fwp
Filed Pursuant to Rule 433
Issuer Free Writing Prospectus dated February 8, 2012
(Relating to Preliminary Prospectus Dated January 25, 2012)
Registration No. 333-174405
This free writing prospectus should be read together with the preliminary prospectus, dated January
25, 2012 (the Preliminary
Prospectus), included in Amendment No. 11 to the Registration Statement on Form S-1 (File No.
333-174405), and the free writing prospectus, dated February 7,
2012 relating to the initial public offering of common stock by Ceres, Inc. References to Ceres, our
company, we, us, and our are used in the manner described in the Preliminary Prospectus.
The following information supplements and updates the information contained in the Preliminary
Prospectus.
The disclosure set forth on the cover of the Preliminary Prospectus relating to the estimated
initial public offering price has been updated in its entirety to read: It is currently estimated
that the initial public offering price per share will be between $16.00 and $17.00.
The disclosure set forth in the Preliminary Prospectus under Prospectus SummaryThe
Offering has been updated in its entirety to read as set forth on Exhibit A.
The disclosure set forth in the Preliminary Prospectus under Prospectus SummarySummary
Consolidated Financial Data has been updated in its entirety to read as set forth on Exhibit
B.
The disclosure set forth in the Preliminary Prospectus under Risk FactorsRisks Related to
this Offering and Ownership of our Common StockA significant portion of our total outstanding
shares of common stock is restricted from immediate resale, but may be sold into the public market
in the near future. If there are substantial sales of our common stock, or the perception that
these sales could occur in the future, the trading price of our common stock could decline has
been updated in its entirety to read as set forth on Exhibit C.
The disclosure set forth in the Preliminary Prospectus under Risk FactorsRisks Related to
this Offering and Ownership of our Common Stock Purchasers in this offering will experience
immediate and substantial dilution in the book value of their investment has been updated in its
entirety to read as set forth on Exhibit D.
The disclosure set forth in the Preliminary Prospectus under Risk FactorsRisks Related to
this Offering and Ownership of our Common Stock Concentration of ownership among our existing
officers, directors and principal stockholders may prevent other stockholders from influencing
significant corporate decisions has been updated in its entirety to read as set forth on
Exhibit E.
The disclosure set forth in the Preliminary Prospectus under Use of Proceeds has been
updated in its entirety to read as set forth on Exhibit F.
The disclosure set forth in the Preliminary Prospectus under Capitalization has been updated
in its entirety to read as set forth on Exhibit G.
The disclosure set forth in the Preliminary Prospectus under Dilution has been updated in
its entirety to read as set forth on Exhibit H.
The disclosure set forth in the Preliminary Prospectus under Selected Consolidated Financial
Data has been updated in its entirety to read as set forth in Exhibit I.
The disclosure set forth in the Preliminary Prospectus under Managements Discussion and
Analysis of Financial Condition and Results of OperationsFair Value of WarrantsLiability
Classified Warrants to Purchase Common Stock has been updated in its entirety to read as set forth
on Exhibit J.
The disclosure set forth in the Preliminary Prospectus under Compensation Discussion and
AnalysisEquity Compensation PlansCeres, Inc. 2010 Stock Option/Stock Issuance PlanShare
Reserve has been updated to read in substance as follows:
Share Reserve. The maximum number of shares of common stock issuable under the 2010 Plan is
585,800, increased by the number of shares underlying awards granted under the 2010 Plan and
predecessor plans that were expired or were otherwise forfeited; provided that no more than
2,676,448 shares may be issued under the plan. As of January 10, 2012, 41,603 shares of
common stock remained available for future issuance.
The disclosure set forth in the Preliminary Prospectus under Principal Stockholders has been
updated in its entirety to read as set forth on Exhibit K.
The disclosure set forth in the Preliminary Prospectus under Description of Capital
Stock has been updated in its entirety to read as set forth on Exhibit L.
The disclosure set forth in the Preliminary Prospectus under Shares Eligible for Future Sale
has been updated in its entirety to read as set forth on Exhibit M.
The issuer has filed a registration statement (including a prospectus) with the SEC for the
offering to which this communication relates. This registration statement can be accessed through
the following link:
http://www.sec.gov/Archives/edgar/data/767884/000095012312001221/z91150b5sv1za.htm. The Company
has also filed a free writing prospectus that can be accessed through the following link:
http://www.sec.gov/Archives/edgar/data/767884/000119312512042371/d296294dfwp.htm. Before you
invest, you should read the prospectus in that registration statement, the free writing prospectus
and other documents we have filed with the SEC for more complete information about us and this
offering. You may get these documents for free by visiting EDGAR on the SEC Web site at
www.sec.gov. Alternatively, we will arrange to send you the prospectus if you request it by
calling us at 1-866-471-2526.
Exhibit A
THE
OFFERING
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Common stock offered |
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5,000,000 shares. |
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Common stock to be outstanding after this offering |
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23,244,874 shares, or 23,994,874 shares if the underwriters
exercise their option to purchase additional shares in full. |
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Use of proceeds |
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We expect to receive net proceeds from this offering of
approximately $72.2 million, based on an assumed initial
public offering price of $16.50 per share, which is the
midpoint of the range set forth on the cover of this prospectus,
after deducting estimated underwriting discounts and commissions
and estimated offering expenses. We intend to use the net
proceeds from this offering for research and development,
capital expenditures, commercial activities, working capital and
other general corporate purposes, which may include acquisitions
of other companies, assets or technologies. See Use of
Proceeds. |
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Proposed Nasdaq Global Market trading symbol |
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CERE |
The number of shares of common stock that will be outstanding
after this offering is based on 18,244,874 shares
outstanding as of January 10, 2012, and excludes:
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2,554,488 shares of common stock issuable upon exercise of
options to purchase our common stock outstanding as of
January 10, 2012, at a weighted average exercise price of
$6.06 per share;
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1,994,868 shares of common stock issuable upon exercise of
warrants to purchase our common stock outstanding as of
January 10, 2012, at a weighted average exercise price of
$20.55 per share;
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66,666 shares of common stock issuable upon exercise of warrants
to purchase our common stock outstanding as of January 10, 2012,
at an exercise price equal to the per share offering price to
the public of our common stock in this initial public offering
plus an amount equal to 10% of such price;
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20,511 shares of common stock issuable upon exercise of
warrants to purchase our preferred stock outstanding as of
January 10, 2012, at an exercise price of $19.50 per share,
that do not expire upon the completion of this offering; these
preferred stock warrants will automatically convert to warrants
to purchase our common stock upon the completion of this
offering;
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41,603 shares of common stock reserved as of
January 10, 2012 for future issuance under our 2010 Stock
Option/Stock Issuance Plan as more fully described in
Compensation Discussion and Analysis Executive
Compensation Equity Compensation
Plans; and
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1,333,333 shares of common stock reserved for future
issuance under our 2011 Equity Incentive Plan, which will become
effective on the day prior to the day upon which we become
subject to the reporting requirements of the Securities Exchange
Act of 1934, as amended, or the Exchange Act.
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Except as otherwise indicated, all information in this
prospectus assumes:
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a 1 for 3 reverse stock split effective on January 24, 2012;
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the automatic conversion of all outstanding shares of our
convertible preferred stock into an aggregate of
15,353,221 shares of common stock effective immediately
prior to the completion of this offering;
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the issuance of 865,542 shares of common stock pursuant to the
automatic conversion of our convertible subordinated notes, or
the Convertible Notes, upon the consummation of this offering,
as described in Certain Relationships and Related Party
Transactions, assuming an initial public offering price of
$16.50 per share, the midpoint of the price range set forth on
the cover of this prospectus; see Capitalization for
a sensitivity analysis on the number of shares to be issued and
outstanding upon the completion of this offering;
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the filing of our amended and restated certificate of
incorporation immediately prior to the completion of this
offering; and
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no exercise by the underwriters of their right to purchase up to
an additional 750,000 shares of common stock at the initial
public offering price.
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Exhibit B
SUMMARY
CONSOLIDATED FINANCIAL DATA
The following table summarizes our consolidated financial data.
In 2009, we changed our fiscal year end from December 31 to
August 31. The change was effective for the eight-month
period ended August 31, 2009. We have derived the following
summary consolidated statement of operations data for the fiscal
year ended December 31, 2008, the eight months ended
August 31, 2009 and the fiscal years ended August 31,
2010 and 2011 from our audited consolidated financial statements
appearing elsewhere in this prospectus. The summary consolidated
financial data for the three month periods ended November 30,
2010 and 2011 has been derived from our unaudited consolidated
financial statements included elsewhere in this prospectus. The
unaudited consolidated financial statements have been prepared
on a basis consistent with our audited consolidated financial
statements and include, in the opinion of management, all
adjustments, consisting only of normal and recurring
adjustments, necessary for a fair presentation of such
consolidated financial data. Historical results are not
necessarily indicative of results for future periods. Results
for interim periods are not necessarily indicative of results
for a full fiscal year. You should read the summary of our
consolidated financial data set forth below together with the
more detailed information contained in Managements
Discussion and Analysis of Financial Condition and Results of
Operations and our consolidated financial statements and
the related notes appearing elsewhere in this prospectus.
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Eight
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Months
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Year Ended
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Ended
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Year Ended
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Three Months Ended
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December 31,
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August 31,
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August 31,
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November 30,
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2008
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2009
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2010
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2011
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2010
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2011
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(Unaudited)
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(In thousands, except share and per share data)
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Consolidated Statement of Operations
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Revenues
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Product sales
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$
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64
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$
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98
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$
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288
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$
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116
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$
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2
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$
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276
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Collaborative research and government grants
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3,880
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2,328
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6,326
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6,500
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1,713
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1,472
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Total revenue
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3,944
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2,426
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6,614
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6,616
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1,715
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1,748
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Cost and operating expenses
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Cost of product sales
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3,777
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2,690
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2,946
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2,492
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1,058
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763
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Research and development
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20,309
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12,397
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16,697
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19,014
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4,293
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5,275
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Selling, general and administrative
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8,784
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6,645
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9,207
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10,008
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2,148
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2,804
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Total cost and operating expenses
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32,870
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21,732
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28,850
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31,514
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7,499
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8,842
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Loss from operations
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(28,926
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(19,306
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(22,236
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)
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(24,898
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(5,784
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(7,094
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)
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Interest expense
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(5
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)
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(153
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(456
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)
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(127
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(111
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)
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Interest income
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2,001
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243
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23
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7
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1
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4
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Other income (expense)
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161
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(152
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)
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(11,020
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)
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1
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(338
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)
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Loss before income taxes
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(26,925
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(18,907
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(22,518
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)
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(36,367
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)
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(5,909
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)
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(7,539
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)
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Income tax benefit (expense)
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148
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211
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(65
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)
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31
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(1
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(1
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Net loss
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$
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(26,777
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$
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(18,696
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$
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(22,583
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$
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(36,336
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$
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(5,910
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$
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(7,540
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)
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Eight
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Months
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Year Ended
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Ended
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Year Ended
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Three Months Ended
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December 31,
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August 31,
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August 31,
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November 30,
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2008
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2009
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2010
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2011
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2010
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2011
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(Unaudited)
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(In thousands, except share and per share data)
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Basic and diluted net loss per share attributable to common
stockholders(1)
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$
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(14.68
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$
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(9.98
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$
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(11.70
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)
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$
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(18.34
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$
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(3.02
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$
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(3.73
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)
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Weighted average outstanding common shares used for net loss per
share attributable to common stockholders:
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Basic and diluted(1)
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1,824,284
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1,873,808
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1,930,395
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1,981,627
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1,957,554
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2,018,939
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Pro forma net loss per share:
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Basic and diluted (unaudited)(2)
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$
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(2.17
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)
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$
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(0.39
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)
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Weighted average outstanding common shares used in computing pro
forma net loss per share:
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Basic and diluted (unaudited)(2)
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17,405,993
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18,237,707
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(1)
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The basic and diluted loss per
share are computed by dividing the net loss attributable to
common stockholders by the weighted average number of common
shares outstanding during the period. As we have losses in all
periods presented, all potentially dilutive common shares
comprising of stock options, warrants, Convertible Notes and
convertible preferred stock are anti-dilutive.
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(2)
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The unaudited pro forma basic and
diluted loss per common share have been computed to give effect
to as of September 1, 2010: (i) the automatic
conversion of all outstanding shares of our convertible
preferred stock into an aggregate of 15,353,226 shares of
common stock immediately prior to the completion of this
offering using the if-converted method, and (ii) the
issuance of 865,542 shares of common stock pursuant to the
automatic conversion of the Convertible Notes issued on
August 1, 2011 upon the consummation of this offering, as
described in Certain Relationships and Related Party
Transactions, assuming an initial public offering price of
$16.50 per share, the midpoint of the price range set forth on
the cover of this prospectus. See Capitalization for
a sensitivity analysis on the number of shares to be issued and
outstanding upon the completion of this offering. Additionally,
the net loss used to compute pro forma basic and diluted net
loss per share includes: (i) mark-to-market adjustments
related to changes in the fair value of common and preferred
stock warrants and Convertible Notes, (ii) adjustment to
reverse the fair value charge on the issuance of Convertible
Notes and (iii) adjustment to reflect the assumed
conversion of Convertible Notes to common stock at a 20%
discount to the initial public offering price. See
Note 1(f) to our consolidated financial statements.
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Our consolidated balance sheet data as of November 30, 2011
is presented:
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on an actual basis;
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on a pro forma basis to give effect to (i) the automatic
conversion of all outstanding shares of our convertible
preferred stock into 15,353,226 shares of our common stock,
(ii) the issuance of 865,542 shares of common stock pursuant to
the automatic conversion of the Convertible Notes upon the
consummation of this offering, as described in Certain
Relationships and Related Party Transactions, assuming an
initial public offering price of $16.50 per share, the midpoint
of the price range set forth on the cover of this prospectus,
and (iii) the reclassification of the common and the
preferred stock warrant liabilities to stockholders
(deficit) equity upon the completion of this offering; and
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on a pro forma as adjusted basis to give effect to the pro forma
adjustments and the sale of 5,000,000 shares of common
stock by us in this offering at an assumed initial public
offering price of $16.50 per share, the midpoint of the price
range set forth on the cover of this prospectus, and after
deducting estimated underwriting discounts and commissions and
estimated offering expenses payable by us.
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As of November 30, 2011
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Pro Forma as
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Actual
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Pro Forma
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Adjusted(1)
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(In thousands)
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(Unaudited)
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Consolidated Balance Sheet Data:
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Cash and cash equivalents
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$
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17,532
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$
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17,532
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$
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89,757
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Total assets
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33,125
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33,125
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105,350
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Total indebtedness (including short-term indebtedness)
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20,319
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|
|
20,319
|
|
|
|
20,319
|
|
Common and preferred stock warrant liabilities
|
|
|
17,514
|
|
|
|
|
|
|
|
|
|
Convertible preferred stock
|
|
|
197,502
|
|
|
|
|
|
|
|
|
|
Total stockholders (deficit) equity
|
|
|
(211,158
|
)
|
|
|
18,038
|
|
|
|
90,263
|
|
|
|
|
(1)
|
|
Each $1.00 increase or decrease in
the assumed initial public offering price of $16.50 per share,
the midpoint of the price range set forth on the cover of this
prospectus, would increase or decrease, as applicable, our cash
and cash equivalents, total assets and total stockholders
(deficit) equity by approximately $4.65 million, assuming
that the number of shares offered by us, as set forth on the
cover of this prospectus, remains the same and after deducting
the estimated underwriting discounts and commissions and
estimated offering expenses payable by us.
|
Exhibit C
A significant
portion of our total outstanding shares of common stock is
restricted from immediate resale, but may be sold into the
public market in the near future. If there are substantial sales
of our common stock, or the perception that these sales could
occur in the future, the trading price of our common stock could
decline.
The trading price of our common stock could decline as a result
of sales of a large number of shares of our common stock in the
public market after this offering. The perception that these
sales could occur may also depress the trading price of our
common stock. Based on the number of shares outstanding as of
January 10, 2012, we will have 23,244,874 shares of
common stock outstanding after the completion of this offering,
assuming an initial public offering price of $16.50, the
midpoint of the price range set forth on the cover of this
prospectus and no exercise of the underwriters right to
purchase additional shares. Of these shares, the
5,000,000 shares of common stock sold in this offering will
be freely tradable in the United States immediately after the
offering, except for any shares purchased by our
affiliates as defined in Rule 144 under the
Securities Act of 1933, as amended, or the Securities Act.
The holders of approximately 18,146,000 shares of common
stock have agreed with the underwriters, subject to certain
exceptions discussed under the section entitled
Underwriting, not to offer, sell, pledge or
otherwise dispose of any of their common stock during the period
beginning on the date of this prospectus and continuing through
the date 180 days after the date of this prospectus
(subject to extension under certain circumstances), except with
the prior written consent of Goldman, Sachs & Co. and
us.
However, Goldman, Sachs & Co. can waive the provisions
of these
lock-up
agreements with our consent and allow these stockholders to sell
their shares at any time. After the expiration of the
180-day
restricted period (subject to extension under certain
circumstances), these shares may be sold in the public market in
the United States, subject to prior registration in the United
States, if required, or reliance upon an exemption from
U.S. registration under Rule 144 or Rule 701
under the Securities Act. See Shares Eligible for
Future Sale.
|
|
|
Number of Shares and
|
|
|
% of Total Outstanding
|
|
Date Available for Sale into Public Market
|
|
5,098,874 or 21.9%
|
|
Immediately after this offering.
|
18,146,000 or 78.1%
|
|
180 days after the date of this prospectus.
|
In addition, as of January 10, 2012, there were
4,636,533 shares of common stock issuable upon the exercise
of outstanding options and warrants that will become eligible
for sale in the public market to the extent permitted by
applicable vesting requirements, the
lock-up
agreements discussed in Underwriting and
Rules 144 (including applicable holding periods) and 701 of
the Securities Act.
Holders owning an aggregate of 17,496,210 shares of common
stock will be entitled, under contracts providing for
registration rights, to require us to register shares of our
common stock owned by them for public sale in the United States,
subject to the restrictions of Rule 144. See
Description of Capital Stock Registration
Rights. In addition, we intend to file a registration
statement to register approximately 3,890,000 shares
previously issued or reserved for future issuance under our
equity compensation plans and agreements. Upon effectiveness of
such registration statement, subject to the satisfaction of
applicable exercise periods and, in certain cases, the
lock-up
agreements discussed in Underwriting, the shares of
common stock issued upon exercise of outstanding options will be
available for immediate resale in the United States in the open
market.
Exhibit D
Purchasers
in this offering will experience immediate and substantial dilution
in the book value of their investment.
The initial public offering price will be substantially higher than the net
tangible book value per share of our outstanding common stock immediately after this offering. Therefore, if you purchase shares of our
common stock in this offering, you will experience immediate and substantial dilution of approximately $12.62 per share in the price you
pay for shares of our common stock as compared to its net tangible book value as of November 30, 2011, assuming an initial public offering
price of $16.50 per share, the midpoint of the price range set forth on the cover page of this prospectus. In addition, following this offering,
purchasers in this offering will have contributed 28.2% of the total consideration paid by our stockholders to purchase shares of common stock,
in exchange for acquiring approximately 21.5% of our total outstanding shares as of November 30, 2011, assuming an initial public offering price
of $16.50 per share, the midpoint of the price range set forth on the cover of this prospectus. To the extent that outstanding options and warrants
to purchase shares of common stock are exercised or if more shares are issued upon conversion of the Convertible Notes than we have assumed, there
will be further dilution. For further information on this
calculation, see the Dilution section of this
prospectus.
Exhibit E
Concentration of
ownership among our existing officers, directors and principal
stockholders may prevent other stockholders from influencing
significant corporate decisions.
Based on the number of shares outstanding as of January 10,
2012, when this offering is completed, our officers, directors
and existing stockholders who hold at least 5% of our stock will
together beneficially own approximately 63.5% of our outstanding
common stock, assuming an initial public offering price of
$16.50 per share, the midpoint of the price range set forth on
the cover of this prospectus, and if the underwriters
option to purchase additional shares is exercised in full, such
persons will beneficially own, in the aggregate, approximately
61.8% of our outstanding common stock. If these officers,
directors and principal stockholders or a group of our principal
stockholders act together, they will be able to exert a
significant degree of influence over our management and affairs
and exercise a significant level of control over all matters
requiring stockholder approval, including the election of
directors and approval of mergers or other business combination
transactions. This concentration of ownership may have the
effect of delaying or preventing a change in control of our
company or changes in management and will make the approval of
certain transactions difficult or impossible without the support
of these stockholders.
Exhibit F
USE OF
PROCEEDS
We estimate that the net proceeds from this offering will be
approximately $72.2 million, assuming an initial public
offering price of $16.50 per share, the midpoint of the price
range set forth on the cover of this prospectus, and after
deducting estimated underwriting discounts and commissions and
estimated offering expenses payable by us.
A $1.00 increase or decrease in the assumed initial public
offering price of $16.50 per share would increase or decrease
the net proceeds from this offering by approximately
$4.65 million, assuming that the number of shares offered
by us, as set forth on the cover of this prospectus, remains the
same and after deducting estimated underwriting discounts and
commissions and estimated offering expenses payable by us. If
the underwriters exercise their option to purchase additional
shares in full, we estimate that our net proceeds will be
approximately $83.7 million, assuming an initial public
offering price of $16.50 per share and after deducting estimated
underwriting discounts and commissions and estimated offering
expenses payable by us.
We intend to use the net proceeds from this offering for the
following:
|
|
|
|
|
Research and development
|
|
$
|
35.0 million
|
|
Capital expenditures primarily relating to breeding stations,
production facilities, systems and agricultural equipment
|
|
$
|
10.0 million
|
|
Commercial activities, including increasing the number of sales
and marketing personnel, expanding our advertising and branding
efforts and pursuing government approvals
|
|
$
|
5.0 million
|
|
Working capital and other general corporate purposes, including
seed production efforts and operating as a public company
|
|
$
|
22.2 million
|
|
We may also use a portion of the net proceeds to expand our
business through acquisitions of other companies, assets or
technologies, which we expect would reduce the amount of net
proceeds available for working capital and other general
corporate purposes. However, we do not have any present
understandings, commitments or agreements to enter into any
potential agreements for any acquisitions. Pending the uses of
the net proceeds of this offering, as described above, we intend
to invest the net proceeds in short-term investment-grade,
interest-bearing securities.
Some of the other principal purposes of this offering are to
create a public market for our common stock, increase our
visibility in the marketplace and provide liquidity to existing
stockholders. Creating a public market for our common stock will
facilitate our ability to raise additional equity in the future
and to use our common stock as a means of attracting and
retaining key employees and as consideration for acquisitions.
Exhibit G
CAPITALIZATION
The following table sets forth our cash and cash equivalents and
our capitalization as of November 30, 2011:
|
|
|
|
|
on an actual basis;
|
|
|
|
on a pro forma basis to give effect to:
|
(1) the filing of our amended and restated certificate of
incorporation immediately prior to the completion of this
offering;
(2) the automatic conversion of all outstanding shares of
our convertible preferred stock into an aggregate of
15,353,226 shares of common stock immediately prior to the
completion of this offering;
(3) the issuance of 865,542 additional shares of
common stock pursuant to the automatic conversion of the
Convertible Notes upon the consummation of this offering, as
described in Certain Relationships and Related Party
Transactions, assuming an initial public offering price of
$16.50 per share, the midpoint of the price range set forth on
the cover of this prospectus; and
(4) the reclassification of the common stock warrant
liability and the convertible preferred stock warrant liability
to stockholders (deficit) equity upon the completion of
this offering.
|
|
|
|
|
on a pro forma as adjusted basis to give effect to the pro forma
adjustments and the sale of 5,000,000 shares of common
stock by us in this offering at an assumed initial public
offering price of $16.50 per share, the midpoint of the price
range set forth on the cover of this prospectus, and after
deducting estimated underwriting discounts and commissions and
estimated offering expenses payable by us.
|
The pro forma and pro forma as adjusted information below is
illustrative only and our capitalization following the
completion of this offering will be adjusted based on the actual
initial public offering price and other terms of this offering
determined at pricing. The following table also reflects the 1
for 3 reverse stock split of our outstanding common stock
effected on January 24, 2012. You should read this table
together with Managements Discussion and Analysis of
Financial Condition and Results of Operations and our
consolidated financial statements and the accompanying notes
appearing elsewhere in this prospectus.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of November 30, 2011
|
|
|
|
|
|
|
|
|
|
Pro Forma as
|
|
|
|
Actual
|
|
|
Pro Forma
|
|
|
Adjusted(1)
|
|
|
|
(Unaudited)
|
|
|
|
(In thousands, except per share data)
|
|
|
Cash and cash equivalents
|
|
$
|
17,532
|
|
|
$
|
17,532
|
|
|
$
|
89,757
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term debt, less current portion
|
|
$
|
3,417
|
|
|
$
|
3,417
|
|
|
$
|
3,417
|
|
Preferred stock warrant liabilities
|
|
|
290
|
|
|
|
|
|
|
|
|
|
Common stock warrant liabilities
|
|
|
17,224
|
|
|
|
|
|
|
|
|
|
Convertible notes
|
|
|
14,180
|
|
|
|
|
|
|
|
|
|
Convertible preferred stock, $0.01 par value; 50,854,383
authorized, 46,059,819 shared issued and outstanding,
actual; no shares authorized, issued or outstanding, pro forma
and pro forma as adjusted
|
|
|
197,502
|
|
|
|
|
|
|
|
|
|
Stockholders equity (deficit):
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred Stock, $0.01 par value; no shares authorized, issued
and outstanding, actual; 10,000,000 shares authorized, pro
forma and pro forma as adjusted; no shares issued and
outstanding, pro forma and pro forma as adjusted
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Stock, $0.01 par value; 25,000,000 shares
authorized, actual; 2,026,111 shares issued and
outstanding, actual; 490,000,000 shares authorized, pro
forma and pro forma as adjusted; 18,244,879 shares issued
and outstanding, pro forma; 23,244,879 shares issued and
outstanding, pro forma as adjusted(2)
|
|
|
20
|
|
|
|
182
|
|
|
|
232
|
|
Additional paid-in capital
|
|
|
8,952
|
|
|
|
238,087
|
|
|
|
310,262
|
|
Accumulated other comprehensive loss
|
|
|
73
|
|
|
|
73
|
|
|
|
73
|
|
Accumulated deficit
|
|
|
(220,203
|
)
|
|
|
(220,304
|
)
|
|
|
(220,304
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total stockholders (deficit) equity
|
|
|
(211,158
|
)
|
|
|
18,038
|
|
|
|
90,263
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total capitalization
|
|
$
|
21,455
|
|
|
$
|
21,455
|
|
|
$
|
93,680
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
A $1.00 increase or decrease in the assumed initial public
offering price of $16.50 per share, the midpoint of the price
range set forth on the cover of this prospectus, would increase
or decrease each of cash and cash equivalents, total
stockholders (deficit) equity and total capitalization by
$4.65 million, assuming that the number of shares offered
by us, as set forth on the cover of this prospectus, remains the
same, and after deducting estimated underwriting discounts and
commissions and estimated offering expenses payable by us. Each
increase of 1.0 million shares in the number of shares of
common stock offered by us would increase each of cash and cash
equivalents, total stockholders (deficit) equity and total
capitalization by $15.3 million, assuming an initial public
offering price of $16.50 per share, the midpoint of the price
range set forth on the cover of this prospectus. Similarly, each
decrease of 1.0 million shares in the number of shares
offered by us would decrease each of cash and cash equivalents,
total stockholders (deficit) equity and total
capitalization by $15.3 million. If the underwriters
option to purchase additional shares was exercised in full, pro
forma as adjusted cash and cash equivalents, stockholders
(deficit) equity, total capitalization, and shares issued and
outstanding as of November 30, 2011, would be
$101.3 million, $101.8 million, $105.2 million
and 23,994,879, respectively. |
The table above does not include:
|
|
|
|
|
2,557,363 shares of common stock issuable upon exercise of
options to purchase our common stock outstanding as of
November 30, 2011 at a weighted average exercise price of
$6.06 per share;
|
|
|
|
|
|
1,994,868 shares of common stock issuable upon the exercise
of warrants to purchase our common stock outstanding as of
November 30, 2011 at a weighted average exercise price of
$20.55 per share that do not expire on the completion of this
offering;
|
|
|
|
20,511 shares of common stock issuable upon exercise of
warrants to purchase our preferred stock outstanding as of
November 30, 2011 at an exercise price of $19.50 per share
that do not expire on the completion of this offering; these
preferred stock warrants will automatically convert to common
stock warrants upon the completion of this offering;
|
|
|
|
38,728 shares of common stock reserved as of
November 30, 2011 for future issuance under our 2010 Stock
Option/Stock Issuance Plan as more fully described in
Compensation Discussion and Analysis Executive
Compensation Equity Compensation
Plans; and
|
|
|
|
1,333,333 shares of common stock reserved for future
issuance under our 2011 Equity Incentive Plan, which will become
effective on the day prior to the day upon which we become
subject to the reporting requirements of the Exchange Act.
|
The table above also does not include:
|
|
|
|
|
66,666 shares of common stock issuable upon exercise of
warrants to purchase our common stock outstanding as of
January 10, 2012, at an exercise price equal to the per
share offering price to the public in this initial public
offering plus an amount equal to 10% of such price.
|
|
|
|
(2) |
|
The number of shares of our common stock to be issued upon the
conversion of our Convertible Notes depends on the initial
public offering price ïn this offering. As further
described in Certain Relationships and Related Party
Transactions, the terms of the Convertible Notes provide
that the Convertible Notes automatically convert into shares of
our common stock in connection with a qualified initial public
offering at a price per share equal to a 20% discount from the
public offering price. |
|
|
|
The pro forma and pro forma as adjusted share information in the
table above includes the issuance of 865,542 additional shares
of common stock in connection with the conversion of our
Convertible Notes based on an assumed initial public offering
price of $16.50 per share, which is the midpoint of the price
range set forth on the cover of this prospectus. In addition: |
|
|
|
|
|
A $1.00 increase in the assumed initial public
offering price would decrease the total number of shares issued
upon the completion of this offering by 49,460 shares;
|
|
|
|
|
|
A $1.00 decrease in the assumed initial public offering price
would increase the total number of shares issued upon the
completion of this offering by 55,844 shares;
|
|
|
|
A $2.00 increase in the assumed initial public offering price
would decrease the total number of shares issued upon the
completion of this offering by 93,571 shares;
|
|
|
|
A $2.00 decrease in the assumed initial public offering price
would increase the total number of shares issued upon the
completion of this offering by 119,386 shares; and
|
|
|
|
More than a $2.00 decrease in the assumed initial public
offering price would further increase the total number of shares
issued upon the completion of this offering and more than a
$2.00 increase in the assumed initial public offering price
would further decrease the total number of shares issued upon
the completion of this offering.
|
Exhibit H
DILUTION
If you invest in our common stock in this offering, your
ownership interest will be immediately diluted to the extent of
the difference between the initial public offering price per
share of our common stock and the net tangible book value per
share of our common stock immediately after this offering. As of
November 30, 2011, our pro forma net tangible book value
was $18.0 million, or $0.99 per share of our common
stock. Pro forma net tangible book value per share represents
the amount of our total tangible assets less our total
liabilities, divided by the total number of shares of our common
stock outstanding as of November 30, 2011, after giving
effect to (i) the automatic conversion of all of our
outstanding convertible preferred stock into 15,353,226 shares
of common stock upon the completion of this offering,
(ii) the reclassification of preferred stock warrant
liabilities to stockholders equity (deficit) immediately
prior to the completion of this offering, and (iii) the issuance
of 865,542 additional shares of common stock pursuant to
the automatic conversion of the Convertible Notes upon the
consummation of this offering, as described in greater detail in
Certain Relationships and Related Party
Transactions, assuming an initial public offering price of
$16.50 per share, the midpoint of the price range set forth on
the cover of this prospectus.
After giving effect to the above referenced adjustment and the
sale by us of 5,000,000 shares of our common stock in this
offering at an assumed initial public offering price of $16.50
per share, the midpoint of the price range set forth on the
cover of this prospectus, and after deducting estimated
underwriting discounts and commissions and estimated offering
expenses payable by us, our pro forma as adjusted net tangible
book value as of November 30, 2011, would have been
approximately $90.3 million, or $3.88 per share of our
common stock. This amount represents an immediate increase in
our pro forma as adjusted net tangible book value of $2.89 per
share to our existing stockholders and an immediate dilution of
$12.62 per share to new investors purchasing shares of our
common stock in this offering at the initial public offering
price.
The following table illustrates this dilution on a per share
basis:
|
|
|
|
|
|
|
|
|
Assumed initial public offering price per share
|
|
|
|
|
|
$
|
16.50
|
|
Pro forma net tangible book value per share as of
November 30, 2011, before giving effect to this offering
|
|
$
|
0.99
|
|
|
|
|
|
Increase in pro forma net tangible book value per share
attributable to new investors purchasing shares in this offering
|
|
|
2.89
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pro forma as adjusted net tangible book value per share after
giving effect to this offering
|
|
|
|
|
|
|
3.88
|
|
|
|
|
|
|
|
|
|
|
Dilution per share to investors in this offering
|
|
|
|
|
|
$
|
12.62
|
|
|
|
|
|
|
|
|
|
|
A $1.00 increase in the initial public offering price of $16.50
per share, the midpoint of the price range set forth on the
cover of this prospectus, would increase our pro forma as
adjusted net tangible book value per share after this offering
by approximately $0.21 and would increase dilution per share to
new investors by approximately $0.79, assuming that the number
of shares offered by us, as set forth on the cover of this
prospectus, remains the same.
A $1.00 decrease in the initial public offering price of $16.50
per share, the midpoint of the price range set forth on the
cover of this prospectus, would decrease our pro forma as
adjusted net tangible book value per share after this offering
by approximately $0.21 and would decrease dilution per share to
new investors by approximately $0.79, assuming that the number
of shares offered by us, as set forth on the cover of this
prospectus, remains the same.
A $2.00 increase in the initial public offering price of
$16.50 per share, the midpoint of the price range set forth
on the cover of this prospectus, would increase our pro forma as
adjusted net tangible
book value per share after this offering by approximately $0.42
and would increase dilution per share to new investors by
approximately $1.58, assuming that the number of shares offered
by us, as set forth on the cover of this prospectus, remains the
same.
A $2.00 decrease in the initial public offering price of
$16.50 per share, the midpoint of the price range set forth
on the cover of this prospectus, would decrease our pro forma as
adjusted net tangible book value per share after this offering
by approximately $0.41 and would decrease dilution per share to
new investors by approximately $1.59, assuming that the number
shares offered by us, as set forth on the cover of this
prospectus, remains the same.
If the underwriters exercise their option to purchase additional
shares in full, assuming an initial public offering price of
$16.50 per share, the midpoint of the price range set forth on
the cover of this prospectus, the pro forma as adjusted net
tangible book value will increase to $4.24 per share,
representing an immediate increase to existing stockholders of
$3.25 per share and an immediate dilution of $12.26 per share to
new investors.
The following table summarizes, as of November 30, 2011, on
a pro forma as adjusted basis, the number of shares purchased or
to be purchased from us, the total consideration paid or to be
paid to us, and the average price per share paid or to be paid
to us by existing stockholders and new investors purchasing
shares of our common stock in this offering at an assumed
initial public offering price of $16.50 per share, before
deducting estimated underwriting discounts and commissions and
estimated offering expenses payable by us. As the table below
shows, new investors purchasing shares of our common stock in
this offering will pay an average price per share substantially
higher than our existing stockholders paid.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average
|
|
|
|
Share Purchased
|
|
|
Total Consideration
|
|
|
Price per
|
|
|
|
Number
|
|
|
Percent
|
|
|
Amount
|
|
|
Percent
|
|
|
Share
|
|
|
Existing stockholders
|
|
|
18,244,879
|
|
|
|
78.5
|
%
|
|
$
|
210,518,000
|
|
|
|
71.8
|
%
|
|
$
|
11.54
|
|
New investors
|
|
|
5,000,000
|
|
|
|
21.5
|
|
|
|
82,500,000
|
|
|
|
28.2
|
|
|
$
|
16.50
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
23,244,879
|
|
|
|
100.0
|
%
|
|
$
|
293,018,000
|
|
|
|
100.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
A $1.00 increase or decrease in the assumed initial public
offering price of $16.50 per share, the midpoint of the price
range set forth on the cover of this prospectus, would increase
or decrease the total consideration paid to us by new investors
by $5.0 million and increase or decrease the percent of
total consideration paid to us by new investors by approximately
1.2%, assuming that the number of shares offered by us, as set
forth on the cover of this prospectus, remains the same.
The above discussion and tables are based on our common stock
outstanding as of November 30, 2011, after giving effect to
(i) the automatic conversion of all outstanding shares of
our convertible preferred stock into an aggregate of
15,353,226 shares of common stock immediately prior to the
completion of this offering; and (ii) the issuance of
865,542 additional shares of common stock pursuant to the
automatic conversion of the Convertible Notes upon the
consummation of this offering, as described in greater detail in
Certain Relationships and Related Party
Transactions, assuming an initial public offering price of
$16.50 per share, the midpoint of the price range set forth on
the cover of this prospectus.
This number excludes:
|
|
|
|
|
2,557,363 shares of common stock issuable upon exercise of
options to purchase our common stock outstanding as of
November 30, 2011 at a weighted average exercise price of
$6.06 per share;
|
|
|
|
1,994,868 shares of common stock issuable upon exercise of
warrants to purchase our common stock outstanding as of
November 30, 2011 at a weighted average exercise price of
$20.55 per share that do not expire on the completion of this
offering;
|
|
|
|
|
|
20,511 shares of common stock issuable upon exercise of
warrants to purchase our preferred stock outstanding as of
November 30, 2011 at a weighted average exercise price of
$19.50 per share that do not expire on the completion of this
offering; these preferred stock warrants will automatically
convert to common stock warrants upon the completion of this
offering;
|
|
|
|
38,728 shares of common stock reserved as of
November 30, 2011 for future issuance under our 2010 Stock
Option/Stock Issuance Plan as more fully described in
Compensation Discussion and Analysis Executive
Compensation Equity Compensation
Plans; and
|
|
|
|
1,333,333 shares of common stock reserved for future
issuance under our 2011 Equity Incentive Plan, which will become
effective on the day prior to the day upon which we become
subject to the reporting requirements of the Securities Exchange
Act of 1934, as amended, or the Exchange Act.
|
To the extent that any outstanding options or warrants are
exercised, new investors will experience further dilution.
Exhibit I
SELECTED
CONSOLIDATED FINANCIAL DATA
In 2009, we changed our fiscal year end from December 31 to
August 31. The change was effective for the eight-month
period ended August 31, 2009. The selected consolidated
statement of operations data for fiscal year ended
December 31, 2008, the eight months ended August 31,
2009 and the fiscal years ended August 31, 2010 and 2011
and the selected consolidated balance sheet data at
August 31, 2009, 2010, and 2011 are derived from our
audited Consolidated Financial Statements, appearing elsewhere
in this prospectus. The selected consolidated financial data for
the three month periods ended November 30, 2010 and 2011
and as of November 30, 2011 has been derived from our unaudited
consolidated financial statements included elsewhere in this
prospectus. The unaudited consolidated financial statements have
been prepared on a basis consistent with our audited
consolidated financial statements and include, in the opinion of
management, all adjustments, consisting only of normal and
recurring adjustments, necessary for a fair presentation of such
consolidated financial data. The selected consolidated statement
of operations data for the fiscal year ended December 31, 2007
and the selected consolidated balance sheet data as of
December 31, 2007 and 2008 have been derived from our
audited consolidated financial statements, which are not
included in this prospectus. Historical results are not
necessarily indicative of results for future periods. Results
for interim periods are not necessarily indicative of results
for a full fiscal year.
You should read the following selected consolidated financial
data in conjunction with Managements Discussion
Analysis of Financial Condition and Results of Operations
and our Consolidated Financial Statements appearing elsewhere in
this prospectus.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Eight Months
|
|
|
|
|
|
Three Months
|
|
|
|
|
|
|
Ended
|
|
|
Year Ended
|
|
|
Ended
|
|
|
|
Year Ended December 31,
|
|
|
August 31,
|
|
|
August 31,
|
|
|
November 30,
|
|
|
|
2007
|
|
|
2008
|
|
|
2009
|
|
|
2010
|
|
|
2011
|
|
|
2010
|
|
|
2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Unaudited)
|
|
|
|
(In thousands, except per share data)
|
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Product sales
|
|
$
|
|
|
|
$
|
64
|
|
|
$
|
98
|
|
|
$
|
288
|
|
|
$
|
116
|
|
|
$
|
2
|
|
|
$
|
276
|
|
Collaborative research and government grants
|
|
|
7,180
|
|
|
|
3,880
|
|
|
|
2,328
|
|
|
|
6,326
|
|
|
|
6,500
|
|
|
|
1,713
|
|
|
|
1,472
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues
|
|
|
7,180
|
|
|
|
3,944
|
|
|
|
2,426
|
|
|
|
6,614
|
|
|
|
6,616
|
|
|
|
1,715
|
|
|
|
1,748
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost and operating expenses(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of product sales
|
|
|
|
|
|
|
3,777
|
|
|
|
2,690
|
|
|
|
2,946
|
|
|
|
2,492
|
|
|
|
1,058
|
|
|
|
763
|
|
Research and development
|
|
|
19,220
|
|
|
|
20,309
|
|
|
|
12,397
|
|
|
|
16,697
|
|
|
|
19,014
|
|
|
|
4,293
|
|
|
|
5,275
|
|
Selling, general and administrative
|
|
|
9,811
|
|
|
|
8,784
|
|
|
|
6,645
|
|
|
|
9,207
|
|
|
|
10,008
|
|
|
|
2,148
|
|
|
|
2,804
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total cost and operating expenses
|
|
|
29,031
|
|
|
|
32,870
|
|
|
|
21,732
|
|
|
|
28,850
|
|
|
|
31,514
|
|
|
|
7,499
|
|
|
|
8,842
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from operations
|
|
|
(21,851
|
)
|
|
|
(28,926
|
)
|
|
|
(19,306
|
)
|
|
|
(22,236
|
)
|
|
|
(24,898
|
)
|
|
|
(5,784
|
)
|
|
|
(7,094
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
(123
|
)
|
|
|
|
|
|
|
(5
|
)
|
|
|
(153
|
)
|
|
|
(456
|
)
|
|
|
(127
|
)
|
|
|
(111
|
)
|
Interest income
|
|
|
1,521
|
|
|
|
2,001
|
|
|
|
243
|
|
|
|
23
|
|
|
|
7
|
|
|
|
1
|
|
|
|
4
|
|
Other income (expense)
|
|
|
5
|
|
|
|
|
|
|
|
161
|
|
|
|
(152
|
)
|
|
|
(11,020
|
)
|
|
|
1
|
|
|
|
(338
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss before income taxes
|
|
|
(20,448
|
)
|
|
|
(26,925
|
)
|
|
|
(18,907
|
)
|
|
|
(22,518
|
)
|
|
|
(36,367
|
)
|
|
|
(5,909
|
)
|
|
|
(7,539
|
)
|
Income tax benefit (expense)
|
|
|
(7
|
)
|
|
|
148
|
|
|
|
211
|
|
|
|
(65
|
)
|
|
|
31
|
|
|
|
(1
|
)
|
|
|
(1
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
|
(20,445
|
)
|
|
|
(26,777
|
)
|
|
|
(18,696
|
)
|
|
|
(22,583
|
)
|
|
|
(36,336
|
)
|
|
|
(5,910
|
)
|
|
|
(7,540
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss allocable to preferred stockholders
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss attributable to common stockholders
|
|
$
|
(20,455
|
)
|
|
$
|
(26,777
|
)
|
|
$
|
(18,696
|
)
|
|
$
|
(22,583
|
)
|
|
$
|
(36,336
|
)
|
|
$
|
(5,910
|
)
|
|
$
|
(7,540
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Eight Months
|
|
|
|
|
|
Three Months
|
|
|
|
|
|
|
Ended
|
|
|
Year Ended
|
|
|
Ended
|
|
|
|
Year Ended December 31,
|
|
|
August 31,
|
|
|
August 31,
|
|
|
November 30,
|
|
|
|
2007
|
|
|
2008
|
|
|
2009
|
|
|
2010
|
|
|
2011
|
|
|
2010
|
|
|
2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Unaudited)
|
|
|
|
(In thousands, except per share data)
|
|
|
Basic and diluted net loss per share attributable to common
stockholders(1)
|
|
$
|
(11.53
|
)
|
|
$
|
(14.68
|
)
|
|
$
|
(9.98
|
)
|
|
$
|
(11.70
|
)
|
|
$
|
(18.34
|
)
|
|
$
|
(3.02
|
)
|
|
$
|
(3.73
|
)
|
Weighted average outstanding common shares used for net loss per
share attributable to common stockholders(1):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted
|
|
|
1,774,346
|
|
|
|
1,824,284
|
|
|
|
1,873,808
|
|
|
|
1,930,395
|
|
|
|
1,981,627
|
|
|
|
1,957,554
|
|
|
|
2,018,939
|
|
Pro forma net loss per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted (unaudited)(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(2.17
|
)
|
|
|
|
|
|
$
|
(0.39
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average outstanding common shares used in computing pro
forma net loss per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted (unaudited)(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
17,405,993
|
|
|
|
|
|
|
|
18,237,707
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
The basic and diluted loss per
share are computed by dividing the net loss attributable to
common stockholders by the weighted average number of common
shares outstanding during the period. For the periods where we
presented losses, all potentially dilutive common shares
comprising of stock options, warrants, Convertible Notes and
convertible preferred stock are anti-dilutive.
|
(2)
|
|
The unaudited pro forma basic and
diluted loss per common share have been computed to give effect
to as of September 1, 2010: (i) the automatic
conversion of all outstanding shares of our convertible
preferred stock into an aggregate of 15,353,226 shares of
common stock effective immediately prior to the completion of
this offering using the if-converted method, and (ii) the
issuance of 865,542 additional shares of common stock (from the
issuance date of August 1, 2011) pursuant to the automatic
conversion of the Convertible Notes upon the consummation of
this offering, as described in Certain Relationships and
Related Party Transactions, assuming an initial public
offering price of $16.50 per share, the midpoint of the price
range set forth on the cover of this prospectus. See
Capitalization for a sensitivity analysis on the
number of shares to be issued and outstanding upon the
completion of this offering. Additionally, the net loss used to
compute pro forma basic and diluted net loss per share includes:
(i) mark-to-market adjustments related to changes in the
fair value of common and preferred stock warrants and
convertible notes, (ii) adjustment to reverse the fair
value charge on to the issuance of Convertible Notes and
(iii) adjustment to reflect the assumed conversion of
Convertible Notes to common stock at a 20% discount to the
initial public offering price. See Note 1(f) to our consolidated
financial statements.
|
(3)
|
|
Our stock-based compensation
expense is as follows (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Eight Months
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ended
|
|
|
Year Ended
|
|
|
Three Months
|
|
|
|
Year Ended December 31,
|
|
|
August 31,
|
|
|
August 31,
|
|
|
Ended November 30,
|
|
|
|
2007
|
|
|
2008
|
|
|
2009
|
|
|
2010
|
|
|
2011
|
|
|
2010
|
|
|
2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Unaudited)
|
|
|
Research and development
|
|
$
|
389
|
|
|
$
|
467
|
|
|
$
|
345
|
|
|
$
|
409
|
|
|
$
|
1,895
|
|
|
$
|
115
|
|
|
$
|
257
|
|
Selling, general and administrative
|
|
|
338
|
|
|
|
705
|
|
|
|
737
|
|
|
|
891
|
|
|
|
815
|
|
|
|
154
|
|
|
|
296
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total stock-based compensation expense
|
|
$
|
727
|
|
|
$
|
1,172
|
|
|
$
|
1,082
|
|
|
$
|
1,300
|
|
|
$
|
2,710
|
|
|
$
|
269
|
|
|
$
|
553
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Our consolidated balance sheet data is as follows (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of
|
|
|
As of December 31,
|
|
As of August 31,
|
|
November 30,
|
|
|
2007
|
|
2008
|
|
2009
|
|
2010
|
|
2011
|
|
2011
|
|
|
|
|
|
|
|
|
|
|
|
|
(Unaudited)
|
|
Cash and cash equivalents
|
|
$
|
13,863
|
|
|
$
|
12,145
|
|
|
$
|
14,960
|
|
|
$
|
33,055
|
|
|
$
|
21,911
|
|
|
$
|
17,532
|
|
Working capital
|
|
|
70,029
|
|
|
|
41,297
|
|
|
|
27,543
|
|
|
|
28,325
|
|
|
|
16,739
|
|
|
|
11,960
|
|
Total assets
|
|
|
84,500
|
|
|
|
57,718
|
|
|
|
41,094
|
|
|
|
46,648
|
|
|
|
36,797
|
|
|
|
33,125
|
|
Common and preferred stock warrant liabilities
|
|
|
13
|
|
|
|
13
|
|
|
|
2,944
|
|
|
|
8,911
|
|
|
|
17,726
|
|
|
|
17,514
|
|
Convertible Notes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13,630
|
|
|
|
14,180
|
|
Total long-term liabilities
|
|
|
358
|
|
|
|
290
|
|
|
|
3,197
|
|
|
|
13,310
|
|
|
|
33,518
|
|
|
|
35,247
|
|
Convertible preferred stock
|
|
|
183,079
|
|
|
|
183,079
|
|
|
|
183,079
|
|
|
|
197,502
|
|
|
|
197,502
|
|
|
|
197,502
|
|
Total stockholders deficit
|
|
$
|
(103,358
|
)
|
|
$
|
(128,905
|
)
|
|
$
|
(149,577
|
)
|
|
$
|
(170,829
|
)
|
|
$
|
(204,318
|
)
|
|
$
|
(211,158
|
)
|
Exhibit J
Fair Value of
Warrants
Liability
Classified Warrants to Purchase Common Stock
We issued warrants to purchase our common stock in connection
with the issuances of our Series F and Series G
preferred stock. We have accounted for these warrants as
liabilities as the warrants are not considered indexed to our
common stock. We estimate the fair value of our liability
classified warrants to purchase common stock using an
option-pricing model, which incorporates several estimates and
assumptions that are subject to significant management judgment.
Changes in fair value at each period-end are recorded in other
income (expense) in our consolidated statement of operations
until the earlier of the exercise or expiration of the warrants,
or the completion of this offering.
Warrants to purchase the following shares of common stock were
outstanding as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of
|
|
As of
|
|
|
|
|
August 31,
|
|
November 30,
|
|
Exercise
|
Series
|
|
2009
|
|
2010
|
|
2011
|
|
2011
|
|
Price
|
|
Series F
|
|
|
769,229
|
|
|
|
769,229
|
|
|
|
769,229
|
|
|
|
769,229
|
|
|
$
|
19.50
|
|
Series G
|
|
|
|
|
|
|
1,025,640
|
|
|
|
1,025,640
|
|
|
|
1,025,640
|
|
|
$
|
19.50
|
|
In connection with the issuance of the Convertible Notes,
warrants issued to purchase 539,972 shares of common stock
in connection with the Series F Preferred Stock offering
and all of the warrants issued in connection with the
Series G Preferred Stock offering were amended such that
they no longer expire upon the completion of an initial public
offering at a price per share greater than or equal to $19.50
per share (subject to certain adjustments) and resulting in
aggregate gross proceeds to us and any selling security holders
of $40 million or more. The expense associated with the
modification was $9.6 million.
Warrants to purchase 229,257 shares of common stock issued in
connection with the Series F Preferred Stock offering were not
amended and will remain outstanding after the completion of this
public offering, assuming an initial public offering price of
$16.50 per share, the midpoint of the range set forth on the
cover of this prospectus.
The fair value of the Series F warrants was calculated
using the following assumptions:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of
|
|
|
|
|
As of August 31,
|
|
November 30,
|
|
|
Non-Modified F warrants
|
|
2009
|
|
2010
|
|
2011
|
|
2011
|
|
|
|
|
|
|
|
|
|
|
(Unaudited)
|
|
|
|
Expected term (in years)
|
|
6.0
|
|
5.0
|
|
1.9
|
|
1.6
|
|
|
Expected volatility
|
|
85%
|
|
90%
|
|
86%
|
|
84%
|
|
|
Risk free interest rate
|
|
3.21%
|
|
1.47%
|
|
0.41%
|
|
0.31%
|
|
|
Expected dividend yield
|
|
0%
|
|
0%
|
|
0%
|
|
0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-
|
|
Post-
|
|
|
|
As of
|
|
|
August 31,
|
|
Modification
|
|
Modification
|
|
August 31,
|
|
November 30,
|
Modified F warrants
|
|
2009
|
|
2010
|
|
8/1/2011
|
|
8/1/2011
|
|
2011
|
|
2011
|
|
|
|
|
|
|
|
|
|
|
|
|
(Unaudited)
|
|
Expected term (in years)
|
|
6.0
|
|
5.0
|
|
1.6
|
|
4.1
|
|
4.0
|
|
3.8
|
Expected volatility
|
|
85%
|
|
90%
|
|
84%
|
|
97%
|
|
98%
|
|
95%
|
Risk free interest rate
|
|
3.21%
|
|
1.47%
|
|
0.51%
|
|
1.32%
|
|
0.96%
|
|
0.69%
|
Expected dividend yield
|
|
0%
|
|
0%
|
|
0%
|
|
0%
|
|
0%
|
|
0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-
|
|
|
Post-
|
|
|
|
|
|
As of
|
|
|
|
Number of
|
|
|
August 31,
|
|
|
Modification
|
|
|
Modification
|
|
|
August 31,
|
|
|
November 30,
|
|
|
|
shares
|
|
|
2009
|
|
|
2010
|
|
|
8/1/2011
|
|
|
8/1/2011
|
|
|
2011
|
|
|
2011
|
|
|
|
|
|
|
|
|
|
|
|
|
Estimated fair value (in thousands)
|
|
|
(Unaudited)
|
|
|
F warrants: modified
|
|
|
539,972
|
|
|
$
|
2,057
|
|
|
$
|
2,102
|
|
|
$
|
2,942
|
|
|
$
|
6,128
|
|
|
$
|
5,454
|
|
|
$
|
5,359
|
|
F warrants: non-modified
|
|
|
229,257
|
|
|
|
874
|
|
|
|
892
|
|
|
|
|
|
|
|
|
|
|
|
1,229
|
|
|
|
1,040
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total F warrants
|
|
|
769,229
|
|
|
$
|
2,931
|
|
|
$
|
2,994
|
|
|
$
|
2,942
|
|
|
$
|
6,128
|
|
|
$
|
6,683
|
|
|
$
|
6,399
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The fair value of the Series G warrants was calculated
using the following assumptions:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-
|
|
Post-
|
|
|
|
As of
|
|
|
August 31,
|
|
Modification
|
|
Modification
|
|
August 31,
|
|
November 30,
|
|
|
2010
|
|
8/1/2011
|
|
8/1/2011
|
|
2011
|
|
2011
|
|
|
|
|
|
|
|
|
|
|
(Unaudited)
|
|
Expected term (in years)
|
|
9.8
|
|
3.0
|
|
8.9
|
|
8.8
|
|
8.6
|
Expected volatility
|
|
85%
|
|
74%
|
|
66%
|
|
66%
|
|
65%
|
Risk free interest rate
|
|
2.70%
|
|
0.94%
|
|
2.77%
|
|
2.23%
|
|
1.81%
|
Expected dividend yield
|
|
0%
|
|
0%
|
|
0%
|
|
0%
|
|
0%
|
Estimated fair value (in thousands)
|
|
$5,584
|
|
5,759
|
|
12,207
|
|
$10,767
|
|
$10,825
|
Exhibit K
PRINCIPAL
STOCKHOLDERS
The following table sets forth information with respect to the
beneficial ownership of our common stock, as of January 10,
2012, by:
|
|
|
|
|
each person, or group of affiliated persons, who is known by us
to beneficially own more than 5% of our voting securities;
|
|
|
|
each of our directors;
|
|
|
|
each of our named executive officers; and
|
|
|
|
all of our directors and executive officers as a group.
|
Beneficial ownership is determined in accordance with the rules
of the SEC and generally includes any shares over which the
individual or entity has sole or shared voting power or
investment power. The information does not necessarily indicate
beneficial ownership for any other purpose. Except as indicated
in the footnotes to this table and pursuant to applicable
community property laws, to our knowledge the persons named in
the table below have sole voting and investment power with
respect to all shares of common stock beneficially owned.
Percentage ownership of our common stock in the table prior to
the offering is based on 18,244,874 shares of our common
stock outstanding on January 10, 2012, after giving effect
to (i) the automatic conversion of all of our outstanding
convertible preferred stock into 15,353,221 shares of
common stock upon the completion of this offering, and
(ii) the issuance of 865,542 additional shares of
common stock pursuant to the automatic conversion of the
Convertible Notes upon the consummation of this offering, as
described in Certain Relationships and Related Party
Transactions, assuming an initial public offering price of
$16.50 per share, the mid point of the range set forth on
the cover of this prospectus. Percentage ownership of our common
stock after this offering also assumes our sale of the
5,000,000 shares in this offering.
The number of shares beneficially owned by each person or group
as of January 10, 2012 includes shares of common stock that
such person or group had the right to acquire on or within
60 days after January 10, 2012, upon the exercise of
options and warrants. References to options and warrants in the
footnotes of the table below include only options and warrants
outstanding as of January 10, 2012 that were exercisable on
or within 60 days after January 10, 2012. For the
purposes of calculating each persons or groups
percentage ownership, stock options and warrants exercisable
within 60 days after January 10, 2012 are included for
that person or group but not the stock options or warrants of
any other person or group.
Except as otherwise set forth below, the address of the
beneficial owner is
c/o Ceres,
Inc., 1535 Rancho Conejo Blvd., Thousand Oaks, CA 91320.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares Beneficially Owned
|
|
Shares Beneficially Owned
|
|
|
Prior to Offering
|
|
After Offering
|
Name and Address of Beneficial Owner
|
|
Number (#)
|
|
Percentage (%)
|
|
Number (#)
|
|
Percentage (%)
|
|
5% Stockholders
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Artal Luxembourg S.A.(1)
|
|
|
3,600,546
|
|
|
|
19.22
|
%
|
|
|
3,600,546
|
|
|
|
15.17
|
%
|
Warburg Pincus Private Equity(2)
|
|
|
2,889,866
|
|
|
|
15.45
|
|
|
|
2,889,866
|
|
|
|
12.19
|
|
Ambergate Trust(3)
|
|
|
2,743,058
|
|
|
|
14.67
|
|
|
|
2,743,058
|
|
|
|
11.57
|
|
Oxford Bioscience entities(4)
|
|
|
1,845,191
|
|
|
|
10.11
|
|
|
|
1,845,191
|
|
|
|
7.94
|
|
Gimv entities(5)
|
|
|
1,550,529
|
|
|
|
8.44
|
|
|
|
1,550,529
|
|
|
|
6.64
|
|
Oppenheimer Growth entities(6)
|
|
|
1,476,953
|
|
|
|
8.05
|
|
|
|
1,476,953
|
|
|
|
6.33
|
|
Quantum Industrial Partners LDC and related entities(7)
|
|
|
1,077,824
|
|
|
|
5.91
|
|
|
|
1,077,824
|
|
|
|
4.64
|
|
Monsanto Company(8)
|
|
|
1,111,111
|
|
|
|
6.09
|
|
|
|
1,111,111
|
|
|
|
4.78
|
|
Directors and Named Executive Officers
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Walter De Logi(9)
|
|
|
533,328
|
|
|
|
2.91
|
|
|
|
533,328
|
|
|
|
2.29
|
|
Pascal Brandys(10)
|
|
|
88,566
|
|
|
|
*
|
|
|
|
88,566
|
|
|
|
*
|
|
Raymond Debbane(1)
|
|
|
16,666
|
|
|
|
*
|
|
|
|
16,666
|
|
|
|
*
|
|
Richard Flavell(11)
|
|
|
254,999
|
|
|
|
1.39
|
|
|
|
254,999
|
|
|
|
1.09
|
|
Robert Goldberg(12)
|
|
|
181,360
|
|
|
|
*
|
|
|
|
181,360
|
|
|
|
*
|
|
Richard Hamilton(13)
|
|
|
812,330
|
|
|
|
4.29
|
|
|
|
812,330
|
|
|
|
3.39
|
|
Thomas Kiley(14)
|
|
|
79,497
|
|
|
|
*
|
|
|
|
79,497
|
|
|
|
*
|
|
David B. Krieger(2)(15)
|
|
|
2,889,866
|
|
|
|
15.45
|
|
|
|
2,889,866
|
|
|
|
12.19
|
|
Edmund Olivier(4)(16)
|
|
|
1,867,008
|
|
|
|
10.23
|
|
|
|
1,867,008
|
|
|
|
8.03
|
|
Paul Kuc(17)
|
|
|
156,664
|
|
|
|
*
|
|
|
|
156,664
|
|
|
|
*
|
|
Michael Stephenson(18)
|
|
|
146,664
|
|
|
|
*
|
|
|
|
146,664
|
|
|
|
*
|
|
Wilfriede van Assche(19)
|
|
|
94,164
|
|
|
|
*
|
|
|
|
94,164
|
|
|
|
*
|
|
All directors and executive officers as a group
(16 persons)
|
|
|
7,399,438
|
|
|
|
36.33
|
%
|
|
|
7,399,438
|
|
|
|
29.17
|
%
|
|
|
|
* |
|
Represents beneficial ownership of less than 1%. |
|
(1) |
|
Includes 491,747 shares of common stock that may be
acquired pursuant to the exercise of warrants held by Artal
Luxembourg S.A. Also includes 378,787 additional shares of
common stock issuable to Artal Luxembourg S.A. pursuant to the
automatic conversion of the Convertible Notes upon the
consummation of this offering, as described in Certain
Relationships and Related Party Transactions, assuming an
initial public offering price of $16.50 per share, the midpoint
of the price range set forth on the cover of this prospectus.
Raymond Debbane, one of our directors, is a director of Artal
Group S.A. Artal Group S.A. is the parent entity of Artal
International S.C.A., which is the parent entity of Artal
Luxembourg S.A. Mr. Debbane disclaims beneficial ownership of
the shares and shares underlying warrants held by Artal
Luxembourg S.A., except to the extent of his pecuniary interest
therein. The address for Artal Luxembourg S.A. is 105 Grand-Rue,
L-1661, Luxembourg. |
|
(2) |
|
Includes 461,538 shares of common stock that may be
acquired pursuant to the exercise of warrants held by Warburg
Pincus Private Equity IX, L.P., a Delaware partnership, or
WP IX. Also includes 120,636 additional shares of
common stock issuable to WP IX pursuant to the automatic
conversion of the Convertible Notes upon the consummation of
this offering, as described in Certain Relationships and
Related Party Transactions, assuming an initial public
offering price of $16.50 per share, the midpoint of the price
range set forth on the cover of this prospectus. The sole
general partner of WP IX is Warburg Pincus IX LLC, a New York
limited liability company, or WP IX LLC. Warburg Pincus
Partners, LLC, a New York limited liability company, or WP
Partners, is the sole member of WP IX LLC. Warburg
Pincus & Co., a New York general partnership, or WP,
is the managing member of WP Partners. WP IX is managed by
Warburg Pincus LLC, a New York |
|
|
|
|
|
limited liability company, or WP LLC. David B. Krieger, one of
our directors, is a Managing Director of WP LLC and a General
Partner of WP. The shares and shares underlying warrants
acquired by WP IX are reflected as indirectly owned by
Mr. Krieger because of his affiliation with the Warburg
Pincus entities. Mr. Krieger disclaims beneficial ownership
of the shares and shares underlying warrants held by WP IX,
except to the extent of his pecuniary interests therein. Charles
R. Kaye and Joseph P. Landy are Managing General Partners of
Warburg Pincus and Managing Members and Co-Presidents of WP and
may be deemed to control the Warburg Pincus entities.
Messrs. Kaye and Landy disclaim beneficial ownership of all
shares held by the Warburg Pincus entities. The address for WP
IX, WP IX LLC, WP Partners, WP, WP LLC, and Messrs. Kaye,
Krieger and Landy is 450 Lexington Avenue, New York,
NY 10017. |
|
(3) |
|
Represents 2,320,611 shares of common stock held by
Rothschild Trust Guernsey Limited as Trustee F/B/O the
Ambergate Trust, or Rothschild, and 359,000 shares of
common stock held by The Lynda De Logi trust. Includes
453,866 shares of common stock that may be acquired
pursuant to the exercise of warrants held by Rothschild. Also
includes 253,787 additional shares of common stock issuable
to Rothschild pursuant to the automatic conversion of the
Convertible Notes upon the consummation of this offering, as
described in Certain Relationships and Related Party
Transactions, assuming an initial public offering price of
$16.50 per share, the midpoint of the price range set forth on
the cover of this prospectus. Mr. De Logi is the
settlor of the Ambergate Trust and one of the beneficiaries. Mr.
De Logi disclaims beneficial ownership of the shares held
by the Ambergate Trust. The address for Rothschild is
PO Box 472, St. Peters House, Le Bordage,
St. Peter Port GY1 6AX, Guernsey. |
|
(4) |
|
Represents 793,333 shares of common stock held by Oxford
Bioscience Partners II, L.P., 81,620 shares of common stock
held by Oxford Bioscience Partners (GS-Adjunct) II, L.P.,
221,111 shares of common stock held by Oxford Bioscience
Management Partners II, 184,015 shares of common stock
held by Oxford Bioscience Partners (Adjunct) II, L.P. and
565,112 shares of common stock held by Oxford Bioscience
Partners (Bermuda) II, Limited Partnership. OBP
Management II L.P. is the general partner of Oxford
Bioscience Partners II L.P., Oxford Bioscience Partners
(Adjunct) II L.P. and Oxford Bioscience Partners (GS-Adjunct) II
L.P. Edmund Olivier, Alan Walton, Cornelius Ryan and Jonathan
Fleming are the general partners of OBP Management II L.P.
OBP Management (Bermuda) II Limited Partnership is the general
partner of Oxford Bioscience Partners (Bermuda) II Limited
Partnership. Edmund Olivier, Alan Walton, Cornelius Ryan and
Jonathan Fleming are the general partners of Oxford Bioscience
Partners (Bermuda) II Limited Partnership. Messrs. Olivier,
Walton, Ryan and Fleming all disclaim beneficial ownership of
the shares except to the extent of their pecuniary interests
therein. The shares acquired by the Oxford Bioscience entities
are reflected as indirectly owned by Mr. Olivier because of
his affiliation with the Oxford Bioscience entities. The address
for Oxford Bioscience Partners is 222 Berkeley St.
Suite 1960, Boston, MA 02116. |
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(5) |
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Represents 92,416 shares of common stock held by
Adviesbeheer Gimv Life Sciences 2004 N.V. and
1,440,893 shares of common stock held by Gimv N.V. Includes
22,308 shares of common stock that may be acquired pursuant
to the exercise of warrants held by Adviesbeheer Gimv Life
Sciences 2004 N.V. and 126,410 shares of common stock that
may be acquired pursuant to the exercise of warrants held by
Gimv N.V. Also includes 10,331 additional shares of common
stock issuable to Adviesbeheer Gimv Life Sciences 2004 N.V. and
58,546 additional shares of common stock issuable to Gimv
N.V. pursuant to the automatic conversion of the Convertible
Notes upon the consummation of this offering, as described in
Certain Relationships and Related Party
Transactions, assuming an initial public offering price of
$16.50 per share, the midpoint of the price range set forth on
the cover of this prospectus. The address for Adviesbeheer Gimv
Life Sciences 2004 N.V. and Gimv N.V. is Karel Oomsstraat 37,
B-2018, Antwerpen, Belgium. |
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(6) |
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Represents 1,134,780 shares of common stock held by
Oppenheimer International Growth Fund and 342,173 shares of
common stock held by Oppenheimer MassMutual International Equity
Fund. Includes 126,666 shares of common stock that may be
acquired pursuant to the exercise of warrants |
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held by Oppenheimer International Growth Fund. The address for
Oppenheimer International Growth Fund is 2 World Financial
Center, 225 Liberty Street, New York, NY 10281. |
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(7) |
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Represents 1,000,772 shares of common stock held by Quantum
Industrial Partners LDC, an exempted limited duration company
formed under the laws of the Cayman Islands, or QIP, which
includes 19,195 shares of common stock that may be acquired
pursuant to the exercise of warrants held by QIP. The principal
address of QIP is Kaya Flamboyan 9, Willemstad, Curacao.
QIH Management Investor, L.P., or QIHMI, an investment advisory
firm organized as a Delaware limited partnership, is a minority
stockholder of, and is vested with investment discretion with
respect to portfolio assets held for the account of QIP. The
sole general partner of QIHMI is QIH Management LLC, a Delaware
limited liability company, or QIH Management. Also represents
77,052 shares of common stock which includes
2,025 shares of common stock that may be acquired pursuant
to the exercise of warrants held by George Soros. Soros
Fund Management LLC, or SFM LLC, a Delaware limited
liability company, may be deemed the beneficial owner of the
shares held for the account of QIP. SFM LLC is the sole managing
member of QIH Management. George Soros serves as Chairman of SFM
LLC and Robert Soros serves as President and Deputy Chairman of
SFM LLC. |
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(8) |
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The address for Monsanto Company is 800 North Lindbergh
Boulevard, St. Louis, Missouri 63167. Pursuant to the terms of
the Investors Rights Agreement, Monsanto agreed that,
subject to certain exceptions, it would not increase its
ownership position to more than 15% of our then outstanding
voting stock. |
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(9) |
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Includes 53,330 shares of common stock held by Lynda De
Logi, Walter De Logis spouse, and 83,333 shares of
common stock issuable pursuant to stock options exercisable
within 60 days of January 10, 2012. |
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(10) |
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Includes 30,000 shares of common stock issuable pursuant to
stock options exercisable within 60 days of
January 10, 2012, 7,185 of which are unvested and early
exercisable and would be subject to a right of repurchase in our
favor upon Mr. Brandyss cessation of service with us
prior to vesting. |
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(11) |
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Includes 164,999 shares of common stock issuable pursuant
to stock options exercisable within 60 days of
January 10, 2012, 28,610 of which are unvested and early
exercisable and would be subject to a right of repurchase in our
favor upon Dr. Flavells cessation of service with us
prior to vesting. |
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(12) |
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Includes 181,360 shares of common stock held by The Robert
Goldberg Revocable Living Trust and 31,666 shares of common
stock issuable pursuant to stock options exercisable within
60 days of January 10, 2012, 4,582 of which are
unvested and early exercisable and would be subject to a right
of repurchase in our favor upon Dr. Goldbergs
cessation of service with us prior to vesting. |
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(13) |
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Includes 33,333 shares of common stock held by
Dr. Richard Hamilton 2011-Ceres GRAT and
722,331 shares of common stock issuable pursuant to stock
options exercisable within 60 days January 10, 2012,
66,666 of which are unvested and early exercisable and would be
subject to a right of repurchase in our favor upon
Dr. Hamiltons cessation of service with us prior to
vesting. |
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Includes 61,666 shares of common stock issuable pursuant to
stock options exercisable within 60 days of
January 10, 2012, 9,477 of which are unvested and early
exercisable and would be subject to a right of repurchase in our
favor upon Mr. Kileys cessation of service with us
prior to vesting. Includes 5,128 shares of common stock
held by The Kiley Revocable Trust and 5,128 shares of
common stock issuable upon the exercise of warrants held by The
Kiley Revocable Trust. Also includes 7,575 additional
shares of common stock issuable to The Kiley Revocable Trust
pursuant to the automatic conversion of the Convertible Notes
upon the consummation of this offering, as described in
Certain Relationships and Related Party
Transactions, assuming an initial public offering price of
$16.50 per share, the midpoint of the price range set forth on
the cover of this prospectus. |
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Consists of 2,889,866 shares of common stock held by
WP IX, including the 582,174 shares identified in
footnote 2. |
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(16) |
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Consists of 1,845,191 shares of common stock identified in
footnote 4, 6,666 shares of common stock held by Mr.
Olivier and 15,151 additional shares of common stock
issuable to The Edmund and Ellen Olivier Revocable Family Trust
pursuant to the automatic conversion of the Convertible Notes
upon the consummation of this offering, as described in
Certain Relationships and Related Party
Transactions, assuming an initial public offering price of
$16.50 per share, the midpoint of the price range set forth on
the cover of this prospectus. |
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(17) |
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Consists of 156,664 shares of common stock issuable
pursuant to stock options exercisable within 60 days of
January 10, 2012, 45,833 of which are unvested and early
exercisable and would be subject to a right of repurchase in our
favor upon Mr. Kucs cessation of service with us
prior to vesting. |
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(18) |
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Consists of 146,664 shares of common stock issuable
pursuant to stock options exercisable within 60 days of
January 10, 2012, 38,333 of which are unvested and early
exercisable and would be subject to a right of repurchase in our
favor upon Mr. Stephensons cessation of service with
us prior to vesting. |
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(19) |
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Consists of 94,164 shares of common stock issuable pursuant
to stock options exercisable within 60 days of
January 10, 2012, 29,825 of which are unvested and early
exercisable and would be subject to a right of repurchase in our
favor upon Ms. van Assches cessation of service with us
prior to vesting. |
Exhibit L
DESCRIPTION OF
CAPITAL STOCK
General
The following is a summary of our capital stock and certain
provisions of our amended and restated certificate of
incorporation and amended and restated bylaws, as they will be
in effect upon the completion of this offering. This summary
does not purport to be complete and is qualified in its entirety
by the provisions of our amended and restated certificate of
incorporation and amended and restated bylaws, copies of which
have been filed with the SEC as exhibits to the registration
statement of which this prospectus is a part.
Immediately following the completion of this offering, our
authorized capital stock will consist of
500,000,000 shares, with a par value of $0.01 per share, of
which:
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490,000,000 shares are designated as common stock; and
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10,000,000 shares are designated as preferred stock.
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As of January 10, 2012, we had outstanding
18,244,874 shares of common stock, held of record by 170
stockholders, and no shares of preferred stock, assuming
(i) the automatic conversion of all outstanding shares of
our convertible preferred stock into an aggregate of
15,353,221 shares of common stock immediately prior to the
completion of this offering; and (ii) the issuance of 865,542
additional shares of common stock pursuant to the automatic
conversion of the Convertible Notes upon the consummation of
this offering, as described in greater detail in Certain
Relationships and Related Party Transactions, assuming an
initial public offering price of $16.50 per share, the midpoint
of the price range set forth on the cover of this prospectus. In
addition, as of January 10, 2012, we had outstanding
options to acquire 2,554,488 shares of common stock.
Common
Stock
The holders of common stock are entitled to one vote per share
on all matters submitted to a vote of our stockholders and do
not have cumulative voting rights. Subject to preferences that
may be applicable to any preferred stock outstanding at the
time, the holders of outstanding shares of common stock are
entitled to receive ratably any dividends declared by our board
of directors out of assets legally available. See the section
entitled Dividend Policy. Upon our liquidation,
dissolution or winding up, holders of our common stock are
entitled to share ratably in all assets remaining after payment
of liabilities and the liquidation preference of any then
outstanding shares of preferred stock. Holders of common stock
have no preemptive or conversion rights or other subscription
rights. There are no redemption or sinking fund provisions
applicable to the common stock.
Preferred
Stock
After the completion of this offering, no shares of preferred
stock will be outstanding. Pursuant to our amended and restated
certificate of incorporation, our board of directors will have
the authority, without further action by our stockholders, to
issue from time to time up to 10,000,000 shares of
preferred stock in one or more series. Our board of directors
may designate the rights, preferences, privileges and
restrictions of the preferred stock, including dividend rights,
conversion rights, voting rights, terms of redemption,
liquidation preference, sinking fund terms and the number of
shares constituting any series or the designation of any series.
The issuance of preferred stock or even the ability to issue
preferred stock could have the effect of delaying, deterring or
preventing a change in control.
Warrants
As of November 30, 2011, we had warrants outstanding to
purchase 2,015,379 shares of our common stock, assuming the
automatic conversion of our preferred stock warrants into common
stock. In December 2011, we issued warrants to purchase
66,666 shares of our common stock to
Texas A&M at an exercise price equal to the per share
offering price to the public of our common stock in this initial
public offering plus an amount equal to ten percent (10%) of
such price (see Business Major Research
Collaborations Texas A&M University).
These warrants expire on September 24, 2026. Except for The
Samuel Roberts Noble Foundation, Inc. and Texas A&M
University warrants to purchase 133,333 and 66,666 shares
of our common stock, respectively, each warrant contains
provisions for the adjustment of the exercise price and the
number of shares issuable upon exercise upon the occurrence of
certain events, including stock dividends, reorganizations,
reclassifications and consolidations.
In August 2011, we completed the sale of $11,425,232 aggregate
principal amount of non-interest bearing convertible
subordinated notes, or the Convertible Notes, to nine existing
investors in the Company in a private placement. The Convertible
Notes are convertible, subject to the terms and conditions set
forth therein, into shares of our common stock upon the
consummation of a qualified initial public offering of our
common stock at a price per share equal to a 20% discount from
the public offering price. In the event that we do not
consummate a qualified initial public offering on or prior to
the six month anniversary of the issuance date of the
Convertible Notes, (i) the Convertible Notes will automatically
convert, subject to the terms and conditions set forth therein,
into shares of our Series G Convertible Preferred Stock, at a
conversion price per share equal to $6.50 and (ii) the holders
will receive warrants exercisable for 0.3333 shares of our
common stock, at an initial exercise price of $19.50 per share,
equal to the number of shares of Series G Convertible Preferred
Stock into which such holders Convertible Notes convert.
In January 2012, we amended the Convertible Notes such that the
notes will automatically convert into shares of our
Series G convertible preferred stock if the initial public
offering is not consummated by June 30, 2012.
In connection with the issuance of the Convertible Notes, so
long as any investors who held existing warrants to purchase
shares of our common stock in connection with the original
issuances of the Companys Series F and G preferred stock
purchased at least their respective full pro rata portion of the
Convertible Notes being offered, the termination provisions of
such investors existing warrants were amended such that
those warrants will no longer expire upon a qualified initial
public offering.
In June 2010, we sold an aggregate of 3,076,923 shares of
Series G convertible preferred stock in a private placement
pursuant to a stock purchase agreement. Purchasers of the
Series G convertible preferred stock also received, for
each share purchased, a warrant to purchase 0.3333 shares
of our common stock at an exercise price of $19.50 per share. In
connection with the offering of the Convertible Notes, these
warrants were amended such that they no longer expire upon the
completion of a qualified initial public offering.
In January 2010, we entered into a Loan and Security Agreement
with Silicon Valley Bank, or SVB, to finance qualified equipment
purchases, pursuant to which we granted SVB warrants to purchase
43,076 shares of our Series F convertible preferred
stock at a price of $6.50 per share. The warrants expire on the
later of February 29, 2020 or five years subsequent to the
completion of our initial public offering.
In September 2007, we sold an aggregate of
11,538,462 shares of Series F convertible preferred
stock in a private placement pursuant to a stock purchase
agreement. Purchasers of the Series F convertible preferred
stock also received, for each share purchased, a warrant to
purchase 0.066 shares of our common stock at an exercise
price of $19.50 per share. In connection with the offering of
the Convertible Notes, warrants to purchase 539,972 shares of
common stock were amended such that they no longer expire upon
the completion of a qualified initial public offering. The
remaining warrants to purchase 229,257 shares of common stock
would have otherwise expired upon the completion of a qualified
initial public offering but instead will remain outstanding
after the completion of this public offering, assuming an
initial public offering price of $16.50 per share, the midpoint
of the range set forth on the cover of this prospectus. Pursuant
to the terms of these warrants, a qualified initial public
offering means an initial public offering of our common stock at
a
price per share greater than or equal to $19.50 per share
(subject to certain adjustments) resulting in aggregate gross
proceeds to the Company and any selling security holders of
$40 million or more.
In August 2007, we entered into an agreement with Texas A&M
University, pursuant to which we granted Texas A&M
University a warrant to purchase 66,666 shares of our
common stock for an exercise price of $30.00 per share. The
warrant vests in various installments based on certain research
and commercialization milestones being met and will remain
exercisable until August 28, 2017.
In May 2006, we entered into an agreement with The Samuel
Roberts Noble Foundation, Inc., pursuant to which we granted the
Noble Foundation a warrant to purchase 133,333 shares of
our common stock for an exercise price of $30.00 per share. On
June 20, 2011, we agreed to amend this warrant such that
the warrant vests in equal installments of 33,333 shares on
May 19, 2009, May 19, 2011, May 19, 2013 and
May 19, 2015, respectively, and shall remain exercisable
until the earliest of a period of five years from the respective
vesting date, or May 18, 2017.
In July 2004, we entered into a borrowing agreement with SVB to
finance construction of a greenhouse and tenant improvements at
our Thousand Oaks, California facility, pursuant to which we
granted SVB warrants to purchase 18,461 shares of our
Series E preferred stock at a price of $6.50 per
share, which were set to expire on the later of July 31,
2014 or five years after an initial public offering. During
2010, the warrants were extended and now expire on
February 29, 2020 or five years subsequent to the
completion of our initial public offering.
Registration
Rights
Stockholder
Registration Rights
In June 2010, we entered into an Amended and Restated
Investors Rights Agreement, or the Investors Rights
Agreement, with our major stockholders pursuant to which we
agreed to provide certain rights to those stockholders that are
a party to the Investors Rights Agreement to register the
shares of our common stock (i) issuable upon conversion of
outstanding convertible preferred stock, (ii) issued as a
dividend or other distribution related to the convertible
preferred stock, (iii) currently held or later acquired,
and (iv) issuable upon the exercise of warrants held by any
stockholder that is party to the agreement. We will bear all
expenses incurred in connection with any underwritten
registration, including, without limitation, all registration,
filing and qualification fees, printers and accounting fees and
the reasonable fees of counsel for the selling holders, but
excluding underwriting discounts and commissions.
The registration rights provided for under the Investors
Rights Agreement terminate after the earlier of five years
following the consummation of an initial public offering, or any
such time as the holder would be able to dispose of all of its
registrable securities in any three month period under SEC
Rule 144.
Demand
Registration Rights
Pursuant to the Investors Rights Agreement, if, at any
time after six months after the effective date of the first
registration statement for a public offering of our securities
(other than a registration statement relating either to the sale
of securities to our employees pursuant to a stock option, stock
purchase or similar plan or an SEC Rule 145 transaction),
upon the written request of the holders of at least 15% of the
securities covered by the Investors Rights Agreement that
we file a registration statement under the Securities Act
covering the registration of at least 15% of the securities
covered by the Investors Rights Agreement, then we are
required to file a registration statement covering the resale of
the common stock requested to be registered. We are not
obligated to file a registration statement after we have
effected five registration statements pursuant to the
Investors Rights Agreement or during certain periods prior
to and after a registration statement has been filed by the
company or, for a period of 90 days in the event the board
of directors, in its judgment, makes the determination that it
would be seriously detrimental to the Company and its
shareholders for such
registration statement to be filed and is therefore essential to
defer the filing of such registration statement.
If an underwriter selected for an underwritten offering advises
the holders demanding registration that marketing factors
require a limitation on the number of shares to be underwritten,
then, subject to certain limitations, the number of shares of
registrable securities that may be included in the underwriting
will be allocated among all holders of registrable securities in
proportion to the amount of our registrable securities owned by
each holder.
Piggyback
Registration Rights
Pursuant to the Investors Rights Agreement, if, subject to
certain exceptions, we propose to register any of our stock or
other securities under the Securities Act in connection with the
public offering of such securities solely for cash, we are
required to promptly give such holders written notice of such
registration. Upon the written request of each eligible holder,
we will, subject to certain limitations, cause to be registered
under the Securities Act all such securities that each such
holder has requested to be registered.
Stockholders with registration rights have signed agreements
with the representatives of the underwriters prohibiting the
exercise of their registration rights for 180 days, subject
to extension under certain circumstances, following the date of
this prospectus. These agreements are described below under
Underwriting.
Anti-Takeover
Provisions to be in Effect Upon the Completion of this
Offering
Certain provisions of the Delaware General Corporation Law, or
DGCL, and our amended and restated certificate of incorporation
and bylaws that will become effective upon the completion of
this offering may have the effect of delaying, deferring or
discouraging another party from acquiring control of our
company. These provisions, which are summarized below, may
discourage certain types of coercive takeover practices and
inadequate takeover bids and encourage anyone seeking to acquire
control of our company to first negotiate with our board of
directors. These provisions might also have the effect of
preventing changes in our management and could make it more
difficult to accomplish transactions that stockholders might
otherwise deem to be in their best interests. However, we
believe that the advantages gained by protecting our ability to
negotiate with any unsolicited and potentially unfriendly
acquirer outweigh the disadvantages of discouraging such
proposals, because, among other reasons, the negotiation of such
proposals could result in improving their terms.
Amended and
Restated Certificate of Incorporation and Bylaw
Provisions
Upon the completion of this offering, our amended and restated
certificate of incorporation and bylaws will include a number of
provisions that may have the effect of delaying, deferring or
discouraging another party from acquiring control of our company
or preventing changes in our management, including the following:
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Issuance of Undesignated Preferred Stock. Upon
the completion of this offering and the filing of our amended
and restated certificate of incorporation, our board of
directors will have the authority, without further action by the
stockholders, to issue up to 10,000,000 shares of undesignated
preferred stock with rights, preferences and privileges
designated from time to time by our board of directors without
further action by stockholders. These rights, preferences and
privileges could include dividend rights, conversion rights,
voting rights, terms of redemption, liquidation preferences and
sinking fund terms, any or all of which may be greater than the
rights of common stock.
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Size of the Board of Directors and Filling
Vacancies. The number of directors constituting
our board of directors may be set only by resolution adopted by
a majority vote of our entire board of directors. Any vacancy on
our board of directors, however occurring, including a vacancy
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resulting from an increase in the size of the board of
directors, may only be filled by the affirmative vote of a
majority of our directors then in office, even if less than a
quorum.
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Classified Board. Our board of directors will
be divided into three classes of directors, with staggered
three-year terms. Only one class of directors will be elected at
each annual meeting of our stockholders, with the other classes
continuing for the remainder of their respective three-year
terms.
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No Cumulative Voting. Our amended and restated
certificate of incorporation and amended and restated bylaws do
not permit cumulative voting in the election of directors.
Cumulative voting allows a stockholder to vote a portion, or all
of its shares for one or more candidates. The absence of
cumulative voting makes it more difficult for a minority
stockholder to gain a seat.
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Removal of Directors. Directors can only be
removed by our stockholders for cause and removal of a director
will require a
662/3%
stockholder vote.
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No Written Consent of Stockholders. All
stockholder actions are required to be taken by a vote of the
stockholders at an annual or special meeting. Stockholders may
not take action by written consent in lieu of a meeting. The
inability of stockholders to take action by written consent
means that a stockholder would need to wait until the next
annual or special meeting to bring business before the
stockholders for a vote.
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Special Meetings of Stockholders. Special
meetings of our stockholders may be called only by a majority of
our board of directors, the chairman of our board of directors,
our chief executive officer, or president (in the absence of a
chief executive officer). Only those matters set forth in the
notice of the special meeting may be considered or acted upon at
a special meeting of our stockholders.
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Advance Notice Requirements for Stockholder Proposals and
Director Nominations. Our amended and restated
bylaws provide advance notice procedures for stockholders
seeking to bring business before our annual meeting of
stockholders or to nominate candidates for election as directors
at our annual meeting of stockholders. These procedures provide
that notice must be timely given in writing prior to the meeting
at which the action is to be taken and the form and content of
such notice must comply with the applicable provisions of our
amended and restated bylaws. These procedures may have the
effect of precluding the conduct of certain business at a
meeting if the proper procedures are not followed or may
discourage or deter a potential acquirer from conducting a
solicitation of proxies to elect its own slate of directors or
otherwise attempt to obtain control of us.
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Amendment to Amended and Restated Certificate of
Incorporation and Bylaws. Any amendment, repeal
or modification of certain provisions of our amended and
restated certificate of incorporation and bylaws will require a
662/3
stockholder vote. Provisions requiring such supermajority vote
include, among other things, any amendment, repeal or
modification of the provisions relating to the classification of
our board of directors, the requirement that stockholder actions
be effected at a duly called annual or special meeting of our
stockholders and the designated parties entitled to call a
special meeting of our stockholders.
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Section 203
of the DGCL
Upon the completion of this offering, we will be subject to
Section 203 of the DGCL. In general, Section 203 of
the DGCL prohibits a publicly held Delaware corporation from
engaging in a business combination with an
interested stockholder for a three-year period
following the time that this stockholder becomes an interested
stockholder, unless it satisfies one of the following conditions:
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the transaction is approved by the board of directors prior to
the time that the interested stockholder became an interested
stockholder;
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upon consummation of the transaction which resulted in the
stockholder becoming an interested stockholder, the interested
stockholder owned at least 85% of the voting stock of the
corporation outstanding at the time the transaction
commenced; or
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at or subsequent to such time that the stockholder became an
interested stockholder, the business combination was approved by
the board of directors and authorized at an annual or special
meeting of stockholders by at least two-thirds of the
outstanding voting stock which is not owned by the interested
stockholder.
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In general, Section 203 defines business
combination to include the following:
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any merger or consolidation involving the corporation and the
interested stockholder;
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any sale, lease, exchange, mortgage, pledge, transfer or other
disposition of the assets of the corporation with an aggregate
market value of 10% or more of either the aggregate market value
of all assets of the corporation on a consolidated basis or the
aggregate market value of all of the outstanding stock of the
corporation involving the interested stockholder;
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subject to certain exceptions, any transaction that results in
the issuance or transfer by the corporation of any stock of the
corporation to the interested stockholder;
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any transaction involving the corporation that has the effect of
increasing the proportionate share of the stock or any class or
series of the corporation beneficially owned by the interested
stockholder; or
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the receipt by the interested stockholder of the benefit of any
loans, advances, guarantees, pledges or other financial benefits
by or through the corporation.
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In general, Section 203 defines an interested
stockholder as an entity or person who, together with the
stockholders affiliates and associates (as defined in
Section 203), beneficially owns, or within three years
prior to the time of determination of interested stockholder
status did own, 15% or more of the outstanding voting stock of
the corporation.
Treatment of
Options Upon Change of Control
In general, under the terms of our 2010 Stock Option/Stock
Issuance Plan and our 2011 Equity Incentive Plan, in the event
of certain change in control transactions, if the successor
corporation does not assume our outstanding options or issue
replacement awards, or if an optionholders employment is
involuntarily terminated in connection with such change in
control, the vesting of the options outstanding under such plans
will accelerate.
Transfer Agent
and Registrar
The transfer agent and registrar for our common stock will be
American Stock Transfer & Trust Company, LLC. The
transfer agents telephone number is (800) 937-5449.
Stock Exchange
Listing
We have applied to have our common stock listed on the Nasdaq
Global Market under the symbol CERE.
Exhibit M
SHARES ELIGIBLE
FOR FUTURE SALE
Prior to this offering, there has been no public market for our
common stock and we cannot assure you that a market for our
common stock will develop or be sustained after this offering.
Future sales of our common stock in the public market, including
shares issued upon exercise of outstanding or options, or the
availability of such shares for sale in the public market, could
adversely affect the trading price of our common stock. As
described below, only a limited number of shares will be
available for sale by our existing stockholders shortly after
this offering due to contractual and legal restrictions on
resale. Sales of our common stock in the public market after
such restrictions lapse, or the perception that those sales may
occur, could adversely affect the trading price of our common
stock at such time and our ability to raise equity capital in
the future.
Based on 18,244,874 shares of common stock outstanding as
of January 10, 2012, upon completion of this offering,
23,244,874 shares of common stock will be outstanding,
reflecting 5,000,000 shares of common stock sold in this
offering and assuming an initial public offering price of $16.50
per share, the midpoint of the range set forth on the cover of
this prospectus, and no exercise of the underwriters
option to purchase additional shares of common stock. All of the
shares sold in this offering (including any shares sold upon the
underwriters exercise of their option to purchase
additional shares) will be freely tradable, except that any
shares purchased in this offering by our affiliates, as that
term is defined in Rule 144 under the Securities Act,
generally may be sold in the public market only in compliance
with Rule 144 under the Securities Act. The remaining
18,244,874 shares of common stock will be deemed restricted
securities as that term is defined in Rule 144 under the
Securities Act. These restricted securities are eligible for
public sale only if they are registered under the Securities Act
or if they qualify for an exemption from registration under
Rule 144 or Rule 701 under the Securities Act, which
are summarized below. In addition, substantially all of these
restricted securities will be subject to the
lock-up
agreements described below.
Subject to the
lock-up
agreements described below and the provisions of Rules 144
and 701 under the Securities Act, these restricted securities
will be available for sale in the public market as follows:
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Date
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Number of Shares
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On the date of this prospectus
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98,874
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At various times beginning more than 180 days (subject to
extension) after the date of this prospectus
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18,146,000
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In addition, of the 2,554,488 shares of our common stock
that were subject to stock options outstanding as of January 10,
2012, options to purchase 1,897,848 shares of common stock
were vested as of January 10, 2012 and will be eligible for sale
180 days following the effective date of this offering,
subject to extension as described in the section entitled
Underwriting.
In addition, as of January 10, 2012, warrants representing
the right to purchase 2,082,045 shares of common stock
remain outstanding.
Rule 144
In general, under Rule 144 under the Securities Act, as in
effect on the date of this prospectus, a person who is one of
our affiliates and has beneficially owned shares of our common
stock for at least six months would be entitled to sell within
any three-month period, beginning on the date 90 days after
the date of this prospectus, a number of shares that does not
exceed the greater of:
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one percent of the number of shares of common stock then
outstanding, which will equal approximately 232,448 shares
immediately after the completion of this offering; or
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the average weekly trading volume of our common stock on the
Nasdaq Global Market during the four calendar weeks preceding
the filing of a notice on Form 144 with respect to the sale.
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Sales under Rule 144 by our affiliates or persons selling
shares on behalf of our affiliates are also subject to a certain
manner of sale provisions and notice requirements and to the
availability of current public information about us.
In general, under Rule 144 under the Securities Act, as in
effect on the date of this prospectus, a person who is not
deemed to have been one of our affiliates at any time during the
three months preceding a sale, and who has beneficially owned
the shares proposed to be sold for at least six months,
including the holding period of any prior owner other than an
affiliate, is entitled to sell the shares beginning on the
91st day after the date of this prospectus without
complying with the manner of sale, volume limitation or notice
provisions of Rule 144, and will be subject only to the
public information requirements of Rule 144. If such person
has beneficially owned the shares proposed to be sold for at
least one year, including the holding period of any prior owner
other than our affiliates, then such person is entitled to sell
such shares without complying with any of the requirements of
Rule 144.
Rule 701
Any of our employees, officers, directors or consultants who
purchased shares under a written compensatory plan or contract
may be entitled to sell them in reliance on Rule 701.
Rule 701 permits affiliates to sell their
Rule 701 shares under Rule 144 without complying
with the holding period requirements of Rule 144.
Rule 701 further provides that non-affiliates may sell
these shares in reliance on Rule 144 without complying with
the holding period, public information, volume limitation or
notice provisions of Rule 144. All holders of
Rule 701 shares are required to wait until
90 days after the date of this prospectus before selling
those shares. However, substantially all of the shares issued
under Rule 701 are subject to the
lock-up
agreements described below and will only become eligible for
sale when the
lock-up
period expires.
As of January 10, 2012, 1,325,454 shares of our outstanding
common stock had been issued in reliance on Rule 701 as a
result of exercise of stock options. These shares will be
eligible for resale in reliance on this rule upon expiration of
the lock-up
agreements described below.
Lock-Up
Agreements
In connection with this offering, we and each of our directors
and officers and holders of substantially all of our outstanding
common stock and holders of securities exercisable for or
convertible into our common stock outstanding immediately prior
to the completion of this offering, have agreed that, without
the prior written consent of Goldman, Sachs & Co. and
us, that they will not offer, sell, contract to sell, pledge,
grant any option to purchase, make any short sale or otherwise
dispose of any shares of common stock, options or warrants to
purchase shares of common stock or securities convertible into,
exchangeable for or that represent the right to receive shares
of common stock, whether now owned or hereafter acquired, during
the period from the date of this prospectus and ending on the
date 180 days after the date of this prospectus (as such
period may be extended under certain circumstances). These
restrictions are subject to certain exceptions, as described in
more detail under Underwriting in this prospectus.
Registration
Rights
We are party to an investor rights agreement which provides that
certain stockholders have the right to demand that we file a
registration statement or request that their shares of our
common stock be covered by a registration statement that we are
otherwise filing. See Description of Capital
Stock Registration Rights in this prospectus.
Registration of their shares under the Securities Act would
result in these shares becoming freely tradable without
restriction under the Securities Act
immediately upon effectiveness of the registration statement,
subject to the expiration of the
lock-up
period described above and under Underwriting in
this prospectus.
Stock
Plans
As soon as practicable after the completion of this offering, we
intend to file a
Form S-8
registration statement under the Securities Act to register
shares of our common stock reserved for issuance under our stock
plan. This registration statement will become effective
immediately upon filing, and shares covered by this registration
statement will thereupon be eligible for sale in the public
market, subject to Rule 144 limitations applicable to
affiliates and any
lock-up
agreements. For a more complete discussion of our stock plans,
see Compensation Discussion and Analysis
Executive Compensation Equity Compensation
Plans.