Filed pursuant to Rule 424(b)(3)
Registration No. 333-217305
Common Shares, Debt Securities, Warrants, Purchase Contracts and Units offered by the Company
241,117 Common Shares offered by
the Selling Shareholder
MEDICAL HOLDING AG
(incorporated in Switzerland)
We may offer, from time to time, in one
or more offerings, common shares, senior debt securities, subordinated debt securities, warrants, purchase contracts or units,
which we collectively refer to as the “securities” and the selling shareholder may offer up to 241,117 common shares.
The aggregate initial offering price of the securities that we may offer and sell under this prospectus will not exceed $100,000,000.
We may offer and sell any combination of the securities described in this prospectus in different series, at times, in amounts,
at prices and on terms to be determined at or prior to the time of each offering. This prospectus describes the general terms of
these securities and the general manner in which these securities will be offered. We will provide the specific terms of these
securities in supplements to this prospectus. The prospectus supplements will also describe the specific manner in which these
securities will be offered and may also supplement, update or amend information contained in this prospectus. You should read this
prospectus and any applicable prospectus supplement before you invest.
The securities covered by this prospectus
may be offered through one or more underwriters, dealers and agents, or directly to purchasers. The names of any underwriters,
dealers or agents, if any, will be included in a supplement to this prospectus. For general information about the distribution
of securities offered, please see “Plan of Distribution” beginning on page 30.
Our common shares are listed on
the Nasdaq Global Market under the symbol “EARS.” On April 11, 2017, the last sale price of our common shares as
reported by the Nasdaq Global Market was $0.76 per common share. As of April 11, 2017, the aggregate market value
of our outstanding common shares held by non-affiliates was approximately $16.4 million based on 44,329,704
outstanding common shares, of which approximately 21,604,162 common shares were held by non-affiliates. We have not offered
any securities pursuant to General Instruction I.B.5 of Form F-3 during the prior 12 calendar month period that ends on,
and includes, the date of this prospectus.
Investing in our securities involves
risks. See “Risk Factors” beginning on page 3 of this prospectus.
Neither the U.S. Securities and Exchange
Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus
is truthful or complete. Any representation to the contrary is a criminal offense.
The date of this
prospectus is April 24, 2017.
You should rely only on the information
contained in or incorporated by reference in this prospectus or any related prospectus supplement we provide to you. Neither we
nor the selling shareholder have authorized anyone to provide you with different or additional information. Neither we nor the
selling shareholder are making an offer of securities in any state where the offer is not permitted. You should not assume that
the information contained in or incorporated by reference in this prospectus is accurate as of any date other than the date on
the front of this prospectus. Unless otherwise noted or the context otherwise requires, references in this prospectus to “Auris
Medical,” “the Company,” “our company,” “we,” “us” or “our” refer
to Auris Medical Holding AG and its subsidiaries.
|About This Prospectus
|Where You Can Find More Information
|Special Note Regarding Forward-Looking Statements
|Auris Medical Holding AG
|Ratio of Earnings to Fixed Charges
|Use of Proceeds
|Description of Share Capital and Articles of Association
|Comparison of Swiss Law and Delaware Law
|Description of Debt Securities
|Description of Warrants
|Description of Purchase Contracts
|Description of Units
|Forms of Securities
|Plan of Distribution
|Incorporation of Certain Information by Reference
|Enforcement of Civil Liabilities
This prospectus is part of a registration
statement that we filed with the Securities and Exchange Commission, or the SEC, utilizing a “shelf” registration process.
Under this shelf process, we may sell any combination of the securities described in this prospectus in one or more offerings and
the selling shareholder may sell up to 241,117 common shares in one or more offerings. This prospectus provides you with a general
description of the securities we may offer. Each time we sell securities, we will provide a prospectus supplement that will contain
specific information about the terms of that offering. The prospectus supplement may also add, update or change information contained
in this prospectus. You should read both this prospectus and any prospectus supplement together with additional information described
under the headings “Where You Can Find More Information” and “Incorporation of Certain Information by Reference.”
We have filed or incorporated by reference
exhibits to the registration statement of which this prospectus forms a part. You should read the exhibits carefully for provisions
that may be important to you.
Neither the delivery of this prospectus
nor any sale made under it implies that there has been no change in our affairs or that the information in this prospectus is correct
as of any date after the date of this prospectus. You should not assume that the information in this prospectus, including any
information incorporated in this prospectus by reference, the accompanying prospectus supplement or any free writing prospectus
prepared by us, is accurate as of any date other than the date on the front of those documents. Our business, financial condition,
results of operations and prospects may have changed since that date.
You should not assume that the information
contained in this prospectus is accurate as of any other date.
Can Find More Information
We file annual reports on Form 20-F, reports
on Form 6-K, and other information with the SEC under the Securities Exchange Act of 1934, as amended, or the Exchange Act. You
may read and copy this information at the following location of the SEC: Public Reference Room, 100 F Street, N.E., Washington,
You may obtain information on the operation
of the SEC’s Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC also maintains an Internet site that contains
reports and other information about issuers like us who file electronically with the SEC. The address of the site is http://www.sec.gov.
As a foreign private issuer, we are exempt
under the Exchange Act from, among other things, the rules prescribing the furnishing and content of proxy statements, and our
directors, executive officers and principal shareholders are exempt from the reporting and short-swing profit recovery provisions
contained in Section 16 of the Exchange Act.
Note Regarding Forward-Looking Statements
This prospectus and the financial statements
and other documents incorporated by reference in this prospectus contain forward-looking statements, including statements concerning
our industry, our operations, our anticipated financial performance and financial condition, and our business plans and growth
strategy and product development efforts. These statements constitute 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 Exchange Act. The words “may,”
“might,” “will,” “should,” “estimate,” “project,” “plan,”
“anticipate,” “expect,” “intend,” “outlook,” “believe” and other similar
expressions are intended to identify forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking
statements, which speak only as of their dates. These forward-looking statements are based on estimates and assumptions by our
management that, although we believe to be reasonable, are inherently uncertain and subject to a number of risks and uncertainties.
Forward-looking statements appear in a
number of places in this prospectus and include, but are not limited to, statements regarding our intent, belief or current expectations.
Forward-looking statements are based on our management’s beliefs and assumptions and on information currently available to
our management. Such statements
subject to risks and uncertainties, and actual results may differ materially from those expressed or implied in the forward-looking
statements due to various factors, including, but not limited to:
|·||our operation as a development-stage company with limited operating history and a history of operating losses;|
|·||our need for substantial additional funding before we can expect to become profitable from sales of our products;|
|·||our dependence on the success of Keyzilen® (AM-101) and AM-111, which are still in clinical development and may eventually
prove to be unsuccessful, including the likelihood that the TACTT3 clinical trial with Keyzilen® will not meet its endpoints;|
|·||the chance that we may become exposed to costly and damaging liability claims resulting from the testing of our product candidates
in the clinical or in the commercial stage;|
|·||the chance our clinical trials may not be completed on schedule, or at all, as a result of factors such as delayed enrollment
or the identification of adverse effects;|
|·||uncertainty surrounding whether any of our product candidates will receive regulatory approval, which is necessary before they
can be commercialized;|
|·||if our product candidates obtain regulatory approval, our being subject to expensive, ongoing obligations and continued regulatory
|·||enacted and future legislation may increase the difficulty and cost for us to obtain marketing approval and commercialization;|
|·||the chance that we do not obtain orphan drug exclusivity for AM-111, which would allow our competitors to sell products that
treat the same conditions;|
|·||dependence on governmental authorities and health insurers establishing adequate reimbursement levels and pricing policies;|
|·||our products may not gain market acceptance, in which case we may not be able to generate product revenues;|
|·||our reliance on our current strategic relationships with INSERM or Xigen and the potential failure to enter into new strategic
|·||our reliance on third parties to conduct our nonclinical and clinical trials and on third-party, single-source suppliers to
supply or produce our product candidates;|
|·||our ability to comply with the requirement under our term loan facility with Hercules Capital, Inc., including repayment of
amounts outstanding when due; and|
|·||other risk factors set forth in our most recent Annual Report on Form 20-F.|
Our actual results or performance could
differ materially from those expressed in, or implied by, any forward-looking statements relating to those matters. Accordingly,
no assurances can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if
any of them do so, what impact they will have on our results of operations, cash flows or financial condition. Except as required
by law, we are under no obligation, and expressly disclaim any obligation, to update, alter or otherwise revise any forward-looking
statement, whether written or oral, that may be made from time to time, whether as a result of new information, future events or
We are a clinical-stage biopharmaceutical
company focused on the development of novel products for the treatment of inner ear disorders. Our most advanced product candidates
are in Phase 3 clinical development. Keyzilen® (AM-101) is being developed for the treatment of acute inner ear tinnitus and
has received fast track designation from the FDA. AM-111 is being developed for the treatment of acute inner ear hearing loss and
has been granted orphan drug status by the FDA and the EMA and has been granted fast track designation by the FDA. AM-125 is being
developed for the treatment of vestibular disorders. In addition, we are pursuing early stage projects for the treatment of tinnitus
We are a stock corporation organized under
the laws of Switzerland. We began our current operations in 2003.
Our principal office is located at Bahnhofstrasse 21, 6300
Zug, Switzerland, telephone number +41 729 71 94. We maintain a website at www.aurismedical.com where general information about
us is available. Investors can obtain copies of our filings with the Securities and Exchange Commission, or SEC, from this site
free of charge, as well as from the SEC website at www.sec.gov. We are not incorporating the contents of our website into this
Before making a decision to invest in our
securities, you should carefully consider the risks described under “Risk Factors” in the applicable prospectus supplement
and in our then most recent Annual Report on Form 20-F, and in any updates to those risk factors in our reports on Form 6-K incorporated
herein, together with all of the other information appearing or incorporated by reference in this prospectus and any applicable
prospectus supplement, in light of your particular investment objectives and financial circumstances.
Earnings to Fixed Charges
The following table sets forth our ratio
of earnings to fixed charges for each of the periods indicated. You should read this table in conjunction with the consolidated
financial statements and notes incorporated by reference in this prospectus.
Year Ended December 31,
|Ratio of earnings to fixed charges
* Our earnings were
insufficient to cover fixed charges by CHF 673,390, CHF 94,732 and CHF 38,000 for the years ended December 31, 2016, 2015
and 2014, respectively.
For purposes of calculating the ratios in the table above, earnings
consist of net profit/(loss) before income taxes plus fixed charges. Fixed charges consist of rental expenses and cash relevant
Use of Proceeds
Unless otherwise indicated in a prospectus
supplement, the net proceeds from our sale of the securities will be used for general corporate purposes and other business opportunities.
We will not receive any of the proceeds
from the sale of any common shares offered by the selling shareholder.
This prospectus also relates to the possible
resale from time to time by Hercules Capital, Inc., whom we refer to in this prospectus as the “selling shareholder,”
of up to 241,117 of our common shares. Such common shares may be acquired by the selling shareholder from us in private placement
transactions exempt from registration under the Securities Act, upon exercise of a warrant to purchase common shares. We issued
such warrants to the selling shareholder in a private placement transaction in connection with our entering into a term loan facility
with the selling shareholder.
If the selling shareholder offers common
shares in any future offering, an applicable prospectus supplement may set forth the nature of any position, office or other material
relationship which the selling shareholder has had with the Company or any of its predecessors or affiliates during the three years
prior to the date of the applicable prospectus supplement, the number of our common shares owned by the selling shareholder before
and after the offering and the number of our common shares to be offered by the selling shareholder.
We will pay the fees and the expenses incurred
in effecting the registration of the common shares covered by this prospectus, including, without limitation, all registration
and filing fees, fees and expenses of our counsel and accountants and fees and expenses of selling shareholder’ counsel.
The selling shareholder will pay any underwriting or broker discounts and any commissions incurred by the selling shareholder in
selling its common shares.
The selling shareholder may sell or transfer
all or a portion of its common shares pursuant to any available exemption from the registration requirements of the Securities
of Share Capital and Articles of Association
We are a Swiss stock corporation (Aktiengesellschaft)
organized under the laws of Switzerland. We were formed in 1998 and started operations as Auris Medical in 2003. We are currently
registered in Zug, Switzerland. Our head office is currently located at Bahnhofstrasse 21, 6300 Zug, Switzerland.
The Company’s corporate purpose as
set forth in its articles of association is to participate in business organizations of all kinds in Switzerland and abroad, particularly
in relation to pharmaceutical products and services. Moreover, the Company may transact any business conducive to developing the
Company or furthering the Company’s corporate purpose. The Company may also arrange financing for its own or third party
account, in particular it may grant loans to affiliated companies or to third parties, as well as guarantees or surety bonds of
any sort for obligations towards affiliated companies. These loans or guarantees may also be granted without any remuneration or
compensation. The Company may in addition participate in cash-pooling operations with affiliated companies.
As of the date of this prospectus, our
issued fully paid-in share capital consists of CHF 17,731,881.60, divided into 44,329,704 common shares with a nominal value of
CHF 0.40 each and no preferred shares.
Articles of Association
When we refer to our articles of association
in this prospectus, we refer to our amended and restated articles of association dated as of April 13, 2017.
Ordinary Capital Increase, Authorized
and Conditional Share Capital
Under Swiss law, we may increase our share
capital (Aktienkapital) with a resolution of the general meeting of shareholders (ordinary capital increase) that must be
carried out by the board of directors within three months in order to become effective. In the case of subscription and increase
against payment of contributions in cash, a resolution passed by an absolute majority of the shares represented at the general
meeting of shareholders is required. In the case of subscription and increase against contributions in kind or to fund acquisitions
in kind, when shareholders’ statutory pre-emptive rights are withdrawn or where transformation of reserves into share capital
is involved, a resolution passed by two-thirds of the shares represented at a general meeting of shareholders and the absolute
majority of the nominal amount of the shares represented is required.
Our shareholders, by a resolution passed
by two-thirds of the shares represented at a general meeting of shareholders and the absolute majority of the nominal amount of
the shares represented, may empower our board of directors to issue shares of a specific aggregate nominal amount up to a maximum
of 50% of the share capital in the form of:
|·||conditional capital (bedingtes Kapital) for the purpose of issuing shares in connection with, among other things, (i)
option and conversion rights granted in connection with warrants, convertible bonds or other financial market instruments issued
by the Company or one of our subsidiaries or (ii) grants of rights to employees, members of our board of directors or consultants
or our subsidiaries to subscribe for new shares (conversion or option rights); and/or|
|·||authorized capital (genehmigtes Kapital) to be utilized by the board of directors within a period determined by the
shareholders but not exceeding two years from the date of the shareholder approval.|
Pursuant to the Swiss Code of Obligations,
or CO, shareholders have pre-emptive rights (Bezugsrechte) to subscribe for new issuances of shares. With respect to conditional
capital in connection with the issuance of conversion rights, convertible bonds or similar debt instruments, shareholders have
advance subscription rights (Vorwegzeichnungsrechte) for the subscription of conversion rights, convertible bonds or similar
A resolution passed at a general meeting
of shareholders by two-thirds of the shares represented and the absolute majority of the nominal value of the shares represented
may authorize our board of directors to withdraw or limit pre-emptive rights and/or advance subscription rights in certain circumstances.
If pre-emptive rights are granted, but
not exercised, the board of directors may allocate the pre-emptive rights as it elects.
With respect to our authorized share capital,
the board of directors is authorized by our articles of association to withdraw or to limit the pre-emptive rights of shareholders,
and to allocate them to third parties or to us, in the event that the newly issued shares are used for a purpose set forth in our
articles of association.
Our Authorized Share Capital
At our ordinary general meeting of shareholders
dated April 13, 2017, the shareholders approved an amendment to our authorized share capital. The new provision (article 3a of
the articles of association) reads as follows (translation of the binding original German version):
“The Board of Directors is authorized
at any time until 13 April 2019 to increase the share capital by a maximum aggregate amount of CHF 8,860,000.00 through the
issuance of not more than 22,150,000 registered shares, which will have to be fully paid-in, with a nominal value of CHF 0.40
Increases in partial amounts are permitted.
The Board of Directors may issue new shares also by means of underwriting or in any other manner by one or more banks and subsequent
offer to shareholders or third parties. The Board of Directors determines the type of contributions, the issue price, the time
of the issue, the conditions for the exercise of the pre-emptive rights, the allocation of pre-emptive rights which have not been
exercised, and the date on which the dividend entitlement starts. The Board of Directors is authorized to permit, to restrict or
to deny the trade with pre-emptive rights.
If pre-emptive rights are granted, but
not exercised, the Board of Directors may use the respective shares in the interest of the Corporation.
The Board of Directors is authorized
to restrict or to exclude the pre-emptive rights of the shareholders, and to allocate them to third parties or to the Corporation,
in the event of use of the shares for the purpose of: a) expanding the shareholder base in certain capital markets or in the context
of the listing, admission to official trading or registration of the shares at domestic or international stock exchanges; b) granting
an over-allotment option (“greenshoe”) to one or several underwriters in connection with a placement of shares; c)
share placements, provided the issue price is determined by reference to the market price; d) the participation of employees, Members
of the Board of Directors or consultants of the Corporation or of one of its Group companies according to one or several equity
incentive plans issued by the Board of Directors; e) the acquisition of companies, company assets, participations, the acquisition
of products, intellectual property rights, licenses or new investment projects or for public or private share placements for the
financing and/or refinancing of such transactions; f) for raising equity capital in a fast and flexible manner as such transaction
would be difficult to carry out, or could be carried out only at less favorable terms, without the exclusion of the pre-emptive
rights of the existing shareholders; or g) the acquisition of a participation in the Corporation by a strategic partner (including
in the case of a public takeover offer).”
Within the limits of Swiss law, the general
meeting of shareholders may increase or alter the authorization granted to the board of directors. See “—Ordinary Capital
Increase, Authorized and Conditional Share Capital.”
To effect any capital increase based on
our authorized share capital in connection with any offering, the Company will have to follow the relevant procedures under Swiss
law. In particular, the Company’s board of directors will have to approve a general authorization resolution (Ermächtigungsbeschluss),
issue a capital increase report (Kapitalerhöhungsbericht), approve a notarized confirmation resolution (Feststellungsbeschluss)
on the capital increase and the amended articles of association, and obtain (i) duly executed subscription form(s) covering the
subscription of the relevant number of new shares, (ii) a report of an audit firm relating to the withdrawal of the pre-emptive
rights, as well as (iii) a banking confirmation confirming the payment of the aggregate nominal value of the respective number
of new shares to a special Swiss bank account, all in accordance with Swiss law. The Company’s board of directors will subsequently
have to file the relevant documentation accompanied by an application form with the competent commercial register. Any issuance
of common shares based on such filing(s) is
to the recording of the respective capital increase(s) in the commercial register in accordance with Swiss law.
Our Conditional Share Capital
Conditional Share Capital for Warrants and
At our ordinary general meeting of shareholders
dated April 13, 2017, the shareholders approved an amendment to our conditional share capital for financing purposes. The new provision
(article 3b of the articles of association) reads as follows (translation of the binding original German version):
“The Corporation’s share
capital shall be increased by a maximum aggregate amount of CHF 6,260,000.00 through the issuance of not more than 15,650,000
registered shares, which will have to be fully paid-in, with a nominal value of CHF 0.40 each, by the exercise of option and
conversion rights which are granted in connection with bonds, similar obligations, loans or other financial market instruments
or contractual obligations of the Corporation or one of its Group companies, and/or by the exercise of option rights issued by
the Corporation or one of its Group companies (“Financial Instruments”). The pre-emptive rights of shareholders are
excluded. The holders of Financial Instruments are entitled to the new shares. The conditions of the Financial Instruments shall
be determined by the Board of Directors.
When issuing Financial Instruments the
Board of Directors is authorized to limit or exclude the advance subscription rights of shareholders:
|a)||for the purpose of financing or refinancing the acquisition of enterprises, divisions thereof, or of participations, products,
intellectual property rights, licenses, cooperations or of newly planned investments of the Corporation;|
|b)||if the issue occurs on domestic or international capital markets including private placements; or|
|c)||for purposes of an underwriting of the Financial Instruments by a banking institution or a consortium of banks with subsequent
offering to the public.|
To the extent that the advance subscription
rights are excluded, i) the Financial Instruments are to be placed at market conditions; ii) the exercise period, the conversion
period or the exchange period of the Financial Instruments may not exceed 10 years as of the date of the issue; and iii) the conversion
price, the exchange price or other exercise price of the Financial Instruments must be determined by reference to the market price.”
Conditional Share Capital for Equity Incentive
At our ordinary general meeting of shareholders
dated April 13, 2017, the shareholders approved an amendment to our conditional share capital for equity incentive plans. The new
provision (last paragraph of article 3b of the articles of association) reads as follows (translation of the binding original German
“The Corporation’s share
capital shall, to the exclusion of the pre-emptive rights and advance subscription rights of shareholders, be increased by a maximum
aggregate amount of CHF 2,600,000.00 through the issuance of not more than 6,500,000 registered shares, which shall be fully
paid-in, with a nominal value of CHF 0.40 each, by issuance of shares upon the exercise of options or pre-emptive rights thereof,
which have been issued or granted to employees, Members of the Board of Directors or consultants of the Corporation or of one of
its Group companies according to one or several equity incentive plans or regulations issued by the Board of Directors. The details
shall be determined by the Board of Directors.”
Our shares are uncertificated securities
(Wertrechte, within the meaning of art. 973c of the CO) and, when administered by a financial intermediary (Verwahrungsstelle,
within the meaning of the Federal Act on Intermediated Securities, “FISA”), qualify as intermediated securities (Bucheffekten,
within the meaning of the FISA). In accordance with art. 973c of the CO, we maintain a non-public register of uncertificated securities
(Wertrechtebuch). We may at any time convert uncertificated securities into share certificates (including global certificates),
one kind of certificate into another, or share certificates (including global certificates) into
securities. If registered in our share register, a shareholder may at any time request from us a written confirmation in respect
of the shares. Shareholders are not entitled, however, to request the printing and delivery of certificates.
Participation certificates and profit
The Company has not issued any non-voting
equity securities, such as participation certificates (Partizipationsscheine) or profit sharing certificates (Genussscheine),
nor has it issued any preference shares (Vorzugsaktien).
General Meeting of Shareholders
Ordinary/extraordinary meetings and powers
The general meeting of shareholders is
our supreme corporate body. Under Swiss law, ordinary and extraordinary general meetings of shareholders may be held. Under Swiss
law, an ordinary general meeting of shareholders must be held annually within six months after the end of a corporation’s
financial year. In our case, this means on or before June 30.
The following powers are vested exclusively
in the general meeting of shareholders:
|·||adopting and amending our articles of association;|
|·||electing the members of the board of directors, the chairman of the board of directors, the members of the compensation committee,
the auditors and the independent proxy;|
|·||approving the annual report, the annual statutory financial statements and the consolidated financial statements, and deciding
on the allocation of profits as shown on the balance sheet, in particular with regard to dividends and bonus payments to members
of the board of directors;|
|·||approving the compensation of members of the board of directors and executive management, which under Swiss law is not necessarily
limited to the executive officers;|
|·||discharging the members of the board of directors and executive management from liability with respect to their tenure in the
previous financial year;|
|·||dissolving the Company with or without liquidation;|
|·||deciding matters reserved to the general meeting of shareholders by law or our articles of association or that are presented
to it by the board of directors.|
An extraordinary general meeting of shareholders
may be called by a resolution of the board of directors or, under certain circumstances, by the Company’s auditor, liquidator
or the representatives of convertible bond holders, if any. In addition, the board of directors is required to convene an extraordinary
general meeting of shareholders if shareholders representing at least ten percent of the share capital request such general meeting
of shareholders in writing. Such request must set forth the items to be discussed and the proposals to be acted upon. The board
of directors must convene an extraordinary general meeting of shareholders and propose financial restructuring measures if, based
on the Company’s stand-alone annual statutory balance sheet, half of our share capital and reserves are not covered by our
Voting and Quorum Requirements
Shareholder resolutions and elections (including
elections of members of the board of directors) require the affirmative vote of the absolute majority of shares represented at
the general meeting of shareholders, unless otherwise stipulated by law.
A resolution of the general meeting of
the shareholders passed by two-thirds of the shares represented at the meeting, and the absolute majority of the nominal value
of the shares represented is required for:
|·||amending the Company’s corporate purpose;|
|·||creating or cancelling shares with preference rights or amending rights attached to such shares;|
|·||cancelling or amending the transfer restrictions of registered shares;|
|·||creating authorized or conditional share capital;|
|·||increasing the share capital out of equity, against contributions in kind or for the purpose of acquiring specific assets and
granting specific benefits;|
|·||limiting or suppressing shareholder’s pre-emptive rights;|
|·||dissolving or liquidating the Company.|
The same voting requirements apply to resolutions
regarding transactions among corporations based on Switzerland’s Federal Act on Mergers, Demergers, Transformations and the
Transfer of Assets, or the Merger Act (including a merger, demerger or conversion of a corporation) see “—Compulsory
Acquisitions; Appraisal Rights.”
In accordance with Swiss law and generally
accepted business practices, our articles of association do not provide quorum requirements generally applicable to general meetings
of shareholders. To this extent, our practice varies from the requirement of Nasdaq Listing Rule 5620(c), which requires an issuer
to provide in its bylaws for a generally applicable quorum, and that such quorum may not be less than one-third of the outstanding
General meetings of shareholders must be
convened by the board of directors at least twenty days before the date of the meeting. The general meeting of shareholders is
convened by way of a notice appearing in our official publication medium, currently the Swiss Official Gazette of Commerce. Registered
shareholders may also be informed by ordinary mail. The notice of a general meeting of shareholders must state the items on the
agenda, the proposals to be acted upon and, in case of elections, the names of the nominated candidates. Except in the limited
circumstances listed below, a resolution may not be passed at a general meeting without proper notice. This limitation does not
apply to proposals to convene an extraordinary general meeting of shareholders or to initiate a special investigation. No previous
notification is required for proposals concerning items included in the agenda or for debates that do not result in a vote. The
notice period for a general meeting of shareholders may be waived if all shareholders are present or represented at such meeting.
Pursuant to Swiss law, one or more shareholders
whose combined shareholdings represent the lower of (i) one tenth of the share capital or (ii) an aggregate nominal value of at
least CHF 1,000,000, may request that an item be included in the agenda for an ordinary general meeting of shareholders. To be
timely, the shareholder’s request must be received by us at least 45 calendar days in advance of the meeting. The request
must be made in writing and contain, for each of the agenda items, the following information:
|·||a brief description of the business desired to be brought before the ordinary general meeting of shareholders and the reasons
for conducting such business at the ordinary general meeting of shareholders;|
|·||the name and address, as they appear in the share register, of the shareholder proposing such business; and|
|·||all other information required under the applicable laws and stock exchange rules.|
Our business report, the compensation report
and the auditor’s report must be made available for inspection by the shareholders at our registered office no later than
20 days prior to the general meeting of shareholders. Shareholders of record may be notified of this in writing.
Each of our shares entitles a holder to
one vote, regardless of its nominal value. The shares are not divisible. The right to vote and the other rights of share ownership
may only be exercised by shareholders (including any nominees) or usufructuaries who are entered in our share register at cut-off
date determined by the board of directors. Those entitled to vote in the general meeting of shareholders may be represented by
the independent proxy holder (annually elected by the general meeting of shareholders), another registered shareholder or third
person with written authorization to act as proxy or the shareholder’s legal representative. The chairman has the power to
decide whether to recognize a power of attorney.
Dividends and Other Distributions
Our board of directors may propose to shareholders
that a dividend or other distribution be paid but cannot itself authorize the distribution. Dividend payments require a resolution
passed by an absolute majority of the shares represented at a general meeting of shareholders. In addition, our auditors must confirm
that the dividend proposal of our board of directors conforms to Swiss statutory law and our articles of association.
Under Swiss law, we may pay dividends only
if we have sufficient distributable profits brought forward from the previous business years (Gewinnvortrag), or if we have
distributable reserves (frei verfügbare Reserven), each as evidenced by our audited stand-alone statutory balance sheet
prepared pursuant to Swiss law, and after allocations to reserves required by Swiss law and the articles of association have been
deducted. We are not permitted to pay interim dividends out of profit of the current business year.
Distributable reserves are generally booked
either as “free reserves” (freie Reserven) or as “reserve from capital contributions” (Reserven
aus Kapitaleinlagen). Under the CO, if our general reserves (allgemeine Reserve) amount to less than 20% of our share
capital recorded in the commercial register (i.e., 20% of the aggregate nominal value of our issued capital), then at least 5%
of our annual profit must be retained as general reserves. The CO permits us to accrue additional general reserves. Further, a
purchase of our own shares (whether by us or a subsidiary) reduces the distributable reserves in an amount corresponding to the
purchase price of such own shares. Finally, the CO under certain circumstances requires the creation of revaluation reserves which
are not distributable.
Distributions out of issued share capital
(i.e. the aggregate nominal value of our issued shares) are not allowed and may be made only by way of a share capital reduction.
Such a capital reduction requires a resolution passed by an absolute majority of the shares represented at a general meeting of
shareholders. The resolution of the shareholders must be recorded in a public deed and a special audit report must confirm that
claims of our creditors remain fully covered despite the reduction in the share capital recorded in the commercial register. The
share capital may be reduced below CHF 100,000 only if and to the extent that at the same time the statutory minimum share capital
of CHF 100,000 is reestablished by sufficient new fully paid-up capital. Upon approval by the general meeting of shareholders of
the capital reduction, the board of directors must give public notice of the capital reduction resolution in the Swiss Official
Gazette of Commerce three times and notify creditors that they may request, within two months of the third publication, satisfaction
of or security for their claims. The reduction of the share capital may be implemented only after expiration of this time limit.
Our board of directors determines the date
on which the dividend entitlement starts. Dividends are usually due and payable shortly after the shareholders have passed the
resolution approving the payment, but shareholders may also resolve at the ordinary general meeting of shareholders to pay dividends
in quarterly or other installments.
Transfer of Shares
Shares in uncertificated form (Wertrechte)
may only be transferred by way of assignment. Shares that constitute intermediated securities (Bucheffekten) may only be
transferred when a credit of the relevant intermediated securities to the acquirer’s securities account is made in accordance
with the relevant provisions of the FISA. Article 4 of our articles of association provides that in the case of securities held
with an intermediary such as a registrar, transfer agent, trust corporation, bank or similar entity, any transfer, grant of a security
interest or usufructuary right in such intermediated securities and the appurtenant rights associated therewith requires the cooperation
of the intermediary in order for such transfer, grant of a security interest or usufructuary right to be valid against us.
Voting rights may be exercised only after
a shareholder has been entered in our share register (Aktienbuch) with his or her name and address (in the case of legal
entities, the registered office) as a shareholder with voting rights.
acquirer of our shares who is not registered in our share register as a shareholder with voting rights will still be entitled
to dividends and other rights with financial value with respect to such shares.
Inspection of Books and Records
Under the CO, a shareholder has a right
to inspect our share register with respect to his own shares and otherwise to the extent necessary to exercise his shareholder
rights. No other person has a right to inspect our share register. Our books and correspondence may be inspected with the express
authorization of the general meeting of shareholders or by resolution of the board of directors and subject to the safeguarding
of our business secrets. See “Comparison of Swiss Law and Delaware Law—Inspection of Books and Records.”
If the shareholders’ inspection rights
as outlined above prove to be insufficient in the judgment of the shareholder, any shareholder may propose to the general meeting
of shareholders that specific facts be examined by a special commissioner in a special investigation. If the general meeting of
shareholders approves the proposal, we or any shareholder may, within 30 calendar days after the general meeting of shareholders,
request a court in Zug, Switzerland, our registered office, to appoint a special commissioner. If the general meeting of shareholders
rejects the request, one or more shareholders representing at least 10 percent of the share capital or holders of shares in an
aggregate nominal value of at least CHF 2,000,000 may request that the court appoint a special commissioner. The court will issue
such an order if the petitioners can demonstrate that the board of directors, any member of the board of directors or our executive
management infringed the law or our articles of association and thereby caused damages to the Company or the shareholders. The
costs of the investigation would generally be allocated to us and only in exceptional cases to the petitioners.
Compulsory Acquisitions; Appraisal Rights
Business combinations and other transactions
that are governed by the Swiss Merger Act (i.e. mergers, demergers, transformations and certain asset transfers) are binding on
all shareholders. A statutory merger or demerger requires approval of two-thirds of the shares represented at a general meeting
of shareholders and the absolute majority of the nominal value of the shares represented.
Swiss corporations may be acquired by an
acquirer through the direct acquisition of the share capital of the Swiss corporation. The Swiss Merger Act provides for the possibility
of a so-called “cash-out” or “squeeze-out” merger if the acquirer controls 90% of the outstanding shares.
In these limited circumstances, minority shareholders of the corporation being acquired may be compensated in a form other than
through shares of the acquiring corporation (for instance, through cash or securities of a parent corporation of the acquiring
corporation or of another corporation). Following a statutory merger or demerger, pursuant to the Merger Act, shareholders can
file an appraisal action against the surviving company. If the consideration is deemed inadequate, the court will determine an
adequate compensation payment.
In addition, under Swiss law, the sale
of “all or substantially all of our assets” by us may require the approval of two-thirds of the number of shares represented
at a general meeting shareholders and the absolute majority of the nominal value of the shares represented. Whether a shareholder
resolution is required depends on the particular transaction, including whether the following test is satisfied:
|·||a core part of the Company’s business is sold without which it is economically impracticable or unreasonable to continue
to operate the remaining business;|
|·||the Company’s assets, after the divestment, are not invested in accordance with the Company’s statutory business
|·||the proceeds of the divestment are not earmarked for reinvestment in accordance with the Company’s business purpose but,
instead, are intended for distribution to the Company’s shareholders or for financial investments unrelated to the Company’s
Board of Directors
Our articles of association provide that
the board of directors shall consist of at least three and not more than nine members.
The members of the board of directors and
the chairman are elected annually by the general meeting of shareholders for a period until the completion of the subsequent ordinary
general meeting of shareholders and are eligible for re-election. Each member of the board of directors must be elected individually.
Unless an exception is granted by the general meeting of shareholders, only persons who have not completed their seventy-fifth
year of age on the election date are eligible for election.
The board of directors has the following
non-delegable and inalienable powers and duties:
|·||the ultimate direction of the business of the Company and issuing of the relevant directives;|
|·||laying down the organization of the Company;|
|·||formulating accounting procedures, financial controls and financial planning, to the extent required for the governance of
|·||nominating and removing persons entrusted with the management and representation of the Company and regulating the power to
sign for the Company;|
|·||the ultimate supervision of those persons entrusted with management of the Company, with particular regard to adherence to
law, our articles of association, and regulations and directives of the Company;|
|·||issuing the annual report and the compensation report, and preparing for the general meeting of shareholders and carrying out
its resolutions; and|
|·||informing the court in case of over-indebtedness.|
The board of directors may, while retaining
such non-delegable and inalienable powers and duties, delegate some of its powers, in particular direct management, to a single
or to several of its members, managing directors, committees or to third parties who need be neither members of the board of directors
nor shareholders. Pursuant to Swiss law and Article 13 of our articles of association, details of the delegation and other procedural
rules such as quorum requirements must be set in the organizational rules issued by the board of directors.
Indemnification of Executive Management and
Subject to Swiss law, Article 17 of our
articles of association provides for indemnification of the existing and former members of the board of directors, executive management
and their heirs, executors and administrators, against liabilities arising in connection with the performance of their duties in
such capacity, and permits us to advance the expenses of defending any act, suit or proceeding to our directors and executive management.
In addition, under general principles of
Swiss employment law, an employer may be required to indemnify an employee against losses and expenses incurred by such employee
in the proper execution of their duties under the employment agreement with the employer. See “Comparison of Swiss Law and
Delaware Law—Indemnification of directors and executive management and limitation of liability.”
We have entered into indemnification agreements
with each of the members of our board of directors and executive management. The indemnification agreements and our articles of
association require us to indemnify our directors and executive officers to the fullest extent permitted by law.
Conflict of Interest, Management Transactions
Swiss law does not provide for a general
provision regarding conflicts of interest. However, the CO contains a provision that requires our directors and executive management
to safeguard the Company’s interests and imposes a
of loyalty and duty of care on our directors and executive management. This rule is generally understood to disqualify directors
and executive management from participation in decisions that directly affect them. Our directors and executive officers are personally
liable to us for breach of these provisions. In addition, Swiss law contains provisions under which directors and all persons
engaged in the Company’s management are liable to the Company, each shareholder and the Company’s creditors for damages
caused by an intentional or negligent violation of their duties. Furthermore, Swiss law contains a provision under which payments
made to any of the Company’s shareholders or directors or any person associated with any such shareholder or director, other
than payments made at arm’s length, must be repaid to the Company if such shareholder or director acted in bad faith.
Our board of directors has adopted a Code
of Business Conduct and Ethics that covers a broad range of matters, including the handling of conflicts of interest.
Principles of the Compensation of the
Board of Directors and the Executive Management
Pursuant to Swiss law our shareholders
must annually resolve on the approval of the compensation of the board of directors and the persons whom the board of directors
has, fully or partially, entrusted with the management of the Company. The board of directors must issue, on an annual basis, a
written compensation report that must be reviewed together with a report on our business by our auditor. The compensation report
must disclose all compensation, loans and other forms of indebtedness granted by the Company, directly or indirectly, to current
or former members of the board of directors and executive management to the extent related to their former role within the Company
or not on customary market terms.
The disclosure concerning compensation,
loans and other forms of indebtedness must include the aggregate amount for the board of directors and the executive management
as well as the particular amount for each member of the board of directors and executive officer, specifying the name and function
of each respective person.
Certain forms of compensation are prohibited
for members of our board of directors and executive management, such as:
|·||severance payments provided for either contractually or in the articles of association (compensation due until the termination
of a contractual relationship does not qualify as severance payment);|
|·||incentive fees for the acquisition or transfer of corporations or parts thereof by the Company or by companies being, directly
or indirectly, controlled by us;|
|·||loans, other forms of indebtedness, pension benefits not based on occupational pension schemes and performance-based compensation
not provided for in the articles of association; and|
|·||equity securities and conversion and option rights awards not provided for in the articles of association.|
Compensation to members of the board of
directors and executive management for activities in entities that are, directly or indirectly, controlled by the Company is prohibited
if the compensation (i) would have been prohibited if it was paid directly by the Company, (ii) is not provided for in the articles
of association or (iii) has not been approved by the general meeting of shareholders.
The general meeting of shareholders annually
votes on the proposals of the board of directors with respect to:
|·||the maximum aggregate amount of compensation of the board of directors for the subsequent term of office; and|
|·||the maximum aggregate amount of compensation of the executive management for the subsequent financial year.|
The board of directors may submit for approval
at the general meeting of shareholders deviating or additional proposals relating to the same or different periods.
In the event that at the general meeting
of shareholders the shareholders do not approve a proposal of the board of directors, the board of directors must form a new proposal
for the maximum aggregate compensation and the particular compensation for each individual, taking into account all relevant factors,
and submit the new proposal for approval by the same general meeting of shareholders, at a subsequent extraordinary general meeting
or the next ordinary general meeting of shareholders.
In addition to fixed compensation, members
of the board of directors and executive management may be paid variable compensation, depending on the achievement of certain performance
criteria. The performance criteria may include individual targets, targets of the Company or parts thereof and targets in relation
to the market, other companies or comparable benchmarks, taking into account the position and level of responsibility of the recipient
of the variable compensation. The board of directors or, where delegated to it, the compensation committee shall determine the
relative weight of the performance criteria and the respective target values.
Compensation may be paid or granted in
the form of cash, shares, financial instruments, in kind, or in the form of other types of benefits. The board of directors or,
where delegated to it, the compensation committee shall determine grant, vesting, exercise and forfeiture conditions.
Neither Swiss law nor our articles of association
restrict in any way our power to borrow and raise funds. The decision to borrow funds is made by or under the direction of our
board of directors, and no approval by the shareholders is required in relation to any such borrowing.
Repurchases of Shares and Purchases of
The CO limits our right to purchase and
hold our own shares. We and our subsidiaries may purchase shares only if and to the extent that (i) we have freely distributable
reserves in the amount of the purchase price; and (ii) the aggregate nominal value of all shares held by us does not exceed 10
percent of our share capital. Pursuant to Swiss law, where shares are acquired in connection with a transfer restriction set out
in the articles of association, the foregoing upper limit is 20 percent. We currently do not have any transfer restriction in our
articles of association. If we own shares that exceed the threshold of 10 percent of our share capital, the excess must be sold
or cancelled by means of a capital reduction within two years.
Shares held by us or our subsidiaries are
not entitled to vote at the general meeting of shareholders but are entitled to the economic benefits applicable to the shares
generally, including dividends and pre-emptive rights in the case of share capital increases.
Notification and Disclosure of Substantial
The disclosure obligations generally applicable
to shareholders of Swiss corporations under the Swiss Financial Market Infrastructure Act do not apply to us since our shares are
not listed on a Swiss exchange.
Pursuant to art. 663c of the CO, Swiss
corporations whose shares are listed on a stock exchange must disclose their significant shareholders and their shareholdings in
the notes to their balance sheet, where this information is known or ought to be known. Significant shareholders are defined as
shareholders and groups of shareholders linked through voting rights who hold more than five percent of all voting rights.
Stock Exchange Listing
Our common shares are listed on the Nasdaq
Global Market under the symbol “EARS.”
The Depository Trust Company
Initial settlement of any common shares
to be issued pursuant to this prospectus will take place through The Depository Trust Company, or DTC, in accordance with its customary
settlement procedures for equity securities. Each person owning common shares held through DTC must rely on the procedures thereof
and on institutions that have accounts therewith to exercise any rights of a holder of the shares.
Transfer Agent and Registrar of Shares
Our share register is currently kept by
American Stock Transfer & Trust Company, LLC., which acts as transfer agent and registrar. The share register reflects only
record owners of our shares. Swiss law does not recognize fractional shares.
of Swiss Law and Delaware Law
The Swiss laws applicable to Swiss corporations
and their shareholders differ from laws applicable to U.S. corporations and their shareholders. The following table summarizes
significant differences in shareholder rights between the provisions of the Swiss Code of Obligations (Schweizerisches Obligationenrecht)
and the Swiss Ordinance against excessive compensation in listed stock corporations applicable to our company and the Delaware
General Corporation Law applicable to companies incorporated in Delaware and their shareholders. Please note that this is only
a general summary of certain provisions applicable to companies in Delaware. Certain Delaware companies may be permitted to exclude
certain of the provisions summarized below in their charter documents.
|Mergers and similar arrangements|
|Under the Delaware General Corporation Law, with certain exceptions, a merger, consolidation, sale, lease or transfer of all or substantially all of the assets of a corporation must be approved by the board of directors and a majority of the outstanding shares entitled to vote thereon. A shareholder of a Delaware corporation participating in certain major corporate transactions may, under certain circumstances, be entitled to appraisal rights pursuant to which such shareholder may receive cash in the amount of the fair value of the shares held by such shareholder (as determined by a court) in lieu of the consideration such shareholder would otherwise receive in the transaction. The Delaware General Corporation Law also provides that a parent corporation, by resolution of its board of directors, may merge with any subsidiary, of which it owns at least 90.0% of each class of capital stock without a vote by the shareholders of such subsidiary. Upon any such merger, dissenting shareholders of the subsidiary would have appraisal rights.
||Under Swiss law, with certain exceptions, a merger or a division of the corporation or a sale of all or substantially all of the assets of a corporation must be approved by two-thirds of the shares represented at the respective general meeting of shareholders as well as the absolute majority of the share capital represented at such shareholders’ meeting. The articles of association may increase the voting threshold. A shareholder of a Swiss corporation participating in a statutory merger or demerger pursuant to the Swiss Merger Act can file an appraisal right lawsuit against the surviving company. As a result, if the consideration is deemed “inadequate,” such shareholder may, in addition to the consideration (be it in shares or in cash) receive an additional amount to ensure that such shareholder receives the fair value of the shares held by such shareholder. Swiss law also provides that a parent corporation, by resolution of its board of directors, may merge with any subsidiary, of which it owns at least 90.0% of the shares without a vote by shareholders of such subsidiary, if the shareholders of the subsidiary are offered the payment of the fair value in cash as an alternative to shares.|
|Class actions and derivative actions generally are available to shareholders of a Delaware corporation for, among other things, breach of fiduciary duty, corporate waste and actions not taken in accordance with applicable law. In such actions, the court has discretion to permit the winning party to recover attorneys’ fees incurred in connection with such action.
||Class actions and derivative actions as such are not available under Swiss law. Nevertheless, certain actions may have a similar effect. A shareholder is entitled to bring suit against directors for breach of, among other things, their fiduciary duties and claim the payment of the company’s damages to the corporation. Likewise, an appraisal lawsuit won by a shareholder will indirectly compensate all shareholders. Under Swiss law, the winning party is generally entitled to recover attorneys’ fees incurred in connection with such action, provided, however, that the court has discretion to permit the shareholder whose claim has been dismissed to recover attorneys’ fees incurred to the extent he acted in good faith.|
|Shareholder vote on board and management compensation|
|Under the Delaware General Corporation Law, the board of directors has the authority to fix the compensation of directors, unless otherwise restricted by the certificate of incorporation or bylaws.
||Pursuant to the Swiss Ordinance against excessive compensation in listed stock corporations, the general meeting of shareholders has the non-transferable right, amongst others, to vote on the compensation due to the board of directors, executive management and advisory boards.|
|Annual vote on board renewal|
Unless directors are elected by written consent in lieu of an
annual meeting, directors are elected in an annual meeting of stockholders on a date and at a time designated by or in the manner
provided in the bylaws. Re-election is possible.
Classified boards are permitted.
||The general meeting of shareholders elects annually (i.e. until the following general meeting of shareholders) the members of the board of directors (including the chairman) and the members of the compensation committee individually for a term of office of one year. Re-election is possible.|
|Indemnification of directors and executive management and limitation of liability|
The Delaware General Corporation Law provides that a certificate
of incorporation may contain a provision eliminating or limiting the personal liability of directors (but not other controlling
persons) of the corporation for monetary damages for breach of a fiduciary duty as a director, except no provision in the certificate
of incorporation may eliminate or limit the liability of a director for:
breach of a director’s duty of loyalty to the corporation or its shareholders;
or omissions not in good faith or which involve intentional misconduct or a knowing violation of law;
liability for unlawful payment of dividends or unlawful stock purchase or redemption; or
transaction from which the director derived an improper personal benefit.
A Delaware corporation may indemnify any person who was or is
a party or is threatened to be made a party to any proceeding, other than an action by or on behalf of the corporation, because
the person is or was a director or officer, against liability incurred in connection with the proceeding if the director or officer
acted in good faith and in a manner reasonably believed to be in, or not opposed to, the best interests of the corporation; and
the director or officer, with respect to any criminal action or proceeding, had no reasonable cause to believe his or her conduct
Unless ordered by a court, any foregoing indemnification is
subject to a determination that the
Under Swiss corporate law, an indemnification of a director
or member of the executive management in relation to potential personal liability is not effective to the extent the director or
member of the executive management intentionally or negligently violated his or her corporate duties towards the corporation (certain
views advocate that at least a grossly negligent violation is required to exclude the indemnification). Most violations of corporate
law are regarded as violations of duties towards the corporation rather than towards the shareholders. In addition, indemnification
of other controlling persons is not permitted under Swiss corporate law, including shareholders of the corporation.
Nevertheless, a corporation may enter into and pay for directors’
and officers’ liability insurance which typically covers negligent acts as well.
director or officer has met the applicable standard of conduct:
a majority vote of the directors who are not parties to the proceeding, even though less than a quorum;
a committee of directors designated by a majority vote of the eligible directors, even though less than a quorum;
independent legal counsel in a written opinion if there are no eligible directors, or if the eligible directors so direct; or
Moreover, a Delaware corporation may not indemnify a director
or officer in connection with any proceeding in which the director or officer has been adjudged to be liable to the corporation
unless and only to the extent that the court determines that, despite the adjudication of liability but in view of all the circumstances
of the case, the director or officer is fairly and reasonably entitled to indemnity for those expenses which the court deems proper.
|Directors’ fiduciary duties|
A director of a Delaware corporation has a fiduciary duty to
the corporation and its shareholders. This duty has two components:
duty of care; and
duty of loyalty.
The duty of care requires that a director act in good faith,
with the care that an ordinarily prudent person would exercise under similar circumstances. Under this duty, a director must inform
himself of, and disclose to shareholders, all material information reasonably available regarding a significant transaction. The
duty of loyalty requires that a director act in a manner he reasonably believes to be in the best interests of the corporation.
He must not use his corporate position for personal gain or advantage. This duty prohibits self-dealing by a director and mandates
that the best interest of the corporation and its shareholders take precedence over any interest possessed by a director, officer
or controlling shareholder and not shared by the shareholders generally. In general, actions of a director are presumed to have
been made on an informed basis, in good faith and in the honest belief that the action taken was in the best interests of the corporation.
However, this presumption may be rebutted by evidence
A director of a Swiss corporation has a fiduciary duty to the
corporation only. This duty has two components:
duty of care; and
duty of loyalty.
The duty of care requires that a director act in good faith,
with the care that an ordinarily prudent director would exercise under similar circumstances. Under this duty, a director must
inform himself of, and disclose, all material information reasonably available regarding a significant transaction.
The duty of loyalty requires that a director act in a manner
he reasonably believes to be in the best interest of the corporation. He must not use his corporate position for personal gain
or advantage. This duty prohibits in principle self-dealing by a director and mandates that the best interest of the corporation
take precedence over any interest possessed by a director or officer.
The burden of proof for a violation of these duties is with
the corporation or with the shareholder bringing a suit against the director.
Directors also have an obligation to treat shareholders
of a breach of one of the fiduciary duties.
Should such evidence be presented concerning a transaction by
a director, a director must prove the procedural fairness of the transaction, and that the transaction was of fair value to the
||equally proportionate to their share ownership.|
|Shareholder action by written consent|
|A Delaware corporation may, in its certificate of incorporation, eliminate the right of shareholders to act by written consent.
||Shareholders of a Swiss corporation may only exercise their voting rights in a general meeting of shareholders and may not act by written consent.|
|A shareholder of a Delaware corporation has the right to put any proposal before the annual meeting of shareholders, provided it complies with the notice provisions in the governing documents. A special meeting may be called by the board of directors or any other person authorized to do so in the governing documents, but shareholders may be precluded from calling special meetings.
At any general meeting of shareholders any shareholder may put
proposals to the meeting if the proposal is part of an agenda item. Unless the articles of association provide for a lower threshold
or for additional shareholders’ rights:
or several shareholders representing 10.0% of the share capital may ask that a general meeting of shareholders be called for specific
agenda items and specific proposals; and
or several shareholders representing 10.0% of the share capital or CHF 1.0 million of nominal share capital may ask that an agenda
item including a specific proposal be put on the agenda for a regularly scheduled general meeting of shareholders, provided such
request is made with appropriate notice.
Any shareholder can propose candidates for election as directors
without prior written notice.
In addition, any shareholder is entitled, at a general meeting
of shareholders and without advance notice, to (i) request information from the Board on the affairs of the company (note, however,
that the right to obtain such information is limited), (ii) request information from the auditors on the methods and results of
their audit, and (iii) request, under certain circumstances and subject to certain conditions, a special audit.
|Under the Delaware General Corporation Law, cumulative voting for elections of directors is not permitted unless the corporation’s certificate of incorporation provides for it.
||Cumulative voting is not permitted under Swiss corporate law. Pursuant to Swiss law, shareholders can vote for each proposed candidate, but they are not allowed to cumulate their votes for single candidates. An annual individual election of all members of the board of directors (including the chairman) for a term of office of one year (i.e. until the following annual general meeting) is mandatory for listed companies.|
|Removal of directors|
|A Delaware corporation with a classified board may be removed only for cause with the approval of a majority of the outstanding shares entitled to vote, unless the certificate of incorporation provides otherwise.
||A Swiss corporation may remove, with or without cause, any director at any time with a resolution passed by an absolute majority of the shares represented at a general meeting of shareholders. The articles of association may provide for a qualified majority for the removal of a director.|
|Transactions with interested shareholders|
|The Delaware General Corporation Law generally prohibits a Delaware corporation from engaging in certain business combinations with an “interested shareholder” for three years following the date that such person becomes an interested shareholder. An interested shareholder generally is a person or group who or which owns or owned 15.0% or more of the corporation’s outstanding voting stock within the past three years.
||No such rule applies to a Swiss corporation.|
|Dissolution; Winding up|
|Unless the board of directors of a Delaware corporation approves the proposal to dissolve, dissolution must be approved by shareholders holding 100.0% of the total voting power of the corporation. Only if the dissolution is initiated by the board of directors may it be approved by a simple majority of the corporation’s outstanding shares. Delaware law allows a Delaware corporation to include in its certificate of incorporation a supermajority voting requirement in connection with dissolutions initiated by the board.
||A dissolution and winding up of a Swiss corporation requires the approval by two-thirds of the shares represented as well as the absolute majority of the nominal value of the share capital represented at a general meeting of shareholders passing a resolution on such dissolution and winding up. The articles of association may increase the voting thresholds required for such a resolution (but only by way of a resolution with the majority stipulated by law).|
|Variation of rights of shares|
|A Delaware corporation may vary the rights of a class of shares with the approval of a majority of the outstanding shares of such class, unless the certificate of incorporation provides otherwise.
||A Swiss corporation may modify the rights of a category of shares with (i) a resolution passed by an absolute majority of the shares represented at the general meeting of shareholders and (ii) a resolution passed by an absolute majority of the shares represented at the special meeting of the affected preferred shareholders. Shares that are granted more voting power are not regarded a special class for these purposes.|
|Amendment of governing documents|
|A Delaware corporation’s governing documents may be amended with the approval of a majority of the outstanding shares entitled to vote, unless the certificate of incorporation provides otherwise.
||By way of a public deed, the articles of association of a Swiss corporation may be amended with a resolution passed by an absolute majority of the shares represented at such meeting, unless otherwise provided in the articles of association. There are a number of resolutions, such as an amendment of the stated purpose of the corporation and the introduction of authorized and conditional capital, that require the approval by two-thirds of the votes and an absolute majority of the nominal value of the shares represented at a shareholders’ meeting. The articles of association may|
||increase the voting thresholds.|
|Inspection of Books and Records|
|Shareholders of a Delaware corporation, upon written demand under oath stating the purpose thereof, have the right during the usual hours for business to inspect for any proper purpose, and to obtain copies of list(s) of shareholders and other books and records of the corporation and its subsidiaries, if any, to the extent the books and records of such subsidiaries are available to the corporation.
||Shareholders of a Swiss corporation may only inspect books and records if the general meeting of shareholders or the board of directors approved such inspection. The inspection right is limited in scope and only extends to information required for the exercise of shareholder rights and does not extend to confidential information. The right to inspect the share register is limited to the right to inspect that shareholder’s own entry in the share register.|
|Payment of dividends|
The board of directors may approve a dividend without shareholder
approval. Subject to any restrictions contained in its certificate of incorporation, the board may declare and pay dividends upon
the shares of its capital stock either:
of its surplus, or
case there is no such surplus, out of its net profits for the fiscal year in which the dividend is declared and/or the preceding
Stockholder approval is required to authorize capital stock
in excess of that provided in the charter. Directors may issue authorized shares without stockholder approval.
Dividend payments are subject to the approval of the general
meeting of shareholders. The board of directors may propose to shareholders that a dividend shall be paid but cannot itself authorize
Payments out of the Company’s share capital (in other
words, the aggregate nominal value of the Company’s registered share capital) in the form of dividends are not allowed and
may be made by way of a capital reduction only. Dividends may be paid only from the profits brought forward from the previous business
years or if the Company has distributable reserves, each as will be presented on the Company’s audited annual stand-alone
balance sheet. The dividend may be determined only after the allocations to reserves required by the law and the articles of association
have been deducted.
|Creation and issuance of new shares|
|All creation of shares require the board of directors to adopt a resolution or resolutions, pursuant to authority expressly vested in the board of directors by the provisions of the company’s certificate of incorporation.
||All creation of shares requires a shareholders’ resolution documented by way of a public deed. Authorized shares can be, once created by shareholders’ resolution, issued by the board of directors (subject to fulfillment of the authorization). Conditional shares are created and issued through the exercise of options and conversion rights related to debt instruments issued by the board of directors or such rights issued to employees.|
of Debt Securities
The debt securities will be our direct
general obligations. The debt securities will be either senior debt securities or subordinated debt securities and may be secured
or unsecured and may be convertible into other securities, including our common shares. The debt securities will be issued under
one or more separate indentures between our company and a financial institution that will act as trustee. Senior debt securities
will be issued under a senior indenture. Subordinated debt securities will be issued under a subordinated indenture. Each of the
senior indenture and the subordinated indenture is referred to individually as an indenture and collectively as the indentures.
Each of the senior debt trustee and the subordinated debt trustee is referred to individually as a trustee and collectively as
the trustees. The material terms of any indenture will be set forth in the applicable prospectus supplement.
We have summarized certain terms and provisions
of the indentures. The summary is not complete. The indentures are subject to and governed by the Trust Indenture Act of 1939,
as amended. The senior indenture and subordinated indenture are substantially identical, except for the provisions relating to
Neither indenture will limit the amount
of debt securities that we may issue. We may issue debt securities up to an aggregate principal amount as we may authorize from
time to time. The applicable prospectus supplement will describe the terms of any debt securities being offered. These terms will
include some or all of the following:
|·||classification as senior or subordinated debt securities;|
|·||ranking of the specific series of debt securities relative to other outstanding indebtedness, including subsidiaries’
|·||if the debt securities are subordinated, the aggregate amount of outstanding indebtedness, as of a recent date, that is senior
to the subordinated securities, and any limitation on the issuance of additional senior indebtedness;|
|·||the designation, aggregate principal amount and authorized denominations;|
|·||the date or dates on which the principal of the debt securities may be payable;|
|·||the rate or rates (which may be fixed or variable) per annum at which the debt securities shall bear interest, if any;|
|·||the date or dates from which such interest shall accrue, on which such interest shall be payable, and on which a record shall
be taken for the determination of holders of the debt securities to whom interest is payable;|
|·||the place or places where the principal and interest shall be payable;|
|·||our right, if any, to redeem the debt securities, in whole or in part, at our option and the period or periods within which,
the price or prices at which and any terms and conditions upon which such debt securities may be so redeemed, pursuant to any sinking
fund or otherwise;|
|·||our obligation, if any, of the Company to redeem, purchase or repay any debt securities pursuant to any mandatory redemption,
sinking fund or other provisions or at the option of a holder of the debt securities;|
|·||if other than denominations of $2,000 and any higher integral multiple of $1,000, the denominations in which the debt securities
will be issuable;|
|·||if other than the currency of the United States, the currency or currencies, in which payment of the principal and interest
shall be payable;|
|·||whether the debt securities will be issued in the form of global securities;|
|·||provisions, if any, for the defeasance of the debt securities;|
|·||any U.S. federal income tax consequences; and|
|·||other specific terms, including any deletions from, modifications of or additions to the events of default or covenants described
below or in the applicable indenture.|
We will issue under the senior indenture
the debt securities that will constitute part of our senior debt. These senior debt securities will rank equally and pari passu
with all our other unsecured and unsubordinated debt.
We will issue under the subordinated indenture
the debt securities that will constitute part of our subordinated debt. These subordinated debt securities will be subordinate
and junior in right of payment, to the extent and in the manner set forth in the subordinated indenture, to all our “senior
indebtedness.” “Senior indebtedness” is defined in the subordinated indenture and generally includes obligations
of, or guaranteed by, us for borrowed money, or as evidenced by bonds, debentures, notes or other similar instruments, or in respect
of letters of credit or other similar instruments, or to pay the deferred purchase price of property or services, or as a lessee
under capital leases, or as secured by a lien on any asset of ours. “Senior indebtedness” does not include the subordinated
debt securities or any other obligations specifically designated as being subordinate in right of payment to, or pari passu with,
the subordinated debt securities. In general, the holders of all senior indebtedness are first entitled to receive payment in full
of such senior indebtedness before the holders of any of the subordinated debt securities are entitled to receive a payment on
account of the principal or interest on the indebtedness evidenced by the subordinated debt securities in certain events. These
|·||subject to Swiss law, any insolvency or bankruptcy proceedings, or any receivership, dissolution, winding up, total or partial
liquidation, reorganization or other similar proceedings in respect of us or a substantial part of our property, whether voluntary
|·||(i) a default having occurred with respect to the payment of principal or interest on or other monetary amounts due and payable
with respect to any senior indebtedness or (ii) an event of default (other than a default described in clause (i) above) having
occurred with respect to any senior indebtedness that permits the holder or holders of such senior indebtedness to accelerate the
maturity of such senior indebtedness. Such a default or event of default must have continued beyond the period of grace, if any,
provided in respect of such default or event of default, and such a default or event of default shall not have been cured or waived
or shall not have ceased to exist; and|
|·||the principal of, and accrued interest on, any series of the subordinated debt securities having been declared due and payable
upon an event of default pursuant to the subordinated indenture. This declaration must not have been rescinded and annulled as
provided in the subordinated indenture.|
Authentication and Delivery
We will deliver the debt securities to
the trustee for authentication, and the trustee will authenticate and deliver the debt securities upon our written order.
Events of Default
When we use the term “Event of Default”
in the indentures with respect to the debt securities of any series, set forth below are some examples of what we mean:
|(1)||default in the payment of the principal on the debt securities when it becomes due and payable at maturity or otherwise;|
|(2)||default in the payment of interest on the debt securities when it becomes due and payable, and such default continues for a
period of 30 days;|
|(3)||default in the performance, or breach, of any covenant in the indenture (other than defaults specified in clauses (1) or (2)
above) and the default or breach continues for a period of 90 consecutive days or more after written notice to us by the trustee
or to us and the trustee by the holders of 25% or more in aggregate principal amount of the outstanding debt securities of all
series affected thereby;|
|(4)||the occurrence of certain events of bankruptcy, insolvency, or similar proceedings with respect to us or any substantial part
of our property; or|
|(5)||any other Events of Default that may be set forth in the applicable prospectus supplement.|
If an Event of Default (other than an Event
of Default specified in clause (4) above) with respect to the debt securities of any series then outstanding occurs and is continuing,
then either the trustee or the holders of not less than 25% in principal amount of the securities of all such series then outstanding
in respect of which an Event of Default has occurred may by notice in writing to us declare the entire principal amount of all
debt securities of the affected series, and accrued interest, if any, to be due and payable immediately, and upon any such declaration
the same shall become immediately due and payable.
If an Event of Default described in clause
(4) above occurs and is continuing, then the principal amount of all the debt securities then outstanding and accrued interest
shall be and become due immediately and payable without any declaration, notice or other action by any holder of the debt securities
or the trustee.
The trustee will, within 90 days after
the occurrence of any default actually known to it, give notice of the default to the holders of the debt securities of that series,
unless the default was already cured or waived. Unless there is a default in paying principal or interest when due, the trustee
can withhold giving notice to the holders if it determines in good faith that the withholding of notice is in the interest of the
Satisfaction, Discharge and Defeasance
We may discharge our obligations under
each indenture, except as to:
|·||the rights of registration of transfer and exchange of debt securities, and our right of optional redemption, if any;|
|·||substitution of mutilated, defaced, destroyed, lost or stolen debt securities;|
|·||the rights of holders of the debt securities to receive payments of principal and interest;|
|·||the rights, obligations and immunities of the trustee; and|
|·||the rights of the holders of the debt securities as beneficiaries with respect to the property deposited with the trustee payable
to them (as described below);|
|·||all debt securities of any series issued that have been authenticated and delivered have been delivered by us to the trustee
for cancellation; or|
|·||all the debt securities of any series issued that have not been delivered by us to the trustee for cancellation have become
due and payable or will become due and payable within one year or are to be called for redemption within one year under arrangements
satisfactory to the trustee for the giving of notice of redemption by such trustee in our name and at our expense, and we have
irrevocably deposited or caused to be deposited with the trustee as trust funds the entire amount sufficient to pay at maturity
or upon redemption all debt securities of such series not delivered to the trustee for cancellation, including principal and interest
due or to become due on or prior to such date of maturity or redemption;|
|·||we have paid or caused to be paid all other sums then due and payable under such indenture; and|
|·||we have delivered to the trustee an officers’ certificate and an opinion of counsel, each stating that all conditions
precedent under such indenture relating to the satisfaction and discharge of such indenture have been complied with.|
In addition, unless the applicable prospectus
supplement and supplemental indenture otherwise provide, we may elect either (i) to have our obligations under each indenture discharged
with respect to the outstanding debt securities of any series (“legal defeasance”) or (ii) to be released from our
obligations under each indenture with respect to certain covenants applicable to the outstanding debt securities of any series
(“covenant defeasance”). Legal defeasance means that we will be deemed to have paid and discharged the entire indebtedness
represented by the outstanding debt securities of such series under such indenture and covenant defeasance means that we will no
longer be required to comply with the obligations with respect to such covenants (and an omission to comply with such obligations
will not constitute a default or event of default).
In order to exercise legal defeasance or
covenant defeasance with respect to outstanding debt securities of any series:
|·||we must irrevocably have deposited or caused to be deposited with the trustee as trust funds in trust for the purpose of making
the following payments, specifically pledged as security for, and dedicated solely to the benefits of the holders of the debt securities
of a series:|
|·||U.S. government obligations; or|
|·||a combination of money and U.S. government obligations,|
in each case sufficient without reinvestment, in the
written opinion of a nationally recognized firm of independent public accountants, to pay and discharge, and which shall be applied
by the trustee to pay and discharge, all of the principal and interest at due date or maturity or if we have made irrevocable arrangements
satisfactory to the trustee for the giving of notice of redemption by the trustee, the redemption date;
|·||we have delivered to the trustee an opinion of counsel stating that, under then applicable U.S. federal income tax law, the
holders of the debt securities of that series will not recognize gain or loss for U.S. federal income tax purposes as a result
of the defeasance and will be subject to the same federal income tax as would be the case if the defeasance did not occur;|
|·||no default relating to bankruptcy or insolvency and, in the case of a covenant defeasance, no other default has occurred and
is continuing at any time;|
|·||if at such time the debt securities of such series are listed on a national securities exchange, we have delivered to the trustee
an opinion of counsel to the effect that the debt securities of such series will not be delisted as a result of such defeasance;
|·||we have delivered to the trustee an officers’ certificate and an opinion of counsel stating that all conditions precedent
with respect to the defeasance have been complied with.|
We are required to furnish to each trustee
an annual statement as to compliance with all conditions and covenants under the indenture.
We may issue warrants to purchase debt
securities, common shares or other securities. We may issue warrants independently or together with other securities. Warrants
sold with other securities may be attached to or separate from the other securities. We will issue warrants under one or more warrant
agreements between our company and a warrant agent that we will name in the applicable prospectus supplement.
The prospectus supplement relating to any
warrants we offer will include specific terms relating to the offering. These terms will include some or all of the following:
|·||the title of the warrants;|
|·||the aggregate number of warrants offered;|
|·||the designation, number and terms of the debt securities, common shares or other securities purchasable upon exercise of the
warrants and procedures by which those numbers may be adjusted;|
|·||the exercise price of the warrants;|
|·||the dates or periods during which the warrants are exercisable;|
|·||the designation and terms of any securities with which the warrants are issued;|
|·||if the warrants are issued as a unit with another security, the date on and after which the warrants and the other security
will be separately transferable;|
|·||if the exercise price is not payable in U.S. dollars, the foreign currency, currency unit or composite currency in which the
exercise price is denominated;|
|·||any minimum or maximum amount of warrants that may be exercised at any one time;|
|·||any terms relating to the modification of the warrants;|
|·||any terms, procedures and limitations relating to the transferability, exchange or exercise of the warrants; and|
|·||any other specific terms of the warrants.|
The terms of any warrants to be issued
and a description of the material provisions of the applicable warrant agreement will be set forth in the applicable prospectus
of Purchase Contracts
We may issue purchase contracts for the
purchase or sale of debt or equity securities issued by us or securities of third parties, a basket of such securities, an index
or indices or such securities or any combination of the above as specified in the applicable prospectus supplement.
Each purchase contract will entitle the
holder thereof to purchase or sell, and obligate us to sell or purchase, on specified dates, such securities at a specified purchase
price, which may be based on a formula, all as set forth in the applicable prospectus supplement. We may, however, satisfy our
obligations, if any, with respect to any purchase contract by delivering the cash value of such purchase contract or the cash value
of the property otherwise deliverable as set forth in the applicable prospectus supplement. The applicable prospectus supplement
will also specify the methods by which the holders may purchase or sell such securities and any acceleration, cancellation or termination
provisions or other provisions relating to the settlement of a purchase contract.
The purchase contracts may require us to
make periodic payments to the holders thereof or vice versa, which payments may be deferred to the extent set forth in the applicable
prospectus supplement, and those payments may be unsecured or prefunded on some basis. The purchase contracts may require the holders
thereof to secure their obligations in a specified manner to be described in the applicable prospectus supplement. Alternatively,
purchase contracts may require holders to satisfy their obligations thereunder when the purchase contracts are issued. Our obligation
to settle such pre-paid purchase contracts on the relevant settlement date may constitute indebtedness. Accordingly, pre-paid purchase
contracts will be issued under either the senior indenture or the subordinated indenture.
As specified in the applicable prospectus
supplement, we may issue units consisting of one or more common shares, debt securities, warrants, purchase contracts or any combination
of such securities. The applicable prospectus supplement will describe:
|·||the terms of the units and of the common shares, debt securities, warrants and/ or purchase contracts comprising the units,
including whether and under what circumstances the securities comprising the units may be traded separately;|
|·||a description of the terms of any unit agreement governing the units; and|
|·||a description of the provisions for the payment, settlement, transfer or exchange of the units.|
Each debt security, warrant and unit will
be represented either by a certificate issued in definitive form to a particular investor or by one or more global securities representing
the entire issuance of securities. Certificated securities in definitive form and global securities will be issued in registered
form. Definitive securities name you or your nominee as the owner of the security, and in order to transfer or exchange these securities
or to receive payments other than interest or other interim payments, you or your nominee must physically deliver the securities
to the trustee, registrar, paying agent or other agent, as applicable. Global securities name a depositary or its nominee as the
owner of the debt securities, warrants or units represented by these global securities. The depositary maintains a computerized
system that will reflect each investor’s beneficial ownership of the securities through an account maintained by the investor
with its broker/dealer, bank, trust company or other representative, as we explain more fully below.
Registered Global Securities
We may issue the registered debt securities,
warrants and units in the form of one or more fully registered global securities that will be deposited with a depositary or its
nominee identified in the applicable prospectus supplement and registered in the name of that depositary or nominee. In those cases,
one or more registered global securities will be issued in a denomination or aggregate denominations equal to the portion of the
aggregate principal or face amount of the securities to be represented by registered global securities. Unless and until it is
exchanged in whole for securities in definitive registered form, a registered global security may not be transferred except as
a whole by and among the depositary for the registered global security, the nominees of the depositary or any successors of the
depositary or those nominees.
If not described below, any specific terms
of the depositary arrangement with respect to any securities to be represented by a registered global security will be described
in the prospectus supplement relating to those securities. We anticipate that the following provisions will apply to all depositary
Ownership of beneficial interests in a
registered global security will be limited to persons, called participants, that have accounts with the depositary or persons that
may hold interests through participants. Upon the issuance of a registered global security, the depositary will credit, on its
book-entry registration and transfer system, the participants’ accounts with the respective principal or face amounts of
the securities beneficially owned by the participants. Any dealers, underwriters or agents participating in the distribution of
the securities will designate the accounts to be credited. Ownership of beneficial interests in a registered global security will
be shown on, and the transfer of ownership interests will be effected only through, records maintained by the depositary, with
respect to interests of participants, and on the records of participants, with respect to interests of persons holding through
participants. The laws of some states may require that some purchasers of securities take physical delivery of these securities
in definitive form. These laws may impair your ability to own, transfer or pledge beneficial interests in registered global securities.
So long as the depositary, or its nominee,
is the registered owner of a registered global security, that depositary or its nominee, as the case may be, will be considered
the sole owner or holder of the securities represented by the registered global security for all purposes under the applicable
indenture, warrant agreement or unit agreement. Except as described below, owners of beneficial interests in a registered global
security will not be entitled to have the securities represented by the registered global security registered in their names, will
not receive or be entitled to receive physical delivery of the securities in definitive form and will not be considered the owners
or holders of the securities under the applicable indenture, warrant agreement or unit agreement. Accordingly, each person owning
a beneficial interest in a registered global security must rely on the procedures of the depositary for that registered global
security and, if that person is not a participant, on the procedures of the participant through which the person owns its interest,
to exercise any rights of a holder under the applicable indenture, warrant agreement or unit agreement. 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 applicable indenture, warrant agreement
or unit agreement, the depositary for the registered global security would authorize the participants holding the relevant beneficial
interests to give or take that action, and the participants would authorize beneficial owners owning through them to give or take
that action or would otherwise act upon the instructions of beneficial owners holding through them.
Principal, premium, if any, and interest
payments on debt securities, and any payments to holders with respect to warrants or units, represented by a registered global
security registered in the name of a depositary or its nominee will be made to the depositary or its nominee, as the case may be,
as the registered owner of the registered global security. None of Auris Medical Holding AG, its affiliates, the trustees, the
warrant agents, the unit agents or any other agent of Auris Medical Holding AG, agent of the trustees or agent of the warrant agents
or unit agents will have any responsibility or liability for any aspect of the records relating to payments made on account of
beneficial ownership interests in the registered global security or for maintaining, supervising or reviewing any records relating
to those beneficial ownership interests.
We expect that the depositary for any of
the securities represented by a registered global security, upon receipt of any payment of principal, premium, interest or other
distribution of underlying securities or other property to holders on that registered global security, will immediately credit
participants’ accounts in amounts proportionate to their respective beneficial interests in that registered global security
as shown on the records of the depositary. We also expect that payments by participants to owners of beneficial interests in a
registered global security held through participants will be governed by standing customer instructions and customary practices,
as is now the case with the securities held for the accounts of customers in bearer form or registered in “street name,”
and will be the responsibility of those participants.
If the depositary for any of these securities
represented by a registered global security is at any time unwilling or unable to continue as depositary or ceases to be a clearing
agency registered under the Exchange Act, and a successor depositary registered as a clearing agency under the Exchange Act is
not appointed by us within 90 days, we will issue securities in definitive form in exchange for the registered global security
that had been held by the depositary. Any securities issued in definitive form in exchange for a registered global security will
be registered in the name or names that the depositary gives to the relevant trustee, warrant agent, unit agent or other relevant
agent of ours or theirs. It is expected that the depositary’s instructions will be based upon directions received by the
depositary from participants with respect to ownership of beneficial interests in the registered global security that had been
held by the depositary.
We, or the selling shareholder, as applicable,
may sell the securities in one or more of the following ways (or in any combination) from time to time:
|·||through underwriters or dealers;|
|·||directly to a limited number of purchasers or to a single purchaser;|
|·||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; or|
|·||through any other method permitted by applicable law and described in the applicable prospectus supplement.|
The prospectus supplement will state the
terms of the offering of the securities, including:
|·||the name or names of any underwriters, dealers or agents;|
|·||the purchase price of such securities and the proceeds to be received by us, if any;|
|·||any underwriting discounts or agency fees and other items constituting underwriters’ or agents’ compensation;|
|·||any initial public offering price;|
|·||any discounts or concessions allowed or reallowed or paid to dealers; and|
|·||any securities exchanges on which the securities may be listed.|
Any initial public offering price and any
discounts or concessions allowed or reallowed or paid to dealers may be changed from time to time.
If underwriters are used in the sale, the
securities will be acquired by the underwriters for their own account and may be resold from time to time in one or more transactions,
|·||at a fixed public offering price or prices, which may be changed;|
|·||at market prices prevailing at the time of sale;|
|·||at prices related to prevailing market prices; or|
Unless otherwise stated in a prospectus
supplement, the obligations of the underwriters to purchase any securities will be conditioned on customary closing conditions
and the underwriters will be obligated to purchase all of such series of securities, if any are purchased.
The securities may be sold through agents
from time to time. The prospectus supplement will name any agent involved in the offer or sale of the securities and any commissions
paid to them. Generally, any agent will be acting on a best efforts basis for the period of its appointment.
We, or the selling shareholder, as applicable,
may authorize underwriters, dealers or agents to solicit offers by certain purchasers to purchase the securities 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. The
will be subject only to those conditions set forth in the prospectus supplement, and the prospectus supplement will set forth
any commissions paid for solicitation of these contracts.
Underwriters and agents may be entitled
under agreements entered into with us or the selling shareholder, as applicable, to indemnification by us or the selling shareholder,
as applicable, against certain civil liabilities, including liabilities under the Securities Act, or to contribution with respect
to payments which the underwriters or agents may be required to make.
The prospectus supplement may also set
forth whether or not underwriters may over-allot or effect transactions that stabilize, maintain or otherwise affect the market
price of the securities at levels above those that might otherwise prevail in the open market, including, for example, by entering
stabilizing bids, effecting syndicate covering transactions or imposing penalty bids.
Underwriters and agents may be customers
of, engage in transactions with, or perform services for us and our affiliates in the ordinary course of business.
Each series of securities will be a new
issue of securities and will have no established trading market, other than our common shares, which are listed on Nasdaq Global
Market. Any underwriters to whom securities are sold for public offering and sale 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. The securities, other
than our common shares, may or may not be listed on a national securities exchange.
of Certain Information by Reference
The SEC allows us to incorporate by reference
information into this document. This means that we can disclose important information to you by referring you to another document
filed separately with the SEC. The information incorporated by reference is considered to be a part of this document, except for
any information superseded by information that is included directly in this prospectus or incorporated by reference subsequent
to the date of this prospectus.
We incorporate by reference the following
documents or information that we have filed with the SEC
|·||our Annual Report on Form 20-F for the fiscal year ended December 31, 2016; |
| ||·||our report on Form 6-K filed with the SEC on April 13, 2017; and|
|·||the description of our common shares contained in our registration statement on Form 8-A filed with the SEC on July 29, 2014
and amended on June 1, 2016, including any subsequent amendment or reports filed for the purpose of updating such description.|
All annual reports we file with the SEC
pursuant to the Exchange Act on Form 20-F after the date of this prospectus and prior to termination or expiration of this registration
statement shall be deemed incorporated by reference into this prospectus and to be part hereof from the date of filing of such
documents. We may incorporate by reference any Form 6-K subsequently submitted to the SEC by identifying in such Form 6-K that
it is being incorporated by reference into this prospectus.
Documents incorporated by reference in
this prospectus are available from us without charge upon written or oral request, excluding any exhibits to those documents that
are not specifically incorporated by reference into those documents. You can obtain documents incorporated by reference in this
document by requesting them from us in writing or at Auris Medical Holding AG, Bahnhofstrasse 21, 6300 Zug, Switzerland or via
telephone at +41 (0)41 729 71 94.
of Civil Liabilities
We are organized under the laws of Switzerland
and our jurisdiction of incorporation is Zug, Switzerland. Moreover, a number of our directors and executive officers and a number
of directors of each of our subsidiaries are not residents of the United States, and all or a substantial portion of the assets
of such persons are located outside the United States. As a result, it may not be possible for investors to effect service of process
within the United States upon us or upon such persons or to enforce against them judgments obtained in U.S. courts, including amongst
others judgments in actions predicated upon the civil liability provisions of the federal securities laws of the United States.
We have been advised by our Swiss counsel that there is doubt as to the enforceability in Switzerland of original actions, or of
actions for enforcement of judgments of U.S. courts, of civil liabilities to the extent predicated inter alia upon the federal
and state securities laws of the United States. Original actions against persons in Switzerland based solely upon the U.S. federal
or state securities laws are governed, among other things, by the principles set forth in the Swiss Federal Act on International
Private Law. This statute provides that the application of provisions of non-Swiss law by the courts in Switzerland shall be precluded
if the result was incompatible with Swiss public policy. Also, mandatory provisions of Swiss law may be applicable regardless of
any other law that would otherwise apply.
Switzerland and the United States do not
have a treaty providing for reciprocal recognition of and enforcement of judgments in civil and commercial matters. The recognition
and enforcement of a judgment of the courts of the United States in Switzerland is governed by the principles set forth in the
Swiss Federal Act on Private International Law. This statute provides in principle that a judgment rendered by a non-Swiss court
may be enforced in Switzerland only if:
|·||the non-Swiss court had jurisdiction pursuant to the Swiss Federal Act on Private International Law;|
|·||the judgment of such non-Swiss court has become final and non-appealable;|
|·||the judgment does not contravene Swiss public policy;|
|·||the court procedures and the service of documents leading to the judgment were in accordance with the due process of law; and|
|·||no proceeding involving the same position and the same subject matter was first brought in Switzerland, or adjudicated in Switzerland,
or was earlier adjudicated in a third state and this decision is recognizable in Switzerland.|
The following table sets forth the expenses
(other than underwriting discounts and commissions or agency fees and other items constituting underwriters’ or agents’
compensation, if any) expected to be incurred by us in connection with a possible offering of securities registered under this
To Be Paid
|SEC registration fee ||
|FINRA filing fee ||
|Transfer agent’s fees ||
|| ||*|| |
|Printing and engraving expenses ||
|| ||*|| |
|Legal fees and expenses ||
|| ||*|| |
|Accounting fees and expenses ||
|| ||*|| |
|*||To be provided by a prospectus supplement or a Report
on Form 6-K that is incorporated by reference into this prospectus.
The validity of our common shares and certain
other matters of Swiss law will be passed upon for us by Walder Wyss Ltd., Switzerland. Certain matters of U.S. federal and New
York State law will be passed upon for us by Davis Polk & Wardwell LLP, New York, New York.
The consolidated financial statements of
Auris Medical Holding AG incorporated in this Prospectus by reference from Auris Medical Holding AG’s Annual Report on Form
20-F, have been audited by Deloitte AG, an independent registered public accounting firm , as stated in their report, which is
incorporated herein by reference. Such consolidated financial statements have been so incorporated in reliance on the report of
such firm, given upon their authority as experts in accounting and auditing.
The current address of Deloitte AG is General
Guisan-Quai 38, 8002 Zurich, Switzerland, phone number +(41) 58 279 60 00.
Auris Medical Holding AG