Registration No. 333-
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM S-3
REGISTRATION STATEMENT
THE SECURITIES ACT OF 1933
CBAK ENERGY TECHNOLOGY, INC.
(Exact name of registrant as specified in its charter)
Nevada | ||
(State or Incorporation or | (I.R.S. Employer Identification |
BAK Industrial Park, No. 1 BAKMeigui Street
Huayuankou Economic Zone
Dalian City, Liaoning Province, 116450
People’s Republic of China
(Address, including zip code, and telephone number,
of registrant’s principal executive offices)
| Copies of Correspondence to: | |
CSC Services of Nevada, Inc. 2215 Renaissance Dr. Ste. Las Vegas, NV, 89119 (866) 403 5272 (Name, address, and telephone number, including area code, of agent for service) | Kevin (Qixiang) Sun, Esq. Bevilacqua PLLC 1050 Connecticut Avenue, NW, Suite 500 Washington, DC 20036 202-869-0888 |
Thelen Reid Brown Raysman & Steiner LLP
If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box.
If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, please check the following box.
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.
If delivery ofthis Form is a registration statement pursuant to General Instruction I.D. or a post-effective amendment thereto that shall become effective upon filing with the prospectus is expected to be madeCommission pursuant to Rule 434, please462(e) under the Securities Act, check the following box.
If this Form is a post-effective amendment to a registration statement filed pursuant to General Instruction I.D. filed to register additional securities or additional classes of securities pursuant to Rule 413(b) under the Securities Act, please check the following box.
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large Accelerated Filer | ☐ | Accelerated Filer | ☐ | |
| Non-Accelerated Filer | ☐ | Smaller reporting company | ☒ | |
| Emerging growth company | ☐ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☐
CALCULATION OF REGISTRATION FEE
Title of Each Class of Securities to be Registered1) | Proposed Maximum Aggregate Offering Price (2)(3) | Amount of Registration Fee (3) |
| Common Stock, $0.001 par value per share | ||
| Warrants to Purchase Common Stock | ||
| Total | $60,000,000 | $2,358.00 |
| Title of each class of securities to be registered | Amount to be Registered (1) | Proposed Maximum Offering Price Per Unit (2) | Proposed Maximum Aggregate Offering Price (1)(2) | Amount of Registration Fee (3) | ||||||||||||
| Common Stock, par value $0.001 per share | ||||||||||||||||
| Debt Securities | ||||||||||||||||
| Warrants | ||||||||||||||||
| Units | ||||||||||||||||
| Total | $ | 200,000,000 | $ | 21,820 | ||||||||||||
| (1) | There |
| (2) | The proposed maximum aggregate offering price for |
| Estimated solely for the purposes of | |
The Registrantregistrant hereby amends this Registration Statementregistration statement on such date or dates as may be necessary to delay its effective date until the Registrantregistrant shall file a further amendment which specifically states that this Registration Statementregistration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until this Registration Statementregistration statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.
The information in this prospectus is not complete and may be changed. These securitiesWe may not be soldsell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.
SUBJECT TO COMPLETION, DATED JUNE 27, 2008
Subject to completion, dated November 23, 2020
PROSPECTUS
CBAK ENERGY TECHNOLOGY, INC.
$60,000,000200,000,000
Common Stock
andDebt Securities
Common Stock Warrants
Units
We may offer, issue and sell from time to time our shares of Common Stock, par value $0.001 per share, debt securities, warrants, or units up to $200,000,000 or its equivalent in any other currency, currency units, or composite currency or currencies in one or more offerings common stock and/issuances. We may sell any combination of these securities in one or warrants to purchase common stock at an aggregate public offering price of up to $60,000,000.
This prospectus provides you with a general descriptiondescribes some of the general terms that may apply to these securities weand the general manner in which they may offer. Each time we offer securities, we will provide thebe offered. The specific terms of any securities to be offered, and the offerings of our common stock and/or warrants to purchase common stockspecific manner in supplementswhich they may be offered, will be described in a supplement to this prospectus. The prospectus supplement also may add, update or change information contained inincorporated into this prospectus.prospectus by reference. You should read this prospectus and any prospectus supplement as well as the documents incorporated by reference or deemed to be incorporated by reference into this prospectus, carefully before you invest.
The information contained or incorporated in this prospectus or in any prospectus supplement is accurate only as of the date of this prospectus, or such prospectus supplement, as applicable, regardless of the time of delivery of this prospectus or any sale of our common stock.
Our common stockCommon Stock is quotedlisted on the Nasdaq GlobalCapital Market under the symbol “CBAK.“CBAT.” TheOn November 20, 2020, the last reported per share sale price of our common stock onCommon Stock was $7.99.
We may offer securities through underwriting syndicates managed or co-managed by one or more underwriters, through agents, or directly to purchasers. The Nasdaq Global Market on June 26, 2008, was $4.92 per share.
Investing in our securities involves risks. You should carefully consider the risk factors beginning on page 23 of this prospectus, in any accompanying prospectus supplement and set forthin any related free writing prospectus, and in the documents incorporated by reference hereininto this prospectus, any accompanying prospectus supplement and any related free writing prospectus before making any decision to invest in our common stock.securities.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.
The date of this prospectus is June 27, 2008, 2020
| ABOUT THIS PROSPECTUS | 1 |
| 2 | |
| RISK FACTORS | 3 |
| FORWARD-LOOKING STATEMENTS | 4 |
| 4 | |
| 5 | |
| 16 | |
| DESCRIPTION OF UNITS | 17 |
| PLAN OF DISTRIBUTION | |
i
As permitted under the rules of the SEC, this prospectus incorporates by reference important information about China BAK Battery, Inc. that is contained in documents that we file with the SEC, but that are not attached to or delivered with this prospectus. You may obtain copies of these documents, without charge, from the website maintained by the SEC at www.sec.gov, as well as other sources. See “Available Information” for further information.
This prospectus is part of a registration statement that we filed with the Securities and Exchange Commission, or the SEC, using a “shelf” registration process. Under this shelf registration process, we may offer from time to timesell our securities described in this prospectus in one or more offerings up to $60,000,000a total dollar amount of our common stock and/$200,000,000 (or its equivalent in foreign or warrants to purchase common stock.composite currencies).
This prospectus provides you with a general description of the securities that may be offered. Each time we offer our common stock and/or warrants to purchase common stock,securities, we will provide you with a supplement to this prospectus supplement that describeswill describe the specific amounts, prices and terms of the common stock and/or warrants to purchase common stocksecurities we offer. The prospectus supplement(s)supplement may also may add, update or change information contained in this prospectus.
You should rely only on the information contained in or incorporated by reference in this prospectus or aand any applicable prospectus supplement. We have not authorized anyone to provide you with different or additional information. If anyone provides you with different or inconsistent information, you should not rely on it. We take no responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you. The information contained in this prospectus is accurate only as of the date of this prospectus, regardless of the time of delivery of this prospectus or any sale of securities described in this prospectus. This prospectus is neithernot an offer to sell nor a solicitation of an offer to buy anythese securities and it is not soliciting an offer to buy ourthese securities in any jurisdiction where the offer or sale is not permitted.
You should not assume that the information appearingcontained in this prospectus or anyand the accompanying prospectus supplement as well asis accurate on any date subsequent to the date set forth on the front of the document or that any information that we have previously filed with the SEC and incorporated by reference is accurate ascorrect on any date subsequent to the date of the date on the front of those documents only.document incorporated by reference. Our business, financial condition, results of operations and prospectusprospects may have changed since those dates.This
Unless the context otherwise requires, the terms “we,” “our,” “us,” “our company,” and the “Company” in this prospectus may not be usedeach refer to consummate a sale of our securities unless it is accompaniedCBAK Energy Technology, Inc. and its consolidated subsidiaries.
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The information contained in or incorporated by areference into this prospectus supplement.
Our Business
We are a manufacturer of new energy high power lithium batteries that are mainly used in electric vehicles, light electric vehicles, electric tools, energy storage, uninterruptible power supply (UPS) and other high-power applications. The use of new materials has enabled the configuration of high-power lithium battery cells to contain much higher energy density and higher voltage, and to have a long-life cycle and shorter charge time than other types of lithium-based batteries.
We currently conduct our business through various operating subsidiaries located in China. We acquired most of the operating assets, including customers, employees, patents and technologies of our former subsidiary, BAK International (Tianjin) Ltd. Such assets were acquired in exchange for a reduction in accounts receivable from our former subsidiaries that were disposed in June 2014. We currently are equipped with complete production equipment which can fulfill most of our customers’ needs.
We generated revenues of $22.2 million and $24.4 million for the fiscal years ended December 31, 2019 and 2018, respectively, and revenues of $22.1 million and $17.5 million for the nine months ended September 30, 2020 and 2019, respectively. We had a net loss of $10.9 million and $2.0 million for the fiscal years ended December 31, 2019 and December 31, 2018, respectively, and had a net loss of $3.5 million and $6.9 million for the nine months ended September 30, 2020 and 2019, respectively. As of December 31, 2019, we had an accumulated deficit of $176.2 million and net assets of $13.7 million. As of September 30, 2020, we had an accumulated deficit of $179.7 million and net assets of $17.0 million. We had a working capital deficiency and accumulated deficit from recurring net losses and short-term debt obligations maturing in less than one year as of September 30, 2020.
Although the COVID-19 pandemic has caused disruptions to our operations, it has had limited adverse impacts on our operating results. Our revenue grew by $4.6 million, or 26% for the nine months ended September 30, 2020, compared to the same period of 2019, and our gross profit grew by $1.5 million, or 694% for the nine months ended September 30, 2020 compared to the same period of 2019.
On June 23, 2020, our wholly-owned Hong Kong subsidiary, China BAK Asia Holdings Limited, entered into a framework investment agreement with Jiangsu Gaochun Economic Development Zone Development Group Company (“Gaochun EDZ”), pursuant to which we intend to develop certain lithium battery projects that aim to have a production capacity of approximately 8Gwh. Gaochun EDZ has agreed to provide various support to facilitate the development and operation of the projects. On September 24, 2020, our wholly-owned Hong Kong subsidiary, BAK Asia Investments Limited, entered into another framework investment agreement with Gaochun EDZ, under which we intend to develop light electric vehicle projects. As of mid-November 2020, we have received a RMB20 million (approximately $2.9 million) subsidy from Gaochun EDZ.
We report financial and operational information in one segment. Management, including the risk factors,chief operating decision maker, reviews operating results solely by monthly revenue of li-ion rechargeable batteries (but not by sub product type or geographic area).
Corporate Information
CBAK Energy Technology, Inc. (formerly known as China BAK Battery, Inc.) is a corporation formed in the financial statementsState of Nevada on October 4, 1999 as Medina Copy, Inc. The Company changed its name to Medina Coffee, Inc. on October 6, 1999 and the documents incorporated by reference. References in this prospectus to: “China BAK,” “the Company,” “we,” “us” and “our” refersubsequently changed its name to China BAK Battery, Inc. and its consolidated subsidiaries.
The shares of the largest manufacturers of lithium-ion battery cellsCompany traded in the world, as measured by production output. We produce battery cellsover-the-counter market through the Over-the-Counter Bulletin Board from 2005 until May 31, 2006, the date when the Company obtained approval to list its Common Stock on the Nasdaq Global Market, and trading commenced that aresame date under the principal component of rechargeable batteries commonly usedsymbol “CBAK.”
Effective January 16, 2017, the Company changed its name to powerCBAK Energy Technology, Inc. Effective November 30, 2018, the following applications:
The Company’s mailing address and after-sales servicesprincipal place of lithium-ion battery cells.
2
This prospectus contains or incorporates forward-looking statements within the SEC a registration statement on Form S-3 undermeaning of section 27A of the Securities Act that registers the common stock to be sold by the selling stockholders. This prospectus does not contain alland section 21E of the information set forth in the registration statement and the exhibits filed as part of the registration statement. For further information with respect to us and our common stock, we refer you to the registration statement and the exhibits filed as a part of the registration statement. Statements contained in this prospectus concerning the contents of any contract or any other document are not necessarily complete. If a contract or document has been filed as an exhibit to the registration statement, we refer you to the copy of the contract or document that has been filed. Each statement in this prospectus relating to a contract or document filed as an exhibit is qualified in all respects by the filed exhibit.
We describe material risks, uncertainties and assumptions that could affect our business, including our financial condition and results of operations, under “Risk Factors” and may update our descriptions of such risks, uncertainties and assumptions in any prospectus supplement. We base our forward-looking statements on our management’s beliefs and assumptions based on information available to our management at the time the statements are made. We caution you that actual outcomes and results may differ materially from what is expressed, implied or anticipatedforecast by our forward-looking statements. Accordingly, you should be careful about relying on any forward-looking statements. Reference is made in particular to forward-looking statements regarding growth strategies, financial results, product and service development, competitive strengths, intellectual property rights, litigation, mergers and acquisitions, market acceptance or performance are discussed incontinued acceptance of our products, accounting estimates, financing activities, ongoing contractual obligations and sales efforts. Except as required under the federal securities laws, the rules and regulations of the SEC, stock exchange rules, and other applicable laws, regulations and rules, we do not have any intention or obligation to update publicly any forward-looking statements after the distribution of this prospectus, whether as a result of new information, future events, changes in assumptions, or otherwise.
Except as described in any prospectus supplement and any free writing prospectus in the reports incorporated by reference into this prospectus or any prospectus supplement. You are urged to carefully review and consider the various disclosures made by us therein before making any investment decision. The forward-looking statement speak only as of the date made andconnection with a specific offering, we disclaim any obligation to provide updates, revisions or amendments to any forward-looking statements to reflect changes in our expectations or future events.
We may include, among other things:
PLANDESCRIPTION OF DISTRIBUTIONCAPITAL STOCK
The following describes our capital stock and summarizes the securities being offeredmaterial provisions of our articles of incorporation and amendments thereto and amended and restated bylaws, which is based upon, and is qualified by us inreference to, our articles of incorporation and amendments thereto, amended and restated bylaws and the applicable provisions of Nevada law. This summary does not purport to be complete. You should read our articles of incorporation and amendments thereto and amended and restated bylaws which are filed as exhibits to the registration statement of which this prospectus (a) through underwriters or dealers, (b) directlyforms a part, for the provisions that are important to purchasers, (c) through agents or (d) through a combinationyou.
Common Stock
The Company is authorized to issue up to 500,000,000 shares of any of these methods. We and our agents and underwritersCommon Stock, with par value $0.001 per share. The Common Stock may sell the securities being offered by us in this prospectusbe issued from time to time in one or more transactions in and outside the United States:
Voting Rights and may discontinue any market making at any time without notice.
Each outstanding share of common stockCommon Stock entitles the holder thereof to one vote per share on all matters coming before the stockholders for a vote. Our articles of incorporation do not permit cumulative voting for the election of directors, which means that the holders of more than 50% of such outstanding shares voting for the election of directors can elect all of the directors to be elected, if they so choose; in such event, the holders of the remaining shares will not be able to elect any of our directors. Likewise, our articles of incorporation do not vary the size of the vote necessary for the stockholders to act on various matters from the size of the vote required by Nevada law, which requiresmeans, unless a different vote is required by express provisions of Nevada law, an action by the stockholders on a matter other than the election of directors toshall be approved if the number of votes cast in favor of the action exceeds the number of votes cast in opposition to the action. The directors of a Nevada corporation are elected at the annual meeting of the stockholders by a plurality of the votes cast at the election. Stockholders do not have preemptive rights to purchase shares in any future issuance of our common stock.
Dividends
The holders of shares of our common stockCommon Stock are entitled to dividends out of funds legally available when and as declared by our board of directors. Our board of directors has never declared a dividend or otherwise authorized any cash or other distribution with respect to the shares of our common stockCommon Stock and does not anticipate declaring a dividend in the foreseeable future. Should we decide in the future to pay dividends, as a holding company, our ability to do so and meet other obligations depends upon the receipt of dividends or other payments from our operating subsidiaries and other holdings and investments. In addition, our operating subsidiaries, from time to time, may be subject to restrictions on their ability to make distributions to us, including as a result of restrictive covenants in loan agreements, restrictions on the conversion of local currency into dollars or other hard currency and other regulatory restrictions.
Liquidation
In the event of our liquidation, dissolution or winding up, holders of our common stock are entitled to receive, ratably, the net assets available to stockholders after payment of all creditors.
Fully Paid and Nonassessable
All of the issued and outstanding shares of our common stockCommon Stock are duly authorized, validly issued, fully paid and non-assessable. To the extent that additional shares of our common stockCommon Stock are issued, the relative interests of existing stockholders will be diluted.
Warrants
Our articles of incorporation and by-lawsbylaws contain certain provisions that may have the effect of entrenching our existing board members, delaying, deferring or preventing a future takeover or change in control of the company unless such takeover or change in control is approved by the board of directors.
| ● | Special Meetings of Stockholders — Our articles of incorporation provide that special meetings of the stockholders can only be called by our president or any other executive officer, or the board of directors, or any member thereof, the record holder or holders of at least 10% of all shares entitled to vote at the meeting, and our bylaws provide that a special meeting will be called by the president or secretary at the written request of our stockholders holding not less than 30% of all the shares issued, outstanding and entitled to vote. |
| ● | Advance Notice Procedures — At an annual meeting, our stockholders elect a board of directors and transact such other business as may properly be brought before the meeting. By contrast, at a special meeting, our stockholders may transact only the business for the purposes specified in the notice of the meeting unless all of our stockholders entitled to vote are present at the special meeting and consent. |
| ● | Contracts and Transactions with Interested Directors — We may enter into a contract or a transaction with an entity in which our directors or officers have a financial or other interest as long as such relationship has been disclosed to, or is known by, our board of directors, or is otherwise fair to the Company at the time it is authorized or approved. |
| ● | Amendment of Bylaws — Our Bylaws may be amended by our board of directors alone. |
| ● | Authorized but Unissued Shares — Our board of directors may cause us to issue our authorized but unissued shares of Common Stock in the future without stockholders’ approval. These additional shares may be utilized for a variety of corporate purposes, including future public offerings to raise additional capital, corporate acquisitions and employee benefit plans. The existence of authorized but unissued shares of Common Stock could render more difficult or discourage an attempt to obtain control of a majority of our Common Stock by means of a proxy contest, tender offer, merger or otherwise. |
Special Meetings of Shareholders — Our articles of incorporation provide that special meetings of the stockholders can only be called by our president, or the board of directors, or the president or secretary at the written request of our stockholders holding not less than 10% of all the issued and outstanding stock.
Nevada Business Combination Statute
We are subject to the “business combination” provisions of Sections 78.411 to 78.444 of Nevada’s Combinations with Interested Stockholders statute.the Nevada Revised Statutes. In general, such provisions prohibit a Nevada corporation with at least 200 stockholders from engaging in various “combination” transactions with any interested stockholder:
A “combination” is generally defined to include mergers or consolidations or any sale, lease, exchange, mortgage, pledge, transfer, or other disposition, in one transaction or a series of transactions, with an “interested stockholder” or any affiliate or associate of an interested stockholder having: (a) an aggregate market value equal to more than 5% or more of the aggregate market value of the assets of the corporation, (b) an aggregate market value equal to more than 5% or more of the aggregate market value of all outstanding voting shares of the corporation, orand (c) more than 10% or more of the earning power or net income of the corporation.
An “interested stockholder” is generally defined to mean a person who, together with affiliates and associates, owns (orbeneficial owner of at least 10% of the outstanding voting power or an affiliate or associate of the corporation that has been a 10% beneficial owner within three years, did own) 10% or more of a corporation’s voting stock.the preceding 2 years. The statutestatutes could prohibit or delay mergers or other takeover or change in control attempts and, accordingly, may discourage attempts to acquire our company even though such a transaction may offer our stockholders the opportunity to sell their stock at a price above the prevailing market price.
Nevada Acquisition of Controlling Interest Statute
Nevada’s Acquisition of Controlling Interest statuteStatute (NRS Sections 78.378-78.3793) applies only to Nevada corporations with at least 200 stockholders, including at least 100 stockholders of record who are Nevada residents, and which conduct business directly or indirectly in Nevada.Nevada and whose articles of incorporation or bylaws in effect 10 days following the acquisition of a controlling interest by an acquiror do not prohibit its application. As of the date of this prospectus, we do not believe we have 100 stockholders of record who are residents of Nevada, although there can be no assurance that in the future the Acquisitionacquisition of Controlling Interest statutecontrolling interest statutes will not apply to us.
Nevada’s Acquisition of Controlling Interest statuteStatute, prohibits an acquiror, under certain circumstances, from voting its shares of a target corporation’s stock after crossing certain threshold ownership threshold percentages, unless the acquiror obtains the approval of the target corporation’s disinterested stockholders. The statute specifies three thresholds:thresholds that constitute a controlling interest: (a) at least one-fifth or more but less than one-third,one-third; (b) at least one-third but less than a majority,majority; and (c) a majority or more, of the outstanding voting power. Once an acquiror crosses one of these thresholds, shares which it acquired in the above thresholds, those shares in an offer or acquisition and acquiredtransaction exceeding the threshold (or within 90ninety days thereofpreceding the date thereof) become “control shares” and such Control Shares arewhich could be deprived of the right to vote until a majority of the disinterested stockholders restore that right.
A special stockholders meeting may be called at the right. The Acquisitionrequest of Controlling Interest statute also providesthe acquiror to consider the voting rights of the acquiror’s shares. If the acquiror requests a special meeting and gives an undertaking to pay the expenses of said meeting, then the meeting must take place no earlier than 30 days (unless the acquiror requests that the meeting be held sooner) and no more than 50 days (unless the acquiror agrees to a later date) after the delivery by the acquiror to the corporation of an information statement which sets forth the range of voting power that the acquiror has acquired or proposes to acquire and certain other information concerning the acquiror and the proposed control share acquisition.
If no such request for a stockholders meeting is made, consideration of the voting rights of the acquiror’s shares must be taken at the next special or annual stockholders meeting. If the stockholders fail to restore voting rights to the acquiror, or if the acquiror fails to timely deliver an information statement to the corporation, then the corporation may, if so provided in its articles of incorporation or bylaws, call certain of the acquiror’s shares for redemption at the average price paid for the control shares are accordedby the acquiror.
In the event the stockholders restore full voting rights and the acquiring person has acquiredto a holder of control shares that owns a majority or more of allthe voting power,stock, then all other stockholders who do not vote in favor of authorizingrestoring voting rights to the control shares are entitled tomay demand payment for the fair value“fair value” of their shares as determined by a court in accordance with statutory procedures established for dissenters’ rights.
Listing
Our Common Stock is listed on Nasdaq Capital Market under the symbol “CBAT.”
Transfer Agent
Our transfer agent is Securities Transfer Corporation, 25912901 N Dallas Parkway, Suite 102, Frisco,380, Plano, Texas 75034.
The following is a summary describesof the general terms of the debt securities that we may issue. We will file a prospectus supplement that may contain additional terms when we issue debt securities. The terms presented here, together with the terms in a related prospectus supplement, will be a description of the material terms of the debt securities. You should also read the indenture under which the debt securities are to be issued. We have filed a form of indenture governing different types of debt securities with the SEC as an exhibit to the registration statement of which this prospectus is a part. All capitalized terms have the meanings specified in the indenture.
We may issue, from time to time, debt securities, in one or more series, that will consist of senior debt, senior subordinated debt or subordinated debt. We refer to the subordinated debt securities and the senior subordinated debt securities together as the subordinated securities. The debt securities that we may offer will be issued under an indenture between us and an entity, identified in the applicable prospectus supplement, as trustee. Debt securities, whether senior, senior subordinated or subordinated, may be issued as convertible debt securities or exchangeable debt securities. The following is a summary of the material provisions of the indenture filed as an exhibit to the registration statement of which this prospectus is a part.
As you read this section, please remember that for each series of debt securities, the specific terms of your debt security as described in the applicable prospectus supplement will supplement and, if applicable, may modify or replace the general terms described in the summary below. The statement we make in this section may not apply to your debt security.
General Terms of the Indenture
The indenture does not limit the amount of debt securities that we may issue. It provides that we may issue debt securities up to the principal amount that we may authorize and may be in any currency or currency unit that we may designate. We may, without the consent of the holders of any series, increase the principal amount of securities in that series in the future, on the same terms and conditions and with the same CUSIP numbers as that series. Except for the limitations on consolidation, merger and sale of all or substantially all of our assets contained in the indenture, the terms of the indenture do not contain any covenants or other provisions designed to give holders of any debt securities protection against changes in our operations, financial condition or transactions involving us.
We may issue the debt securities issued under the indenture as “discount securities,” which means they may be sold at a discount below their stated principal amount. These debt securities, as well as other debt securities that are not issued at a discount, may be issued with “original issue discount”, or OID, for U.S. federal income tax consequences arising from the purchase, ownershippurposes because of interest payment and disposition of our common stock. This discussion does not cover all aspects ofother characteristics. Material U.S. federal income taxationtax considerations applicable to debt securities issued with original issue discount will be described in more detail in any applicable prospectus supplement.
The applicable prospectus supplement for a series of debt securities that we issue will describe, among other things, the following terms of the offered debt securities:
| ● | the title and authorized denominations of the series of debt securities; |
| ● | any limit on the aggregate principal amount of the series of debt securities; |
| ● | whether such debt securities will be issued in fully registered form without coupons or in a form registered as to principal only with coupons or in bearer form with coupons; |
| ● | whether issued in the form of one or more global securities and whether all or a portion of the principal amount of the debt securities is represented thereby; |
| ● | the price or prices at which the debt securities will be issued; |
| ● | the date or dates on which principal is payable; |
| ● | the place or places where and the manner in which principal, premium or interest, if any, will be payable and the place or places where the debt securities may be presented for transfer and, if applicable, conversion or exchange; |
| ● | interest rates, and the dates from which interest, if any, will accrue, and the dates when interest is payable and the maturity; |
| ● | the right, if any, to extend the interest payment periods and the duration of the extensions; |
| ● | our rights or obligations to redeem or purchase the debt securities; |
| ● | any sinking fund or other provisions that would obligate us to repurchase or otherwise redeem some or all of the debt securities; |
| ● | conversion or exchange provisions, if any, including conversion or exchange prices or rates and adjustments thereto; |
| ● | the currency or currencies of payment of principal or interest; |
| ● | the terms applicable to any debt securities issued at a discount from their stated principal amount; |
| ● | the terms, if any, under which any debt securities will rank junior to any of our other debt; |
| ● | whether and upon what terms the debt securities may be defeased, if different from the provisions set forth in the indenture; |
| ● | if the amount of payments of principal or interest is to be determined by reference to an index or formula, or based on a coin or currency other than that in which the debt securities are stated to be payable, the manner in which these amounts are determined and the calculation agent, if any, with respect thereto; |
| ● | the provisions, if any, relating to any collateral provided for the debt securities; |
| ● | if other than the entire principal amount of the debt securities when issued, the portion of the principal amount payable upon acceleration of maturity as a result of a default on our obligations; |
| ● | the events of default and covenants relating to the debt securities that are in addition to, modify or delete those described in this prospectus; |
| ● | the nature and terms of any security for any secured debt securities; and |
| ● | any other specific terms of any debt securities. |
The applicable prospectus supplement will present material U.S. federal income tax considerations for holders of any debt securities and the securities exchange or quotation system on which any debt securities are to be listed or quoted.
Senior Debt Securities
Payment of the principal of, premium and interest, if any, on senior debt securities will rank on a parity with all of our other secured/unsecured and unsubordinated debt.
Senior Subordinated Debt Securities
Payment of the principal of, premium and interest, if any, on senior subordinated debt securities will be junior in right of payment to the prior payment in full of all of our unsubordinated debt, including senior debt securities and any credit facility. We will state in the applicable prospectus supplement relating to any senior subordinated debt securities the subordination terms of the securities as well as the aggregate amount of outstanding debt, as of the most recent practicable date, that by its terms would be senior to the senior subordinated debt securities. We will also state in such prospectus supplement limitations, if any, on issuance of additional senior debt.
Subordinated Debt Securities
Payment of the principal of, premium and interest, if any, on subordinated debt securities will be subordinated and junior in right of payment to the prior payment in full of all of our senior debt, including our senior debt securities and senior subordinated debt securities. We will state in the applicable prospectus supplement relating to any subordinated debt securities the subordination terms of the securities as well as the aggregate amount of outstanding indebtedness, as of the most recent practicable date, that by its terms would be senior to the subordinated debt securities. We will also state in such prospectus supplement limitations, if any, on issuance of additional senior indebtedness.
Conversion or Exchange Rights
Debt securities may be relevantconvertible into or exchangeable for other securities being registered in this registration statement, including, for example, shares of our equity securities. The terms and conditions of conversion or exchange will be stated in the applicable prospectus supplement. The terms will include, among others, the following:
| ● | the conversion or exchange price; |
| ● | the conversion or exchange period; |
| ● | provisions regarding the ability of us or the holder to convert or exchange the debt securities; |
| ● | events requiring adjustment to the conversion or exchange price; and |
| ● | provisions affecting conversion or exchange in the event of our redemption of the debt securities. |
Consolidation, Merger or Sale
We cannot consolidate or merge with or into, or transfer or lease all or substantially all of our assets to, any person, and we cannot permit any other person to consolidate with or merge into us, unless (1) we will be the continuing corporation or (2) the successor corporation or person to which our assets are transferred or leased is a corporation organized under the laws of the United States, any state of the United States or the District of Columbia and it expressly assumes our obligations under the debt securities and the indenture. In addition, we cannot complete such a transaction unless immediately after completing the transaction, no event of default under the indenture, and no event which, after notice or lapse of time or both, would become an event of default under the indenture, shall have occurred and be continuing. When the person to whom our assets are transferred or leased has assumed our obligations under the debt securities and the indenture, we shall be discharged from all our obligations under the debt securities and the indenture except in limited circumstances.
This covenant would not apply to any recapitalization transaction, a change of control of us or a highly leveraged transaction, unless the transaction or change of control were structured to include a merger or consolidation or transfer or lease of all or substantially all of our assets.
Events of Default
The term “Event of Default,” when used in the indenture, unless otherwise indicated, means any of the following:
| ● | failure to pay interest for 30 days after the date payment is due and payable; |
| ● | failure to pay principal or premium, if any, on any debt security when due, either at maturity, upon any redemption, by declaration or otherwise; |
| ● | failure to make sinking fund payments when due; |
| ● | failure to perform other covenants for 60 days after notice that performance was required; |
| ● | events in bankruptcy, insolvency or reorganization relating to us; or |
| ● | any other Event of Default provided in the applicable officer’s certificate, resolution of our board of directors or the supplemental indenture under which we issue a series of debt securities. |
An Event of Default for a particular series of debt securities does not necessarily constitute an Event of Default for any other series of debt securities issued under the indenture.
If an Event of Default with respect to any series of senior debt securities occurs and is continuing, then either the trustee for such series or the holders of a majority in aggregate principal amount of the outstanding debt securities of such series, by notice in writing, may declare the principal amount of and interest on all of the debt securities of such series to be due and payable immediately; provided, however, unless otherwise provided in the applicable prospectus supplement, if such an Event of Default occurs and is continuing with respect to more than one series of senior debt securities under the indenture, the trustee for such series or the holders of a majority in aggregate principal amount of the outstanding debt securities of all such series of senior debt securities of equal ranking (or, if any of such senior debt securities are discount securities, such portion of the principal amount as may be specified in the terms of that series), voting as one class, may make such declaration of acceleration as to all series of such equal ranking and not the holders of the debt securities of any one of such series of senior debt securities.
If an Event of Default with respect to any series of subordinated securities occurs and is continuing, then either the trustee for such series or the holders of a majority in aggregate principal amount of the outstanding debt securities of such series, by notice in writing, may declare the principal amount of and interest on all of the debt securities of such series to be due and payable immediately; provided, however, unless otherwise provided in the applicable prospectus supplement, if such an Event of Default occurs and is continuing with respect to more than one series of subordinated securities under the indenture, the trustee for such series or the holders of a majority in aggregate principal amount of the outstanding debt securities of all such series of subordinated securities of equal ranking (or, if any of such subordinated securities are discount securities, such portion of the principal amount as may be specified in the terms of that series), voting as one class, may make such declaration of acceleration as to all series of equal ranking and not the holders of the debt securities of any one of such series of subordinated securities. The holders of not less than a majority in aggregate principal amount of the debt securities of all affected series of equal ranking may, after satisfying certain conditions, rescind and annul any of the above-described declarations and consequences involving such series.
If an Event of Default relating to events in bankruptcy, insolvency or reorganization of us occurs and is continuing, then the principal amount of all of the debt securities outstanding, and any accrued interest, will automatically become due and payable immediately, without any declaration or other act by the trustee or any holder.
The indenture imposes limitations on suits brought by holders of debt securities against us. Except for actions for payment of overdue principal or interest, no holder of debt securities of any series may institute any action against us under the indenture unless:
| ● | the holder has previously given to the trustee written notice of default and continuance of such default; |
| ● | the holders of not less than a majority in principal amount of the outstanding debt securities of the affected series of equal ranking have requested that the trustee institute the action; |
| ● | the requesting holders have offered the trustee reasonable indemnity for expenses and liabilities that may be incurred by bringing the action; |
| ● | the trustee has not instituted the action within 60 days of the request; and |
| ● | the trustee has not received inconsistent direction by the holders of a majority in principal amount of the outstanding debt securities of the affected series of equal ranking. |
We will be required to file annually with the trustee a certificate, signed by one of our officers, stating whether or not the officer knows of any default by us in the performance, observance or fulfillment of any condition or covenant of the indenture.
Registered Global Securities and Book Entry System
The debt securities of a series may be issued in whole or in part in book-entry form and may be represented by one or more fully registered global securities or in unregistered form with or without coupons. We will deposit any registered global securities with a depositary or with a nominee for a depositary identified in the applicable prospectus supplement and registered in the name of such depositary or nominee. In such case, we will issue one or more registered global securities denominated in an amount equal to the aggregate principal amount of all of the debt securities of the series to be issued and represented by such registered global security or securities. This means that we will not issue certificates to each holder.
Unless and until it is exchanged in whole or in part for debt securities in definitive registered form, a registered global security may not be transferred except as a whole:
| ● | by the depositary for such registered global security to its nominee; |
| ● | by a nominee of the depositary to the depositary or another nominee of the depositary; or |
| ● | by the depositary or its nominee to a successor of the depositary or a nominee of the successor. |
The prospectus supplement relating to a series of debt securities will describe the specific terms of the depositary arrangement involving any portion of the series represented by a registered global security. We anticipate that the following provisions will apply to all depositary arrangements for registered debt securities:
| ● | ownership of beneficial interests in a registered global security will be limited to persons that have accounts with the depositary for such registered global security, these persons being referred to as “participants,” or persons that may hold interests through participants; |
| ● | upon the issuance of a registered global security, the depositary for the registered global security will credit, on its book-entry registration and transfer system, the participants’ accounts with the respective principal amounts of the debt securities represented by the registered global security beneficially owned by the participants; |
| ● | any dealers, underwriters, or agents participating in the distribution of the debt securities represented by a registered global security will designate the accounts to be credited; and |
| ● | ownership of beneficial interest in such registered global security will be shown on, and the transfer of such ownership interest will be effected only through, records maintained by the depositary for such registered global security for interests of participants, and on the records of participants for interests of persons holding through participants. |
The laws of some states may require that specified purchasers of securities take physical delivery of the securities in definitive form. These laws may limit the ability of those persons to own, transfer or pledge beneficial interests in registered global securities.
So long as the depositary for a registered global security, or its nominee, is the registered owner of such registered global security, the depositary or such nominee, as the case may be, will be considered the sole owner or holder dueof the debt securities represented by the registered global security for all purposes under the indenture. Except as stated below, owners of beneficial interests in a registered global security:
| ● | will not be entitled to have the debt securities represented by a registered global security registered in their names; |
| ● | will not receive or be entitled to receive physical delivery of the debt securities in the definitive form; and |
| ● | will not be considered the owners or holders of the debt securities under the relevant indenture. |
Accordingly, each person owning a beneficial interest in a registered global security must rely on the procedures of the depositary for the registered global security and, if the person is not a participant, on the procedures of a participant through which the person owns its interest, to exercise any rights of a holder under the indenture.
We understand that under existing industry practices, if we request any action of holders or if an owner of a beneficial interest in a registered global security desires to give or take any action that a holder is entitled to give or take under the indenture, the depositary for the registered global security would authorize the participants holding the relevant beneficial interests to give or take the action, and the participants would authorize beneficial owners owning through the participants to give or take the action or would otherwise act upon the instructions of beneficial owners holding through them.
We will make payments of principal and premium, if any, and interest, if any, on debt securities represented by a registered global security registered in the name of a depositary or its nominee to the particular circumstancesdepositary or its nominee, as the case may be, as the registered owners of such holderthe registered global security. None of us, the trustee or address estateany other agent of ours or the trustee will be responsible or liable for any aspect of the records relating to, or payments made on account of, beneficial ownership interests in the registered global security or for maintaining, supervising or reviewing any records relating to the beneficial ownership interests.
We expect that the depositary for any debt securities represented by a registered global security, upon receipt of any payments of principal and gift tax consequences, state, localpremium, if any, and interest, if any, in respect of the registered global security, will immediately credit participants’ accounts with payments in amounts proportionate to their respective beneficial interests in the registered global security as shown on the records of the depositary. We also expect that standing customer instructions and customary practices will govern payments by participants to owners of beneficial interests in the registered global security held through the participants, as is now the case with the securities held for the accounts of customers in bearer form or registered in “street name.” We also expect that any of these payments will be the responsibility of the participants.
If the depositary for any debt securities represented by a registered global security is at any time unwilling or unable to continue as depositary or stops being a clearing agency registered under the Exchange Act, we will appoint an eligible successor depositary. If we fail to appoint an eligible successor depositary within 90 days, we will issue the debt securities in definitive form in exchange for the registered global security. In addition, we may at any time and in our sole discretion decide not to have any of the debt securities of a series represented by one or more registered global securities. In that event, we will issue debt securities of the series in a definitive form in exchange for all of the registered global securities representing the debt securities. The trustee will register any debt securities issued in definitive form in exchange for a registered global security in the name or names as the depositary, based upon instructions from its participants, shall instruct the trustee.
We may also issue bearer debt securities of a series in the form of one or more global securities, referred to as “bearer global securities.” The prospectus supplement relating to a series of debt securities represented by a bearer global security will describe the applicable terms and procedures. These will include the specific terms of the depositary arrangement and any specific procedures for the issuance of debt securities in definitive form in exchange for a bearer global security, in proportion to the series represented by a bearer global security.
Discharge, Defeasance and Covenant Defeasance
We can discharge or decrease our obligations under the indenture as stated below.
We may discharge obligations to holders of any series of debt securities that have not already been delivered to the trustee for cancellation and that have either become due and payable or are by their terms to become due and payable, or are scheduled for redemption, within sixty (60) days. We may effect a discharge by irrevocably depositing with the trustee cash or U.S. government obligations, as trust funds, in an amount certified to be enough to pay when due, whether at maturity, upon redemption or otherwise, the principal of, premium and interest, if any, on the debt securities and any mandatory sinking fund payments.
Unless otherwise provided in the applicable prospectus supplement, we may also discharge any and all of our obligations to holders of any series of debt securities at any time, which we refer to as defeasance. We may also be released from the obligations imposed by any covenants of any outstanding series of debt securities and provisions of the indenture, and we may omit to comply with those covenants without creating an event of default under the trust declaration, which we refer to as covenant defeasance. We may effect defeasance and covenant defeasance only if, among other tax consequences or non-U.S. tax laws. This summary isthings:
| ● | we irrevocably deposit with the trustee cash or U.S. government obligations, as trust funds, in an amount certified to be enough to pay at maturity, or upon redemption, the principal, premium and interest, if any, on all outstanding debt securities of the series; |
| ● | we deliver to the trustee an opinion of counsel from a nationally recognized law firm to the effect that the holders of the series of debt securities will not recognize income, gain or loss for U.S. federal income tax purposes as a result of the defeasance or covenant defeasance and that defeasance or covenant defeasance will not otherwise alter the holders’ U.S. federal income tax treatment of principal, premium and interest, if any, payments on the series of debt securities; and |
| ● | in the case of subordinated debt securities, no event or condition shall exist that, based on the subordination provisions applicable to the series, would prevent us from making payments of principal of, premium and interest, if any, on any of the applicable subordinated debt securities at the date of the irrevocable deposit referred to above or at any time during the period ending on the 91st day after the deposit date. |
In the case of a defeasance by us, the opinion we deliver must be based on a ruling of the Internal Revenue Service issued, or a change in U.S. federal income tax law occurring, after the date of the indenture, since such a result would not occur under the U.S. federal income tax laws in effect on such date.
Although we may discharge or decrease our obligations under the indenture as described in the two preceding paragraphs, we may not avoid, among other things, our duty to register the transfer or exchange of any series of debt securities, to replace any temporary, mutilated, destroyed, lost or stolen series of debt securities or to maintain an office or agency in respect of any series of debt securities.
Modification of the Indenture
The indenture provides that we and the trustee may enter into supplemental indentures without the consent of the holders of debt securities to:
| ● | secure any debt securities and provide the terms and conditions for the release or substitution of the security; |
| ● | evidence the assumption by a successor corporation of our obligations; |
| ● | add covenants for the protection of the holders of debt securities; |
| ● | add any additional events of default; |
| ● | cure any ambiguity or correct any inconsistency or defect in the indenture; |
| ● | add to, change or eliminate any of the provisions of the indenture in a manner that will become effective only when there is no outstanding debt security which is entitled to the benefit of the provision as to which the modification would apply; |
| ● | establish the forms or terms of debt securities of any series; |
| ● | eliminate any conflict between the terms of the indenture and the Trust Indenture Act of 1939; |
| ● | evidence and provide for the acceptance of appointment by a successor trustee and add to or change any of the provisions of the indenture as is necessary for the administration of the trusts by more than one trustee; and |
| ● | make any other provisions with respect to matters or questions arising under the indenture that will not be inconsistent with any provision of the indenture as long as the new provisions do not adversely affect the interests of the holders of any outstanding debt securities of any series created prior to the modification. |
The indenture also provides that we and the trustee may, with the consent of the holders of not less than a majority in aggregate principal amount of debt securities of all series of senior debt securities or of Subordinated Securities of equal ranking, as the case may be, then outstanding and affected, voting as one class, add any provisions to, or change in any manner, eliminate or modify in any way the provisions of, the Internal Revenue Codeindenture or modify in any manner the rights of 1986, as amended (the “Code”), final, temporary and proposed United States Treasury regulations promulgated thereunder,the holders of the debt securities. We and the administrativetrustee may not, however, without the consent of the holder of each outstanding debt security affected thereby:
| ● | extend the final maturity of any debt security; |
| ● | reduce the principal amount or premium, if any; |
| ● | reduce the rate or extend the time of payment of interest; |
| ● | reduce any amount payable on redemption or impair or affect any right of redemption at the option of the holder of the debt security; |
| ● | change the currency in which the principal, premium or interest, if any, is payable; |
| ● | reduce the amount of the principal of any debt security issued with an original issue discount that is payable upon acceleration or provable in bankruptcy; |
| ● | alter provisions of the relevant indenture relating to the debt securities not denominated in U.S. dollars; |
| ● | impair the right to institute suit for the enforcement of any payment on any debt security when due; |
| ● | if applicable, adversely affect the right of a holder to convert or exchange a debt security; or |
| ● | reduce the percentage of holders of debt securities of any series whose consent is required for any modification of the indenture. |
The indenture provides that the holders of not less than a majority in aggregate principal amount of the then outstanding debt securities of any and judicial interpretationsall affected series of equal ranking, by notice to the relevant trustee, may on behalf of the holders of the debt securities of any and all such series of equal ranking waive any default and its consequences under the indenture except:
| ● | a continuing default in the payment of interest on, premium, if any, or principal of, any such debt security held by a non-consenting holder; or |
| ● | a default in respect of a covenant or provision of the indenture that cannot be modified or amended without the consent of the holder of each outstanding debt security of each series affected. |
Concerning the Trustee
The indenture provides that there may be more than one trustee under the indenture, each for one or more series of debt securities. If there are different trustees for different series of debt securities, each trustee will be a trustee of a trust under the indenture separate and apart from the trust administered by any other trustee under that indenture.
Except as otherwise indicated in this prospectus or any prospectus supplement, any action permitted to be taken by a trustee may be taken by such trustee only on the one or more series of debt securities for which it is the trustee under the indenture. Any trustee under the indenture may resign or be removed from one or more series of debt securities. All payments of principal of, premium and interest, if any, on, and all registration, transfer, exchange, authentication and delivery of, the debt securities of a series will be effected by the trustee for that series at an office designated by the trustee.
If the trustee becomes a creditor of ours, the indenture places limitations on the right of the trustee to obtain payment of claims or to realize on property received in respect of any such claim as security or otherwise. The trustee may engage in other transactions. If it acquires any conflicting interest relating to any duties concerning the debt securities, however, it must eliminate the conflict or resign as trustee.
The holders of a majority in aggregate principal amount of any and all affected series of debt securities of equal ranking then outstanding will have the right to direct the time, method and place of conducting any proceeding for exercising any remedy available to the trustee concerning the applicable series of debt securities, provided that the direction:
| ● | would not conflict with any rule of law or with the relevant indenture; |
| ● | would not be unduly prejudicial to the rights of another holder of the debt securities; and |
| ● | would not involve any trustee in personal liability. |
The indenture provides that in case an Event of Default shall occur, not be cured and be known to any trustee, the trustee must use the same degree of care as a prudent person would use in the conduct of his or her own affairs in the exercise of the trustee’s power. The trustee will be under no obligation to exercise any of its rights or powers under the indenture at the request of any of the holders of the debt securities, unless they shall have offered to the trustee security and indemnity satisfactory to the trustee.
No Individual Liability of Incorporators, Stockholders, Officers or Directors
No recourse under or upon any obligation, covenant or agreement of this Indenture, or of any debt security thereunder, or for any claim based thereon or otherwise in respect thereof, shall be had against any incorporator, stockholder, officer or director, as such, past, present or future, of the Company or of any successor corporation, either directly or through the Company, whether by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise; it being expressly understood that this Indenture and the obligations issued hereunder are solely corporate obligations of the Company, and that no such personal liability whatever shall attach to, or is or shall be incurred by, the incorporators, stockholders, officers or directors, as such, of the Company or of any successor corporation, or any of them.
Governing Law
The indenture and the debt securities will be governed by, and construed in accordance with, the laws of the State of New York.
We may issue warrants for the purchase of our Common Stock and/or debt securities in one or more series. We may issue warrants independently or together with our Common Stock and/or debt securities, and the warrants may be attached to or traded separate and apart from these securities. Each series of warrants will be issued under a warrant agreement all as set forth in the prospectus supplement. The applicable prospectus supplement or term sheet will describe the terms of the warrants offered thereby, any warrant agreement relating to such warrants and the warrant certificates, including but not limited to the following:
| ● | the title of the warrants; |
| ● | the offering price or prices of the warrants, if any; |
| ● | the minimum or maximum amount of the warrants which may be exercised at any one time; |
| ● | the currency or currency units in which the offering price, if any, and the exercise price are payable; |
| ● | the number of securities, if any, with which such warrants are being offered and the number of such warrants being offered with each security; |
| ● | the date, if any, on and after which such warrants and the related securities, if any, will be transferable separately; |
| ● | the amount of securities purchasable upon exercise of each warrant and the price at which the securities may be purchased upon such exercise, and events or conditions under which the amount of securities may be subject to adjustment; |
| ● | the date on which the right to exercise such warrants shall commence and the date on which such right shall expire; |
| ● | the circumstances, if any, which will cause the warrants to be deemed to be automatically exercised; |
| ● | any material risk factors, if any, relating to such warrants; |
| ● | the identity of any warrant agent; and |
| ● | any other material terms of the warrants. |
Prior to the exercise of any warrants, holders of such warrants will not have any rights of holders of the securities purchasable upon such exercise, including the right to receive payments of dividends or the right to vote such underlying securities. Prospective purchasers of warrants should be aware that material U.S. federal income tax, accounting and other considerations may be applicable to instruments such as warrants.
We may issue units comprised of one or more of the other securities described in this prospectus in any combination. Each unit will be issued so that the holder of the unit is also the holder of each security included in the unit. Thus, the holder of a unit will have the rights and obligations of a holder of each included security. The unit agreement under which a unit is issued may provide that the securities included in the unit may not be held or transferred separately, at any time or at any time before a specified date.
The applicable prospectus supplement may describe:
| ● | the designation and terms of the units and of the securities comprising the units, including whether and under what circumstances those securities may be held or transferred separately; |
| ● | any provisions for the issuance, payment, settlement, transfer or exchange of the units or of the securities comprising the units; and |
| ● | any additional terms of the governing unit agreement. |
The applicable prospectus supplement will describe the terms of any units. The preceding description and any description of units in the applicable prospectus supplement does not purport to be complete and is subject to and is qualified in its entirety by reference to the unit agreement and, if applicable, collateral arrangements and depositary arrangements relating to such units.
We may sell the securities offered by this prospectus in any one or more of the following ways (or in any combination) from time to time:
| ● | directly to investors, including through privately negotiated transactions, a specific bidding, auction or other process; |
| ● | to investors through agents; |
| ● | directly to agents; |
| ● | to or through underwriters or dealers; |
| ● | in “at the market” offerings, within the meaning of the Rule 415(a)(4) of the Securities Act, to or through a market maker or into an existing trading market on an exchange or otherwise; |
| ● | through a combination of any such methods of sale; or |
| ● | through any other method permitted by applicable law and described in the applicable prospectus supplement. |
The accompanying prospectus supplement will set forth the terms of the offering and the method of distribution and will identify any firms acting as underwriters, dealers or agents in connection with the offering, including:
| ● | the names and addresses of any underwriters, dealers or agents; |
| ● | the purchase price of the securities and the proceeds to us from the sale, if any; |
| ● | any over-allotment options under which underwriters may purchase additional securities from us; |
| ● | any underwriting discounts and other items constituting compensation to underwriters, dealers or agents; |
| ● | any public offering price, any discounts or concessions allowed or reallowed or paid to dealers; and |
| ● | any securities exchange or market on which the securities offered in the prospectus supplement may be listed. |
If underwriters are used in the sale, the underwriters will acquire the offered securities for their own account and may resell them from time to time in one or more transactions, including negotiated transactions, at a fixed public offering price or at varying prices determined at the time of sale. The offered securities may be offered either to the public through underwriting syndicates represented by one or more managing underwriters or by one or more underwriters without a syndicate. Unless otherwise set forth in a prospectus supplement, the obligations of the underwriters to purchase any series of securities will be subject to certain conditions precedent and the underwriters will be obligated to purchase all of such series of securities if any are purchased. Only those underwriters identified in such prospectus supplement are deemed to be underwriters in connection with the securities offered in the prospectus supplement. Any underwritten offering may be on a best efforts or a firm commitment basis.
In connection with the sale of our securities, underwriters or agents may receive compensation (in the form of discounts, concessions or commissions) from us, or from purchasers of securities for whom they may act as agents. Underwriters may sell securities to or through dealers, and such dealers may receive compensation in the form of discounts, concessions or commissions from the underwriters and/or commissions from the purchasers for whom they may act as agents. Underwriters, dealers and agents that participate in the distribution of our securities may be deemed to be “underwriters” as that term is defined in the Securities Act, and any discounts allowed or commissions paid, and any profit on the resale of the securities they realize may be deemed to be underwriting discounts and commissions under the Securities Act. Any person who may be deemed to be an underwriter will be identified, and the compensation received from us will be described, in the prospectus supplement. Maximum compensation to any underwriters, dealers or agents will not exceed any applicable Financial Industry Regulatory Authority limitations.
Underwriters and agents may be entitled to indemnification by us against some civil liabilities, including liabilities under the Securities Act, or to contributions with respect to payments which the underwriters or agents may be required to make relating to these liabilities. Underwriters and agents may be customers of, engage in transactions with, or perform services for us in the ordinary course of business.
Unless otherwise specified in the related prospectus supplement, each series of securities will be a new issue with no established trading market, other than our Common Stock, which is listed on the Nasdaq Capital Market. Any Common Stock sold pursuant to a prospectus supplement will be listed on the Nasdaq Capital Market, subject to official notice of issuance. We may elect to list any series of debt securities on an exchange, but we are not obligated to do so. It is possible that one or more underwriters may make a market in the securities, but such underwriters will not be obligated to do so and may discontinue any market making at any time without notice. No assurance can be given as to the liquidity of, or the trading market for, any offered securities.
The aggregate proceeds to us from the sale of our Common Stock will be the purchase price of our Common Stock less discounts or commissions, if any. We reserve the right to accept and, together with our agents from time to time, to reject, in whole or in part, any proposed purchase of our Common Stock to be made directly or through agents.
To facilitate the offering of the Common Stock offered by us, certain persons participating in the offering may engage in transactions that stabilize, maintain or otherwise affect the price of our Common Stock. This may include over-allotments or short sales, which involve the sale by persons participating in the offering of more shares than were sold to them. In these circumstances, these persons would cover such over-allotments or short positions by making purchases in the open market or by exercising their over-allotment option, if any. In addition, these persons may stabilize or maintain the price of our Common Stock by bidding for or purchasing shares in the open market or by imposing penalty bids, whereby selling concessions allowed to dealers participating in the offering may be reclaimed if shares sold by them are repurchased in connection with stabilization transactions. The effect of these transactions may be to stabilize or maintain the market price of our Common Stock at a level above that which might otherwise prevail in the open market. These transactions may be discontinued at any time.
Except as otherwise set forth in the applicable prospectus supplement, the validity of any securities offered pursuant to this prospectus will be passed upon by Sherman & Howard L.L.C. If legal matters in connection with offerings made pursuant to this prospectus are passed upon by counsel to underwriters, dealers or agents, such counsel will be named in the applicable prospectus supplement relating to any such offering.
The consolidated financial statements of CBAK Energy Technology, Inc. for the years ended December 31, 2019 and 2018, incorporated by reference in this prospectus and the registration statement of which the prospectus is a part, have been audited by the independent registered public accounting firm Centurion ZD CPA & Co., as set forth in its report thereon, incorporated by reference elsewhere herein, and are included herein in reliance upon such report given on the authority of such firm as experts in accounting and auditing.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The SEC allows us to “incorporate by reference” into this prospectus the information that we have filed with the SEC, which means that we can disclose important information to you by referring you to those documents. Any information that we file subsequently with the SEC will automatically update this prospectus. We incorporate by reference into this prospectus the information contained in the documents listed below, which is considered to be a part of this prospectus:
| ● | The Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019, filed with the Commission on May 14, 2020; |
| ● | Our Quarterly Reports on Form 10-Q filed on July 2, 2020, August 14, 2020 and November 16, 2020; |
| ● | Our Current Reports on Form 8-K filed on May 15, 2020, June 12, 2020, June 16, 2020, July 10, 2020, July 14, 2020, August 4, 2020, October 16, 2020 and November 17, 2020; |
| ● | The description of the Company’s Common Stock contained in our registration statement on Form 8-A filed on June 6, 2006 pursuant to Section 12(b) of the Exchange Act, including any amendment or reports filed hereafter for the purpose of updating such description; and |
| ● | All documents we file with the Commission pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this prospectus (if they state that they are incorporated by reference into this prospectus) until we file a post-effective amendment indicating that the offering of the securities made by this prospectus has been terminated. |
Any reports filed by us with the SEC after the date of this prospectus and before the date that the offering of securities by means of this prospectus is terminated will automatically update and, where applicable, supersede any information contained in this prospectus or incorporated by reference in this prospectus. This means that you must look at all of which are subjectthe SEC filings that we incorporate by reference to change, possiblydetermine if any of the statements in this prospectus or in any documents incorporated by reference have been modified or superseded. Unless expressly incorporated by reference, nothing in this prospectus shall be deemed to incorporate by reference information furnished to, but not filed with, retroactive effect. In particular,the SEC.
We will provide without charge to any person (including any beneficial owner) to whom this summary doesprospectus is delivered, upon oral or written request, a copy of any document incorporated by reference in this prospectus but not addressdelivered with the considerationsprospectus (except for exhibits to those documents unless a documents states that one of its exhibits is incorporated into the document itself). Such request should be directed to: CBAK Energy Technology, Inc., BAK Industrial Park, Meigui Street, Huayuankou Economic Zone, Dalian City, Liaoning Province, People’s Republic of China 116450, and telephone number (+86)(411)3918-5985.
WHERE YOU CAN FIND MORE INFORMATION
This prospectus is part of a registration statement on Form S-3 that we filed with the SEC registering the securities that may be applicable to (a) particular classes of taxpayers, including financial institutions, insurance companies, small business investment companies, mutual funds, partnerships or other pass-through entities or investors in such entities, expatriates, broker-dealersoffered and tax-exempt organizations, (b) holders withsold hereunder. This prospectus, which constitutes a “functional currency” other than the U.S. dollar or (c) holders of 10% or morepart of the total combined voting power of the Company’s shares. This summary deals only with the tax treatment of holders who own our common stock as “capital assets” as defined in Section 1221 of the Code.
The SEC maintains a website that you are not a U.S. person.
Additionally, we make these filings available, free of charge, on our website at http://www.cbak.com.cn as soon as reasonably practicable after we electronically file such materials with, or furnish them to, the United States by or through a non-U.S. broker generally willSEC. The information on our website, other than these filings, is not, and should not be, subject to information reporting or backup withholding. However, information reporting, but generallyconsidered part of this prospectus and is not backup withholding, will apply to such a payment ifincorporated by reference into this document.
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CBAK ENERGY TECHNOLOGY, INC.
$200,000,000
Common Stock
Debt Securities
Warrants
Units
PROSPECTUS
_______, 2020
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The following table sets forth the broker has certain connectionsvarious expenses in connection with the United States unless the broker has documentary evidence in its records that the beneficial owner of the disposed stock is a Non-U.S. Holdersale and either specified conditions are met or an exemption is otherwise established. Backup withholding and information reporting will apply to dispositions made by or through a U.S. office of any broker (U.S. or foreign).
| Securities and Exchange Commission registration fee | $ | 21,820 | ||
| Printing expenses | * | |||
| Legal fees and expenses | * | |||
| Accounting fees and expenses | * | |||
| Transfer agent fees and expenses | * | |||
| Miscellaneous | * | |||
| Total | $ | * |
*The amount of securities and number of offerings are indeterminable, and the expenses cannot be estimated at this time. The foregoing sets forth the general categories of fees and expenses (other than underwriting discounts and commissions) that we anticipate we will incur in connection with the offering of securities under this prospectus.
Item 15. Indemnification of PKF, independent registered public accounting firms, given on the authority of said firm as experts in auditingDirectors and accounting.
Under Sections 78-7502, 78.751 and 78.752 of the Nevada Revised Statutes, we have broad powers to indemnify and insure our directors and officers against liabilities they may incur in their capacities as such. Our Amended and Restated Bylaws implement the indemnification and insurance provisions permitted by Chapter 78 of the Nevada Revised Statutes by providing that:
| We must indemnify our directors to the fullest extent permitted by Chapter 78 of the Nevada Revised Statutes and may, if and to the extent authorized by our board of directors, so indemnify our officers and any other person whom we have power to indemnify against liability, reasonable expense or other matter whatsoever. |
| We may at the discretion of our board of directors to purchase and maintain insurance on behalf of our company and any person whom we have power to indemnify pursuant to law, our articles of incorporation, our bylaws or otherwise. |
These indemnification provisions may be sufficiently broad to permit indemnification of our directors and officers for liabilities (including reimbursement of expenses incurred) arising under the Securities Act. We also have entered into indemnification agreements with our executive officers and directors and may provide indemnity insurance pursuant to which directors and officers are indemnified or insured against liability or loss under certain circumstances that may include liability, or related loss under the Securities Act and the Securities Exchange Act. Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers, or persons controlling the registrant pursuant to the foregoing provisions, we have been informed that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.
The indemnity provisions may discourage stockholders from bringing a lawsuit against our directors for breach of their fiduciary duty. These provisions may also have the effect of reducing the likelihood of derivative litigation against directors and officers, even though such an action, if successful, might otherwise benefit us and our stockholders. Furthermore, a stockholder’s investment may be adversely affected to the extent we pay the costs of settlement and damage awards against directors and officers pursuant to these indemnification provisions. We believe that these provisions, the indemnification agreements and the insurance are necessary to attract and retain talented and experienced directors and officers.
At present, there is no pending litigation or proceeding involving any of our directors or officers where indemnification will be required or permitted. We are not aware of any threatened litigation or proceeding that might result in a claim for such indemnification.
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PART II
The following table sets forth the expenses to be incurred in connection with the issuance and distribution of the securities registered under this Registration Statement, other than underwriting discounts and commissions. All such expensesexhibits are estimates except for the SEC registration fee. The following expenses will be borne solelyfiled herewith or incorporated herein by the registrant.
| SEC registration fee | $ | 2,358 | ||
| Printing expenses | 100,000 | |||
| Legal fees and expenses | 175,000 | |||
| Accounting fees and expenses | 105,000 | |||
| Transfer agent and registrar fees | 10,000 | |||
| Miscellaneous expenses | 10,000 | |||
| Total | $ | 402,358 |
| Exhibit No. | Description | |
| 1.1+ | Form of Underwriting Agreement. | |
| 2.1 | Articles of Merger (incorporated by reference to Exhibit 2.1 to the |
| * | Filed herewith. |
| ** | To be filed separately pursuant to Section 305(b)(2) of the Trust Indenture Act of 1939, if applicable. |
| + | To be filed as an exhibit to a post-effective amendment to this registration statement or as an exhibit to a report of the registrant filed pursuant to the Securities and Exchange Act of 1934, if applicable, and incorporated herein by reference. |
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Item 17. Undertakings.
The undersigned registrant hereby undertakes:
| (1) | To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: |
| (i) | to include any prospectus required by Section 10(a)(3) of the Securities Act of 1933; |
| (ii) | to reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any |
| (iii) | to include any material information with respect to the plan of distribution not previously disclosed in the registration statement or |
provided, however, that subsections (i), (ii) and officers for liabilities (including reimbursement of expenses incurred) arising under the Securities Act.
| (2) | That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. |
| (3) | To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. |
| (4) | That, for the purpose of determining liability under the Securities Act of 1933, as amended, to any purchaser: |
| (i) | Each prospectus filed by the registrant pursuant to Rule 424(b)(3) shall be deemed to be part of this registration statement as of the date the filed prospectus was deemed part of and included in this registration statement. |
| (ii) | Each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as part of this registration statement in reliance on Rule 430B relating to an offer made pursuant to Rule 415(a)(1)(i), (vii), or (x) for the purpose of providing the information required by section 10(a) of the Securities Act of 1933, as amended, shall be deemed to be part of and included in this registration statement as of the earlier of the date such form of prospectus is first used after effectiveness or the date of the first contract of sale of securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any person that is at that date an underwriter, such date shall be deemed to be a new effective date of the registration statement relating to the securities in the registration statement to which that prospectus relates, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such effective date, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such effective date. |
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| (5) | That, for |
The undersigned registrant undertakes that in a primaryan offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:
| (i) | Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424; |
| (ii) | Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant; |
| (iii) | The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and |
| (iv) | Any other communication |
| (6) | That, for purposes of determining any liability under the Securities Act of 1933, as amended, each filing of the registrant’s annual report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934, as amended), that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. |
| (7) | Insofar as indemnification for liabilities arising under the Securities Act of 1933, as amended, may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act of 1933, as amended, and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. |
| (8) | To file an application for the purpose of determining the eligibility of the trustee to act under subsection (a) of Section 310 of the Trust Indenture Act in accordance with the rules and regulations prescribed by the Securities and Exchange Commission under Section 305(b)(2) of the Trust Indenture Act. |
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Pursuant to the requirements of the Securities Act of 1933, each filingthe registrant certifies that it has reasonable grounds to believe that it meets all of the registrant’s annual report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered herein,requirements for filing on Form S-3 and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
| CBAK ENERGY TECHNOLOGY, INC. | |||
| By: | /s/ | ||
| Yunfei Li | |||
| Chief Executive Officer | |||
POWER OF ATTORNEY
KNOW ALL PERSONSMEN BY THESE PRESENTS:
*****
Pursuant to the requirements of the Securities Exchange Act of 1934,1933, this Registration Statement on Form S-3registration statement has been signed below by the following persons on behalf of the registrant in the capacities indicated on June 27, 2008.
Signature | Title | Date | ||
| Chairman | November 23, 2020 | |||
| (Principal Executive Officer) | ||||
| /s/ | Interim Chief Financial Officer | November 23, 2020 | ||
| Xiangyu Pei | (Principal Financial | |||
| /s/ Guosheng Wang | Director | November 23, 2020 | ||
| Guosheng Wang | ||||
| /s/ J. Simon Xue | Director | November 23, 2020 | ||
| J. Simon Xue | ||||
| /s/ Martha C. Agee | Director | November 23, 2020 | ||
| Martha C. Agee | ||||
| /s/ | Director | November 23, 2020 | ||
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