aggregated with the holders for purposes of Section 13(d) of the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder, including any
group of which the holder is a member, beneficially owning more than 19.99%, of the outstanding common stock or outstanding voting power of the Company (including shares of common stock issuable upon exercise of the Pre-Funded Warrants and Common Warrants held by them).
The Pre-Funded Warrants and the Common Warrants to be issued to the Purchasers in the Registered Direct
Offering provide that (i) the Company may not effect the exercise of any such warrant, and a holder will not be entitled to exercise any portion of any such warrant, if, upon giving effect to such exercise, the aggregate number of shares of the
Companys common stock beneficially owned by the holder (together with its affiliates) would exceed 4.99% of the number of shares of the Companys common stock outstanding immediately after giving effect to the exercise, as such percentage
ownership is determined in accordance with the terms of such warrant, which percentage may be changed at the holders election to a higher or lower percentage not in excess of 9.99% upon 61 days notice to the Company subject to the terms
of such warrants, and (ii) such warrant may not be exercised to the extent that such exercise would result in the holder and its affiliates and any other persons whose beneficial ownership of the Companys common stock would be aggregated
with the holders for purposes of Section 13(d) of the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder, including any group of which the holder is a member, beneficially owning
more than 19.99%, of the outstanding common stock or outstanding voting power of the Company (including shares of common stock issuable upon exercise of the Pre-Funded Warrants and Common Warrants held by
them).In addition, in certain circumstances, upon a fundamental transaction, the holder of Common Warrants will have the right to require the Company to repurchase such warrants at their fair value using the Black Scholes option pricing formula;
provided that (i) such holder may not require the Company or its successor entity to repurchase such warrants for the Black Scholes value in connection with a fundamental transaction that is not approved by the Board, and therefore not
within the Companys control, and (ii) in the event that the alternate consideration payable to holders of the Companys common stock in such fundamental transaction consists of equity securities of the successor or acquirer that are
quoted or listed on a nationally recognized securities exchange, then the holder of the warrants shall only be entitled to receive the same type or form of consideration (and in the same proportion), determined in accordance with the Black Scholes
option pricing formula.
The Registered Shares, Registered Common Warrants and Registered Pre-Funded Warrants are
being issued pursuant to an effective registration statement on Form S-3 that the Company filed with the Securities and Exchange Commission (SEC) on January 25, 2018 (File No. 333-222699), and a base prospectus and prospectus supplement thereunder.
The Purchase Agreement contains
customary representations, warranties and agreements by the Company, customary conditions to closing, indemnification obligations of the Company and the Purchaser, including for liabilities arising under the Securities Act of 1933, as amended (the
Securities Act), other obligations of the parties and termination provisions
Registration Rights Agreement
On January 22, 2020 (the Agreement Date), in connection with the Private Placement, the Company entered into a registration rights agreement
(the Registration Rights Agreement) with Armistice, pursuant to which the Company agreed to register for resale the Unregistered Shares, as well as the shares of the Companys common stock issuable upon exercise of the Unregistered Pre-Funded Warrants and the Unregistered Common Warrants (the Unregistered Warrant Shares). Under the Registration Rights Agreement, the Company has agreed to file a registration statement covering the
resale by Armistice of the Unregistered Shares and Unregistered Warrant Shares (together, the Registrable Securities) on the later of 30 days following the Agreement Date or the second trading day following the date the Company files its
Annual Report on Form 10-K for the fiscal year ended December 31, 2019 (the 2019 10-K) with the Securities and Exchange Commission (the
SEC). The Company has agreed to use commercially reasonable efforts to cause such registration statement to become effective and to keep such registration statement effective until the date the Unregistered Shares and Unregistered
Warrant Shares covered by such registration statement have been sold or may be resold pursuant to Rule 144 without restriction. The Company has agreed to be responsible for all fees and expenses incurred in connection with the registration of the
Registrable Securities.