stock of the successor entity or the consideration that would have
been issuable to the holders had they exercised the Series B Warrants prior to such Fundamental Transaction, at the holders' election. Additionally, if the successor entity is a publicly traded
corporation, the holders may elect to receive an equivalent security of the successor entity, in exchange for the Series B Warrants. Any security issuable or potentially issuable to the holder
pursuant to the terms of the Series B Warrants on the consummation of a Fundamental Transaction must be registered and freely tradable by the holder without any restriction or limitation or the
requirement to be subject to any holding period pursuant to any applicable securities laws.
The Series B Warrants also contain a "cashless exercise" feature that allows the holders to exercise the Series B Warrants without making a cash payment.
The Series B Warrants are subject to a blocker provision which restricts the exercise of the Series B Warrants if, as a result of such exercise, the holder, together with its affiliates and any other
person whose beneficial ownership of shares of Common Stock would be aggregated with the holder's for purposes of Section 13(d) of the Exchange Act would beneficially own in excess of
4.99% or 9.99% of the outstanding shares of Common Stock (including the shares of Common Stock issuable upon such exercise), as such percentage ownership is determined in accordance
with the terms of the Series B Warrants.
In the event that the Company does not have sufficient authorized shares to deliver in satisfaction of an exercise of a Series B Warrant, then unless the holder elects to
void such attempted exercise, the holder may require the Company to pay an amount equal to the product of (i) the number of shares that the Company is unable to deliver and (ii) the highest
volume-weighted average price of a share of Common Stock as quoted on the Nasdaq Capital Market during the period beginning on the date of such attempted exercise and ending on the date
that the Company makes the applicable payment.
The foregoing summaries of the Warrants are qualified in their entirety by reference to full text of the form of Series A Warrant and form of Series B Warrant filed herewith
as Exhibits 4.1 and 4.2, respectively.
Item 3.02 Unregistered Sales of Equity Securities.
The information in Item 1.01 of this Current Report on Form 8-K is incorporated herein by reference.
The Company issued the Warrants to the Investors in reliance on the exemption from registration provided for under Section 4(a)(2) of the Securities Act. The Company
relied on this exemption from registration for private placements based in part on the representations made by the Investors, including the representations with respect to each Investor's status
as an "accredited investor", as such term is defined in Rule 501(a) of the Securities Act, and the Investors' investment intent.
Item 9.01 Financial Statements and Exhibits.
Form of Series A Warrant, issued to investors on January 31, 2019.
Form of Series B Warrant, issued to investors on January 31, 2019.