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Item 4 of the Statement is hereby supplemented as follows:

On April 11, 2017, Oracle Partners, L.P. (“Partners”), Oracle Ten Fund Master, L.P. (“Ten Fund”) and Oracle Institutional Partners, L.P. (“Institutional Partners”, and collectively with Partners and Ten Fund, the “Oracle Entities”) and other individuals and entities (the “April 2017 Investors”) entered into a Securities Purchase Agreement (the “April 2017 Purchase Agreement”) with the Issuer. In accordance with the April 2017 Purchase Agreement, the Issuer agreed to sell to the April 2017 Investors an aggregate of 80,644 shares of Series D Participating Convertible Preferred Stock, par value $0.001 per share (the “Series D Preferred Stock”) at a per share price of $124.00, of which the Oracle Entities collectively agreed to purchase 36,986 shares of Series D Preferred Stock the (the “New Preferred Shares”), in a private placement (the “April 2017 Private Placement”).

The April 2017 Private Placement closed on April 18, 2017. Under the terms of the Certificate of Designations for the Series D Preferred Stock, each share of Series D Preferred Stock will initially be convertible into 100 Shares, reflecting a conversion price equal to $1.24 per Share, subject to customary anti-dilution adjustments. Beginning on January 1, 2018, and continuing so long as any shares of Series D Preferred Stock remain outstanding, the Series D Preferred Stock will bear interest at an initial rate of 2%, which interest rate will increase by 2% quarterly, subject to a maximum rate of 17% per annum. The New Preferred Shares are not convertible until the New Requisite Stockholder Approval (defined below) is obtained.

In addition, the April 2017 Investors agreed to purchase warrants (the “New Warrants”) to acquire up to an aggregate of 3,925,871 Shares, of which the Oracle Entities agreed to purchase New Warrants to acquire 1,800,535 Shares for a price of $0.125 per New Warrant. The New Warrants have an exercise price of $1.80 per New Warrant, subject to customary anti-dilution adjustments, and become exercisable on October 18, 2017 and have a term of five years from the date of issuance or, if earlier, five business days after the Issuer delivers notice that the closing price per Share exceeded the exercise price of $1.80 per New Warrant for 30 consecutive trading days during the exercise period. The New Warrants are not exercisable until the New Requisite Stockholder Approval is obtained.

The April 2017 Purchase Agreement contains customary terms regarding, among other things, representations and warranties and indemnification. Additionally, under the April 2017 Purchase Agreement, the Issuer has granted certain registration rights to the April 2017 Investors. The Issuer is obligated to use commercially reasonable efforts to file, within 30 days following receipt of the New Requisite Stockholder Approval, a registration statement on Form S-3 to register the resale of the Shares issued upon conversion of the Series D Preferred Stock and Shares that may be issued pursuant to the exercise of New Warrants and to effect the registration no later than 90 days after the filing date. With certain exceptions, the Issuer is obligated to keep the registration statement effective until all of the Shares so registered are sold. The Issuer will be responsible for all of its fees and expenses incurred in connection with registering the Shares.

 

 

Pursuant to the April 2017 Purchase Agreement, the Issuer will be required to hold a meeting of its stockholders in order to, among other things, approve an amendment to the Issuer’s Restated Certificate of Incorporation, as amended, increasing the number of authorized Shares from 100,000,000 shares to 200,000,000 shares and satisfy NASDAQ requirements with respect to the issuance of Shares upon conversion of the Series D Preferred Stock and exercise of the New Warrants by the Oracle Entities and certain other April 2017 Investors whose warrants will initially be subject to the 19.99% Limitation (as defined below). The conversion of the Series D Preferred Stock will occur automatically upon receipt of such stockholder approval (the “New Requisite Stockholder Approval”), and no New Warrants will be subject to the 19.99% Limitation following receipt of the New Requisite Stockholder Approval. The “19.99% Limitation” means the provision contained in certain New Warrants prohibiting the holder thereof from exercising the New Warrants to the extent that the exercise would result in the holder beneficially owning more than 19.99% of the outstanding Shares.

 

 

 

 

 

 

 

 

 

SIGNATURES

After reasonable inquiry and to the best of our knowledge and belief, the undersigned certify that the information set forth in this statement is true, complete and correct.