S-3A

As filed with the Securities and Exchange Commission on April 9, 2020 

Registration No. 333-237452 

UNITED STATES 

SECURITIES AND EXCHANGE COMMISSION 

Washington, D.C. 20549 



Amendment No. 1

to

FORM S-3 

REGISTRATION STATEMENT 

Under 

THE SECURITIES ACT OF 1933 



Cassava Sciences, Inc.

 (Exact name of Registrant as specified in its charter)



 

 



 

 



 

 

Delaware

 

91-1911336

(State or other jurisdiction of

incorporation or organization)

 

 

(I.R.S. Employer

Identification Number)



7801 N Capital of Texas Highway, Suite 260 

Austin, TX 78731 

(512) 501-2444 

(Address, including zip code, and telephone number, including area code, of Registrant’s principal executive offices) 



Remi Barbier 

President, Chief Executive Officer and Chairman of the Board of Directors 

Cassava Sciences, Inc. 

7801 N Capital of Texas Highway, Suite 260 

Austin, TX 78731 

(512) 501-2444 

(Name, address, including zip code, and telephone number, including area code, of agent for service)



Copies to: 

Alfredo B. D. Silva, Esq.

Morrison & Foerster LLP 

425 Market Street 

San Francisco, CA 94105 

(415) 268-7000 



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 under the Securities Act of 1933, other than securities offered only in connection with dividend


 

or interest reinvestment plans, check the following box.  



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, 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 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, 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, 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 and smaller reporting company in Rule 12b-2 of the Exchange Act.



 

 

 

 



 

 

 

 

Large accelerated filer

Accelerated filer

Non-accelerated filer  

Smaller reporting company

Emerging growth company



 

(Do not check if a smaller reporting company)

 

 



 

 

 

 



 

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

Amount To Be
Registered (1)(2)

Proposed Maximum Offering Price Per Unit

Proposed
Maximum Aggregate Offering Price(1)(2)

Amount of Registration Fee

Common Stock, $0.001 par value per share (3)

-

-

-

-

Preferred Stock, $0.001 par value per share (3)

-

-

-

-

Depositary Shares

-

-

-

-

Warrants (4)

-

-

-

-

Debt Securities

-

-

-

-

Units (5)

-

-

-

-

Total(6)

$200,000,000 (6)

-  (7)

$200,000,000 (5)

$25,960

(8)



 

 

 

 

 

 

(1)

There are being registered hereunder such indeterminate number of shares of common stock and preferred stock, such indeterminate number of depositary shares, such indeterminate number of warrants to purchase common stock, preferred stock and/or debt securities, and such indeterminate principal amount of debt securities as may be sold by the registrant from time to time, which together shall have an aggregate initial offering price not to exceed $200 million.

(2)

We have estimated the amount to be registered and the proposed maximum offering price solely for the purpose of calculating the registration fee pursuant to Rule 457(o) under the Securities Act of 1933, as amended (the “Securities Act”). The amount and price are exclusive of accrued interest, if any, on the debt securities. The amount to be registered and proposed maximum aggregate offering price are not specified as to each class of security pursuant to General Instruction II.D. of Form S-3 under the Securities Act.

(3)

In addition to any securities that may be registered hereunder, we are also registering an indeterminate number of shares of common stock or preferred stock as may be issued upon conversion, exercise or exchange of the securities issued directly hereunder.

(4)

Includes warrants to purchase common stock, warrants to purchase preferred stock and warrants to purchase debt securities.

(5)

The securities registered hereunder may be sold separately, or as units with other securities registered hereby. The proposed maximum offering price per unit will be determined by us in connection with the issuance of the securities.

(6)

In no event will the aggregate offering price of all securities issued from time to time pursuant to this Registration Statement exceed $200 million or the equivalent thereof in one or more foreign currencies, foreign currency units or composite currencies.

(7)

We will determine the proposed maximum offering price per unit in connection with the issuance of the securities and it is not specified as to each class of security pursuant to General Instruction II.D. of Form S-3 under the Securities Act.

(8)

Calculated pursuant to Rule 457(o) under the Securities Act. Pursuant to Rule 457(p) under the Securities Act, the registrant is applying $7,738 of the registration fee paid in connection with the Registration Statement on Form S-3 (File No. 333-217319) initially filed on April 14, 2017 and declared effective on July 31, 2017 (the “Prior Registration Statement”) representing a portion of the total amount of the filing fee associated with the unsold securities registered under the Prior Registration Statement, to offset $7,738 of the registration fee due hereunder.



 

 

 

 

 

 



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 this Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine. 

 




 

STATEMENT PURSUANT TO RULE 429(b)



The registrant is filing a base prospectus in this registration statement pursuant to Rule 429 under the Securities Act in order to satisfy the requirements of the Securities Act and the rules and regulations thereunder for the offering, issuance and sale by the registrant of up to a maximum aggregate offering price of $200,000,000 of the registrant’s common stock, preferred stock, debt securities, warrants and/or units registered in the Prior Registration Statement. The base prospectus in this registration statement, which is a new registration statement, also constitutes a post-effective amendment to the Prior Registration Statement. Such post-effective amendment shall hereafter become effective concurrently with the effectiveness of this registration statement and in accordance with Section 8(c) of, and Rule 429 under, the Securities Act.  

 


 

EXPLANATORY NOTE



This registration statement contains two prospectuses:

 

 

 

a base prospectus which covers the offering, issuance and sale by the registrant of up to a maximum aggregate offering price of $200,000,000 of the registrants common stock, preferred stock, debt securities, warrants and/or units; and

 



 

 

 

 

 

a sales agreement prospectus supplement covering the offering, issuance and sale by the registrant of up to a maximum aggregate offering price of $100,000,000 of the registrants common stock that may be issued and sold under a Sales Agreement dated March 27, 2020 with SVB Leerink LLC.



The base prospectus immediately follows this explanatory note. The sales agreement prospectus supplement immediately follows the base prospectus. The common stock that may be offered, issued and sold by the registrant under the sales agreement prospectus supplement is included in the $200,000,000 of securities that may be offered, issued and sold by the registrant under the base prospectus.




 

The information in this prospectus is not complete and may be changed. We may not sell the 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 is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted. 



SUBJECT TO COMPLETION, DATED APRIL 9, 2020



PROSPECTUS 



$200,000,000 



Picture 5

Common Stock
Preferred Stock

Depository Shares
Warrants
Debt Securities
Units



 

From time to time, we may offer and sell, in one or more offerings, in amounts, at prices and on terms determined at the time of any such offering, common stock, preferred stock, depository shares, warrants and debt securities, either individually or in units, with a total value of up to $200,000,000.



This prospectus may not be used to sell securities unless accompanied by a prospectus supplement, which will describe the method and the terms of the offering. We will provide you with specific the amount, price and terms of the applicable offered securities in one or more supplements to this prospectus. You should read this prospectus and any supplement carefully before you purchase any of our securities.



Our common stock is listed on the Nasdaq Capital Market under the symbol SAVA. On April 3, 2020, the closing price of our common stock on the Nasdaq Capital Market was $4.80 per share.



 

Investing in our securities involves risk. Please carefully read the information under “Risk Factors” beginning on page 4 for information you should consider before investing in our securities.

 

 

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense. 



 

We may offer the securities in amounts, at prices and on terms determined at the time of offering. We may sell the securities directly to you, through agents we select, or through underwriters and dealers we select. If we use agents, underwriters or dealers to sell the securities, we will name them and describe their compensation in a prospectus supplement. In addition, the underwriters may overallot a portion of the securities. For additional information regarding the methods of sale of our securities, you should refer to the section entitled Plan of Distribution in this prospectus.


 



This prospectus is dated                    , 2020.


 

Table of Contents 

Page 





 



 

ABOUT THIS PROSPECTUS

PROSPECTUS SUMMARY

RISK FACTORS

FORWARD-LOOKING STATEMENTS

USE OF PROCEEDS

DIVIDEND POLICY

DESCRIPTION OF CAPITAL STOCK

DESCRIPTION OF THE DEPOSITARY SHARES

10 

DESCRIPTION OF THE WARRANTS

13 

DESCRIPTION OF THE DEBT SECURITIES

16 

DESCRIPTION OF THE UNITS

27 

PLAN OF DISTRIBUTION

28 

LEGAL MATTERS

31 

EXPERTS

31 

WHERE YOU CAN FIND MORE INFORMATION

31 

INFORMATION INCORPORATED BY REFERENCE

32 



 


 

ABOUT THIS PROSPECTUS



This prospectus is part of a registration statement on Form S-3 that we filed with the Securities and Exchange Commission, or the SEC, using a shelf registration process. Under this shelf process, we may, from time to time, offer or sell any combination of the securities described in this prospectus in one or more offerings up to a total dollar amount of $200,000,000.



This prospectus provides you with a general description of the securities we may offer. Each time we sell securities, we will provide a prospectus supplement that will contain specific information about the terms of that offering. The prospectus supplement may also add to, update or change information contained in the prospectus or in the documents incorporated by reference in the prospectus. To the extent inconsistent, information in this prospectus is superseded by the information in the prospectus supplement.



The prospectus supplement to be attached to the front of this prospectus may describe, as applicable: the terms of the securities offered; the initial public offering price; the price paid for the securities; net proceeds; and the other specific terms related to the offering of the securities.



You should only rely on the information contained or incorporated by reference in this prospectus and any prospectus supplement or issuer free writing prospectus relating to a particular offering. No person has been authorized to give any information or make any representations in connection with this offering other than those contained or incorporated by reference in this prospectus, any accompanying prospectus supplement and any related issuer free writing prospectus in connection with the offering described herein and therein, and, if given or made, such information or representations must not be relied upon as having been authorized by us. Neither this prospectus nor any prospectus supplement nor any related issuer free writing prospectus shall constitute an offer to sell or a solicitation of an offer to buy offered securities in any jurisdiction in which it is unlawful for such person to make such an offering or solicitation. This prospectus does not contain all of the information included in the registration statement. For a more complete understanding of the offering of the securities, you should refer to the registration statement, including its exhibits. You should read the entire prospectus and any prospectus supplement and any related issuer free writing prospectus, as well as the documents incorporated by reference into this prospectus or any prospectus supplement or any related issuer free writing prospectus, before making an investment decision. Neither the delivery of this prospectus or any prospectus supplement or any issuer free writing prospectus nor any sale made hereunder shall under any circumstances imply that the information contained or incorporated by reference herein or in any prospectus supplement or issuer free writing prospectus is correct as of any date subsequent to the date hereof or of such prospectus supplement or issuer free writing prospectus, as applicable.

 

  



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PROSPECTUS SUMMARY



The following summary highlights information contained in this prospectus or incorporated by reference. While we have included what we believe to be the most important information about the company and this offering, the following summary may not contain all the information that may be important to you. You should read this entire prospectus carefully, including the risks of investing discussed under “Risk Factors” beginning on page 4, the information to which we refer you and the information incorporated into this prospectus by reference, for a complete understanding of our business and this offering. References in this prospectus to “our company,” “we,” “our,” “Cassava Sciences” and “us” refer to Cassava Sciences, Inc. 



Cassava Sciences, Inc.

Overview



Cassava Sciences, Inc. is a clinical stage biotechnology company. Our mission is to detect and treat neurodegenerative diseases, such as Alzheimer’s disease. Our novel science is based on stabilizing – but not removing – a critical protein in the brain.



Over the past 10 years, we have combined state-of-the-art technology with new insights in neurobiology to develop novel solutions for Alzheimer’s disease and other neurodegenerative diseases. Our strategy is to leverage our unique scientific/clinical platform to develop a first-in-class program for treating neurodegenerative diseases, such as Alzheimer’s.  



We currently have two clinical-stage biopharmaceutical assets under development:



·

our lead therapeutic product candidate, called PTI-125, for the treatment of Alzheimer’s disease; and



·

our lead investigational diagnostic product candidate, called SavaDx, to detect Alzheimer’s disease from a small sample of blood, possibly years before the overt appearance of clinical symptoms.



Our scientific approach for the treatment of Alzheimer’s disease seeks to simultaneously improve both neurodegeneration and neuroinflammation. We believe our ability to improve multiple vital functions in the brain represents a new, different and crucial approach to address Alzheimer’s disease.



Corporate Information



We were incorporated in Delaware in May 1998. Our principal executive offices are located at 7801 N Capital of Texas Highway, Suite 260, Austin, TX, 78731 and our telephone number at that address is (512) 501-2444.



The securities we may offer



We may offer up to $200 million of common stock, preferred stock, depositary shares, warrants and debt securities in one or more offerings and in any combination. This prospectus provides you with a general description of the securities we may offer. A prospectus supplement, which we will provide each time we offer securities, will describe the specific amounts, prices and terms of these securities.



We may sell the securities to or through underwriters, dealers or agents or directly to purchasers or as otherwise set forth below under Plan of Distribution. We, as well as any agents acting on our behalf, reserve the sole right to accept and to reject in whole or in part any proposed purchase of securities. Each prospectus supplement will set forth the names of any underwriters, dealers, agents or other entities involved in the sale of securities described in that prospectus supplement and any applicable fee, commission or discount arrangements with them.



Common stock



We may offer shares of our common stock, par value $0.001 per share, either alone or underlying other registered securities convertible into our common stock. Holders of our common stock are entitled to receive dividends

2

 


 

declared by our board of directors out of funds legally available for the payment of dividends, subject to rights, if any, of preferred stockholders. Currently, we do not pay a dividend. Each holder of common stock is entitled to one vote per share. The holders of common stock have no preemptive rights.



Preferred stock and depositary shares



We may issue preferred stock in one or more series. Our board of directors or a committee designated by the board will determine the dividend, voting and conversion rights and other provisions at the time of sale. Each series of preferred stock will be more fully described in the particular prospectus supplement that will accompany this prospectus, including redemption provisions, rights in the event of liquidation, dissolution or the winding up of Cassava Sciences, Inc., voting rights and rights to convert into common stock. We may also issue fractional shares of preferred stock that will be represented by depositary shares and depositary receipts. Each particular series of depositary shares will be more fully described in the prospectus supplement that will accompany this prospectus.

 

Warrants



We may issue warrants for the purchase of common stock, preferred stock or debt securities. We may issue warrants independently or together with other securities.



Debt securities



We may offer secured or unsecured obligations in the form of one or more series of senior or subordinated debt. The senior debt securities and the subordinated debt securities are together referred to in this prospectus as the debt securities. The senior debt securities will have the same rank as all of our other unsubordinated debt. The subordinated debt securities generally will be entitled to payment only after payment of our senior debt. Senior debt generally includes all debt for money borrowed by us, except debt that is stated in the instrument governing the terms of that debt to be not senior to, or to have the same rank in right of payment as, or to be expressly junior to, the subordinated debt securities. We may issue debt securities that are convertible into shares of our common stock.



The senior and subordinated debt securities will be issued under separate indentures between us and a trustee. We have summarized the general features of the debt securities to be governed by the indentures. These indentures have been filed as exhibits to the registration statement of which this prospectus forms a part. We encourage you to read these indentures. Instructions on how you can get copies of these documents are provided under the heading Where You Can Find More Information. 



Units



We may offer units comprised of common stock, preferred stock, depository shares, warrants, debt securities, or any combination thereof.



 



3

 


 

RISK FACTORS



An investment in our securities involves a high degree of risk. The prospectus supplement applicable to each offering of our securities will contain a discussion of the risks applicable to an investment in our securities. Prior to making a decision about investing in our securities, you should carefully consider the specific factors discussed under the heading Risk Factors in the applicable prospectus supplement, together with all of the other information contained or incorporated by reference in the prospectus supplement or appearing or incorporated by reference in this prospectus. You should also consider the risks, uncertainties and assumptions discussed under Item 1A, Risk Factors, in our Annual Report on Form 10-K for the fiscal year ended December 31, 2019 which are incorporated herein by reference, and may be amended, supplemented or superseded from time to time by other reports we file with the SEC in the future and any prospectus supplement related to a particular offering. The risks and uncertainties we have described are not the only ones we face. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also affect our operations.



FORWARD-LOOKING STATEMENTS



This prospectus and the registration statement of which it forms a part, any prospectus supplement, any related issuer free writing prospectus and the documents incorporated by reference into these documents contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements deal with our current plans, intentions, beliefs and expectations and statements of future economic performance. Statements containing terms such as believe, do not believe, plan, expect, intend, estimate, anticipate and other phrases of similar meaning are considered to contain uncertainty and are forward-looking statements. In addition, from time to time we or our representatives have made or will make forward-looking statements orally or in writing. Furthermore, such forward-looking statements may be included in various filings that we make with the SEC, or press releases or oral statements made by or with the approval of one of our authorized executive officers. These forward-looking statements are subject to certain known and unknown risks and uncertainties, as well as assumptions that could cause actual results to differ materially from those reflected in these forward-looking statements. Factors that might cause actual results to differ include, but are not limited to, those set forth under Item 1A, Risk Factors, and Item 7, Managements Discussion and Analysis of Financial Condition and Results of Operation, in our most recent Annual Report on Form 10-K and in our future filings made with the SEC. Readers are cautioned not to place undue reliance on any forward-looking statements contained in this prospectus, any prospectus supplement or any related issuer free writing prospectus, which reflect managements opinions only as of their respective dates. Except as required by law, we undertake no obligation to revise or publicly release the results of any revisions to any forward-looking statements. You are advised, however, to consult any additional disclosures we have made or will make in our reports to the SEC on Forms 10-K, 10-Q and 8-K. All subsequent written and oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements contained in this prospectus, any prospectus supplement or any related issuer free writing prospectus.



4

 


 



USE OF PROCEEDS

Unless otherwise indicated in the prospectus supplement, the net proceeds from the sale of securities offered by this prospectus will be used for general corporate purposes and working capital requirements, which may include, among other things, the repayment or repurchase of debt obligations and other capital expenditures. We may also use a portion of the net proceeds for licensing or acquiring intellectual property or technologies to incorporate into our products and product candidates or our research and development programs, capital expenditures, to fund possible investments in and acquisitions of complementary businesses or partnerships. We have not determined the amounts we plan to spend on the areas listed above or the timing of these expenditures, and we have no current plans with respect to acquisitions as of the date of this prospectus. As a result, unless otherwise indicated in the prospectus supplement, our management will have broad discretion to allocate the net proceeds of the offerings. Pending their ultimate use, we intend to invest the net proceeds in a variety of securities, including commercial paper, government and non-government debt securities and/or money market funds that invest in such securities.





DIVIDEND POLICY

Other than our special nondividend distributions in December 2012 and December 2010, we have not paid cash dividends on our common stock. We do not anticipate paying periodic cash dividends on our common stock for the foreseeable future. We intend to use all available cash and liquid assets in the operation and growth of our business. Any future determination about the payment of dividends will be made at the discretion of our board of directors and will depend upon our earnings, if any, capital requirements, operating and financial conditions and on such other factors as our board of directors deems relevant.

 

 

5

 


 

DESCRIPTION OF CAPITAL STOCK

General

 

As of the date of this prospectus, our authorized capital stock consists of 130,000,000 shares. Those shares consist of 120,000,000 shares designated as common stock, $0.001 par value, and 10,000,000 shares designated as preferred stock, $0.001 par value. The only equity securities currently outstanding are shares of common stock. As of December 31, 2019, there were 21,841,810 shares of common stock issued and outstanding.



The following is a summary of the material provisions of the common stock and preferred stock provided for in our amended and restated certificate of incorporation (including the certificate of designation relating to the Series A Preferred) and bylaws. For additional detail about our capital stock, please refer to our amended and restated certificate of incorporation (including the certificate of designation relating to the Series A Preferred), and bylaws, each as amended, copies of which are incorporated by reference into the registration statement to which this prospectus relates.



Common stock



The holders of common stock are entitled to one vote per share on all matters to be voted upon by the stockholders. Subject to preferences that may be applicable to any outstanding preferred stock, the holders of common stock are entitled to receive ratably any dividends that may be declared from time to time by the board of directors out of funds legally available for that purpose. However, we are not currently paying any dividends. In the event of our liquidation, dissolution or winding up, the holders of common stock are entitled to share ratably in all assets remaining after payment of liabilities, subject to prior distribution rights of preferred stock then outstanding. The common stock has no preemptive or conversion rights or other subscription rights. There are no redemption or sinking fund provisions applicable to the common stock. The outstanding shares of common stock are fully paid and non-assessable, and any shares of common stock to be issued upon an offering pursuant to this prospectus and the related prospectus supplement will be fully paid and nonassessable upon issuance.



Our common stock is listed on the Nasdaq Capital Market under the symbol SAVA. The transfer agent and registrar for the common stock is Computershare Shareowner Services LLC. Its address is 330 N Brand Boulevard, Suite 701, Glendale, California, 91203-2389.   



Preferred stock



The following description of preferred stock and the description of the terms of any particular series of preferred stock that we choose to issue hereunder and that will be set forth in the related prospectus supplement are not complete. These descriptions are qualified in their entirety by reference to our amended and restated certificate of incorporation and the certificate of designation relating to that series. The rights, preferences, privileges and restrictions of the preferred stock of each series will be fixed by the certificate of designation relating to that series. The prospectus supplement also will contain a description of certain U.S. federal income tax consequences relating to the purchase and ownership of the series of preferred stock that is described in the prospectus supplement.



We currently have no shares of preferred stock outstanding. Our board of directors has the authority, without further action by the stockholders, to issue up to 10,000,000 shares of preferred stock in one or more series and to fix the rights, preferences, privileges and restrictions granted to or imposed upon the preferred stock. Any or all of these rights may be greater than the rights of the common stock.



The board of directors, without stockholder approval, can issue preferred stock with voting, conversion or other rights that could negatively affect the voting power and other rights of the holders of common stock. Preferred stock could thus be issued quickly with terms calculated to delay or prevent a change in control of us or make it more difficult to remove our management. Additionally, the issuance of preferred stock may have the effect of decreasing the market price of the common stock.

 

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The prospectus supplement for a series of preferred stock will specify:





 

 

 



 

 

the maximum number of shares;



 

 

the designation of the shares;



 

 

the annual dividend rate, if any, whether the dividend rate is fixed or variable, the date or dates on which dividends will accrue, the dividend payment dates, and whether dividends will be cumulative;



 

 

the price and the terms and conditions for redemption, if any, including redemption at our option or at the option of the holders, including the time period for redemption, and any accumulated dividends or premiums;



 

 

the liquidation preference, if any, and any accumulated dividends upon the liquidation, dissolution or winding up of our affairs;



 

 

any sinking fund or similar provision, and, if so, the terms and provisions relating to the purpose and operation of the fund;



 

 

the terms and conditions, if any, for conversion or exchange of shares of any other class or classes of our capital stock or any series of any other class or classes, or of any other series of the same class, or any other securities or assets, including the price or the rate of conversion or exchange and the method, if any, of adjustment;



 

 

the voting rights; and



 

 

any or all other preferences and relative, participating, optional or other special rights, privileges or qualifications, limitations or restrictions.



Preferred stock will be fully paid and nonassessable upon issuance.

 

Anti-takeover effects of some provisions of Delaware law



Provisions of Delaware law and our currently in effect amended and restated certificate of incorporation and amended bylaws could make the acquisition of our company through a tender offer, a proxy contest or other means more difficult and could make the removal of incumbent officers and directors more difficult. We expect these provisions to discourage coercive takeover practices and inadequate takeover bids and to encourage persons seeking to acquire control of our company to first negotiate with our board of directors. We believe that the benefits provided by our ability to negotiate with the proponent of an unfriendly or unsolicited proposal outweigh the disadvantages of discouraging these proposals. We believe the negotiation of an unfriendly or unsolicited proposal could result in an improvement of its terms.



We are subject to Section 203 of the Delaware General Corporation Law, an anti-takeover law. In general, Section 203 prohibits a publicly held Delaware corporation from engaging in a business combination with an interested stockholder for a period of three years following the date the person became an interested stockholder, unless:





 

 

Prior to the date of the transaction, the board of directors of the corporation approved either the business combination or the transaction which resulted in the stockholder becoming an interested stockholder;

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The stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, excluding for purposes of determining the number of shares outstanding (a) shares owned by persons who are directors and also officers, and (b) shares owned by employee stock plans in which employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer; or



 

 

On or subsequent to the date of the transaction, the business combination is approved by the board and authorized at an annual or special meeting of stockholders, and not by written consent, by the affirmative vote of at least two-thirds of the outstanding voting stock that is not owned by the interested stockholder.



Generally, a business combination includes a merger, asset or stock sale, or other transaction resulting in a financial benefit to the interested stockholder. An interested stockholder is a person who, together with affiliates and associates, owns or, within three years prior to the determination of interested stockholder status, did own 15% or more of a corporations outstanding voting securities. We expect the existence of this provision to have an anti-takeover effect with respect to transactions our board of directors does not approve in advance. We also anticipate that Section 203 may also discourage attempts that might result in a premium over the market price for the shares of common stock held by stockholders.



Anti-takeover effects of provisions of our charter documents



Our amended and restated certificate of incorporation provides for our board of directors to be divided into three classes serving staggered terms. Approximately one-third of the board of directors will be elected each year. The provision for a classified board could prevent a party who acquires control of a majority of the outstanding voting stock from obtaining control of the board of directors until the second annual stockholders meeting following the date the acquirer obtains the controlling stock interest. The classified board provision could discourage a potential acquirer from making a tender offer or otherwise attempting to obtain control of our company and could increase the likelihood that incumbent directors will retain their positions. Our amended and restated certificate of incorporation provides that directors may be removed with cause by the affirmative vote of the holders of the outstanding shares of common stock.



Our amended and restated certificate of incorporation requires that certain amendments of the amended and restated certificate of incorporation and certain amendments by the stockholders of our bylaws require the approval of at least 66 2/3% of the voting power of all outstanding stock. These provisions could discourage a potential acquirer from making a tender offer or otherwise attempting to obtain control of our company and could delay changes in our management.



Our amended bylaws establish an advance notice procedure for stockholder proposals to be brought before an annual meeting of our stockholders, including proposed nominations of persons for election to the board of directors. At an annual meeting, stockholders may only consider proposals or nominations specified in the notice of meeting or brought before the meeting by or at the direction of the board of directors. Stockholders may also consider a proposal or nomination by a person who was a stockholder of record on the record date for the meeting, who is entitled to vote at the meeting and who has given to our Secretary timely written notice, in proper form, of his or her intention to bring that business before the meeting. The amended bylaws do not give the board of directors the power to approve or disapprove stockholder nominations of candidates or proposals regarding other business to be conducted at a special or annual meeting of the stockholders. However, our bylaws may have the effect of precluding the conduct of business at a meeting if the proper procedures are not followed. These provisions may also discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirers own slate of directors or otherwise attempting to obtain control of our company.



Our amended bylaws provide that only our board of directors, the chairman of the board, the president or the chief executive officer may call a special meeting of stockholders. Because our stockholders do not have the right to call a special meeting, a stockholder could not force stockholder consideration of a proposal over the opposition of the board of directors by calling a special meeting of stockholders prior to such time as a majority of the board of directors believed or the chief executive officer believed the matter should be considered or until the next annual meeting provided that the requestor met the notice requirements. The restriction on the ability of stockholders to call

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a special meeting means that a proposal to replace the board also could be delayed until the next annual meeting.



Our amended and restated certificate of incorporation does not allow stockholders to act by written consent without a meeting. Without the availability of stockholders actions by written consent, a holder controlling a majority of our capital stock would not be able to amend our bylaws or remove directors without holding a stockholders meeting. The holder would have to obtain the consent of a majority of the board of directors, the chairman of the board or the chief executive officer to call a stockholders meeting and satisfy the notice periods determined by the board of directors.

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DESCRIPTION OF THE DEPOSITARY SHARES

General



At our option, we may elect to offer fractional shares of preferred stock, rather than full shares of preferred stock. If we do elect to offer fractional shares of preferred stock, we will issue receipts for depositary shares and each of these depositary shares will represent a fraction of a share of a particular series of preferred stock, as specified in the applicable prospectus supplement. Each owner of a depositary share will be entitled, in proportion to the applicable fractional interest in shares of preferred stock underlying that depositary share, to all rights and preferences of the preferred stock underlying that depositary share. These rights may include dividend, voting, redemption and liquidation rights.



The shares of preferred stock underlying the depositary shares will be deposited with a bank or trust company selected by us to act as depositary, under a deposit agreement by and among us, the depositary and the holders of the depositary receipts. The depositary will be the transfer agent, registrar and dividend disbursing agent for the depositary shares.



The depositary shares will be evidenced by depositary receipts issued pursuant to the depositary agreement. Holders of depositary receipts agree to be bound by the deposit agreement, which requires holders to take certain actions such as filing proof of residence and paying certain charges.



The summary of terms of the depositary shares contained in this prospectus is not complete, and is subject to modification in any prospectus supplement for any issuance of depositary shares. You should refer to the forms of the deposit agreement, our amended and restated certificate of incorporation and the certificate of designation that are, or will be, filed with the SEC for the applicable series of preferred stock.



Dividends



The depositary will distribute cash dividends or other cash distributions, if any, received in respect of the series of preferred stock underlying the depositary shares to the record holders of depositary receipts in proportion to the number of depositary shares owned by those holders on the relevant record date. The relevant record date for depositary shares will be the same date as the record date for the preferred stock.



In the event of a distribution other than in cash, the depositary will distribute property received by it to the record holders of depositary receipts that are entitled to receive the distribution, unless the depositary determines that it is not feasible to make the distribution. If this occurs, the depositary, with our approval, may adopt another method for the distribution, including selling the property and distributing the net proceeds to the holders.



Liquidation preference



If a series of preferred stock underlying the depositary shares has a liquidation preference, in the event of our voluntary or involuntary liquidation, dissolution or winding up, holders of depositary shares will be entitled to receive the fraction of the liquidation preference accorded each share of the applicable series of preferred stock, as set forth in the applicable prospectus supplement.



Redemption



If a series of preferred stock underlying the depositary shares is subject to redemption, the depositary shares will be redeemed from the proceeds received by the depositary resulting from the redemption, in whole or in part, of the preferred stock held by the depositary. Whenever we redeem any preferred stock held by the depositary, the depositary will redeem, as of the same redemption date, the number of depositary shares representing the preferred stock so redeemed. The depositary will mail the notice of redemption to the record holders of the depositary receipts promptly upon receiving the notice from us and not fewer than 20 or more than 60 days, unless otherwise provided in the applicable prospectus supplement, prior to the date fixed for redemption of the preferred stock.

 

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Voting



Upon receipt of notice of any meeting at which the holders of preferred stock are entitled to vote, the depositary will mail the information contained in the notice of meeting to the record holders of the depositary receipts underlying the preferred stock. Each record holder of those depositary receipts on the record date will be entitled to instruct the depositary as to the exercise of the voting rights pertaining to the amount of preferred stock underlying that holders depositary shares. The record date for the depositary will be the same date as the record date for the preferred stock. The depositary will, to the extent practicable, vote the preferred stock underlying the depositary shares in accordance with these instructions. We will agree to take all action that may be deemed necessary by the depositary in order to enable the depositary to vote the preferred stock in accordance with these instructions. The depositary will not vote the preferred stock to the extent that it does not receive specific instructions from the holders of depositary receipts.



Withdrawal of preferred stock



Owners of depositary shares will be entitled to receive upon surrender of depositary receipts at the principal office of the depositary and payment of any unpaid amount due to the depositary, the number of whole shares of preferred stock underlying their depositary shares.



Partial shares of preferred stock will not be issued. Holders of preferred stock will not be entitled to deposit the shares under the deposit agreement or to receive depositary receipts evidencing depositary shares for the preferred stock.



Amendment and termination of the deposit agreement



The form of depositary receipt evidencing the depositary shares and any provision of the deposit agreement may be amended by agreement between the depositary and us. However, any amendment which materially and adversely alters the rights of the holders of depositary shares, other than fee changes, will not be effective unless the amendment has been approved by at least a majority of the outstanding depositary shares. The deposit agreement may be terminated by the depositary or us only if:





 

 

all outstanding depositary shares have been redeemed; or



 

 

there has been a final distribution of the preferred stock in connection with our dissolution and such distribution has been made to all the holders of depositary shares.



Charges of depositary



We will pay all transfer and other taxes and governmental charges arising solely from the existence of the depositary arrangement. We will also pay charges of the depositary in connection with:





 

 

the initial deposit of the preferred stock;



 

 

the initial issuance of the depositary shares;



 

 

any redemption of the preferred stock; and



 

 

all withdrawals of preferred stock by owners of depositary shares.



Holders of depositary receipts will pay transfer, income and other taxes and governmental charges and other specified charges as provided in the deposit agreement for their accounts. If these charges have not been paid, the depositary may:



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refuse to transfer depositary shares;



 

 

withhold dividends and distributions; and



 

 

sell the depositary shares evidenced by the depositary receipt.



Miscellaneous



The depositary will forward to the holders of depositary receipts all reports and communications we deliver to the depositary that we are required to furnish to the holders of the preferred stock. In addition, the depositary will make available for inspection by holders of depositary receipts at the principal office of the depositary, and at such other places as it may from time to time deem advisable, any reports and communications we deliver to the depositary as the holder of preferred stock.



Neither the depositary nor we will be liable if either the depositary or we are prevented or delayed by law or any circumstance beyond the control of either the depositary or us in performing our respective obligations under the deposit agreement. Our obligations and the depositarys obligations will be limited to the performance in good faith of our or the depositarys respective duties under the deposit agreement. Neither the depositary nor we will be obligated to prosecute or defend any legal proceeding in respect of any depositary shares or preferred stock unless satisfactory indemnity is furnished. The depositary and we may rely on:





 

 

 



 

 

written advice of counsel or accountants;



 

 

information provided by holders of depositary receipts or other persons believed in good faith to be competent to give such information; and



 

 

documents believed to be genuine and to have been signed or presented by the proper party or parties.



Resignation and removal of depositary



The depositary may resign at any time by delivering a notice to us. We may remove the depositary at any time. Any such resignation or removal will take effect upon the appointment of a successor depositary and its acceptance of such appointment. The successor depositary must be appointed within 60 days after delivery of the notice for resignation or removal. The successor depositary must be a bank and trust company having its principal office in the United States of America and having a combined capital and surplus of at least $50,000,000.



Federal income tax consequences



Owners of the depositary shares will be treated for U.S. federal income tax purposes as if they were owners of the preferred stock underlying the depositary shares. As a result, owners will be entitled to take into account for U.S. federal income tax purposes and deductions to which they would be entitled if they were holders of such preferred stock. No gain or loss will be recognized for U.S. federal income tax purposes upon the withdrawal of preferred stock in exchange for depositary shares. The tax basis of each share of preferred stock to an exchanging owner of depositary shares will, upon such exchange, be the same as the aggregate tax basis of the depositary shares exchanged. The holding period for preferred stock in the hands of an exchanging owner of depositary shares will include the period during which such person owned such depositary shares.

 

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DESCRIPTION OF THE WARRANTS

General



We may issue warrants for the purchase of our debt securities, preferred stock or common stock, or any combination thereof. Warrants may be issued independently or together with our debt securities, preferred stock or common stock and may be attached to or separate from any offered securities. Each series of warrants will be issued under a separate warrant agreement to be entered into between us and a bank or trust company, as warrant agent. The warrant agent will act solely as our agent in connection with the warrants. The warrant agent will not have any obligation or relationship of agency or trust for or with any holders or beneficial owners of warrants. This summary of certain provisions of the warrants is not complete. For the terms of a particular series of warrants, you should refer to the prospectus supplement for that series of warrants and the warrant agreement for that particular series.



Debt warrants



The prospectus supplement relating to a particular issue of warrants to purchase debt securities will describe the terms of the debt warrants, including the following:





 

 

 



 

 

the title of the debt warrants;



 

 

the offering price for the debt warrants, if any;



 

 

the aggregate number of the debt warrants;



 

 

the designation and terms of the debt securities, including any conversion rights, purchasable upon exercise of the debt warrants;



 

 

if applicable, the date from and after which the debt warrants and any debt securities issued with them will be separately transferable;



 

 

the principal amount of debt securities that may be purchased upon exercise of a debt warrant and the exercise price for the warrants, which may be payable in cash, securities or other property;



 

 

the dates on which the right to exercise the debt warrants will commence and expire;



 

 

if applicable, the minimum or maximum amount of the debt warrants that may be exercised at any one time;



 

 

whether the debt warrants represented by the debt warrant certificates or debt securities that may be issued upon exercise of the debt warrants will be issued in registered or bearer form;



 

 

information with respect to book-entry procedures, if any; the currency or currency units in which the offering price, if any, and the exercise price are payable;



 

 

if applicable, a discussion of material U.S. federal income tax considerations;



 

 

the antidilution provisions of the debt warrants, if any;



 

 

the redemption or call provisions, if any, applicable to the debt warrants;



 

 

any provisions with respect to the holders right to require us to repurchase the warrants upon a change in control or similar event; and



 

 

any additional terms of the debt warrants, including procedures, and limitations relating to the exchange, exercise and settlement of the debt warrants.

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Debt warrant certificates will be exchangeable for new debt warrant certificates of different denominations. Debt warrants may be exercised at the corporate trust office of the warrant agent or any other office indicated in the prospectus supplement. Prior to the exercise of their debt warrants, holders of debt warrants will not have any of the rights of holders of the debt securities purchasable upon exercise and will not be entitled to payment of principal or any premium, if any, or interest on the debt securities purchasable upon exercise.

 

Equity warrants



The prospectus supplement relating to a particular series of warrants to purchase our common stock or preferred stock, including preferred stock underlying depositary shares, will describe the terms of the warrants, including the following:





 

 

the title of the warrants;



 

 

the offering price for the warrants, if any;



 

 

the aggregate number of warrants;



 

 

the designation and terms of the common stock or preferred stock that may be purchased upon exercise of the warrants;



 

 

if applicable, the designation and terms of the securities with which the warrants are issued and the number of warrants issued with each security;



 

 

if applicable, the date from and after which the warrants and any securities issued with the warrants will be separately transferable;



 

 

the number of shares of common stock or preferred stock that may be purchased upon exercise of a warrant and the exercise price for the warrants;



 

 

the dates on which the right to exercise the warrants shall commence and expire;



 

 

if applicable, the minimum or maximum amount of the warrants that may be exercised at any one time;



 

 

the currency or currency units in which the offering price, if any, and the exercise price are payable;



 

 

if applicable, a discussion of material U.S. federal income tax considerations;



 

 

the antidilution provisions of the warrants, if any;



 

 

the redemption or call provisions, if any, applicable to the warrants;



 

 

any provisions with respect to the holders right to require us to repurchase the warrants upon a change in control or similar event; and



 

 

any additional terms of the warrants, including procedures, and limitations relating to the exchange, exercise and settlement of the warrants.



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Holders of equity warrants will not be entitled:





 

 

to vote, consent or receive dividends;



 

 

receive notice as stockholders with respect to any meeting of stockholders for the election of our directors or any other matter; or



 

 

exercise any rights as stockholders of us.



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DESCRIPTION OF THE DEBT SECURITIES



The debt securities may be either secured or unsecured and will either be our senior debt securities or our subordinated debt securities. The debt securities will be issued under one or more separate indentures between us and a trustee to be specified in an accompanying prospectus supplement. Senior debt securities will be issued under a senior indenture and subordinated debt securities will be issued under a subordinated indenture. Together, the senior indenture and the subordinated indenture are called indentures in this description. This prospectus, together with the applicable prospectus supplement, will describe the terms of a particular series of debt securities.



The following is a summary of selected provisions and definitions of the indentures and debt securities to which any prospectus supplement may relate. The summary of selected provisions of the indentures and the debt securities appearing below is not complete and is subject to, and qualified entirely by reference to, all of the provisions of the applicable indenture and certificates evidencing the applicable debt securities. For additional information, you should look at the applicable indenture and the certificate evidencing the applicable debt security that is filed as an exhibit to the registration statement that includes the prospectus. In this description of the debt securities, the words Cassava Sciences, we, us, or our refer only to Cassava Sciences, Inc. and not to any of our subsidiaries, unless we expressly state or the context otherwise requires.



The following description sets forth selected general terms and provisions of the applicable indenture and debt securities to which any prospectus supplement may relate. Other specific terms of the applicable indenture and debt securities will be described in the applicable prospectus supplement. If any particular terms of the indenture or debt securities described in a prospectus supplement differ from any of the terms described below, then the terms described below will be deemed to have been superseded by that prospectus supplement.



General



Debt securities may be issued in separate series without limitation as to aggregate principal amount. We may specify a maximum aggregate principal amount for the debt securities of any series.



We are not limited as to the amount of debt securities we may issue under the indentures. Unless otherwise provided in a prospectus supplement, a series of debt securities may be reopened to issue additional debt securities of such series.



The prospectus supplement relating to a particular series of debt securities will set forth:





 

 

 



 

 

whether the debt securities are senior or subordinated;



 

 

the offering price;



 

 

the title;



 

 

any limit on the aggregate principal amount;



 

 

the person who shall be entitled to receive interest, if other than the record holder on the record date;



 

 

the date or dates the principal will be payable;



 

 

the interest rate or rates, which may be fixed or variable, if any, the date from which interest will accrue, the interest payment dates and the regular record dates, or the method for calculating the dates and rates;



 

 

the place where payments may be made;

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any mandatory or optional redemption provisions or sinking fund provisions and any applicable redemption or purchase prices associated with these provisions;



 

 

if issued other than in denominations of U.S. $1,000 or any multiple of U.S. $1,000, the denominations in which the debt securities shall be issuable;



 

 

if applicable, the method for determining how the principal, premium, if any, or interest will be calculated by reference to an index or formula;



 

 

if other than U.S. currency, the currency or currency units in which principal, premium, if any, or interest will be payable and whether we or a holder may elect payment to be made in a different currency;



 

 

the portion of the principal amount that will be payable upon acceleration of maturity, if other than the entire principal amount;



 

 

if the principal amount payable at stated maturity will not be determinable as of any date prior to stated maturity, the amount or method for determining the amount which will be deemed to be the principal amount;



 

 

if applicable, whether the debt securities shall be subject to the defeasance provisions described below under Satisfaction and discharge; defeasance or such other defeasance provisions specified in the applicable prospectus supplement for the debt securities;



 

 

any conversion or exchange provisions;



 

 

whether the debt securities will be issuable in the form of a global security;



 

 

any subordination provisions applicable to the subordinated debt securities if different from those described below under Subordinated debt securities; 



 

 

any paying agents, authenticating agents, security registrars or other agents for the debt securities, if other than the trustee;



 

 

any provisions relating to any security provided for the debt securities, including any provisions regarding the circumstances under which collateral may be released or substituted;



 

 

any deletions of, or changes or additions to, the events of default, acceleration provisions or covenants;



 

 

any provisions relating to guaranties for the securities and any circumstances under which there may be additional obligors; and



 

 

any other specific terms of such debt securities.



Unless otherwise specified in the prospectus supplement, the debt securities will be registered debt securities. Debt securities may be sold at a substantial discount below their stated principal amount, bearing no interest or interest at a rate which, at the time of issuance, is below market rates. The U.S. federal income tax considerations applicable to debt securities sold at a discount will be described in the applicable prospectus supplement.



Exchange and transfer



Debt securities may be transferred or exchanged at the office of the security registrar or at the office of any

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transfer agent designated by us.



We will not impose a service charge for any transfer or exchange, but we may require holders to pay any tax or other governmental charges associated with any transfer or exchange.



In the event of any partial redemption of debt securities of any series, we will not be required to:





 

 

issue, register the transfer of, or exchange, any debt security of that series during a period beginning at the opening of business 15 days before the day of mailing of a notice of redemption and ending at the close of business on the day of the mailing; or



 

 

register the transfer of or exchange any debt security of that series selected for redemption, in whole or in part, except the unredeemed portion being redeemed in part.



We will appoint the trustee as the initial security registrar. Any transfer agent, in addition to the security registrar initially designated by us, will be named in the prospectus supplement. We may designate additional transfer agents or change transfer agents or change the office of the transfer agent. However, we will be required to maintain a transfer agent in each place of payment for the debt securities of each series.

  

Global securities



The debt securities of any series may be represented, in whole or in part, by one or more global securities. Each global security will:





 

 

be registered in the name of a depositary, or its nominee, that we will identify in a prospectus supplement;



 

 

be deposited with the depositary or nominee or custodian; and



 

 

bear any required legends.



No global security may be exchanged in whole or in part for debt securities registered in the name of any person other than the depositary or any nominee unless:





 

 

 



 

 

the depositary has notified us that it is unwilling or unable to continue as depositary or has ceased to be qualified to act as depositary;



 

 

an event of default is continuing with respect to the debt securities of the applicable series; or



 

 

any other circumstance described in a prospectus supplement has occurred permitting or requiring the issuance of any such security.



As long as the depositary, or its nominee, is the registered owner of a global security, the depositary or nominee will be considered the sole owner and holder of the debt securities represented by the global security for all purposes under the indentures. Except in the above limited circumstances, owners of beneficial interests in a global security will not be:





 

 

entitled to have the debt securities registered in their names;



 

 

entitled to physical delivery of certificated debt securities; or

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considered to be holders of those debt securities under the indenture.



Payments on a global security will be made to the depositary or its nominee as the holder of the global security. Some jurisdictions have laws that require that certain purchasers of securities take physical delivery of such securities in definitive form. These laws may impair the ability to transfer beneficial interests in a global security.



Institutions that have accounts with the depositary or its nominee are referred to as participants. Ownership of beneficial interests in a global security will be limited to participants and to persons that may hold beneficial interests through participants. The depositary will credit, on its book-entry registration and transfer system, the respective principal amounts of debt securities represented by the global security to the accounts of its participants.

 

Ownership of beneficial interests in a global security will be shown on and effected through records maintained by the depositary, with respect to participants interests, or any participant, with respect to interests of persons held by participants on their behalf.



Payments, transfers and exchanges relating to beneficial interests in a global security will be subject to policies and procedures of the depositary. The depositary policies and procedures may change from time to time. Neither any trustee nor we will have any responsibility or liability for the depositarys or any participants records with respect to beneficial interests in a global security.



Payment and paying agents



Unless otherwise indicated in a prospectus supplement, the provisions described in this paragraph will apply to the debt securities. Payment of interest on a debt security on any interest payment date will be made to the person in whose name the debt security is registered at the close of business on the regular record date. Payment on debt securities of a particular series will be payable at the office of a paying agent or paying agents designated by us. However, at our option, we may pay interest by mailing a check to the record holder. The trustee will be designated as our initial paying agent.



We may also name any other paying agents in a prospectus supplement. We may designate additional paying agents, change paying agents or change the office of any paying agent. However, we will be required to maintain a paying agent in each place of payment for the debt securities of a particular series.



All moneys paid by us to a paying agent for payment on any debt security that remain unclaimed for a period ending the earlier of:





 

 

10 business days prior to the date the money would be turned over to the applicable state; or



 

 

 



 

 

at the end of two years after such payment was due,



will be repaid to us thereafter. The holder may look only to us for such payment.



No protection in the event of a change of control



Unless otherwise indicated in a prospectus supplement with respect to a particular series of debt securities, the debt securities will not contain any provisions that may afford holders of the debt securities protection in the event we have a change in control or in the event of a highly leveraged transaction, whether or not such transaction results in a change in control.



Covenants



Unless otherwise indicated in a prospectus supplement with respect to a particular series of debt securities, the debt securities will not contain any financial or restrictive covenants.



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Consolidation, merger and sale of assets



Unless we indicate otherwise in a prospectus supplement with respect to a particular series of debt securities, we may not consolidate with or merge into any other person (other than a subsidiary of us), in a transaction in which we are not the surviving corporation, or convey, transfer or lease our properties and assets substantially as an entirety to, any person (other than a subsidiary of us), unless:





 

 

 



 

 

the successor entity, if any, is a U.S. corporation, limited liability company, partnership, trust or other business entity;



 

 

the successor entity assumes our obligations on the debt securities and under the indentures;



 

 

immediately after giving effect to the transaction, no default or event of default shall have occurred and be continuing; and



 

 

certain other conditions specified in the indenture are met.



Events of default



Unless we indicate otherwise in a prospectus supplement, the following will be events of default for any series of debt securities under the indentures:



(1)

we fail to pay principal of or any premium on any debt security of that series when due;

(2)

we fail to pay any interest on any debt security of that series for 60 days after it becomes due;

(3)

we fail to deposit any sinking fund payment when due;

(4)

we fail to perform any other covenant in the indenture and such failure continues for 90 days after we are given the notice required in the indentures; and

(5)

certain events involving our bankruptcy, insolvency or reorganization.



Additional or different events of default applicable to a series of debt securities may be described in a prospectus supplement. An event of default of one series of debt securities is not necessarily an event of default for any other series of debt securities.



The trustee may withhold notice to the holders of any default, except defaults in the payment of principal, premium, if any, interest, any sinking fund installment on, or with respect to any conversion right of, the debt securities of such series. However, the trustee must consider it to be in the interest of the holders of the debt securities of such series to withhold this notice.



Unless we indicate otherwise in a prospectus supplement, if an event of default, other than an event of default described in clause (5) above, shall occur and be continuing with respect to any series of debt securities, either the trustee or the holders of at least a 25 percent in aggregate principal amount of the outstanding securities of that series may declare the principal amount and premium, if any, of the debt securities of that series, or if any debt securities of that series are original issue discount securities, such other amount as may be specified in the applicable prospectus supplement, in each case together with accrued and unpaid interest, if any, thereon, to be due and payable immediately.



Unless we indicate otherwise in a prospectus supplement, if an event of default described in clause (5) above shall occur, the principal amount and premium, if any, of all the debt securities of that series, or if any debt securities of that series are original issue discount securities, such other amount as may be specified in the applicable prospectus supplement, in each case together with accrued and unpaid interest, if any, thereon, will automatically become immediately due and payable. Any payment by us on the subordinated debt securities following any such acceleration will be subject to the subordination provisions described below under Subordinated debt securities. 



Notwithstanding the foregoing, each indenture will provide that we may, at our option, elect that the sole remedy for an event of default relating to our failure to comply with our obligations described under the section entitled Reports below or our failure to comply with the requirements of Section 314(a)(1) of the Trust Indenture Act will

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for the first 180 days after the occurrence of such an event of default consist exclusively of the right to receive additional interest on the relevant series of debt securities at an annual rate equal to (i) 0.25% of the principal amount of such series of debt securities for the first 90 days after the occurrence of such event of default and (ii) 0.50% of the principal amount of such series of debt securities from the 91st day to, and including, the 180th day after the occurrence of such event of default, which we call additional interest. If we so elect, the additional interest will accrue on all outstanding debt securities from and including the date on which such event of default first occurs until such violation is cured or waived and shall be payable on each relevant interest payment date to holders of record on the regular record date immediately preceding the interest payment date. On the 181st day after such event of default (if such violation is not cured or waived prior to such 181st day), the debt securities will be subject to acceleration as provided above. In the event we do not elect to pay additional interest upon any such event of default in accordance with this paragraph, the debt securities will be subject to acceleration as provided above.



In order to elect to pay the additional interest as the sole remedy during the first 180 days after the occurrence of any event of default relating to the failure to comply with the reporting obligations in accordance with the preceding paragraph, we must notify all holders of debt securities and the trustee and paying agent of such election prior to the close of business on the first business day following the date on which such event of default occurs. Upon our failure to timely give such notice or pay the additional interest, the debt securities will be immediately subject to acceleration as provided above.



After acceleration, the holders of a majority in aggregate principal amount of the outstanding securities of that series may, under certain circumstances, rescind and annul such acceleration if all events of default, other than the non-payment of accelerated principal, or other specified amounts or interest, have been cured or waived.



Other than the duty to act with the required care during an event of default, the trustee will not be obligated to exercise any of its rights or powers at the request of the holders unless the holders shall have offered to the trustee reasonable indemnity. Generally, the holders of a majority in aggregate principal amount of the outstanding debt securities of any series will have the right to direct the time, method and place of conducting any proceeding for any remedy available to the trustee or exercising any trust or power conferred on the trustee.



A holder of debt securities of any series will not have any right to institute any proceeding under the indentures, or for the appointment of a receiver or a trustee, or for any other remedy under the indentures, unless:

 

(1)

the holder has previously given to the trustee written notice of a continuing event of default with respect to the debt securities of that series;  

(2)

the holders of at least 25 percent in aggregate principal amount of the outstanding debt securities of that series have made a written request and have offered reasonable indemnity to the trustee to institute the proceeding; and

(3)

the trustee has failed to institute the proceeding and has not received direction inconsistent with the original request from the holders of a majority in aggregate principal amount of the outstanding debt securities of that series within 60 days after the original request.



Holders may, however, sue to enforce the payment of principal, premium or interest on any debt security on or after the due date or to enforce the right, if any, to convert any debt security (if the debt security is convertible) without following the procedures listed in (1) through (3) above.



We will furnish the trustee an annual statement from our officers as to whether or not we are in default in the performance of the conditions and covenants under the indenture and, if so, specifying all known defaults.



Modification and waiver



Unless we indicate otherwise in a prospectus supplement, the applicable trustee and we may make modifications and amendments to an indenture with the consent of the holders of a majority in aggregate principal amount of the outstanding securities of each series affected by the modification or amendment.



We may also make modifications and amendments to the indentures for the benefit of holders without their consent, for certain purposes including, but not limited to:

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providing for our successor to assume the covenants under the indenture;



 

 

adding covenants or events of default;



 

 

making certain changes to facilitate the issuance of the securities;



 

 

securing the securities;



 

 

providing for a successor trustee or additional trustees;



 

 

curing any ambiguities or inconsistencies;



 

 

providing for guaranties of, or additional obligors on, the securities;



 

 

permitting or facilitating the defeasance and discharge of the securities; and



 

 

other changes specified in the indenture.



However, neither the trustee nor we may make any modification or amendment without the consent of the holder of each outstanding security of that series affected by the modification or amendment if such modification or amendment would:





 

 

change the stated maturity of any debt security;



 

 

reduce the principal, premium, if any, or interest on any debt security or any amount payable upon redemption or repurchase, whether at our option or the option of any holder, or reduce the amount of any sinking fund payments;



 

 

reduce the principal of an original issue discount security or any other debt security payable on acceleration of maturity;



 

 

change the place of payment or the currency in which any debt security is payable;



 

 

impair the right to enforce any payment after the stated maturity or redemption date;



 

 

if subordinated debt securities, modify the subordination provisions in a materially adverse manner to the holders;



 

 

adversely affect the right to convert any debt security if the debt security is a convertible debt security; or



 

 

change the provisions in the indenture that relate to modifying or amending the indenture.



Satisfaction and discharge; defeasance



We may be discharged from our obligations on the debt securities, subject to limited exceptions, of any series that have matured or will mature or be redeemed within one year if we deposit enough money with the trustee to pay all the principal, interest and any premium due to the stated maturity date or redemption date of the debt securities.



Each indenture contains a provision that permits us to elect either or both of the following:



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we may elect to be discharged from all of our obligations, subject to limited exceptions, with respect to any series of debt securities then outstanding. If we make this election, the holders of the debt securities of the series will not be entitled to the benefits of the indenture, except for the rights of holders to receive payments on debt securities or the registration of transfer and exchange of debt securities and replacement of lost, stolen or mutilated debt securities.



 

 

we may elect to be released from our obligations under some or all of any financial or restrictive covenants applicable to the series of debt securities to which the election relates and from the consequences of an event of default resulting from a breach of those covenants.



 

 

 



To make either of the above elections, we must irrevocably deposit in trust with the trustee enough money to pay in full the principal, interest and premium on the debt securities. This amount may be made in cash and/or U.S. government obligations or, in the case of debt securities denominated in a currency other than U.S. dollars, cash in the currency in which such series of securities is denominated and/or foreign government obligations. As a condition to either of the above elections, for debt securities denominated in U.S. dollars we must deliver to the trustee an opinion of counsel that the holders of the debt securities will not recognize income, gain or loss for U.S. federal income tax purposes as a result of the action.



With respect to debt securities of any series that are denominated in a currency other than United States dollars, foreign government obligations means:





 

 

direct obligations of the government that issued or caused to be issued the currency in which such securities are denominated and for the payment of which obligations its full faith and credit is pledged, or, with respect to debt securities of any series which are denominated in Euros, direct obligations of certain members of the European Union for the payment of which obligations the full faith and credit of such members is pledged, which in each case are not callable or redeemable at the option of the issuer thereof; or



 

 

obligations of a person controlled or supervised by or acting as an agency or instrumentality of a government described in the bullet above the timely payment of which is unconditionally guaranteed as a full faith and credit obligation by such government, which are not callable or redeemable at the option of the issuer thereof.



Reports



The indentures provide that any reports or documents that we file with the SEC pursuant to Section 13 or 15(d) of the Exchange Act will be filed with the trustee within 15 days after the same is filed with the SEC. Documents filed by us with the SEC via the EDGAR system will be deemed filed with the trustee as of the time such documents are filed with the SEC.



Notices



Notices to holders will be given by mail to the addresses of the holders in the security register.

 

Governing law



The indentures and the debt securities will be governed by, and construed under, the laws of the State of New York.



No personal liability of directors, officers, employees and stockholders



No incorporator, stockholder, employee, agent, officer, director or subsidiary of ours will have any liability for any obligations of ours, or because of the creation of any indebtedness under the debt securities, the indentures or supplemental indentures. The indentures provide that all such liability is expressly waived and released as a condition of, and as a consideration for, the execution of such indentures and the issuance of the debt securities.

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Regarding the trustee



The indentures limit the right of the trustee, should it become our creditor, to obtain payment of claims or secure its claims.



The trustee will be permitted to engage in certain other transactions with us. However, if the trustee acquires any conflicting interest, and there is a default under the debt securities of any series for which it is trustee, the trustee must eliminate the conflict or resign.



Subordinated debt securities



The following provisions will be applicable with respect to each series of subordinated debt securities, unless otherwise stated in the prospectus supplement relating to that series of subordinated debt securities.



The indebtedness evidenced by the subordinated debt securities of any series is subordinated, to the extent provided in the subordinated indenture and the applicable prospectus supplement, to the prior payment in full, in cash or other payment satisfactory to the holders of senior debt, of all senior debt, including any senior debt securities.



Upon any distribution of our assets upon any dissolution, winding up, liquidation or reorganization, whether voluntary or involuntary, marshalling of assets, assignment for the benefit of creditors, or in bankruptcy, insolvency, receivership or other similar proceedings, payments on the subordinated debt securities will be subordinated in right of payment to the prior payment in full in cash or other payment satisfactory to holders of senior debt of all senior debt.



In the event of any acceleration of the subordinated debt securities of any series because of an event of default with respect to the subordinated debt securities of that series, holders of any senior debt would be entitled to payment in full in cash or other payment satisfactory to holders of senior debt of all senior debt before the holders of subordinated debt securities are entitled to receive any payment or distribution.



In addition, the subordinated debt securities will be structurally subordinated to all indebtedness and other liabilities of our subsidiaries, including trade payables and lease obligations. This occurs because our right to receive any assets of our subsidiaries upon their liquidation or reorganization, and your right to participate in those assets, will be effectively subordinated to the claims of that subsidiarys creditors, including trade creditors, except to the extent that we are recognized as a creditor of such subsidiary. If we are recognized as a creditor of that subsidiary, our claims would still be subordinate to any security interest in the assets of the subsidiary and any indebtedness of the subsidiary senior to us.



We are required to promptly notify holders of senior debt or their representatives under the subordinated indenture if payment of the subordinated debt securities is accelerated because of an event of default.

 

Under the subordinated indenture, we may also not make payment on the subordinated debt securities if:





 

 

a default in our obligations to pay principal, premium, if any, interest or other amounts on our senior debt occurs and the default continues beyond any applicable grace period, which we refer to as a payment default; or



 

 

any other default occurs and is continuing with respect to designated senior debt that permits holders of designated senior debt to accelerate its maturity, which we refer to as a non-payment default, and the trustee receives a payment blockage notice from us or some other person permitted to give the notice under the subordinated indenture.



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We will resume payments on the subordinated debt securities:





 

 

in case of a payment default, when the default is cured or waived or ceases to exist, and



 

 

in case of a nonpayment default, the earlier of when the default is cured or waived or ceases to exist or 179 days after the receipt of the payment blockage notice.



No new payment blockage period may commence on the basis of a nonpayment default unless 365 days have elapsed from the effectiveness of the immediately prior payment blockage notice. No nonpayment default that existed or was continuing on the date of delivery of any payment blockage notice to the trustee shall be the basis for a subsequent payment blockage notice.



As a result of these subordination provisions, in the event of our bankruptcy, dissolution or reorganization, holders of senior debt may receive more, ratably, and holders of the subordinated debt securities may receive less, ratably, than our other creditors. The subordination provisions will not prevent the occurrence of any event of default under the subordinated indenture.



The subordination provisions will not apply to payments from money or government obligations held in trust by the trustee for the payment of principal, interest and premium, if any, on subordinated debt securities pursuant to the provisions described under the section entitled Satisfaction and discharge; defeasance, if the subordination provisions were not violated at the time the money or government obligations were deposited into trust.



If the trustee or any holder receives any payment that should not have been made to them in contravention of subordination provisions before all senior debt is paid in full in cash or other payment satisfactory to holders of senior debt, then such payment will be held in trust for the holders of senior debt.



Senior debt securities will constitute senior debt under the subordinated indenture.



Additional or different subordination provisions may be described in a prospectus supplement relating to a particular series of debt securities.



Definitions



Designated senior debt means our obligations under any particular senior debt in which the instrument creating or evidencing the same or the assumption or guarantee thereof, or related agreements or documents to which we are a party, expressly provides that such indebtedness shall be designated senior debt for purposes of the subordinated indenture. The instrument, agreement or other document evidencing any designated senior debt may place limitations and conditions on the right of such senior debt to exercise the rights of designated senior debt.



Indebtedness means the following, whether absolute or contingent, secured or unsecured, due or to become due, outstanding on the date of the indenture for such series of securities or thereafter created, incurred or assumed:





 

 

our indebtedness evidenced by a credit or loan agreement, note, bond, debenture or other written obligation;



 

 

all of our obligations for money borrowed;



 

 

all of our obligations evidenced by a note or similar instrument given in connection with the acquisition of any businesses, properties or assets of any kind,



 

 

our obligations:



 

 

as lessee under leases required to be capitalized on the balance sheet of the lessee under generally accepted accounting principles, or

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as lessee under leases for facilities, capital equipment or related assets, whether or not capitalized, entered into or leased for financing purposes;



 

 

all of our obligations under interest rate and currency swaps, caps, floors, collars, hedge agreements, forward contracts or similar agreements or arrangements;



 

 

all of our obligations with respect to letters of credit, bankers acceptances and similar facilities, including reimbursement obligations with respect to the foregoing;



 

 

all of our obligations issued or assumed as the deferred purchase price of property or services, but excluding trade accounts payable and accrued liabilities arising in the ordinary course of business;



 

 

all obligations of the type referred to in the above clauses of another person, the payment of which, in either case, we have assumed or guaranteed, for which we are responsible or liable, directly or indirectly, jointly or severally, as obligor, guarantor or otherwise, or which are secured by a lien on our property; and



 

renewals, extensions, modifications, replacements, restatements and refundings of, or any indebtedness or obligation issued in exchange for, any such indebtedness or obligation described in the above clauses of this definition.



 “Senior debt means the principal of, premium, if any, and interest, including all interest accruing subsequent to the commencement of any bankruptcy or similar proceeding, whether or not a claim for post-petition interest is allowable as a claim in any such proceeding, and rent payable on or in connection with, and all fees and other amounts payable in connection with, our indebtedness. However, senior debt shall not include:





 

 

any debt or obligation if its terms or the terms of the instrument under which or pursuant to which it is issued expressly provide that it shall not be senior in right of payment to the subordinated debt securities or expressly provide that such indebtedness is on the same basis or junior to the subordinated debt securities; or



 

 

debt to any of our subsidiaries, a majority of the voting stock of which is owned, directly or indirectly, by us.



Subsidiary means a corporation more than 50% of the outstanding voting stock of which is owned, directly or indirectly, by us or by one or more or our other subsidiaries or by a combination of us and our other subsidiaries. For purposes of this definition, voting stock means stock or other similar interests which ordinarily has or have voting power for the election of directors, or persons performing similar functions, whether at all times or only so long as no senior class of stock or other interests has or have such voting power by reason of any contingency. 

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DESCRIPTION OF THE UNITS

General



At our option, we may elect to issue units comprised of common stock, preferred stock, depository shares, warrants, debt securities, or any combination thereof. Each unit will be issued so that the holder of the unit is also the holder of each security included in the unit. Thus, the holder of a unit will have the rights and obligations of a holder of each included security. The unit agreement under which a unit is issued may provide that the securities included in the unit may not be held or transferred separately, at any time or at any time before a specified date.



The summary of terms of the units contained in this section of the prospectus is not complete, and is subject to modification in any prospectus supplement for any issuance of units. We will describe in the applicable prospectus supplement the terms of the series of units, including:





 

 

the designation and terms of the units and of the securities comprising the units, including whether and under what circumstances those securities may be held or transferred separately;  



 

 

Any provisions of the governing unit agreement that differ from those described below; and 



 

 

Any provisions for the issuance, settlement, transfer or exchange of the units or of the securities comprising the units. 



In addition, the provisions described under “Description of Capital Stock,” “Description of the Depositary Shares,” “Description of the Warrants” and “Description of the Debt Securities” will apply to each unit and to any common stock, preferred stock, debt security or warrants included in each unit, respectively.



Issuance in Series



We may issue units in such amounts and in such numerous distinct series as we determine.



Enforceability of Rights by Holders of Units



Any unit agent will act solely as our agent under the applicable unit agreement and will not assume any obligation or relationship of agency or trust with any holder of any unit. A single bank or trust company may act as unit agent for more than one series of units. A unit agent will have no duty or responsibility in case of any default by us under the applicable unit agreement or unit, including any duty or responsibility to initiate any proceedings at law or otherwise, or to make any demand upon us. Any holder of a unit may, without the consent of the related unit agent or the holder of any other unit, enforce by appropriate legal action its rights as holder under any security included in the unit.



Title



We, any unit agents and any of their agents may treat the registered holder of any unit certificate as an absolute owner of the units evidenced by that certificate for any purpose and as the person entitled to exercise the rights attaching to the units so requested, despite any notice to the contrary.



Outstanding Units



We have no outstanding units.

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PLAN OF DISTRIBUTION



We may sell the securities offered through this prospectus (1) to or through underwriters or dealers, (2) directly to purchasers, including our affiliates, (3) through agents, or (4) through a combination of any these methods. The securities may be distributed at a fixed price or prices, which may be changed, market prices prevailing at the time of sale, prices related to the prevailing market prices, or negotiated prices. The prospectus supplement will include the following information:





 

 

the terms of the offering;



 

 

the names of any underwriters or agents;



 

 

the name or names of any managing underwriter or underwriters;



 

 

the purchase price of the securities;



 

 

the net proceeds from the sale of the securities;



 

 

any delayed delivery arrangements;



 

 

any underwriting discounts, commissions and other items constituting underwriters compensation;



 

 

any initial public offering price;



 

 

any discounts or concessions allowed or reallowed or paid to dealers; and



 

 

any commissions paid to agents.



Sale through underwriters or dealers



If underwriters are used in the sale, the underwriters will acquire the securities for their own account, including through underwriting, purchase, security lending or repurchase agreements with us. The underwriters may resell the securities from time to time in one or more transactions, including negotiated transactions. Underwriters may sell the securities in order to facilitate transactions in any of our other securities (described in this prospectus or otherwise), including other public or private transactions and short sales. Underwriters may offer securities to the public either through underwriting syndicates represented by one or more managing underwriters or directly by one or more firms acting as underwriters. Unless otherwise indicated in the prospectus supplement, the obligations of the underwriters to purchase the securities will be subject to certain conditions, and the underwriters will be obligated to purchase all the offered securities if they purchase any of them. The underwriters may change from time to time any initial public offering price and any discounts or concessions allowed or reallowed or paid to dealers.



If dealers are used in the sale of securities offered through this prospectus, we will sell the securities to them as principals. They may then resell those securities to the public at varying prices determined by the dealers at the time of resale. The prospectus supplement will include the names of the dealers and the terms of the transaction.



Direct sales and sales through agents



We may sell the securities offered through this prospectus directly. In this case, no underwriters or agents would be involved. Such securities may also be sold through agents designated from time to time. The prospectus supplement will name any agent involved in the offer or sale of the offered securities and will describe any commissions payable to the agent. Unless otherwise indicated in the prospectus supplement, any agent will agree to use its reasonable best efforts to solicit purchases for the period of its appointment.



We may sell the securities directly to institutional investors or others who may be deemed to be underwriters

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within the meaning of the Securities Act with respect to any sale of those securities. The terms of any such sales will be described in the prospectus supplement.

  

Underwriter, dealer or agent discounts and commissions



Underwriters, dealers or agents may receive compensation in the form of discounts, concessions or commissions from us or our purchasers as their agents in connection with the sale of securities. These underwriters, dealers or agents may be considered to be underwriters under the Securities Act. As a result, discounts, commissions, or profits on resale received by the underwriters, dealers or agents may be treated as underwriting discounts and commissions. Each prospectus supplement will identify any such underwriter, dealer or agent, and describe any compensation received by them from us. Any initial public offering price and any discounts or concessions allowed or reallowed or paid to dealers may be changed from time to time. The maximum commission or discount to be received by any underwriter, dealer or agent will not be greater than eight percent (8%) of the maximum gross proceeds of the securities that may be sold under this prospectus.



Delayed delivery contracts



If the prospectus supplement indicates, we may authorize agents, underwriters or dealers to solicit offers from certain types of institutions to purchase securities at the public offering price under delayed delivery contracts. These contracts would provide for payment and delivery on a specified date in the future. The contracts would be subject only to those conditions described in the prospectus supplement. The applicable prospectus supplement will describe the commission payable for solicitation of those contracts.

 

Market making, stabilization and other transactions



Unless the applicable prospectus supplement states otherwise, each series of offered securities will be a new issue and will have no established trading market. We may elect to list any series of offered securities on an exchange. Any underwriters that we use in the sale of offered securities may make a market in such securities, but may discontinue such market making at any time without notice. Therefore, we cannot assure you that the securities will have a liquid trading market.

 

Any underwriter may also engage in stabilizing transactions, syndicate covering transactions and penalty bids in accordance with Rule 104 under the Securities Exchange Act. Stabilizing transactions involve bids to purchase the underlying security in the open market for the purpose of pegging, fixing or maintaining the price of the securities. Syndicate covering transactions involve purchases of the securities in the open market after the distribution has been completed in order to cover syndicate short positions.



Penalty bids permit the underwriters to reclaim a selling concession from a syndicate member when the securities originally sold by the syndicate member are purchased in a syndicate covering transaction to cover syndicate short positions. Stabilizing transactions, syndicate covering transactions and penalty bids may cause the price of the securities to be higher than it would be in the absence of the transactions. The underwriters may, if they commence these transactions, discontinue them at any time.



Derivative transactions and hedging



We, the underwriters or other agents may engage in derivative transactions involving the securities. These derivatives may consist of short sale transactions and other hedging activities. The underwriters or agents may acquire a long or short position in the securities, hold or resell securities acquired and purchase options or futures on the securities and other derivative instruments with returns linked to or related to changes in the price of the securities. In order to facilitate these derivative transactions, we may enter into security lending or repurchase agreements with the underwriters or agents. The underwriters or agents may affect the derivative transactions through sales of the securities to the public, including short sales, or by lending the securities in order to facilitate short sale transactions by others. The underwriters or agents may also use the securities purchased or borrowed from us or others (or, in the case of derivatives, securities received from us in settlement of those derivatives) to directly or indirectly settle sales of the securities or close out any related open borrowings of the securities.

  

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Electronic auctions



We may also make sales through the Internet or through other electronic means. Since we may from time to time elect to offer securities directly to the public, with or without the involvement of agents, underwriters or dealers, while utilizing the Internet or other forms of electronic bidding or ordering systems for the pricing and allocation of such securities, you should pay particular attention to the description of that system we will provide in a prospectus supplement. 



Such electronic system may allow bidders to directly participate, through electronic access to an auction site, by submitting conditional offers to buy that are subject to acceptance by us, and which may directly affect the price or other terms and conditions at which such securities are sold. These bidding or ordering systems may present to each bidder, on a so-called real-time basis, relevant information to assist in making a bid, such as the clearing spread at which the offering would be sold, based on the bids submitted, and whether a bidders individual bids would be accepted, prorated or rejected. For example, in the case of a debt security, the clearing spread could be indicated as a number of basis points above an index treasury note. Of course, many pricing methods can and may also be used.



Upon completion of such an electronic auction process, securities will be allocated based on prices bid, terms of bid or other factors. The final offering price at which securities would be sold and the allocation of securities among bidders would be based in whole or in part on the results of the Internet or other electronic bidding process or auction.



General information



Agents, underwriters, and dealers may be entitled, under agreements entered into with us, to indemnification by us against certain liabilities, including liabilities under the Securities Act.

  

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LEGAL MATTERS



The validity of the securities offered by this prospectus will be passed upon by Morrison & Foerster LLP, San Francisco, California.





EXPERTS



The financial statements of Cassava Sciences, Inc. appearing in its Annual Report (Form 10-K) for the year ended December 31, 2019 have been audited by Ernst & Young LLP, independent registered public accounting firm, as set forth in their report thereon, included therein, and incorporated herein by reference. Such financial statements as of December 31, 2019 have been incorporated herein by reference in reliance upon such report given on the authority of such firm as experts in accounting and auditing.





WHERE YOU CAN FIND MORE INFORMATION



We file annual, quarterly and other reports, proxy statements and other information with the SEC. Our SEC filings are available to the public over the Internet at the SECs website at http://www.sec.gov. You may also read and copy any document we file at the SECs Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the Public Reference Room. Our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K, including any amendments to those reports, and other information that we file with or furnish to the SEC pursuant to Section 13(a) or 15(d) of the Exchange Act can also be accessed free of charge through the Internet. These filings will be available as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC. Information contained on our website is not part of this prospectus.

  



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INFORMATION INCORPORATED BY REFERENCE



The SEC allows us to incorporate by reference into this prospectus certain information we file with it, which means that we can disclose important information by referring you to those documents. The information incorporated by reference is considered to be a part of this prospectus, and information that we file later with the SEC will automatically update and supersede information contained in this prospectus and any accompanying prospectus supplement. We incorporate by reference the documents listed below that we have previously filed with the SEC (excluding any portions of any Form 8-K that are not deemed filed pursuant to the General Instructions of Form 8-K):





 

 

 



 

 

our Annual Report on Form 10-K for the fiscal year ended December 31, 2019, filed on March 26, 2020; and



 

 

the description of our common stock contained in our Registration Statement on Form 8-A as filed with the SEC on March 15, 2000, and any further amendment or report filed hereafter for the purpose of updating such description pursuant to Section 12(b) of the Exchange Act.



We also incorporate by reference into this prospectus additional documents that we may file with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act prior to the completion or termination of the offering, including all such documents we may file with the SEC after the date of the initial registration statement and prior to the effectiveness of the registration statement, but excluding any information deemed furnished and not filed with the SEC. Any statements contained in a previously filed document incorporated by reference into this prospectus is deemed to be modified or superseded for purposes of this prospectus to the extent that a statement contained in this prospectus, or in a subsequently filed document also incorporated by reference herein, modifies or supersedes that statement.



You may request a copy of these filings, at no cost to you, by telephoning us at (512) 501-2444 or by writing us at the following address:



Cassava Sciences, Inc.

7801 N Capital of Texas Highway, Suite 260

Austin, TX 78731

United States of America

Attn: Investor Relations



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The information in this prospectus supplement 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 supplement is not an offer to sell these securities, and we are not soliciting offers to buy these securities, in any state or other jurisdiction where the offer or sale is not permitted.



SUBJECT TO COMPLETION, DATED APRIL 9, 2020



PROSPECTUS SUPPLEMENT 

Picture 1

Cassava Sciences, Inc.

Up to $100,000,000 of Shares 

Common Stock 

 

On March 27, 2020, we entered into a sales agreement with SVB Leerink LLC, or the Agent, relating to the  shares of our common stock, par value $0.001 per share, offered by this prospectus. In accordance with the terms of the sales agreement, we may offer and sell up to $100,000,000 of our common stock from time to time through or to the Agent, as sales agent or principal, by any method deemed to be an at the market offering as defined in Rule 415 promulgated under the Securities Act of 1933, as amended, or the Securities Act.



Our common stock is listed on the Nasdaq Capital Market under the symbol “SAVA.” The last sale price of our common stock on April 3, 2020, as reported by the Nasdaq Capital Market, was $4.80 per share.



There is no arrangement for funds to be received in any escrow, trust or similar arrangement.

 

We will pay the Agent an amount equal to 3.0% of the aggregate sales price received by the Agent from each sale of shares sold through it acting as our sales agent. Subject to the terms and conditions of the sales agreement, the Agent will use its commercially reasonable efforts to sell on our behalf any shares of common stock to be offered by us under the sales agreement.



In connection with the sale of common stock on our behalf, the Agent will be deemed to be an “underwriter” within the meaning of the Securities Act and the compensation to the Agent will be deemed to be an underwriting commission or discount. We have also agreed to provide indemnification and contribution to the Agent with respect to certain liabilities, including liabilities under the Securities Act.



Investing in our common stock involves risks. See “Risk Factors” beginning on page S-5 of this prospectus supplement and page 4 of the accompanying prospectus, and the risks set forth under the caption “Item 1A. Risk Factors” included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2019 and in the documents that are incorporated by reference into this prospectus. 

 

Neither the Securities and Exchange Commission, or the SEC, nor any state securities commission has approved or disapproved of these securities or determined if this prospectus supplement or the accompanying prospectus is truthful or complete. Any representation to the contrary is a criminal offense.  



SVB Leerink



The date of this prospectus supplement is            , 2020.

 

 


 

TABLE OF CONTENTS 

Prospectus Supplement 





 



 



Page

Statement Regarding Forward-Looking Information

S-1

Prospectus Supplement Summary

S-4

Risk Factors

S-7

Use of Proceeds

S-8

Dilution

S-9

Price Range of Common Stock

S-11

Plan of Distribution

S-12

Where You Can Find More Information

S-13

Incorporation of Certain Documents By Reference

S-13

Legal Matters

S-14

Experts

S-14



This prospectus supplement describes the terms of this offering and adds to and updates information contained in the accompanying prospectus. The accompanying prospectus provides more general information, some of which may not apply to this offering. Generally, when we refer to this prospectus, we are referring to this prospectus supplement and the accompanying prospectus combined. To the extent there is a conflict between the information contained in this prospectus supplement, on the one hand, and the information contained in the accompanying prospectus, on the other hand, you should rely on the information contained in this prospectus supplement.

 

You should rely only on the information contained or incorporated by reference in this prospectus. We have not, and the Agent has not, authorized anyone to provide additional information or information different from that contained or incorporated by reference in this prospectus. If anyone provides you with different or inconsistent information, you should not rely on it. This prospectus does not constitute an offer to sell, or a solicitation of an offer to purchase, the securities offered by this prospectus in any jurisdiction where it is unlawful to make such offer or solicitation. Neither the delivery of this prospectus nor the sale of shares of common stock means that information contained or incorporated by reference in this prospectus is correct after its respective dates. These documents do not constitute an offer to sell or solicitation of any offer to buy these shares of common stock in any circumstances under which the offer or solicitation is unlawful.

 

Unless otherwise expressly stated or the context otherwise requires, references in this prospectus to Cassava Sciences, we, us, our or the company are to Cassava Sciences, Inc.

 

 


 

STATEMENT REGARDING FORWARD-LOOKING INFORMATION



This prospectus and the documents incorporated by reference in this prospectus include statements about future events and expectations that constitute forward-looking statements. Such forward-looking statements include, without limitation, statements concerning regulatory filings, development activity and capital expenditures, and capital raising activities. Words such as expects, anticipates, intends, plans, believes, seeks, estimates, and variations of such words and similar expressions are intended to identify such forward-looking statements. Such statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements to be materially different from the results of operations or plans expressed or implied by such forward-looking statements. Such factors include, among other things, unanticipated adverse business developments and adverse changes in general and local economies and business conditions. Although we believe that the assumptions underlying such forward-looking statements are reasonable, any of the assumptions could be inaccurate, and therefore such statements may not prove to be accurate. In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by us or any other person that the results or conditions described in such statements or our objectives and plans will be achieved.

 

The following factors, among others, could cause our future results to differ materially from those expressed in the forward-looking statements:

 

·

Our ability to initiate, conduct or analyze studies with PTI-125 or SavaDx (formerly referred to as PTI-125Dx), our lead product candidates targeted at Alzheimer’s disease and other neurodegenerative diseases;



·

our estimated timeline for announcing top-line results of a Phase 2b study of PTI-125;



·

our estimated timeline for testing clinical samples with SavaDx, our investigational blood-based diagnostic;



·

our intention to conduct additional clinical studies of PTI-125 or SavaDx, the anticipated scope of such studies and our estimated timeline for doing so;



·

the beneficial characteristics, safety, efficacy, and therapeutic effects of our product candidates, such as PTI-125 or SavaDx;



·

the utility of protection, or the sufficiency, of our intellectual property;



·

our potential competitors or competitive products;



·

expected future sources of revenue and capital and increasing cash needs;



·

our continued reliance on third parties to conduct additional clinical studies of our product candidates, and for the manufacture of our product candidates;



·

expectations regarding trade secrets, technological innovations, licensing agreements and outsourcing of certain business functions;



·

our expenses increasing or fluctuations in our financial or operating results;



·

our operating losses and anticipated operating and capital expenditures;



·

expectations regarding the issuance of shares of common stock to employees pursuant to equity compensation awards, net of employment taxes;



S-1

 


 

·

our ability to maintain compliance with the ongoing listing requirements for the Nasdaq Capital Market;



·

the development and maintenance of our internal systems and infrastructure;



·

our need to hire additional personnel and our ability to attract and retain such personnel;



·

existing regulations and regulatory developments in the United States and other jurisdictions;



·

the sufficiency of our current resources to continue to fund our operations;



·

the accuracy of our estimates regarding expenses, capital requirements, and needs for additional financing; and



·

assumptions and estimates used for our disclosures regarding stock-based compensation.



Such forward-looking statements involve risks and uncertainties, including, but not limited to, those risks and uncertainties relating to:



·

difficulties or delays in development, testing, pre-clinical studies, clinical trials (including patient enrollment), regulatory authorization or approval, manufacturing and commercialization of our drug candidates;



·

unexpected adverse side effects or inadequate therapeutic efficacy of our drug candidates that could slow or prevent product approval (including the risk that current and past results of clinical trials are not indicative of future results of clinical trials) or potential post-approval market acceptance;



·

significant issues that may arise related to outsourcing of pre-clinical studies, clinical trials, and formation and manufacturing activities;



·

discussions with potential strategic partners for the development and commercialization of PTI-125 and SavaDx;



·

the successful development of other drug candidates, independently as well as pursuant to our other collaboration agreements, and the continuation of such agreements;



·

the uncertainty of protection of our intellectual property rights or trade secrets;



·

potential infringement of the intellectual property rights of third parties;



·

pursuing in-license and acquisition opportunities;



·

maintenance or third party funding of our collaboration and license agreements;



·

legislation or regulatory actions affecting product pricing, reimbursement or access;



·

significant breakdown or interruption of our information technology and infrastructure;



·

hiring and retaining personnel; and



·

our financial position and our ability to obtain additional financing if necessary.

 

Please also refer to the section entitled Risk Factors in our Annual Report on Form 10-K for the fiscal year ended December 31, 2019 for further information on these and other risks affecting us.

 

We caution you not to place undue reliance on forward-looking statements because our future results may

S-2

 


 

differ materially from those expressed or implied by them. We do not intend to update any forward-looking statement, whether written or oral, relating to the matters discussed in this prospectus, except as required by law.

   

S-3

 


 

PROSPECTUS SUPPLEMENT SUMMARY 

 

This summary highlights information contained elsewhere in this prospectus or incorporated by reference in this prospectus. This summary does not contain all of the information that you should consider before making an investment decision. Before making an investment decision, you should read carefully in its entirety this prospectus, including the matters discussed in “Risk Factors” in this prospectus and our Annual Report on Form 10-K for the fiscal year ended December 31, 2019, as such risk factors may be amended, updated or modified periodically in our reports filed with the SEC and the financial data and related notes and the reports incorporated by reference in this prospectus. 



Company Overview

 

Cassava Sciences, Inc. is a clinical stage biotechnology company. Our mission is to detect and treat neurodegenerative diseases, such as Alzheimer’s disease. Our novel science is based on stabilizing – but not removing – a critical protein in the brain.



Over the past 10 years, we have combined state-of-the-art technology with new insights in neurobiology to develop novel solutions for Alzheimer’s disease and other neurodegenerative diseases. Our strategy is to leverage our unique scientific/clinical platform to develop a first-in-class program for treating neurodegenerative diseases, such as Alzheimer’s.  



We currently have two clinical-stage biopharmaceutical assets under development:



our lead therapeutic product candidate, called PTI-125, for the treatment of Alzheimer’s disease; and



our lead investigational diagnostic product candidate, called SavaDx, to detect Alzheimer’s disease from a small sample of blood, possibly years before the overt appearance of clinical symptoms.



Our scientific approach for the treatment of Alzheimer’s disease seeks to simultaneously improve both neurodegeneration and neuroinflammation. We believe our ability to improve multiple vital functions in the brain represents a new, different and crucial approach to address Alzheimer’s disease.



Corporate Information



We were incorporated in Delaware in May 1998. Our principal executive offices are located at 7801 N Capital of Texas Highway, Suite 260, Austin, TX, 78731 and our telephone number at that address is (512) 501-2444.

 

Additional information regarding our company is set forth in documents on file with the SEC and incorporated by reference in this prospectus, as described below under the sections entitled Where You Can Find More Information and Incorporation of Certain Documents by Reference. 

 

S-4

 


 

The Offering





 

 



 

 

Issuer

 

Cassava Sciences, Inc., a Delaware corporation.

 

 

 

Common stock offered

 

Up to $100 million of our common stock, par value $0.001 per share.



 

 

Common stock to be outstanding immediately after this offering(1)

 

Up to 42,675,143 shares, assuming sales of 20,833,333 shares of our common stock in this offering at an offering price of $4.80 per share, which was the last reported sale price of our common stock on the Nasdaq Capital Market on April 3, 2020. The actual number of shares issued will vary depending on how many shares of our common stock we choose to sell and the prices at which such sales occur.



 

 

Plan of Distribution

 

“At the market offering” that may be made from time to time on the Nasdaq Capital Market or other existing trading market for our common stock through or to the Agent, as sales agent or principal. See “Plan of Distribution”.



 

 

Use of Proceeds

 

We intend to use the net proceeds, if any, from the sale of the shares that we may offer under this prospectus, after deducting commissions and estimated offering expenses, for general corporate purposes and working capital requirements. We may also use a portion of the net proceeds for licensing or acquiring intellectual property or technologies to incorporate into our products and product candidates or our research and development programs, capital expenditures, to fund possible investments in and acquisitions of complementary businesses or partnerships. Pending their ultimate use, we intend to invest the net proceeds in a variety of securities, including commercial paper, government and non-government debt securities and/or money market funds that invest in such securities. See Use of Proceeds.

 

 

 

Risk Factors

 

Before deciding to invest in shares of our common stock, you should read carefully the risks set forth under the caption Risk Factors beginning on page S-5 of this prospectus supplement and page 4 of the accompanying prospectus, and the risks set forth under the caption Item 1A. Risk Factors included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2019 and in the documents that are incorporated by reference into this prospectus for certain considerations relevant to an investment in our common stock.

 

 

 

Nasdaq Capital Market symbol

 

SAVA

 

 

 

Transfer agent and registrar

 

Computershare Shareowner Services LLC



  ___________

(1)

Based on 21,841,810 shares of our common stock outstanding as of December 31, 2019, and excludes, as of that date, the following: 

·

4,504,091 shares of common stock issuable upon exercise of outstanding warrants having a weighted-average exercise price of $1.25 per share;

·

3,210,965 shares of common stock issuable upon exercise of outstanding options having a weighted-average exercise price of $12.27 per share;

S-5

 


 

·

138,055 shares of common stock issuable upon the vesting and settlement of outstanding restricted stock units;

·

277,500 shares of common stock reserved for issuance and available for future grant under our 2018 Omnibus Incentive Plan; and

·

58,017 shares of common stock reserved for issuance and available for future grant under our Employee Stock Purchase Plan.

S-6

 


 

RISK FACTORS

 

An investment in our common stock is subject to risk. Our business, financial condition, and results of operations could be materially adversely affected by any of these risks. The trading price of our common stock could decline due to any of these risks, and you may lose all or part of your investment. Before you decide to invest in our common stock, you should carefully consider the risks described in our Annual Report on Form 10-K for the fiscal year ended December 31, 2019, as such risks may be amended, updated or modified periodically in our reports filed with the SEC, as well as the other information included in and incorporated by reference in this prospectus. 

A substantial number of shares may be sold in the market following this offering, which may depress the market price for our common stock.

Sales of a substantial number of shares of our common stock in the public market following this offering could cause the market price of our common stock to decline. Although there can be no assurance that any of the  $100,000,000 of shares being offered under this prospectus will be sold or the price at which any such shares might be sold, assuming that an aggregate of 20,833,333 shares of our common stock are sold during the term of the sales agreement with SVB Leerink LLC, at a price of $4.80 per share, the last reported sale price of our common stock on the Nasdaq Capital Market on April 3, 2020, upon completion of this offering, based on our shares outstanding as of December 31, 2019, we will have outstanding an aggregate of 42,675,143 shares of common stock, assuming no exercise of outstanding warrants or stock options and no purchases of stock under our employee stock purchase plan. A substantial majority of the outstanding shares of our common stock are, and all of the shares sold in this offering upon issuance will be, freely tradable without restriction or further registration under the Securities Act of 1933, as amended, or the Securities Act, unless these shares are owned or purchased by “affiliates” as that term is defined in Rule 144 under the Securities Act.



We have broad discretion in the use of the net proceeds from this offering and may not use them effectively. 

 

Our management has broad discretion in the application of the net proceeds from this offering, and you will not have the opportunity as part of your investment decision to assess whether the net proceeds are being used appropriately. Our management could spend the net proceeds from this offering in ways that do not improve our results of operations or enhance the value of our common stock. The failure by our management to apply these funds effectively could result in financial losses that could have a material adverse effect on our business, cause the price of our common stock to decline and delay the development of our product candidates. Pending their use, we may invest the net proceeds from this offering in a manner that does not produce income or that loses value.

 

If you purchase shares of common stock sold in this offering, you will incur immediate and substantial dilution. 

 

If you purchase shares of our common stock in this offering, you will experience substantial and immediate dilution in the pro forma net tangible book value per share after giving effect to this offering, based on the assumed public offering price of $4.80 per share, which is the last reported sale price of our common stock on The Nasdaq Capital Market on April 3, 2020, because the price that you pay will be substantially greater than the pro forma net tangible book value per share of the common stock that you acquire. This dilution in pro forma net tangible book value is due in large part to the fact that certain of our earlier investors paid substantially less than the offering price when they purchased shares of our capital stock. For more information, see Dilution. 

You may experience future dilution as a result of future equity offerings or other equity issuances.

In order to raise additional capital, we may in the future offer and issue additional shares of our common stock or other securities convertible into or exchangeable for our common stock. We cannot assure you that we will be able to sell shares or other securities in any other offering at a price per share that is equal to or greater than the price per share paid by investors in this offering, and investors purchasing shares or other securities in the future could have rights superior to existing stockholders. The price per share at which we sell additional shares of our common stock or other securities convertible into or exchangeable for our common stock in future transactions may be higher or lower than the price per share in this offering. In addition, we have also registered all of the shares of common stock

S-7

 


 

that we may issue under our stock option and employee stock purchase plans, and as of December 31, 2019,  3,210,965 shares of common stock were issuable upon the exercise of stock options outstanding under our stock option plans at a weighted average exercise price of $12.27 per share, 277,500 additional shares of common stock were reserved for potential future issuance under our stock option plan, and an aggregate of 58,017 shares of common stock were reserved for potential future issuance under our 2000 Employee Stock Purchase Plan. Further, our Board of Directors has approved, and also recommended approval by our stockholders at the 2020 Annual Meeting of Stockholders to be held on May 7, 2020, an increase of 2,000,000 shares available for issuance under our stock option plan. You will incur dilution upon the grant of any shares pursuant to such plan, upon vesting of any stock awards under any such plan, or upon exercise of any such outstanding options or warrants.  



USE OF PROCEEDS 

 

We intend to use the net proceeds, if any, from the sale of the shares that we may offer under this prospectus, after deducting commissions and estimated offering expenses, for general corporate purposes and working capital requirements. We may also use a portion of the net proceeds for licensing or acquiring intellectual property or technologies to incorporate into our products and product candidates or our research and development programs, capital expenditures, to fund possible investments in and acquisitions of complementary businesses or partnerships. We have not determined the amounts we plan to spend on the areas listed above or the timing of these expenditures, and we have no current plans with respect to acquisitions as of the date of this prospectus. As a result, our management will have broad discretion to allocate the net proceeds from the sale of the shares that we may offer under this prospectus. Pending their ultimate use, we intend to invest the net proceeds in a variety of securities, including commercial paper, government and non-government debt securities and/or money market funds that invest in such securities.

 

S-8

 


 

DILUTION

 

If you invest in our common stock, your interest will be diluted to the extent of the difference between the public offering price per share you pay in this offering and the net tangible book value per share of our common stock immediately after this offering.

   

Net tangible book value per share is determined by subtracting our total liabilities from our total tangible assets, which is total assets less intangible assets, and dividing this amount by the number of shares of common stock outstanding. The historical net tangible book value of our common stock, as of December 31, 2019, was approximately $22.1 million, or $1.01 per share, based on 21,841,810 shares of our common stock outstanding as of December 31, 2019 as reported in our Annual Report on Form 10-K for the fiscal year ended December 31, 2019. Dilution in net tangible book value per share represents the difference between the amount per share paid by purchasers of shares of common stock in this offering and the net tangible book value per share of our common stock immediately after this offering.

   

After giving effect to the sale of shares of common stock in this offering at an assumed offering price of $4.80 per share, and after deducting estimated commissions and offering expenses payable by us, our as adjusted net tangible book value at December 31, 2019 would have been approximately $118.9 million, or $2.79 per share. This represents an immediate dilution of $2.01 per share to new investors purchasing shares of common stock in this offering. The following table illustrates this dilution:  

   



 

 

 

 



 

 

 

 



 

 

 

 

Assumed offering price per share

 

$

4.80

 

Net tangible book value per share as of December 31, 2019

 

$

1.01

 

Increase in net tangible book value per share attributable to investors participating in this offering

 

$

1.78

 

 

 

 

 

 

As adjusted net tangible book value per share after giving effect to this offering

 

$

2.79

 

 

 

 

 

 

As adjusted dilution per share to investors participating in this offering

 

$

2.01

 



The above illustration of dilution per share to investors participating in this offering assumes no exercise of outstanding options to purchase our common stock or outstanding warrants to purchase shares of our common stock. To the extent that any of these outstanding warrants or options are exercised or we issue additional shares under our equity incentive plans, there will be further dilution to new investors. In addition, we may choose to raise additional capital due to market conditions or strategic considerations even if we believe we have sufficient funds for our current or future operating plans. To the extent that additional capital is raised through the sale of equity or convertible debt securities, the issuance of these securities could result in further dilution to our shareholders.



The above discussion and table are based on 21,841,810 shares of our common stock outstanding as of December 31, 2019 and excludes, as of that date, the following:   

·

4,504,091 shares of common stock issuable upon exercise of outstanding warrants having a weighted-average exercise price of $1.25 per share;

·

3,210,965 shares of common stock issuable upon exercise of outstanding options having a weighted-average exercise price of $12.27 per share;

·

138,055 shares of common stock issuable upon the vesting and settlement of outstanding restricted stock units;

·

277,500 shares of common stock reserved for issuance and available for future grant under our 2018 Omnibus Incentive Plan; and

S-9

 


 

·

58,017 shares of common stock reserved for issuance and available for future grant under our Employee Stock Purchase Plan.

S-10

 


 

PRICE RANGE OF OUR COMMON STOCK



Our common stock has been traded on the Nasdaq Capital Market under the symbol SAVA since March 28, 2019, and previously traded under the symbol “PTIE”. The following table sets forth, for the periods indicated, the high and low sales prices for our common stock as reported by the Nasdaq Capital Market.





 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

Common Stock

Price

 

Year ended December 31, 2018

 

 

  Low

 

 

 

  High 

 

First Quarter

 

$

3.88 

 

 

$

12.80 

 

Second Quarter

 

 

2.04 

 

 

 

10.87 

 

Third Quarter

 

 

0.81 

 

 

 

2.92 

 

Fourth Quarter

 

 

0.76 

 

 

 

2.99 

 



 

 

 

 

 

 

 

 

Year ended December 31, 2019

 

 

 

 

 

 

 

 

First Quarter

 

$

0.84 

 

 

 

1.37 

 

Second Quarter

 

 

1.00 

 

 

 

1.40 

 

Third Quarter

 

 

1.03 

 

 

 

1.49 

 

Fourth Quarter

 

 

1.05 

 

 

 

7.20 

 



 

 

 

 

 

 

 

 

Year ending December 31, 2020

 

 

 

 

 

 

 

 

First Quarter

 

$

3.10 

 

 

 

10.95 

 

Second Quarter (through April 3, 2020)

 

 

3.85 

 

 

 

5.27 

 



The closing sale price of our common stock as reported on the Nasdaq Capital Market on April 3, 2020 was $4.80 per share. As of that date there were approximately 33 holders of record of the common stock. This does not include the number of persons whose stock is in nominee or “street name” accounts through brokers. The market price of our common stock has been and may continue to be subject to wide fluctuations in response to a number of events and factors, such as progress in our development programs, quarterly variations in our operating results, announcements of technological innovations or new products by us or our competitors, changes in financial estimates and recommendations by securities analysts, the operating and stock performance of other companies that investors may deem comparable to us, and news reports relating to trends in our markets. These fluctuations, as well as general economic and market conditions, may adversely affect the market price for our common stock.

S-11

 


 

PLAN OF DISTRIBUTION

 

We have entered into a sales agreement with the Agent under which we may issue and sell from time to time shares of our common stock through the Agent, acting as sales agent or principal. Sales of the shares to which this prospectus relates, if any, will be made by any method deemed to be an at the market offering as defined in Rule 415 promulgated under the Securities Act. As our sales agent, the Agent will not engage in any transactions that stabilize our common stock. 

 

The Agent will offer the shares of our common stock subject to the terms and conditions of the sales agreement on a daily basis or as otherwise agreed upon by us and the Agent. We will designate the maximum number of shares or dollar value of common stock to be sold through the Agent on a daily basis or otherwise determine such maximum number together with the Agent. Subject to the terms and conditions of the sales agreement, the Agent will use its commercially reasonable efforts to sell on our behalf all of the shares of common stock so designated or determined. We may instruct the Agent not to sell shares of common stock if the sales cannot be effected at or above the price designated by us in any such instruction. We or the Agent may suspend the offering of shares of common stock being made through the Agent under the sales agreement upon proper notice to the other party.

 

For its service as sales agent in connection with the sale of shares of our common stock that may be offered hereby, we will pay the Agent an amount equal to 3.0% of the aggregate sales price received by the Agent from each sale of shares sold through it acting as our sales agent. The remaining sales proceeds, after deducting any expenses payable by us and any transaction fees imposed by any governmental, regulatory, or self-regulatory organization in connection with the sales, will equal our net proceeds for the sale of such shares. We have also agreed to reimburse the Agent for certain specified expenses, including the fees and disbursements of its legal counsel in an amount not to exceed $50,000, as provided in the sales agreement.

 

The Agent will provide written confirmation to us following the close of trading on the Nasdaq Capital Market each day in which shares of common stock are sold by it for us under the sales agreement. Each confirmation will include the number of shares sold on that day, the gross sales price per share, the compensation payable by us to the Agent and the proceeds to us net of such compensation.

 

Settlement for sales of common stock will occur, unless the parties agree otherwise, on the second business day following the date on which any sales were made in return for payment of the proceeds to us net of compensation paid by us to the Agent. There is no arrangement for funds to be received in an escrow, trust or similar arrangement.

 

We will deliver to the Nasdaq Capital Market copies of this prospectus pursuant to the rules of the Nasdaq Capital Market. Unless otherwise required, we will report at least quarterly the number of shares of common stock sold through the Agent under the sales agreement, the net proceeds to us and the compensation paid by us to the Agent in connection with the sales of common stock.

 

In connection with the sale of the common stock on our behalf, the Agent will be deemed to be an underwriter within the meaning of the Securities Act and the compensation paid to the Agent will be deemed to be underwriting commissions or discounts. We have agreed in the sales agreement to provide indemnification and contribution to the Agent against certain civil liabilities, including liabilities under the Securities Act.

 

In the ordinary course of their business, the Agent and/or its affiliates may perform, investment banking, broker dealer, lending, financial advisory or other services for us for which they have received, or may receive, separate fees.

 

We estimate that the total expenses of the offering payable by us, excluding discounts and commissions payable to the Agent under the sales agreement, will be approximately $180,000.  



The offering of common stock pursuant to the sales agreement will terminate upon the earlier of (1) the sale of all of our shares of common stock provided for in the sales agreement or (2) the termination of the sales agreement, pursuant to its terms, by either the Agent or us.



S-12

 


 

 

WHERE YOU CAN FIND MORE INFORMATION 

 

We file annual, quarterly and other reports, proxy statements and other information with the SEC. Our SEC filings are available to the public over the Internet at the SECs website at http://www.sec.gov. You may also read and copy any document we file at the SECs Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the Public Reference Room. Our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K, including any amendments to those reports, and other information that we file with or furnish to the SEC pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, or the Exchange Act, can also be accessed free of charge through the Internet. These filings will be available as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC.

 

We maintain a web site at www.cassavasciences.com. Information contained on our website is not part of this prospectus or any other document we file with or furnish to the SEC.

 

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE 

 

The SEC allows us to incorporate by reference into this prospectus certain information we file with it, which means that we can disclose important information by referring you to those documents. The information incorporated by reference is considered to be a part of this prospectus, and information that we file later with the SEC will automatically update and supersede information contained in this prospectus. We incorporate by reference the documents listed below that we have previously filed with the SEC (excluding any portions of any Form 8-K that are not deemed filed pursuant to the General Instructions of Form 8-K):



 

 

 



 

 

our Annual Report on Form 10-K for the fiscal year ended December 31, 2019, filed on March 26, 2020; and



 

 

the description of our common stock contained in our Registration Statement on Form 8-A as filed with the SEC on March 15, 2000, and any further amendment or report filed hereafter for the purpose of updating such description pursuant to Section 12(b) of the Exchange Act.



We also incorporate by reference into this prospectus additional documents that we may file with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act prior to the completion or termination of the offering, including all such documents we may file with the SEC after the date of the initial registration statement and prior to the effectiveness of the registration statement, but excluding any information deemed furnished and not filed with the SEC. Any statements contained in a previously filed document incorporated by reference into this prospectus is deemed to be modified or superseded for purposes of this prospectus to the extent that a statement contained in this prospectus, or in a subsequently filed document also incorporated by reference herein, modifies or supersedes that statement.

As explained above in Where You Can Find More Information, these incorporated documents (as well as other documents filed by us under the Exchange Act) are available at the SEC and may be accessed in a number of ways, including online via the Internet.  

You may request a copy of any of the documents described above, at no cost to you, by telephoning us at (512) 501-2444 or by writing us at the following address:

   

Cassava Sciences, Inc.

7801 N Capital of Texas Highway, Suite 260

Austin, TX 78731

United States of America

Attn: Investor Relations

 

S-13

 


 

LEGAL MATTERS 

 

Certain legal matters in connection with this offering will be passed upon for us by Morrison & Foerster LLP, San Francisco, California. Certain legal matters in connection with this offering will be passed upon for the Agent by Duane Morris LLP, New York, New York.  

 

EXPERTS 

 

The financial statements of Cassava Sciences, Inc. appearing in its Annual Report (Form 10-K) for the year ended December 31, 2019 have been audited by Ernst & Young LLP, independent registered public accounting firm, as set forth in their report thereon, included therein, and incorporated herein by reference. Such financial statements as of December 31, 2019 have been incorporated herein by reference in reliance upon such report given on the authority of such firm as experts in accounting and auditing. 

S-14

 


 





$100,000,000

 

 

logo

 

Common Stock 

 

 

 

 

 

 

PROSPECTUS SUPPLEMENT 

 

    







SVB Leerink



 

                     , 2020

 

 


 

Part II



Information Not Required in the Prospectus



Item 14. Other Expenses of Issuance and Distribution



The aggregate estimated (other than the registration fee and FINRA filing fee) expenses which will be paid or have been paid by the Company in connection with a distribution of securities registered hereby are as follows:





 

 

 



 

 

 



 

 

 



Securities and Exchange Commission registration fee

$

25,960 



FINRA filing fee

 

30,500 



Accounting fees and expenses

 

20,000 



Legal fees and expenses

 

85,000 



Printing expenses

 

10,000 



Transfer agent fees and expenses

 

5,000 



Miscellaneous

 

3,540 



Total

$

180,000 



 

 

 



Item 15. Indemnification of Directors and Officers



Our amended and restated certificate of incorporation contains provisions that eliminate, to the maximum extent permitted by the General Corporation Law of the State of Delaware, the personal liability of directors and executive officers for monetary damages for breach of their fiduciary duties as a director or officer. Our amended and restated certificate of incorporation and bylaws provide that we shall indemnify our directors and executive officers and may indemnify our employees and other agents to the fullest extent permitted by the General Corporation Law of the State of Delaware.



Sections 145 and 102(b)(7) of the General Corporation Law of the State of Delaware provide that a corporation may indemnify any person made a party to an action by reason of the fact that he or she was a director, executive officer, employee or agent of the corporation or is or was serving at the request of the corporation against expenses (including attorneys fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him or her in connection with such action if he or she acted in good faith and in a manner he or she 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 or her conduct was unlawful, except that, in the case of an action by or in right of the corporation, no indemnification may generally be made in respect of any claim as to which such person is adjudged to be liable to the corporation.



We have entered into indemnification agreements with our directors and executive officers, in addition to the indemnification provided for in our amended and restated certificate of incorporation and bylaws, and intend to enter into indemnification agreements with any new directors and executive officers in the future.



We have purchased and intend to maintain insurance on behalf of any person who is or was a director or officer of our company against any loss arising from any claim asserted against him or her and incurred by him or her in any such capacity, subject to certain exclusions.



See also the undertakings set out in our response to Item 17 herein.



II-1

 


 

Item 16. Exhibits



The following exhibits are filed herewith or incorporated by reference herein:





 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

Incorporated by Reference

 

 

 

Exhibit No.

 

Description

 

Form

 

Filing Date

 

Exhibit No.

 

Previously Filed

Filed Herewith

1.1

 

 

Sales Agreement, dated March 27, 2020, by and between the Company and SVB Leerlink LLC.

 

 

 

 

 

 

 

X

 

1.2

*

 

Form of Underwriting Agreement

 

 

 

 

 

 

 

 

 

3.1

 

 

Amended and Restated Certificate of Incorporation.

 

10-Q

 

7/29/2005

 

3.1

 

 

 

3.2

 

 

Certificate of Amendment of Amended and Restated Certificate of Incorporation.

 

8-K

 

5/8/2017

 

3.1

 

 

 

3.3

 

 

Certificate of Amendment of Amended and Restated Certificate of Incorporation.

 

10-K

 

3/29/2019

 

3.3

 

 

 

3.4

 

 

Amended and Restated Bylaws.

 

10-K

 

3/29/2019

 

3.4

 

 

 

4.1

 

 

Form of Senior Indenture

 

 

 

 

 

 

 

X

 

4.2

 

 

Form of Subordinated Indenture

 

 

 

 

 

 

 

X

 

4.3

 

 

Form of Senior Debt Security (included in Exhibit 4.1)

 

 

 

 

 

 

 

X

 

4.4

 

 

Form of Subordinated Debt Security (included in Exhibit 4.2)

 

 

 

 

 

 

 

X

 

4.5

*

 

Form of Certificate of Designation

 

 

 

 

 

 

 

 

 

4.6

*

 

Form of Preferred Stock Certificate

 

 

 

 

 

 

 

 

 

4.7

*

 

Form of Deposit Agreement

 

 

 

 

 

 

 

 

 

4.8

*

 

Form of Depositary Receipt (included in Exhibit 4.7)

 

 

 

 

 

 

 

 

 

4.9

*

 

Form of Warrant Agreement

 

 

 

 

 

 

 

 

 

4.10

*

 

Form of Warrant Certificate

 

 

 

 

 

 

 

 

 

5.1

 

 

Opinion of Morrison & Foerster LLP

 

 

 

 

 

 

 

 

X

23.1

 

 

Consent of Independent Registered Public Accounting Firm

 

 

 

 

 

 

 

 

X

23.2

 

 

Consent of Morrison & Foerster LLP (included in Exhibit 5.1)

 

 

 

 

 

 

 

 

X

24.1