Page 11 of 20 – SEC Filing
| CUSIP No. 438083107 | Page 11 of 18 Pages |
On August 21, 2017, Deerfield
Management voluntarily agreed to settle an SEC administrative proceeding relating to alleged violations of Section 204A of the
Investment Advisers Act of 1940 (the “Advisers Act”), without admitting or denying the SEC’s allegations,
pursuant to an order under Section 203(e) and 203(k) of the Advisers Act (the “Order”). The Order resolved the
SEC’s allegations that Deerfield Management, from 2012 through 2014, violated Section 204A of the Advisers Act by failing
to establish, maintain, and enforce policies and procedures reasonably designed to prevent the misuse of material, nonpublic information,
particularly taking into consideration the nature of Deerfield Management’s business. The Order alleged that, as part of
Deerfield Management’s research in the healthcare sector, Deerfield Management engaged third party consultants and research
firms, including firms that specialized in providing “political intelligence” regarding upcoming regulatory and legislative
decisions, that Deerfield Management employees based certain trading recommendations on such information, and that hedge funds
advised by Deerfield Management then made those trades. The Order required Deerfield Management to cease and desist from committing
or causing any violations and any future violations of Section 204A of the Advisers Act, censured Deerfield Management and provided
that Deerfield Management would pay disgorgement and interest of $811,695 and a civil money penalty of $3,946,267.
Other than as set forth above
in this Item 2(e), during the last five years, none of the Reporting Persons, nor, to the best of each of the Reporting Person’s
knowledge, any of the persons listed on Schedule A attached hereto, has been a party to a civil proceeding of a judicial
or administrative body of competent jurisdiction and, as a result of such proceeding, was or is subject to a judgment, decree or
final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws
or finding any violation with respect to such laws.
| (f) | Each of Deerfield Mgmt, Deerfield Mgmt III, Deerfield Partners, Deerfield Private Design Fund III, Deerfield Healthcare Innovations Fund, Deerfield Mgmt HIF and Deerfield Management is each organized under the laws of the State of Delaware. Flynn is a citizen of the United States of America. |
The Reporting Persons have entered into
a Joint Filing Agreement, a copy of which is attached hereto as Exhibit 99.1.
| Item 3. | Source and Amount of Funds or Other Consideration. |
Prior to the Company’s April 2, 2018
initial public offering (the “IPO”), Deerfield Healthcare Innovations Fund and Deerfield Private Design Fund
III had participated in equity financings involving the Company and had acquired shares of Series A Preferred Stock and Series
B Preferred Stock (collectively, the “Preferred Stock”). Specifically, Deerfield Healthcare Innovations Fund
acquired 3,521,126 shares of Series A Preferred Stock and 6,944,445 shares of Series B Preferred Stock, and Deerfield Private Design
Fund III acquired 3,521,126 shares of Series A Preferred Stock and 6,944,444 shares of Series B Preferred Stock. Deerfield Healthcare
Innovations Fund and Deerfield Private Design Fund III paid an aggregate of $12,500,000.80 and $12,499,99.36, respectively, for
the Preferred Stock.
