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PROSPECTUS SUPPLEMENT NO. 1
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Filed pursuant to Rule 424(b)(5) |
(TO PROSPECTUS DATED MAY 11, 2006)
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Registration Statement No. 333-133598 |
6,061,000 Shares
Endologix, Inc.
Common Stock
We are offering up to 6,061,000 shares of our common stock at a price per share of $3.30.
Our common stock is listed on the Nasdaq National Market under the symbol ELGX. On May 30,
2006, the last reported sale price of our common stock on the Nasdaq National Market was $3.56 per
share.
Investing in our common stock involves a high degree of risk. Please see the section entitled
Risk Factors beginning on page S-3 of this prospectus supplement and beginning on page 2 of the
accompanying prospectus to read about risks you should consider carefully before buying shares of
our common stock.
Neither the Securities and Exchange Commission nor any state securities commission has
approved or disapproved of these securities, or determined if this prospectus supplement or the
accompanying prospectus is truthful or complete. Any representation to the contrary is a criminal
offense.
We have retained Canaccord Adams Inc. to act as the exclusive placement agent for us in
connection with the shares offered by this prospectus supplement and the accompanying prospectus.
We have agreed to pay Canaccord Adams the aggregate placement agent fees set forth in the table
below. The placement agent is not purchasing or selling any of these shares nor is it required to
sell any specific number or dollar amount of shares, but will use commercially reasonable efforts
to arrange for the sale of the shares of common stock offered by this prospectus supplement. Please
see the section entitled Plan of Distribution in this prospectus supplement.
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Per Share |
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Maximum Offering |
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Public offering price |
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3.30 |
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20,001,300 |
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Placement agent fees |
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$ |
0.1914 |
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$ |
1,160,075 |
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Proceeds, before expenses, to us |
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3.1086 |
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$ |
18,841,225 |
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We expect the total offering expenses, excluding placement agent fees, to be approximately
$51,225 for all sales pursuant to the prospectus supplemented by this prospectus supplement.
Because there is no minimum offering amount required as a condition to closing this offering, the
actual public offering amount, placement agent fees, and proceeds to us, if any, are not presently
determinable and may be substantially less than the maximum amounts set forth above.
Canaccord
Adams
As Placement Agent
The date of this prospectus supplement is May 31, 2006
TABLE OF CONTENTS
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Prospectus Supplement |
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S-1 |
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S-1 |
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S-2 |
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S-3 |
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S-11 |
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S-11 |
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S-12 |
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S-13 |
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S-13 |
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S-14 |
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S-14 |
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S-14 |
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Prospectus |
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You should rely only on information contained in this prospectus supplement, the accompanying
prospectus and the documents we incorporate by reference. We have
not authorized anyone to provide you with information that is different. You should not assume that
the information in this prospectus supplement or the accompanying prospectus is accurate as of any
date other than the date on the front of this prospectus supplement or the prospectus or that any
document that we incorporated by reference is accurate as of any
date other than its filing date. You should not consider this prospectus supplement or the
accompanying prospectus to be an offer or solicitation relating to the securities in any
jurisdiction in which such an offer or solicitation relating to the securities is not authorized.
Furthermore, you should not consider this prospectus supplement or the accompanying prospectus to
be an offer or solicitation relating to the securities if the person making the offer or
solicitation is not qualified to do so, or if it is unlawful for you to receive such an offer or
solicitation.
i
ABOUT THIS PROSPECTUS SUPPLEMENT
This summary highlights selected information about us and this offering. This information is
not complete and does not contain all the information you should consider before investing in our
common stock pursuant to this prospectus supplement and the accompanying prospectus. You should
carefully read this entire prospectus supplement and the accompanying prospectus, including Risk
Factors contained in this prospectus supplement and the financial statements and the other
information that we incorporated by reference, before making an
investment decision.
This prospectus supplement supplements the accompanying prospectus filed with our registration
statement on Form S-3 (registration file no. 333-133598) as part of a shelf registration process.
Under the shelf registration process, we may offer to sell shares of our common stock, par value
$0.001 per share, from time to time in one or more offerings up to a total dollar amount of
$50,000,000.
This prospectus supplement describes the specific terms of this offering and the accompanying
prospectus gives more general information, some of which may not apply to this offering. If the
description of the offering varies between this prospectus supplement and the accompanying
prospectus, you should rely on the information contained in this prospectus supplement.
Unless the context otherwise requires, references to we, us or the Company in this
prospectus supplement and accompanying prospectus shall refer to Endologix, Inc. Generally, when
we refer to this prospectus we are referring to both this prospectus supplement and the
accompanying prospectus combined.
ABOUT ENDOLOGIX
We develop, manufacture, sell and market minimally invasive therapies for the treatment of
cardiovascular disease. Our product, the Powerlink® System, is a
catheter-based alternative treatment for abdominal aortic aneurysm, or AAA. AAA is a weakening of
the wall of the aorta, the largest artery of the body. Once AAA develops, it continues to enlarge
and if left untreated becomes increasingly susceptible to rupture. The overall patient mortality
rate for ruptured AAAs is approximately 75%, making it the 13th leading cause of death in the
United States today.
The Powerlink System is a catheter and endoluminal graft system. The self-expanding cobalt
chromium alloy stent cage is covered by ePTFE, a common surgical graft material. The Powerlink
System is implanted in the abdominal aorta, which is accessed through the femoral artery. Once
deployed into its proper position, the blood flow is shunted away from the weakened or aneurysmal
section of the aorta, reducing pressure and the potential for the aorta to rupture. We believe that
implantation of our products will reduce the mortality and morbidity rates associated with
conventional AAA surgery, as well as provide a clinical alternative to many patients that could not
undergo conventional surgery.
More comprehensive information about our products and us is available through our worldwide
web site at www.endologix.com. The information on our website is not incorporated by reference into
this prospectus supplement. Our main offices are located at 11 Studebaker, Irvine, California 92618, and our
telephone number is (949) 595-7200.
S-1
THE OFFERING
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Common stock offered by us: |
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6,061,000 |
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Common stock outstanding before the offering: |
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36,538,364 |
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Common stock to be outstanding after the offering: |
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42,599,364 |
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Use of proceeds: |
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We currently anticipate |
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that the net proceeds |
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from the sale of the |
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common stock will be |
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used for general |
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corporate purposes. |
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Please see the section |
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entitled Use of |
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Proceeds. |
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Nasdaq National Market Symbol: |
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ELGX |
The information above is based on 36,538,364 shares of our common stock outstanding as of May
30, 2006. This number does not include:
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3,119,341 shares of common stock issuable upon the exercise of outstanding stock options
under our stock incentive plans, with a weighted average exercise price of $4.50; and |
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2,592,748 shares of common stock available for future issuance under our equity incentive
plans. |
S-2
RISK FACTORS
Investment in our common stock involves a high degree of risk. In deciding whether to invest,
you should carefully consider the following risk factors, as well as the other information
contained in this prospectus supplement and the accompanying prospectus. Any of the following risks
could have a material adverse effect on our business, financial condition, results of operations
and prospects and cause the value of our stock to decline, which could cause you to lose all or
part of your investment.
Risks Related to Our Business
Our success depends on the safety and efficacy of the Powerlink System in general use.
While we have demonstrated the safety and efficacy of the Powerlink System in our clinical
studies with our clinical investigators, market acceptance will depend on similar results with the
Powerlink System in general use. Any significant difficulties or adverse events encountered in
general use will impair the success of the Powerlink System and our business.
Our success depends on the growth in the number of AAA patient treated with endovascular devices.
Of the estimated 1.7 million people with AAA in the U.S., only about 220,000 are diagnosed
annually, and of that amount only about 20,000 to 25,000 are treated with an endovascular device.
Our success with our Powerlink System will depend on an increasing percentage of patients with AAA
being diagnosed at earlier stages and an increasing percentage of those patients receiving endovascular, as
opposed to open surgical, procedures. Initiatives to increase screening for AAA are underway but
are out of our control and such general screening programs may never gain wide acceptance. The
failure to diagnose more patients with AAA, at an earlier stage, will negatively impact sales of
the Powerlink System.
Our success depends on convincing a concentrated customer base of vascular surgeons and a limited
number of interventional radiologists and cardiologists to use our product over alternative
products and treatment modalities.
The physicians currently treating AAA have choices in treatment approach, one of which is
endovascular AAA stent graft placement. There are several competing endovascular stent grafts to
choose from and that number may increase. Increasing revenues from sales of Powerlink Systems will
depend on our marketing and sales team demonstrating that the Powerlink System is a superior
treatment alternative to watchful waiting, open surgery and competitive products. We believe that
this will require continued demonstration through clinical data and personal experience of the
efficacy of the Powerlink System.
While we have committed, and intend to continue to commit, substantial resources to our
marketing efforts, our competitors have superior resources to market and promote their endovascular
stent graft products. The most prominent devices that pose a competitive challenge to us include:
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Medtronics AneuRx, W.L. Gores Excluder, and Cooks Zenith AAA system, which are
available both in the U.S. and Europe; |
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other AAA graft Systems by Medtronic, and Johnson & Johnson, which currently have
more limited availability; and |
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other technologies in various phases of development, including pharmaceutical
solutions. |
Any of these treatments could prove to be more effective or may achieve greater market
acceptance than the Powerlink System. Even if these treatments are not as effective as the
Powerlink System, many of the companies pursuing these treatments and technologies have:
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significantly greater financial, management and other resources; |
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more extensive research and development capability; |
S-3
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established market positions; and |
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larger sales and marketing organizations. |
In addition, we believe that many of the purchasers and potential purchasers of our
competitors products prefer to purchase medical devices from a single source. Accordingly, many of
our competitors may have an advantage over us because of their size and range of product offerings.
Any failure of our Powerlink System to achieve clinical and commercial acceptance over our
competitors products will harm our business.
If third-party payors do not provide reimbursement for the use of the Powerlink System, our
revenues may be negatively impacted.
Our success in marketing the Powerlink System depends in large part on whether domestic and
international government health administrative authorities, private health insurers and other
organizations will reimburse customers for the cost of our product. Reimbursement systems in
international markets vary significantly by country and by region within some countries, and
reimbursement approvals must be obtained on a country-by-country basis. Further, many international
markets have government managed healthcare systems that control reimbursement for new devices and
procedures. In most markets there are private insurance systems as well as government-managed
systems. If sufficient reimbursement is not made available for the Powerlink System, or any other
product that we may develop, in either the United States or internationally, the demand for our
products will be adversely affected.
Substantially all of our revenue is generated from a single product, the Powerlink System, and any
declines in the sale of this product will negatively impact our business.
We have focused heavily on the development and commercial launch of a single technology, the
Powerlink System, because of our limited resources. If we are unable to successfully commercialize
the existing Powerlink System and reach positive cash flow from operations, we will be constrained
in our ability to fund development and commercialization improvements and other product lines.
We have a history of operating losses and we expect to incur losses for the foreseeable future and
may never achieve profitability.
Our operations to date have consumed a substantial amount of cash. From our formation in 1992
to March 31, 2006, we have incurred an accumulated deficit of approximately $103.2 million,
including a net loss of $15.5 million and $4.1 million for the year ended December 31, 2005 and the
quarter ended March 31, 2006, respectively. Additionally, our independent registered public
accounting firm has included an explanatory paragraph in its report on our consolidated financial
statements for the year ended December 31, 2005 with respect to substantial doubt about our ability
to continue as a going concern.
We only began generating significant revenues from product sales in 2005, and it is possible
that we may never achieve profitability. Our ability to achieve positive cash flow from operations
will be impacted by a number of factors, including market acceptance of the Powerlink System, our
ability to develop additional products, competing technologies and regulatory developments. We
believe that, excluding the anticipated net proceeds received in this offering, we have sufficient
capital resources to operate through March 31, 2007, and including the anticipated net proceeds
received in this offering, we will have sufficient capital resources to operate through at least
December 31, 2007. However, if we are unable to achieve profitability or our expenses are greater
than anticipated, our business will be negatively impacted.
Our future operating results are difficult to predict and may vary significantly from quarter to
quarter, which may negatively impact our stock price in the future.
We have only commercially distributed the Powerlink System in the United States since late
2004 and, therefore, we are unable to predict future revenues derived from sales of the Powerlink
System. As a result, our quarterly revenues and results of operations may fluctuate in the future
due to:
S-4
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physician acceptance of the Powerlink System; |
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the conduct and results of clinical trials; |
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the timing of, and expense in obtaining, future regulatory approvals; |
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fluctuations in our expenses associated with expanding our operations; |
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introduction of new products by our competitors; |
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changes in our pricing policies or in the pricing policies of our competitors or suppliers; |
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variations in foreign exchange rates; and |
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changes in third-party payors reimbursement policies. |
In addition, we believe that sales of our products may be lower in the fourth fiscal quarter
as many patients choose to delay elective procedures during the holiday season. Therefore, we
believe that period to period comparisons of our operating results may not necessarily be reliable
indicators of our future performance. It is likely that in some future period our operating results
will not meet investor expectations or those of public market analysts.
Any unanticipated change in revenues or operating results is likely to cause our stock price
to fluctuate since such changes reflect new information available to investors and analysts. New
information may cause investors and analysts to revalue our stock, which could cause a decline in
the trading price of our stock.
Our business is subject to extensive governmental regulation that could make it more expensive and
time consuming for us to introduce new or improved products.
Our products must comply with regulatory requirements imposed by the FDA and similar agencies
in foreign countries. These requirements involve lengthy and detailed laboratory and clinical
testing procedures, sampling activities, an extensive FDA review process, and other costly and
time-consuming procedures. It often takes several years to satisfy these requirements, depending on
the complexity and novelty of the product. We also are subject to numerous additional licensing and
regulatory requirements relating to safe working conditions, manufacturing practices, environmental
protection, fire hazard control and disposal of hazardous or potentially hazardous substances. Some
of the most important requirements we face include:
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FDA approval process; |
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California Department of Health Services requirements; |
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ISO 9001:1994 and ENISO 13485:2003; and |
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European Union CE Mark requirements. |
Government regulation may impede our ability to conduct continuing clinical trials of
Powerlink System enhancements and to manufacture the Powerlink System and other prospective
products. Government regulation also could delay our marketing of new products for a considerable
period of time and impose costly procedures on our activities. The FDA and other regulatory
agencies may not approve any of our future products on a timely basis, if at all. Any delay in
obtaining, or failure to obtain, such approvals could negatively impact our marketing of any
proposed products and reduce our product revenues.
Our products remain subject to strict regulatory controls on manufacturing, marketing and use.
We may be forced to modify or recall our product after release in response to regulatory action or
unanticipated difficulties
S-5
encountered in general use. Any such action could have a material effect on the reputation of
our products and on our business and financial position.
Further, regulations may change, and any additional regulation could limit or restrict our
ability to use any of our technologies, which could harm our business. We could also be subject to
new federal, state or local regulations that could affect our research and development programs and
harm our business in unforeseen ways. If this happens, we may have to incur significant costs to
comply with such laws and regulations, which will harm our results of operations.
We may not receive approval to market the Powerlink System in Japan.
In 2005, the Japanese Ministry of Health notified us that they would not grant Shonin approval
for the PowerWeb System. However, the Ministry of Health requested that we submit the data on the
FDA approved Powerlink System and informed us that we would be able to utilize the clinical results
from our PowerWeb clinical trials as supplementary data. We estimate that the Powerlink System will
receive Shonin approval by the end of 2006. However, the Ministry of Health may not grant Shonin
approval by such time, or at all, either of which may negatively impact our future results of
operations.
If we fail to increase our direct sales force in a timely manner, our business could suffer.
We have a limited domestic direct sales force and we utilize a distribution network for sales
outside of the U.S. As we launch new products and increase our marketing efforts with respect to
existing products, we will need to significantly expand the number of our direct sales personnel.
The establishment and development of a more extensive sales force will be expensive and time
consuming. In addition, there is significant competition for sales personnel experienced in
relevant medical device sales. If we are unable to attract, motivate and retain qualified sales
personnel and thereby increase our sales force, we may not be able to increase our revenues.
Our third-party distributors may not effectively distribute our products.
We depend on medical device distributors and strategic relationships for the marketing and
selling of our Powerlink System internationally. We depend on these distributors efforts to market
our product, yet we are unable to control their efforts completely. If our distributors fail to
market and sell our products effectively, our operating results and business may suffer
substantially, or we may have to make significant additional expenditures or concessions to market
our products.
If we fail to properly manage our anticipated growth, our business could suffer.
We may experience periods of rapid growth and expansion, which could place a significant
strain on our limited personnel and other resources. In particular, the ongoing increase in our
direct sales force will require significant management and other supporting resources. Any failure
by us to manage our growth effectively could have an adverse effect on our ability to achieve our
development and commercialization goals. To achieve our revenue goals, we must successfully
increase production output as required by customer demand. We may in the future experience
difficulties in increasing production, including problems with production yields and quality
control and assurance, component supply, and shortages of qualified personnel. These problems could
result in delays in product availability and increases in expenses. Any such delay or increased
expense could adversely affect our ability to generate revenues. Future growth will also impose
significant added responsibilities on management, including the need to identify, recruit, train
and integrate additional employees. In addition, rapid and significant growth will place a strain
on our administrative and operational infrastructure. In order to manage our operations and growth
we will need to continue to improve our operational and management controls, reporting and
information technology systems, and financial internal controls procedures. If we are unable to
manage our growth effectively, it may be difficult for us to execute our business strategy and our
operating results and business could suffer.
We rely on a single vendor to supply our graft material for the Powerlink System, and any
disruption in our supply could delay or prevent us from producing the product for sale.
S-6
Currently, we rely on Bard Peripheral Vascular Systems, a subsidiary of C.R. Bard, Inc., to
supply us with graft material, which is a primary component for the Powerlink System. Our reliance
on a sole source supplier exposes our operations to disruptions in supply caused by:
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failure of our supplier to comply with regulatory requirements; |
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any strike or work stoppage; |
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disruptions in shipping; |
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a natural disaster caused by fire, floods or earthquakes; |
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a supply shortage experienced by our sole source supplier; and |
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the fiscal health and manufacturing strength of our sole source supplier. |
Although we retain a significant stock of the graft material, the occurrence of any of the
above disruptions in supply or other unforeseen events that could cause a disruption in supply from
our sole source graft supplier may cause us to halt or experience a disruption in manufacturing the
Powerlink System. Because we do not have alternative suppliers, our sales and profitability would
be harmed in the event of a disruption.
If we are unable to protect our intellectual property, our business may be negatively affected.
The market for medical devices is subject to frequent litigation regarding patent and other
intellectual property rights. It is possible that our patents or licenses may not withstand
challenges made by others or protect our rights adequately.
Our success depends in large part on our ability to secure effective patent protection for our
products and processes in the United States and internationally. We have filed and intend to
continue to file patent applications for various aspects of our technology. However, we face the
risks that:
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we may fail to secure necessary patents prior to or after obtaining regulatory
clearances, thereby permitting competitors to market competing products; and |
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our already-granted patents may be re-examined, re-issued or invalidated. |
We also own trade secrets and confidential information that we try to protect by entering into
confidentiality agreements with other parties. However, the confidentiality agreements may not be
honored or, if breached, we may not have sufficient remedies to protect our confidential
information. Further, our competitors may independently learn our trade secrets or develop similar
or superior technologies. To the extent that our consultants, key employees or others apply
technological information to our projects that they develop independently or that others develop,
disputes may arise regarding the ownership of proprietary rights to such information, and such
disputes may not be resolved in our favor. If we are unable to protect our intellectual property
adequately, our business and commercial prospects likely will suffer.
If our products or processes infringe upon the intellectual property of our competitors, the sale
of these products may be challenged and we may have to defend costly and time-consuming
infringement claims.
We may need to engage in expensive and prolonged litigation to assert any of our rights or to
determine the scope and validity of rights claimed by other parties. With no certainty as to the
outcome, litigation could be too expensive for us to pursue. Our failure to prevail in such
litigation or our failure to pursue litigation could result in the loss of our rights that could
hurt our business substantially. In addition, the laws of some foreign countries do not protect our
intellectual property rights to the same extent as the laws of the United States, if at all.
S-7
Our failure to obtain rights to intellectual property of third parties or the potential for
intellectual property litigation could force us to do one or more of the following:
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stop selling, making or using our products that use the disputed intellectual
property; |
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obtain a license from the intellectual property owner to continue selling, making,
licensing or using our products, which license may not be available on reasonable
terms, or at all; |
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redesign our products, processes or services; and |
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subject us to significant liabilities to third parties. |
If any of the foregoing occurs, we may be unable to manufacture and sell our products or
license our technology and may suffer severe financial harm. Whether or not an intellectual
property claim is valid, the cost of responding to it, in terms of legal fees and expenses and the
diversion of management resources, could harm our business.
Our sales in international markets subject us to foreign currency exchange and costs which could
harm our business.
A portion of our revenues are derived from sales outside the United States. For the fiscal
years ended December 31, 2005, 2004, and 2003, international sales were 30%, 86%, and 86% of total
product revenue, respectively. Foreign exchange gains or losses as a result of exchange rate
fluctuations in any given period could harm our operating results and negatively impact our
revenues. Additionally, if the effective price of our products were to increase as a result of
fluctuations in foreign currency exchange rates, demand for our products could decline and
adversely affect our results of operations and financial condition.
If we are unable to effectively manage our inventory held on consignment by our intended customers,
we will not achieve our expected results.
Our Powerlink System is sold primarily on a consignment basis to hospitals which purchase our
product as they use it. In these consignment locations, we do not have physical possession of our
products. We therefore must rely on information from our customers as well as periodic inspections
by our sales personnel and third party inventory auditors to determine when our products have been
used. Our efforts to strengthen our monitoring and management of consigned inventory may not be
adequate to meaningfully reduce the risk of inventory loss. If we are not able to effectively
manage appropriate consigned inventory levels, we may suffer inventory losses which will reduce our
operating results.
We may face product liability claims that could result in costly litigation and significant
liabilities.
Manufacturing and marketing of our commercial products, and clinical testing of our products
under development, may expose us to product liability claims. Although we have, and intend to
maintain, product liability insurance, the coverage limits of our insurance policies may not be
adequate and one or more successful claims brought against us may have a material adverse effect on
our business and results of operations. Additionally, adverse product liability actions could
negatively affect the reputation and sales of our products, our ability to obtain and maintain
regulatory approval for our products and may divert managements attention from other matters.
Our operations are capital intensive, and we may need to raise additional funds in the future to
fund our operations.
Our activities are capital intensive. Although we believe that our existing cash resources
will be sufficient to meet our anticipated cash needs for operations and planned capital
requirements through at least March 31, 2007, we may require additional capital to fund on-going
operations. Our cash requirements in the future may be significantly different from our current
estimates and depend on many factors, including:
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the results of our commercialization efforts for the Powerlink System; |
S-8
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the time and costs involved in obtaining additional regulatory approvals; |
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the costs involved in obtaining and enforcing patents or any litigation by third
parties regarding intellectual property; |
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the establishment of high volume manufacturing and increased sales and marketing
capabilities; and |
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our success in entering into collaborative relationships with other parties. |
To finance these activities, we may seek funds through borrowings or through additional rounds
of financing, including private or public equity or debt offerings and collaborative arrangements
with corporate partners. We may be unable to raise funds on favorable terms, or at all. In
addition, the sale of additional equity or convertible debt securities could result in additional
dilution to our stockholders. If we borrow additional funds or issue debt securities, these
securities could have rights superior to holders of our common stock, and could contain covenants
that will restrict our operations. We might have to obtain funds through arrangements with
collaborative partners or others that may require us to relinquish rights to our technologies,
product candidates or products that we otherwise would not relinquish. If adequate funds are not
available, we might have to delay, scale back or eliminate one or more of our development programs,
which could significantly impair our ability to operate our business.
Our operations are currently conducted at a single location that may be at risk from earthquakes or
other natural disasters.
We currently conduct all of our manufacturing, development and management activities at a
single location in Irvine, California, near known earthquake fault zones. We have taken precautions
to safeguard our facilities, including insurance, health and safety protocols, and off-site storage
of computer data. However, any future natural disaster, such as an earthquake, could cause
substantial delays in our operations, damage or destroy our equipment or inventory, and cause us to
incur additional expenses. A disaster could seriously harm our business and results of operations.
The insurance coverage we maintain against earthquakes and other natural disasters may not be
adequate to cover our losses in any particular case.
The price of our stock may fluctuate unpredictably in response to factors unrelated to our
operating performance.
The stock market periodically experiences significant price and volume fluctuations that are
unrelated to the operating performance of particular companies. These broad market fluctuations may
cause the market price of our common stock to drop. In particular, the market price of securities
of small medical device companies, like ours, has been very unpredictable and may vary in response
to:
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announcements by us or our competitors concerning technological innovations; |
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introductions of new products; |
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FDA and foreign regulatory actions; |
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developments or disputes relating to patents or proprietary rights; |
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failure of our results of operations to meet the expectations of stock market
analysts and investors; |
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changes in stock market analyst recommendations regarding our common stock; |
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changes in healthcare policy in the United States or other countries; and |
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general stock market conditions. |
S-9
Risks Related to this Offering and the Common Stock
Since we have broad discretion in how we use the proceeds from this offering, we may use the
proceeds in ways in which you disagree.
We have not allocated specific amounts of the net proceeds from this offering for any specific
purpose. Accordingly, our management will have significant flexibility in applying the net proceeds
of this offering. Accordingly, you will be relying on the judgment of our management with regard to
the use of these net proceeds, and you will not have the opportunity, as part of your investment
decision, to assess whether the proceeds are being used appropriately. It is possible that the net
proceeds will be invested in a way that does not yield a favorable, or any, return for our company.
The failure of our management to use such funds effectively could have a material adverse effect
on our business, financial condition, operating results and cash flow.
Substantial future sales of our common stock in the public market may depress our stock price and
make it difficult for you to recover the full value of your investment in our shares.
We have approximately 36.5 million shares of common stock outstanding, most of which are
freely tradable. The market price of our common stock could drop due to sales of a large number of
shares or the perception that such sales could occur. These factors also could make it more
difficult to raise funds through future offerings of common stock.
Investors in this offering will pay a much higher price than the book value of our stock.
If you purchase common stock in this offering, you will incur an immediate and substantial
dilution in net tangible book value, after giving effect to the sale by us of 6,061,000 shares of
common stock offered in this offering at the price to public of $3.30 per share.
Some provisions of our charter documents may make takeover attempts difficult, which could depress
the price of our stock and inhibit your ability to receive a premium price for your shares.
Provisions of our amended and restated certificate of incorporation could make it more
difficult for a third party to acquire control of our business, even if such change in control
would be beneficial to our stockholders. Our amended and restated certificate of incorporation
allows our board of directors to issue up to five million shares of preferred stock and to fix the
rights and preferences of such shares without stockholder approval. Any such issuance could make it
more difficult for a third party to acquire our business and may adversely affect the rights of our
stockholders. In addition, our board of directors is divided into three classes for staggered terms
of three years. These provisions may delay, deter or prevent a change in control of us, adversely
affecting the market price of our common stock.
S-10
NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus supplement, the accompanying prospectus and the documents incorporated by
reference herein include forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities
Exchange Act of 1934, as amended, or the Exchange Act. Forward-looking statements are those that
predict or describe future events or trends and that do not relate solely to historical matters.
You can generally identify forward-looking statements as statements containing the words believe,
expect, will, anticipate, intend, estimate, project, plan, assume or other similar
expressions, or negatives of those expressions, although not all forward-looking statements contain
these identifying words. All statements contained or incorporated by reference in this prospectus
supplement and the accompanying prospectus regarding our future strategy, future operations,
projected financial position, estimated future revenues, projected costs, future prospects, the
future of our industries and results that might be obtained by pursuing managements current plans
and objectives are forward-looking statements.
You should not place undue reliance on our forward-looking statements because the matters they
describe are subject to known and unknown risks, uncertainties and other unpredictable factors,
many of which are beyond our control. Our forward-looking statements are based on the information
currently available to us and speak only as of the date on the cover of this prospectus supplement
or, in the case of forward-looking statements incorporated by reference, as of the date of the
filing that includes the statement. New risks and uncertainties arise from time to time, and it is
impossible for us to predict these matters or how they may affect us. Over time, our actual
results, performance or achievements will likely differ from the anticipated results, performance
or achievements that are expressed or implied by our forward-looking statements, and such
difference might be significant and materially adverse to our security holders. We do not
undertake and specifically decline any obligation to update any forward-looking statements or to
publicly announce the results of any revisions to any statements to reflect new information or
future events or developments.
We have identified some of the important factors that could cause future events to differ from
our current expectations and they are described in this prospectus supplement under the caption
Risk Factors as well as in our most recent Annual Report on Form 10-K, including, without
limitation, under the captions Risk Factors and Managements Discussion and Analysis of
Financial Condition and Results of Operations and in other documents that we may file with the
SEC, all of which you should review carefully. Please consider our forward-looking statements in
light of those risks as you read this prospectus supplement and the accompanying prospectus.
USE OF PROCEEDS
We
expect the net proceeds from this offering to be up to approximately $18,790,000 after deducting
fees due to the placement agent and our estimated offering expenses, as described in Plan of
Distribution. The net proceeds from this offering will be used for general corporate purposes,
which may include:
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accelerating our sales force recruitment; |
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expanding our marketing effort in the United States to
commercialize the Powerlink System products; and |
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general working capital. |
Our management has broad discretion as to the allocation of the net proceeds received in this
offering and may use these proceeds for that purpose in the future. Pending these uses, we may
temporarily use the net proceeds to make short-term investments in accordance with our Investment
Policy approved by our Audit Committee.
S-11
DILUTION
Our net tangible book value on March 31, 2006 was approximately $23.6 million, or approximately
$0.65 per share of common stock. Net tangible book value per share is determined by dividing our
net tangible book value, which consists of tangible assets less total liabilities, by the number of
shares of common stock outstanding on that date. Without taking into account any other changes in
our net tangible book value after March 31, 2006, other than to give effect to our receipt of the
estimated proceeds from the sale of the maximum number of shares issuable in this offering
(6,061,000 shares) at an offering price of $3.30 per share, less the fees due to the placement
agent and our estimated offering expenses, our net tangible book value as of March 31, 2006, after
giving effect to the items above, would have been approximately
$42.4 million, or $0.99 per share.
This represents an immediate increase in the net tangible book value of $0.34 per share to existing
stockholders and an immediate dilution of $2.31 per share to new investors. The following table
illustrates this per share dilution:
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Public offering price per share |
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$ |
3.30 |
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Net tangible book value per share as of March 31, 2006 |
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$ |
0.65 |
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Increase in net tangible book value per share attributable to this offering |
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$ |
0.34 |
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Pro forma net tangible book value per share as of March 31, 2006, after
giving effect to the offering |
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$ |
0.99 |
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Dilution per share to new investors in the offering |
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$ |
2.31 |
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The above table is based on 42,599,364 shares of our common stock outstanding as of March 31,
2006 (as adjusted for 6,061,000 shares to be issued in this offering) and excludes, as of March 31,
2006:
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2,468,957 shares of common stock issuable upon the exercise of outstanding stock options
under our stock incentive plans, with a weighted average exercise price of $4.77; and |
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995,194 shares of common stock available for future issuance under our equity incentive
plans. |
To the extent that any of these options are exercised, new options are issued under our stock
incentive plans, additional shares of common stock are issued under our employee stock purchase
plan or we otherwise issue additional shares of common stock in the future, there will be further
dilution to new investors.
S-12
PLAN OF DISTRIBUTION
We are offering the shares of common stock through a placement agent. Subject to the terms
and conditions contained in the placement agency agreement, dated May 31, 2006, Canaccord Adams has
agreed to act as the exclusive placement agent for the sale of up to 6,061,000 shares of our common
stock. The placement agent is not purchasing or selling any shares by this prospectus supplement
and the accompanying prospectus, nor is it required to arrange the purchase or sale of sell any
specific number or dollar amount of the shares, but has agreed to use commercially reasonable
efforts to arrange for the sale of all of the shares offered hereby.
The placement agent proposes to arrange for the sale to one or more purchasers, of the shares
of common stock offered pursuant to this prospectus supplement and the accompanying prospectus,
through direct purchase agreements between the purchasers and us. We will pay the placement agent
a total commission equal to 5.8% of the gross proceeds from the sales of shares of common stock.
The following table shows the per share and total commissions we will pay to the placement
agent in connection with the sale of the shares offered pursuant to this prospectus supplement and
the accompanying prospectus, assuming the purchase of all of the shares offered hereby.
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Per share |
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$ |
0.1914 |
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Maximum offering total |
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1,160,075 |
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Because there is no minimum offering amount required as a condition to closing in this
offering, the actual total offering commissions, if any, are not presently determinable and may be
substantially less than the maximum amount set forth above.
Our obligation to issue and sell shares to the purchasers is subject to the conditions set
forth in the purchase agreements, which may be waived by us at our discretion. A purchasers
obligation to purchase shares is subject to the conditions set forth in the purchase agreement as well,
which also may be waived.
We currently anticipate that the sale of up to 6,061,000 shares will be completed on June 2,
2006. We estimate the total expenses of this offering which will be payable by us, excluding the
commissions, will be approximately $51,225.
We
have agreed to indemnify the placement agent against certain
liabilities, including liabilities under the Securities Act, and to
contribute to payments that the placement agent may be required to
make for certain liabilities.
The placement agency agreement with Canaccord Adams is included as an exhibit to our Current
Report on Form 8-K that will be filed with the Securities and Exchange Commission in connection
with the consummation of this offering. The placement agent has performed advisory services for us
from time to time for which it has received customary fees and expenses. The placement agent may,
from time to time, engage in transactions with, and perform services for, us in the ordinary course
of its business.
We,
and each of our executive officers and directors, have agreed that,
during the period ending 90 days after the date of this
prospectus supplement, which we refer to as the restricted period,
neither we nor our executive officers and directors will, without the
prior consent of the placement agent, directly or indirectly offer,
sell or otherwise dispose of any shares of common stock or any
securities that may be converted into or exchanged for any such
shares of common stock or enter into any swap or other arrangement
that transfers to another person, in whole or in part, the economic
consequences of ownership of common stock.
In order to facilitate the offering of the common stock, the placement agent may engage in
transactions that stabilize, maintain or otherwise affect the market price of our common stock.
Any of these activities may maintain the market price of our common stock at a level above that
which might otherwise prevail in the open market. The placement agent is not required to engage in
these activities and if commenced, may end any of these activities at any time. Neither we nor the
placement agent make any representation or prediction as to the effect that these transactions may
have on the market price of our common stock. These transactions may occur on The Nasdaq National
Market or otherwise.
LEGAL MATTERS
The validity of the common stock being offered hereby will be passed on by Stradling Yocca
Carlson & Rauth, a Professional Corporation, Newport Beach, California.
S-13
EXPERTS
The consolidated financial statements and managements assessment of the effectiveness of
internal control over financial reporting (which is included in Managements Report on Internal
Control Over Financial Reporting) incorporated in this prospectus supplement by reference to the
Annual Report on Form 10-K for the year ended December 31, 2005 have been so incorporated in
reliance on the report of PricewaterhouseCoopers LLP, an independent registered public accounting
firm, given on the authority of said firm as experts in auditing and accounting.
WHERE YOU CAN FIND ADDITIONAL INFORMATION
We have filed a registration statement on Form S-3 with the SEC with respect to the common
stock covered by this prospectus supplement and accompanying prospectus. This prospectus supplement
and accompanying prospectus do not include all of the information contained in the registration
statement. You should refer to the registration statement and its exhibits for additional
information. Whenever we make reference in this prospectus supplement or the accompanying
prospectus to any of our contracts, agreements or other documents, the references are not
necessarily complete and you should refer to the exhibits attached to the registration statement or
incorporated by reference for copies of the actual contract, agreement or other document. You may
obtain a copy of the registration statement from the SEC at the address listed below or from the
SECs web site.
We are subject to the informational requirements of the Exchange Act and in accordance
therewith file periodic reports, current reports, proxy statements and other information with the
SEC. You may read and copy any document we file at the SECs public reference room at 100 F
Street, N.E., Washington, D.C. 20549. Please call the SEC toll free at 1-800-SEC-0330 for
information about its public reference room. You may also read our filings at the SECs web site at
http://www.sec.gov.
INCORPORATION BY REFERENCE
The SEC allows us to incorporate by reference the information we file with it, which means
that we can disclose important information to you by referring you to those documents. The
information incorporated by reference is considered to be a part of this prospectus and
information that we file subsequently with the SEC will automatically update and supercede this
prospectus. We incorporate by reference the following documents listed below and any future
filings we make with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act until
this offering of common stock is terminated, except for information furnished under Item 2.02 or
Item 7.01 of our Current Reports on Form 8-K which is not deemed filed and not incorporated by
reference herein:
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our Annual Report on Form 10-K for the fiscal year ended December 31, 2005 as filed with
the SEC on March 16, 2006; |
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our Quarterly Report on Form 10-Q for the quarter ended March 31, 2006 as filed with the
SEC on May 10, 2006; |
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our Current Reports on Form 8-K as filed with the SEC on February 1, 2006 and May 26,
2006; and |
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the description of our common stock contained in our Registration Statement on Form 8-A,
filed with the SEC on May 3, 1996, including any amendment or report filed for the purpose
of updating such description. |
You may request a copy of these filings (other than an exhibit to a filing unless that exhibit
is specifically incorporated by reference into that filing) at no cost, by writing to or
telephoning us at the following address: Investor Relations, Endologix, Inc., 11 Studebaker,
Irvine, California 92618; (949) 595-7200.
S-14
PROSPECTUS
$50,000,000
Common Stock
We may, from time to time in one or more offerings, sell up to $50,000,000 in the aggregate of
our common stock.
We will provide the specific terms of the offerings of our common stock in supplements to this
prospectus. The prospectus supplement may also add, update or change information in this
prospectus. 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. This prospectus may not be used to offer or sell our common stock
unless accompanied by a prospectus supplement.
Our principal executive offices are located at 11 Studebaker, Irvine, California 92618, and
our telephone number is (949) 595-7200.
Our common stock is listed on the Nasdaq National Market under the symbol ELGX. Each
prospectus supplement will contain information, where applicable, as to any listing on the Nasdaq
National Market or any other securities exchange covered by the prospectus supplement.
Investing in our common stock involves various risks. See the section entitled Risk Factors
on page 2 for more information on these risks. Additional risks associated with an investment in
us as well as with our common stock will be described in the related prospectus supplements.
Neither the Securities and Exchange Commission nor any state securities commission has
approved or disapproved of our common stock or determined if this prospectus is truthful or
complete. Any representation to the contrary is a criminal offense.
The date of this prospectus is May 11, 2006.
TABLE OF CONTENTS
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ABOUT THIS PROSPECTUS |
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1 |
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NOTE REGARDING FORWARD-LOOKING STATEMENTS |
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USE OF PROCEEDS |
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LEGAL MATTERS |
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EXPERTS |
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WHERE YOU CAN FIND ADDITIONAL INFORMATION |
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INCORPORATION BY REFERENCE |
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5 |
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i
ABOUT THIS PROSPECTUS
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 time up to $50,000,000 worth of our common stock.
Each time we offer our common stock, we will provide you with a prospectus supplement that
describes the specific amounts, prices and terms of the common stock we offer. The prospectus
supplement also may add, update or change information contained in this prospectus. You should
read carefully both this prospectus and any prospectus supplement together with additional
information described below under the caption Incorporation By Reference.
This prospectus does not contain all the information provided in the registration statement we
filed with the SEC. For further information about us or our common stock offered hereby, you
should refer to that registration statement, which you can obtain from the SEC as described below
under Where You Can Find More Information.
You should rely only on the information contained or incorporated by reference in this
prospectus or a prospectus supplement. We have not authorized any other person to provide you with
different information. If anyone provides you with different or inconsistent information, you
should not rely on it. This prospectus is not an offer to sell our common stock and it is not
soliciting an offer to buy our common stock in any jurisdiction where the offer or sale is not
permitted. You should assume that the information appearing in this prospectus or any prospectus
supplement, as well as information we have previously filed with the SEC and incorporated by
reference, is accurate as of the date on the front of those documents only. Our business,
financial condition, results of operations and prospects may have changed since those dates.
We may sell our common stock through agents, directly to purchasers or through a combination
of these methods. We and our agents reserve the sole right to accept or reject in whole or in part
any proposed purchase of our common stock. The prospectus supplement, which we will provide to you
each time we offer our common stock, will set forth the names of any agents involved in the sale of
our common stock, and any applicable fee, commission or discount arrangements with them. See Plan
of Distribution.
ABOUT ENDOLOGIX
We develop, manufacture, sell and market minimally invasive therapies for the treatment of
cardiovascular disease. Our product, the Powerlink® System, is a catheter-based alternative
treatment for abdominal aortic aneurysm, or AAA. AAA is a weakening of the wall of the aorta, the
largest artery of the body. Once AAA develops, it continues to enlarge and if left untreated
becomes increasingly susceptible to rupture. The overall patient mortality rate for ruptured AAAs
is approximately 75%, making it the 13th leading cause of death in the United States today.
The Powerlink System is a catheter and endoluminal graft system. The self-expanding cobalt
chromium alloy stent cage is covered by ePTFE, a common surgical graft material. The Powerlink
System is implanted in the abdominal aorta, which is accessed through the femoral artery. Once
deployed into its proper position, the blood flow is shunted away from the weakened or aneurysmal
section of the aorta, reducing pressure and the potential for the aorta to rupture. We believe that
implantation of our products will reduce the mortality and morbidity rates associated with
conventional AAA surgery, as well as provide a clinical alternative to many patients that could not
undergo conventional surgery.
More comprehensive information about our products and us is available through our worldwide
web site at www.endologix.com. The information on our website is not incorporated by reference into
this prospectus. Our main offices are located at 11 Studebaker, Irvine, California 92618, and our
telephone number is (949) 595-7200.
1
RISK FACTORS
Before making an investment decision, you should carefully consider the risks described under
Risk Factors in the applicable prospectus supplement and in our most recent Annual Report on Form
10-K, or any updates in our Quarterly Reports on Form 10-Q, together with all of the other
information appearing in this prospectus or incorporated by reference into this prospectus and any
applicable prospectus supplement, in light of your particular investment objectives and financial
circumstances. Our business, financial condition or results of operations could be materially
adversely affected by any of these risks. The trading price of our common stock could decline due
to any of these risks, and you may lose all or part of your investment.
NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus, any prospectus supplement and the documents incorporated by reference herein
include forward-looking statements within the meaning of Section 27A of the Securities Act of 1933,
as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as
amended, or the Exchange Act. Forward-looking statements are those that predict or describe future
events or trends and that do not relate solely to historical matters. You can generally identify
forward-looking statements as statements containing the words believe, expect, will,
anticipate, intend, estimate, project, plan, assume or other similar expressions, or
negatives of those expressions, although not all forward-looking statements contain these
identifying words. All statements contained or incorporated by reference in this prospectus and
any prospectus supplement regarding our future strategy, future operations, projected financial
position, estimated future revenues, projected costs, future prospects, the future of our
industries and results that might be obtained by pursuing managements current plans and objectives
are forward-looking statements.
You should not place undue reliance on our forward-looking statements because the matters they
describe are subject to known and unknown risks, uncertainties and other unpredictable factors,
many of which are beyond our control. Our forward-looking statements are based on the information
currently available to us and speak only as of the date on the cover of this prospectus, the date
of any prospectus supplement, or, in the case of forward-looking statements incorporated by
reference, as of the date of the filing that includes the statement. New risks and uncertainties
arise from time to time, and it is impossible for us to predict these matters or how they may
affect us. Over time, our actual results, performance or achievements will likely differ from the
anticipated results, performance or achievements that are expressed or implied by our
forward-looking statements, and such difference might be significant and materially adverse to our
security holders. We do not undertake and specifically decline any obligation to update any
forward-looking statements or to publicly announce the results of any revisions to any statements
to reflect new information or future events or developments.
We have identified some of the important factors that could cause future events to differ from
our current expectations and they are described in this prospectus and supplements to this
prospectus under the caption Risk Factors as well as in our most recent Annual Report on Form
10-K, including, without limitation, under the captions Risk Factors and Managements Discussion
and Analysis of Financial Condition and Results of Operations and in other documents that we may
file with the SEC, all of which you should review carefully. Please consider our forward-looking
statements in light of those risks as you read this prospectus and any prospectus supplement.
USE OF PROCEEDS
We intend to use the net proceeds from sales of our common stock for the purposes set forth in
the applicable prospectus supplement relating to a specified offering of shares.
2
PLAN OF DISTRIBUTION
We may sell the shares of common stock through underwriters or dealers, through agents, or
directly to one or more purchasers or through a combination of these methods. The applicable
prospectus supplement will describe the terms of the offering of the common stock, including:
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the name or names of any underwriters, if any, and if required, any dealers or agents; |
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the purchase price of the securities and the proceeds we will receive from the sale; |
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any underwriting discounts and other items constituting underwriters compensation; |
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any discounts or concessions allowed or reallowed or paid to dealers; and |
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any securities exchange or market on which the securities may be listed. |
We may distribute the common stock from time to time in one or more transactions at:
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a fixed price or prices, which may be changed; |
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market prices prevailing at the time of sale; |
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prices related to such prevailing market prices; or |
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negotiated prices. |
Only underwriters named in the prospectus supplement are underwriters of the common stock
offered by the prospectus supplement.
If we use underwriters in the sale, they will acquire the common stock for their own account
and may resell the shares from time to time in one or more transactions at a fixed public offering
price or at varying prices determined at the time of sale. We may offer the common stock to the
public through underwriting syndicates represented by managing underwriters or by underwriters
without a syndicate. Any public offering price and any discounts or concessions allowed or
reallowed or paid to dealers may change from time to time.
If we use a dealer in the sale of the common stock being offered pursuant to this prospectus
or any prospectus supplement, we will sell the common stock to the dealer, as principal. The
dealer may then resell the common stock to the public at varying prices to be determined by the
dealer at the time of resale.
We may sell the common stock directly or through agents we designate from time to time. We
will name any agent involved in the offering and sale of common stock and we will describe any
commissions we will pay the agent in the prospectus supplement. Unless the prospectus supplement
states otherwise, our agent will act on a best-efforts basis for the period of its appointment.
We may authorize agents or underwriters to solicit offers by institutional investors to
purchase common stock from us at the public offering price set forth in the prospectus supplement
pursuant to delayed delivery contracts providing for payment and delivery on a specified date in
the future. We will describe the conditions to these contracts and the commissions we must pay for
solicitation of these contracts in the prospectus supplement.
In connection with the sale of the common stock, underwriters, dealers or agents may receive
compensation from us or from purchasers of the common stock for whom they act as agents in the form
of discounts, concessions or commissions. Underwriters may sell the common stock to or through
dealers, and those dealers may receive compensation in the form of discounts, concessions or
commissions from the underwriters or commissions from the purchasers for whom they may act as
agents. Underwriters, dealers and agents that participate in the distribution of the common stock,
and any institutional investors or others that purchase common stock directly and then resell the
3
common stock, may be deemed to be underwriters, and any discounts or commissions received by
them from us and any profit on the resale of the common stock by them may be deemed to be
underwriting discounts and commissions under the Securities Act.
We may provide agents and underwriters with indemnification against particular civil
liabilities, including liabilities under the Securities Act, or contribution with respect to
payments that the agents or underwriters may make with respect to such liabilities. Agents and
underwriters may engage in transactions with, or perform services for, us in the ordinary course of
business.
In addition, we may enter into derivative transactions with third parties (including the
writing of options), or sell common stock not covered by this prospectus to third parties in
privately negotiated transactions. If the applicable prospectus supplement indicates, in
connection with such a transaction the third parties may, pursuant to this prospectus and the
applicable prospectus supplement, sell common stock covered by this prospectus and the applicable
prospectus supplement. If so, the third party may use common stock borrowed from us or others to
settle such sales and may use common stock received from us to close out any related short
positions. We may also loan or pledge common stock covered by this prospectus and the applicable
prospectus supplement to third parties, who may sell the loaned common stock or, in an event of
default in the case of a pledge, sell the pledged common stock pursuant to this prospectus and the
applicable prospectus supplement. The third party in such sale transactions will be an underwriter
and will be identified in the applicable prospectus supplement or in a post-effective amendment.
Underwriters may engage in stabilizing and syndicate covering transactions in accordance with
Rule 104 under the Exchange Act. Rule 104 permits stabilizing bids to purchase the common stock
being offered as long as the stabilizing bids do not exceed a specified maximum. Underwriters may
over-allot the offered common stock in connection with the offering, thus creating a short position
in their account. Syndicate covering transactions involve purchases of the offered common stock by
underwriters in the open market after the distribution has been completed in order to cover
syndicate short positions. Underwriters may also cover an over-allotment or short position by
exercising their over-allotment option, if any. Stabilizing and syndicate covering transactions
may cause the price of the offered common stock to be higher than it would otherwise be in the
absence of these transactions. These transactions, if commenced, may be discontinued at any time.
LEGAL MATTERS
The validity of the common stock being offered hereby will be passed on by Stradling Yocca
Carlson & Rauth, a Professional Corporation, Newport Beach, California.
EXPERTS
The consolidated financial statements and managements assessment of the effectiveness of
internal control over financial reporting (which is included in Managements Report on Internal
Control Over Financial Reporting) incorporated in this prospectus by reference to the Annual Report
on Form 10-K for the year ended December 31, 2005 have been so incorporated in reliance on the
report of PricewaterhouseCoopers LLP, an independent registered public accounting firm, given on
the authority of said firm as experts in auditing and accounting.
WHERE YOU CAN FIND ADDITIONAL INFORMATION
We have filed a registration statement on Form S-3 with the SEC with respect to the common
stock covered by this prospectus or any prospectus supplement. This prospectus does not include all
of the information contained in the registration statement. You should refer to the registration
statement and its exhibits for additional information. Whenever we make reference in this
prospectus to any of our contracts, agreements or other documents, the references are not
necessarily complete and you should refer to the exhibits attached to the registration statement
for copies of the actual contract, agreement or other document.
We are subject to the informational requirements of the Exchange Act and in accordance
therewith file periodic reports, current reports, proxy statements and other information with the
SEC. You may read and copy any document we file at the SECs public reference room at 100 F
Street, N.E., Washington, D.C. 20549. Please call the
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SEC toll free at 1-800-SEC-0330 for information about its public reference room. You may also
read our filings at the SECs web site at http://www.sec.gov.
INCORPORATION BY REFERENCE
The SEC allows us to incorporate by reference the information we file with it, which means
that we can disclose important information to you by referring you to those documents. The
information incorporated by reference is an important part of this prospectus and information that
we file subsequently with the SEC will automatically update and supercede this prospectus. We
incorporate by reference the following documents listed below and any future filings we make with
the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act until this offering of common
stock is terminated, except for information furnished under Item 2.02 or Item 7.01 of our Current
Reports on Form 8-K which is not deemed filed and not incorporated by reference herein:
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our Annual Report on Form 10-K for the fiscal year ended December 31, 2005 as filed
with the SEC on March 16, 2006; |
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our Current Report on Form 8-K as filed with the SEC on February 1, 2006; and |
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the description of our common stock contained in our Registration Statement on Form
8-A, filed with the SEC on May 3, 1996, including any amendment or report filed for the
purpose of updating such description. |
You may request a copy of these filings (other than an exhibit to a filing unless that exhibit
is specifically incorporated by reference into that filing) at no cost, by writing to or
telephoning us at the following address: Investor Relations, Endologix, Inc., 11 Studebaker,
Irvine, California 92618; (949) 595-7200.
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6,061,000 shares
Endologix, Inc.
Common Stock
PROSPECTUS SUPPLEMENT
Canaccord Adams
May 31, 2006
No action is being taken in any jurisdiction outside the United States to permit a public offering of the common stock of possession or distribution of this prospectus
supplement and the accompanying prospectus in that jurisdiction.
Persons who come into possession of this prospectus supplement and the accompanying prospectus in jurisdictions
outside the United States are required to inform themselves about and to observe any restrictions as to this offering and the distribution of this prospectus supplement and the accompanying
prospectus applicable to that jurisdiction.