Anthera Pharmaceuticals Inc (ANTH): Biotechnology Value Fund Reports 9.99% Stake

Page 9 of 14 – SEC Filing

The Series X Preferred Stock may not be converted if, after such conversion, the Reporting Persons would beneficially own, as determined in accordance with Section 13(d) of the Securities Exchange Act of 1934 (the “Exchange Act”), more than 9.99% of the number of shares of Common Stock then issued and outstanding (the “Series X Beneficial Ownership Limitation”). As of the date hereof, the Series X Preferred Stock Beneficial Ownership Limitation described in the prior sentence limits the aggregate conversion by the Reporting Persons to approximately 4,582,033 shares of Common Stock underlying the Series X Preferred Stock, owned by the Reporting Persons in the aggregate.

In providing beneficial ownership described herein, the Reporting Persons have assumed only certain Series X Preferred Stock owned by BVF and BVF2 would be fully converted, certain Series X Preferred Stock held in the Partners Managed Account would be partially converted and the remaining Series X Preferred Stock owned by Trading Fund OS would remain unconverted, thereby bringing the Reporting Persons to the aggregate Series X Beneficial Ownership Limitation.

In addition to the Series X Preferred Stock, the Reporting Persons hold approximately 1,271,185 Shares underlying certain warrants (the “Warrants”).  The Warrants will be exercised at a rate of 25% of the number of shares of Common Stock into which the Series X Preferred Stock converts. Each Warrant has an exercise price equal to the Series X Conversion Price, plus a 20% premium, and will be exercisable at any time and from time to time after the date that is six months from the date of issuance, and will expire thirty months from the first date it first becomes exercisable. If the Series X Preferred Stock were convertible into 5,084,745 shares of Common Stock, the Warrants would be exercisable to purchase 1,271,185 shares of Common Stock.

The Warrants may not be exercised if, after such exercise, the Reporting Persons would beneficially own, as determined in accordance with the Exchange Act, more than 9.99% of the number of shares of Common Stock then issued and outstanding (the “Warrant Beneficial Ownership Limitation”).

Due to the Warrant Beneficial Ownership Limitation, in providing beneficial ownership described herein, the Reporting Persons have assumed that no Warrants would be exercised.

In addition to the Series X Preferred Stock and Warrants, the Reporting Persons hold an option to purchase an aggregate of 25,000 shares of Series X-1 Preferred Stock, par value $0.001 per share (the “Series X-1 Preferred Stock” and the option to purchase the Series X-1 Preferred Stock the “Series X-1 Preferred Option”).

The Series X-1 Preferred Stock is convertible into Common Stock at a rate of the lesser of: (i) one thousand (1,000) divided by the product of the Series X Conversion Price and one-hundred and seventy five percent (175%) and (ii) one thousand (1,000) divided by seventy-five percent (75%) of the 5-day VWAP following the public announcement of certain top-line data.