Filing Details

Birchview Fund LLC, along with other individuals and entities, (collectively, the “Investors”) entered into a Securities Purchase Agreement (the “Purchase Agreement”) with the Company dated February 13, 2017.  Pursuant to the terms of the Purchase Agreement, on February 17, 2017, the date of the closing, the Issuer sold an aggregate of 3,747,125 Shares to the Investors for the price of $1.40 per Share, including 100,419 Shares to Birchview Fund LLC.  The Purchase Agreement contains customary terms regarding, among other things, representations and warranties and indemnification. Additionally, under the Purchase Agreement, the Company grants certain registration rights to the Investors.  The Company is obligated to use commercially reasonable efforts to file a registration statement on Form S-3 no later than April 18, 2017, to register the resale of the Shares and the Shares that may be issued pursuant to the Warrants and to effect the registration no later than 90 days after the filing date. With certain exceptions, the Company is obligated to keep the registration statement effective until the later of February 17, 2019, the date by which all Shares and Shares that may be issued pursuant to the Warrants may be sold without volume or manner of sale restrictions which may be applicable to affiliates under Rule 144 or the date by which all Shares and Shares that may be issued pursuant to the Warrants are sold. The Company will be responsible for all of its fees and expenses incurred in connection with registering the Shares.

In addition, pursuant to the terms of the Purchase Agreement, upon closing on February 17, 2017, the Issuer sold Warrants to purchase an aggregate of 2,810,338 Shares to the Investors for the price of $0.125 per Warrant, including Warrants to purchase 75,314 Shares to Birchview Fund LLC. Warrants may be exercised at an exercise price of $1.80 per Share. Each Warrant becomes exercisable on or after August 17, 2017. In addition, the terms of certain of the Warrants prohibit the holder of such Warrants from exercising the Warrants to the extent that the exercise would result in the holder beneficially owning more than 19.99% of the outstanding Shares. The Warrants expire on February 17, 2022, five years following the date of issuance or, if earlier, five business days after the Company delivers notice that the closing price per share of its Shares exceeded the Exercise Price for 20 consecutive trading days during the exercise period.

The description and summary of the Purchase Agreement and the Warrants set forth above in this Item 4 do not purport to be complete and are qualified in their entirety by reference to the full text of the Purchase Agreement and Form of Warrant, which are included as Exhibit 8 and Exhibit 9, respectively, to this Amendment No. 4 and are incorporated herein by reference.

(d) See disclosure in Item 2(a) and Item 5(a) of this Amendment No. 4.  Except as set forth herein, no person is known to have the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, the Shares that may be deemed to be beneficially owned by the Reporting Persons.

Exhibit 9:  Form of Warrant (incorporated by reference to Exhibit A to the Securities Purchase Agreement filed as Exhibit 99.1 to the Current Report on Form 8-K filed by the Issuer on February 17, 2017)

 

	Matthew Strobeck
	By:	/s/ Matthew Strobeck

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