same terms as the July 20, 2018 Securities Purchase Agreement with Discover Growth Fund, LLC, except that the conversion price under the Notes and exercise price of the Warrants is $1,225,
and interest on the Notes shall accrue and be payable at maturity. On August 31, 2018, the Company sold $3,336,617 face amount of Notes and 2,888 Warrants and 33,968 Pre-funded Warrants to
Discover Growth Fund, LLC with gross proceeds to the Company of $2,500,000.
In March 2019, the Company amended the June 2018, July 2018 and August 2018
Notes to make them non-convertible.
On April 19, 2019, April 26, 2019, May 9, 2019 and
May 23, 2019, the Company borrowed an aggregate $3.3 million from two institutional investors and issued promissory notes to the investors. The promissory notes have an aggregate principal amount of $3.3 million, bear interest at the
rate of 8% per annum and are due six months from the issuance of each note. The promissory notes are nonconvertible. The notes contain standard events of default and remedies therefor. The Companys obligations under the promissory notes to the
institutional investor are secured by a lien on the Companys assets.
On June 6, 2019, the Company entered into an agreement with two
institutional investors, pursuant to which the investors agreed to transfer and surrender to the Company for cancellation of 39,234 Series D Warrants and 0.1 million Pre-Funded Series D Warrants. Under
the terms of the Purchase Agreement, the investors agreed to defer the payment of the purchase price for the Series D Warrants and Pre-Funded Series D Warrants and, accordingly, the Company agreed to sell and
issue to the investors 8% Senior Secured Promissory Notes in an aggregate principal amount of $2.0 million in full payment and satisfaction of the purchase price for the Series D Warrants and Pre-Funded
Series D Warrants.
July 2019 Private Placement
On
July 11, 2019, the Company and certain accredited investors (each an Investor and, collectively, the Investors) entered into a securities purchase agreement (the Securities Purchase Agreement) pursuant to
which the Company expects to sell and issue to the Investors an aggregate of 20,000 shares of Series E Convertible Preferred Stock, par value $0.01 per share, at a price of $1,000 per share (the Private Placement). Pursuant to the
Securities Purchase Agreement, the Company will issue to each Investor a warrant (a Warrant) to purchase a number of shares of common stock of the Company, par value $0.01 per share (Common Stock), equal to the number of
shares of Common Stock issuable upon conversion of the Series E Preferred Stock purchased by the Investor. Each Warrant will have an exercise price equal to $25.36, subject to adjustment in accordance with the terms of the Warrants (the
Exercise Price), and be exercisable at any time beginning on the date that the Company effects a reverse stock split until 5:00 p.m. (NYC time) on the date that is five years following the date that the Company effects a reverse stock
split. The Company expects to receive gross proceeds from the Private Placement of approximately $20.0 million, before deducting cash fees in the amount of $1.4 million payable to Roth Capital Partners, LLC (Roth) for serving
as placement agent for the Private Placement and cash fees in the amount of $552,000 payable to Roth for serving as placement agent for certain prior securities offerings by the Company, and other transaction costs, fees and expenses payable by the
Company.
Pursuant to certain Waiver Agreements, certain holders of Common Stock (the MFN Common Stockholders) were issued 923 shares of
Series E Preferred Stock, in the aggregate, and Warrants to purchase up to 21,976 shares of Common Stock, in the aggregate, in exchange for the MFN Common Stockholders waiver of certain most favored nations rights granted to them pursuant to
exchange agreements between the Company and the MFN Common Stockholders, which exchange agreements were previously reported by the Company.
Following the
closing of the July 2019 Private Placement, the Company entered into agreements (the Exchange Agreements) with the holders of (i) its 8% Senior Secured Promissory Notes in an aggregate amount (principal plus accrued interest) of
approximately $10.8 million (the Bridge Notes), and (ii) its 8% Senior Secured
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