prospectus required by Section 10(a)(3) of the Securities Act of
1933;
(ii) To
reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set
forth in the registration statement. Notwithstanding the foregoing,
any increase or decrease in volume of securities offered (if the
total dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high end of
the estimated maximum offering range may be reflected in the form
of prospectus filed with the Commission pursuant to Rule 424(b) if,
in the aggregate, the changes in volume and price represent no more
than 20% change in the maximum aggregate offering price set forth
in the “Calculation of Registration Fee” table in the
effective registration statement.
(iii) To
include any material information with respect to the plan of
distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement;
provided, however, that paragraphs (i),
(ii) and (iii) do not apply if the information required to be
included in a post-effective amendment by those paragraphs is
contained in reports filed with or furnished to the Commission by
the Registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference
in the registration statement, or is contained in a form of
prospectus filed pursuant to Rule 424(b) that is part of the
registration statement.
(2) That, for the
purpose of determining any liability under the Securities Act of
1933, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(3) To remove from
registration by means of a post-effective amendment any of the
securities being registered which remain unsold at the termination
of the offering.
(4) That, for the
purpose of determining liability under the Securities Act of 1933
to any purchaser:
(i) If the Registrant
is relying on Rule 430B:
(A) Each prospectus
filed by the registrant pursuant to Rule 424(b)(3) shall be deemed
to be part of the registration statement as of the date the filed
prospectus was deemed part of and included in the registration
statement; and
(B) Each prospectus
required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7)
as part of a registration statement in reliance on Rule 430B
relating to an offering made pursuant to Rule 415(a)(1)(i), (vii),
or (x) for the purpose of providing the information required by
section 10(a) of the Securities Act of 1933 shall be deemed to be
part of and included in the registration statement as of the
earlier of the date such form of prospectus is first used after
effectiveness or the date of the first contract of sale of
securities in the offering described in the prospectus. As provided
in Rule 430B, for liability purposes of the issuer and any person
that is at that date an underwriter, such date shall be deemed to
be a new effective date of the registration statement relating to
the securities in the registration statement to which that
prospectus relates, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
Provided, however, that no statement made in a registration
statement or prospectus that is part of the registration statement
or made in a document incorporated or deemed incorporated by
reference into the registration statement or prospectus that is
part of the registration statement will, as to a purchaser with a
time of contract of sale prior to such effective date, supersede or
modify any statement that was made in the registration statement or
prospectus that was part of the registration statement or made in
any such document immediately prior to such effective date;
or
II-3
(ii) If
the registrant is subject to Rule 430C, each prospectus filed
pursuant to Rule 424(b) as part of a registration statement
relating to an offering, other than registration statements relying
on Rule 430B or other than prospectuses filed in reliance on Rule
430A, shall be deemed to be part of and included in the
registration statement as of the date it is first used after
effectiveness. Provided, however, that no statement made in a
registration statement or prospectus that is part of the
registration statement or made in a document incorporated or deemed
incorporated by reference into the registration statement or
prospectus that is part of the registration statement will, as to a
purchaser with a time of contract of sale prior to such first use,
supersede or modify any statement that was made in the registration
statement or prospectus that was part of the registration statement
or made in any such document immediately prior to such date of
first use.
(5) That, for the
purpose of determining liability of the registrant under the
Securities Act of 1933 to any purchaser in the initial distribution
of the securities: The undersigned registrant undertakes that in a
primary offering of securities of the undersigned registrant
pursuant to this registration statement, regardless of the
underwriting method used to sell the securities to the purchaser,
if the securities are offered or sold to such purchaser by means of
any of the following communications, the undersigned registrant
will be a seller to the purchaser and will be considered to offer
or sell such securities to such purchaser:
(i)
Any preliminary
prospectus or prospectus of the undersigned registrant relating to
the offering required to be filed pursuant to Rule
424;
(ii)
Any free writing
prospectus relating to the offering prepared by or on behalf of the
undersigned registrant or used or referred to by the undersigned
registrant;
(iii)
The portion of any
other free writing prospectus relating to the offering containing
material information about the undersigned registrant or its
securities provided by or on behalf of the undersigned registrant;
and
(iv)
Any other communication that is an offer in the offering made by
the undersigned registrant to the purchaser.
(6) That, for purposes
of determining any liability under the Securities Act of 1933, each
filing of the Registrant’s annual report pursuant to Section
13(a) or 15(d) of the Securities Exchange Act of 1934 (and, where
applicable, each filing of an employee benefit plan’s annual
report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the registration
statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(7) To file an
application for the purpose of determining the eligibility of the
trustee to act under subsection (a) of Section 310 of the Trust
Indenture Act in accordance with the rules and regulations
prescribed by the Commission under Section 305(b)(2) of the Trust
Indenture Act.
Insofar
as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling
persons of each Registrant pursuant to the foregoing provisions, or
otherwise, each Registrant has been advised that in the opinion of
the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Securities Act of 1933
and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by
a Registrant of expenses incurred or paid by a director, officer or
controlling person of a Registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer
or controlling person in connection with the securities being
registered, that Registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in
the Securities Act of 1933 and will be governed by the final
adjudication of such issue.
II-4
SIGNATURES
Pursuant to the
requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused
this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Morrisville,
North Carolina on August 2, 2018.
|
|
ISSUER
DIRECT CORPORATION
|
|
|
|
|
|
|
|
|
|
By:
|
/s/ Brian R.
Balbirnie
|
|
|
|
|
Brian R.
Balbirnie
|
|
|
|
|
Chief Executive
Officer
|
|
POWER OF ATTORNEY
KNOWN
ALL MEN BY THESE PRESENTS, that each person whose signature below
constitutes and appoints Brian R. Balbirnie as attorney-in-fact,
with power of substitution, for him in any and all capacities, to
sign any amendments to this Registration Statement on Form S-3,
including
any post-effective amendments thereto, and file the same,
with exhibits thereto and other documents in connection therewith,
with the Securities and Exchange Commission, hereby ratifying and
confirming all that each of said attorneys-in-fact, or his
substitute or substitutes, may do or cause to be done by virtue
hereof. This power of attorney shall be governed by and construed
with the laws of the State of Delaware and applicable federal
securities laws.
Pursuant to the
requirements of the Securities Act of 1933, this registration
statement has been signed by the following persons in the
capacities and on the dates indicated.
| Signature |
|
Title
|
|
Date
|
|
|
|
|
|
|
|
/s/
Brian R. Balbirnie
|
|
Chief
Executive Officer and Director
|
|
|
|
Brian
R. Balbirnie
|
|
(Principal
Executive Officer)
|
|
August
2, 2018
|
|
|
|
|
|
|
|
/s/
Steven Knerr
|
|
Chief
Financial Officer
|
|
|
|
Steven
Knerr
|
|
(Principal
Financial and Accounting Officer)
|
|
August
2, 2018
|
|
|
|
|
|
|
|
/s/
William Everett
|
|
Chairman of the
Board of Directors
|
|
|
|
William
Everett
|
|
|
|
August
2, 2018
|
|
|
|
|
|
|
|
/s/
Eric Alan Frank
|
|
Director
|
|
|
|
Eric
Alan Frank
|
|
|
|
August
2, 2018
|
|
|
|
|
|
|
|
/s/ J.
Patrick Galleher
|
|
Director
|
|
|
|
J.
Patrick Galleher
|
|
|
|
August
2, 2018
|
|
|
|
|
|
|
|
/s/
Michael Nowlan
|
|
Director
|
|
|
|
Michael
Nowlan
|
|
|
|
August
2, 2018
|
II-5