Proposal 3 —
Approval of the issuance of shares of our common stock issuable upon the exercise of warrants and conversion of preferred stock issued to Foris Ventures, LLC in accordance with Nasdaq Marketplace Rules 5635(b) and 5635(d)
General
We are asking stockholders to approve the issuance of shares of our common stock issuable upon the exercise of warrants and conversion of preferred stock issued to Foris Ventures, LLC in accordance with Nasdaq Marketplace Rules 5635(b) and 5635(d), as described in more detail below.
Background
During 2019, we have engaged in the following issuances of equity securities to Foris Ventures, LLC (“Foris”), an entity affiliated with director John Doerr of Kleiner Perkins Caufield & Byers, a current stockholder, and an owner of greater than five percent of our outstanding common stock, par value $0.0001 per share (the “Common Stock”):
On April 16, 2019, we issued and sold to Foris 6,732,369 shares of Common Stock at a price of $2.87 per share, the closing bid price of the Common Stock on the Nasdaq Global Select Market on April 12, 2019, as well as a warrant to purchase up to 5,424,804 shares of Common Stock at an exercise price of $2.87 per share, with an exercise term of two years from issuance, pursuant to a Securities Purchase Agreement, dated April 15, 2019, between us and Foris, for aggregate proceeds to us of $20.0 million (the “April Investment”). The securities were sold in a private placement pursuant to the exemption from registration under Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”), and Regulation D promulgated under the Securities Act.
On April 26, 2019, we issued and sold to Foris 2,832,440 shares of Common Stock at a price of $5.12 per share, the closing price of the Common Stock on the Nasdaq Global Select Market on April 23, 2019, as well as a warrant to purchase up to 3,983,230 shares of Common Stock at an exercise price of $5.12 per share, with an exercise term of two years from issuance, pursuant to a Security Purchase Agreement, dated April 24, 2019, between us and Foris, for aggregate proceeds to us of $15.0 million. The securities were sold in a private placement pursuant to the exemption from registration under Section 4(a)(2) of the Securities Act and Regulation D promulgated under the Securities Act.
On May 14, 2019 we issued and sold to Foris 1,122,460 shares of Common Stock at a price of $4.60 per share, as well as a warrant to purchase 352,638 shares of Common Stock at an exercise price of $4.56 per share, the closing price of the Common Stock on the Nasdaq Global Select Market on May 9, 2019, with an exercise term of two years from issuance (the “Exchange Warrant”), in exchange for the surrender and cancellation of $5.0 million principal amount of our 6.50% Convertible Senior Notes due 2019 held by Foris, pursuant to an Exchange Agreement, dated May 10, 2019, between us and Foris. The securities were sold in a private placement pursuant to the exemption from registration under Section 3(a)(9) of the Securities Act.
On August 14, 2019, in connection with the entry by us and Foris into the Amendment No 5 and Waiver to the Loan and Security Agreement, dated June 29, 2018, by and among us, certain of our subsidiaries and Foris, as successor in interest to GACP Finance Co., LLC, we issued to Foris a warrant to purchase up to 1,438,829 shares of Common Stock at an exercise price of $2.87 per share, with an exercise term of two years from issuance. The warrant was issued in a private placement pursuant to the exemption from registration under Section 4(a)(2) of the Securities Act and Regulation D promulgated under the Securities Act.
On August 28, 2019, in connection with the entry by us and Foris into a credit agreement to make available to us an unsecured credit facility in an aggregate principal amount of $19.0 million, which we borrowed in full on August 28, 2019, we (i) issued to Foris a warrant to purchase up to 4,871,795 shares of Common Stock at an exercise price of $3.90 per share, with an exercise term of two years from issuance and (ii) amended the warrants issued to Foris on April 26, 2019 and May 14, 2019 to reduce the exercise price of such warrants to $3.90 per share.