Item 3. Source and Amount of Funds or Other Consideration
As described more fully in Item 4 below, on November 3, 2016, NHS entered into a Securities Purchase Agreement with the Issuer, pursuant
to which NHS purchased 7,552,084 newly issued shares of the Issuers Common Stock at a cash purchase price of $19.20 per share for an aggregate purchase price of $145 million. NHS purchased these shares with funds from its working capital.
The 2016 Purchase Agreement (as defined below) is incorporated herein by reference as described in Item 7 below.
Additionally, as
described more fully in Item 4 below, on February 26, 2018, NHS purchased 937,500 shares of the Issuers Common Stock in a public offering by the Issuer that was registered with the SEC for an aggregate cash purchase price of
$30 million. NHS purchased these shares with funds from its working capital.
As described more fully in Item 4 below, on
November 11, 2018, NHS entered into a Securities Purchase Agreement with the Issuer, pursuant to which NHS purchased 3,237,529 newly issued shares of the Issuers Common Stock at a cash purchase price of $30.27 per share for an aggregate
purchase price of approximately $98 million. NHS purchased these shares with funds from its working capital. The November 2018 Purchase Agreement (as defined below) is incorporated herein by reference as described in Item 6 below.
Item 4. Purpose of Transaction
On
November 23, 2016, NHS purchased 15.12% of the Issuers Common Stock (the
2016 Equity Investment
), pursuant to a Securities Purchase Agreement (the
2016 Purchase Agreement
), dated November 3,
2016, between the Issuer and NHS. In connection with the 2016 Equity Investment, Nestec Ltd. (
NESTEC
), a subsidiary of Nestlé, entered into a Strategic Collaboration Agreement (the
Collaboration
Agreement
), dated as of November 3, 2016, with the Issuer; and NHS entered into a Standstill Agreement (the
Standstill Agreement
) and a Registration Rights Agreement (the
Registration Rights
Agreement
), each dated as of November 23, 2016, with the Issuer.
On February 26, 2018, NHS purchased 937,500 shares
of the Issuers Common Stock (the
February 2018 Equity Investment
) in a public offering by the Issuer, for the purposes of preventing the dilution of NHSs existing share ownership, which would have occurred as a result
of the Issuers public offering of 5,500,000 shares.
On November 28, 2018, NHS purchased 3,237,529 newly issued shares of the
Issuers Common Stock (the
November 2018 Equity Investment
), pursuant to a Securities Purchase Agreement (the
November 2018 Purchase Agreement
), dated November 11, 2018, between the Issuer and NHS. In
connection with the November 2018 Equity Investment, NESTEC entered into an Amended and Restated Strategic Collaboration Agreement (the
Amended and Restated Collaboration Agreement
), dated as of November 11, 2018, with the
Issuer, which amended and restated the previously entered into Collaboration Agreement in its entirety; and NHS entered into an Amended and Restated Standstill Agreement (the
Amended and Restated Standstill Agreement
) and an
Amended and Restated Registration Rights Agreement (the
Amended and Restated Registration Rights Agreement
), each dated as of November 11, 2018, with the Issuer, each of which amended and restated the previously entered into
Standstill Agreement and Registration Rights Agreement, respectively, in their entirety.
For so long as NESTEC or its affiliates hold not
less than 14% of the Issuers Common Stock, NESTEC is entitled to designate one nominee to serve as a director on the Issuers board of directors. Additionally, pursuant to the Amended and Restated Standstill Agreement, so long as the
Amended and Restated Collaboration Agreement is in effect, NHS is prohibited from taking certain specified control actions towards the Issuer without the prior written consent of a majority of the Issuers board of directors who are not
affiliated with NHS.
The Reporting Persons from time to time review their investment in and collaboration with the Issuer. Based on such
review and depending on the price and availability of the Issuers securities and the terms of the existing agreements between the Reporting Persons and the Issuer, including the Amended and Restated Standstill Agreement, the Reporting Persons
will take such actions in the future as the Reporting Persons may deem appropriate in light of the circumstances existing from time to time. Subject to the terms of the Amended and Restated Standstill Agreement, if the Reporting Persons believe that
further investment in the Issuer is attractive, whether because of the market price of the Common Stock or otherwise, they may acquire Common Stock or other securities of the Issuer either in the
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