Filing Details

Tohuan Steve Chen

c/o Armistice Capital LLC

510 Madison Avenue

7^th Floor

New York, NY 10022

Telephone Number: 212-231-4930

(Name, Address and Telephone Number of Person Authorized to Receive

Notices and Communications)

Armistice Capital is an investment adviser registered with the Securities and Exchange Commission (the “SEC”) that is principally engaged in the business of providing investment management services to private investment vehicles, including the Master Fund. The principal business address of Armistice Capital is 510 Madison Avenue, 7^th Floor, New York, New York 10022.

The Master Fund is principally engaged in the business of investing in securities. The principal business address of the Master Fund is c/o dms Corporate Services Ltd., 20 Genesis Close, P.O. Box 314, Grand Cayman KY1-1104, Cayman Islands. The board of directors of the Master Fund consists of Steven Boyd, Kevin A. Phillip and Gregory S. Bennett.

Steven Boyd is the managing member of Armistice Capital and a director of the Master Fund. Mr. Boyd’s business address is 510 Madison Avenue, 7^th Floor, New York, New York 10022.

On September 20, 2018, the Issuer and the Master Fund entered into a securities purchase agreement (the “Securities Purchase Agreement”) pursuant to which the Master Fund acquired from the Issuer in a private placement (the “Private Placement”): (i) 4,600,000 Shares at a purchase price of $0.27 per Share; (ii) warrants to purchase up to 3,450,000 Shares, exercisable for five years beginning on March 24, 2019, at an exercise price of $0.30 per share, subject to adjustments as provided under the terms of the warrants; and (iii) warrants to purchase up to 2,677,160 Shares, exercisable for five years beginning on March 24, 2019, at an exercise price of $0.40 per share, subject to adjustments as provided under the terms of the warrants (the warrants described in clauses (ii) and (iii) are collectively referred to herein as, the “Warrants”).

Pursuant to the terms of the Securities Purchase Agreement, from the date thereof until 30 days after the effective date of a Resale Registration Statement (as defined below), the Issuer is prohibited from issuing, entering into any agreement to issue, or announcing the issuance or proposed issuance of, any Shares or Share equivalents, subject to certain permitted exceptions, including, without limitation, the securities to be issued in connection with the Agreement and Plan of Merger and Reorganization (the “Merger Agreement”), dated July 30, 2018, by and among: (i) Seelos Therapeutics, Inc. (“Seelos”); (ii) Arch Merger Sub, Inc., a wholly-owned subsidiary of the Issuer (“Merger Sub”); and (iii) the Issuer.

In connection with the Private Placement, the Issuer and the Master Fund also entered into a voting agreement (the “Voting Agreement”) pursuant to which the Master Fund agreed to vote all of its Shares (as well as any new Shares acquired by it) in favor of adoption of the Merger Agreement. In particular, the Voting Agreement includes covenants with respect to the voting of Shares in favor of approving the transactions contemplated by the Merger Agreement and against any competing acquisition proposals. The Voting Agreement also places certain restrictions on the Master Fund’s ability to sell, assign, transfer, tender or otherwise dispose of it Shares.

The Master Fund and the Issuer also entered into a Registration Rights Agreement (the “Registration Rights Agreement”) in connection with the Private Placement. Pursuant to the Registration Rights Agreement, the Issuer agreed to prepare and file a registration statement (the “Resale Registration Statement”) with the SEC for purposes of registering the resale of the Shares and the Shares issuable upon exercise of the Warrants within 30 days after the closing of the merger of Merger Sub, with and into Seelos pursuant to the Merger Agreement. If the Merger Agreement is terminated, the Issuer has agreed to file the Resale Registration Statement within 15 days of such termination. The Issuer also agreed to use its reasonable best efforts to cause the Resale Registration Statement to be declared effective by the SEC within 45 days after September 21, 2018 (75 days in the event the Resale Registration Statement is reviewed by the SEC). If the Issuer fails to meet the specified filing deadlines or keep the Resale Registration Statement effective, subject to certain permitted exceptions, the Issuer will be required to pay liquidated damages to the Master Fund. The Issuer also agreed, among other things, to indemnify the Master Fund as a selling shareholder under the Resale Registration Statement from certain liabilities and to pay all fees and expenses incident to the Issuer’s performance of, or compliance with, the Registration Rights Agreement.

The foregoing was a summary of certain material terms of the: (i) Securities Purchase Agreement; (ii) Voting Agreement; (iii) Registration Rights Agreement; and (iv) Warrants. The foregoing descriptions are not, and do not purport to be, complete and are qualified in their entirety by reference to the full text of those documents, which have been filed as Exhibits B, C, D, E and F, respectively, and are incorporated herein by reference.

The Reporting Persons purchased the Shares for investment in the ordinary course of their investment activities based on the Reporting Persons’ belief that the Shares, when purchased, were undervalued and represented an attractive investment opportunity.

Except as otherwise set forth herein, the Reporting Persons do not have any present plans or proposals which would relate to, or result in, the matters set forth in subparagraphs (a) – (j) of Item 4 of Schedule 13D. However, subject to market conditions and in compliance with applicable securities laws, the Reporting Persons reserve the right, at a later date, to effect one or more of such changes or transactions in the number of Shares they may be deemed to beneficially own in open-market or privately negotiated transactions, on such terms and at such times as the Reporting Persons may deem advisable.

As of the date hereof, each of the Reporting Persons may be deemed to be the beneficial owner of 4,600,000 Shares, constituting 16.3% of the Shares, based upon : 28,138,559 Shares outstanding as of the date hereof. Each of the Reporting Persons has the sole power to vote or direct the vote of 0 Shares and the shared power to vote or direct the vote of 4,600,000 Shares. Each of the Reporting Persons has the sole power to dispose or direct the disposition of 0 Shares and the shared power to dispose or direct the disposition of 4,600,000 Shares.

There have been no transactions in the Shares by the Reporting Persons during the past sixty days other than the transactions described in Item 4 above.

The information set forth in Item 4 above is incorporated by reference in its entirety in this Item 6. The Reporting Persons do not have any contract, arrangement, understanding or relationship with any person with respect to securities of the Issuer that is not described in Item 4 above and/or incorporated herein by reference.

Name: Steven Boyd

Title: Managing Member

Name: Steven Boyd

Title: Director

Name: Steven Boyd

Title: Managing Member

Name: Steven Boyd

Title: Director