13D Filing: James E. Flynn and Proteon Therapeutics Inc (PRTO)

Page 15 of 21

(9) Deerfield Mgmt IV

Sole power to vote or direct the
vote: 0

Shared power to vote or direct
the vote: 16,082,018

Sole power to dispose or to direct
the disposition: 0

Shared power to dispose or direct
the disposition: 16,082,018

(10) Flynn

Sole power to vote or direct the
vote: 0

Shared power to vote or direct
the vote: 17,306,917

Sole power to dispose or to direct
the disposition: 0

Shared power to dispose or direct
the disposition: 17,306,917

Flynn is the sole member of the general partner of each of Deerfield
Mgmt, Deerfield Mgmt III, Deerfield Mgmt IV and Deerfield Management.  Deerfield Mgmt is the general partner of Deerfield
Special Situations Fund, Deerfield Partners and Deerfield International Master Fund. Deerfield Mgmt III is the general partner
of Deerfield Private Design Fund III. Deerfield Mgmt IV is the general partner of Deerfield Private Design Fund IV. Deerfield Management
is the investment manager of each of Deerfield Special Situations Fund, Deerfield Private Design Fund III and Deerfield Private
Design Fund IV.

(c) Except as set forth in Items 3, 4 and 6 of the Schedule
13D, no Reporting Person has effected any transactions in the Common Stock during the past 60 days.

Item 6.

Contracts, Arrangements, Understandings or Relationships With Respect to Securities of the Issuer.

Item 6 of the Schedule 13D is hereby amended by adding the
following:

Series A Director

In connection with the closing of the Transaction,
Jonathan Leff, a partner at Deerfield Management, was named to the board of directors of the Company, to serve as the Series A
Director, and the Company granted Mr. Leff an option to purchase 13,333 shares of Common Stock, at an exercise price of $1.30 per
share, for his service on the board, subject to the terms and conditions of the Company’s stock plan. The option is scheduled
to vest with respect to one-third of the underlying shares of Common Stock on each of August 2, 2018, August 2, 2019 and August
2, 2020. Mr. Leff does not have any pecuniary interest, and disclaims beneficial ownership of, such option and holds the option
for, and at the direction of, Deerfield Management.

Registration Rights Agreement

On August 2, 2017, at the closing of the
Transaction, the Company entered into the Registration Rights Agreement. Pursuant to the Registration Rights Agreement, the Investors
are entitled to certain shelf and “piggyback” registration rights with respect to Series A Conversion Shares, subject
to the limitations set forth in the Registration Rights Agreement.