On August 19, 2016, TerraVia Holdings, Inc. (the “Company”) entered into note exchange agreements (the “Exchange Agreements”) with certain holders (the “Holders”) of the Company’s 6.00% Convertible Senior Subordinated Notes due 2018 (the “Notes”) pursuant to which such Holders agreed to exchange (the “Exchange”) up to $19.5 million in aggregate principal amount of their Notes with the Company for shares of the Company’s common stock, par value $0.001 per share (the “Common Stock”).

The maximum aggregate principal of Notes that may be surrendered under the Exchange Agreements is $19.5 million. The Exchange will occur over a period of up to 80 trading days beginning on August 22, 2016 (the “Exchange Period”). The principal amount of Notes and Common Stock to be exchanged will be determined on each trading day during the Exchange Period based on the volume-weighted average price of the Common Stock (the “VWAP”) on such trading day, and will be zero on any trading day if the VWAP on that day is below an agreed upon floor price. On each such trading day, the aggregate number of shares of Common Stock issuable to the Holders pursuant to the Exchange Agreements (the “Exchange Stock”) will be equal to the sum of (i) a base number of shares of Common Stock equal to the principal amount of Notes for such trading day multiplied by 121.124 shares of Common Stock per $1,000 principal amount of Notes, and (ii) an additional number of shares of Common Stock equal to $365.00 per $1,000 of the principal amount of Notes for such trading day, divided by the VWAP on such trading day. The maximum amount of Exchange Stock is approximately 6.4 million shares.

The issuance of the Exchange Stock represents the satisfaction of the Company’s obligation to deliver shares of Common Stock upon conversion of the principal amount of the Notes surrendered pursuant to the indenture relating to the Notes, the satisfaction of the Company’s obligation to deliver the Early Conversion Payment (as defined in the indenture relating to the Notes) upon conversion of the principal amount of the Notes surrendered and inducement to the Holders to exchange the principal amount of the Notes surrendered in the Exchange plus all accrued and unpaid interest on the principal amount of the Notes surrendered.

The settlement of the Exchange is expected to occur on a rolling basis based on eight successive “Tranche Periods” during the Exchange Period. Each Tranche Period will consist of ten consecutive trading days, with the first period beginning on August 22, 2016. On the second scheduled trading day following the last trading day of each Tranche Period, the Holders are expected to surrender the aggregate principal amount of the Notes deliverable for each of the trading days within such Tranche Period, and the Company is expected to issue the shares of Common Stock issuable in respect of such Notes, in each case subject to customary closing conditions. Upon the surrender of Notes to the Company, such Notes will be cancelled. The last settlement date is expected to occur on December 16, 2016.

The issuance of the Common Stock pursuant to the Exchange Agreements is being made in reliance on the exemption from registration contained in Section 3(a)(9) of the Securities Act of 1933, as amended.