UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

 

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported):  March 5, 2015

 

Tyme Technologies, Inc.

(Exact name of registrant as specified in its charter)

 

Delaware

333-179311

45-3864597

(State or Other Jurisdiction
of Incorporation)

(Commission File Number)

(I.R.S. Employer
Identification Number)

 

48 Wall Street - Suite 1100

New York, New York 10005

(Address of principal executive offices, including zip code)

 

646-205-1603

(Registrant’s telephone number, including area code)

 

c/o CKR Law LLP

1330 Avenue of the Americas

New York, New York 10019

(Former name or former address, if changed since last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))



INTRODUCTORY COMMENT – USE OF TERMINOLOGY


Throughout this Current Report on Form 8-K, the terms “Company,” “we,” “us,” and “our” refers to Tyme Technologies, Inc. and, unless the context indicates otherwise, its direct and indirect subsidiaries, Tyme Inc. and Luminant Biosciences, LLC, on a consolidated basis.


CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS


This Current Report on Form 8-K contains forward-looking statements, including, without limitation, statements in the sections captioned “Description of Business,” “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Plan of Operations” and elsewhere in this Form 8-K.  Any and all statements contained in this Form 8-K that are not statements of historical fact may be deemed forward-looking statements. Terms such as “aim,” “anticipate,” “assume,” “attempt,” “believe,” “can,” “could,” “continue,” “develop,” “envision,” “estimate,” “expect,” “forecast,” “future,” “goal,” “intend,” “likely,” “may,” “might,” “plan,” “potential,” “predict,” “probable,” “project,” “seek,” “projection,” “should,” “usually,” “will,” “would” and terms of similar import (including the negative of any of the foregoing) may be intended to identify forward-looking statements.  However, not all forward-looking statements may contain one or more of these identifying terms.  Forward-looking statements in this Form 8-K may include, without limitation, statements regarding:


•

the plans and objectives of our management for future operations, including plans or objectives relating to the development of commercially viable pharmaceuticals;

 

 

•

a projection or forecast of revenue, income (including income/loss), earnings (including earnings/loss) per share, capital expenditures, dividends, capital structure or other financial items;

 

 

•

our future financial performance, including any such statement contained in the discussion and analysis of financial condition and the results of operations by our management included pursuant to the rules and regulations of the United States Securities and Exchange Commission (the “SEC”);

 

 

•

our future clinical trials, drug development activities and filings with applicable regulators, including, without limitation, the United States Food and Drug Administration (the “FDA”);

 

 

•

obtaining regulatory approval to market any of our product candidates; and

 

 

•

the assumptions underlying or relating to any statement described above.


Forward-looking statements are not meant to predict or guarantee actual results, performance, events or circumstances and may not be realized because they are based upon our current projections, plans, objectives, beliefs, expectations, estimates and assumptions which are subject to a number of risks and uncertainties and other influences, many of which we have no control over. Actual results and the timing of certain events and circumstances may differ materially from those described in the forward-looking statements as a result of these risks and uncertainties. Factors that may influence or contribute to the inaccuracy of our forward-looking statements or cause actual results to differ materially from expected or desired results may include, without limitation:


•

our ability to obtain and maintain regulatory approval of our initial drug candidate, SM-88, as well as any other drug candidate we may seek regulatory approval for and to commercialize in the future;

 

 

•

our ability to successfully commercialize SM-88 or other drug candidates, once approved for marketing;

 

 

•

our ability to obtain drug starting materials and substances necessary to manufacture SM-88, as well as any other drug candidate we may seek regulatory approval for and to commercialize in the future;

 

 

•

the rate and degree of market acceptance of SM-88, as well as any other drug candidate we may seek regulatory approval for and to commercialize in the future;

 

 

•

the accuracy of estimates of our expenses, ongoing losses, future revenue, capital requirements and our needs for or ability to obtain additional financing;

 

 

•

our ability to obtain and maintain intellectual property (“IP”) protection for SM-88, as well as any other drug candidate we may seek regulatory approval for and to commercialize in the future;

 

 

•

our ability to scale up manufacturing of SM-88 or other drug candidates, for commercialization;


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•

our ability to successfully establish and maintain appropriate collaborations and derive significant revenue from collaborations, if we enter into collaboration arrangements;

 

 

•

challenges to the claims contained in and coverage of our patents and patent applications, whether or not such challenges are successful;

 

 

•

our ability to control costs, a significant portion of which may be beyond our control;

 

 

•

our reliance on any collaboration partners’ performance, over which we likely will have limited or no control;

 

 

•

the actual receipt and timing of any milestone payments or royalties from our collaborators, if any;

 

 

•

our reliance on third parties to conduct our clinical trials;

 

 

•

our reliance on third-party contract manufacturers to manufacture and supply SM-88 and any other drug candidate we may seek regulatory approval for and to commercialize in the future, to us;

 

 

•

our ability to identify, develop, acquire and in-license new products and drug candidates;

 

 

•

our ability to enroll patients in our clinical trials at the pace that we project;

 

 

•

our ability to retain and recruit key personnel, advisors and consultants;

 

 

•

our expectations regarding the time during which we will be an emerging growth company under the Jumpstart Our Business Startups Act;

 

 

•

our financial performance;

 

 

•

developments and projections relating to our competitors or our industry;

 

 

•

changes to regulations, both domestically and in foreign jurisdictions in which we intend to market our product candidates, that affect our drug candidates;

 

 

•

unanticipated results of clinical trials that are necessary for us to obtain regulatory approval to market our product candidates;

 

 

•

our inability to obtain adequate financing when needed and on favorable terms;

 

 

•

the significant length of time associated with drug development and related insufficient cash flows and resulting illiquidity;

 

 

•

our inability to expand our business;

 

 

•

our lack of product diversification;

 

 

•

volatility in the price of raw materials necessary for the manufacture of SM-88 and any other drug products we may seek regulatory approval for and to commercialize in the future;

 

 

•

existing, new or increased competition;

 

 

•

results of arbitration and litigation, if any;

 

 

•

significant government regulation of pharmaceuticals and their manufacture, marketing and distribution;

 

 

•

the various economic factors affecting the healthcare industry;

 

 

•

stock volatility and illiquidity; and

 

 

•

our failure to implement our business plans and/or strategies.


A description of some of the risks and uncertainties that could cause our actual results to differ materially from those described by the forward-looking statements in this Form 8-K appears in the section captioned “Risk Factors” in Item 2.01 below and elsewhere in this Form 8-K.


Readers are cautioned not to place undue reliance on forward-looking statements because of the risks and uncertainties related to them.  We disclaim any obligation to update the forward-looking statements contained in this Form 8-K to reflect any new information or future events or circumstances or otherwise.


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EXPLANATORY NOTE


We were incorporated as Global Group Enterprises Corp. in Florida on November 22, 2011.  Our initial intention was to distill, bottle, market and distribute alcoholic beverages (primarily an ultra-premium vodka), but we never acted on such intention, other than initial planning.  


As previously reported in our Current Report on Form 8-K (Date of Report: September 18, 2014), filed with the SEC on September 19, 2014, effective as of September 18, 2014, we reincorporated in the State of Delaware by merging with and into Tyme Technologies, Inc., our newly-formed, wholly-owned Delaware subsidiary, which was the surviving corporation in such merger and our successor-in-interest (the “Reincorporation”). As a result of the Reincorporation, among other things,


•

we changed our jurisdiction of incorporation from Florida to Delaware (the “Re-Domicile”);

 

 

•

we changed our name from Global Group Enterprises Corp. to Tyme Technologies, Inc. (the “Name Change”);

 

 

•

each share of Global Group Enterprises Corp.’s common stock outstanding at the time of the Reincorporation was automatically converted into 4.3334 issued and outstanding and fully paid and non-assessable shares of the surviving corporation’s common stock, with the result that the aggregate 12,000,000 shares of Global Group Enterprises Corp.’s common stock outstanding immediately prior to the Reincorporation were converted into an aggregate of 52,000,800 shares of our common stock (the “Share Conversion”); and

 

 

•

we increased our authorized capital stock from 250 million shares of common stock, par value $0.0001 per share, to 300 million shares of common stock, par value $0.0001 per share (our “Common Stock”) and 10 million shares of “blank check” preferred stock, par value $0.0001 per share (our “Preferred Stock”).


All share and per share numbers in this Form 8-K relating to our Common Stock have been adjusted to give effect to the Share Conversion, unless otherwise stated.


On March 5, 2015, our wholly owned subsidiary, Tyme Acquisition Corp., a corporation formed in the State of Delaware on February 18, 2015  (“Acquisition Sub”), merged (the “Merger”) with and into Tyme, Inc., a corporation incorporated in the State of Delaware on July 26, 2013 (“Tyme”).  Tyme was the surviving corporation in the Merger and became our wholly-owned subsidiary.  All of the outstanding Tyme stock was converted into shares of our Common Stock, as described in more detail below.


In connection with the Merger and pursuant to the Split-Off Agreement (defined below), we transferred all of our pre-Merger assets and liabilities to one of our pre-Merger principal stockholders who was a founder and former executive officer of our Company, in exchange for the surrender by him and cancellation of 13,000,200 shares of our Common Stock (the “Split-Off Transaction”).  (See Item 2.01, “Split-Off,” below.)


As a result of the Split-Off and Merger, we discontinued our pre-Merger business and acquired the business of Tyme, a research and development company focused on developing drug candidates for the treatment of cancer in humans. We intend to continue the existing business operations of Tyme as our wholly-owned subsidiary.  At the present time, we do not intend to operate any other business other than Tyme, although such operations may be conducted through one or more direct and/or indirect subsidiaries as we believe appropriate.


Also on March 5, 2015, we closed a private placement offering (the “PPO”) of 2,716,000 shares of our Common Stock, at a purchase price of $2.50 per share.  Additional information concerning the PPO is presented below under Item 2.01, “Merger and Related Transactions - the PPO” and “Description of Securities,” and Item 3.02, “Unregistered Sales of Equity Securities.”


The Merger resulted in a change of control of our Company, as the pre-Merger stockholders of Tyme own approximately 79% of our Common Stock as a result of the shares issued to them in the Merger and giving effect to the PPO, Split-Off Transaction and other related transactions discussed elsewhere in this Form 8-K.  In accordance with “reverse merger” accounting treatment, our historical financial statements as of and for periods ended prior to the Merger will be replaced with the historical financial statements of Tyme prior to the Merger in all future filings with the SEC.


Also on March 5, 2015, we changed our fiscal year from a fiscal year ending on November 30 th of each year, which was used in our most recent filing with the SEC, to one ending on December 31 st  of each year, which is the fiscal year end of Tyme.


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This Form 8-K contains summaries of the material terms of various agreements executed in connection with the transactions described herein. The summaries of these agreements are subject to and are qualified in their entirety by, reference to these agreements, which are filed as exhibits hereto and incorporated herein by reference.


This Form 8-K responds to the following Items of Form 8-K:


•

Item 1.01.

Entry into a Material Definitive Agreement

 

 

 

•

Item 2.01.

Completion of Acquisition or Disposition of Assets

 

 

 

•

Item 3.02.

Unregistered Sales of Equity Securities

 

 

 

•

Item 4.01.

Changes in Registrant’s Certifying Accountant

 

 

 

•

Item 5.01.

Changes in Control of Registrant

 

 

 

•

Item 5.02.

Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers

 

 

 

•

Item 5.03.

Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year

 

 

 

•

Item 5.06.

Change in Shell Company Status

 

 

 

•

Item 9.01.

Financial Statements and Exhibits


Prior to the Merger, we were a “shell company,” as such term is defined in Rule 12b-2 promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).  As a result of the Merger, we have ceased to be a shell company.  The information contained in this Form 8-K, together with the information contained in our Annual Report on Form 10-K for the fiscal year ended November 30, 2014 constitute the current “Form 10 information” necessary to satisfy the conditions contained in Rule 144(i)(2) promulgated under the Securities Act of 1933, as amended (the “Securities Act”).


Item 1.01

Entry into a Material Definitive Agreement


The information contained in Item 2.01 below relating to the various agreements described therein is incorporated into this Item 1.01 by reference.


Item 2.01

Completion of Acquisition or Disposition of Assets


THE MERGER AND RELATED TRANSACTIONS


Merger Agreement


On March 5, 2015, our Company, Acquisition Sub, Tyme and certain other parties entered into an Agreement and Plan of Merger and Reorganization (the “Merger Agreement”).  Simultaneous with the execution of the Merger Agreement, we and the other parties to the Merger Agreement consummated the transactions contemplated by the Merger Agreement.  We refer to the date that the transactions contemplated by the Merger Agreement, including the Merger, were consummated as the “Closing Date.”  Pursuant to the terms of the Merger Agreement, Acquisition Sub merged with and into Tyme.  Tyme was the surviving corporation in the Merger and thus became our wholly-owned subsidiary. In accordance with the Merger Agreement, we also completed the Split-Off Transaction whereby we transferred all of our pre-Merger assets and liabilities to a newly formed subsidiary, Global Group Enterprises Corp., a Florida corporation (“Split-Off Subsidiary”) and transferred our entire equity interest in Split-Off Sub to a pre-Merger principal stockholder, who was a founder and former executive officer of our Company,  in consideration for his surrender to us for cancellation of all of his 13,000,200 shares of our Common Stock.  As a result of the consummation of the Merger and Split-Off Transaction, our sole business at this time is the business of Tyme, a research and development company focused on developing drug candidates for the treatment of cancer in humans.


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At the closing of the Merger, the shares of Tyme’s common stock issued and outstanding immediately prior to the Merger were converted into shares of outstanding Common Stock resulting in an aggregate of 68 million shares of our Common Stock being issued in connection with the Merger to the holders of Tyme’s common stock immediately preceding the effective time of the Merger (the “pre-Merger Tyme stockholders”).  Tyme’s common stock was Tyme’s sole authorized class of equity securities.  Tyme had no outstanding warrants, options or convertible securities outstanding as of the closing of the Merger.


The Merger Agreement contained customary representations and warranties and pre- and post-closing covenants of each party and customary closing conditions.  Breaches of the representations and warranties will be subject to indemnification provisions.  Each of the pre-Merger Tyme stockholders initially received in the Merger 95% of the shares to which each such stockholder is entitled under the terms of the Merger Agreement, with the remaining 5% of such shares being held in escrow for two years to satisfy post-closing claims for indemnification by the Company (“Indemnity Shares”), pursuant to an Indemnification Shares Escrow Agreement.  Any of the Indemnity Shares remaining in escrow at the end of such two-year period shall be distributed to the pre-Merger Tyme stockholders on a pro rata basis.  The Merger Agreement also contains a provision providing for a post-Merger share issuance as a means for which claims for indemnity may be made by the pre-Merger Tyme stockholders.  Pursuant to this provision, up to 1 million additional shares (“R&W Shares”) of our Common Stock may be issued to the pre-Merger Tyme stockholders during the one-year period following the Merger for breaches of representations and warranties of the pre-Merger Company contained in the Merger Agreement.  The value of the Indemnity Shares and the R&W Shares issued pursuant to these indemnification provisions is fixed at $0.50 per share. The foregoing mechanisms are the exclusive remedies of the Company on the one hand and the pre-Merger Tyme stockholders on the other hand for satisfying indemnification claims under the Merger Agreement, other than claims based on fraud or willful misconduct.


The Merger Agreement also called for the surrender for cancellation, effective as of the Merger Closing, of a number of shares of our Common Stock by the owners of such shares.  In addition to the surrender and cancellation of 13,000,200 shares in connection with the Split-Off Transaction, a further 26,276,600 shares (the “Merger Related Surrendered Shares”) were surrendered by their owners and canceled.  


The Merger will be treated as a recapitalization of the Company for financial accounting purposes.  Tyme will be considered the acquirer for accounting purposes and our historical financial statements before the Merger will be replaced with the historical financial statements of Tyme before the Merger in all future filings with the SEC.


The Merger is intended to be treated as a tax-free reorganization under Section 368(a) of the Internal Revenue Code of 1986, as amended.


The issuance of shares of our Common Stock to holders of Tyme’s common stock in connection with the Merger was not registered under the Securities Act, in reliance upon the exemption from registration provided by Section 4(2) of the Securities Act, which exempts transactions by an issuer not involving any public offering.  These securities may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirement and are subject to further contractual restrictions on transfer as described below.


We also agreed, subject to one exception discussed below, not to register under the Securities Act for resale any of the shares of our Common Stock issued to the pre-Merger Tyme stockholders for the two years following the closing of the Merger.  Notwithstanding the restriction on registering shares of our Common Stock received in the Merger by the pre-Merger Tyme stockholders, we did agree to register 9% of the shares of our Common Stock issued in connection with the Merger to the pre-Merger Tyme stockholders.


In addition, two of the pre-Merger Tyme stockholders who each are executive officers and directors of our Company and are holders of 10% or more of our Common Stock (the “Restricted Stockholders”) have each entered into a Lock-Up and No Shorting Agreement (each, a “Lock-Up Agreement”), whereby they agreed to certain restrictions on the sale or disposition (including pledges) of shares of our Common Stock held by them for one year following the closing of the Merger.  The Lock-Up Agreements exclude the shares which we agreed to register for all of the pre-Merger Tyme stockholders discussed in the immediately preceding paragraph, as well as an additional 1 million shares each which they are permitted to sell only in private transactions.


The form of the Merger Agreement, Indemnification Shares Escrow Agreement and Lock-Up Agreements have been filed as exhibits to this Current Report on Form 8-K.


All descriptions of the Merger Agreement, Indemnification Shares Escrow Agreement and Lock-Up Agreements herein are qualified in their entireties by reference to the texts thereof filed as exhibits hereto, which is incorporated herein by reference.


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Split-Off Transaction


Immediately prior to the closing of the Merger, under the terms of a Split-Off Agreement and a General Release Agreement, we (x) transferred all of our pre-Merger operating assets and liabilities to Split-Off Subsidiary, our wholly-owned special-purpose subsidiary and (y) transferred all of the outstanding shares of capital stock of Split-Off Subsidiary to Andrew Keck, our founder and a principal stockholder of our Company prior to the consummation of the Merger, in consideration of and in exchange for (i) the surrender for cancellation of an aggregate of 13,000,200 shares of our Common Stock owned by him and (ii) certain representations, covenants and indemnities  (the “Split-Off”).  Mr. Keck served as our sole executive officer and director from our initial formation through April 26, 2013.


All descriptions of the Split-Off Agreement and the General Release Agreement herein are qualified in their entireties by reference to the texts thereof filed as exhibits hereto, which are incorporated herein by reference.


Bridge Financing


In July 2014, Tyme offered and sold to an accredited investor a Tyme senior subordinated secured convertible note in the principal amount of $1.1 million. The note bore interest at 10% per annum and was payable on October 11, 2015, subject to earlier conversion as described below.  In November of 2014, the holder of such note loaned Tyme an additional $250,000 and the note was amended and restated to reflect a principal amount of $1.35 million.  In January of 2015, the holder of such note loaned Tyme an additional $960,000 and the note was further amended and restated to reflect a principal amount of $2.31 million.  In February of 2015, the note was further amended to reflect a change in its mandatory conversion feature to a fixed amount, as further discussed below.  The note as amended and restated is referred to in this Current Report on Form 8-K as the “Bridge Note.”


Interest on the Bridge Note would have been payable at maturity; however, upon conversion of the Bridge Note as described below, accrued interest was, in accordance with the terms of the Bridge Note, forgiven. The Bridge Note was secured by a security interest on all of the assets of Tyme and its Luminant Biosciences, LLC wholly-owned subsidiary (“Luminant”), subject to certain limited exceptions, as well as a pledge of certain shares of stock of Tyme held by two principal stockholders of Tyme and Tyme’s membership interest in Luminant.


Upon the closing of the Merger and the PPO, the outstanding principal amount of the Bridge Note was automatically converted into 2.31 million shares (the “Conversion Shares”) of our Common Stock, at a rate of one share for every $1.00 of Bridge Note principal then outstanding.  The security interest and pledges terminated upon conversion of the Bridge Note.


No broker or finder was engaged in connection with the sale of the Bridge Note and no fee or commission was paid.  Tyme utilized and plans to utilize the proceeds from the sale of the Bridge Note to pay a portion of its outstanding accounts payable, to pay the accounting and auditing costs with respect to the preparation of the financial statements of Tyme contained elsewhere in this Form 8-K, to continue to proceed with its development of its drug candidates, to proceed with additional required clinical trials necessary to obtain regulatory approval of such drug candidates (which approval is not assured), to pay other costs relating to obtaining such regulatory approval and for general working capital purposes.


All descriptions of the Bridge Note original and as amended and restated, herein are qualified in their entireties by reference to the texts thereof which have been filed as exhibits hereto, which are incorporated herein by reference.


The PPO


Concurrently with the closing of the Merger and in contemplation of the Merger, we held a closing of the PPO in which we sold 2,716,000 shares of our Common Stock at a purchase price of $2.50 per share for gross proceeds of $6.79 million.  Only $4.29 million of such gross proceeds was paid in cash.  The remaining $2.5 million was paid by the delivery to us of a 90-day, limited recourse promissory note in the principal amount of $2.5 million (the “PPO Note”).  The PPO Note is secured by an escrow of 5 million shares of our Common Stock, pursuant to a Subscription Note Shares Escrow Agreement among the purchaser in the PPO, our Company and an escrow agent (the “PPO Note Escrow Agreement”).  To the extent that the PPO Note is not paid at or prior to its maturity date of June 5, 2015 (the “PPO Note Maturity Date”), the escrowed shares will be forfeited to us for cancellation at the rate of one share for every $0.50 of PPO Note principal not paid to us.  


The PPO investor and the Bridge Note purchaser who received the Conversion Shares upon the automatic conversion of the Bridge Note which occurred simultaneous with the closing of the PPO, were granted, pursuant to the subscription agreement for the PPO and pursuant to the Bridge Note, anti-dilution protection on the shares purchased in the PPO and the Conversion Shares (as the case may


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be) such that, if within two years after the closing of the Merger, our Company issues additional shares of our Common Stock or Common Stock equivalents (subject to customary exceptions, including but not limited to Exempt Securities (defined below)) for a consideration per share less than $0.50 (the “Lower Price”), the PPO investor and former Bridge Note holder will be entitled to receive from the Company additional shares of our Common Stock (the “Lower Price Shares”) in  an amount such that, when added to the number of shares initially purchased by such investor or received upon conversion of the Bridge Note, will equal the number of shares that such investor’s PPO subscription amount would have purchased or the Bridge Note holder would have received upon conversion of the Bridge Note at the Lower Price.  


“Exempt Securities” include: (a) options and other equity awards issued under our 2015 Equity Incentive Plan (as discussed below); (b) shares of our Common Stock, options or convertible securities issued pursuant to or in conjunction with a joint venture, development, technology license or similar type of collaboration or strategic partnership agreement; (c) shares issued in the Merger and (d) securities issued to financial institutions, institutional investors or lessors in connection with credit arrangements, equipment financings, lease arrangements or similarly transaction (in each case, subject to a maximum number equal to 10% of the number of shares of our Common Stock outstanding at the time of issuance); provided, however, no such issuance shall include any type of “death spiral” provision.


The PPO was exempt from registration under Section 4(2) of the Securities Act.  The sole investor in the PPO was GEM Global Yield Fund LLC SCS, a “société en commaudite simple” formed under the laws of Luxembourg (“GEM”).  The Bridge Note investor designated GEM as the party to receive the Conversion Shares.  GEM was a principal stockholder of our pre-Merger company, and the purchaser of the Bridge Note is the manager of GEM.


The closing of the PPO and the closing of the Merger were conditioned upon each other.


All descriptions herein of the subscription agreement for the PPO, PPO Note and PPO Note Escrow Agreement are qualified in their entireties by reference to the texts thereof filed as exhibits hereto, which are incorporated herein by reference.


Share Adjustment


The Merger Agreement provides that, in the event we raise additional capital in a public or private offering (in one or more closings) for gross proceeds of at least $20 million (a “Qualified Offering”), based on a pre-money valuation of our Company of at least $200 million, within five months of the earlier of the (i) date on which the PPO Note has been fully satisfied and (ii) PPO Note Maturity Date, subject to certain conditions, we will issue to the holders of record of our Common Stock as of the Closing Date (the “Pre-Merger Company Stockholders”), pro rata , 1,333,333 additional restricted shares of our Common Stock (the “Qualified Offering Shares”).


The Merger Agreement further provides that:


•

if the pre-money valuation of our Company upon a Qualified Offering is $150 million or more but less than $200 million, the Pre-Merger Company Stockholders will surrender to us for cancellation without consideration 1 million shares of our Common Stock;

 

 

•

if the pre-money valuation of our Company upon a Qualified Offering is $100 million or more but less than $150 million, the Pre-Merger Company Stockholders will surrender to us for cancellation without consideration 2 million shares of our Common Stock; and

 

 

•

if the pre-money valuation of the Company upon a Qualified Offering is less than $100 million (which Qualified Offering may be rejected in the Company’s sole and absolute discretion) or if no Qualified Offering occurs within five months of the PPO Note Satisfaction Date, the Pre-Merger Company Stockholders will surrender to us for cancellation without consideration 3.5 million shares of our Common Stock.


The Pre-Merger Company Stockholders have placed into escrow, pursuant to an Adjustment Shares Escrow Agreement, 3.5 million shares of our Common Stock (the “Adjustment Shares”) to secure such surrender obligations.


We have the sole authority to determine all matters relating to the Qualified Offering, including the subscription price, pre-money valuation and whether or not to accept any subscriber’s subscription offer.  While GEM has agreed to assist us in the Qualified Offering, GEM is prohibited under the Merger Agreement from performing certain acts which would require GEM to be registered as a broker/dealer and/or a member of FINRA in order to receive compensation in connection with the Qualified Offering.


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Registration Rights


In connection with the PPO and Merger, we entered into a Registration Rights Agreement (the “Registration Rights Agreement”), pursuant to which we have agreed that promptly, but no later than 90 days following the earlier of the (i) date on which the PPO Note has been fully satisfied and (ii) the PPO Note Maturity Date (such earlier date, the “PPO Note Satisfaction Date”), we will file a registration statement with the SEC (the “Registration Statement”) covering (a) the shares of our Common Stock issued in the PPO (the “PPO Shares”) (a total of 2.716 million shares), (b) the Conversion Shares issued upon conversion of the Bridge Note (a total of 2.31 million shares), (c) the Lower Price Shares, if any, (d) 9% of the shares issued to the pre-Merger Tyme stockholders in the Merger (a total of 6.12 million shares) (the “Tyme Merger Registrable Shares”) and (e) any shares of our Common Stock issued or issuable with respect to the PPO Shares, Conversion Shares, Tyme Merger Registrable Shares and Lower Price Shares upon any stock split, dividend or other distribution, recapitalization or similar event (collectively, the “Registrable Shares”).  Pursuant to a separate consulting agreement, we also agreed to include in the Registration Statement the 250,000 shares of our Common Stock issued to the consultant as part of its compensation under such consulting agreement.  We are required to use commercially reasonable efforts to ensure that the Registration Statement is declared effective within 180 calendar days of its filing with the SEC.  If we are late in filing the Registration Statement or if the Registration Statement is not declared effective within 180 days of its filing with the SEC, liquidated damages payable by the Company to the holders of the PPO Shares and Conversion Shares that have not been so registered will commence to accrue at a rate equal to $0.01 per share with respect to Conversion Shares and $0.025 per share with respect to the PPO Shares for each full month that (i) the Company is late in filing the Registration Statement or (ii) the Registration Statement is late in being declared effective by the SEC; provided, however, that in no event shall the aggregate of any such liquidated damages exceed $0.08 per Conversion Share and $0.20 per PPO Share.  No liquidated damages will accrue with respect to any Registrable Shares removed from the Registration Statement in response to a comment from the staff of the SEC limiting the number of shares of Common Stock which may be included in the Registration Statement (a “Cutback Comment”), after the shares may be resold under Rule 144 under the Securities Act or another exemption from registration under the Securities Act or in other specified situations.  


The Company must keep the Registration Statement “evergreen” for two years from the date it is declared effective by the SEC or until Rule 144 is available to the holders of Registrable Shares who are not and have not been affiliates of our Company with respect to all of their Registrable Shares, whichever is earlier.


The holders of Registrable Shares (including any Registrable Shares removed from the Registration Statement as a result of a Cutback Comment) will have “piggyback” registration rights for such shares with respect to any registration statement filed by our Company following the effectiveness of the Registration Statement that would permit the inclusion of such Registrable Shares.


We will pay all expenses in connection with any registration obligation provided in the Registration Rights Agreement, including, without limitation, all registration, filing, stock exchange fees, printing expenses, all fees and expenses of complying with applicable securities laws and the fees and disbursements of our counsel and of our independent accountants.  Each holder of any Registrable Shares included in the Registration Statement will be responsible for its own sales commissions, if any, transfer taxes and the expenses of any attorney or other advisor such holder decides to employ in connection with the Registration Statement and/or the sale of such holder’s Registrable Shares.


All descriptions of the Registration Rights Agreement herein are qualified in their entirety by reference to the text thereof filed as an exhibit hereto, which is incorporated herein by reference.


2015 Equity Incentive Plan


Prior the closing of the Merger, our Board of Directors adopted and our stockholders approved, our 2015 Equity Incentive Plan (the “2015 Plan”), which provides for the issuance of incentive awards of up to 10,000,000 shares of our Common Stock to officers, key employees, consultants and directors.  The 2015 Plan provides that no greater than 3,333,333 shares may be awarded prior to the first anniversary of the 2015 Plan’s adoption, which occurred on March 5, 2015.  See “Market Price of and Dividends on Common Equity and Related Stockholder Matters—Securities Authorized for Issuance under Equity Compensation Plans” below for more information about the 2015 Plan.


Departure and Appointment of Directors and Officers


Under our Certificate of Incorporation, our Board of Directors is authorized to consist of between one and eleven members, as determined from time to time by our Board.  In connection with the Merger, our Board size was fixed at five members, subject to increase or decrease as further determined by the Board.  


- 9 -


Effective as of the closing of the Merger, Peter de Svastich, our sole director before the Merger, who was also our sole executive officer prior to the Merger, resigned his position as a director and executive officer of our Company and Steve Hoffman and Michael Demurjian were appointed to our Board of Directors. In addition, effective as of the closing of the Merger, Steve Hoffman was appointed as our Chief Executive Officer, Chief Science Officer and President, Michael Demurjian was appointed as our Chief Operating Officer and Executive Vice President and Akber Pabani was appointed as our Chief Financial Officer and Treasurer.  Messrs. Hoffman and Demurjian served as the sole directors and executive officers of Tyme and were Tyme’s principal stockholders.


During the negotiations of the terms of the Merger Agreement and amendments to the Bridge Note, it was agreed that, in addition to the requirement of Messrs. Hoffman and Demurjian be appointed to our post-Merger Board of Directors and their executive positions with our Company, Tyme had the right to designate three independent directors to our Board and a list of potential director-candidates was provided to GEM and the holder of Bridge Note.  Prior to the funding in January of 2015 of the final $960,000 of the loan evidenced by the Bridge Note, Tyme placed into escrow 25 shares of its Common Stock which escrowed shares were returned to Tyme for cancelation upon Tyme providing the Bridge Note holder with letters from at least three of a list of potential director-candidates of their willingness to join our Board following the Merger, our obtaining appropriate directors’ and officers’ insurance (“D&O insurance”) and other events occurring (certain of such events not being within our or Tyme’s control).  Neither GEM nor any of its affiliates has any right to appoint or nominate any person to serve as a director of our Company.


Following the consummation of the Merger, we expanded our Board of Directors by three members, each of whom we believe meets the the NASDAQ Stock Market definition of independent director.  These three new members are Patrick LePore, Dr. Gerald Sokol and Timothy Tyson.


See “Management – Directors and Executive Officers” below for information about our new directors and executive officers.  


Lock-up Agreements and Other Restrictions


In connection with the Merger, each of Steve Hoffman, our Chief Executive Officer, Chief Science Officer and President and Michael Demurjian, our Chief Operating Officer and Executive Officer, who own, in the aggregate, 56,555,600 shares or approximately 65.8% of our Common Stock issued and outstanding immediately following the closing of the Merger, PPO and the other transactions contemplated by the Merger Agreement (each, a “Restricted Holder”), entered into separate Lock-Up Agreements with our Company, pursuant to which the Restricted Holders are restricted, for a period of twelve months from the date of the Merger (extendable in the case of certain public and private sales of our Common Stock by our Company), from certain sales or dispositions of our Common Stock held by them, except in certain limited circumstances (the “Lock-Up”).  The Restricted Holders’ Tyme Merger Registrable Shares and an additional 1 million shares owned by each Restricted Holder are excluded from the Lock-Up.


Further, under the Lock-Up Agreements, each Restricted Holder has agreed to be subject to restrictions on engaging in certain transactions, including effecting or agreeing to effect short sales, whether or not against the box, establishing any “put equivalent position” with respect to our Common Stock, borrowing or pre-borrowing any shares of our Common Stock or granting other rights (including put or call options) with respect to our Common Stock or with respect to any security that includes, relates to or derives any significant part of its value from our Common Stock or otherwise seeks to hedge the Restricted Holder’s position in our Common Stock.


All descriptions of the Lock-Up Agreements are qualified in their entireties by reference to the texts thereof filed as exhibits hereto, which are incorporated herein by reference.


Pro Forma Ownership


Immediately after giving effect to (i) the Merger and (ii) the surrender and cancellation of 13,000,200 shares of our Common Stock in the Split-Off Transaction, (iii) the surrender for cancellation of 26,276,600 shares of our Common Stock in accordance with the terms of the Merger Agreement, (iv) the closing of the PPO and (v) the conversion of the Bridge Note, there were 86 million shares of our Common Stock issued and outstanding, as follows:


•

the pre-Merger stockholders of Tyme hold 68 million shares of our Common Stock;

 

 

•

the pre-Merger stockholders of our Company hold 12.724 million shares of our Common Stock;

 

 

•

investors in the PPO hold 2.716 million shares of our Common Stock;

 

 

•

the holder of the Bridge Note received 2.31 million shares of our Common Stock upon the conversion of the Bridge Note; and

 

 

•

a consultant to our Company received 250,000 shares of our Common Stock upon entering into a consulting agreement with us.


- 10 -


In addition, to the shares of our Common Stock issued and outstanding immediately following the closing of the Merger, our 2015 Plan authorizes issuance of up to 10,000,000 shares of our Common Stock as incentive awards to our directors, executive officers, consultants and employees.  As of the date of filing this Current Report on Form 8-K, no options or other awards have been granted under the 2015 Plan.


No other securities convertible into or exercisable or exchangeable for our Common Stock are outstanding.


Our common stock is quoted on the OTC Markets (OTC QB) under the symbol “TYMI.”


Accounting Treatment; Change of Control


The Merger is being accounted for as a “reverse merger,” and Tyme is deemed to be the acquirer in the Merger. Consequently, the assets and liabilities and the historical operations that will be reflected in the financial statements prior to the Merger will be those of Tyme and will be recorded at the historical cost basis of Tyme and the consolidated financial statements after completion of the Merger will include the assets and liabilities of Tyme, historical operations of Tyme and operations of our Company and its subsidiaries, on a consolidated basis from the closing date of the Merger. As a result of the issuance of the shares of our Common Stock pursuant to the Merger, a change in control of the Company occurred as of the date of consummation of the Merger. Except as described in this Current Report on Form 8-K, no arrangements or understandings exist among present or former controlling stockholders with respect to the election of members of our Board of Directors and, to our knowledge, no other arrangements exist that might result in a change of control of the Company.


We continue to be a “smaller reporting company,” as defined under the Exchange Act, following the Merger. We believe that the Merger resulted in our Company ceasing to be a “shell company” (as such term is defined in Rule 12b-2 under the Exchange Act).


DESCRIPTION OF BUSINESS


Immediately following the Merger, the business of Tyme became our business.


History


As described above and in our prior periodic Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q, we were incorporated in Florida as Global Group Enterprises Corp. on November 22, 2011.  Our initial intention was to distill, bottle, market and distribute alcoholic beverages (primarily an ultra-premium vodka), but we never acted on such intention, other than initial planning.  Effective as of September 18, 2014, we reincorporated in the State of Delaware by merging with and into Tyme Technologies, Inc., our newly-formed, wholly-owned Delaware subsidiary, which was the surviving corporation in such merger and our successor-in-interest. As a result of the Reincorporation, among other things,


•

we changed our jurisdiction of incorporation from Florida to Delaware;

 

 

•

we changed our name from Global Group Enterprises Corp. to Tyme Technologies, Inc.;

 

 

•

each share of Global Group Enterprises Corp.’s common stock outstanding at the time of the Reincorporation was automatically converted into 4.3334 issued and outstanding and fully paid and non-assessable shares of the surviving corporation’s common stock, with the result that the aggregate 12,000,000 shares of Global Group Enterprises Corp.’s common stock outstanding immediately prior to the Reincorporation were converted into an aggregate of 52,000,800 shares of our common stock; and

 

 

•

we increased our authorized capital stock from 250 million shares of common stock, par value $0.0001 per share, to 300 million shares of common stock, par value $0.0001 per share and 10 million shares of “blank check” preferred stock, par value $0.0001 per share.


As a result of the Merger, we have acquired the business of Tyme and its subsidiaries.  Tyme was incorporated on July 26, 2013 under the laws of the State of Delaware.  


Our principal executive offices are located at 48 Wall Street - Suite 1100, New York, New York 10005.  Our telephone number is 646-205-1603.  Our website address is www.tymetechnologiesinc.com.  The information contained on our website is not incorporated by reference into this Current Report on Form 8-K.


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Our Business


Tyme Inc., is a clinical-stage pharmaceutical company focused on discovering and developing highly targeted cancer therapeutics for a broad range of oncology indications.  We are currently developing for use in humans SM-88, our proprietary drug cocktail – which we believe to be a first-in-class drug that harnesses the body’s own immune defenses to fight tumor cells.  Our drug is based on a mechanism designed to utilize oxidative stress, among other techniques, to selectively kill cancer cells.


SM-88 is a novel combination of four currently marketed drugs that synergistically target the unique metabolic features of cancer cells, thus providing a selective method of altering the susceptibility of cancer cells to oxidative stress.  This selectivity is underscored by evidence indicating that, to date, the SM-88 drug cocktail has been shown to be nontoxic to noncancerous cells, unlike most current anticancer drugs and treatments.  SM-88’s therapeutic potential is based on its ability to increase the availability of free radicals at the cancer site and promote their entry into the cell by stripping the cancer cells of their normal barriers to these toxic electrons. The active components of SM-88 are all administered in low doses and are generally considered safe for their approved indications in areas other than cancer treatment.


We believe, based on SM-88’s mechanism of action and proof-of-concept clinical data, that our drug may ultimately improve overall response rates, clinical outcomes and survival rates in breast cancer patients and could eventually become a cornerstone of modern, targeted oncology care.  Based on its novel proposed mechanism of action, SM-88 may prove beneficial to breast cancer patients who have relapsed following traditional cancer therapies failing at improving long-term survival rates.


We have focused our research and development efforts on a proprietary platform technology, for which we retain global intellectual property and commercial rights, for use in creating drugs to treat the unmet medical needs of oncology patients.  This population includes patients with limited life expectancy and scarce therapeutic options, such as those with refractory cancer (i.e. , cancer that is unresponsive to treatment with standard therapies), those who are undergoing salvage therapy or patients who have relapsed.  We believe this development strategy may allow for faster regulatory approval and may likely require smaller clinical trials, as compared to those indications with more therapeutic options and larger patient populations.  


Our initial proof-of-concept clinical trial demonstrated that our drug was well-tolerated by patients and has the potential to shrink tumors and/or slow tumor growth.  Promising and exciting results were shown in the 30 enrolled subjects eligible for efficacy evaluation in a proof-of-concept institutional review board (IRB)-approved clinical trial.  


We are currently finalizing our regulatory and drug development program for SM-88 and working towards the initiation of our first phase II clinical trial.  At this time, based on the positive results experienced by the breast cancer subjects in the proof-of-concept trial, advanced metastatic breast cancer is being considered as the initial indication for the phase II trial.


Our Strengths


We believe we can become a leader in developing cancer therapies with our platform technology for the following reasons:


•

Our initial drug candidate, SM-88, is believed to be a first-in-class immuno-modulating-electrochemical-response-modifier cancer therapy;

 

 

•

Our SM-88 cocktail has demonstrated its potential as an aggressive combination treatment, with significant antitumor activity that has not, to date, shown any toxic side effects at current therapeutic dose levels;

 

 

•

We have a growing pipeline of drug candidates based on our technology platform that are focused on key cancer indications;

 

 

•

We retain global commercial rights for the drug candidates in our product pipeline;

 

 

•

Our management team has a strong track record in the development and commercialization of new technologies and discoveries; and

 

 

•

We have a technology base and patent portfolio in the field of targeted electrochemical immuno-oncology.


Our Strategy


Our goal is to develop and commercialize targeted electrochemical immuno-oncology therapies aimed at improving and extending patients’ lives.  Key elements of our strategy to achieve this goal are to:


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•

Successfully advance SM-88 through clinical development and commercial launch.   We intend to pursue a worldwide development and commercialization plan for SM-88.

 

 

•

Continue to invest in our technology platform and IP portfolio to further build our electrochemical immuno-oncology therapy pipeline.  Our development plan is focused on continued advancement of our technology and an investigation of other oncology indications for our technology platform beyond the indications targeted by our SM-88 drug product.

 

 

•

Further establish research and development (R&D) capabilities in the U.S.    We plan to expand our R&D efforts to encompass other indications within the oncology field that will benefit from our technology platform, to investigate other uses and patient populations and to conduct further mechanism studies that could potentially pave the way for adding further drugs to our pipeline.  We also intend to extend our R&D program, subject to available funds, to encompass pediatric indications, where the FDA offers added exclusivity rights.  Furthermore, in the future, we may expand our R&D program to investigate other possible oncology treatment uses for our drugs.

 

 

•

Build a balanced portfolio of proprietary and partnered programs.   We plan to independently develop and commercialize multiple drug candidates, initially for human indications within the oncology field.  For targets outside our core areas of interest or where a partner can contribute specific expertise, we intend to evaluate potential collaborations with strategic partners and/or potential acquisitions of other companies who can augment our expertise and technology, as well as a means to acquire rights or ownership of additional IP.  We also contemplate exploring global development partners and arrangements, where appropriate.


Current Status


To date, we have financed our operations primarily through loans from third parties and private sales of convertible debt, as well as loans and equity contributions from existing stockholders.  Through September 30, 2014, we raised $2.226 million through the issuance of convertible loans, including the sale of the convertible Bridge Note in the original principal amount of $1.1 million.  In November 2014, the holder of the Bridge Note advanced us an additional $250,000 and the Bridge Note was amended and restated to reflect a principal amount of $1.35 million.  In January of 2015, the holder of the Bridge Note advanced us an additional $960,000 and the Bridge Note was further amended and restated to reflect a principal amount of $2.31 million.  In March of 2015, we completed a private offering of our Common Stock for gross proceeds of $6.79 million, of which $4.29 million was received in cash and the remaining $2.5 million was tendered in the form of a note in the principal amount of $2.5 million.  In connection with the consummation of the PPO, the Bridge Note was converted into 2.31 million shares of our Common Stock.  Based on our current plans, we do not anticipate generating product or royalty revenues unless and until we obtain marketing approval for and commercialize one or more of our drug candidates.


We have generated losses since we began drug development in 2011.  For the years ending December 31, 2013 and 2012, we incurred net losses of approximately $1.058 million and $888,000, respectively.  For the nine months ending September 30, 2014 and 2013, we incurred net losses of approximately $1.196 million and $657,000, respectively.  As of September 30, 2014, we had an accumulated deficit of approximately $2.707 million.  We expect to continue to incur losses as we continue our drug development program and will incur losses until at least such time as we gain approval to market one or more of our drugs.  Our near-term future profitability is dependent upon the successful development, approval and commercialization of SM-88 and achieving a level of revenues adequate to support operations.  We may never achieve profitability and unless and/or until we do, we will continue to need to raise additional funds or be forced to limit or curtail our R&D efforts.  We intend to fund future operations through additional equity and debt financings and we also may seek additional capital through arrangements with strategic partners or from other sources.


Based on our operating plan, our existing working capital as of September 30, 2014 is not sufficient to meet the cash requirements to fund planned operations without additional financing.  Although we have raised an aggregate of $9.1 million in gross proceeds from the sale of the Bridge Note and equity securities since July 1, 2014, there can be no assurances that additional financing will be available to us on satisfactory terms or at all.  These conditions raise substantial doubts about our ability to continue operations and we will be required to raise additional funds, alternative means of financial support or both, in order to continue operations.  The accompanying financial statements have been prepared assuming that we will continue as a going concern and do not include adjustments that might result from the outcome of this uncertainty. This basis of accounting contemplates the recovery of our assets and the satisfaction of liabilities in the normal course of business.


In order to comply with laws governing the sales and marketing of drugs within the U.S., we must comply with the rules and regulations of the U.S. Food and Drug Administration.  These rules and regulations are time consuming, detailed and complex and require substantial financial commitment in order to maintain compliance.  We also would be required to comply with the laws, rules and regulations of other countries and regions, including those enacted in the European Union (“EU”), before we could market and sell our drugs in such countries and regions.  In order to further our efforts we completed a proof-of-concept clinical trial for our first drug candidate, SM-88, in December 2012.  We are now preparing to file an IND for SM-88.  The IND is the next step in the FDA regulatory approval process.


- 13 -


The timeline for filing an IND for SM-88 with the FDA cannot be stated at this time with any degree of certainty.  The timing is subject to many factors, many of which are beyond our control.  


We plan on initiating a comprehensive, closely monitored, phase II clinical trial in patients with advanced metastatic breast cancer who have failed the usual standard-of-care therapies or have exhausted conventional treatments. We plan to review interim data during the course of this clinical trial to confirm that our product development activities are in line with our internal development and commercialization plans.


Commercialization Plans


We have not yet established a sales, marketing or product distribution infrastructure because our lead drug is still in an early stage of development and regulatory approval.


In anticipation of receiving regulatory approvals to market SM-88 or any other product, we may build a focused sales and marketing organization in the U.S. to sell our products at the appropriate time, if and when, marketing approval is granted.  We believe that such an organization will be able to effectively target the community of oncologists who are on the front line in treating the patient populations for which SM-88 is being developed.  We may at such time also build the necessary medical communications team for any products we market ourselves.  These responsibilities would include developing educational initiatives regarding our regulatory-approved drugs and technology platform and establishing relationships with thought leaders in the specific fields of medicine and oncology.  Along with the above capabilities, we may also build the commercial infrastructure required to support sales and marketing, including, but not limited to:  sales support, sales management, internal marketing, distribution support, national account management team, key management account support, managed care organizations, group purchasing account management, government account management, oncology group management, specialty pharmacy management, international sales and distribution.


To develop the appropriate commercial infrastructure, we will have to invest significant financial and managerial resources, some of which will need to be in place prior to any confirmation that SM-88 or any other product we develop, has received marketing approval.  At this time, we do not have the funding to support such an infrastructure.


Alternatively or in combination with our own marketing efforts, we may elect to enter into licensing, distribution or other marketing arrangements in the U.S.   


Outside the U.S., we will explore all options, including, but not limited to: developing our own sales and marketing organization or entering into licensing, distribution or other marketing arrangements with third parties to commercialize any of our drug candidates once they obtain marketing approval.


Thinking forward, outside of the U.S., we may elect to utilize strategic partners, distributors or contract sales forces to assist in the commercialization of our products, if any.


Background - Tyme


Tyme Inc. was formed in July of 2013.  At that time, we acquired two-thirds of the outstanding membership interest in Luminant Biosciences, LLC, a Delaware limited liability company, which was formed in August of 2011 and conducted the initial R&D of our therapeutic platform.  In May of 2014, we acquired the remaining minority interest in Luminant.  Since January 1, 2014, the majority of our R&D activities and other business efforts have been conducted by Tyme Inc. and all of our patent and patent application rights are held by Tyme Inc.  Throughout this description of our Company and business, references to “us,” “we,” “our” and similar terminology refer to our Company in its entirety, including Tyme and its Luminant wholly-owned subsidiary, unless the context implies otherwise.


Platform Technology


We believe we have developed a novel approach for selectively killing cancer cells that is not predicated on any single-agent or agents.  Rather, it is an approach in which multiple compounds are used in combination to achieve a cascade of therapeutic events.  Our therapeutic platform technology uses both approved drugs as well as an active compound, which the FDA may ultimately categorize as a new chemical entity.  We have received one patent and have applied for additional patents regarding these compounds and the methodology that could be used to create future drug products based on our technology platform.


- 14 -


Our approach is intended to take advantage of the deregulated energy state of tumors to selectively kill cancer cells using electrochemical pathways.  While mechanism of action studies are being designed and tested, our IP and drug research program deals with a multi-part process.  It is proposed that the high-energy needs of rapidly proliferating tumor cells may be harnessed as a means of stopping cancer cell growth, reducing the size of tumors and eventually destroying those cells.  A normal cell uses a process called oxidative phosphorylation to generate approximately 32-high-energy molecules (adenosine triphosphate) from glucose to provide energy for the cell.  In contrast, cancer cells use a process called glycolysis that only generates approximately two such high-energy molecules from glucose and requires the additional metabolism of lipids (fats) for energy.  This results in a very high-energy requirement for the cancer cells.  Cancer cells reproduce rapidly and must synthesize large amounts of proteins to drive their proliferation and, accordingly, their amino acid needs are also quite high.  Our approach is to use tumor cells’ own exaggerated hunger against them.  Our approach is to essentially change the metabolic uptake of the cancer cell.  Our SM-88 drug is designed to exploit a cancer’s weakness in a manner that we believe has never before been exploited.


Clinical Trial Study


We recently completed a 30 subject, single-center, open-label, proof-of-concept clinical trial of SM-88 for the treatment of advanced metastatic cancer.


The purpose of our proof-of-concept study was to determine the safety, tolerability and efficacy of SM-88 in subjects with advanced metastatic cancer.  Goals of the study were to:


•

Assess Progression-Free Survival (“PFS”) in patients treated with SM-88;

 

 

•

Assess secondary measures of efficacy including Objective Response Rate, Duration of Response and Overall Survival;

 

 

•

Evaluate safety and tolerability of SM-88; and

 

 

•

Explore Patient Reported Outcomes, including health-related Quality-of-Life (“QoL”) and disease/treatment-related symptoms.


Between January and December 2012, 30 subjects with stage IV cancer and distant metastasis, including bone and central nervous system involvement, were included in the trial.  The patient population was comprised of patients who failed all available anticancer treatments.


Cancer types were: 43% breast cancer with metastases (15% each had metastases to: bone, lung, bone/lymph;) 20% had metastases to lung; (8% each had metastases to: lung, lymph, bone/brain/lung, bone/brain/spine, bone/liver, bone/brain; liver/bones/lymph), 10% pancreatic cancer with metastases, 6.6% bile duct cancer, 6.6% had prostate cancer with bone metastasis, 3.3% had colon cancer, 3.3% had tongue cancer, 3.3% had cancer of the appendix and 3.3% had thyroid cancer.


Subjects received between one to ten cycles of treatment with SM-88, each cycle consisting of daily administration, five days per week for six weeks.  The therapy was well-tolerated with all drug-related AEs occurring within the first cycle of treatment, with the exception of hyperpigmentation, which eventually occurred in all subjects.  Drug-related AEs in Cycle 1 were mild to moderate, self-limiting and did not require therapy.  They are presented in the following table.


Drug-related Adverse Events Reported in SM-88, Cycle 1

Adverse Events

Number of Treated Subjects (N = 30)

Hyperpigmentation

8

Fatigue

15

Lethargy

1

Pain

4

Paresthesia

1

Pigmentation change

2

Pruritus

1


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During Cycle 1, 24 (80.0%) subjects experienced at least one AE that was considered by the investigator to be possibly, probably or definitely related to SM-88. The majority of these AEs were fatigue, which was reported as related in 15 (50.0%) subjects. Other AEs reported as related to SM-88 in greater than 10% of subjects were hyperpigmentation (8 subjects, 26.7%) and pain (4 subjects, 13.3%). No serious adverse events (SAE) were reported during Cycle 1 and there were no subject discontinuations due to an AE.


Overall, 28 (93.3%) subjects experienced at least one AE during the first 6-week cycle. The most commonly reported AEs were fatigue, which was reported by 20 (66.7%) subjects, AEs related to pigmentation (hyperpigmentation [9 subjects/30.0%] or pigment change [2 subjects/6.7%]) and AEs related to pain (pain [9 subjects/30.0%], tumor pain [2 subjects/6.7%], abdominal pain [1 subject/3.3%], bone pain [1 subject/3.3%], flank pain [1 subject/3.3%] or neck pain [2 subjects/6.7%]). Other AEs reported in greater than 10% of subjects were nausea (6 [20.0%] subjects), lethargy (4 [13.3%] subjects), diarrhea (3 [10.0%] subjects) and headache (3 [10.0%] subjects).


Most AEs of fatigue started within two weeks of the onset of treatment and had durations ranging from 1.5 to 3 weeks.  Two of those events resolved within one day and approximately one-third were still ongoing at the end of treatment.  Three of the events were reported as moderate in severity and the rest were mild.


The primary endpoint for the study was PFS and 25 of the 30 randomized subjects had evaluable data to contribute to this analysis. Subjects with missing data for the PFS analysis included subjects whom: either had no evaluable baseline scans, had no measurable tumors on Baseline scans or had no follow-up scans. For subjects who did provide data, scans were not always obtained on a regular schedule during the study and in some cases, the interval between tumor assessments differed from subject to subject.


The last assessment of tumor responses was performed on November 15, 2013. At that time, 25 of the 30 treated subjects were evaluable and their Response Evaluation Criteria In Solid Tumors (RECIST1.1) status is presented below.


RECIST Results

Tumor Response

Number of Subjects

n = 25

Complete Response

2 (8%)

Partial Response

3 (12%)

Stable Disease

18 (72%)

Progressive Disease

2 (8%)


Virtually all subjects experienced dramatic and rapid improvements in Eastern Cooperative Oncology Group Performance Status (ECOG PS), European Organization for Research and Treatment of Cancer (EORTC) QoL questionnaire and self-reported pain scores during Cycle 1.  


A measureable and dramatic improvement in self-reported pain was seen in all subjects.  As shown in the pain score table below for all treated subjects, at the end of Cycle 1, an additional eight subjects no longer experienced pain after treatment with SM-88.


Pain Scores* for all Treated Subjects

Following 1 Cycle of SM-88

N=30

Pain Scores* for Subjects with Breast Cancer

Following 1 Cycle of SM-88

n=14

Number of Subjects

Number of Subjects

Score

Start

End

Score

Start

End

0

4

12

0

1

7

1

6

7

1

3

2

2

3

7

2

2

3

3

5

2

3

2

0

4

3

1

4

0

1

5

2

0

5

1

0

6

3

1

6

2

1

7

3

0

7

2

0

8

0

0

8

0

0

9

0

0

9

0

0

10

1

0

10

1

0

* Pain score scale was the National Institutes of Health, Warren Grant Magnuson Clinical Center, Pain Intensity Instruments, July 2003.


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We believe that SM-88 is a promising treatment for advanced metastatic cancer. It was well-tolerated among 30 subjects with a variety of cancers in our proof-of-concept clinical trial, including 14 subjects with stage IV breast cancer. We believe that our drug is not only unique, but thus far has shown no significant side effects except for cutaneous hyperpigmentation.


We believe that the results of the proof-of-concept clinical trial indicate that SM-88 holds promise as a successful monotherapy and likely has utility in combinations with both cytotoxic and current immuno-therapies. We further believe that the magnitude of the positive clinical response in this end-stage cancer population, as well as the amelioration of disease-related symptoms, an increase in performance status and QoL, provides a solid rationale for further development of SM-88 as a potential cancer treatment.


Target Markets


Cancer


Cancer is a term used for a variety of diseases in which abnormal cells divide without control and are able to invade other tissues.  Cancer is not just one disease but many diseases.  Cancer cells can spread to other parts of the body through the blood and lymph systems. In normal tissues, the rates of new cell growth and cell death are tightly regulated and kept in balance. In cancerous tissues, this balance is disrupted as a result of mutations, causing unregulated cell growth that leads to tumor formation. While tumors can grow slowly or rapidly, the dividing cells will nevertheless accumulate and the normal organization of the tissue will become disrupted. Cancers subsequently can spread throughout the body by processes known as invasion and metastasis. Once cancer spreads to sites beyond the primary tumor, it may be incurable. Cancer cells that arise in the lymphatic system and bone marrow are referred to as hematological malignancies. Cancer cells that arise in other tissues or organs are referred to as solid tumors.


The American Cancer Society (“ACS”) estimates that solid tumor cancers will account for approximately 1.5 million or 91% of new cancer cases diagnosed annually and will account for approximately 500,000 cancer-related deaths in the U.S. annually. For 2014, the ACS estimates that in the U.S. there will be approximately 1.66 million new cases of cancer and 585,000 deaths related to all cancers (solid and hematological).


Despite significant improvements in cancer diagnosis and treatment, cancer rates continue to increase globally and are a leading cause of death. According to the International Agency for Research on Cancer, the specialized cancer agency of the World Health Organization, annual cancer rates around the world are projected to increase by over 56% from 14.1 million cases in 2012 to 22 million new cases in the year 2030.  According to the CDC, cancer is the second leading cause of death in the U.S., exceeded only by heart disease. The overall five-year survival expectancy is currently approximately 66% and there are an estimated 13 million people currently suffering from cancer in the U.S.


Metastatic Breast Cancer (MBC)


The American Cancer Society estimated that over 230,000 new cases of invasive breast cancer would be diagnosed among women in the U.S. during 2013, along with over 2,000 new cases in men. Breast cancer is the second most frequently diagnosed cancer in women, after skin cancer. Furthermore, an estimated 40,000 breast cancer deaths were expected to be seen in 2013. Breast cancer ranks second as a cause of cancer death in women, after lung cancer. After taking into account tumor size, extent of spread and other characteristics of the tumor, as well as patient preference, treatment usually involves breast-conserving surgery (surgical removal of the tumor and surrounding tissue) or mastectomy (surgical removal of the breast). Treatment may also involve radiation therapy, chemotherapy (before or after surgery), hormone therapy (e.g., selective estrogen response modifiers, aromatase inhibitors and ovarian ablation) and/or targeted therapy.


In 2012, approximately 330,000 patients with breast cancer were treated with drugs in the U.S. and the top five countries (Germany, France, Italy, Spain and United Kingdom) of the EU. Half of these patients were from the U.S. and approximately 100,000 of these patients were treated for advanced or metastatic cancer with first, second or third-line therapy.


Cancer Costs in the U.S.


Of the nation’s 10 most expensive medical conditions, cancer has the highest per person-estimated cost of treatment. According to a National Institute of Health analysis, medical costs associated with cancer reached $125 billion in 2010 and are projected to increase another 27% by 2020, to at least $158 billion in the U.S.


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When estimating projections for the cost of cancer in the U.S. from 2010-2020, cancer prevalence was estimated by phase of care (initial year following diagnosis, continuing and last year of life) and tumor site, for 13 cancers in men and 16 cancers in women and projected through 2020.  Cancer prevalence was calculated from cancer incidence and survival models estimated from Surveillance, Epidemiology and End Results (SEER) Program data.  Annualized net costs were estimated from recent SEER Medicare linkage data, which included claims through 2006 among beneficiaries aged 65 years and older with a cancer diagnosis.


The table below provides estimates of expenditures on cancer treatment in 2010 and projected for 2020.


A Snapshot of Estimates of the National Expenditures

for Cancer Care in 2010 and 2020

(Costs in 2010 U.S. Billion Dollars)

Cancer Site

2010

2020 Projection

Breast

$16.50

$20.50

Colorectal

$14.14

$17.41

Lung

$12.12

$14.73

Lymphoma

$12.14

$15.26

Prostate

$11.85

$16.34

Leukemia

$5.44

$6.95

Ovary

$5.12

$6.03

Brain

$4.47

$5.53

Bladder

$3.98

$4.91

Kidney

$3.80

$5.12

Head/Neck

$3.64

$4.34

Uterus

$2.62

$3.05

Melanoma

$2.36

$3.16

Pancreas

$2.27

$2.83

Stomach

$1.82

$2.26

Cervix

$1.55

$1.54

Esophagus

$1.33

$1.76

All sites

$124.57

$157.77

Note:  This is based on a study that estimated and projected the national cost of cancer care, segregated by cancer site, through the year 2020 using the most recently available U.S. population projections, cancer incidence, survival and cost of care data.


Data Source:  Mariotto AB, Yabroff KR, Shao Y, Feuer EJ, Brown ML.  Projections of the Cost of Cancer Care in the U.S.: 2010-2020 .  J Natl Cancer Inst . 2011 Jan.


Patients with cancer who received chemotherapy averaged $111,000 per year in total medical and pharmacutical costs. In contrast, the average annual per capita medical cost (including pharmaceuticals) for nononcology patients was less than $4,000. The per patient annual cost for patients with cancer receiving chemotherapy was, on average, approximately four times the cost of patients with cancer not receiving chemotherapy. These costs were significantly higher than the averages for other patients with common chronic diseases and patients without cancer.


After matching the demographics of patients without cancer to those with cancer, patients with cancer receiving chemotherapy incurred six times the annual costs of patients with diabetes and 26 times the costs of patients without cancer. The majority of costs incurred by patients with cancer receiving chemotherapy occurred in the outpatient setting. Outpatient costs included chemotherapy drugs, infusions, physician visits, lab, radiology and ambulatory surgery.


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Worldwide Rates of Cancer


There were an estimated 14.1 million cancer cases reported around the world in 2012, comprising 7.4 million cases in men and 6.7 million in women. This caseload is expected to increase to 24 million by 2035. The age-standardized rate for all cancers (excluding non-melanoma skin cancer) for men and women combined was 182 per 100,000 in 2012.  The rate was higher for men (205 per 100,000) than women (165 per 100,000).  The highest rates of cancer for both men and women was found in Denmark, with 338 people per 100,000 being diagnosed in 2012.  The age-standardized rate was at least 300 per 100,000 for nine other countries (Denmark, France, Australia, Belgium, Norway, U.S., Ireland, Republic of Korea and The Netherlands).


Cancer Costs Worldwide


Reports indicate that, in the U.S., $322 billion dollars was spent on healthcare in 2011 and GMR Data estimates that, in the U.S., $31.8 billion was spent in the oncology market in 2012, capturing 40.5% of the worldwide oncology market. Following the U.S. was Japan; spending $8.9 billion dollars in 2012, capturing 11.2% of the market. In addition, the European mainstays of the pharmaceutical sector, the United Kingdom, Germany, France, Spain and Italy, comprised 25% of the global oncology market in 2012.


Staging


Stages of Cancer


Most types of cancer are classified into four stages, with an additional Stage 0 to distinguish those forms that may later lead to cancer (“pre-cancer” stage).  The diagram below illustrates the progression of the disease:

Data Source:  WWW.MD-HEALTH.COM. Accessed 29 August 2014.


Stage 0 . Also known as carcinoma in situ, this is an early form of cancer where there is a flat lesion but no invasion of malignant cells into the surrounding tissue. Although this can develop into full-blown cancer, some doctors do not consider this as cancer but “pre-cancer.”


Stage I . Tumors in this stage are usually smaller than 2 centimeters (cm) and are localized to their site of origin.  Lymph nodes are not affected and there is no sign of metastasis (spreading to other parts of the body).


Stage II . Tumors in this stage measure 2-5 cm, but are still localized to their site of origin since they have not invaded other tissues or metastasized.  Local lymph nodes may be affected.  Stage II tumors are considered to be locally advanced tumors.


Stage III . Tumors in this stage are fairly large, measuring more than 5 cm.  This late, locally advanced stage affects nearby lymph nodes and it may be difficult to differentiate from stage II cancer.


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Stage IV . Tumors in this stage may be of any size, affecting nearby lymph nodes and showing evidence of metastasis to other organs or regions of the body.  A secondary cancer may develop during this stage.  The overall physical and mental health of the patient may be affected and the historical survival rate is very low.


Survival


Stage IV cancer usually carries a grim prognosis, as compared to earlier stages of the disease. The five-year survival rate for patients in this stage may depend on different factors such as the type of cancer, overall general health, the type of treatment used and will power to overcome the disease.  


The five-year survival rate is expressed as the percentage of patients who will likely live up to 5 years after diagnosis of the disease, based on research performed in patients with the same type and stage of cancer. Therefore, a 60% five-year survival rate indicates that it is estimated that 60 out of every 100 patients will live for five years after diagnosis while the rest (40 of 100) will most likely die.


The five-year survival rate is just an estimate and not an exact number, since many factors influence the progression of one’s disease. The following table summarizes the five-year survival rates of different types of stage IV cancers:


Five-Year Cancer Survival Rates

Cancer Type

Survival Rate (%)

Brain

Less than 20%

Breast

16%

Colon

8-15%

Liver:

Primary Tumor

Secondary Tumor


30%

0%

Lung

50%

Ovarian

17%

Pancreatic

4%

Prostate

33%

Skin

15-20%

Stomach

5%

Data Source:  WWW.MD-HEALTH.COM. Accessed 29 August 2014


Cancer Treatments


The most common methods of treating patients with cancer are surgery, radiation and drug therapy.  For patients with localized disease, surgery and radiation therapy are particularly effective.  Drug therapies are generally used by physicians for treating patients with metastatic cancer or for cancers that cannot otherwise be treated through surgery, such as most hematological malignancies.  The goal of the various drug therapies is to damage and kill cancer cells or to interfere with the molecular and cellular processes that control the development, growth and survival of cancer cells.  In many cases, drug therapy entails the administration of a cocktail of drugs.  Over the past several decades, drug therapy has evolved from non-specific drugs that kill both healthy and cancerous cells, to drugs that target specific molecular pathways involved in cancer.


An early approach to pharmacological cancer treatment was to develop drugs, referred to as chemotherapeutic or cytotoxic drugs, which kill rapidly proliferating cancer cells through non-specific mechanisms, such as disrupting cell metabolism or causing damage to cellular components required for tumor survival and rapid growth.  While these drugs have been effective in the treatment of some cancers, cytotoxic drug therapies act in an indiscriminate manner, killing healthy cells along with cancerous cells.  Due to their mechanism of action, many cytotoxic drugs have a narrow therapeutic window or a dose range above which the toxicity causes unacceptable or even fatal levels of damage and below which the drugs are not effective in eradicating cancer cells.


The next approach to pharmacological cancer treatment was to develop drugs such as monoclonal antibodies, referred to as targeted therapeutics, which are antibodies that are derived from a single-parental cell clone, that target specific biological molecules in the human body that play a role in rapid cell growth and the spread of cancer. Included in this category are small molecule drugs as well as large molecule drugs, also known as biologics.  With heightened vigilance and new diagnostic tests, targeted therapies (including monoclonal antibodies such as Herceptin ® , Rituxan ® , Erbitux ®  and Avastin ® , as well as small molecules such as Nexavar ®  and Tarceva ® ) have resulted in improvements in overall survival for many cancer patients.  More recently, antibodies have been developed that are optimized regarding their effector function, also known as F C  optimized antibody drugs, such as obinutuzumab.  These molecules are designed to engage NK-cells and macrophages more effectively in the elimination of cancer cells.


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Cancer immunotherapy plays an increasing role among emerging cancer drug therapies.  The intention of the cancer immunotherapy is to harness the body’s own immune system to fight tumor cells or, in some cases, re-establish or remove certain blockades or promote certain signaling cascades.  There are different approaches, such as vaccinations, checkpoint inhibitors, immunomodulators, T-cell and NK-cell engagers like bispecific antibodies or cellular therapies involving the induction of a patient’s own T-cells to express chimeric antigen receptors.  Ipilimumab (Yervoy ® ) and sipuleucel-T (Provenge ® ) were the first cancer immunotherapies to enter the market.


As an example of how immunotherapy is part of standard treatments, postmenopausal women with early-stage breast cancer that is positive for hormone receptors, may benefit from treatment with an aromatase inhibitor (e.g., letrozole, anastrozole or exemestane) or tamoxifen. For women whose cancer tests positive for HER2/neu, approved targeted therapies include trastuzumab (Herceptin; Genentech) and for advanced disease, lapatinib (Tykerb ® ; GSK) and pertuzumab (Perjeta ® ; Genentech).


Of note, in 2013, the FDA approved Kadcyla (ado-trastuzumab emtansine) from Roche-Genentech, as a new therapy for patients with HER2-positive, late-stage MBC. Kadcyla is intended for patients who were previously treated with trastuzumab, another anti-HER2 therapy and taxanes. The safety and effectiveness of Kadcyla were evaluated in a clinical study of 991 patients randomly assigned to receive Kadcyla or lapatinib plus capecitabine (Xeloda; Roche-Genentech). Results showed that patients treated with Kadcyla had a median PFS of 9.6 months compared to 6.4 months in patients treated with lapatinib plus capecitabine. The median overall survival was 30.9 months in the Kadcyla group and 25.1 months in the lapatinib plus capecitabine group.


Revenue/Payment Structure within the Healthcare Industry


Pharmaceutical Coverage, Pricing and Reimbursement


In the U.S. and other countries, the level of sales of any product for which we receive regulatory approval for commercial sale will depend in part on the availability of reimbursement from third-party payers, including government health administrative authorities, managed care providers, private health insurers and other organizations. Increasingly, third-party payers examine the medical necessity and cost effectiveness of medical products and services, in addition to their safety and efficacy and, accordingly, significant uncertainty exists as to the reimbursement status of newly approved therapeutics. Third-party reimbursement is necessary for us to adequately enable us to realize an appropriate return on our investment in research and product development, but may not be available for our products.


The division of competencies within the EU provides its Member States the power to organize their own social security systems, which includes health care policies to promote the financial stability of their health care insurance systems. According to Article 168 of the Treaty on the Functioning of the EU, “Union action shall respect the responsibilities of the Member States for the definition of their health policy and for the organization and delivery of health services and medical care.”


In this context, the national authorities are free to set the prices of medicinal products and to designate the treatments that they wish to reimburse under their own social security systems. However, the EU has defined a common procedural framework through the adoption of Council Directive 89/105/EEC, which is generally known as the “Transparency Directive.” This instrument aims to ensure that national pricing and reimbursement decisions are made in a transparent manner and do not disrupt the operation of the internal market.


The Pharmaceutical Pricing and Reimbursement systems established by Member States of the EU are usually quite complex.  Each country uses different schemes and policies, adapted to fit its own economic and health needs. We would have to develop or access special expertise in this field to prepare health economic dossiers on our medicinal products if we would market our products, if and when approved, in the EU.


Significant uncertainty exists as to the coverage and reimbursement status of SM-88 in the U.S. and international markets.  Commercial sale of SM-88 will depend, in part, on the availability of reimbursement from third-party payers. The process for determining whether a third-party payer will provide coverage for a drug product may be separate from the process for setting the price or reimbursement rate. Third-party payers may limit coverage to the specific drug products on an approved list or formulary, which might not include all of the FDA-approved drugs for a particular indication.  We may need to conduct expensive pharmacoeconomic studies in order to demonstrate the medical necessity and cost-effectiveness of our products, in addition to the costs required to obtain FDA approval. SM-88 may not be considered as medically necessary or cost-effective by one or more third party payers. A decision by a third-party payer to provide coverage for a drug product does not imply that an adequate reimbursement rate will be approved. Adequate third-party reimbursement may not be available to enable us to maintain price levels sufficient to realize an appropriate return on our investment in product development.


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In 2003, the U.S. government enacted legislation providing a partial prescription drug benefit for Medicare beneficiaries, which became effective at the beginning of 2006. Government payment for some of the costs of prescription drugs may increase demand for any products for which we receive marketing approval. However, to obtain payments under this program, we would be required to sell products to Medicare recipients through prescription drug plans operating pursuant to this legislation. These plans will likely negotiate discounted prices for our drug.


The Healthcare Reform Law of 2010 substantially changes the way healthcare is financed in the U.S. by both government and private insurers. Among other cost containment measures, the Healthcare Reform Law establishes:


•

An annual, nondeductible fee on any entity that manufactures or imports certain branded prescription drugs and biologic agents;

 

 

•

A new Medicare Part D coverage gap discount program, in which pharmaceutical manufacturers who wish to have their drugs covered under Part D must offer discounts to eligible beneficiaries during their coverage gap period (the “donut hole”); and

 

 

•

A new formula that increases the rebates a manufacturer must pay under the Medicaid Drug Rebate Program.


We expect that federal, state and local governments in the U.S. will continue to consider legislation to limit the growth of healthcare costs, including the cost of prescription drugs. Future legislation could limit payments for pharmaceuticals such as SM-88.


Different pricing and reimbursement schemes exist in other countries. In the EU, governments influence the price of pharmaceutical products through their pricing and reimbursement rules and control of national health care systems that fund a large part of the cost of those products to consumers. Some jurisdictions operate positive and negative list systems under which products may only be marketed once a reimbursement price has been agreed. To obtain reimbursement or pricing approval, some of these countries may require the completion of clinical trials that compare the cost-effectiveness of a particular drug to currently available therapies. Other Member States allow companies to fix their own prices for medicines, but monitor and control company profits. The downward pressure on healthcare costs in general, particularly prescription drugs, has become very intense. As a result, increasingly high barriers are being erected to the entry of new products. In addition, in some countries, cross-border imports from low-priced markets exert a commercial pressure on pricing within that country.


The marketability of SM-88, if and when approved, may suffer if government and third-party payers fail to provide adequate coverage and reimbursement. In addition, an increasing emphasis on managed care in the U.S. has increased and we expect will continue to increase the pressure on pharmaceutical pricing. Coverage policies and third-party reimbursement rates may change at any time. Even if favorable coverage and reimbursement status is attained for SM-88, less favorable coverage policies and reimbursement rates could be implemented in the future.


Competition


Our competition comes from other commercial and research enterprises working in the field of cancer research.  Those pharmaceutical and biotechnology companies, academic institutions and government research institutes around the globe that are working towards new treatments in the field of oncology, collectively form the competitive nature in cancer R&D.


We expect SM-88 to compete with products manufactured by other companies in highly competitive markets throughout the world.  


Important competitive factors include patient safety, effectiveness, QoL and ease of use of products; price and demonstrated cost-effectiveness; marketing effectiveness; and research and development of new products and processes.  Most new products we intend to market, assuming regulatory approval, will and must compete with other products already on the market as well as products that are later developed by existing or new competitors. If competitors introduce new products or delivery systems with therapeutic or cost advantages, our products would be subject to progressive price reductions, decreased volume of sales or both. Increasingly, to obtain favorable reimbursement and formulary positioning with government payers, managed care organizations and pharmacy benefits managers, we would be required to demonstrate that our products offer not only medical benefits but also more value as compared with other treatment regimens.


The pharmaceutical and biotechnology industries are characterized by rapidly advancing technologies, intense competition and a strong emphasis on proprietary products. While we believe that our technology, development and regulatory plans and scientific knowledge provide us with competitive advantages, we face potential competition from many different sources, including major pharmaceutical, specialty pharmaceutical and biotechnology companies, academic institutions and governmental agencies and public and private research institutions. Any drugs that we successfully develop and commercialize will compete with existing therapies and new potential therapies that may become available in the future.


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Our products, if approved for sale, would eventually all be subject to competition from generic drug manufacturers. Manufacturers of generic pharmaceuticals generally invest far less than R&D companies such as us.  We anticipate that any manufacturer of a generic version of our drugs will invest far less than we have in the past and intend to do in the future in R&D and marketing our products, including SM-88. They therefore, have the advantage in that they can price their drugs much lower than our brand-name drugs. Accordingly, when the time comes for our brand-name drug to lose market exclusivity, we anticipate that each of such products will face intense price competition from generic forms of the product. Additionally, in many countries outside the U.S., IP protection is weak or nonexistent and we would be forced to compete with generic or counterfeit versions of our products in such counties whether or not we hold legal exclusivity.  


The most common methods of treating patients with cancer are surgery, radiation and drug therapy, including chemotherapy, hormone therapy and targeted drug therapy. Our products once approved, would compete not only with other drugs, but also with such other types of therapies and treatments.


There are a variety of available drug therapies marketed for cancer. In many cases, these drugs are administered in combination to enhance efficacy. While SM-88 may compete with many existing drug and other therapies, to the extent it is ultimately used in combination with or as an adjunct to these therapies, our drug will not be competitive with them.  Some of the currently approved drug therapies are branded and subject to patent protection and others are available on a generic basis. Many of these approved drugs are well-established therapies and widely accepted by physicians, patients and third-party payers.  In general, although there has been considerable progress over the past few decades in the treatment of cancer with currently marketed therapies providing benefits to many patients, these therapies all are limited to some extent in their efficacy and frequency of AEs and none are successful in treating all patients. As a result, the level of morbidity and mortality from cancer remains high.


In addition to currently marketed therapies, there are also a number of medicines in late-stage clinical development to treat cancer. These medicines in development may provide efficacy, safety, convenience and other benefits that are not provided by currently marketed therapies. As a result, they may provide significant competition for SM-88.


Intellectual Property


Overview


We will strive to protect and enhance our proprietary technology, inventions and improvements that are commercially important to the development of our business, including through seeking, maintaining and defending patent rights, whether developed internally or licensed from third parties. We also intend to rely on trade secrets related to our proprietary technology platform and our know-how, continuing technological innovation and in-licensing opportunities to develop, strengthen and maintain our proprietary position in the field of cancer treatment, which may be important for the development of our business. We additionally may rely on regulatory protection afforded through data exclusivity, market exclusivity and patent term extensions, where available.


Our commercial success may depend, in part, on our ability to obtain and maintain patent and other proprietary protection for commercially important technology, inventions and know-how related to our business, defend and enforce our patents, preserve the confidentiality of our trade secrets and operate without infringing the valid enforceable patents and proprietary rights of third parties. Our ability to stop third parties from making, using, selling, offering to sell or importing our products may depend on the extent to which we have rights under valid and enforceable licenses, patents or trade secrets that cover these activities. With respect to both licensed and Company-owned IP, we cannot be sure that patents will be granted with respect to any of our pending patent applications or with respect to any patent applications filed by us in the future, nor can we be sure that any of our existing patents or any patents that may be granted to us in the future will be commercially useful in protecting our commercial products and methods of manufacturing such products, as well as being held valid if challenged.


Licensed IP


Currently, we already have one patent issued in the U.S., as well as four patent applications pending.  We have begun the process of pursuing foreign patent applications corresponding to two of these patent applications and intend to pursue foreign patent applications corresponding to the others.  Our policy is to file patent applications to protect technology, inventions and improvements to inventions that are commercially important to the development of our business. We have and will continue to seek U.S. and international patent protection for a variety of technologies, including: pharmaceutical compositions, methods for treating diseases of interest, methods for manufacturing the pharmaceutical compositions and research tools and methods. We also intend to seek patent protection or rely upon trade secret rights to protect other technologies that may be used to discover and validate targets and that may be used to identify and develop novel products. We will also seek protection, in part, through confidentiality and proprietary information agreements.


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We believe we have no need to license any technologies for SM-88 to be commercially viable.  We believe our Company owns all the IP necessary for our SM-88 to perform as intended and to be commercially marketed, once all applicable regulatory requirements have been obtained.  Additionally, we believe the drug substances utilized in SM-88 are not covered by any patents that would impede our use of such drug substances.


Regulatory Process


Government Regulation and Product Approval


Government authorities in all major pharmaceutical markets extensively regulate, among other things, the research, development, testing, manufacture, packaging, storage, recordkeeping, labeling, advertising, promotion, distribution, marketing and import and export of pharmaceutical products, such as those we are developing. Although our initial focus will be in the U.S. and Europe, we will develop and seek marketing approval for our products in other countries and territories, such as Canada and Japan and for markets that follow the leading authorities, such as Brazil and South Korea. The processes for obtaining regulatory approvals in the U.S., Europe and in other countries, along with subsequent compliance with applicable statutes and regulations, will require the expenditure of substantial time and financial resources.


FDA Approval Process


SM-88 is subject to regulation in the U.S. by the FDA as a drug product.  The FDA subjects drug products to extensive pre- and post-market regulation.  The Public Health Service Act (“PHSA”), the Federal Food, Drug and Cosmetic Act and other federal and state statutes and regulations govern, among other things, the research, development, testing, manufacture, storage, recordkeeping, approval, labeling, promotion and marketing, distribution, post-approval monitoring and reporting, sampling and the import and export of drugs. Failure to comply with applicable U.S. requirements may subject a company to a variety of administrative or judicial sanctions, such as FDA refusal to approve pending new drug applications (“NDAs”), withdrawal of approvals, clinical holds, warning letters, product recalls, product seizures, total or partial suspension of production or distribution, injunctions and/or fines or civil or criminal penalties.


The PHSA emphasizes the importance of manufacturing control for products whose attributes cannot be precisely defined. The PHSA also provides authority to the FDA to immediately suspend licenses in situations where there exists a danger to public health, to prepare or procure products in the event of shortages and critical public health needs and to authorize the creation and enforcement of regulations to prevent the introduction or spread of communicable diseases in the U.S. and between states.


The drug development process required by the FDA before a new drug may be marketed in the U.S. is long, expensive and inherently uncertain. Drug development in the U.S. typically involves preclinical laboratory and animal testing, the submission to the FDA of an IND, which must become effective before clinical testing may commence and adequate and well-controlled clinical trials to establish the safety and effectiveness of the drug for each indication for which FDA approval is sought. Developing the data to satisfy FDA pre-market approval requirements typically takes many years and the actual time required may vary substantially based upon the type, complexity and novelty of the product or disease.


Preclinical tests include laboratory evaluation of product chemistry, formulation and toxicity, as well as animal trials to assess the characteristics and potential safety and efficacy of the product. The conducting of the preclinical tests must comply with federal regulations and requirements, including good laboratory practices (“GLP”). The results of preclinical testing are submitted to the FDA as part of an IND along with other information, including information about product chemistry, manufacturing and controls (“CMC”) and a proposed clinical trial protocol. Long-term preclinical tests, such as animal tests of reproductive toxicity and carcinogenicity, may continue after the IND is submitted.


An IND must become effective before U.S. clinical trials may begin. A 30-day waiting period after the submission of each IND is required prior to the commencement of clinical testing in humans. If the FDA has neither commented on nor questioned the IND submission within this 30-day period, the clinical trial proposed in the IND may begin.


Clinical trials involve the administration of the investigational new drug to healthy volunteers or subjects with the condition under investigation, all under the supervision of a qualified investigator. Clinical trials must be conducted: (i) in compliance with federal regulations; (ii) in compliance with good clinical practices (“GCP”), an international standard meant to protect the rights and health of patients and to define the roles of clinical trial sponsors, administrators and monitors; and (iii) under protocols detailing the objectives of the trial, the parameters to be used in monitoring safety and the effectiveness criteria to be evaluated. Each protocol involving testing on U.S. patients and subsequent protocol amendments must be submitted to the FDA as part of the ongoing IND file.


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The FDA may order the temporary or permanent discontinuation of a clinical trial at any time or impose other sanctions if it believes that the clinical trial is not being conducted in accordance with FDA requirements or presents an unacceptable risk to clinical trial subjects. The study protocol and informed consent information for subjects in clinical trials must be submitted to an IRB for review and approval. An IRB may also require the clinical trial at a clinical site to be halted, either temporarily or permanently, for failure to comply with the IRB’s requirements or may impose other conditions to assure subject safety. The study sponsor may also suspend a clinical trial at any time on various grounds, including a determination that the subjects are being exposed to an unacceptable health risk.


Clinical trials to support NDAs for marketing approval are typically conducted in three sequential phases, but the phases may overlap or be combined. In phase I, the drug is initially introduced into healthy human subjects and is tested to assess pharmacokinetics, pharmacological actions, adverse events (AEs) associated with increasing doses and, if possible, early evidence of effectiveness.  In the case of some products targeted for severe or life-threatening diseases, such as cancer treatments, initial human testing may be conducted in the intended patient population. Phase II usually involves trials in a limited patient population to determine the effectiveness of the drug for a particular indication, dosage tolerance and optimum dosage, as well as identification of common adverse effects and safety risks. If a compound demonstrates evidence of effectiveness and an acceptable safety profile in phase II, phase III trials are initiated to obtain additional information about clinical efficacy and safety in a larger number of subjects, typically at geographically dispersed clinical trial sites. Phase III clinical trials are intended to establish data sufficient to demonstrate substantial evidence of the efficacy and safety of the product to permit the FDA to evaluate the overall benefit-risk relationship of the drug and to provide adequate information for the labeling of the drug. Trials conducted outside of the U.S. under similar, GCP-compliant conditions in accordance with local applicable laws may also be acceptable to the FDA in support of product licensing.


Sponsors of clinical trials for investigational drugs must publicly disclose certain clinical trial information, including detailed trial design and trial results, in FDA public databases. These requirements are subject to specific timelines and apply to most controlled clinical trials of FDA-regulated products.


After completion of the required clinical testing, an NDA is prepared and submitted to the FDA. The FDA review and approval of the NDA is required before marketing of the product may begin in the U.S.  The NDA must include the results of all preclinical, clinical and other testing and a compilation of data relating to the product’s pharmacology and CMC and must demonstrate the safety and efficacy of the product based on these results. The NDA must also contain extensive manufacturing information. The cost of preparing and submitting an NDA is substantial and is in addition to the costs of conducting clinical trials.  Under federal law, the submission of most NDAs is additionally subject to a substantial application user fee, as well as annual product and establishment user fees, which may total several million dollars and are typically increased annually.


The FDA has 60 days from its receipt of an NDA to determine whether the application will be accepted for filing based on the agency’s threshold determination that the NDA is sufficiently complete to permit substantive review. Once the submission is accepted for filing, the FDA begins an in-depth review. The FDA has agreed to certain performance goals in the review of NDAs. Most such applications for standard review drugs are reviewed within 10 months from the date the application is accepted for filing. Although the FDA often meets its user fee performance goals, it can extend these timelines if necessary and its review may not occur on a timely basis at all. The FDA usually refers applications for novel drugs, which present complex questions of safety or efficacy, to an advisory committee - typically a panel that includes clinicians and other experts - for review, evaluation and a recommendation as to whether the application should be approved. The FDA is not bound by the recommendation of an advisory committee, but it generally follows such recommendations. Before approving an NDA, the FDA will typically inspect one or more clinical sites to assure compliance with GCPs. Additionally, the FDA will inspect the facility or the facilities at which the drug is manufactured. The FDA will not approve the drug product unless it verifies that compliance with current good manufacturing practice (“cGMP”) standards is satisfactory and the NDA contains data that provide substantial evidence that the drug is safe and effective in the indication(s) being studied.


After the FDA evaluates the NDA and the manufacturing facilities, it issues either an approval letter or a complete response letter. A complete response letter generally outlines the deficiencies in the submission and may require substantial additional nonclinical or clinical testing or supplemental information, in order for the FDA to reconsider the application. If or when, those deficiencies have been addressed to the FDA’s satisfaction in a resubmission of the NDA, the FDA will issue an approval letter. The FDA has committed to reviewing such resubmissions in two or six months depending on the type of information that was included. The FDA approval is never guaranteed and the FDA may refuse to approve an NDA if the applicable regulatory criteria are not satisfied.


Under the PHSA, the FDA may approve a NDA if it determines that the product is safe, pure and potent and the facility where the product will be manufactured meets standards designed to ensure that it continues to be safe, pure and potent. An approval letter authorizes commercial marketing of the drug with specific prescribing information for specific indications. The approval for a drug may be significantly more limited than requested in the application, including limitations on the specific diseases and dosages or the indications for use, which could restrict the commercial value of the product. The FDA may also require that certain contraindications,


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warnings or precautions be included in the product labeling. In addition, as a condition of NDA approval, the FDA may require a risk evaluation and mitigation strategy (“REMS”) to further ensure that the benefits of the drug outweigh the potential risks. REMS can include medication guides, communication plans for healthcare professionals and elements to assure safe use (“ETASU”). ETASU can include, but are not limited to, special training or certification for prescribing or dispensing, dispensing only under certain circumstances, special monitoring and the use of patient registries. The requirement for a REMS or use of a companion diagnostic with a drug can materially affect the potential market and profitability of the drug. Moreover, product approval may require, as a condition of approval, substantial post-approval testing and surveillance to monitor the drug’s safety or efficacy. Once granted, product approvals may be withdrawn if compliance with regulatory standards is not maintained or problems are identified following initial marketing.


FDA Fast Track Program


The FDA’s Fast Track program, a provision of the FDA Modernization Act of 1997, is designed to facilitate interactions between a sponsoring company and the FDA before and during submission of a NDA for an investigational agent that, alone or in combination with one or more other drugs, is intended to treat a serious or life-threatening disease or condition and which demonstrates the potential to address an unmet medical need for that disease or condition. Under the Fast Track program, the FDA may consider reviewing portions of a marketing application before the sponsor submits the complete application if the FDA determines, after a preliminary evaluation of the clinical data, that a fast track product may be effective. A Fast Track designation provides the opportunity for more frequent interactions with the FDA and a fast track product could be eligible for priority review if supported by clinical data at the time of submission of the NDA.


Based on the initial results of our clinical trial in subjects with late-stage breast cancer, SM-88 has shown to slow disease progression in some cases, as well as PFS in many subjects with advanced breast cancer.  Accordingly, we believe SM-88 may ultimately qualify for FDA fast track designation.  We intend to engage the FDA in future discussions concerning SM-88 qualification for FDA Fast Track designation.  However, there can be no assurance that such designation will be granted.


Priority Review/Standard Review (U.S.) and Accelerated Review (EU)


The FDA may grant a New Drug Application a priority review designation based both upon the request of an applicant and the results of the Phase III clinical trial(s) submitted in the NDA.  This designation sets the target date at six months for FDA action on the application.  Priority review is granted where preliminary trial results indicate that a product, if approved, has the potential to provide a safe and effective therapy for a situation where no satisfactory alternative therapy exists or where the product is possibly a significant improvement over existing marketed products.  If these criteria are not met for priority review, the NDA is subject to the standard FDA review period of ten months. However, priority review designation does not change the scientific/medical standard for regulatory approval or the quality of evidence necessary to support approval.


Under the Centralized Procedure in the European Union, the maximum timeframe for the evaluation of a marketing authorization application is 210 days, which excludes clock stops when additional written or oral information needs to be provided by the applicant in response to questions asked by The Committee for Medicinal Products for Human Use (“CHMP”). Accelerated evaluation might be granted by the CHMP in exceptional cases, such as when a medicinal product is expected to be a major public health interest, as defined by three cumulative criteria: the seriousness of the disease to be treated ( e.g. , heavily disabling or life-threatening); the absence or insufficiency of an appropriate alternative therapeutic approach; and an anticipation of high therapeutic benefit. Under these circumstances the European Medicines Agency (“EMA”) ensures that the opinion of the CHMP is delivered within 150 days, excluding clock stops.


There can be no assurance that we would be able to satisfy any of these requirements to conduct preclinical or clinical trials or receive any regulatory approvals including priority or accelerated evaluation.


Breakthrough Therapy Approvals


On July 9, 2012, the Food and Drug Administration Safety and Innovation Act (“FDASIA”) was signed into law.  FDASIA provides a new designation for an expedited FDA review process called Breakthrough Therapy Designation.  A breakthrough therapy is a drug that is intended alone or in combination with one or more other drugs, to treat a serious or life-threatening disease or condition and where preliminary clinical evidence indicates that the drug may demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints, such as substantial treatment effects observed early in clinical development.  If a drug is designated as a breakthrough therapy, the FDA will expedite the development and review of such drug for trial and market approval.  All requests for Breakthrough Therapy Designation will be reviewed within 60 days of receipt and FDA will either grant or deny the request.


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As with the Fast Track program, promising results from early phase clinical studies indicate that SM-88 may qualify as an FDA Breakthrough Therapy designation while the clinical testing program continues.  When appropriate, we intend to hold discussions with the FDA regarding SM-88’s qualification for Breakthrough Therapy designation. There can be no assurance that such designation will be granted.


The Hatch-Waxman Act


Under the Hatch-Waxman Act, newly approved drugs and indications may benefit from a statutory period of non-patent marketing exclusivity. The Hatch-Waxman Act provides five-year marketing exclusivity to the first applicant to gain approval of an NDA for a new chemical entity, meaning that the FDA has not previously approved any other new drug containing the same active moiety. The Hatch-Waxman Act prohibits having an effective approval date for an abbreviated new drug application (“ANDA”) or a Section 505(b)(2) NDA for another version of such drug during the five-year exclusive period; however, submission of an ANDA or Section 505(b)(2) NDA containing a paragraph IV certification is permitted after four years, which may trigger a 30-month stay of approval of the ANDA or Section 505(b)(2) NDA. Protection under the Hatch-Waxman Act will not prevent the submission or approval of another “full” NDA; however, the applicant would be required to conduct its own preclinical and adequate and well-controlled clinical trials to demonstrate safety and effectiveness. The Hatch-Waxman Act also provides three years of marketing exclusivity for the approval of new and supplemental NDAs, including Section 505(b)(2) NDAs, for, among other things, new indications, dosages or strengths of an existing drug, if new clinical investigations that were conducted or sponsored by the applicant are determined by the FDA to be essential to the approval of the application.


In addition to non-patent marketing exclusivity, the Hatch-Waxman Act amended the Food, Drug and Cosmetic Act (“FDCA”) to require each NDA sponsor to submit with its application information on any patent that claims the active pharmaceutical ingredient, drug product (formulation and composition) and method-of-use for which the applicant submitted the NDA and with respect to which a claim of patent infringement could reasonably be asserted if a person not licensed by the owner engaged in the manufacture, use or sale of the drug. Generic applicants that wish to rely on the approval of a drug listed in the Orange Book must certify to each listed patent. The Orange Book is a listing of all drug products that have been approved by the FDA and their generic equivalences.  We intend to submit for Orange Book listing all relevant patents for SM-88 and to vigorously defend any Orange Book-listed patents for our approved products.


The Hatch-Waxman Act also permits a patent term extension of up to five years as compensation for the patent term lost during product development and the FDA regulatory review process. However, a patent term extension cannot extend the remaining term of a patent beyond a total of 14 years after the FDA approves a marketing application. The patent term extension period is generally equal to the sum of one-half the time between the effective date of an IND and the submission date of an NDA and all of the time between the submission date of an NDA and the approval of that application, up to a total of five years. Only one patent applicable to a regulatory review period that represents the first commercial marketing of that drug is eligible for the extension and it must be applied for prior to expiration of the patent. The U.S. Patent and Trademark Office, in consultation with the FDA, reviews and approves the application for patent term extension. We will consider applying for a patent term extension for some of our patents, to add patent life beyond the expiration date, depending on our ability to meet certain legal requirements permitting such extension and the expected length of clinical trials and other factors involved in the submission of an NDA. There can be no assurance that such an extension, if applied for, will be granted.


Advertising and Promotion


Once an NDA is approved, a product will be subject to continuing post-approval regulatory requirements. For instance, the FDA closely regulates the post-approval marketing and promotion of drugs, including standards and regulations for direct-to-consumer advertising, off-label promotion, industry-sponsored scientific and educational activities and promotional activities involving the internet. Failure to comply with these regulations can result in significant penalties, including the issuance of warning letters directing a company to correct deviations from FDA standards, a requirement that future advertising and promotional materials be pre-cleared by the FDA and federal and state civil and criminal investigations and prosecutions.


Drugs may be marketed only for the approved indications and in accordance with the provisions of the approved labeling. Changes to some of the conditions established in an approved application, including changes to indications, labeling or manufacturing processes or facilities, require submission and FDA approval of a new NDA or NDA supplement before the change can be implemented. An NDA supplement for a new indication typically requires clinical data similar to that in the original application and the FDA uses the same procedures and actions in reviewing NDA supplements as it does in reviewing original and resubmitted NDAs.


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AE Reporting and cGMP Compliance


AE reporting and submission of periodic reports are required following FDA approval of an NDA. The FDA also may require post-marketing testing, known as phase IV testing, REMS and surveillance to monitor the effects of an approved product or the FDA may place conditions on an approval that could restrict the distribution or use of the product. In addition, manufacture, packaging, labeling, storage and distribution procedures must continue to conform to cGMPs after approval. Drug manufacturers and certain manufacturing subcontractors are required to register their establishments with the FDA and certain state agencies. Registration with the FDA subjects entities to periodic unannounced inspections by the FDA, during which the agency inspects manufacturing facilities to assess compliance with cGMPs. Accordingly, manufacturers must continue to expend time, money and effort in the areas of production and quality control to maintain compliance with cGMPs. Regulatory authorities may withdraw product approvals, request product recalls or impose marketing restrictions through labeling changes or product removals if a company fails to comply with regulatory standards, if the product encounters problems following initial marketing or if previously unrecognized problems are subsequently discovered.


Orphan Drug


Under the Orphan Drug Act, the FDA may grant orphan drug designation to drugs intended to treat a rare disease or condition; generally, a disease or condition that affects fewer than 200,000 individuals in the U.S.  Orphan drug designation must be requested before submitting a NDA. After the FDA grants orphan drug designation, the generic identity of the drug and its potential orphan use are disclosed publicly by the FDA. Orphan drug designation does not necessarily convey any advantage in or shorten the duration of, the regulatory review and approval process. The first NDA applicant to receive FDA approval for a particular product to treat a particular disease with FDA orphan drug designation is entitled to a seven-year exclusive marketing period in the U.S. for the product for treatment of the specified indication. During the seven-year exclusivity period, the FDA may not approve any other applications to market the same drug for the same disease, except in limited circumstances, such as a showing of clinical superiority to the product with orphan drug exclusivity. Orphan drug exclusivity does not prevent the FDA from approving a different drug for the same disease or condition or the same drug for a different disease or condition. Among the other benefits of orphan drug designation are tax credits for certain research and a waiver of the NDA application user fee. It is not our current intent to pursue orphan drug designation for SM-88.


Other Healthcare Laws and Compliance Requirements


In the U.S., our activities are potentially subject to regulation by federal, state and local authorities in addition to the FDA, including the Centers for Medicare and Medicaid Services, other divisions of the U.S. Department of Health and Human Services (for example, the Office of Inspector General), the U.S. Department of Justice and individual U.S. Attorney offices within the Department of Justice and state and local governments.


EU Approval Process


The EMA is a decentralized scientific agency of the EU. It coordinates the evaluation and monitoring of centrally authorized medicinal products. It is responsible for the scientific evaluation of applications for EU marketing authorizations, as well as the development of technical guidance and the provision of scientific advice to sponsors. The EMA decentralizes its scientific assessment of medicines by working through a network of about 4,500 experts throughout the EU, nominated by the Member States. The EMA draws on resources of over 40 National Competent Authorities of European Member States.

The process regarding regulatory approval of medicinal products in the EU follows roughly the same lines as in the U.S. and likewise generally involves satisfactorily completing each of the following:


•

preclinical laboratory tests, animal studies and formulation studies all performed in accordance with the applicable European GLP regulations;

 

 

•

submission to the relevant national authorities of a clinical trial application (“CTA”) for each trial in humans, which must be approved before the trial may begin;

 

 

•

performance of adequate and well-controlled clinical trials to establish the safety and efficacy of the product for each proposed indication;

 

 

•

submission to the relevant competent authorities of a Marketing Authorization Application (“MAA”), which includes the data supporting safety and efficacy as well as detailed information on the manufacture and composition of the product in clinical development and proposed labelling;


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•

satisfactory completion of an inspection by the relevant national authorities of the manufacturing facility or facilities, including those of third parties, at which the product is produced to assess compliance with strictly enforced cGMPs;

 

 

•

potential audits of the nonclinical and clinical trial sites that generated the data in support of the MAA; and

 

 

•

review and approval by the relevant competent authority of the MAA before any commercial marketing, sale or shipment of the product.


Preclinical Studies


The conduct of the preclinical tests and formulation of the compounds for testing must comply with the relevant European regulations and requirements. Preclinical tests include laboratory evaluations of product chemistry, formulation and stability, as well as studies to evaluate toxicity in animal studies in order to assess the potential safety and efficacy of the product. The results of the preclinical tests, together with relevant manufacturing information and analytical data, are submitted as part of the CTA.


Clinical Trial Approval


Pursuant to the Clinical Trials Directive 2001/20/EC, as amended, a system for the approval of clinical trials in the EU has been implemented through national legislation of the Member States. Under this system, approval must be obtained from the competent national authority of each European Member State in which a study is planned to be conducted. To this end, a CTA is submitted, which must be supported by an investigational medicinal product dossier (IMPD) and further supporting information prescribed by the Clinical Trials Directive and other applicable guidance documents. Furthermore, a clinical trial may only be started after a competent ethics committee has issued a favorable opinion on the clinical trial application in that country.


Manufacturing and import into the EU of investigational medicinal products is subject to the holding of appropriate authorizations and must be carried out in accordance with cGMPs.


Health Authority Interactions


During the development of a medicinal product, frequent interactions with the EU regulators are vital to make sure all relevant input and guidelines/regulations are taken into account in the overall program.


Pediatric Studies


Regulation (EC) 1901/2006, which came into force in the EU on January 26, 2007, aims to facilitate the development and accessibility of medical products for use in children without subjecting children to unnecessary trials or delaying the authorization of medicinal products for use in adults. The regulation established the Pediatric Committee (“PDCO”), which is responsible for coordinating the EMA’s activities regarding medicines for children. The PDCO’s main role is to determine which studies that marketing authorization applicants need to complete in the pediatric population as part of the so-called Pediatric Investigation Plans (“PIP”). All applications for marketing authorization for new medicines that were not authorized in the EU before January 26, 2007 have to include either the results of studies carried out in children of different ages (as agreed with the PDCO) or proof that a waiver or a deferral of these studies has been obtained from the PDCO. As indicated, the PDCO determines what pediatric studies are necessary and describes them in a PIP. This requirement for pediatric studies also applies when a company wants to add a new indication, pharmaceutical form or route of administration for a medicine that is already authorized. The PDCO can grant deferrals for some medicines, allowing a company to delay development of the medicine in children until there is enough information to demonstrate its effectiveness and safety in adults and can also grant waivers when development of a medicine in children is not needed or is not appropriate, such as for diseases that only affect the elderly population.


Before an MAA can be filed or an existing marketing authorization can be varied, the EMA checks that companies are in compliance with the agreed studies and measures listed in each relevant PIP.


Regulation (EC) 1901/2006 also introduced several incentives for the development of medicines for children in the EU:


•

medicines that have been authorized across the EU in compliance with an agreed PIP are eligible for an extension of their patent protection by six months (this is the case even when the pediatric studies’ results are negative);

 

 

•

for orphan medicines, the incentive is an additional two years of market exclusivity, extending the typical 10-year period to 12 years;


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•

scientific advice and protocol assistance at the EMA are free of charge for questions relating to the development of medicines for children; and

 

 

•

medicines developed specifically for children that are already authorized but are not protected by a patent or supplementary protection certificate, may be eligible for a pediatric use marketing authorization (PUMA); and

 

 

•

if a PUMA is granted, the product will benefit from 10 years of market protection as an incentive for the development of the product for use in children.


MAA


Authorization to market a product in the EU member states proceeds under one of four procedures: a centralized authorization procedure, a mutual recognition procedure, a decentralized procedure or a national procedure.  


Centralized Authorization Procedure


Certain drugs, including medicinal products developed by means of biotechnological processes, must be approved via the centralized authorization procedure for marketing authorization. A successful application under the centralized authorization procedure results in a marketing authorization from the European Commission, which is automatically valid in all EU member states. The other European Economic Area member states (namely Norway, Iceland and Liechtenstein) are also obligated to recognize the Commission decision. The EMA and the European Commission administer the centralized authorization procedure.


Under the centralized authorization procedure, the Committee for Medicinal Products for Human Use (“CHMP”) serves as the scientific committee that renders opinions about the safety, efficacy and quality of human products on behalf of the EMA. The CHMP is composed of experts nominated by each member state’s national drug authority, with one of them appointed to act as Rapporteur for the co-ordination of the evaluation with the possible assistance of a further member of the Committee acting as a Co-Rapporteur. After approval, the Rapporteur(s) continue to monitor the product throughout its life cycle. The CHMP is required to issue an opinion within 210 days of receipt of a valid application, though the clock is stopped if it is necessary to ask the applicant for clarification or further supporting data. The process is complex and involves extensive consultation with the regulatory authorities of member states and a number of experts. Once the procedure is completed, a European Public Assessment Report is produced. If the CHMP concludes that the quality, safety and efficacy of the medicinal product is sufficiently proven, it adopts a positive opinion. The CHMP’s opinion is sent to the European Commission, which uses the opinion as the basis for its decision whether or not to grant a marketing authorization. If the opinion is negative, information is given as to the grounds on which this conclusion was reached.


After a drug has been authorized and launched, it is a condition of maintaining the marketing authorization that all aspects relating to its quality, safety and efficacy must be kept under review. Sanctions may be imposed for failure to adhere to the conditions of the marketing authorization. In extreme cases, the authorization may be revoked, resulting in withdrawal of the product from sale.


Mutual Recognition Procedure and Decentralized National Procedure


Under a Mutual Recognition Procedure (“MRP”) or a Decentralized Procedure (“DCP”), the applicant must select which and how many EU member states in which to seek approval. In the case of an MRP, the applicant must initially receive national approval in one EU member state. This will be the so-called reference member state (“RMS”) for the MRP. Then, the applicant seeks approval for the product in other EU member states, the so-called concerned member states (“CMS”) in a second step.


For the DCP, the applicant will approach all chosen Member States at the same time. To do so, the applicant will identify the RMS that will assess the submitted MAA and provide the other selected Member States with the conclusions and results of the assessment. In principle, the applicant can choose any EU Member State as the RMS; however, in almost all Member States, the applicant needs to send a request for a time slot when the applicant will be allowed to submit the application. Depending on the Member State selected as RMS, the interval between submission of the request to the actual submission date can be two years or longer.


Accelerated Assessment Procedure


When an application is submitted for a marketing authorization in respect of a drug for human use, which is of major interest from the point of view of public health and in particular, from the viewpoint of therapeutic innovation, the applicant may request an accelerated assessment. Under the accelerated assessment procedure, the CHMP is required to issue an opinion within 150 days of receipt of a valid application, subject to clock stops. We believe that SM-88 may qualify for this provision and we will take advantage of this provision, if appropriate. 


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Conditional Approval


Under EU regulations, a medicine that would fulfill an unmet medical need may, if its immediate availability is in the interest of public health, be granted a conditional marketing authorization on the basis of less complete clinical data than are normally required, subject to specific obligations being imposed on the authorization holder. These specific obligations are to be reviewed annually by the EMA. The list of these obligations is to be made publicly accessible. Such an authorization shall be valid for one year, on a renewable basis.


Period of Authorization and Renewals


A marketing authorization is initially valid for five years and may then be renewed on the basis of a re-evaluation of the risk-benefit balance by the EMA or by the competent authority of the authorizing member state. To this end, the marketing authorization holder is to provide the EMA or the competent authority with a consolidated version of the file in respect of quality, safety and efficacy, including all variants introduced since the marketing authorization was granted, at least six months before the marketing authorization ceases to be valid. Once renewed, the marketing authorization shall be valid for an unlimited period, unless the Commission or the competent authority decides, on justified grounds relating to pharmacovigilance, to proceed with one additional five-year renewal. Any authorization which is not followed by the actual placing of the drug on the European market (in case of centralized procedure) or on the market of the authorizing Member State within three years after authorization shall cease to be valid (the so-called sunset clause).


Orphan Drug Designation


EU regulations also provide for an orphan drug designation. This designation is granted if its sponsor can establish:


(a)

(i)

that the product is intended for the diagnosis, prevention or treatment of a life-threatening or chronically debilitating condition affecting not more than five in 10,000 persons in the EU when the application is made; or

 

(ii)

that the product is intended for the diagnosis, prevention or treatment of a life-threatening, seriously debilitating or serious and chronic condition in the EU and that without incentives it is unlikely that the marketing of the drug in the EU would generate sufficient return to justify the necessary investment; and

 

 

 

(b)

that there exists no satisfactory method of diagnosis, prevention or treatment of the condition in question that has been authorized in the EU or, if such method exists, the drug will be of significant benefit to those affected by that condition.


An application for designation as an orphan product can be made any time prior to the filing of an application for approval to market the product. Marketing authorization for an orphan drug leads to a ten-year period of market exclusivity. This period may, however, be reduced to six years if, at the end of the fifth year, it is established that the product no longer meets the criteria for orphan drug designation, for example because the product is sufficiently profitable not to justify continued market exclusivity. Market exclusivity can be revoked only in very selected cases, such as consent from the marketing authorization holder, inability to supply sufficient quantities of the product, demonstration of “clinically relevant superiority” by a similar medicinal product or, after a review by the Committee for Orphan Medicinal Products, requested by a Member State in the fifth year of the marketing exclusivity period (if the designation criteria are believed to no longer apply). Medicinal products designated as orphan drugs are eligible for incentives made available by the EU and by its Member States to support research into and the development and availability of orphan drugs.  It is not our current intention to pursue orphan drug designation for SM-88.


Regulatory Data Protection


Without prejudice to the law on the protection of industrial and commercial property, marketing authorizations for new medicinal products in the EU benefit from an 8+2+1 year period of regulatory protection.


This regime consists of a regulatory data protection period of eight years plus a concurrent market exclusivity of ten years plus an additional market exclusivity of one further year if, during the first eight years of those ten years, the marketing approval holder obtains an approval for one or more new therapeutic indications which, during the scientific evaluation prior to their approval, are determined to bring a significant clinical benefit in comparison with existing therapies. Under the current rules, a third party may reference the preclinical and clinical data of the reference product beginning eight years after first approval, but the third party may market a generic version only after ten (or eleven) years have lapsed.


Additional regulatory data protection can be applied for when an applicant has complied with all requirements as set forth in an approved PIP.


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International Conference on Harmonization (ICH)


The International Conference on Harmonization of Technical Requirements for Registration of Pharmaceuticals for Human Use (“ICH”) is a project that brings together the regulatory authorities of Europe, Japan and the U.S. and experts from the pharmaceutical industry in the three regions to discuss scientific and technical aspects of pharmaceutical product registration. The purpose of ICH is to reduce or obviate the need to duplicate the testing carried out during the research and development of new medicines by recommending ways to achieve greater harmonization in the interpretation and application of technical guidelines and requirements for product registration. Harmonization would lead to a more economical use of human, animal and material resources, the elimination of unnecessary delay in the global development and availability of new medicines, while maintaining safeguards on quality, safety, efficacy and regulatory obligations to protect public health.


ICH guidelines have been adopted as law in many countries, but are only used as guidance in the U.S. by the FDA. In many areas of drug regulation, ICH has resulted in comparable requirements, for instance with respect to the Common Technical Document, which has become the core document for filings for market authorization in several jurisdictions. In this manner, ICH has facilitated a more efficient path to markets.


Pharmaceutical Coverage, Pricing and Reimbursement


As previously noted, in the U.S. and other countries, sales of any products for which we receive regulatory approval for commercial sale will depend in part on the availability of reimbursement from third-party payers, including government health administrative authorities, managed care providers, private health insurers and other organizations. The division of competences within the EU leaves to its Member States the power to organize their own social security systems, including health care policies to promote the financial stability of their health care insurance systems.


In this context, each of the Member States’ national authorities are free to set the prices of medicinal products and to designate the treatments that they wish to reimburse under their social security system. However, the EU has defined a common procedural framework through the adoption what is generally known as the “Transparency Directive.” This directive aims to ensure that national pricing and reimbursement decisions are made in a transparent manner and do not disrupt the operation of the internal market.


The pharmaceutical pricing and reimbursement systems established by Member States are usually quite complex. Each country uses different schemes and policies, adapted to its own economic and health needs. We would have to develop or access special expertise in this field to prepare health economic dossiers on our medicinal products if we would market our products, if and when approved, in the EU.


Manufacturing


We do not own or operate and currently have no near term plans to establish, any manufacturing facilities. We currently rely on and expect to continue to rely on, third party contract manufacturers for supplies of SM-88 for preclinical and clinical testing, as well as for the initial commercial manufacture of any products that we may market following regulatory approval.


We currently purchase all our drug substance and drug products from contract manufacturers and intend to continue to do so on an as-needed purchase order basis.  We do not have long-term supply arrangements in place at this time.  We intend to identify and qualify any further necessary contract manufacturers to provide all active pharmaceutical ingredients (“API”) and finished drug product services during the IND stages and prior to submission of an NDA to the FDA.


Our current intention is that, during the course of the IND program through the End-of-Phase 2 (“EOP2”), we will scale-up the manufacturing, CMC and GMP program towards commercial manufacturing.  The overall CMC program includes the development of production specifications, producing and validating standards and the development of suitable analytical methods for test and release, as well as stability testing.  Before and during the use of contract manufacturers, we (or qualified designee) will conduct audits to ensure compliance with the mutually agreed process descriptions and cGMP regulations. Our manufacturers themselves must comply with their in-house quality assurance programs and be available for inspections by regulatory agencies, including the FDA and European drug regulatory agencies. During the development of our drug candidates, we will scale the manufacturing process to a suitable size. Such scaling up involves several steps and may involve modification of the process, in which case modifications to our CMC sections will occur, with continuous submissions to the FDA and EU regulatory authorities.


SM-88 is a combination drug that is comprised of four active ingredients.  The components of SM-88 are all administered in low doses and are generally considered safe for the indications for which they have previously received regulatory approval.  Such approvals have been in areas other than cancer treatment. The drug substances that comprise SM-88 are organic compounds of low


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molecular weight, generally called small molecules.  They can be manufactured in reliable and reproducible synthetic processes from readily available starting materials.  The chemistry is amenable to scale-up and we believe does not require unusual equipment in the manufacturing process.


One component of SM-88 is a derivation of an existing FDA-approved drug that has been modified to contribute to the functionality of SM-88.  This drug substance is being manufactured by an FDA-audited contract manufacturer and holder of an FDA Drug Master File.  This manufacturer currently is our sole supplier of this drug substance.  To our knowledge, the current manufacturer of this drug substance is the only FDA-approved supplier of this drug.  We believe this cGMP contract manufacturer has sufficient capacity to meet our projected needs into the near future.  In the event of a catastrophic event or if this contract manufacturer is unable to meet our needs, we will need to find an alternative source.  This will likely result in delays for the clinical development program.  It is not impossible to find a substitute for this supplier in the event that it becomes necessary, but it would be costly in terms of development time.  We do not currently have arrangements in place for a redundant supply of the drug substance.


The remaining three active pharmaceutical ingredients (“APIs”) in SM-88 are available from several contract manufacturers, each holding Drug Master Files at the FDA for their respective API’s.  We believe that the loss of or the inability of, any of these sources to provide our required ingredients would not have any substantive delaying effect on our research program, clinical trials or future commercial sale of SM-88, as, we believe, these other sources are readily available.


Employees


As of March 6, 2015, we have five full-time employees.  Within our staff, two employees are engaged in R&D and three in business development, finance, legal, human resources, facilities, information technology and general management and administration.  None of our employees are represented by labor unions or covered by collective bargaining agreements.  Where necessary, we have entered into consulting contracts to provide us with subject matter expertise.  We believe there is available a sufficient number of contractors with appropriate subject matter expertise for our current and near term needs.  


Facilities


Our principal executive offices are located at 48 Wall Street - Suite 1100, New York, New York  10005, where we lease and occupy approximately 1,100 square feet of office space.  We lease these offices under a three-month lease that provides for automatic renewals, unless either party gives notice of non-renewal.  The current term of our lease expires on March 31, 2015.


We believe that our existing facilities are adequate for our current administrative needs. When our current lease term expires, we may exercise our renewal option or look for additional or alternate space for our operations.  We believe that suitable additional or alternative space will be available in the future on commercially reasonable terms.


We will rely on clinical research centers, hospitals, contract research organizations and other parties for suitable space and facilities to conduct our clinical trials.


We will explore, in the future, establishing a dedicated technical facility, when we believe the need for such a facility has arisen.  No assurance can be given that such a facility can be located without difficulty or at a cost favorable to us.


RISK FACTORS


An investment in our securities is highly speculative and involves a high degree of risk.  We face a variety of risks that may affect our operations or financial results and many of those risks are driven by factors that we cannot control or predict.  Before investing in the securities of our Company, prospective investors should carefully consider the following risks and discussions of other risks contained elsewhere in this Current Report on Form 8-K, together with the financial statements (including notes thereto) and other  information contained in this Form 8-K.  If any of the following risks actually occurs, our business, prospects, financial condition and results of operations could be materially adversely affected.  In such a  case, the trading price of our securities would likely decline and investors in our Company may lose all or a part of their investment.  Only those investors who can bear the risk of loss of their entire investment should consider an investment in our securities.


This Form 8-K contains certain forward-looking statements relating to future events and financial performance of our Company. Prospective investors are cautioned that such statements are only predictions and involve risks and uncertainties and that actual events or results may differ materially. In evaluating such statements, prospective investors should specifically consider the various factors identified in this Form 8-K, including the matters set forth below, which could cause actual results to differ materially from those indicated by such forward-looking statements.


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Prospective investors should consider carefully whether an investment in the Company is suitable for them in light of the information contained in this Form 8-K and the financial resources available to them. The risks described below do not purport to be all the risks to which our Company could be exposed. This section is a summary of certain risks and is not set out in any particular order of priority. They are the risks that we presently believe are material to the business, operations and financial condition of our Company. Additional risks of which we are not presently aware of or which we presently deem immaterial may also impair our Company’s business, operations, financial condition or results of operations.


Risks Related to Our Business and the Development and Commercialization of Our Drug Candidates.


Our proprietary lead drug, SM-88, is in the early stages of clinical development. We are currently finalizing our regulatory and drug development program for SM-88 and working towards the initiation of our first phase II clinical trial. Clinical drug development is expensive, time-consuming and uncertain and we may ultimately not be able to obtain regulatory approval for the commercialization of our lead candidate.


The risk of failure for drugs in clinical development is high and it is impossible to predict when our lead drug candidate for the treatment of cancer, SM-88, will prove effective or safe in humans or will receive regulatory approval for any form of cancer or any other indication.  


The research, testing, manufacturing, labeling, approval, selling, marketing and distribution of drug products are subject to extensive regulation by the U.S. Food and Drug Administration, the European Medicines Agency, national competent authorities in Europe and other non-U.S. regulatory authorities, which establish regulations that differ from country to country. We are not permitted to market SM-88 and any other drug product we may develop in the U.S. or in other countries until we receive approval of a New Drug Application from the FDA or marketing approval from applicable regulatory authorities outside the U.S.  Since SM-88 is in the early stages of development, it is subject to the risk of failure inherent in the drug development process. To date, we have not submitted an application for or received marketing approval for, SM-88. We have limited experience in conducting and managing the clinical trials necessary to obtain regulatory approvals, including approval by the FDA or EMA. Obtaining approval of a NDA or a Marketing Authorization Application (“MAA”) can be a lengthy, expensive and uncertain process. In addition, failure to comply with the FDA, EMA and/or other non-U.S. regulatory requirements prior to regulatory approval, could subject our Company to administrative or judicially imposed sanctions, which include but are not limited to:


•

restrictions on our ability to conduct clinical trials, including issuing full or partial clinical holds or other regulatory objections to ongoing or planned trials;

 

 

•

recalls;

 

 

•

restrictions on the use of drugs, manufacturers or our planned manufacturing process;

 

 

•

warning letters;

 

 

•

clinical investigator disqualification;

 

 

•

civil and criminal penalties;

 

 

•

injunctions;

 

 

•

suspension or withdrawal of regulatory approvals;

 

 

•

drug seizures, detentions or import/export bans or restrictions;

 

 

•

voluntary or mandatory drug recalls and publicity requirements;

 

 

•

total or partial suspension of drug;

 

 

•

imposition of restrictions on operations, including costly new manufacturing requirements; and

 

 

•

refusal to approve pending NDAs or supplements to approved NDAs in the U.S. and refusal to approve marketing approvals in other jurisdictions, such as a MAA in the EU.


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The FDA, EMA and other non-U.S. regulatory authorities also have substantial discretion in the drug approval process. Generally, the number of nonclinical and clinical trials that will be required for regulatory approval varies depending on the drug candidate, the disease or condition that the drug candidate is designed to address and the regulations applicable to any particular drug candidate. Regulatory agencies can delay, limit or deny approval of a drug for many reasons, which include but are not limited to:


•

the drug candidate may be deemed unsafe or ineffective;

 

 

•

current results may not continue to confirm the positive results from earlier nonclinical or clinical trials;

 

 

•

failure to select optimal drug doses and suitable trial endpoints;

 

 

•

populations studied did not reflect populations likely to use the drug;

 

 

•

mortality rates in clinical trials are shown to be  numerically higher in subjects treated with SM-88 that in those treated with comparator drugs;

 

 

•

regulatory agencies may not find the data from nonclinical and clinical trials sufficient or well-controlled;

 

 

•

regulatory agencies might not approve or might require changes to manufacturing processes or facilities; and

 

 

•

regulatory agencies may change their approval policies or adopt new regulations.


Any delay in obtaining or failure to obtain, required approvals could materially adversely affect our ability to generate revenue from SM-88, which would likely result in significant harm to our financial position and adversely impact our share price. Furthermore, any regulatory approval to market SM-88 may be subject to limitations on the indicated uses for which we may market the drug. These limitations may limit the size of the market for SM-88 and any other drug product we may develop.


We have no history of conducting large-scale or pivotal clinical trials or commercializing pharmaceutical products, which may make it difficult to evaluate the prospects for our future viability.


Our operations to date have been limited to financing and staffing our Company and developing our technology platform, SM-88 and other potential drug candidates. We have not yet developed our commercialization strategy and marketing plan. Accordingly, we have not been given the opportunity to demonstrate our ability to successfully complete a large-scale or pivotal clinical trial, obtain marketing approval, manufacture product on a commercial scale or conduct sales and marketing activities. Consequently, predictions about our future success or viability may not be as accurate as they could be if we had a history of successfully developing and commercializing pharmaceutical products.


If clinical trials for SM-88 are prolonged, delayed or stopped, we may be unable to obtain regulatory approval and commercialize our drug on a timely basis, which would require us to incur additional costs and delay revenue.


SM-88 is in the early stages of development. We are working towards conducting our first phase II clinical trial and its initiation is subject to numerous factors that can cause interruption or delay, many of which are beyond our control.  Should we experience any interruption or delay, our future plans and expected future revenue will be adversely affected and could result in our inability to continue our operations.


We anticipate commencing a phase II clinical trial with SM-88 in patients in 2015, with plans to review interim data in order to confirm that our development plans are in line. In addition, we plan to conduct nonclinical trials and develop our pharmacology and toxicology program for SM-88. The commencement of these planned trials could be substantially delayed or prevented due to several factors, which include but are not limited to:


•

further discussions with the FDA, the EMA or other regulatory agencies regarding the scope or design of our clinical trials;

 

 

•

the limited number of and competition for, suitable sites to conduct our clinical trials, many of which may already be engaged in other clinical trial programs, including trials for the same indication as SM-88;

 

 

•

delay or failure to obtain regulatory approval or agreement to commence a clinical trial in any of the countries where enrollment is planned;

 

 

•

inability to obtain sufficient funds required to execute our clinical and regulatory development plans;


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•

clinical holds on or other regulatory objections to, a new or ongoing clinical trial;

 

 

•

delay or failure in the testing, validation, manufacture and delivery of sufficient supplies of SM-88 for our clinical trials;

 

 

•

delay or failure to reach agreement on acceptable clinical trial terms or clinical trial protocols with prospective investigational sites or clinical research organizations (“CRO”), the terms of which can be subject to extensive negotiation and may vary significantly among different sites or CROs; and

 

 

•

delay or failure to obtain institutional review board or independent ethics committee (“IEC”) approval to conduct a clinical trial at a prospective investigational site.


Additionally, many factors could substantially delay or prevent the timely completion of our planned clinical trials due to several factors, which include but are not limited to:


•

slower than expected rate of subject recruitment and enrollment;

 

 

•

slower than projected IRB/IEC review and approval;

 

 

•

the Data Monitoring Committee (“DMC”) of the FDA requires the clinical trial be delayed or stopped or requests major or minor modifications to the clinical trial;

 

 

•

failure of subjects to complete their full participation in clinical trial or return for post-treatment follow-up;

 

 

•

unforeseen safety issues, including severe or unexpected drug-related adverse effects experienced by subjects, including the possibility of death;

 

 

•

lack of SM-88 efficacy during the clinical trials;

 

 

•

poor trial design for one or more of our clinical trials;

 

 

•

withdrawal of participation by a principal investigator in one or more of our clinical trials;

 

 

•

inability or unwillingness of subjects or clinical investigators to comply with clinical trial procedures;

 

 

•

resolution of data discrepancies;

 

 

•

inadequate CRO management and/or monitoring in one or more of our clinical trials;

 

 

•

the need to repeat, reconstruct or terminate a clinical trial due to inconclusive or negative results or unforeseen complications in testing; and

 

 

•

a request by the FDA to abandon our current drug development programs.


Changes in regulatory requirements and guidance may also occur and we may need to significantly amend ongoing clinical trial protocols or revise planned prospective clinical trial protocols to reflect such changes mandated by regulatory authorities. Amendments may require us to renegotiate terms with CROs or resubmit clinical trial protocols to IRBs or IEUs for re-review, which may impact the costs, timing or successful completion of a clinical trial. Our clinical trials may be suspended or terminated at any time by the FDA, the EMA, other regulatory authorities or the IRB/IEC overseeing the clinical trial, due to a number of factors, which include but are not limited to:


•

failure to conduct the clinical trial in accordance with regulatory requirements or compliance with the clinical protocol;

 

 

•

unforeseen safety issues or any determination that a clinical trial presents unacceptable health risks to subjects;

 

 

•

lack of adequate funding to continue the clinical trial due to higher or additional unforeseen costs or other business decisions; and

 

 

•

upon a breach or pursuant to the terms of any agreement with or for any other reason by, current or future collaborators that have responsibility for the clinical development of SM-88.


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Any failure or significant delay in clinical and regulatory development plans for SM-88 or any other drug candidate we may pursue would likely adversely affect our ability to obtain regulatory approval for the drug and would diminish our ability to generate revenue.


The results of previous clinical trials may not be predictive of future results, our progress in trials for one drug candidate may not be indicative of progress in trials for other drug candidates and the results of our current and planned clinical trials may not satisfy the requirements of the FDA, the EMA or other non-U.S. regulatory authorities.


We currently have no products approved for sale and we cannot guarantee that we will ever have marketable products. Before obtaining marketing approval from regulatory authorities for the sale of SM-88 as a cancer therapy, we must conduct extensive clinical trials to demonstrate the safety and efficacy of our drug in humans. Clinical testing is expensive, difficult to design and implement, can take many years to complete and has a risk of uncertainty as to its outcome. Clinical failure can occur at any stage of clinical development and the outcome of early clinical trials may not be predictive of the success of later clinical trials.  Additionally, interim results of a clinical trial do not necessarily predict final trial results. In addition, nonclinical and clinical data are often susceptible to varying interpretations and analyses and many companies that have believed their drug performed satisfactorily in clinical trials have nonetheless failed to obtain marketing approval of their products.


Drug candidates that have shown promising results in early clinical trials may still suffer significant setbacks in subsequent registration clinical trials.  A number of companies in the pharmaceutical industry, including those with greater resources and experience than us, have suffered significant setbacks in advanced clinical trials, even after obtaining promising results in earlier clinical trials.


Clinical trials may also produce negative or inconclusive results and we may decide or regulators may require us, to conduct additional clinical or nonclinical testing. We will be required to demonstrate with substantial evidence through well-controlled clinical trials that SM-88 is safe and effective for use in diverse populations before we can seek regulatory approvals for its commercial sale.  

 

In addition, the design of a clinical trial can determine whether its results will support approval of a drug.  Flaws in the design of a clinical trial may not become apparent until the clinical trial is well advanced. We may be unable to design and execute a clinical trial to support regulatory approval.


In some instances, there may be significant variability in safety and/or efficacy results between different trials of the same drug due to numerous factors, including amendment to trial protocols, variability in size and type of the patient populations, adherence to the dosing regimen and other trial procedures and the rate of dropout among clinical trial subjects. We do not know whether any of the clinical trials in our development plan will demonstrate consistent or adequate efficacy and safety to obtain regulatory approval to market SM-88.


There is always the possibility that SM-88 may not gain regulatory approval even if it achieves its primary endpoints in its phase III clinical trials, which may only be initiated if we are successful in complying with all regulatory requirements necessary to commence phase III clinical trials. The FDA, the EMA or other non-U.S. regulatory authorities may disagree with our trial design and/or our interpretation of data from nonclinical and clinical trials. In addition, any of these regulatory authorities may change requirements for the approval of a drug even after reviewing and providing comments or advice on a protocol for a clinical trial. In addition, any of these regulatory authorities may also approve a drug for fewer or more limited indications than requested or may grant approval that is contingent on the performance of costly post-marketing clinical trials. Further, the FDA, the EMA or other non-U.S. regulatory authorities may not accept the labeling claims that we believe would be necessary or desirable for the successful commercialization of SM-88.


Even if SM-88 obtains regulatory approval, it will be subject to continual regulatory review.


If marketing authorization is obtained for our lead drug candidate, SM-88, the drug will continue to be under review by regulatory authorities and, therefore, authorization could be subsequently withdrawn or restricted at any time there is a safety issue. We will be subject to ongoing obligations and oversight by regulatory authorities, including adverse event (AE) reporting requirements, marketing restrictions and, potentially, other post-marketing obligations, all of which may result in significant expense and limit our ability to commercialize our drug product.


If there are changes in the application of legislation or regulatory policies or if problems are discovered with SM-88 or our manufacture(s) or if we or one of our distributors, licensees or co-marketers fails to comply with regulatory requirements, the regulators could take various actions. These include imposing fines on us, imposing restrictions on the drug or its manufacture and requiring us to recall or remove the drug from the market. The regulators could also suspend or withdraw our marketing


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authorizations, requiring us to conduct additional clinical trials, change our drug labeling or submit additional applications for marketing authorization. If any of these events occurs, our ability to sell SM-88 may be impaired and we may incur substantial additional expense to comply with regulatory requirements, which could adversely affect our business, financial condition and the result of our operations.


We may not be successful in our efforts to use and expand our technology platform to build a pipeline of drug candidates.


A key element of our business strategy is to further develop and expand our technology platform so that we can build a steady pipeline that we ultimately hope will be successful in the treatment of a variety of cancers, as well as other diseases that affect health and quality of life. Although our discovery and development efforts to date have resulted in the development of SM-88, we may not be able to develop additional drugs that are safe and effective. Even if we are successful in continuing to build our pipeline, the potential drug candidates that we discover may not be suitable for further clinical development.  There is always the potential that they produce harmful adverse effects or possess other characteristics that indicate that they are unlikely to be products that will receive marketing approval and achieve market acceptance. If we do not continue the steady development and commercialization of products utilizing our technology platform, we will face difficulty in obtaining revenues in future periods, which could result in significant harm to our financial position and adversely affect our share price.


We have a growing pipeline of drug candidates based on our technology platform that are focused on key cancer indications. To date, the FDA and other regulatory authorities have not approved products that utilize this technology platform.


In the future, we plan to develop additional drug candidates based on our proprietary technology platform. This platform incorporates novel technologies and methods and actions.  The approval of the drug candidates in our pipeline is less certain than approval of drugs that do not employ such novel technologies or methods of action. We intend to work closely with the FDA, the EMA and other non-U.S. regulatory authorities to perform the requisite scientific analyses and evaluation of our methods to obtain regulatory approval for these future drug candidates. For example, final assays and specifications of our future drug candidates have yet to be developed and the FDA, EMA or other non-U.S. regulatory authorities may require additional analyses to evaluate this aspect of our technology. It is possible that the validation process may take time and significant expenditures of resources, require independent third-party analyses or not be accepted by the FDA, the EMA and other non-U.S. regulatory authorities. Delays or failure to obtain regulatory approval of any of our future drug candidates could adversely affect our business prospects.


Even if we obtain marketing approval for SM-88 in a major pharmaceutical market such as the U.S. or Europe, we may never obtain approval or commercialize in other major markets, which would limit our ability to realize the drug’s full market potential.


In order to market any products in a country or territory, we must establish and comply with numerous and varying regulatory requirements of such countries or territories regarding safety and efficacy. Clinical trials conducted in one country may not be acceptable for review by regulatory authorities in other countries and regulatory approval in one country does not mean that regulatory approval will be obtained in any other country. Approval procedures differ among countries and can involve additional testing and validation as well as varying administrative review periods. Seeking regulatory approvals in multiple countries could result in significant delays, difficulties and costs and may require additional nonclinical or clinical trials, which would be costly and time-consuming or even delay or prevent the introduction of SM-88 in those countries. In addition, our failure to obtain regulatory approval in one country may delay or have negative effects on the process for regulatory approval in other countries. We do not have any drug candidates approved for sale in any jurisdiction, including international markets and we do not have experience in obtaining regulatory approval in international markets. If we fail to comply with regulatory requirements in international markets or to obtain and maintain required approvals, our target market will be reduced and our ability to realize the full market potential of SM-88 will be harmed.


In the U.S., we may seek fast track or breakthrough designation for SM-88. There is no assurance that the FDA will grant either designation and even if it does, such designation may not actually lead to a faster development process, regulatory review or approval compared to conventional FDA procedures and does not increase the likelihood that SM-88 will receive marketing approval in the U.S.


The fast track program, a provision of the FDA Modernization Act of 1997, is designed to facilitate interactions between a sponsor and the FDA before and during submission of a NDA for an investigational agent that, alone or in combination with one or more drugs, is intended to treat a serious or life-threatening disease or condition and which demonstrates the potential to address an unmet medical need for that disease or condition. Under the fast track program, the FDA may consider reviewing portions of a marketing application before the sponsor submits the complete application, if the FDA determines, after a preliminary evaluation of the clinical data, that a fast track drug may be effective. A fast track designation provides the opportunity for more frequent interactions with the FDA and could make the drug eligible for priority review if supported by clinical data at the time of submission of the NDA.


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The FDA is authorized to designate a new drug as a breakthrough therapy if it finds that the drug is intended, alone or in combination with one or more drugs, to treat a serious or life-threatening disease or condition and preliminary clinical evidence indicates that the drug may demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints, such as substantial treatment effects observed early in clinical development. For products designated as breakthrough therapies, interaction and communication between the FDA and the sponsor of the trial can help to identify the most efficient path for clinical development while minimizing the number of patients placed in ineffective control regimens. Products designated as breakthrough therapies by the FDA are also eligible for accelerated approval.


The FDA has broad discretion whether or not to grant fast track or breakthrough designation. Accordingly, even if we believe SM-88 meets the criteria for fast track or breakthrough designation, the FDA may disagree and instead determine not to make such designation. In any event, the receipt of fast track or breakthrough designation for a drug candidate may not result in a faster development process, review or approval compared to drug candidates considered for approval under conventional FDA procedures and, in any event, does not assure ultimate approval by the FDA. The FDA may even withdraw fast track designation if it believes that the designation is no longer supported by data from our clinical development program.


Should we choose to pursue orphan drug designation, we may be unable to obtain orphan drug designation or exclusivity for SM-88. If our competitors are able to obtain orphan drug exclusivity for their products in the same indications for which we are developing SM-88, we may not be able to have our products approved by the applicable regulatory authority for a significant period of time. Conversely, if we obtain orphan drug exclusivity for SM-88 or any other drug we may develop, we may not be able to benefit from the associated marketing exclusivity.


Regulatory authorities in some jurisdictions, including the U.S. and Europe, may designate drugs for relatively small patient populations as orphan drugs. Under the Orphan Drug Act, the FDA may designate SM-88 as an orphan drug if it is a drug intended to treat a rare disease or condition, which is generally defined as a patient population of fewer than 200,000 individuals annually in the U.S.  In the European Union, the European Commission may designate a drug candidate as an orphan medicinal drug if it is a medicine for the diagnosis, prevention or treatment of life-threatening or very serious conditions that affects not more than five in 10,000 persons in the EU or it is unlikely that marketing of the medicine would generate sufficient returns to justify the investment needed for its development. If SM-88 were to receive orphan drug designation, this orphan drug status may not ensure that we have market exclusivity in a particular market and there is no assurance we will be able to receive orphan drug designation for SM-88. Further, the granting of a request for orphan drug designation does not alter the standard regulatory requirements and process for obtaining marketing approval.


Generally, if a drug candidate with an orphan drug designation receives the first marketing approval for the indication for which it has such designation, the drug is entitled to a period of marketing exclusivity, which, subject to certain exceptions, precludes the FDA from approving the marketing application of another drug for the same indication for that time period or precludes the EMA and other national drug regulators in the EU, from accepting the marketing application for another medicinal drug for the same indication. The applicable period is seven years in the U.S. and ten years in the EU. The EU period can be reduced to six years if a drug no longer meets the criteria for orphan drug designation or if the drug is sufficiently profitable so that market exclusivity is no longer justified. In the EU orphan exclusivity may also be extended for an additional two years ( i.e ., a maximum of 12 years’ orphan exclusivity) if the drug is approved based on a dossier that includes pediatric clinical trial data generated in accordance with an approved pediatric investigation plan. Orphan drug exclusivity may be lost in the U.S. if the FDA determines that the request for designation was materially defective or if the manufacturer is unable to assure sufficient quantity of the drug to meet the needs of patients with the rare disease or condition.


Even if we obtain orphan drug exclusivity for SM-88, that exclusivity may not effectively protect the drug from competition because exclusivity can be suspended under certain circumstances. In the U.S., even after an orphan drug is approved, the FDA can subsequently approve another drug for the same condition if the FDA concludes that the later drug is clinically superior in that it is shown to be safer, more effective or makes a major contribution to patient care. In the EU orphan exclusivity will not prevent a marketing authorization from being granted for a similar drug in the same indication if the new drug is safer, more effective or otherwise clinically superior to the first drug or if the marketing authorization holder of the first drug is unable to supply sufficient quantities of the drug.


SM-88 and any other drug product we may develop may have serious adverse, undesirable or unacceptable side effects, which may delay or prevent marketing approval. If such side effects are identified during the development of SM-88 or following approval, if any, we may need to abandon our development of SM-88 and any other drug product, the commercial profile of any approved label may be limited and/or we may be subject to other significant negative consequences following marketing approval, if any.


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Although SM-88 and any other drug products we may develop will undergo safety testing to the extent possible and agreed to with regulatory authorities, not all adverse effects of drugs can be predicted or anticipated. SM-88, our proprietary drug cocktail – which we believe is a first-in-class drug that harness the body’s own immune defenses to fight tumor cells - is based on a mechanism designed to utilize oxidative stress, among other techniques, to selectively kill cancer cells, yet is powerful and could lead to serious side effects that we only discover in clinical trials. Unforeseen side effects from SM-88 and any other drug product we may develop could arise either during clinical development or, if such side effects are sporadic, after it has been approved by regulatory authorities and the approved drug has been marketed, resulting in the exposure of additional patients. While our proof-of-concept clinical trial for SM-88 demonstrated a favorable safety profile, the results from future trials of SM-88 may not confirm these results. Any new therapy to kill cancer tumors is risky and may have unintended consequences. We have not fully demonstrated that SM-88 is safe in humans and we may not be able to do so.


Furthermore, we are initially developing SM-88 for patients with cancer for whom no other therapies have succeeded and survival times are frequently short. Therefore, we expect that certain subjects may die during the clinical trials and it may be difficult to ascertain whether such deaths are attributable to the underlying disease, complications from the disease, SM-88 or a combination of such factors.


The results of future clinical trials may show that SM-88 causes undesirable or unacceptable side effects, which could interrupt, delay or halt our clinical trials and result in delay of or failure to obtain, marketing approval from the FDA, the European Commission and other non-U.S. regulatory authorities or result in marketing approval from the FDA, the European Commission and other non-U.S. regulatory authorities with restrictive label warnings or potential drug liability claims.


If SM-88 receives marketing approval and it is later identified as undesirable or has unacceptable side effects, we are at risk for the following actions:


•

regulatory authorities may require us to take SM-88 off the market;

 

 

•

regulatory authorities may require the addition of labeling statements, specific warnings, a contraindication or field alerts to physicians and pharmacies;

 

 

•

regulatory authorities may require post-market clinical trials to assess possible serious risks associated with SM-88, which will require us to provide the FDA with additional data;

 

 

•

we may be required to change the way SM-88 is administered, conduct additional clinical trials or change the labeling of the drug;

 

 

•

we may be subject to limitations on how we may promote SM-88;

 

 

•

sales of SM-88 may decrease significantly;

 

 

•

we may be subject to litigation or drug liability claims; and

 

 

•

our reputation may suffer.


Any of these events could prevent us from achieving or maintaining market acceptance of SM-88 or could substantially increase commercialization costs and expenses, which in turn could delay or prevent us from generating significant revenue from the sale of SM-88.


We depend on continued patient enrollment into our clinical trials. If we are unable to enroll patients in our clinical trials, our research and development efforts could be materially adversely affected.


Successful and timely completion of clinical trials will require that we enroll and complete the trials with a sufficient number of evaluable subjects. Our clinical trials may be subject to delays resulting from the trials’ slower enrollment or subject withdrawal. Subject enrollment depends on many factors, including the size and nature of the patient population, eligibility criteria for the clinical trial, the proximity of patients to clinical sites, the design of the clinical protocol, the availability of competing clinical trials for the same population of subjects, the availability of new drugs approved for metastatic breast cancer and clinicians’ and patients’ perceptions as to the potential advantages of SM-88 and any other drug product we may develop in relation to other available therapies.


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These factors may make it difficult for us to enroll enough patients to complete our clinical trials in a timely and cost-effective manner. Delays in the completion of any clinical trial for SM-88 and any other drug product we may develop will increase our costs, slow down our drug development and delay or potentially jeopardize our ability to commence drug sales and generate revenue. In addition, some of the factors that cause or lead to, a delay in the completion of clinical trials may also ultimately lead to the denial of regulatory approval of SM-88 and any other drug product we may develop.


Even if approved, if SM-88 does not achieve broad market acceptance among physicians, patients, the medical community and third-party payors, our revenue generated from its sales will be limited.


The commercial success of our SM-88 and any other drug product we may develop will depend upon its acceptance among physicians, patients and the overall medical community. The degree of market acceptance of SM-88, which would be applicable to any other drug product we may develop, will depend on a number of factors, which include but are not limited to:


•

limitations or warnings contained in the approved labeling for SM-88;

 

 

•

changes in the standard of care for metastatic breast cancer for SM-88;

 

 

•

limitations in the approved clinical indications for SM-88;

 

 

•

demonstrated clinical safety and efficacy of SM-88 compared to other drugs;

 

 

•

lack of significant adverse effects;

 

 

•

limitations on how we promote SM-88;

 

 

•

sales, marketing and distribution support;

 

 

•

availability and extent of reimbursement from managed care plans and other third-party payors;

 

 

•

timing of market introduction and perceived effectiveness of competitive drugs;

 

 

•

the degree of cost-effectiveness of SM-88;

 

 

•

availability of alternative therapies at similar or lower cost, including generic and over-the-counter drugs;

 

 

•

the extent to which SM-88 is approved for inclusion on formularies of hospitals and managed care organizations;

 

 

•

whether SM-88 is designated under physician treatment guidelines as a first-line therapy or as a second- or third-line therapy for metastatic breast cancer;

 

 

•

adverse publicity about SM-88 or favorable publicity about competitive drugs;

 

 

•

convenience and ease of administration; and

 

 

•

potential drug liability claims.


If SM-88 is approved but does not achieve an adequate level of acceptance by physicians, patients and the overall medical community, we may not generate sufficient revenue to become profitable or to sustain operations. In addition, efforts to educate the medical community and third-party payors on the benefits of SM-88 may require significant resources and may never be successful.


We are subject to manufacturing risks that could substantially increase our costs and limit the supply of SM-88 and any other drug product we may develop.


The process of manufacturing SM-88 is complex, highly regulated and subject to several risks, which include but are not limited to:


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•

We do not have experience in manufacturing SM-88 in bulk quantity or at commercial scale. We plan to contract with external manufacturers to develop a larger scale process for manufacturing SM-88 in parallel with our phase II trial of SM-88. We may not succeed in the scaling up of our process or we may need a larger manufacturing process for SM-88 than what we have planned. Any changes to our manufacturing processes may result in the need to obtain additional regulatory approvals. Difficulties in achieving commercial-scale production or the need for additional regulatory approvals could delay the development and regulatory approval of SM-88 and ultimately affect our success.

 

 

•

The process of manufacturing drugs, such as SM-88, is extremely susceptible to loss due to contamination, equipment failure or improper installation or operation of equipment, vendor or operator error, inconsistency in yields, variability in drug characteristics and difficulties in scaling the production process. Even minor deviations from normal manufacturing processes could result in reduced production yields, drug defects and other supply disruptions. If microbial, viral or other contaminations are discovered in SM-88 or in the manufacturing facilities in which SM-88 is made, such manufacturing facilities may need to be closed for an extended time to investigate and remedy the contamination.

 

 

•

A shortage of one or more SM-88 drug substance(s) or ingredients.

 

 

•

The manufacturing facilities in which SM-88 is made could have delays in manufacturing due to delays created by other sponsor company drug manufacturing runs, which could affect our manufacturing runs.

 

 

•

An unforeseen increase in ingredients procurement or other manufacturing costs.

 

 

•

The manufacturing facilities in which SM-88 is made could be adversely affected by equipment failures, labor shortages, labor strikes, natural disasters, power failures, lack of phone or internet services, riots, crime, act of foreign enemies, war, nationalization, government sanction, blockage, embargo, any extraordinary event or circumstance beyond control and numerous other factors.

 

 

•

We and our manufacturing partners must comply with applicable current Good Manufacturing Practice and local and state regulations and guidelines. We or our manufacturing partners may encounter difficulties in achieving quality controls and quality assurance and may experience shortages in qualified personnel. We and our manufacturing partners will be subject to inspections by the FDA and comparable agencies in other jurisdictions to confirm compliance with applicable regulatory requirements. Any failure to follow cGMPs or other regulatory requirements or delay, interruption or other issues that arise in the manufacture, fill-finish, packaging or storage of SM-88 that result from a failure at the facilities or the facilities or operations of third parties to comply with regulatory requirements or pass any regulatory authority inspection could significantly impair our ability to develop and commercialize SM-88.  This could lead to significant delays in the availability of our drug for clinical trials or the termination or clinical hold on a trial or the delay or prevention of a filing or approval of marketing applications for SM-88. Significant noncompliance could also result in the imposition of sanctions, including fines, injunctions, civil penalties, failure of regulatory authorities to grant marketing approvals for SM-88, delays, suspension or withdrawal of approvals, license revocation, seizures or recalls of products, operating restrictions and criminal prosecutions, any of which could damage our reputation. If we and/or our manufacturing partners are not able to maintain regulatory compliance, we may not be permitted to market SM-88 and/or may be subject to drug recalls, seizures, injunctions or criminal prosecution.

 

 

•

Any adverse developments affecting manufacturing operations for SM-88, if any are approved, may result in shipment delays, inventory shortages, lot inspection failures, drug withdrawals or recalls or other interruptions in the supply of SM-88. We may also have to take inventory write-offs and incur other charges and expenses for products that fail to meet regulator-approved manufacturing specifications, undertake costly remediation efforts or seek more costly manufacturing alternatives; and

 

 

•

Drug products that have been produced and stored for later use may degrade, become contaminated or suffer other quality defects, which could cause the affected products to no longer be suitable for its intended use in clinical trials or other development activities. If the defective drug cannot be replaced in a timely fashion, we may incur significant delays in our development programs that could adversely affect the value of SM-88.


One component of SM-88 is a derivation of an existing FDA-approved drug that has been modified to contribute to the functionality of SM-88. This drug substance is being manufactured by a FDA-approved, third-party and to date that manufacturer is our sole supplier of this drug substance. To our knowledge, the current manufacturer of this drug substance is the only FDA-approved supplier of the existing drug in the U.S.  We believe this cGMP manufacturer has sufficient capacity to meet our projected needs into the near future.  In the event of a catastrophic event or this manufacturer is unable to meet our needs, we will, due to the nature of the drug


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substance and the modifications required for this drug substance, need to find an alternative source of supply, which will likely result in time delays in the clinical development process. We believe that replacement for this supplier, in the event it becomes necessary, is not impossible, but would cost us in development time. Currently, we do not have an arrangement in place for a secondary supplier for this drug substance.


We currently have no marketing, sales or distribution infrastructure. If we are unable to develop sales, marketing and distribution capabilities on our own or through collaborations or if we fail to achieve adequate pricing and/or reimbursement, we will not be successful in commercializing SM-88 and any other drug product we may develop.


We currently have no marketing, sales and distribution capabilities because our lead drug candidate, SM-88, is still in clinical development. If SM-88 is approved, we intend either to have established a sales and marketing organization with technical expertise and supporting distribution capabilities to commercialize our drug or to have outsourced this function or portions, to one or more an experienced third-parties. Either of these options is expensive and time-consuming. Some of these costs may be incurred well in advance of any regulatory approvals for SM-88. In addition, we may not be able to hire a sales force that is sufficient in size or has adequate expertise in the medical markets that we intend to target. Any failure or delay in the development of our internal sales, marketing and distribution capabilities or to outsource these functions, in whole or part, would adversely affect the commercialization of our products.


To the extent that we enter into collaborative agreements for marketing, sales and/or distribution, our revenue may be lower than if we directly marketed and sold SM-88. In addition, any revenue we receive will depend in whole or in part upon the efforts and success of these third-party collaborators, which are likely not to be entirely within our control. If we are unable to enter into these arrangements on acceptable terms or at all, we may not be able to successfully commercialize SM-88. If we are not successful in commercializing SM-88, either on our own or through collaborations with one or more third parties, our future revenues will suffer, we may incur significant and additional losses and we may be forced to curtail operations.


SM-88 and any other drug product we may develop will face significant competition and, if competitors develop and market products that are more effective, safer or less expensive than our drug, our commercial opportunity will be negatively impacted.


The anticancer treatment industry is highly competitive and subject to rapid and significant technological changes. We are currently developing SM-88 to compete with other drugs that currently exist or are being developed. Drugs we may develop in the future are also likely to face competition from other drugs, some of which we may not be currently be aware of. In marketing our products, we will have domestic and international competitors, including major multinational pharmaceutical companies, established biotechnology companies, specialty pharmaceutical companies, universities and other research institutions. Many of our competitors have significantly greater financial, manufacturing, marketing, drug development, technical and human resources than we do. Large pharmaceutical companies, in particular, have extensive experience in clinical testing, obtaining regulatory approvals, patient recruitment and manufacturing pharmaceutical products. These companies also have significantly greater research and marketing capabilities than we do and may also have products that have been approved or are in more advanced stages of development or collaborative arrangements in our target markets with leading companies and research institutions. Established pharmaceutical companies also may invest heavily to accelerate discovery and development of novel compounds or to in-license novel compounds that could make SM-88 and any other drug product we may develop obsolete. Some or all of these factors may contribute to our competitors succeeding in obtaining patent protection and/or marketing approval or developing and commercializing products in our field before we do.


There is a large number of companies working to develop and/or market various types of anticancer treatments. These treatments consist both of small molecule drugs, as well as biological drugs that work by using next-generation technology platforms to address specific cancer targets. These treatments are often combined with one another in an attempt to maximize a response rate. In addition, several companies are developing drugs that work by targeting multiple specificities using a single recombinant molecule, as we are.


Our commercial opportunity could be reduced or eliminated if our competitors develop and commercialize products that are safer, more effective, have fewer or less severe effects, are more convenient or are less expensive than SM-88. Our competitors also may obtain FDA, EU or other non-U.S. regulatory approval for their products more rapidly than we may, which could result in our competitors establishing a strong market position before we are able to enter the market. Even if SM-88 achieves marketing approval, it may be priced at a significant premium over competitive products, if any have been approved by then, resulting in our product’s reduced competitiveness.


In addition, our future ability to compete may be affected in many cases by insurers or other third-party payors seeking to encourage the use of similar or biosimilar products.


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In addition, in March 2010, President Obama signed into law the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act or collectively, the Health Care Reform Law, a sweeping law intended to broaden access to health insurance, reduce or constrain the growth of health care spending, enhance remedies against fraud and abuse, add new transparency requirements for health care and health insurance industries, impose new taxes and fees on the health industry and impose additional health policy reforms. The Health Care Reform Law also created a new regulatory scheme authorizing the FDA to approve biosimilars. Under the Health Care Reform Law, a manufacturer may submit an application for licensure of a biologic product that is “biosimilar to” or “interchangeable with” a previously approved biological product or “reference product,” without the need to submit a full package of nonclinical and clinical data. Under this new statutory scheme, an application for a biosimilar product may not be submitted to the FDA until four years following approval of the reference product. The FDA may not approve a biosimilar product until 12 years from the date on which the reference product was approved. Even if a product is considered to be a reference product eligible for exclusivity, another company could market a competing version of that product if the FDA approves a full NDA for such product containing the sponsor’s own nonclinical data and data from adequate and well-controlled clinical trials to demonstrate the safety, purity and potency of their product. Furthermore, recent legislation has proposed that the 12-year exclusivity period for each a reference product may be reduced to seven years.


Smaller and other early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies. These third parties compete with us in recruiting and retaining qualified scientific and management personnel, recruiting clinical trial sites and patient registration for clinical trials, as well as in acquiring technologies complementary to or necessary for, SM-88. In addition, the biopharmaceutical industry is characterized by rapid technological changes. If we fail to stay at the forefront of technological change, we may be unable to compete effectively. Technological advances or products developed by our competitors may render our technologies or product candidates obsolete, less competitive or not economical.


Enacted and future legislation may increase the difficulty and cost for us to obtain marketing approval and commercialization of SM-88 and may affect the price we set. Our successful commercialization will depend in part on the extent to which governmental authorities and health insurers establish adequate coverage, reimbursement and pricing policies.


In the U.S., the EU, its Member States and some other foreign jurisdictions, there have been a number of legislative and regulatory changes and proposed changes regarding the healthcare system. These changes could prevent or delay marketing approval of SM-88 and any other drug product we may develop, restrict or regulate post-approval activities and affect our ability to sell and recognize revenue from SM-88 or any other drug product we may develop. Among policy makers and payors in the U.S. and elsewhere, there is significant interest in promoting changes in healthcare systems with the stated goals of containing health care costs, improving quality and/or expanding access to health care.


In the U.S., the Medicare Prescription Drug, Improvement and Modernization Act of 2003 or the Medicare Modernization Act, changed the way Medicare covers and pays for pharmaceutical products. The legislation expanded Medicare coverage for drug purchases by the elderly and introduced a new reimbursement methodology based on average sale prices for physician-administered drugs. In addition, this legislation provided authority for limiting the number of drugs that will be covered in any therapeutic class. Cost-reduction initiatives and other provisions of this legislation could decrease the coverage and price that we receive for any approved products. While the Medicare Modernization Act applies only to drug benefits for Medicare beneficiaries, private payors often follow Medicare coverage policy and payment limitations in setting their own reimbursement rates. Therefore, any reduction in reimbursement that results from the Medicare Modernization Act may result in a similar reduction in payments from private payors.


In addition, the Health Care Reform Law, among other things, increased rebates a manufacturer must pay to the Medicaid program, addressed a new methodology by which rebates owed by manufacturers under the Medicaid Drug Rebate Program are calculated for drugs that are inhaled, infused, instilled, implanted or injected, established a new Medicare Part D coverage gap discount program in which manufacturers must provide 50% point-of-sale discounts on products covered under Part D and implemented payment system reforms including a national pilot program on payment bundling to encourage hospitals, physicians and other providers to improve the coordination, quality and efficiency of certain health care services through bundled payment models. Further, the new law imposed a significant annual fee on companies that manufacture or import branded prescription drug products. Substantial new provisions affecting compliance were enacted, which may affect our business practices with health care practitioners. The goal of the Health Care Reform Law is to reduce the cost of health care and substantially change the way health care is financed by both governmental and private insurers. While we cannot predict what impact on federal reimbursement policies this legislation will have in general or on our business specifically, the Health Care Reform Law may result in downward pressure on pharmaceutical reimbursement, which could negatively affect market acceptance of and the price we may charge for, any products we develop that receive regulatory approval. We also cannot predict the impact of the Health Care Reform Law on our business or financial condition, as many of the Health Care Reform Law reforms require the promulgation of detailed regulations implementing the statutory provisions, which has not yet occurred.


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Moreover, other legislative changes have also been proposed and adopted in the U.S. since the Health Care Reform Law was enacted. On August 2, 2011, the Budget Control Act of 2011, among other things, created measures for spending reductions by Congress. A Joint Select Committee on Deficit Reduction, tasked with recommending a targeted deficit reduction of at least $1.2 trillion for the years 2013 through 2021, was unable to reach required goals, thereby triggering the legislation’s automatic reduction to several government programs. This includes aggregate reductions to Medicare payments to providers of 2% per fiscal year, which went into effect on April 1, 2013. On January 2, 2013, President Obama signed into law the American Taxpayer Relief Act of 2012 or the ATRA, which, among other things, further reduced Medicare payments to several providers, including hospitals, imaging centers and cancer treatment centers and increased the statute of limitations period for the government to recover overpayments to providers from three to five years. These new laws may result in additional reductions in Medicare and other health care funding, which could have a material adverse effect on our customers and accordingly, our future results from operations.


The delivery of health care in the EU, including the establishment and operation of health services and the pricing and reimbursement of medicines, is almost exclusively a matter for national, rather than EU, law and policy. National governments and health service providers have different priorities and approaches to the delivery of health care and the pricing and reimbursement of products in that context. In general, however, the health care budgetary constraints in most EU Member States have resulted in restrictions on the pricing and reimbursement of medicines by relevant health service providers. Coupled with ever-increasing EU and national regulatory burdens on those wishing to develop and market products, this could prevent or delay marketing approval of SM-88 and any other drug product we may develop, restrict or regulate post-approval activities and affect our ability to commercialize any products for which we obtain marketing approval.


If any drug liability lawsuits are successfully brought against us or any of our collaborators, we may incur substantial liabilities and may be required to limit commercialization of SM-88 and any other drug product we may develop.


We face an inherent risk of drug liability lawsuits related to the testing of SM-88 and any other drug product we may develop in seriously ill patients and will face an even greater risk of liability lawsuits if SM-88 is approved by regulatory authorities and introduced commercially. Drug liability claims may be brought against us or our collaborators, if any, by subjects enrolled in our clinical trials, patients, health care providers or others using, administering or selling SM-88. If we cannot successfully defend ourselves against any such claims, we may incur substantial liabilities. Regardless of their merit or eventual outcome, liability claims may result in, but are not limited to:


•

decreased demand for SM-88;

 

 

•

injury to our reputation;

 

 

•

withdrawal of subjects in our clinical trials;

 

 

•

withdrawal of clinical trial sites or entire trial programs;

 

 

•

increased regulatory scrutiny;

 

 

•

significant litigation costs;

 

 

•

substantial monetary awards to or costly settlements with patients or other claimants;

 

 

•

drug recalls or a change in the indications for which they may be used;

 

 

•

loss of revenue;

 

 

•

diversion of management and scientific resources from our business operations; and

 

 

•

the inability to commercialize SM-88.


If SM-88 is approved for commercial sale, we will be highly dependent upon consumer perception and the safety and quality of SM-88. We could be adversely affected if we are subject to negative publicity or if SM-88 proves to be or is asserted to be, harmful to patients. Because of our dependence upon consumer perceptions, any adverse publicity associated with illness or other adverse effects resulting from patients’ use or misuse of SM-88 could have a material adverse impact on our financial condition or results of operations.


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When necessary, we intend to obtain clinical trial insurance for the SM-88 phase II clinical trial. We also intend to obtain drug liability insurance coverage at appropriate levels for our operations, which will vary as the level of our operations vary during our growth from a R&D company to a company manufacturing and marketing drugs to the public.  Our planned insurance coverage may not be adequate to cover all liabilities that we may incur. We also may need to increase our insurance coverage when we begin the commercialization of SM-88. Insurance coverage is becoming increasingly expensive. As a result, we may be unable to obtain or maintain sufficient liability insurance at a reasonable cost to protect us against losses that could have a material adverse effect on our business. A successful drug liability claim or series of claims brought against us, particularly if judgments exceed any insurance coverage we may have, could decrease our cash resources and adversely affect our business, financial condition and results of operations and could possibly cause us to cease our operations in their entirety.


Our management lacks experience in obtaining FDA approval of products, which could result in delays or the failure to obtain required regulatory approval of our products .


Although they have experience in creating and marketing various products, neither of our two executive officers have ever organized, managed or completed FDA-required submissions and clinical trials concerning new drug products.  While we intend to retain employees, advisors and consultants with experience in the FDA approval process and have retained and utilized a number of such advisors and consultants in the past, the lack of experience by our chief executive and operating officers could result in delays in obtaining necessary regulatory approvals, both in conducting clinical trials and final marketing approvals, additional costs and the possibility that approvals will not be obtained due to the failure to comply with the regulatory approval process, such delays, costs and/or failure would likely adversely affect our business, financial condition and results of operations and could possibly cause us to cease our operations in their entirety.


Risks Related to our Financial Condition and Need for Additional Capital


We have incurred significant losses since inception and anticipate that we will continue to incur losses for the foreseeable future. We have no products approved for commercial sale and to date we have not generated any revenue or profit from drug sales. We may never achieve or sustain profitability.


We are a clinical-stage pharmaceutical company with a limited operating history. We have incurred significant losses since our inception. As of September 30, 2014, our accumulated deficit (unaudited) was approximately $2.71 million. Our losses have resulted principally from expenses incurred in the discovery and development of SM-88 and from general and administrative expenses incurred while building our business infrastructure. We expect to continue to incur losses for the near future.  Furthermore, we expect these losses to increase as we continue our research and development of and seek regulatory approval for, our drug candidate SM-88, prepare for and begin to commercialize SM-88 or any other approved products and add infrastructure and personnel to support our drug development efforts and operations as a public company. The net losses and negative cash flows incurred to date, together with expected future losses, have had and likely will continue to have, an adverse effect on our stockholders’ equity and working capital. The amount of future net losses will depend, in part, on the rate of future growth of our expenses and our ability to generate revenue.


Because of the numerous risks and uncertainties associated with drug development, we are unable to accurately predict the timing or amount of increased expenses or when or if, we will be able to achieve profitability. For example, our expenses could increase if FDA or EMA require us to conduct supplemental clinical trials not included in our current development plan or if there are any delays in completing our planned clinical trials or in the development of SM-88 or any other drug product we may pursue.


To become and remain profitable, we must succeed in the development and commercialization of drugs with significant market potential. This will require us to be successful in a range of challenging activities for which we are only in the preliminary stages, including developing SM-88, obtaining regulatory approval and manufacturing, marketing and selling SM-88. We may never succeed with these activities or generate revenue from drug sales that is significant enough to achieve profitability. Our ability to generate future revenue from drug sales depends heavily on our success in many areas, which include but are not limited to:


•

completing research and clinical development of SM-88, including successful completion of required clinical trials;

 

 

•

obtaining marketing approval for SM-88;

 

 

•

developing a sustainable and scalable manufacturing process for SM-88 and maintaining supply and manufacturing relationships with third parties that can conduct the process and provide adequate (in amount and quality) drugs to support clinical development and the market demand for SM-88, if approved;

 

 

•

launching and commercializing SM-88, either directly or with a collaborator or distributor;


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•

establishing sales, marketing and distribution capabilities in the U.S. and in other markets, such as the EU;

 

 

•

obtaining market acceptance of SM-88 as a viable treatment option;

 

 

•

addressing any competing technological and market developments;

 

 

•

identifying, assessing, acquiring and/or developing new drug candidates;

 

 

•

negotiating favorable terms in any collaboration, licensing or other arrangements into which we may enter;

 

 

•

maintaining, protecting and expanding our portfolio of intellectual property rights, including patents, trade secrets and know-how; and

 

 

•

attracting, hiring and retaining qualified personnel.


Even if SM-88 or another drug candidate that we develop is approved for commercial sale, we anticipate incurring significant costs associated with commercialization. Because of the numerous risks and uncertainties with drug development, we are unable to accurately predict the timing or amount of increased expenses or when or if, we will be able to achieve profitability. Even if we achieve profitability in the future, we may not be able to sustain profitability in subsequent periods. Our failure to become or remain profitable would depress our market value and could impair our ability to raise capital, expand our business, develop other drug candidates or continue our operations. A decline in the value of our Company could also cause investors in our Common Stock (or other securities we may issue in the future) to lose all or part of their investment.


We will require substantial additional funding, which may not be available to us on acceptable terms or at all and, if not available, may require us to delay, scale back or cease our drug development programs or operations.


In addition to SM-88, we seek to advance multiple drug candidates through the research and clinical development process. The completion of the development and the potential commercialization of SM-88 or any other drug product, should it receive approval, will require substantial funds. We believe that our available cash and cash equivalents will be sufficient to fund our anticipated level of operations for at least the next nine months, but there can be no assurance that this will be the case. Our future financing requirements will depend on many factors, some of which are beyond our control, which include but are not limited to:


•

the number and characteristics of other drug candidates that we pursue;

 

 

•

the scope, progress, timing, cost and results of nonclinical and clinical development and research;

 

 

•

the costs, timing and outcome of our  seeking and obtaining FDA, EMA and other non-U.S. regulatory approvals;

 

 

•

the costs associated with manufacturing SM-88, as well as other potential drug candidates and establishing sales, marketing and distribution capabilities;

 

 

•

our ability to maintain, expand and defend the scope of our IP portfolio, including the amount and timing of any payments we may be required to make in connection with the licensing, filing, defense and enforcement of any patents or other IP rights;

 

 

•

the extent to which we acquire or in-license other products or technologies;

 

 

•

our need and ability to hire additional administrative, managerial, scientific, operational and medical personnel;

 

 

•

the effect of competing products that may limit market penetration of SM-88 and any other drug candidates we may develop;

 

 

•

the amount and timing of revenues, if any, we receive from commercial sales of SM-88 or any other drug candidates for which we receive marketing approval in the future;

 

 

•

our need to implement additional internal systems and infrastructure, including financial and reporting systems; and

 

 

•

the economic and other terms, timing of and success of our existing collaborations and any collaboration, licensing or other arrangements into which we may enter in the future, including the timing of achievement of milestones and receipt of any milestone or royalty payments under such agreements.


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Until we can generate sufficient drug and royalty revenue to finance our cash requirements, which we may never do, we expect to finance future cash needs through a combination of public or private equity offerings, debt financings, collaborations, strategic alliances, licensing arrangements and other marketing and distribution arrangements. Additional financing may not be available to us when we need it or financings may not be available on favorable terms. If we raise additional capital through marketing and distribution arrangements or other collaborations, strategic alliances or licensing arrangements with third parties, we may have to relinquish certain valuable rights to our drug candidates, technologies, future revenue streams or research programs and/or grant licenses on terms that may not be favorable to us. If we raise additional capital through public or private equity offerings, the ownership interests of our existing stockholders will be diluted and the terms of these securities may include liquidation or other preferences that adversely affect our stockholders’ rights, including without limitation the issuance of additional shares of our Common Stock to the purchasers in the PPO and the Bridge Note purchaser if we raise funds within the next two years at a per share price less than the per share price of shares sold in the PPO. If we raise additional capital through debt financing, we may be subject to covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. If we are unable to obtain adequate financing when needed and on favorable terms, we may have to delay, reduce the scope of or suspend one or more of our clinical trials or research and development programs or our commercialization efforts.


We may expend our limited resources to pursue SM-88 for the treatment of metastatic breast cancer and fail to capitalize on drug candidates or indications that may be more profitable or for which there is a greater likelihood of success.


Because we have limited financial and managerial resources, we currently are focusing our research programs on SM-88 for the treatment of metastatic breast cancer. As a result, we may forego or delay pursuit of opportunities with other drug candidates or other indications that later prove to have greater commercial potential. Our resource allocation decisions may cause us to fail to capitalize on viable commercial products or profitable market opportunities. Our spending on current and future research and development programs and drug candidates for specific indications may not yield any commercially viable products.


If we do not accurately evaluate the commercial potential or target market for SM-88 or any other drug candidate, we may relinquish valuable rights through collaboration, licensing or other royalty arrangements in cases where it would have been advantageous for us to retain sole development and commercialization rights.


If we do not achieve our projected development goals in the periods we announce and expect, the commercialization of our products may be delayed and, as a result, our stock price may decline.


Over the course of our development efforts, we will estimate the successful completion of various scientific, clinical, regulatory and other drug development goals, which we refer to as milestones. These milestones may include the commencement or completion of clinical trials and the submission of planned regulatory filings. Occasionally, we may publicly announce the expected timing of some of these milestones. For example, throughout this Current Report on Form 8-K, we state that we plan to begin phase II trials sometime in the immediate future. All of these milestones will be based on a variety of assumptions. The actual timing of achieving these milestones can vary dramatically compared to our estimates, in some cases for reasons beyond our control. If we do not meet these milestones as publicly announced, the commercialization of our products may be delayed and, as a result, our stock price may decline.


Risks Related to our Reliance on Third Parties


We rely on third parties to conduct our clinical trials and those third parties may not perform satisfactorily, including failing to meet deadlines for the completion of these trials.


We will not independently conduct clinical trials for SM-88 and may not do so for any other drug product we may develop. We will rely on third parties, such as CROs, clinical data management organizations, medical institutions and clinical investigators to perform these functions. Our reliance on these third parties for clinical development activities reduces our control over these activities but does not relieve us of our responsibilities. For example, the FDA requires us to comply with standards, commonly referred to as good clinical practices, for conducting, recording and reporting the results of clinical trials to assure that data and reported results are credible, accurate and that the rights, integrity and confidentiality of subjects in clinical trials are protected, even though we are not in control of these processes. These third parties may also have relationships with other entities, some of which may be our competitors. If these third parties do not successfully carry out their contractual duties, meet expected deadlines or conduct our clinical trials in accordance with regulatory requirements or our stated protocols, we will not be able to obtain or may be delayed in obtaining, regulatory approvals for SM-88 or other products we may develop and will not be able to or may be delayed in our efforts to, successfully commercialize SM-88 and any other drug product we may develop.


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We will also rely on other third parties to store and distribute supplies for our clinical trials. Any performance failure on the part of our existing or future distributors could delay clinical development or regulatory approval of SM-88, producing additional losses and depriving us of potential revenue.


We intend to rely on third-party contract manufacturing organizations to manufacture and supply SM-88 for us. If one of our suppliers or manufacturers fails to perform adequately or fulfill our needs, we may be required to incur significant costs and devote significant efforts to find new suppliers or manufacturers. We may also face delays in the development and commercialization of SM-88 and any other drug product we may develop.


We currently have limited experience in and we do not own facilities for, clinical-scale manufacturing of SM-88 and we rely upon third-party contract manufacturing organizations to manufacture and supply drug for our clinical trials. The manufacture of pharmaceutical products in compliance with the FDA’s cGMP requires significant expertise and capital investment, including the development of advanced manufacturing techniques and process controls. Manufacturers of pharmaceutical products often encounter difficulties in production, including difficulties with production costs and yields, quality control, including drug stability, quality assurance testing, shortages of qualified personnel, as well as compliance with strictly enforced cGMP requirements and other federal and state regulatory requirements and foreign regulations. If our manufacturers were to encounter any of these difficulties or otherwise fail to comply with their obligations to us or under applicable regulations, it would jeopardize our ability to supply investigational drug for our clinical trials.  Any delay or interruption in the supply of clinical trial materials could delay the completion of our clinical trials, increase the costs associated with maintaining our clinical development programs and, depending upon the period of delay, require us to commence new trials at significant additional expense or terminate the ongoing trials.


All manufacturers used to formulate the components of SM-88 must comply with cGMP requirements, which are enforced by the FDA through its facilities inspection program. These requirements include, among other things, quality control, quality assurance and the documentation and maintenance of records. Manufacturers of our drug candidates may be unable to comply with cGMP requirements and/or with other FDA, state and foreign regulatory requirements. The FDA or similar foreign regulatory agencies may also implement new standards at any time or change their interpretation and enforcement of existing standards for manufacture, packaging or testing of drug products. We have little control over our manufacturers’ compliance with these regulations and standards and a failure to comply with these requirements may result in fines and civil penalties, suspension of production, suspension or delay in drug approval, drug seizure or recall or withdrawal of a drug approval. If the safety of any drug supplied is compromised due to our manufacturers’ failure to adhere to applicable laws or for other reasons, we may not be able to obtain regulatory approval for or successfully commercialize SM-88 and as a result, may be held liable for any injuries sustained. Any of these factors could cause a delay of clinical trial completion, regulatory submission, approval or commercialization of SM-88, increase our costs or impair our reputation.


We currently rely on single-source suppliers for each of the drug components in SM-88. Supplies are obtained under individual purchase orders and we do not have any long-term supply agreements in place at this time. Although we believe alternative sources of supplies exist, the number of third-party suppliers with the necessary manufacturing and regulatory expertise and facilities is limited, could be more expensive and it could take a significant amount of time to source, any of which would adversely affect our business. New suppliers of SM-88 would be required to qualify under applicable regulatory requirements and would need to have sufficient rights under applicable IP laws to the method of manufacturing the drug candidate. Obtaining the necessary FDA approvals or other qualifications under applicable regulatory requirements and ensuring non-infringement of third-party IP rights could result in a significant interruption of supplies and could require the new manufacturer(s) to bear significant additional costs which may be passed on to us.


Our reliance on third parties may require us to share our trade secrets, which increase the possibility that a competitor will discover them or that our trade secrets will be misappropriated or disclosed.


Because we rely on third parties to assist in the research, development and manufacture of SM-88, we must, at times, share trade secrets with them. We will seek to protect our proprietary technology in part by initially entering into confidentiality agreements and, if applicable, material transfer agreements, consulting agreements or other similar agreements with our advisors, employees and third-party contractors prior to disclosing any proprietary information. These agreements typically limit the rights of third parties to use or disclose our confidential information, which include our trade secrets. Despite the contractual provisions employed when working with third parties, the need to share trade secrets and other confidential information increases the risk that such trade secrets will become known by our competitors, are inadvertently incorporated into the technology of others or are disclosed or used in violation of these agreements. Given that our proprietary position is based, in part, on our know-how and trade secrets, a competitor’s independent discovery of our trade secrets or other unauthorized use or disclosure would impair our competitive position and could have a material adverse effect on our business.


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In addition, these agreements would typically restrict the ability of our advisors, employees, third-party contractors and consultants to publish data that could potentially relate to our trade secrets, even though our agreements may contain certain limited publication rights. For example, any academic institution that we may collaborate with in the future can be, based on customary practice, expected to be granted rights to publish data arising out of such collaboration, provided that we are notified in advance and given the opportunity to delay publication for a limited time period in order for us to secure patent protection of IP rights arising from the collaboration, in addition to the opportunity to remove confidential or trade secret information from any such publication. In the future, we may also conduct joint research and develop programs that may require us to share trade secrets under the terms of such research. Despite our efforts to protect our trade secrets, our competitors may discover our trade secrets, either through breach of our agreements with third parties, independent development or publication of information by any of our third-party collaborators. A competitor’s discovery of our trade secrets would impair our competitive position and have an adverse impact on our business.


We may enter into license agreements with third parties, with respect to SM-88 any other drug products we may develop, that may place the development of SM-88 and any other drug products we may develop partially or entirely outside of our control, may require us to relinquish important rights or may otherwise be on terms unfavorable to us and, if our collaborations are not successful, SM-88 and any other drug products we may develop may not reach their full market potential.


For financial and efficiency reasons, we may enter into licensing or collaboration agreements with third parties. Collaborations, if any are entered into, involving SM-88 and any other drug products we may develop, will be and are subject to numerous risks, which may include, but are not limited to:


•

collaborators may have significant discretion in determining the efforts and resources that they will apply to collaborations;

 

 

•

collaborators may not perform their obligations as expected;

 

 

•

collaborators may not pursue development and commercialization of SM-88 or may elect not to continue or renew development or commercialization programs based on clinical trial results, changes in their strategic focus due to the acquisition of competitive products, availability of funding or other external factors, such as a business combination that diverts resources or creates competing priorities;

 

 

•

collaborators may delay clinical trials, provide insufficient funding for a clinical program, stop a clinical trial, abandon SM-88, repeat or conduct new clinical trials or require a new formulation of SM-88 clinical testing;

 

 

•

collaborators could independently develop or develop with third parties, products that compete directly or indirectly with SM-88;

 

 

•

a collaborator with marketing, manufacturing and distribution rights to one or more products may not commit sufficient resources to or otherwise not perform satisfactorily in carrying out these activities;

 

 

•

we could grant exclusive rights to our collaborators that would prevent us from collaborating with others;

 

 

•

collaborators may not properly maintain or defend our IP rights or may use our IP or proprietary information in a way that gives rise to actual or threatened litigation that could jeopardize or invalidate our IP or proprietary information or expose us to potential liability;

 

 

•

collaborators may not aggressively or adequately pursue litigation against ANDA filers or may settle such litigation on unfavorable terms;

 

 

•

disputes may arise between us and a collaborator that causes the delay or termination of the research, development or commercialization of SM-88 and any other drug product we may develop or results in costly litigation or arbitration that diverts management attention and resources;

 

 

•

collaborations may be terminated, sometimes at-will, without penalty;

 

 

•

collaborators may own or co-own IP covering our products that results from our collaborating with them and, in such cases, we would not have the exclusive right to commercialize such IP; and

 

 

•

a collaborator’s sales and marketing activities or other operations may not be in compliance with applicable laws resulting in civil or criminal proceedings.


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Risks Related to the Operation of our Business


Our future operational success depends on our ability to retain our key executives and to attract, retain and motivate qualified personnel.


We are highly dependent on our chief executive officer, chief operating officer and the other members of our executive and scientific teams. Our executives may terminate their employment with us at any time. The loss of the services of any of these people could impede the achievement of our research, development and commercialization objectives.


Recruiting and retaining qualified scientific, clinical, administrative, operations, manufacturing and sales and marketing personnel will also be critical to our success. We may not be able to attract and retain these personnel on acceptable terms given the competition among numerous pharmaceutical and biotechnology companies for similar personnel. In addition, we rely on consultants and advisors, including scientific and clinical advisors, to assist us in formulating our research and development, preparing filings and communicating with the FDA and other regulatory authorities and commercialization strategies. Our consultants and advisors may be employed or contracted by businesses in addition to ours and may have commitments with other entities that may limit their availability to us.


To date, our drug discovery process and development program has been led by Steve Hoffman, our chief executive officer who was Tyme’s chief executive office prior to the Merger.  He has been instrumental in providing scientific, technical and business expertise and therefore we will need to establish an appropriately valued key man life insurance policy for him. We intend to obtain and thereafter maintain “key person” insurance on Mr. Hoffman but not for any other executives or employees. We may not be able to obtain the insurance on Mr. Hoffman at favorable rates or at all.  Any insurance proceeds we may receive under this “key person” insurance may not adequately compensate us for the loss of Mr. Hoffman’s services.  Development of SM-88 could ultimately continue without Mr. Hoffman’s contributions, but future development of SM-88 and all other drug products in our pipeline, would be adversely affected without his continued involvement.


We expect to expand our development, regulatory and marketing capabilities and, as a result, we may encounter difficulties in managing our growth, which could disrupt our operations.


As of March 6, 2014, we had five employees. Over the next several years, we expect to experience significant growth in the number of our employees and the scope of our operations, particularly in sales and marketing. To manage our anticipated future growth, we must continue to implement and improve our managerial, operational and financial systems, continue to expand our facilities and continue to recruit and train additional qualified personnel. Due to our limited financial resources and the limited experience of our management team in managing a company with such anticipated growth, we may not be able to effectively manage the expansion of our operations or recruit and train additional qualified personnel.  Our current management has limited experience in managing a company which had the research and development and operational growth we anticipate for our Company. The physical expansion of our operations may lead to significant costs and may divert our management and business development resources. Any inability to manage growth could delay the execution of our business plans or disrupt our operations.


We are an “emerging growth company,” and we cannot be certain whether the reduced reporting requirements applicable to emerging growth companies will make our Common Stock less attractive to investors.


We are an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act or the JOBS Act, which was enacted in April 2012. For as long as we continue to be an emerging growth company, we may take advantage of exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies, including not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002 or the Sarbanes-Oxley Act’s reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. We could be an emerging growth company for up to two more years, although circumstances could cause us to lose that status earlier. We will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of our initial public offering of securities, which occurred in March 2012, (b) in which we have total annual gross revenue of at least $1.0 billion or (c) in which we are deemed to be a large accelerated filer, which means the market value of our Common Stock that is held by non-affiliates exceeds $700 million as of the prior June 30th and (2) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the prior three-year period. We cannot predict if investors will find our Common Stock less attractive because we may rely on these exemptions. If some investors find our Common Stock less attractive as a result, there may be a less active trading market for our Common Stock and our stock price may suffer or be more volatile.


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Business disruptions (domestic and/or international) could seriously harm our future revenue and financial condition and increase our costs and expenses.


Our operations could be subject to equipment failures, labor shortages, labor strikes, earthquakes, power shortages, telecommunications failures, floods, hurricanes, typhoons, fires, extreme weather conditions, terrorist activities, medical epidemics, riots, crime, act of foreign enemies, war, nationalization, government sanction, blockage, embargo and other natural or manmade disasters or business interruptions. The occurrence of any of these business disruptions could seriously harm our operations and financial condition and could increase our costs and expenses.


Our corporate headquarters is located in New York.   Our current and future, third-party collaborators, future partners, supplies, CROs and investigational sites are or will be, located throughout the U.S. or internationally and may be located near major high-risk terrorist targets, earthquake faults, flood and fire zones. The ultimate impact on us, our significant partners and suppliers as well as our and their general infrastructures being located near major high-risk terrorist targets, earthquake faults, flood and fire zones and being consolidated in certain geographical areas is unknown, but our operations and financial condition could suffer in the event of a major terrorist attack, earthquake, fire, flood or other natural or manmade disaster.


Our business is also subject to risks associated with conducting international business. If we obtain approval to commercialize any approved products outside of the U.S., a variety of risks associated with international operations could materially adversely affect our business. Some of our third-party collaborators, future partners, suppliers, CROs and investigational sites could be located outside the U.S.  Accordingly, our future success could be harmed by a variety of factors, which include but are not limited to:


•

economic weakness, including inflation or political instability in particular non-U.S. economies and markets;

 

 

•

differing regulatory requirements for drug approvals in non-U.S. countries;

 

 

•

potentially reduced protection for IP rights;

 

 

•

difficulties in compliance with non-U.S. laws and regulations;

 

 

•

changes in non-U.S. regulations and customs, tariffs and trade barriers;

 

 

•

changes in non-U.S. currency exchange rates and currency controls;

 

 

•

changes in a specific country’s or region’s political or economic environment;

 

 

•

trade protection measures, import/export licensing requirements or other restrictive actions by U.S. or non-U.S. governments;

 

 

•

negative consequences from changes in tax laws;

 

 

•

compliance with tax, employment, immigration and labor laws for employees living or traveling abroad;

 

 

•

workforce uncertainty in countries where labor unrest is more common than in the U.S.;

 

 

•

difficulties associated with staffing and managing international operations, including differing labor relations;

 

 

•

production shortages resulting from any events affecting raw material supply or manufacturing capabilities abroad; and

 

 

•

business interruptions resulting from geo-political actions, including war and terrorism or natural disasters including earthquakes, typhoons, floods and fires.


Our internal computer systems or those of our CROs or other contractors or consultants, may fail or suffer security breaches, which could result in a material disruption of our drug development program.


Despite the implementation of security measures, our internal computer systems and those of our CROs and other contractors and consultants are vulnerable to damage from computer viruses, unauthorized access, natural disasters, terrorism, war and telecommunication and electrical failures. While we believe we have not experienced any such system failure, accident or security breach to date, if such an event were to occur and cause interruptions in our operations, it could result in a material disruption of our drug development program. For example, the loss of clinical data from completed or ongoing clinical trials for SM-88 could result in delays in our regulatory approval efforts and significantly increase our costs to recover or reproduce the data. To the extent that any disruption or security breach were to result in a loss of or damage to our data or applications or inappropriate disclosure of confidential or proprietary information, we could incur liability and the further development of SM-88 could be delayed.


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Risks Related to Intellectual Property


Our ability to successfully commercialize our technology and drug candidate may be materially adversely affected if we are unable to obtain and maintain effective IP.


Our success is largely dependent on our ability to obtain and maintain patent and other IP protection in the U.S. and in other countries with respect to our proprietary technology and drug candidates. In some circumstances, we may not have the right to control the preparation, filing and prosecution of patent applications or to maintain or enforce the patents, covering technology or products that we license to third parties or, conversely, that we may license from third parties. Therefore, if we are subject to patent infringement, we cannot be certain that these patents and applications will be prosecuted and enforced in a manner consistent with the best interests of our business. In addition, if third parties who license patents to us or from us fail to maintain such patents or lose rights to those patents, licensing rights may be reduced or eliminated.


We have sought to protect our proprietary position by filing patent applications in the U.S. and abroad related to our novel technologies and products that are important to our business. This process is expensive and time-consuming and we may not be able to file and prosecute all necessary or desirable patent applications at a reasonable cost or in a timely manner. In addition, we may not pursue or obtain patent protection in all relevant markets. It is also possible that we fail to identify patentable aspects of our research and development output before it is too late to obtain patent protection. Our pending and future patent applications may be insufficient to protect our technology or products, completely or in part. In addition, existing and any future patents we obtain may not be extensive enough to prevent others from using our technologies or from developing competing drugs and technologies.


The patent position of specialty pharmaceutical and biotechnology companies generally is highly uncertain and involves complex legal and factual questions for which many legal principles remain unresolved. In recent years, patent rights have been the subject of significant litigation and, as a result, the issuance, scope, validity, enforceability and commercial value of our patent rights are highly uncertain. Our pending and future patent applications may result in patents not being issued to us in the U.S. or in other countries. Changes in either the patent laws or interpretation of patent laws in the U.S. and other countries may diminish the value of our patents or narrow the scope of our patent protection. In addition, the laws of foreign countries may not protect our rights to the same extent as the laws of the U.S.  Publications of discoveries in scientific literature often lag behind the actual discoveries and patent applications in the U.S. and other countries are typically not published until 18 months after filing or in some cases not at all. Therefore, we cannot be certain that we were the first to make the inventions claimed in our patents or pending patent applications or that we were the first to file for patent protection of such inventions. In addition, the United States Patent and Trademark Office or USPTO, might require that the term of a patent issuing from a pending patent application be disclaimed and limited to the term of another patent that is commonly owned or names a common inventor. As a result, the issuance, scope, validity, enforceability and commercial value of our patent rights is highly uncertain.


Recent or future patent reform legislation could increase the uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of our issued patents. In March of 2013, under the recently enacted Leahy-Smith America Invents Act or America Invents Act, the U.S. moved from a “first to invent” to a “first-to-file” system. Under a “first-to-file” system, assuming the other requirements for patentability are met, the first inventor to file a patent application generally will be entitled to a patent on the invention regardless of whether another inventor had made the invention earlier. The America Invents Act includes a number of other significant changes to U.S. patent law, including provisions that affect the way patent applications are prosecuted, redefine prior art and establish a new post-grant review system. The effects of these changes are currently unclear as the USPTO only recently developed new regulations and procedures in connection with the America Invents Act and many of the substantive changes to patent law, including the “first-to-file” provisions, only became effective in 2013. In addition, the courts have yet to address any of these provisions and the applicability of the Act and new regulations on specific patents discussed herein have not been determined and would need to be reviewed. However, the America Invents Act and its implementation could increase the uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of our issued patents, all of which could have a material adverse effect on our business and financial condition. We may become involved in opposition, interference, derivation, inter parties review or other proceedings that challenge our patent rights or the patent rights of others and the outcome of any proceedings are highly uncertain. An adverse determination in any such proceeding could reduce the scope of or invalidate, our patent rights, allowing third parties to commercialize our technology or drug products and compete directly with us, without payment to us or result in our inability to manufacture or commercialize products without infringing third-party patent rights.


Even if our patent applications issue as patents, they may not issue in a form that will provide us with any meaningful protection, prevent competitors from competing with us or otherwise provide us any competitive advantage. Our competitors may be able to circumvent our owned or licensed patents by developing similar or alternative technologies or drugs in a non-infringing manner. The issuance of a patent is not conclusive as to its scope, validity or enforceability and our owned and licensed patents may be challenged


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in the courts or patent offices in the U.S. and abroad. Such challenges may result in the patent claims of our owned or licensed patents being narrowed, invalidated or held unenforceable.  This could limit our ability to stop or prevent us from stopping others from using or commercializing similar or identical technology and drugs or limit the duration of the patent protection of our technology and drug. Given the amount of time required for the development, testing and regulatory review of new drug candidates, patents protecting our drug might expire before or shortly after SM-88 or any other drug product we develop is commercialized. As a result, our patent portfolio may not provide us with sufficient rights to exclude others from commercializing products similar or identical to our drug products or otherwise provide us with a competitive advantage.


We may not be able to protect our IP rights throughout the world.


Filing, prosecuting and defending patents for SM-88 or any other drug product we may develop throughout the world would be prohibitively expensive. Competitors may use our technologies in countries where we have not obtained patent protection to develop their own drugs and, further, may export otherwise infringing products to territories where we have patent protection but where enforcement is not as strong as in the U.S.  These products may compete with our drug products in countries where we do not have any issued patents and our patent claims or other IP rights may not be effective or sufficient to prevent them from so competing. Many companies have encountered significant problems in protecting and defending IP rights in foreign countries. The legal systems of a number of countries, particularly certain developing countries, do not favor the enforcement of patents and other IP protection, including those relating to biopharmaceuticals, which could make it difficult for us to stop the infringement of our patents or marketing of competing products against third parties in violation of our proprietary rights. Further, the initiation of proceedings to enforce or protect our patent rights in foreign countries could result in substantial cost and divert our efforts and attention from other aspects of our business.


Obtaining and maintaining our patent protection depends upon compliance with various procedural, document submission, fee payment and other requirements imposed by governmental patent agencies. Our patent protection could be reduced or eliminated for noncompliance with these requirements.


The USPTO and various non-U.S. patent agencies require compliance with a number of procedural, documentary, fee payment and other provisions during and following the patent prosecution process. Our failure to comply with such requirements could result in abandonment or lapse of a patent or patent application, which would result in partial or complete loss of patent rights in the relevant jurisdiction. In such an event, competitors might be able to enter the market earlier than would have been the case if our patents were in force.


We may become involved in lawsuits or other proceedings to protect or enforce our patents or other IP, which could be expensive, time-consuming and unsuccessful.


Competitors may infringe or otherwise violate our patents, trademarks, copyrights or other IP. To counter infringement or unauthorized use, we or our licensees may be required to file infringement claims, which can be expensive and time-consuming. For example, if we need to file patent infringement lawsuits in the future against manufacturers of generic pharmaceuticals that have filed Abbreviated New Drug Applications with the FDA seeking approval to manufacture and sell generic versions of SM-88 or any other drug product we may develop, we anticipate that the prosecution of such lawsuits will require a significant amount of time and attention from our chief executive officer, chief financial officer and other senior executives. In addition, in a patent infringement proceeding, a court may decide that our patent is invalid or unenforceable or may refuse to stop the other party from using the technology at issue on the grounds that our patents do not cover the technology in question. An adverse result in the litigation or proceeding could put one or more of our patents at risk of being invalidated or interpreted narrowly. Such a result could limit our ability to prevent others from using or commercializing similar or identical technology and drugs, limit our ability to prevent others from launching generic versions of our drug products and could limit the duration of patent protection for our products, all of which could have a material adverse effect on our business. A successful challenge to our patents could reduce or eliminate our right to receive royalties. Furthermore, because of the substantial amount of discovery required in connection with IP litigation, there is a risk that some of our confidential information could be compromised by disclosure during litigation.


Our commercial success depends significantly on our ability to operate without infringing the patents and other proprietary rights of third parties.


Our success will depend in part on our ability to operate without infringing the proprietary rights of third parties. Other entities may have or obtain patents or proprietary rights that could limit our ability to make, use, sell, offer for sale or import/export SM-88, or any other approved drug, or impair our competitive position.


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Patents could be issued to third parties that we may ultimately be found to infringe. Third parties may have or obtain valid and enforceable patents or proprietary rights that could block us from developing drug candidates using our technology. Our failure to obtain a license to any technology that we require may materially harm our business, financial condition and results of operations. Moreover, our failure to maintain a license to any technology that we require for our drug products may also materially harm our business, financial condition and results of operations. Furthermore, we would be exposed to a threat of litigation.


In the pharmaceutical industry, significant litigation and other proceedings regarding patents, patent applications, trademarks and other IP rights have become commonplace. The types of situations in which we may become a party to such litigation or proceedings include:


•

we or our collaborators, may initiate litigation or other proceedings against third parties seeking to invalidate the patents held by those third parties or to obtain a judgment that our drugs or processes do not infringe those third parties’ patents;

 

 

•

if our competitors file patent applications that claim technology also claimed by us or our licensors or collaborators, we or our licensors or collaborators may be required to participate in interference or opposition proceedings to determine the priority of invention, which could jeopardize our patent rights and potentially provide a third-party with a dominant patent position;

 

 

•

if third parties initiate litigation claiming that our processes or products infringe their patent or other IP rights, we and our licensors or collaborators will need to defend against such proceedings; and

 

 

•

if a license to necessary drug technology is terminated, the licensor may initiate litigation claiming that our processes or products infringe or misappropriate their patent or other IP rights and/or that we breached our obligations under the license agreement and we and our collaborators would need to defend against such proceedings.


These lawsuits would likely be costly and could affect our results of operations and divert the attention of our management and scientific personnel. There is a risk that a court would decide that we or our collaborators are infringing the third party’s patents and would order us or our collaborators to stop the activities covered by the patents. In that event, we or our collaborators may not have a viable alternative to the technology protected by the patent and may need to halt work on the affected drug candidate or cease commercialization of an approved product. In addition, there is a risk that a court will order us or our collaborators to pay the other party damages. An adverse outcome in any litigation or other proceeding could subject us to significant liabilities to third parties and require us to cease using the technology that is at issue or to license the technology from third parties. We may not be able to obtain any required licenses on commercially acceptable terms or at all. Any of these outcomes could have a material adverse effect on our business.


The pharmaceutical and biotechnology industries have produced a significant number of patents and it may not always be clear to industry participants, including us, which patents cover various types of products or methods of use. The coverage of patents is subject to interpretation by the courts and the interpretation is not always uniform or predictable. If we are sued for patent infringement, we would need to demonstrate that our products or methods do not infringe the patent claims of the relevant patent or that the patent claims are invalid. We may not be able to do this because proving invalidity is difficult. For example, in the U.S., proving invalidity requires a showing of clear and convincing evidence to overcome the presumption of validity enjoyed by issued patents. Even if we are successful in these proceedings, we may incur substantial costs and divert management’s time and attention in pursuing these proceedings, which could have a material adverse effect on us. If we are unable to avoid infringing the patent rights of others, we may be required to seek a license, defend an infringement action or challenge the validity of the patents in court. We may not have sufficient resources to bring these actions to a successful conclusion. In addition, if we do not obtain a license, develop or obtain non-infringing technology, fail to defend an infringement action successfully or have infringed patents declared invalid, we may incur substantial monetary damages, encounter significant delays in bringing SM-88 or any other drug candidate to market and be precluded from manufacturing or selling one or more of our drug products.


As noted previously, the cost of any patent litigation or other proceeding, even if resolved in our favor, could be substantial. Some of our competitors may be able to sustain the cost of such litigation and proceedings more effectively than we can because of their substantially greater resources. Uncertainties resulting from the initiation and continuation of patent litigation or other proceedings could have a material adverse effect on our ability to compete in the marketplace. Patent litigation and other proceedings may also absorb significant management time.


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We may not be successful in obtaining or maintaining necessary rights to IP through acquisitions and in-licenses.


Because our drugs may require the use of proprietary rights held by third parties, the growth of our business will likely depend in part on our ability to acquire, in-license, maintain or use these proprietary rights. In addition, our drug products may require specific formulations to work effectively and efficiently and the rights to these formulations may be held by others. We may be unable to acquire or in-license any compositions, methods of use, processes or other third-party IP rights from third parties that we identify as necessary for one or more of our drug candidates. The licensing and acquisition of third-party IP rights is a competitive area and a number of more established companies are also pursuing strategies to license or acquire third-party IP rights that we may consider attractive. These established companies may have a competitive advantage over us due to their size, cash resources and greater clinical development and commercialization capabilities.

 

For example, we may sometimes need to collaborate with U.S. and non-U.S. academic institutions to accelerate our nonclinical research or development under written agreements with these institutions. Typically, these institutions could provide us with an option to negotiate a license to any of the institution’s rights in technology resulting from our collaboration. Regardless of such option, we may be unable to negotiate a license within the specified timeframe or under terms that are acceptable to us. If we are unable to do so, the institution may offer the IP rights to other parties, potentially blocking our ability to pursue the applicable drug candidate or program.


In addition, companies that perceive us to be a competitor may be unwilling to assign or license rights to us. We also may be unable to license or acquire third-party IP rights on terms that would allow us to make an appropriate return on our investment. If we are unable to successfully obtain a license to third-party IP rights necessary for the development of our drug products, we may have to abandon its development and therefore, our business and financial condition could suffer.


We may be unable to protect the confidentiality of our trade secrets, thus harming our business and competitive position.


In addition to our patented technology and drug, we rely upon trade secrets, including unpatented know-how, technology and other proprietary information to develop and maintain our competitive position, which we seek to protect, in part, by confidentiality agreements with our current and future employees, as well as our collaborators and consultants. We also have agreements with our employees and selected consultants that obligate them to assign their inventions to us. However, while it is our policy to require our employees and contractors who may be involved in the conception or development of IP to execute such agreements, we may be unsuccessful in executing such an agreement with each party who in fact conceives or develops IP that we regard as our own. In addition, it is possible that technology relevant to our business will be independently developed by a person that is not a party to such an agreement. While to our knowledge the confidentiality of our trade secrets has not been compromised, if the employees, consultants or collaborators that are parties to these agreements breach or violate the terms of these agreements, we may not have adequate remedies for any such breach or violation and we could lose our trade secrets through such breaches or violations. Further, our trade secrets could be disclosed, misappropriated or otherwise become known or be independently discovered by our competitors. In addition, IP laws in foreign countries may not protect our IP to the same extent as the laws of the U.S.  If our trade secrets are disclosed or misappropriated, it would harm our ability to protect our rights and adversely affect our business.


We may be subject to claims that our employees and outside contractors have wrongfully used or disclosed IP from their former employers and clients. IP litigation or proceedings could cause us to spend substantial resources and distract our personnel from their normal responsibilities.


Although we will try to ensure that our employees and outside contractors do not use the proprietary information or the know-how of others in their work for us and we have no knowledge of any instances of wrongful use or disclosure by our employees and outside contractors to date, we may be subject to claims that we or these employees and outside contractors have used or disclosed IP, including trade secrets or other proprietary information from their former employers or clients. Litigation may be necessary to defend our Company against these claims. If we fail in defending any such claims, in addition to paying monetary damages, we may lose valuable IP rights or personnel. Even if we are successful in defending against such claims, litigation or other legal proceedings relating to IP claims may cause us to incur significant expenses and could distract our scientific and management personnel from their normal responsibilities. In addition, there could be public announcements of the results of hearings, motions or other interim proceedings or developments.  Should this occur and securities analysts or investors perceive these results to be negative, it could have a substantial adverse effect on the price of our Common Stock. This type of litigation or proceeding could substantially increase our operating losses and reduce resources available to us for development activities. We may not have sufficient financial or other resources to adequately conduct such litigation or proceedings. Some of our competitors may be able to sustain the costs of such litigation or proceedings more effectively than we can because of their substantially greater financial resources. Uncertainties resulting from the initiation and continuation of patent litigation or other IP-related proceedings could adversely affect our ability to compete in the marketplace.


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If we do not obtain protection under the Hatch-Waxman Amendments and similar non-U.S. legislation for extending the term of patents covering SM-88 and any other drug product we may develop, our business may be materially harmed.


Depending upon the timing, duration and conditions of FDA marketing approval of SM-88 and any other drug product we may develop in the future, one or more of our U.S. patents may be eligible for limited patent term extension under the Drug Price Competition and Patent Term Restoration Act of 1984, referred to as the Hatch-Waxman Amendments and similar legislation in the EU. The Hatch-Waxman Amendments permit a patent term extension of up to five years for a patent covering an approved drug as compensation for effective patent term lost during drug development and the FDA regulatory review process. However, we may not receive an extension if we fail to apply within applicable deadlines, fail to apply prior to expiration of relevant patents or otherwise fail to satisfy applicable requirements. Moreover, the length of the extension could be less than we request. If we are unable to obtain patent term extension or the term of any such extension is less than we request, the period during which we can enforce our patent rights for that drug will be shortened and our competitors may obtain approval to market competing products sooner. As a result, our revenue could be materially reduced.


If our trademarks and trade names are not adequately protected, then we may not be able to build name recognition in our markets of interest and our business may be adversely affected.


Our registered or unregistered trademarks or trade names, to the extent we obtain and use them, may be challenged, infringed, circumvented, declared generic or determined to be infringing on other marks. We may not be able to protect our rights to these trademarks and trade names, which we need to build name recognition among potential partners or customers in our markets of interest. At times, competitors may adopt trade names or trademarks similar to ours, thereby impeding our ability to build brand identity and possibly leading to market confusion. In addition, there could be potential trade name or trademark infringement claims brought by owners of other registered trademarks or trademarks that incorporate variations of our registered or unregistered trademarks or trade names. Over the long term, if we are unable to establish name recognition based on our trademarks and trade names, then we may not be able to compete effectively and our business may be adversely affected. Our efforts to enforce or protect our proprietary rights related to trademarks, trade secrets, domain names, copyrights or other IP may be ineffective and could result in substantial costs and a diversion of resources and could adversely affect our financial condition or results of operations.


Risks Related to Government Regulations


Health care reform measures could hinder or prevent the commercial success of SM-88 any other drug product we may develop.


In the U.S., there have been and we expect there will continue to be, a number of legislative and regulatory changes to the healthcare system that could affect our future revenue and profitability and the future revenue and profitability of our potential customers. Federal and state lawmakers regularly propose and, at times, enact legislation that would result in significant changes to the healthcare system, some of which are intended to contain or reduce the costs of medical products and services. For example, one of the most significant health care reform measures in decades, the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Affordability Reconciliation Act was enacted in 2010. PPACA contains a number of provisions, including those governing enrollment in federal healthcare programs, reimbursement changes and fraud and abuse measures, all of which will affect existing government healthcare programs and will result in the development of new programs. PPACA, among other things:


•

imposes a non-deductible annual fee on entities that manufacture or import certain branded prescription drugs;

 

 

•

increases the minimum level of Medicaid rebates payable by manufacturers of brand-name drugs from 15.1% to 23.1%;

 

 

•

requires collection of rebates for drugs paid by Medicaid managed care organizations;

 

 

•

provides for a new Medicare Part D coverage gap discount program, in which manufacturers must agree to offer 50% point-of-sale discounts off negotiated prices of applicable branded drugs to eligible beneficiaries during their coverage gap period, as a condition for the manufacturer’s outpatient drugs to be covered under Medicare Part D.


While the U.S. Supreme Court upheld most of the constitutional elements of PPACA in June 2012, other legal challenges are still pending final adjudication in several jurisdictions. In addition, Congress has also proposed a number of legislative initiatives, including possible repeal of PPACA. At this time, it remains unclear whether there will be any changes made to PPACA, whether to certain provisions or its entirety. We can provide no assurance that PPACA, as currently enacted or as amended in the future, will not adversely affect our business and financial results and we cannot predict how future federal or state legislative or administrative changes relating to health care reform will affect our business.


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The continuing efforts of the government, insurance companies, managed care organizations and other payors of health care services to contain or reduce costs of health care may, among other things, adversely affect:


•

our ability to set a price we believe is fair for our drug products;

 

 

•

our ability to generate revenue and achieve or maintain profitability; and

 

 

•

the availability of capital.


If we fail to comply with healthcare regulations, we could face substantial penalties and our business, operations and financial condition could be adversely affected.


Certain federal and state healthcare laws and regulations pertaining to fraud and abuse and patients’ rights are and will be, applicable to our business. We could be subject to healthcare fraud and abuse and patient privacy regulation by both the federal government and the states in which we conduct our business. The regulations that may affect our ability to operate include, but are not limited to:


•

the federal healthcare program Anti-Kickback Statute, which prohibits knowingly and willfully offering, soliciting, receiving or providing any remuneration (including any kickback, bribe or rebate), directly or indirectly, overtly or covertly, in cash or in kind, in exchange for or to induce either the referral of an individual for or the purchase order, lease or recommendation of any good, facility, item or service for which payment may be made, in whole or in part, under federal healthcare programs, such as the Medicare and Medicaid programs;

 

 

•

the federal false claims laws and civil monetary penalty laws, which prohibit, among other things, individuals or entities from knowingly presenting or causing to be presented, false or fraudulent claims for payment or approval or knowingly using false statements, to obtain payment from the federal government and which may apply to entities like us which provide coding and billing advice to customers;

 

 

•

the federal Health Insurance Portability and Accountability Act of 1996 (“HIPAA”) which created new federal criminal statutes that prohibit knowingly and willfully executing or attempting to execute, a scheme to defraud any healthcare benefit program or obtain, by means of false or fraudulent pretenses, representations or promises, any of the money or property owned by or under the custody or control of, any healthcare benefit program, regardless of the payor ( e.g ., public or private) and knowingly and willfully falsifying, concealing or covering up by any trick or device a material fact or making any materially false statements in connection with the delivery of or payment for, healthcare benefits, items or services relating to healthcare matters;

 

 

•

the federal physician self-referral law, commonly known as the Stark Law, which prohibits a physician from making a referral to an entity for certain designated health services reimbursed by Medicare or Medicaid if the physician or a member of the physician’s family has a financial relationship with the entity and which also prohibits the submission of any claims for reimbursement for designated health services furnished pursuant to a prohibited referral;

 

 

•

the federal transparency requirements under  PPACA require manufacturers of drugs, devices, biologicals and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program (with certain exceptions) to report annually to the U.S. Department of Health and Human Services or HHS, information related to physician payments and other transfers of value made to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors) and teaching hospitals, as well as certain ownership and investment interests held by physicians and their immediate family members;

 

 

•

HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009 (HITECH) and their respective implementing regulations, which governs the conduct of certain electronic healthcare transactions and protects the security and privacy of protected health information; and

 

 

•

state law equivalents of each of the above federal laws, such as anti-kickback, false claims and transparency laws which may be broader in scope and apply to items or services reimbursed by any third-party payor, including commercial insurers.


PPACA, among other things, amended the intent standard of the federal Anti-Kickback Statute and criminal healthcare fraud statutes to a stricter standard such that a person or entity no longer needs to have actual knowledge of this statute or specific intent to violate it. In addition, PPACA codified case law that a claim including items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the federal False Claims Act.


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If our operations are found to be in violation of any of the laws described above or any other governmental regulations that apply to us, we may be subject to penalties, including civil, criminal and/or administrative penalties, damages, fines, disgorgement and possible exclusion from participation in Medicare, Medicaid and other federal healthcare programs, contractual damages, reputational harm, diminished profits and future earnings and the curtailment or restructuring of our operations, any of which could adversely affect our ability to operate our business and our financial results. Any action against us for violation of these or other laws, even if we successfully defend against it, could cause us to incur significant legal expenses and divert our management’s attention from the operation of our business. Moreover, achieving and sustaining compliance with applicable federal and state privacy, security and fraud laws may prove costly.


Because we and our suppliers, are subject to environmental, health and safety laws and regulations, we may become exposed to liability and substantial expenses in connection with environmental compliance or remediation activities, which may adversely affect our business and financial condition.


Our operations, including our discovery, development, testing, research and manufacturing activities, are subject to numerous environmental, health and safety laws and regulations. These laws and regulations govern, among other things, the controlled use, handling, release and disposal of and the maintenance of a registry for, hazardous materials and biological materials, such as chemical solvents, human cells, carcinogenic compounds, mutagenic compounds and compounds that have a toxic effect on reproduction, laboratory procedures and exposure to blood-borne pathogens. If we fail to comply with such laws and regulations, we could be subject to fines or other sanctions.

 

As with other companies engaged in activities similar to ours, we face a risk of environmental liability inherent in our current and historical activities, including liability relating to release of or exposure to, hazardous or biological materials. Environmental, health and safety laws and regulations are becoming more stringent. We may be required to incur substantial expenses in connection with future environmental compliance or remediation activities, in which case, our production and development efforts may be interrupted or delayed and our financial condition and results of operations may be materially adversely affected.


The third parties with whom we contract to manufacture SM-88 and any other drug products we may develop are also subject to these and other environmental, health and safety laws and regulations. Liabilities they incur pursuant to these laws and regulations could result in significant costs or, in certain circumstances, an interruption in operations, any of which could adversely affect our business and financial condition if we are unable to find an alternate supplier in a timely manner.


Our employees may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements.


We are exposed to the risk of employee fraud or other misconduct. Misconduct by employees could include intentional failures to comply with FDA or EMA regulations, to provide accurate information to the FDA or EMA or intentional failures to report financial information or data accurately or to disclose unauthorized activities to us. Employee misconduct could also involve the improper use of information obtained in the course of clinical trials, which could result in regulatory sanctions and serious harm to our reputation and subjects. We have adopted a code of conduct, but it is not always possible to identify and deter employee misconduct. The precautions we take to detect and prevent this activity may not be effective in controlling unknown or unmanaged risks or losses or in protecting us from governmental investigations or other actions or lawsuits stemming from a failure to comply with these laws or regulations. If any such actions are instituted against us and we are not successful in defending ourselves or asserting our rights, those actions could have a significant impact on our business, including the imposition of significant fines or other sanctions.


If generic manufacturers use litigation and regulatory means to obtain approval for generic versions of products on which our future revenue depends, our business will suffer.


Under the U.S. Food, Drug and Cosmetic Act (“FDCA”), the FDA can approve an ANDA for a generic version of a branded drug without the ANDA applicant undertaking the clinical testing necessary to obtain approval to market a new drug. In place of such clinical trials, an ANDA applicant usually needs only to submit data demonstrating that its drug has the same active ingredient(s) and is bioequivalent to the branded product, in addition to any data necessary to establish that any difference in strength, dosage form, inactive ingredients or delivery mechanism does not result in different safety or efficacy profiles, as compared to the reference drug.


FDCA requires that an applicant for approval of a generic form of a branded drug certify either that its generic drug does not infringe any of the patents listed by the owner of the branded drug in the Approved Drug Products with Therapeutic Equivalence Evaluations, also known as the Orange Book or that those patents are not enforceable. This process is known as a Paragraph IV Challenge. Upon receipt of the Paragraph IV notice, the owner has 45 days to bring a patent infringement suit in federal district court against the company seeking ANDA approval of a drug covered by one of the owner’s patents. The discovery, trial and appeals process in such


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suits can take several years. If this type of suit is commenced, FDCA provides a 30-month stay on the FDA’s approval of the competitor’s application. This type of litigation is often time-consuming, costly and may result in generic competition if the patents at issue are not upheld or if the generic competitor is found not to infringe upon the owner’s patents. If the litigation is resolved in favor of the ANDA applicant or the challenged patent expires during the 30-month stay period, the stay is lifted and the FDA may thereafter approve the application based on the usual standards for approval of ANDAs.


For various strategic and commercial reasons, manufacturers of generic medications frequently file ANDAs shortly after FDA approval of a branded drug regardless of the perceived strength and validity of the patents associated with such products. Based on these past practices, we believe it is likely that one or more such generic manufacturers will file ANDAs with respect to SM-88, if approved by the FDA, prior to the expiration of the patents related to those compounds.


The filing of an ANDA as described above with respect to any of our products could have an adverse impact on our stock price. Moreover, if any such ANDAs were to be approved and the patents covering the relevant products were not upheld in litigation or if a generic competitor were found not to infringe these patents, the resulting generic competition would negatively affect our business, financial condition and results of operations.


The marketing of SM-88, if approved, will be limited to use for the treatment of specific cancer indications and, if we want to expand the indications for which these drug candidates may be marketed, additional regulatory approvals will need to be obtained, which may not be granted.


We are currently seeking regulatory approval of SM-88 for the treatment of metastatic breast cancer. If SM-88 is approved, the FDA will restrict our ability to market or advertise SM-88 for other indications, which could limit physician and patient adoption. We may attempt to develop, promote and commercialize new treatment indications and protocols for future indications for SM-88, but we cannot predict when or if the approval required to do so will be received. In addition, we would be required to conduct additional clinical trials to support approvals for additional indications for SM-88, which would be time-consuming and expensive and may produce results that do not support regulatory approvals. If we do not obtain additional regulatory approvals, our ability to expand our business will be limited.


If SM-88 is approved for marketing and we are found to have improperly promoted off-label uses or if physicians misuse our products or use our products off-label, we may become subject to prohibitions on the sale or marketing of our products, significant fines, penalties, sanctions and drug liability claims.   Additionally, our image and reputation within the industry and marketplace could be harmed.


The FDA and other regulatory agencies strictly regulate the marketing and promotional claims that are made about approved drugs. In particular, a drug may not be promoted for use or indications that are not approved by the FDA or such other regulatory agencies as reflected in the product’s approved labeling. For example, if we receive marketing approval for SM-88 for the treatment of metastatic breast cancer, the first indication we are pursuing, we cannot prevent physicians from using SM-88 for their patients in a manner that is inconsistent with the approved label. If we are found to have promoted such off-label uses prior to FDA approval for an additional indication, we may receive warning letters and become subject to significant liability, which would materially harm our business. The federal government has levied large civil and criminal fines against companies for alleged improper promotion and has enjoined several companies from engaging in off-label promotion. If we become the target of such an investigation or prosecution based on our marketing and promotional practices, we could face similar sanctions, which would materially harm our business. In addition, management’s attention could be diverted from our business operations, significant legal expenses could be incurred and our reputation could be damaged. The FDA has also requested that companies enter into consent decrees or permanent injunctions under which specified promotional conduct is changed or curtailed. If we are deemed by the FDA to have engaged in the promotion of our products for off-label use, we could be subject to FDA prohibitions on the sale or marketing of our products or significant fines and penalties and the imposition of these sanctions could also affect our reputation and position within the industry.


Physicians may also misuse our products, potentially leading to adverse results, side effects or injury, which may lead to drug liability claims. If our products are misused, we may become subject to costly litigation by our customers or their patients. Drug liability claims could divert management’s attention from our core business, be expensive to defend and result in sizable damage awards against us that may not be covered by liability insurance. Furthermore, the use of our products for indications other than those approved by the FDA may not effectively treat such conditions, which could harm our reputation in the marketplace among physicians and patients. Any of these events could harm our business and results of operations and cause our stock price to decline.


Additionally, as with an existing number of previously approved therapeutics to treat cancer, the FDA may require us to educate health care providers and patients about the proper use and administration of  SM-88 or any other drug products we develop in the future and obtain FDA approval to market.


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Being a public company is expensive and administratively burdensome.


As a public reporting company, we are subject to the information and reporting requirements of the Securities Act, the Exchange Act and other federal securities laws, rules and regulations related thereto, including compliance with the Sarbanes-Oxley Act. Complying with these laws and regulations requires the time and attention of our Board of Directors and management and increases our expenses. Among other things, we are required to:


•

maintain and evaluate a system of internal controls over financial reporting in compliance with the requirements of Section 404 of the Sarbanes-Oxley Act and the related rules and regulations of the SEC and the Public Company Accounting Oversight Board;

 

 

•

maintain policies relating to disclosure controls and procedures;

 

 

•

prepare and distribute periodic reports, proxy statements, Forms 8-K and other reports and filings in compliance with our obligations under federal securities laws;

 

 

•

institute a more comprehensive compliance function, including with respect to corporate governance; and

 

 

•

involve, to a greater degree, our outside legal counsel and accountants in the above activities and incur additional expenses relating to such involvement.


The costs of preparing and filing annual and quarterly reports and Forms 8-K, proxy statements and other information with the SEC and furnishing annual reports containing audited financial statements to stockholders is expensive and much greater than that of a privately-held company and compliance with these rules and regulations may require us to hire additional financial reporting, internal controls and other finance personnel and will involve a material increase in regulatory, legal and accounting expenses and the attention of management. There can be no assurance that we will be able to comply with the applicable regulations in a timely manner, if at all. In addition, being a public company makes it more expensive for us to obtain director and officer liability insurance. In the future, we may be required to accept reduced coverage or incur substantially higher costs to obtain this coverage. These factors could also make it more difficult for us to attract and retain qualified executives and members of our Board of Directors, particularly directors willing to serve on an audit committee which we expect to establish in the future.


Any failure to maintain effective internal control over our financial reporting could materially adversely affect us.


Section 404 of the Sarbanes-Oxley Act of 2002 requires us to include in our Annual Reports on Form 10-K an assessment by management of the effectiveness of our internal control over financial reporting. In addition, at such time, if any, as we are no longer a “smaller reporting company,” our independent registered public accounting firm will have to attest to and report on management’s assessment of the effectiveness of such internal control over financial reporting. Based upon an evaluation conducted in connection with the preparation of Tyme’s audited financial statements at and for the year ended December 31, 2013 and our quarterly financial statements at and for the period ended September 30, 2014 and 2013, our current management (which includes the sole directors and executive offices of Tyme prior to the Merger) concluded that our disclosure controls and procedures were not effective as of such dates to ensure that information required to be disclosed in the periodic reports that we file or submit under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms. Specifically, our management determined that there were control deficiencies, although not constituting material weaknesses, including those relating to segregation of duties over cash disbursements, oversight of our outside accounting firm by management, disclosures and the presentation of the original draft of our financial statements to our auditors failing to include necessary items to reflect the financial impact of all transactions involving Tyme during the subject accounting periods and maintaining complete books and records.  Our independent public accountants, in conducting an audit of Tyme’s financial statements as of December 31, 2013, identified several control deficiencies that they believed constituted a significant deficiencies and less severe control deficiencies, individually and in aggregate.  In addition, at the present time, we do not have an audit committee.


We intend to implement a number of changes in our internal control over financial reporting.  Since the date of Tyme’s latest financial statements, we have retained a Chief Financial Officer with substantial experience and appropriate technical knowledge and have begun analyzing our controls and procedures.  With the additional funding provided by the PPO and retention of a CFO, we intend to segregate duties regarding processing disbursements, enact procedures aimed at timely and efficiently maintaining our books and records and financial statement preparations, as well as analyzing both financial and operational transactional activities including verifying that all amounts are properly calculated, required disclosures are properly included and amounts properly presented in our financial statements.


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We must perform system and process evaluation and testing of our internal control over financial reporting to allow management and (if required in future) our independent registered public accounting firm to report on the effectiveness of our internal control over financial reporting, as required by Section 404. Our compliance with Section 404 may require that we incur substantial accounting expenses and expend significant management efforts. We currently do not have an internal audit group and we will need to retain the services of additional accounting and financial staff or consultants with appropriate public company experience and technical accounting knowledge to satisfy the ongoing requirements of Section 404. We intend to review the effectiveness of our internal controls and procedures and make any changes management determines appropriate, including to achieve compliance with Section 404 by the date on which we are required to so comply.


While we intend to diligently and thoroughly document, review, test and improve our internal control over financial reporting in order to ensure compliance with Section 404 in the future, management may not be able to conclude that our internal control over financial reporting is effective. Furthermore, even if management were to reach such a conclusion, if our independent registered public accounting firm is not satisfied with the adequacy of our internal control over financial reporting or if the independent auditors interpret the requirements, rules or regulations differently than we do, then they may decline to attest to management’s assessment or may issue an auditor’s report that is qualified. Any of these events could result in a loss of investor confidence in the reliability of our financial statements, which in turn could negatively affect the price of our Common Stock.


Risks Related to Ownership of Our Common Stock


Our share price is likely to be volatile due to factors beyond our control. There is the possibility that the market price of our Common Stock may drop below the price paid.


All readers of this Current Report on Form 8-K should consider an investment in our Common Stock as risky and invest only if the investor can withstand a significant loss and wide fluctuations in the market value of an investment. Investors may be unable to sell their shares of our Common Stock at or above, the price they paid due to fluctuations in the market price of our Common Stock arising from changes in our operating performance or prospects. In addition, the stock market has recently experienced significant volatility, particularly with respect to pharmaceutical, biotechnology and other life sciences company stocks. The volatility of pharmaceutical, biotechnology and other life sciences company stocks often does not relate to the operating performance of the companies represented by the stock. Some of the factors that may cause the market price of our Common Stock to fluctuate include, but are not limited to:


•

results and timing of our clinical trials and clinical trials of our competitors’ products;

 

 

•

the failure or discontinuation of any of our development programs;

 

 

•

issues in manufacturing SM-88 or any future drugs we may develop and receive governmental approval;

 

 

•

regulatory developments or enforcement in the U.S. and non-U.S. countries with respect to SM-88 or our competitors’ products;

 

 

•

failure to achieve pricing and/or reimbursement levels expected by us or the market;

 

 

•

competition from existing products or new products that may emerge;

 

 

•

developments or disputes concerning patents or other proprietary rights;

 

 

•

introduction of technological innovations or new commercial products by us or our competitors;

 

 

•

announcements by us, our collaborators or our competitors of significant acquisitions, strategic partnerships, joint ventures, collaborations or capital commitments;

 

 

•

changes in estimates or recommendations by securities analysts, if any cover our Common Stock;

 

 

•

fluctuations in the valuation of companies perceived by investors to be comparable to us;

 

 

•

public concern over SM-88 or any future drugs we may develop and receive governmental approval;

 

 

•

litigation;

 

 

•

future sales of our Common Stock;


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•

share price and volume fluctuations attributable to inconsistent trading volume levels of our shares;

 

 

•

additions or departures of key personnel;

 

 

•

changes in the structure of healthcare payment systems in the U.S. or overseas;

 

 

•

the failure of SM-88, if approved or any other approved drug product we may develop, to achieve commercial success;

 

 

•

economic and other external factors or other disasters or crises;

 

 

•

period-to-period fluctuations in our financial condition and results of operations, including the timing of receipt of any milestone or other payments under commercialization or licensing agreements;

 

 

•

general market conditions and market conditions for biopharmaceutical stocks; and

 

 

•

overall fluctuations in U.S. equity markets.


In addition, in the past, when the market price of a stock has been volatile, holders of that stock have instituted securities class action litigation against the company that issued the stock. If any of our stockholders brought a lawsuit against us, we could incur substantial costs defending the lawsuit and divert the time and attention of our management, which could seriously harm our business.


Raising additional capital may cause dilution to our stockholders, restrict our operations or require us to relinquish substantial rights.


Until such time, if ever, as we can generate substantial revenue, we expect to finance our cash needs through a combination of equity offerings, debt financings, grants and license and development agreements in connection with any collaborations. We do not have any committed external source of funds. To the extent that we raise additional capital through the sale of equity or convertible debt securities, then stockholders’ ownership interests will be diluted and the terms of these new securities may include liquidation or other preferences that adversely affect rights of holders of our Common Stock. Debt financing, if available at all, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. If we raise additional funds through collaborations, strategic alliances or licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies, drug candidates, future revenue streams or grant licenses on terms that are not favorable to us. We cannot give any assurance that we will be able to obtain additional funding if and when necessary or on satisfactory terms. If we are unable to obtain adequate financing on a timely basis, we could be required to delay, scale back or eliminate one or more of our development programs or grant rights to develop and market drug candidates that we would otherwise prefer to develop and market ourselves.


Future issuances of our Common Stock or rights to purchase Common Stock pursuant to our equity incentive plans or outstanding warrants could result in additional dilution of the percentage ownership of our stockholders and could cause our share price to fall.


Our Board of Directors authorized to grant equity awards, including stock options, to our employees, directors and consultants, covering up to 10 million shares of our Common Stock, pursuant to our 2015 Equity Incentive Plan. We plan to register the shares available for issuance or subject to outstanding awards under our 2015 Plan.  Future issuances, as well as the possibility of future issuances, under our 2015 Plan or other equity incentive plans could cause the market price of our Common Stock to decrease.

 

If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, our stock price and trading volume could decline.


The trading market for our Common Stock will depend, in part, on the research and reports that securities or industry analysts publish about us or our business. Securities and industry analysts do not currently and may never, publish research on our Company. If no securities or industry analysts commence coverage of our Company, the trading price for our stock would likely be negatively impacted. In the event securities or industry analysts initiate coverage, if one or more of the analysts who cover us downgrade our stock or publish inaccurate or unfavorable research about our business, our stock price would likely decline. In addition, if our operating results fail to meet the forecast of analysts, our stock price would likely decline. Further, if one or more of these analysts cease coverage of our Company or fail to publish reports on us regularly, demand for our stock could decrease, which might cause our stock price and trading volume to decline.


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Provisions in our corporate charter documents and under Delaware law could make an acquisition of us more difficult and may prevent attempts by our stockholders to replace or remove our current management.


Provisions in our corporate charter and our bylaws may discourage, delay or prevent a merger, acquisition or other change in control of us that stockholders may consider favorable, including transactions in which stockholders might otherwise receive a premium for their shares. These provisions could also limit the price that investors might be willing to pay in the future for shares of our Common Stock, thereby depressing the market price of our Common Stock. In addition, these provisions may frustrate or prevent any attempts by our stockholders to replace or remove our current management by making it more difficult for stockholders to replace members of our Board of Directors. Because our Board is responsible for appointing the members of our management team, these provisions could in turn affect any attempt by our stockholders to replace current members of our management team. Among others, these provisions include that:


•

our Board of Directors has the right to expand the size of our board of directors and to elect directors to fill a vacancy created by the expansion of the board of directors or the resignation, death or removal of a director, which prevents stockholders from being able to fill vacancies on our Board;

 

 

•

our certificate of incorporation prohibits cumulative voting in the election of directors, which limits the ability of minority stockholders to elect director candidates;

 

 

•

stockholders must provide advance notice and additional disclosures in order to nominate individuals for election to the board of directors or to propose matters that can be acted upon at a stockholders’ meeting, which may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting to obtain control of our company; and

 

 

•

our Board of Directors may issue, without stockholder approval, shares of undesignated preferred stock; the ability to issue undesignated preferred stock makes it possible for our board of directors to issue preferred stock with voting or other rights or preferences that could impede the success of any attempt to acquire us.


Moreover, because we are incorporated in Delaware, we are governed by the provisions of Section 203 of the Delaware General Corporation Law, which prohibits a person who owns in excess of 15% of our outstanding voting stock from merging or combining with us for a period of three years after the date of the transaction in which the person acquired in excess of 15% of our outstanding voting stock, unless the merger or combination is approved in a prescribed manner.


Investors could lose all of their investment in our Company .


An investment in our securities is speculative and involves a high degree of risk.  Potential investors should be aware that the value of an investment in our Company may go down as well as up.  In addition, there can be no certainty that the market value of an investment in our Company will fully reflect its underlying value.  Investors could lose their entire investment in our Company.


Investors may experience dilution of their ownership interests because of the future issuance of additional shares of our common or preferred stock or other securities that are convertible into or exercisable for our common or preferred stock .


In the future, we may issue our authorized but previously unissued equity securities, resulting in the dilution of the ownership interests of our stockholders at the time of such issuances.  The Company will be authorized to issue an aggregate of 300 million shares of Common Stock and 10 million shares of “blank check” preferred stock.   We may issue additional shares of our Common Stock or other securities that are convertible into or exercisable for our Common Stock in connection with hiring or retaining employees, future acquisitions, future sales of our securities for capital raising purposes or for other business purposes.  The future issuance of any such additional shares of our Common Stock may create downward pressure on the trading price of our Common Stock.  We will need to raise additional capital in the near future to meet our working capital needs and there can be no assurance that we will not be required to issue additional shares, warrants or other convertible securities in the future in conjunction with these capital raising efforts, including at a price (or exercise prices) below the price a stockholder at the time of such securities issuance paid for such stockholder’s stock.


The ability of our Board of Directors to issue additional stock may prevent or make more difficult certain transactions, including a sale or merger of the Company. Our Board of Directors is authorized to issue up to 10 million shares of preferred stock with powers, rights and preferences designated by it.  (See “Preferred Stock” in the section of this Current Report on Form 8-K titled “Description of Securities.”)  Shares of voting or convertible preferred stock could be issued or rights to purchase such shares could be issued, to create voting impediments or to frustrate persons seeking to effect a takeover or otherwise gain control of the Company.  The ability of our Board to issue such additional shares of preferred stock, with rights and preferences it deems advisable, could discourage an


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attempt by a party to acquire control of the Company by tender offer or other means.  Such issuances could therefore deprive stockholders of benefits that could result from such an attempt, such as the realization of a premium over the market price for their shares in a tender offer or the temporary increase in market price that such an attempt could cause. Moreover, the issuance of such additional shares of preferred stock to persons friendly to our Board of Directors could make it more difficult to remove incumbent managers and directors from office even if such change were to be favorable to stockholders generally.


There currently is no public market for our Common Stock and there can be no assurance that a public market will ever develop. Failure to develop or maintain a trading market could negatively affect the value of our Common Stock and make it difficult or impossible for a holder of shares of our Common Stock to sell such shares.


There is currently no public market for shares of our Common Stock and one may never develop. Our Common Stock is quoted on the QM tier of OTC Markets. The OTC Markets is a thinly traded market and lacks the liquidity of certain other public markets with which some investors may have more experience. We may not ever be able to satisfy the listing requirements for our Common Stock to be listed on a national securities exchange, which is often a more widely-traded and liquid market. Some, but not all, of the factors which may delay or prevent the listing of our Common Stock on a more widely-traded and liquid market include the following:


•

our stockholders’ equity may be insufficient;

 

 

•

the market value of our outstanding securities may be too low;

 

 

•

our net income from operations may be too low;

 

 

•

our Common Stock may not be sufficiently widely held;

 

 

•

we may not be able to secure market makers for our Common Stock; and

 

 

•

we may fail to meet other rules and requirements mandated by the several exchanges and markets to have our Common Stock listed.


Should we fail to satisfy the initial listing standards of the national exchanges or our Common Stock is otherwise rejected for listing and remains listed on the OTC Markets or is suspended from the OTC Markets, the trading price of our Common Stock could suffer and the trading market for our Common Stock may be less liquid and our Common Stock price may be subject to increased volatility.


Our Common Stock may be subject to the “penny stock” rules of the SEC and the trading market in the securities is limited, which makes transactions in the stock cumbersome and may reduce the value of an investment in the stock.


Rule 15g-9 under the Exchange Act establishes the definition of a “penny stock,” which, for the purposes relevant to us, is any equity security that has a market price of less than $5.00 per share or with an exercise price of less than $5.00 per share, subject to certain exceptions.  For any transaction involving a penny stock, unless exempt, the rules require:


•

that a broker or dealer approve a person’s account for transactions in penny stocks; and

 

 

•

the broker or dealer receive from the investor a written agreement to the transaction, setting forth the identity and quantity of the penny stock to be purchased.


In order to approve a person’s account for transactions in penny stocks, the broker or dealer must:


•

obtain financial information and investment experience objectives of the person;

 

 

•

make a reasonable determination that the transactions in penny stocks are suitable for that person and the person has sufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks; and

 

 

•

deliver, prior to any transaction in a penny stock, a disclosure schedule prescribed by the SEC relating to the penny stock market, which, in highlight form:


 

•

sets forth the basis on which the broker or dealer made the suitability determination; and

 

 

 

 

•

confirms that the broker or dealer received a signed, written agreement from the investor prior to the transaction.


- 65 -


Disclosure also has to be made about the risks of investing in penny stocks in both public offerings and in secondary trading and about the commissions payable to both the broker or dealer and the registered representative, current quotations for the securities and the rights and remedies available to an investor in cases of fraud in penny stock transactions.  Finally, monthly statements have to be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks.


Generally, brokers may be less willing to execute transactions in securities subject to the “penny stock” rules.  This may make it more difficult for investors to dispose of our Common Stock and cause a decline in the market value of our Common Stock.


Our stock may be traded infrequently and in low volumes, so investors may be unable to sell their shares at or near the quoted bid prices if they need to sell their shares.


Until our Common Stock is listed on a national securities exchange such as the New York Stock Exchange or the Nasdaq Stock Market, we expect our Common Stock to remain eligible for quotation on the OTC Markets or on another over-the-counter quotation system.  In those venues, however, the shares of our Common Stock may trade infrequently and in low volumes, meaning that the number of persons interested in purchasing our Common Stock at or near bid prices at any given time may be relatively small or non-existent. An investor may find it difficult to obtain accurate quotations as to the market value of our Common Stock or to sell the investor’s shares at or near bid prices or at all. In addition, if we fail to meet the criteria set forth in SEC regulations, various requirements would be imposed by law on broker-dealers who sell our securities to persons other than established customers and accredited investors. Consequently, such regulations may deter broker-dealers from recommending or selling our Common Stock, which may further affect the liquidity of our Common Stock. This would also make it more difficult for us to raise capital.


We do not anticipate paying dividends on our Common Stock.


Cash dividends have never been declared or paid on our Common Stock and we do not anticipate such a declaration or payment for the foreseeable future. We expect to use future earnings, if any, to fund business growth. Therefore, stockholders will likely not receive any funds absent a sale of their shares of Common Stock. If we do not pay dividends, our Common Stock may be less valuable because a return on an investment in shares of our Common Stock will only occur if our stock price appreciates. We cannot assure stockholders of a positive return on their investment when they sell their shares, nor can we assure that stockholders will not lose the entire amount of their investment.


The ownership interests in our Company held by two of our executive officers and directors could allow them to significantly influence corporate decision-making in a manner that may not reflect the interests of all of our stockholders.


Steve Hoffman, our chief executive officer and a director and Michael Demurjian, our chief operating officer and a director, each own of record approximately 32.9%, of our Common Stock as of the completion of the Merger and PPO.  As a result, these individuals are positioned to exercise significant influence over the our Company’s management and affairs, including, but not limited to, electing our Board of Directors and exercising managerial influence and voting rights in connection with fundamental corporate transactions to take action that may not reflect the best interests of all of the stockholders of our Company.


MARKET, INDUSTRY AND OTHER DATA


We obtained the industry, market and other data throughout this prospectus from our own internal estimates and research and from industry publications and research, surveys and trials conducted by other third parties. These data involve a number of assumptions and limitations and readers of this Current Report on Form 8-K are cautioned not to give undue weight to such estimates.


Information that is based on estimates, forecasts, projections, market research or similar methodologies is inherently subject to uncertainties and actual events or circumstances may differ materially from events and circumstances that are assumed in this information. In some cases, we do not expressly refer to the sources from which this data is derived. In that regard, when we refer to one or more sources of this type of data in any paragraph, readers of this Form 8-K should assume that other data of this type appearing in the same paragraph is derived from the same sources, unless otherwise expressly stated or the context otherwise requires.


MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS


The following Management’s Discussion and Analysis should be read in conjunction with the historical financial statements and the related notes thereto contained in this Current Report on Form 8-K. The Management’s Discussion and Analysis contains forward-looking statements, such as statements of our plans, objectives, expectations and intentions. Any statements that are not statements of


- 66 -


historical fact are forward-looking statements. When used, the words “believe,” “plan,” “intend,” “anticipate,” “target,” “estimate,” “expect” and the like and/or future tense or conditional constructions (“will,” “may,” “could,” “should,” etc.) or similar expressions, identify certain of these forward-looking statements. These forward-looking statements are subject to risks and uncertainties, including those under “Risk Factors” in this Form 8-K, that could cause actual results or events to differ materially from those expressed or implied by the forward-looking statements. Our Company’s actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of several factors. We do not undertake any obligation to update forward-looking statements to reflect events or circumstances occurring after the date of this Form 8-K.


As the result of the Merger and Split-Off Transaction and the change in business and operations of our Company resulting from such events, a discussion of the past financial results of our Company is not pertinent and under applicable accounting principles the historical financial results of Tyme, the acquirer in the Merger for accounting purposes, prior to the Merger are considered the historical financial results of our Company.


The following discussion highlights Tyme’s results of operations and the principal factors that have affected our financial condition as well as our liquidity and capital resources for the periods described and provides information that management believes is relevant for an assessment and understanding of the statements of financial condition and results of operations presented herein. The following discussion and analysis are based on Tyme’s audited and unaudited financial statements contained in this Form 8-K, which we have prepared in accordance with accounting principles generally accepted in the United States, commonly referred to as “U.S. GAAP.” You should read the discussion and analysis together with such financial statements and the related notes thereto.


Basis of Presentation


The audited consolidated financial statements of Tyme for the fiscal years ended December 31, 2013 and 2012 and the unaudited condensed consolidated financial statements of Tyme for the three and nine months ended September 30, 2014 and 2013, include a summary of our significant accounting policies and should be read in conjunction with the discussion below. In the opinion of management, all material adjustments necessary to present fairly the results of operations for such periods have been included in these audited financial statements. All such adjustments are of a normal recurring nature.


Overview


Tyme is a clinical-stage, research and development pharmaceutical company focused on discovering and developing highly targeted cancer therapeutics for a broad range of oncology indications in humans.  We are currently developing as our first drug product, subject to regulatory approval, SM-88, which we believe to be a first-in-class drug that harness the body’s own immune defenses to fight tumor cells. Our drug is based on a mechanism designed to utilize oxidative stress, among other techniques, to selectively kill cancer cells.


We believe that the net proceeds from the PPO, together with our existing cash as of September 30, 2014 including the remaining funds from Tyme’s issuance and funding of the Bridge Note that was converted into shares of our Common Stock upon consummation of the Merger and PPO, will enable us to fund our planned operating expenses and capital expenditure requirements for a currently forecast period of approximately the next nine months. This forecast period could vary and is subject to numerous factors, including actual research and development results and general and administrative costs and expenses differing from our current estimates of such future results and expenditures. We will need to secure additional funding in the future, from one or more equity or debt financings, collaborations or other sources, in order to carry out all of our planned research and development and potential commercialization activities.


Financial Overview


Revenue


We have not generated any revenue from commercial product sales since we commenced operations. In the future, if any of our product candidates are approved for commercial sale, we may generate revenue from product sales or, alternatively, we may choose to select a collaborator or licensee to commercialize our product candidates and receive revenues through such arrangements.


Progressing any, as yet speculative revenues, will require that we develop not only a viable and regulatory-approved product candidate, but that we also build the necessary operational skills and secure appropriate employees and consultants to either commercialize directly or collaborate with partners. We have yet to fully develop such skills, retain appropriate employees and consultants or enter into any collaborations (if we deem entry into such collaborations to be beneficial to us).


- 67 -


Research and Development Expenses


Our research and development costs are expensed as incurred and are primarily comprised of external research and development expenses incurred under arrangements with third parties, such as contract research organizations (“CROs”), contract manufacturing organizations (“CMOs”), independent clinical trial site operators and consultants and employee-related expenses including salaries and benefits. We do not currently utilize a formal time allocation system to capture expenses on a project-by-project basis as the majority of our past and planned expenses have been and will be in support of the development of our lead product candidate, SM-88, as well as our technology platform and IP portfolio and the further enhancement of our research and development activities.


Research and development activities are central to our business model. We plan to increase our research and development expenses for the foreseeable future. Our research and development expenses may vary substantially from period to period based on the timing of our research and development activities, including the timing of the initiation of clinical trials and enrollment of patients in clinical trials. Research and development expenses are expected to increase as we advance the clinical development of SM-88 and further advance our technology platform and any other drug candidates we may choose to develop. The successful development of our product candidates is highly uncertain. At this time, we cannot reasonably estimate the nature, timing and estimated costs of the efforts, when we will incur and recognize these costs that will be necessary to complete the development efforts or the period, if any, in which material net cash inflows may commence from any of our product candidates.


Additionally, we will incur substantial costs beyond our present and future clinical trials in order to file with the FDA Investigational New Drug Applications and, thereafter, New Drug Applications for our product candidates, including SM-88, and, in each case, the nature, design, size and cost of further studies and trials will depend in large part on the outcome of preceding studies and trials and discussions with regulators. The cost of the nonclinical and clinical work may be substantially different from what we anticipate, due to factors outside our controls.  We currently do not have the funds to support all expected and required R&D activities and will need to raise such funds through public or private offers of debt and or equity securities. No definitive plans are in place at this time with respect to any offering of our securities and we can give no assurance that any such offerings will be successful, on terms favorable to our Company or will raise sufficient funds that are needed at any time during the periods the R&D activities are planned.  


It is difficult to determine with certainty the costs and duration of our current or future clinical trials and pre-clinical studies or if, when or to what extent we will generate revenues from the commercialization and sale of our product candidate if we obtain regulatory approval. We may never succeed in achieving regulatory approval for any of our product candidates. The duration, costs and timing of our clinical trials will depend on a variety of factors that include but are not limited to:


•

per patient trial costs;

 

 

•

the number of patients that participate in the trials;

 

 

•

the number of sites included in the trials;

 

 

•

the countries in which the trials are conducted;

 

 

•

the length of time required to enroll eligible patients;

 

 

•

the number of doses that patients receive;

 

 

•

the drop-out or discontinuation rates of patients;

 

 

•

potential additional safety monitoring or other studies requested by regulatory agencies;

 

 

•

the duration of patient follow-up;

 

 

•

the efficacy and safety profile of the drug candidates;

 

 

•

slower than expected rate of subject recruitment and enrollment;

 

 

•

slower than projected Institutional Review Board, Independent Ethics Committee, and other regulatory review and approval;


- 68 -


•

the Data Monitoring Committee of the FDA requires one or more of our clinical trials to be stopped;

 

 

•

failure of subjects to complete their full participation in one or more of our clinical trials or return for post-treatment follow-up;

 

 

•

unforeseen safety issues, including severe or unexpected drug-related adverse effects experienced by subjects, including the possibility of death;

 

 

•

withdrawal of participation by a principal investigator in one or more of our clinical trials;

 

 

•

inability or unwillingness of subjects or clinical investigators to comply with clinical trial procedures;

 

 

•

resolution of data discrepancies;

 

 

•

inadequate CRO, management and/or monitoring in one or more of our clinical trials;

 

 

•

the need to repeat, reconstruct or terminate one or more of our clinical trials due to inconclusive or negative results or unforeseen complications in testing; and

 

 

•

a request by the FDA to abandon one of more of our current drug development programs.


Product candidates in later stages of clinical development generally have higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical trials. The full extent of costs we may incur is highly speculative and not defined.


General and Administrative Expenses


General and administrative (“G&A”) expenses consist primarily of salaries and related costs for executive and other administrative personnel and consultants, including, travel expenses and expenses related to business development activities. Other general and administrative expenses include professional fees for legal, patent review, consulting and accounting services. General and administrative expenses are expensed when incurred.


We expect that our general and administrative expenses will increase in the future as a result of new employee hiring, stock based compensation, retaining and utilizing outside consultants, the scaling of operations to support more advanced clinical trials and building the appropriate infrastructure for our responsibilities as a public company including establishing necessary financial controls and procedures for compliance with the requirements established by and under the Sarbanes–Oxley Act. We anticipate that our incremental costs per year associated with being a publicly traded company may be substantial and it is possible that our actual incremental costs will be higher than we currently estimate. These increases will likely include increased costs for insurance, hiring of additional personnel, board and outside consultant compensations, outside consultants, investor relations, legal, accounting and audit services, among other expenses.


Interest Expense


Interest expense represents, non-cash interest expense incurred on the convertible debt we have issued.


Results of Operations


Revenues


We do not anticipate recognizing any revenues until such time as one of our products has been approved for marketing by appropriate regulatory authorities or we enter into collaboration or licensing arrangement, none of which is anticipated to occur in the near future.


The following table summarizes certain information in our Unaudited Condensed Consolidated Statement of Operations for the Three and Nine Months ended September 30, 2014 and 2013.


- 69 -


 

 

(Unaudited)

 

(Unaudited)

 

 

 

For the three months ended September 30,

 

For the nine months ended September 30,

 

 

 

2014

 

2013

 

2014

 

2013

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

$

286,979

 

$

167,494

 

$

431,274

 

$

455,944

 

General and administrative

 

 

601,473

 

 

126,003

 

 

719,851

 

 

198,634

 

Total operating expenses

 

 

888,452

 

 

293,494

 

 

1,151,125

 

 

654,578

 

Loss from operations

 

 

(888,452

)

 

(293,497

)

 

(1,151,125

)

 

(654,578

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

30,544

 

 

2,037

 

 

44,509

 

 

2,037

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

 

(918,996

)

 

(295,534

)

 

(1,195,634

)

 

(656,615

)

Loss attributable to non-controlling interests

 

 

(83

)

 

(68,213

)

 

(10,956

)

 

(188,573

)

Loss attributable to controlling interests

 

$

(918,913

)

$

(227,321

)

$

(1,184,678

)

$

(468,042

)


Comparison for the three months ended September 30, 2014 and 2013


We did not recognize any revenues for the three months ended September 30, 2014 and 2013.


Research and Development Expenses


Our R&D expenses for the three months ended September 30, 2014 increased by $119,485 or 71%, to $286,979 from $167,494 for the three months ended September 30, 2013. The increase between the three-month periods was primarily due to a scaling of our proof of concept activities as we not only worked with patients, but purchase the supplies of the necessary therapeutics to accomplish our work during the proof of concept phase.


All R&D expenditures have been incurred in respect of our lead drug candidate, SM-88, its platform. We expect to incur further and larger amounts of R&D expenditures as we plan to prepare for and look to execute on a Phase II clinical trial of SM-88 upon regulatory approval to proceed with such trial.  Future R&D expenditures are subject to successfully raising the required capital and securing the necessary people and processes to direct our activities.


General and Administrative Expenses


Our G&A expenses for the three months ended September 30, 2014 increased by $475,470 or 377%, to $601,473 from $126,003 for the three months ended September 30, 2013.  The increase between the three-month periods was due to increased legal and accounting activities associated with our plans to seek further investment funds and preparations to complete the Merger and associated filings with the SEC. We also incurred increased expenses associated with employing senior management to lead key operational activities.


We expect our G&A expenses, subject to securing ongoing funding, to increase as our operations grow. Key ongoing drivers for our G&A expenses may include legal, accounting, auditing and other costs associated with our planned R&D activities in support of contracts and potential patent related activities internationally; costs associated with migrating to a public company; corporate office expenses and further costs associated with hiring employees.


Interest Expense


Our interest expense was $30,544 for the three months ended September 30, 2014 as compared to interest expense of $2,037 for the three months ended September 30, 2013. The increase was primarily due to interest expense incurred on the USVC convertible debt, funded in part during the 2013 three-month period and the Bridge Note originally issued in July 2014. The USVC debt was converted into equity in August 2014 and the Bridge Note was converted into equity contemporaneous with the consummation of the Merger in March of 2015.


Comparison for the Nine Months Ended September 30, 2014 and 2013


We did not recognize any revenues for the nine months ended September 30, 2014 and 2013.


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Research and Development Expenses


Our R&D expenses for the nine months ended September 30, 2014 decreased by $24,670 or 5%, to $431,274 from $455,944 for the nine months ended September 30, 2013.  The decrease between the nine-month periods was primarily due to a consistent pace of progress in our proof of concept activities.


All R&D expenditures have been incurred in respect of our lead drug candidate, SM-88. We expect to incur further and larger amounts of R&D expenditures as we plan to prepare for and execute on a Phase II clinical trial of our lead drug candidate SM-88. Future R&D expenditures are subject to successfully raising the required capital and securing the necessary people and processes to direct our activities.


General and Administrative Expenses


Our general and administrative expenses for the nine months ended September 30, 2014 increased by $521,217 or 262%, to $719,851 from $198,634 for the nine months ended September 30, 2013.  The increase between the nine-month periods was due to increased legal and accounting activities associated with our plans to seek further investment funds, preparations to complete the Merger and associated filings with the SEC and expenses related to filling domestic and international patent applications. We also incurred increased expenses associated with employing senior management to lead key operational activities.


We expect our G&A expenses, subject to securing ongoing funding, to increase as our operations grow. Key ongoing drivers for our G&A expenses may include legal , accounting, auditing and other costs associated with our planned R&D activities in support of contracts and potential patent related activities internationally, costs associated with migrating to a public company, corporate office expenses and further costs associated with hiring employees.


Interest Expense


Our interest expense was $44,509 for the nine months ended September 30, 2014 as compared to interest expense of $2,037 for the nine months ended September 30, 2013. The increase was primarily due to interest expense incurred on the USVC debt and Bridge Note. The USVC debt was converted into equity in August of 2014 and the Bridge Note was converted into equity contemporaneous with the consummation of the Merger in December 2014.


Comparison for the Year Ended December 31, 2012 and 2013


The following table summarizes certain information for our Audited Condensed Consolidated Statement of Operations for fiscal years ended December 31, 2013 and 2012.


 

 

2013

 

2012

 

Operating expenses:

 

 

 

 

 

 

 

Research and development

 

$

744,717

 

$

602,981

 

General and administrative

 

 

307,100

 

 

284,598

 

Total operating expenses

 

 

1,051,817

 

 

887,579

 

Loss from operations

 

 

(1,051,817

)

 

(887,579

)

 

 

 

 

 

 

 

 

Interest expense

 

 

5,855

 

 

—

 

 

 

 

 

 

 

 

 

Net loss

 

 

(1,057,672

)

 

(887,579

)

Loss attributable to non-controlling interests

 

 

285,847

 

 

295,860

 

Loss attributable to controlling interests

 

$

(771,825

)

$

(591,719

)


We did not recognize any revenues for our fiscal years ended December 31, 2013 and 2012.


Research and Development Expenses


Our R&D expenses for our fiscal year ended December 31, 2013 increased by $141,736 or 24%, to $744,717 from $602,981 for our fiscal year ended December 31, 2012. The increase between the fiscal years was primarily due to increased clinical development activities relating to our lead drug candidate, SM-88. All R&D expenditures relate to the development of our lead drug candidate, SM-88, its platform. We expect to incur further additional expenditures in respect of our R&D activities subject to securing necessary financial funding and hiring the necessary employees with the required skills to execute on our R&D plans.


- 71 -


Subject to securing the necessary capital, future clinical trials will drive material levels of expenditure, which are likely to be significantly greater than the expenditures we incurred in 2013 or 2012. There is no certainty at all that envisaged increased R&D expenditures will translate successfully into a regulatory-approved and commercially viable therapeutic product.


General and Administrative Expenses


Our G&A expenses for our fiscal year ended December 31, 2013 increased by $22,502, or 8%, to $307,100 from $284,598 for our fiscal year ended December 31, 2012.  The increase was primarily due to an increase in consulting and legal fees relating to patent research and regulatory filings. We expect our G&A expenses to increase as we scale up our operations and move into further complex areas of the clinical trial process. Key drivers of G&A will relate to legal costs, costs associated with conducting our operations as a public company, corporate office expenses and the hiring of personnel, including consultants, to both execute and manage our operational activities.


Interest Expense


Our interest expense increased was $5,855 for our fiscal year ended December 31, 2013 as compared to $0 for our fiscal year ended December 31, 2012. The increase was primarily due to interest payable on the convertible debt we issued commencing in 2013. The USVC debt was converted into equity in August of 2014.


Liquidity and Capital Resources


We have incurred losses and negative cash flows from operations since inception and have an accumulated deficit of $2,707,424 as of September 30, 2014. We incurred net losses of $1,057,672 and $887,579 for the years ended December 31, 2013 and December 31, 2012, respectively and net losses of $1,195,634 and $656,615 for the nine months ended September 30, 2014 and September 30, 2013, respectively. We anticipate incurring additional losses until such time, if ever, that we can generate significant revenues from our lead drug candidate, SM-88, which currently is in development and/or any other drug candidates we may develop.


Historically, we have financed our operations primarily through capital contributions and issuance of convertible debt. From inception through September 30, 2014, we have received proceeds of $2,663,000 from capital contributions and $2,226,000 from the issuance of convertible notes. The total proceeds from capital contributions and convertible debt issuance totaling $4,889,000 were reduced by amounts advanced to stockholders and members of $1,455,838. At September 30, 2014, we had cash of $289,628.


In the second quarter of 2013, we began receiving funds from the issuance of another note. The total amount borrowed under this note was $1.126 million, of which $200,000 was funded in 2014 and $926,000 was funded in 2013.


During the third quarter of 2014, we received $1.1 million of proceeds from the issuance of a Bridge Note.  In November of 2014, the holder of the Bridge Note loaned our Company an additional $250,000 and the Bridge Note was amended and restated to reflect the increased principal amount of $1.35 million.  In January of 2015, the holder of such note loaned Tyme an additional $960,000 and the note was further amended and restated to reflect a principal amount of $2.31 million.  In February of 2015, the note was further amended to reflect a change in its mandatory conversion feature to a fixed amount, as further discussed below.  The note as amended and restated is referred to in this Current Report on Form 8-K as the “Bridge Note.”


We believe that the net proceeds from the PPO, together with our existing cash as of September 30, 2014 including the remaining funds from Tyme’s issuance of the Bridge Note that was converted in shares of our Common Stock upon consummation of the Merger and PPO, will enable us to fund our planned operating expenses and capital expenditure requirements for an estimated nine months.  We will need to secure additional funding in the future, from one or more equity or debt financings, collaborations or other sources, in order to carry out all of our planned research and development and potential commercialization activities.


Cash Flows


The following is a summary of cash flows for the years ended December 31, 2013 and 2012 and the nine months ended September 30, 2014 and 2013:


- 72 -


 

(Unaudited)

 

 

 

 

Nine Months Ended September 30,

 

Year Ended December 31,

 

 

2014

 

2013

 

2013

 

2012

 

Net Cash Used in Operating Activities

$

(975,682

)

$

(738,888

)

$

(1,199,246

)

$

(706,696

)

Net Cash Used in Investing Activities

$

(2,710

)

$

(12,473

)

$

(19,953

)

$

(2,200

)

Net Cash Provided by Financing Activities

$

1,175,400

 

$

895,348

 

$

1,311,819

 

$

705,343

 

Net Cash Increase (Decrease) in Cash

$

197,008

 

$

143,987

 

$

92,620

 

$

(3,553

)


Operating Activities


Net cash used in operating activities was $975,682 for the nine months ended September 30, 2014, consisting primarily of a net loss of $1,195,634 offset by non-cash depreciation expense of $3,635 and a net change in operating assets and liabilities of $216,317. The change in operating assets and liabilities was driven by an increase in prepaid assets of $8,725 and a decrease in accounts payable and other current liabilities of $225,042. The decrease in accounts payable and accrued expenses was primarily due to the timing and volume of our payment of costs related to ongoing development of our product candidate.


Net cash used in operating activities was $738,888 for the nine months ended September 30, 2013, consisting primarily of a net loss of $656,615, offset by non-cash depreciation expense of $376 and a net change in operating assets and liabilities of $82,469. The change in operating assets and liabilities was driven by an increase in prepaid assets of $110,080 and a decrease in accounts payable and other current liabilities of $27,431. The net decrease in operating assets and liabilities was primarily due to the timing and volume of our payment of costs related to ongoing development of our product candidate.


Net cash used in operating activities was $1,199,246 for the year ended December 31, 2013, consisting primarily of a net loss of $1,057,672 offset by non-cash depreciation expense of $514 and a net change in operating assets and liabilities of $142,088. The net change in operating assets and liabilities comprised an increase in prepaid assets of $110,080 as we made advance payments to secure supplies required for our proof of concept activities and an increase in accounts payable and other current liabilities of $32,008, which was associated with the timing of payments made to our clinical partners in the ordinary course of business.


Net cash used in operating activities was $706,696 for the year ended December 31, 2012 and consisted primarily of a net loss of $887,579 offset by non-cash depreciation expense of $210 and a net change in operating assets and liabilities of $180,673. The change in operating activities and liabilities comprised a decrease in prepaid assets of $11,103 due to the timing of payments made in the ordinary course of business and an increase in accounts payable and other current liabilities of $169,570. The increase in accounts payable and other current liabilities was primarily due to the timing of our payments of costs related to ongoing development of our product candidate.


Investing Activities


Cash used in investing activities during the nine months ended September 30, 2014 decreased by $9,763 or 78%, to $2,710, as compared to $12,473 during the nine months ended September 30, 2013. The decrease was driven primarily by a reduction in the purchases of equipment.


Cash used in investing activities during the year ended December 31, 2013 increased by $17,753, to $19,953, as compared to $2,200 during the year ended December 31, 2012. The increase was driven primarily due to equipment purchases. We currently envision making office equipment purchases, principally computers and printers, in the near future as our R&D efforts continue and become more complex and in connection with our becoming a public company.


Financing Activities


Cash provided by financing activities during the nine months ended September 30, 2014 increased by $280,052 or 31%, to $1,175,400 from $895,348 for the nine months ended September 30, 2013. The net proceeds of $1,175,400 were primarily driven by proceeds from the sale of the Bridge Note of $1,100,000, proceeds from the issuance of a convertible note totaling $200,000 and proceeds from capital contributions of $25,000. The gross proceeds of $1,325,000 were reduced by advances made to stockholders/members totaling $149,600.


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Cash provided by financing activities during the year ended December 31, 2013 increased by $606,476 or 86%, to $1,311,819 as compared to $705,343 during the year ended December 31, 2012. The net proceeds of $1,311,819 were primarily driven by proceeds in 2013 from the issuance of convertible notes of $926,000 and proceeds from capital contributions of $1,096,400. The gross proceeds of $2,022,400 in the year ended December 31, 2013 were reduced by advances made to stockholders/members totaling $710,581.


Ongoing and enhanced net inflows of financing, which are not guaranteed, will be critical to our ability to execute our plans to engage in R&D and other operational activities. There is no reliable and consistent established framework in place for us to receive financing.


Critical Accounting Policies and Significant Judgments and Estimates


We base this Management’s Discussion and Analysis of Financial Condition and Results of Operations on our financial statements, which we have prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of our financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities and expenses and the disclosure of contingent assets and liabilities in our financial statements. We evaluate our estimates and judgments on an ongoing basis. We base our estimates on historical experience, known trends and events and various other factors that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. Readers should consider their evaluations of our financial condition and results of operations with these policies, judgments and estimates in mind.


While we describe our significant accounting policies in the notes to our financial statements appearing elsewhere in this Current Report on Form 8-K, we believe the following accounting policies are the most critical to the judgments and estimates we use in the preparation of our financial statements.


Clinical Trial Expense Accruals


As part of the process of preparing our financial statements, we are required to estimate our accrued expenses. As we migrate to a more complex Phase II and later clinical trial phases, we envisage that our clinical trial accrual process will account for expenses resulting from our obligations under contracts with vendors, consultants and CROs and clinical site agreements in connection with conducting clinical trials. The financial terms of these contracts are subject to negotiations, which will vary from contract to contract and may result in payment flows that do not match the periods over which materials or services are provided to us under such contracts.


Our objective is to reflect the appropriate clinical trial expenses in our financial statements by matching the appropriate expenses with the period in which services and efforts are expended. We will account for these expenses according to the progress of the trial as measured by subject progression and the timing of various aspects of the trial. We will determine accrual estimates through financial models that take into account discussion with applicable personnel and outside service providers as to the progress or state of completion of trials. During the course of a clinical trial, we will adjust our clinical expense recognition if actual results differ from our estimates. We will make estimates of our accrued expenses as of each balance sheet date in our financial statements based on the facts and circumstances known to us at that time. Our clinical trial accrual and prepaid assets are dependent, in part, upon the receipt of timely and accurate reporting from CROs and other third-party vendors. Although we do not expect our estimates to differ materially from amounts we actually incur, our understanding of the status and timing of services performed relative to the actual status and timing of services performed may vary and may result in us reporting amounts that are too high or too low for any particular period.


Convertible Debt


We have issued convertible debt to help fund our growth and operations. We evaluate the features of our convertible debt in accordance with under FASB ASC Topic 470-20, Debt with Conversion and Other Options and 815-15, Derivatives and Hedging, Embedded Derivatives. The evaluation is done at the time of issuance of convertible debt.


We evaluated each issuance of its convertible debt and determined the embedded conversion features qualify for a scope exception for derivative instruments that are both indexed to our own stock and classified in stockholders equity.  These embedded features therefore are not separately recorded as derivative instruments under ASC 815.


We account for potential beneficial conversion features under ASC 470-20, Debt with Conversion and Other Options. At the time of each of the issuances of convertible debt, our common stock into which each of the convertible debt issuances is convertible had an estimated fair value less than the effective conversion prices of the convertible debt. Therefore, there was no intrinsic value on the respective commitment dates, which required separate recognition and amortization.


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ASC 820, Fair Value Measurement (ASC 820), establishes a fair value hierarchy for instruments measured at fair value that distinguishes between assumptions based on market data (observable inputs) and our own assumptions (unobservable inputs). Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from sources independent of our Company. Unobservable inputs are inputs that reflect our assumptions about the inputs that market participants would use in pricing the asset or liability and are developed based on the best information available in the circumstances.


ASC 820 identifies fair value as the exchange price or exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As a basis for considering market participant assumptions in fair value measurements, ASC 820 establishes a three-tier fair value hierarchy that distinguishes among the following:


•

Level 1 — Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that we have the ability to access.

 

 

•

Level 2 — Valuations based on quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active and models for which all significant inputs are observable, either directly or indirectly.

 

 

•

Level 3 — Valuations based on inputs that are unobservable and significant to the overall fair value measurement.


To the extent that the valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment.  Accordingly, the degree of judgment exercised by us in determining fair value is greatest for instruments categorized in Level 3. A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement.


Items measured at fair value on a recurring basis include money market funds. The fair value of our stock, which is an element of the intrinsic value calculation for conversion feature embedded in our convertible debt was made at the time of issuance and is non-recurring.  In the absence of publicly quoted stock price, our evaluation of the fair market value of our stock and the convertible feature of the convertible debt issues has required management to consider all three levels of fair value measurement noted above.


In the absence of a public trading market for our Common Stock, we must develop an estimate of the fair value of our Common Stock. We determined the fair value of our Common Stock based on values assigned by potential investors and other various objective and subjective factors including external market conditions affecting the biopharmaceutical industry, trends within the biopharmaceutical industry, our results of operations and financial position, the status of our research and development efforts and progress of our clinical programs, our stage of development and business strategy, the lack of an active public market for our Common Stock and the likelihood of achieving a liquidity event such as the Merger or PPO in light of prevailing market conditions.


As we make further progress in our maturing as a public company and should we need to issue other convertible instruments, we will utilize the process and methodologies detailed above. During the periods presented, we have not changed the manner in which it values assets and liabilities that are measured at fair value using Level 3 inputs.


Operating and Capital Expenditure Requirements


We have not achieved profitability since our inception and we expect to continue to incur net losses for the foreseeable future. We expect our cash expenditures to increase in the near term as we fund our planned clinical trials for our product candidate. As a result of the Merger, we will be a publicly traded company and will incur significant legal, accounting and other expenses that we were not required to incur as a private company. In addition, the Sarbanes-Oxley Act, as well as rules adopted by the SEC, requires public companies to implement specified corporate governance practices that were inapplicable to us as a private company. We expect these rules and regulations will increase our legal and financial compliance costs and will make certain activities more time-consuming and costly. At the current time, we are unable to estimate these costs.


We believe that the net proceeds from the PPO, together with our existing cash as of September 30, 2014 and remaining proceeds of our sale of the Bridge Note, will enable us to fund our planned operating expenses and capital expenditure requirements for at least the next nine months. However, we will need to raise funds in the future to pay for our operations in general and our planned clinical trials. In order to meet these additional cash requirements, we may seek to issue additional equity or convertible debt securities that may result in dilution to our then current stockholders. If we raise additional funds through the issuance of preferred stock or convertible debt securities, these securities could have rights senior to those of our Common Stock and could contain covenants that restrict our operations, ability to seek further financing and distributions on our Common Stock. There can be no assurance that we will be able to obtain additional equity or debt financing on terms acceptable to us, if at all. Our failure to obtain sufficient funds on acceptable terms when needed could have a negative impact on our business, results of operations and financial condition.


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Our future capital requirements will depend on many factors, including:


•

the results of our pre-clinical studies and clinical trials;

 

 

•

the development, regulatory approval and commercialization of our product candidate, SM-88;

 

 

•

the scope, progress, results and costs of researching and developing our current product candidates or any other future product candidates and conducting pre-clinical studies and clinical trials;

 

 

•

the timing of and the costs involved in, obtaining regulatory approvals for our current product candidates or any other future product candidates;

 

 

•

the cost of commercialization activities if our current product candidates or any other future product candidates are approved for sale, including marketing, sales and distribution costs;

 

 

•

the cost of manufacturing our current product candidates or any other future product candidates for pre-clinical studies, clinical trials and, if approved, commercial sale;

 

 

•

our ability to establish and maintain strategic collaborations, licensing or other arrangements and the financial terms of such agreements;

 

 

•

the results of any product liability, infringement or other lawsuits related to our current product candidates or future approved products, if any;

 

 

•

the expenses needed to attract and retain skilled personnel;

 

 

•

the costs associated with being a public company;

 

 

•

the costs involved in preparing, filing, prosecuting, maintaining, defending and enforcing patent claims, including litigation costs and the outcome of such litigation; and

 

 

•

the timing, receipt and amount of sales of or royalties on, future approved products, if any.


In addition, the probability of success for our product candidates will depend on numerous factors, including regulatory approval, competition, manufacturing capability, commercial viability and the effects of significant and changing government regulations. Our commercial success depends upon attaining significant market acceptance of our product candidates, if approved for sale, among physicians, patients, healthcare payors and the medical community. We will determine which commercializing programs to pursue and how much to fund each program in response to the scientific and clinical success of our product candidates, as well as an assessment of our product candidates’ commercial potential.


Please see “Risk Factors” above for additional risks associated with our substantial capital requirements.


Contractual Obligations and Commitments


At our current stage of development and at a stage where we have yet to secure material and recurring amounts of financial funding, we do not have any significant contractual obligations. We will plan to enter into longer term obligations once we have a credible level of clarity on the financial resources consistently available to us.

 

Off-Balance Sheet Arrangements


We do not have any off-balance sheet arrangements, as defined by applicable SEC regulations.


Quantitative and Qualitative Disclosure About Market Risk


We are exposed to market risks in the ordinary course of our business. These market risks are principally limited to interest rate fluctuations.


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We had cash and cash equivalents of $289,628 at September 30, 2014, consisting primarily of funds in cash and money market accounts. The primary objective of our investment activities is to preserve principal and liquidity while maximizing income without significantly increasing risk. We do not enter into investments for trading or speculative purposes. Due to the short-term nature of our investment portfolio, we do not believe an immediate 1.0% increase in interest rates would have a material effect on the fair market value of our portfolio and, accordingly, we do not expect a sudden change in market interest rates to materially affect our operating results or cash flows.


We do not believe that inflation and changing prices had a significant impact on our results of operations for any periods presented herein.


JOBS Act


For as long as we remain an “emerging growth company” under the recently enacted JOBS Act, we will, among other things:


•

be exempt from the provisions of Section 404(b) of the Sarbanes-Oxley Act, which requires that our independent registered public accounting firm provide an attestation report on the effectiveness of our internal control over financial reporting;

 

 

•

be permitted to omit the detailed compensation discussion and analysis from proxy statements and reports filed under the Exchange Act and instead provide a reduced level of disclosure concerning executive compensation; and

 

 

•

be exempt from any rules that may be adopted by the Public Company Accounting Oversight Board requiring mandatory audit firm rotation or a supplement to the auditor’s report on the financial statements.


Although we are still evaluating the JOBS Act, we currently intend to take advantage of some or all of the reduced regulatory and reporting requirements that will be available to us so long as we qualify as an “emerging growth company.”  Among other things, this means that our independent registered public accounting firm will not be required to provide an attestation report on the effectiveness of our internal control over financial reporting so long as we qualify as an emerging growth company, which may increase the risk that weaknesses or deficiencies in our internal control over financial reporting go undetected. Likewise, so long as we qualify as an emerging growth company, we may elect not to provide you with certain information, including certain financial information and certain information regarding compensation of our executive officers, that we would otherwise have been required to provide in filings we make with the SEC, which may make it more difficult for investors and securities analysts to evaluate our Company. As a result, investor confidence in our company and the market price of our Common Stock may be materially and adversely affected.


Section 107 of the JOBS Act also provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an “emerging growth company” can delay the adoption of new or revised accounting standards until those standards would otherwise apply to private companies. We have elected to avail ourselves of this exemption from new or revised accounting standards and, therefore, we will not be subject to the same new or revised accounting standards as other public companies that are not emerging growth companies.


Off-Balance Sheet Arrangements


The Company did not engage in any “off-balance sheet arrangements” (as that term is defined in Item 303(a)(4)(ii) of Regulation S-K) as of September 30, 2014.


SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT


Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission and generally includes voting or investment power with respect to securities. In accordance with SEC rules, shares of our Common Stock which may be acquired upon exercise of stock options or warrants which are currently exercisable or which become exercisable within 60 days of the date of the  table below are deemed beneficially owned by the holders of such options and warrants and are deemed outstanding for the purpose of computing the percentage of ownership of such person, but are not treated as outstanding for the purpose of computing the percentage of ownership of any other person.


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The following table sets forth information with respect to the beneficial ownership of our Common Stock as of the date of the closing of the Merger, March 5, 2015 (the “Determination Date”), after giving effect to the Merger, Split-Off Transaction, PPO, conversion of the Bridge Note, surrender of 26,276,600 shares by the Pre-Merger Company Stockholders pursuant to the Merger Agreement and the issuance of 250,000 shares to a consultant, by (i) each stockholder known by us to be the beneficial owner of more than 5% of our Common Stock, (ii) each of our directors and executive officers and (iii) all of our directors and executive officers as a group.  To the best of our knowledge, except as otherwise indicated and subject to community property laws, where applicable, each of the persons named in the table has sole voting and investment power with respect to the shares of our Common Stock beneficially owned by such person.  To our knowledge, none of the shares listed below are held under a voting trust or similar agreement, except as noted.  Other than the Merger, to our knowledge, there is no arrangement, including any pledge by any person of securities of the Company or any of its parents, the operation of which may at a subsequent date result in a change in control of the Company.  Our Common Stock is our only class of voting securities currently outstanding.


The following table assumes that all of the 8.5 million shares of our Common Stock held in escrow pursuant to the PPO Note Escrow Agreement and Adjustment Shares Escrow Agreement and the 6.4 million shares of our Common Stock issued to the pre-Merger Tyme Stockholders in connection with the Merger but held in escrow pursuant to the Indemnification Shares Escrow Agreement will be released to the owners of such shares and not surrendered for cancellation.


Unless otherwise indicated in the following table, the address for each person named in the table is c/o Tyme Technologies, Inc., 48 Wall Street – Suite 1100, New York, New York 10005.


 

 

Amount and Nature of Beneficial Ownership

Name and Address of Beneficial Owner

 

Number

 

 

Percentage

Steve Hoffman (1)

 

28,277,800

(2)

 

32.9%

Michael Demurjian (3)

 

28,277,800

(2)

 

32.9%

Akber Pabani (4)

 

0

 

 

0.0%

GEM Global Yield Fund LLC SCS (5)

 

8,596,540

(6)

 

9.9%

U.S. VC Partners, LLC (7)

 

4,984,400

 

 

5.8%

Patrick G. LePore (8)

 

0

(9)

 

0.0%

Dr. Gerald Sokol (8)

 

0

(9)

 

0.0%

Timothy C. Tyson (8)

 

0

(9)

 

0.0%

All directors and executive officers as a group (6 persons)

 

56,555,600

 

 

65.8%

__________

(1)

Mr. Hoffman is a director, Chief Executive Officer, Chief Science Officer and President of our Company.

 

 

(2)

Includes 1,413,890 shares of our Common Stock held in escrow pursuant to the Indemnification Shares Escrow Agreement.

 

 

(3)

Mr. Demurjian is a director, Chief Operating Officer and Executive Vice President of our Company.

 

 

(4)

Mr. Pabani is Chief Financial Officer and Treasurer of our Company.

 

 

(5)

The address for GEM is 590 Madison Avenue – 36 th Floor, New York, New York 10022.  Christopher Brown is the manager of GEM and was the holder of the Bridge Note.  Mr. Brown designated GEM to receive the Conversation Shares upon the conversion of the Bridge Note which occurred contemporaneously with the closing of the Merger and PPO.

 

 

(6)

Includes 5 million shares of our Common Stock held in escrow pursuant to the PPO Note Pledge Agreement and 3.5 million shares held in escrow pursuant to the Adjustment Shares Escrow Agreement.  GEM would receive additional shares of our Common Stock, if all of the Qualified Offering Shares are issued.

 

 

(7)

The address of U.S. VC Partners, L.P. is 900 Third Avenue - 19th Floor, New York, New York 10022.

 

 

(8)

Patrick G. LePore, Dr. Gerald Sokol and Timothy C. Tyson each serve as a director of our Company.

 

 

(9)

Under our independent director compensation policy, each of our independent directors will be entitled to receive shares of our Common Stock effective the last day of each calendar quarter, provided such independent director is serving on our Board of Directors on such date.  The number of shares each independent director is entitled to receive shall be based upon the market price of our Common Stock on the effective issuance date.  The first issuance of shares under our independent director compensation policy will occur as of March 31, 2015.  Until such date, we will be unable to determine the number of shares each independent director shall then be entitled to receive under our independent director compensation policy.


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DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS


Directors and Executive Officers


Set forth below are the names of and certain information regarding our current executive officers and directors, each of whom was appointed effective as of the closing of the Merger:


Name

 

Age

 

Position(s)

 

Date Elected to Our
Board of Directors

Steve Hoffman

 

52

 

Director and Chief Executive Officer

 

March 5, 2015 *

Michael Demurjian

 

48

 

Director and Chief Operating Officer

 

March 5, 2015 *

Patrick G. LePore

 

59

 

Director

 

March 10, 2015

Dr. Gerald Sokol

 

71

 

Director

 

March 10, 2015

Timothy C. Tyson

 

62

 

Director

 

March 10, 2015

Akber Pabani

 

49

 

Chief Financial Officer

 

N/A

__________

*   Messrs. Hoffman and Demurjian served as the sole directors of Tyme since its formation on July  26, 2013.


During the negotiations that resulted in the terms of the Merger Agreement, the parties, including representatives of GEM, agreed that Steve Hoffman and Michael Demurjian would become directors of our Company following the consummation of the Merger and that Tyme would have the right to designate three individuals to serve as independent directors on our Board after the consummation of the Merger from a list of director candidates provided GEM and the holder of the Bridge Note.  As a result of such negotiations and in accordance with the terms of the Merger Agreement, Messrs. Hoffman and Demurjian became our sole directors upon consummation of the Merger.  Neither GEM nor any of its affiliates has any right to appoint or nominate any person to serve as a director of our Company.  Following the consummation of the Merger, we expanded our Board of Directors by three members, each of whom we believe meets the NASDAQ Stock Market definition of independent director.  These three new members are Patrick LePore, Dr. Gerald Sokol and Timothy Tyson.


In the future, our directors are to be elected at our Company’s annual stockholders’ meetings, each to serve until the next annual meeting of our stockholders and until their respective successors are elected and qualified.  Directors are to be elected by a plurality of the votes cast at the annual meeting of our stockholders and hold office until the expiration of the term for which he or she was elected and until a successor has been elected and qualified.


A majority of the number of directors then serving on our Board of Directors constitutes a quorum for the purpose of the transaction of business at a meeting of our Board.  Directors must be present at the meeting for the purpose of determining a quorum.  However, any action required or permitted to be taken by our Board may be taken without a meeting if all members of the Board of Directors consent in writing to the action.


Executive officers are appointed by our Board and serve at its pleasure.


The principal occupation and business experience during the past five years for our executive officers and directors is as follows:


Steve Hoffman has served as Chief Executive Officer of Tyme since its formation in July 2013 and as a manager of Luminant since its formation in September 2011.  In such roles and continuing with his position as Chief Executive Officer, Chief Science Officer and President of our Company, he supervises the development of our product candidates.  He has over 25 years of holding a variety of senior management positions with companies in the chemistry, aerospace and laser optics fields.  Prior to the establishment of Luminant, Mr. Hoffman was a co-founder and, from 1993 to 2007, Chief Technology Officer of Mikronite Technologies Group Inc., a developer, licensor and marketer of material surfacing technologies for various manufacturing processes and applications.  At Mikronite, Mr. Hoffman supervised its implementation of proprietary technology.  He has received numerous patents and has pending other patent applications, including a patent and three patent applications that have been assigned to our Company.  His efforts on behalf of Mikronite were recognized by The Home Depot and Lowe’s with a Best New Product award and an Innovative Technology award from the New Jersey Manufacturers Association.  Mr. Hoffman attended New York University and Rutgers University with a concentration in mechanical engineering from 1980 to 1984 and continued his studies under the direct supervision of the chairman of the physics department at the University of Michigan specializing in physics and electro-optics.


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Michael Demurjian has served as Chief Operating Officer of Tyme since its formation in July 2013 and as a manager of Luminant since its formation in September 2011.  In such roles and continuing with his position as Chief Operating Officer and Executive Vice President of our Company, he leads the research teams in development, studies and data collection for our submissions to regulatory authorities, including the FDA.  Prior to the establishment of Luminant, Mr. Demurjian was a co-founder and, from 1993 to 2007, Director of Marketing of Mikronite Technologies Group, Inc., a developer, licensor and marketer of material surfacing technologies for various manufacturing processes and applications.  At Mikronite, Mr. Demurjian established all marketing activities and functions, marketing research and analysis, marketing strategy, implementation planning, project, process and vendor management organizational management and leadership. His efforts on behalf of Mikronite were recognized by The Home Depot and Lowe’s with a Best New Product award and an Innovative Technology award from the New Jersey Manufacturers Association.  Mr. Demurjian received a BA in Economics from New York University in 1986. 


Akber Pabani was appointed Chief Financial Officer of Tyme on March 5, 2015 and became our Chief Financial Officer upon the consummation of the Merger.  Mr. Pabani served as Chief Financial Officer of Y-Prime Inc., a start-up healthcare information technology company focused on clinical trial, software, information services and SaaS contracts, from 2012 to February 2014.  From 2008 to 2011, he was Vice-President – Finance of Moksha8 Pharmaceuticals Inc., a specialty pharmaceutical company.  Mr. Pabani served in various executive positions, including as Vice President – Finance, at Mars Electronics International and affiliated companies during 2003 through 2007, Finance Director for the United Kingdom and Ireland region of a financial services division of Electronic Data Systems Inc. during 2001 through 2003 and held various financial positions with Eastman Kodak from 1991 through 2000.  He also performed audit and consulting assignments for a number of publicly-quoted companies while a CPA with Grant Thornton from 1987 through 1990.  Mr. Pabani received his BA in Economics from the University of Kent (United Kingdom) in 1987, became a Chartered Accountant (England and Wales) in 1990, received his MBA from London Business School in 1998 and qualified as a CPA in 2007.


Patrick G. LePore served as Chairman, CEO and President of Par Pharmaceuticals, Inc. (NYSE: PRX) from September 2006 through November 2012.  Par is a healthcare company focusing on the development, licensing, manufacturing and distributing of generic and branded drugs, with facilities in New York, California and Chennai, India.  Through Mr. LePore’s leadership, Par increased its value and market presence during his tenure culminating in its sale to Texas Pacific Group (TPG) in a going private transaction.  Mr. LePore transitioned to Chairman of the new company beginning in November 2012.  Mr. LePore’s leadership in the pharmaceutical industry has spanned both private and public sectors with board and operational experience in each. His experience includes building and running a large pharmaceutical service business as well as a fully integrated manufacturing business. Mr. LePore’s unique background makes him one of a handful of pharmaceutical executives with an in depth knowledge of the brand, generics and pharmaceutical service industries. He began his career with Hoffmann La Roche and then founded Boron LePore and Associates, a medical communications company, which he took public in 1997 and was eventually sold to Cardinal Health in 2002.   As an accomplished and respected life science executive, Mr. LePore has extensive experience in all areas of executive management including human resources, executive development, strategic planning, mergers and acquisition, business development, investor relations and corporate governance.  He also brings over 30 years of industry relationships and an impeccable reputation among his colleagues. Throughout his career, Mr. LePore has served on nonprofit and corporate boards.  In addition to chairing the Par board, he is currently the Chairman of Agene Bio and serves on the boards of PharMerica (NYSE:PMC) and Villanova University.  A graduate of Villanova University, he holds an MBA from Farleigh Dickinson University.


Gerald H. Sokol , MD, MSc, FCP, attained his medical degree from Indiana University’s Combined Degree Program in Experimental Medicine with a Masters Degree in Pharmacology and an MD.  He interned in Medicine at Temple University and attended the U.S. Public Health Service Hospital in affiliation with the National Cancer Institute, Johns Hopkins and the University of Maryland completing training in Internal Medicine. He then completed training at the Massachusetts General Hospital, Harvard Medical School in Radiation Oncology, Medical Oncology and Clinical Pharmacology attaining Board Certification in Internal Medicine, Medical Oncology, Radiation Oncology, Clinical Pharmacology, and later Quality Assurance and Utilization Review. He also is certified in Skin Cancer Medicine from the University of Queensland.  Dr Sokol has been Chief of Radiation Oncology at the University of South Florida’s Tampa General Hospital and has built or contributed to building over ten cancer centers. He is a board member and partner of Florida Cancer Specialists and Research Institute.  Dr Sokol is a decorated retired Captain in the US Navy and served as Commanding Officer of the unit at the Uniformed Services University. Dr. Sokol currently holds professorships in Medicine and Pharmacology at that institution. While maintaining a medical practice, Dr. Sokol served on the review staff of the FDA for over 27 years as a senior regulatory scientist and officer composing over 300 white papers, IND and NDA reviews and opinion papers.  Dr. Sokol has authored or coauthored over 100 books, book chapter, abstracts and papers on a multitude of clinical issues. He is a lifetime fellow and board member of the American Cancer Society and a fellow of the American College of Clinical Pharmacology.


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Timothy C. Tyson serves as the President of Alkaloida Chemical Company Zrt. Mr. Tyson served as Interim Chief Executive Officer of Caldera Pharmaceuticals, Inc. from September 23, 2014 to November 21, 2014. He served as Interim Chief Executive Officer and Executive Chairman of Aptuitand at Laurus Labs Private Limite since August 2008. He has over 30 years of remarkable corporate career in the pharmaceutical industry. He served as Acting Chief Executive Officer of Aptuit LLC since September 2008. He served as the President of ICN Hungary Co., Ltd. (also called as ICN Hungary Ltd.). Mr. Tyson served as the Chief Executive Officer of Valeant Pharmaceuticals International (formerly, ICN Pharmaceuticals Inc.) from January 1, 2005 to February 1, 2008. He served as President of Valeant Pharmaceuticals International from November 2002 to February 1, 2008 and served as its Chief Operating Officer from November 2002 to December 2004. He served as President of Global Manufacturing and Supply for GlaxoSmithKline plc. from June 1998 to November 2002. From 1997 to 1998, Mr. Tyson served as GlaxoSmithKline’s Vice President and General Manager of Business Operations. During his 14-year tenure at GlaxoSmithKline, he served in a variety of roles with broad international and domestic responsibilities, including significant management experience running two divisions: Glaxo Dermatology and Cerenex Pharmaceuticals. He was responsible for managing all sales and marketing for the U.S. operations, where he launched over 30 new products. Prior to his tenure at GlaxoSmithKline, Mr. Tyson served in a number of executive positions at Bristol-Myers Company in Operations and Research and Development. Prior to his tenure at Bristol-Myers, he served as a Manufacturing Manager for Procter & Gamble. He served as an Officer in the United States Army from 1974 to 1979 and spent 14 years in the United States Army Reserves. He has been Independent Non-Executive Chairman of Caldera Pharmaceuticals since April 1, 2014 and has been a director since October 2013. He has been Chairman of the Board of Aptuit LLC since August 2008 and its Manager since August 2008. He has been Independent Director of Marken Limited since March 05, 2013. He serves as a Director of Alkaloida Chemical Company Zrt. He serves as Director of ICN Hungary Co., Ltd., and Valeant Pharmaceuticals. He served as a Director of Ventaira Pharmaceuticals, Inc. He serves as Director for the Pharmaceutical Research and Manufacturing Association; BICOM; the Chief Executive Officer Roundtable for the University of California at Irvine; the Dean’s Executive Forum at Cal State Fullerton; the Chief Executive Officer Council on Cancer; the Health Sector Advisory Board at Duke University; the Leadership Forum of the International Society of Pharmaceutical Engineers and as a visiting lecturer at Cambridge University. Mr. Tyson serves on the board of directors for a number of non-profit organizations. He served as a Director of Valeant Pharmaceuticals International from 2004 to February 1, 2008. In 2002, Mr. Tyson received a Bicentennial Leadership Award from the United States Military Academy at West Point and was named 2007 Alumnus of the Year at Jacksonville State University. Mr. Tyson received a Master in Business Administration and Master in Public Administration from Jacksonville State University in 1979 and 1976, respectively. He is also a 1974 graduate of the United States Military Academy at West Point.


Director Independence


We are not currently subject to listing requirements of any national securities exchange or inter-dealer quotation system which has requirements that a majority of the board of directors of a listed/quoted company be “independent” and, as a result, we are not at this time required to have our Board of Directors comprised of a majority of “independent directors.”  Our Board was recently expanded by the addition of three independent directors, Patrick G. LePore, Dr. Gerald Sokol and Timothy C. Tyson, each of whom we believe meets the Nasdaq Stock Market definition of independent director.


Family Relationships


There are no family relationships among our directors or executive officers.


Involvement in Certain Legal Proceedings


None of our directors or executive officers has been involved in any of the following events during the past ten years:


•

any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time;

 

 

•

any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offences);

 

 

•

being subject to any order, judgment or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his or her involvement in any type of business, securities or banking activities; or

 

 

•

being found by a court of competent jurisdiction (in a civil action), the SEC or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law and the judgment has not been reversed, suspended or vacated.


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Board Committees


We have not established an executive, audit, compensation, nominating or any other committee of our Board of Directors.  Our Board of Directors may designate from among its members an executive committee and/or one or more other committees in the future and adopt appropriate charters for such committees.  Further, we do not have a policy with regard to the consideration of any director-candidates recommended by our stockholders.  To date, no stockholder has made any such recommendations.  Our entire Board of Directors performs all functions that could otherwise be performed by committees.  In connection with and following the Merger, our board underwent a complete change in membership.  We intend to address in the near future the establishment of various Board committees, including the possible creation of separate audit, compensation and nominating committees.


Audit Committee Financial Expert


We have no separate audit committee at this time.  Our entire Board of Directors oversees our audits and auditing procedures.  Our Board has at this time not determined whether any director is an “audit committee financial expert” within the meaning of Item 407(d)(5) of SEC Regulation S-K.

 

Compensation Committee Interlocks and Insider Participation

 

We have no separate compensation committee at this time. No executive officer of our Company has served as a director or member of the compensation committee (or other committee serving an equivalent function) of any other entity, one of whose executive officers served as director of our Company during 2013.


Code of Ethics


The Company currently has not adopted a written code of ethics.


EXECUTIVE COMPENSATION


General


The following table sets forth, with respect to our fiscal years ended December 31, 2014 and 2013, all compensation earned by or paid to all persons who served as Chief Executive Officer of Tyme or our Company at any time during our fiscal year ended December 31, 2014 and such other executive officer and other employees of our Company who were employed by Tyme or our Company as of the close of business on December 31, 2014 and whose total annual salary and bonus earned during our fiscal year ended December 31, 2014  exceeded $100,000.  No compensation in the form of stock, options or other equity were granted or issued to any of the persons set forth in the following table during the periods indicated as compensation.


SUMMARY COMPENSATION TABLE


Name and Principal Position

 

Year (1)

 

Salary

 

All Other
Compensation

 

Total

 

Peter de Svastich, CEO and President

 

2014

 

$

0

 

$

0

 

$

0

 

of our Company (2)

 

2013

 

 

N/A

 

 

N/A

 

 

N/A

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Steve Hoffman, CEO of Tyme and

 

2014

 

$

225,000

 

 

(4)

 

$

225,000

 

currently CEO of our Company (3)

 

2013

 

$

0

 

 

(4)

 

$

0

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Michael Demurjian, COO of Tyme and

 

2014

 

$

225,000

 

 

(6)

 

$

225,000

 

currently COO of our Company (5)

 

2013

 

$

0

 

 

(6)

 

$

0

 

_________

(1)

Prior to the consummation of the Merger, our fiscal year ended on November 30 th of each calendar year.  In connection with the consummation of the Merger, our fiscal year was changed so as to end on December 31 st of each calendar year to conform with the fiscal year historically used by Tyme.  The compensation and other information contained for Peter de Svastich, the sole CEO and President of our Company throughout 2014, contained in the table is with respect to our fiscal years ended November 30, 2014 and 2013.  Information in the table concerning Steve Hoffman and Michael Demurjian is with respect to Tyme’s fiscal years ended December 31, 2014 and 2013.  


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(2)

Mr. Svastich served as our Chief Executive Officer and President from April 26, 2013 to the date of the consummation of the Merger on February March 5, 2015.

 

 

(3)

Mr. Hoffman served as President and Chief Executive Officer of Tyme since its incorporation on July 26, 2013 and became our Chief Executive Officer upon the consummation of the Merger on March 5, 2015.

 

 

(4)

During 2012, Mr. Hoffman received advances from Luminant, a subsidiary of Tyme, totaling $250,000.  During 2013, Mr. Hoffman received additional advances from Luminant totaling $250,000.  In 2014, the rights to receive repayment of these advances was assigned to a third party in connection with such third party’s sale to Mr. Hoffman of one-half of the third party’s membership interest in Luminant, which acquired membership interest Mr. Hoffman then assigned and contributed to Tyme.  Mr. Hoffman remains obligated to repay the amount of the advances to such third party.

 

 

 

In addition, during 2013, Tyme made advances to Mr. Hoffman totaling $103,072.  Prior to the consummation of the Merger and in order for our Company to be in compliance with applicable laws regarding loans by public entities to their executive officers and directors, the amount of the advances was recognized by Mr. Hoffman as income and we recognized an expense equal to the amount of such 2013 advances.  Mr. Hoffman did not otherwise receive any compensation from Tyme or our Company during 2013 and 2014, other than salary totaling $225,000 in 2014 (as reflected in the table) and his other benefits consisted solely of Tyme or Luminant reimbursing him for health insurance premiums for him ($2,875 in 2013 and $6,919 in 2014).

 

 

(5)

Mr. Demurjian served as Vice President and Chief Operating Officer of Tyme from its incorporation on July 26, 2013 and became our Chief Operating Officer upon the consummation of the Merger on March 5, 2015.

 

 

(6)

During 2012, Mr. Demurjian received advances from Luminant, a subsidiary of Tyme, totaling $273,657.  During 2013, Mr. Demurjian received additional advances from Luminant totaling $254,416.  In 2014, the rights to receive repayment of these advances was assigned to a third party in connection with such third party’s sale to Mr. Demurjian of one-half of the third party’s membership interest in Luminant, which acquired membership interest Mr. Demurjian then assigned and contributed to Tyme.  Mr. Demurjian remains obligated to repay the amount of the advances to such third party.

 

 

 

In addition, during 2013, Tyme made advances to Mr. Demurjian totaling $102,293.  Prior to the consummation of the Merger and in order for our Company to be in compliance with applicable laws regarding loans by public entities to their executive officers and directors, the amount of the advances was recognized by Mr. Demurjian as income and we recognized an expense equal to the amount of such 2013 advances.  Mr. Demurjian did not otherwise receive any compensation from Tyme or our Company during 2013 and 2014, other than salary totaling $225,000 in 2014 (as reflected in the table) and his other benefits consisted solely of Tyme or Luminant reimbursing him for health insurance premiums for him and his family ($8,920 in 2013 and $16,144 in 2014).


We have no plans in place and have never maintained any plans that provide for the payment of retirement benefits or benefits that will be paid primarily following retirement including, but not limited to, tax qualified deferred benefit plans, supplemental executive retirement plans, tax-qualified deferred contribution plans and nonqualified deferred contribution plans.


Except as indicated below and our employment agreements with Messrs. Hoffman and Demurjian discussed in the section titled “Employment Agreements” below, we have no contracts, agreements, plans or arrangements, whether written or unwritten, that provide for payments to the named executive officers listed above.


Outstanding Equity Awards at Fiscal Year-End


We have one compensation plan approved by our stockholders, our 2015 Equity Incentive Plan (the “2015 Plan”).  As of end of our last completed fiscal year and through the date of this Current Report on Form 8-K, we had not granted any awards under the 2015 Plan.


Employment Agreements


We have entered into employment agreements with each of Steve Hoffman, our Chief Executive Officer and Chief Science Officer and Michael Demurjian, our Chief Operating Officer.  Under these agreements, which were effective as of the consummation of the Merger, Messrs. Hoffman and Demurjian will each be entitled to an annual base salary of $450,000 and such performance bonuses as our board of directors may determine, from time to time, in its sole discretion.  The base salaries will be reviewed annually


- 83 -


(commencing in 2016) by our board of directors; provided that the base salaries may not be decreased from their then current levels due to any board review.  The employment agreements each have a term of five years; provided, however, that commencing on the first anniversary of the effective date of the agreements and on each anniversary thereafter, the term shall automatically be extended by one year, such that, at any time during the term of the agreement, the remaining employment term shall never be less than four years and one day.  If the executive is terminated without “Cause” or for “Good Reason,” the executive will be entitled to receive his base salary plus any accrued but unpaid performance bonus, with the base salary payable at the same intervals as the base salary would have been payable if the termination had not occurred.  If the employment is terminated for “Cause,” or in the case of the executive’s death or disability, the executive will only be entitled to his base salary through the termination date, plus any accrued and unpaid performance bonus as of the termination date.  “Cause” is defined in the employment agreements as: (i) a breach by the executive of the agreement, (ii) the executive’s conviction of, guilty plea to or confession of guilt of, a felony involving us, (iii) materially fraudulent, dishonest or illegal conduct by the executive in the performance of services for or on behalf of us or any of our affiliates, (iv) any conduct by the executive in material violation of any company policy, (v) any conduct by the executive that is materially detrimental to the reputation of our Company or any of our affiliates, (vi) the executive’s misappropriation of our or any of our affiliates’ funds, (vii) the executive’s gross negligence or willful misconduct or willful failure to comply with written directions of our board of directors which directions are within the scope of the executive’s duties, (viii) the executive’s engaging in conduct involving an act of moral turpitude or (ix)  a breach of the executive’s duty of loyalty to us or our affiliates.  “Good Reason” is defined in each of the employment agreements as our failure to make all payments due the executive under the employment agreement after notice thereof.


All descriptions of Messrs. Hoffman’s and Demurjian’s Employment Agreements herein are qualified in their entireties by reference to the texts thereof filed as exhibits hereto, which are incorporated herein by reference.  


Director Compensation


Prior to the consummation of the Merger, none of our directors or directors of Tyme received any cash compensation for their service as members of our Board of Directors, but they were reimbursed for reasonable out-of-pocket expenses incurred in connection with their duties as directors.


Our Board currently consists of five persons, including two directors who also serve as two of our executive officers, Steve Hoffman and Michael Demurjian.  We believe that each of the three other directors meet the independent director standards of the NASDAQ Stock Market.  Our Board has established a director compensation policy, effective as of March 10, 2015, pursuant to which we will compensate our independent directors at the annual rate of $100,000, of which 50% will be paid in cash quarterly in arrears and 50% in the form of restricted shares of our Common Stock to be issued under the 2015 Plan on a quarterly basis, also in arrears.


Science Advisory Board


We intend to establish a Science Advisory Board, consisting of persons with experience in the oncology, pharmaceutical and health industries.  Members of this Advisory Board would provide advice to us, individually and as a group at meetings organized by our Company, subject to availability and their individual obligations to their employees and clients, as applicable.  We intend to grant to each Advisory Board member at the time he/she joins the Advisory Board with an award, granted under the 2015 Plan, of an option to purchase 50,000 shares of our Common Stock, such option to have a term of five years, have an exercise price equal to the closing price of our Common Stock on the date of grant and vest over a three-year period commencing on the first anniversary of the date of grant.  


CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS


SEC rules require us to disclose any transaction or currently proposed transaction in which our Company is a participant and in which any related person has or will have a direct or indirect material interest involving the lesser of $120,000 or one percent (1%) of the average of the Company’s total assets as of the end of last two completed fiscal years.  A related person is any executive officer, director, nominee for director or holder of 5% or more of the Company’s common stock or an immediate family member of any of those persons.


The descriptions set forth above under the captions “The Merger and Related Transactions - Merger Agreement,” “- Split-Off,” “- the PPO,” “- Registration Rights,” “- Voting Agreement,” “- 2014 Equity Incentive Plan,” “- Lock-up Agreements and Other Restrictions” and “Executive Compensation -Employment Agreements” and “- Director Compensation” and below under “Description of Securities - Options” are incorporated herein by reference.


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In addition, we note the following additional related party transactions:


•

In connection with the incorporation of Tyme, Steve Hoffman and Michael Demurjian assigned and contributed to Tyme all of their membership interests in Luminant, each of such membership interests constituting one-third of the entire membership interests in Luminant then outstanding.  Mr. Hoffman was the Chief Executive Officer of pre-Merger Tyme and is our current Chief Executive Officer and Chief Science Officer, a director of our Company and the beneficial owner of over 5% of our Common Stock currently outstanding. Mr. Demurjian was the Chief Operating Officer of pre-Merger Tyme and is our current Chief Operating Officer, a director of our Company and the beneficial owner of over 5% of our Common Stock currently outstanding.  

 

 

•

During 2012, Mr. Hoffman received advances from Luminant, a subsidiary of Tyme, totaling $250,000.  During 2013, Mr. Hoffman received additional advances from Luminant totaling $250,000.  In 2014, the rights to receive repayment of these advances was assigned to a third party in connection with such third party’s sale to Mr. Hoffman of one-half of the third party’s membership interest in Luminant, which acquired membership interest Mr. Hoffman then assigned and contributed to Tyme.  Mr. Hoffman remains obligated to repay the amount of the advances to such third party.  Such Luminant membership interest represented one-sixth of the total membership interests in Luminant outstanding as of its acquisition by Mr. Hoffman and subsequent assignment and contribution to Tyme.

 

 

•

Tyme made advances to Mr. Hoffman totaling $103,972 in 2013 and $37,600 in 2014.  Prior to the consummation of the Merger and in order for our Company to be in compliance with applicable laws regarding loans by public entities to their executive officers and directors, the amount of the advances was recognized by Mr. Hoffman as income and we recognized an expense equal to the amount of such 2013 and 2014  advances.

 

 

•

During 2012, Mr. Demurjian received advances from Luminant, a subsidiary of Tyme, totaling $273,657.  During 2013, Mr. Demurjian received additional advances from Luminant totaling $254,416.  In 2014, the rights to receive repayment of these advances was assigned to a third party in connection with such third party’s sale to Mr. Demurjian of one-half of the third party’s membership interest in Luminant, which acquired membership interest Mr. Demurjian then assigned and contributed to Tyme.  Mr. Demurjian remains obligated to repay the amount of the advances to such third party.  Such Luminant membership interest represented one-sixth of the total membership interests in Luminant outstanding as of its acquisition by Mr. Demurjian and subsequent assignment and contribution to Tyme.

 

 

•

Tyme made advances to Mr. Demurjian totaling $102,293 in 2013 and $112,000 in 2014.  Prior to the consummation of the Merger and in order for our Company to be in compliance with applicable laws regarding loans by public entities to their executive officers and directors, the amount of the advances was recognized by Mr. Demurjian as income and we recognized an expense equal to the amount of such 2013 and 2014 advances.

 

 

•

As a condition to Tyme’s July 2014 sale of the original Bridge Note, our Chief Executive Officer, Steve Hoffman, assigned to Tyme all of his interest in certain patents and patent applications and Tyme granted Mr. Hoffman a perpetual, non-royalty license rights with respect to such patents and patent applications in all fields other than in connection with the treatment of cancer.

 

 

•

In 2013, Tyme borrowed funds totaling $1.26 million from U.S. VC Partners, L.P. (“USVC”).  In August 2014, USVC converted this debt into 106.6 shares of Tyme common stock.  Contemporaneously with such conversion and issuance of the 106.6 shares, Messrs. Hoffman and Demurjian each assigned and contributed to Tyme 53.3 shares of Tyme common stock that they owned such that no dilution was recognized by any of the other stockholders of Tyme.  USVC currently owns a total of 4,984,400 shares of our Common Stock as a result of the conversion of its shares of Tyme common stock into shares of our Common Stock in the Merger.  Such shares of our Common Stock owned by USVC represent approximately 5.8% of our Common Stock as of the date of this Current Report on Form 8-K.

 

 

•

Christopher Brown is the Manager of GEM and was the holder of the Bridge Note.  Mr. Brown designated GEM to receive the Conversation Shares upon the conversion of the Bridge Note which occurred contemporaneously with the closing of the Merger and PPO.

 

 

•

GEM has deposited with an escrow agent 5 million shares of our Common Stock which are subject to forfeiture under the PPO Note Escrow Agreement.  GEM also has deposited with an escrow agent an additional 3.5 million shares of our Common Stock which are subject to forfeiture under the Adjustment Shares Escrow Agreement.

 

 

•

GEM purchased all of the 2.716 million shares of our Common Stock sold in the PPO.


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•

All of the 26,276,600 Merger Related Surrendered Shares were surrendered for cancelation by GEM.

 

 

•

On November 22, 2011 we issued 39,000,600 shares of our Common Stock to our then-sole director and officer, Andrew Keck, for an aggregate purchase price of $9,000.

 

 

•

On February 27, 2013, GEM purchased a controlling interest in our Company.  At the closing of that 2013 transaction, we entered into a Consulting Agreement with Andrew Keck, our then sole officer and director, pursuant to which Mr. Keck agreed to continue to provide services to us that are ordinarily and customarily performed by a chief executive officer for two  months.  In consideration for the services to be rendered by Mr. Keck, we agreed to pay Mr. Keck a monthly fee of $750, commencing on February 27, 2013.  GEM made the two $750 payments to Mr. Keck on our behalf. The $1,500 advance was non-interest bearing and due on demand.  In connection with the consummation of the Merger such debt was forgiven.

 

 

•

GEM made additional advances to our Company during our fiscal years ended November 30, 2014 and 2013 of $57,670 (with respect to the 2014 fiscal year) and $31,501 (with respect to the 2013 fiscal year).  In connection with the consummation of the Merger all of such debt was forgiven.


MARKET PRICE OF AND DIVIDENDS ON COMMON EQUITY AND RELATED STOCKHOLDER MATTERS


Market Information


Our Common Stock is currently quoted on the OTC Markets, QB Tier, under the symbol “TYMI.”  Previously and until September 26, 2014, our Common Stock was quoted on the OTC Markets, QB Tier, under the symbol “GGET.”  There is currently no trading market for our Common Stock and there is no assurance that a regular trading market will ever develop.  OTC Markets securities are not listed and traded on the floor of an organized national or regional stock exchange.  Instead, OTC Markets securities transactions are conducted through a telephone and computer network connecting dealers.  OTC Markets issuers are traditionally smaller companies that do not meet the financial and other listing requirements of a regional or national stock exchange.


To have our Common Stock listed on any of the public trading markets, including the OTC Markets, we will require a market maker to sponsor our securities. We have not yet engaged any market maker to sponsor our securities and there is no guarantee that our securities will meet the requirements for quotation or that our securities will be accepted for listing on the OTC Markets.  This could prevent us from developing a trading market for our Common Stock.


Holders


As of March 10, 2015, we have 86 million shares of Common Stock outstanding held by 16 stockholders of record.


Dividend Policy


We have never paid any cash dividends on our capital stock and do not anticipate paying any cash dividends on our Common Stock in the foreseeable future.  We intend to retain future earnings to fund ongoing operations and future capital requirements. Any future determination to pay cash dividends will be at the discretion of our Board of Directors and will be dependent upon financial condition, results of operations, capital requirements and such other factors as the Board of Directors deems relevant.


Securities Authorized for Issuance under Equity Compensation Plans


The Company had no equity compensation plans as of the end of our fiscal year 2014.


2015 Equity Incentive Plan


On March 5, 2015, our Board of Directors adopted and our stockholders approved our Company’s 2015 Equity Incentive Plan (the “2015 Plan”), which reserves a total of 10 million shares of our Common Stock for issuance under the 2015 Plan.


We believe that the 2015 Plan is integral to our compensation strategies and programs.  There is an ongoing “battle for talent” within the industry in which we operate and within the overall domestic employment market.  In order to retain and secure employees in this intensely competitive employment environment, we believe that we must have competitive compensation programs, particularly with respect to equity-based awards.  The use of stock options and other stock awards among public companies is widely prevalent.  We believe that the 2015 Plan will give us more flexibility to keep pace with our competitors.


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We expect to use stock options as our most widely used form of long-term incentives for our directors, executive officers, employees and consultants.  The 2015 Plan also will permit stock bonus grants, restricted stock grants, performance stock grants, stock appreciation rights grants and other types of awards.


We have not granted any stock options or other awards under the 2015 Plan through the date of this Current Report on Form 8-K.


Plan Summary


A summary of the principal features of the 2015 Plan is provided below, but is qualified in its entirety by reference to the actual 2015 Plan.  A copy of the 2015 Plan has been attached as an exhibit to this Current Report on Form 8-K.


Purposes


The purposes of the 2015 Plan are to:


•

enable us and our subsidiaries and affiliates to attract and retain highly qualified personnel who will contribute to our success and

 

 

•

provide incentives to participants in the 2015 Plan that are linked directly to increases in stockholder value which will therefore inure to the benefit of all of our stockholders.


Shares Available for Issuance


The maximum number of shares of our Common Stock that initially may be issued under the 2015 Plan is 10 million.  The number of shares that may be granted pursuant to the 2015 Plan and the exercise prices of and number of shares subject to outstanding options and other awards will be proportionately adjusted, subject to any required action by our board of directors or stockholders and compliance with applicable securities laws, in the event of a stock dividend, recapitalization, stock split, reverse stock split, subdivision, combination, reclassification or similar change in our capital structure involving our common stock.  No more than an aggregate of 3,333,333 shares of our Common Stock may be awarded during the twelve months following the 2015 Plan’s adoption by our stockholders, which occurred on March 5, 2015.


Administration


The 2015 Plan will be administered by of our Board of Directors or a committee of our Board in which each member will be an independent director.  Throughout the remainder of this discussion of the 2015 Plan, the term “administrator” refers to our Board or the committee delegated authority to administer the 2015 Plan.


The 2015 Plan provides for the administrator to have full authority, in its discretion, to:


•

select the persons to whom awards will be granted,

 

 

•

grant awards,

 

 

•

determine the number of shares to be covered by each award,

 

 

•

determine the type, nature, amount, pricing, timing and other terms of each award and

 

 

•

interpret, construe and implement the provisions of the 2015 Plan, including the authority to adopt rules and regulations.


Eligibility


Participation in the 2015 Plan is limited to our, our subsidiaries and affiliates’:


•

employees, including officers,

 

 

•

directors,

 

 

•

consultants and

 

 

•

advisors.


- 87 -


Types of Awards


Under the 2015 Plan, the administrator is authorized to award:


•

stock options,

 

 

•

stock bonuses,

 

 

•

restricted stock,

 

 

•

stock appreciation rights, commonly referred to as “SARs,”

 

 

•

performance grants and

 

 

•

other types of awards.


Stock Options


The administrator is authorized to grant stock options, which may be either incentive stock options qualifying for favorable tax treatment under the Internal Revenue Code, referred to as “ISOs,” or nonqualified stock options, referred to as “NSOs.”  The exercise price of all options awarded under the 2015 Plan must be no less than 100% of the fair market value of our common stock on the date of the grant.  For purposes of the 2015 Plan, fair market value shall be equal to the closing market price of our Common Stock.  In the absence of a market price, fair market value shall be determined in such manner as the administrator may deem equitable or as required by applicable law or regulation.


At the time of grant, the administrator will determine when options are exercisable and when they expire.  In absence of such determination, each option will have a ten year term, with one quarter of the shares subject to the option becoming exercisable on the first anniversary of the option grant and with an additional one-quarter becoming exercisable on each of the next three anniversary dates.  The term of an option cannot exceed ten years, except in the case of an ISO granted to a person who beneficially owns 10% or more of the total combined voting power of all of our equity securities, referred to as a “10% stockholder.”  An ISO granted to a 10% stockholder cannot have a term exceeding five years, nor may such an ISO be exercisable at less than 110% of the fair market value of our common stock on the date of grant.  ISOs may not be granted more than ten years after the date of adoption of the 2015 Plan by our Board of Directors.


The aggregate fair market value of shares first exercisable in any calendar year by an individual holding ISOs, whether under the 2015 Plan or any other plan of our company, may not exceed $100,000.  In such an event, the shares in excess of such $100,000 limitation shall be deemed granted as an NSO.


Payment for shares purchased upon exercise of a stock option must be made in full at the time of purchase.  Payment may be made in cash or at the option of the administrator:


•

by reduction of indebtedness we owe to the optionee,

 

 

•

by the transfer to us of shares of our Common Stock owned by the participant for at least six months or obtained in the public market and which are valued at fair market value on the date of transfer,

 

 

•

in the case of employees other than executive officers, by interest bearing promissory note,

 

 

•

except with respect to ISOs or where otherwise prohibited by applicable law and provided a public market for our common stock exists, by “cashless exercise,” or

 

 

•

through a “same day sale” or “margin” commitment by a broker-dealer that is a member of the Financial Industry Regulatory Authority.


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Restricted Stock Grants


Restricted stock consists of shares of our common stock which are sold or granted to a participant, but are subject to substantial risk of forfeiture and to restrictions on their sale or other transfer by the participant.  The administrator determines the eligible participants to whom and the time or times at which, grants of restricted stock will be made, the number of shares to be granted, the price to be paid, if any, the time within which the shares covered by such grants will be subject to forfeiture, the time at which the restrictions will terminate and all other terms and conditions of the grants.  Restrictions could include, but are not limited to, performance criteria, continuous service with us, the passage of time or other restrictions.  In the case of a 10% stockholder, restricted stock will only be issued at fair market value.


Any performance criteria may be used to measure our performance as a whole or the performance of any of our subsidiaries, affiliates or business units.  Any performance criteria may be adjusted to include or exclude extraordinary items.


SARs


An SAR is a right, denominated in shares, to receive an amount, payable in shares, in cash or a combination of shares and cash, that is equal to the excess of: (a) the fair market value of our Common Stock on the date of exercise of the right over (b) the fair market value of our common stock on the date of grant of the right, multiplied by the number of shares for which the right is exercised.  SARs may be awarded either in combination with the grant of an option or other type of award or individually.


Stock Bonus Awards


The administrator may award shares of our Common Stock to participants without payment therefor, as additional compensation for service to us, our subsidiaries or our affiliates.


Performance Grants


The 2015 Plan authorizes the administrator to award performance grants.  Performance grant awards are earned over a performance period determined by the administrator at the time of the award.  There may be more than one performance award in existence at any one time and the performance periods may differ or overlap.  Further, performance grants can be awarded separately or in tandem with other awards.


At the time a performance grant is awarded, the administrator will establish minimum and maximum performance goals over the performance period.  The portion of the performance award earned by the participant will be determined by the administrator, based on the degree to which the performance goals are achieved.  No performance grants will be earned by the participant unless the minimum performance goals are met.


Amendment of the 2015 Plan


Except as may be required for compliance with Rule 16b-3 under the Exchange Act and Sections 162(m) or 422 of the Internal Revenue Code, our Board of Directors has the right and power to amend the 2015 Plan; provided , however , that our Board may not amend the 2015 Plan in a manner which would impair or adversely affect the rights of the holder of an outstanding award without such holder’s consent.  If the Code or any other applicable statute, rule or regulation, including, but not limited to, those of any securities exchange, requires stockholder approval with respect to the 2015 Plan or any type of amendment thereto, then, to the extent so required, stockholder approval will be obtained.


Termination of the 2015 Plan


Subject to earlier termination by our board of directors, the 2015 Plan will terminate on March 5, 2025.  Termination of the 2015 Plan will not, in any manner, impair or adversely affect any award outstanding at the time of termination.


Administrator’s Right to Modify Benefits


Any award granted may be converted, modified, forfeited or canceled, in whole or in part, by the administrator if and to the extent permitted in the 2015 Plan or applicable agreement entered into in connection with an award grant or with the consent of the participant to whom such award was granted.


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Change in Control


An award agreement may provide that, upon a “change in control,” all or any portion of the award shall automatically become immediately vested and exercisable, that restrictions relating to the award shall lapse or that the award shall become immediately payable.


A change of control will be deemed to have occurred if:


•

any person (other than a current stockholder or holder of rights entitling the holder to acquire our securities) acquires beneficial ownership of 50% or more of the voting power of our then-outstanding voting securities,

 

 

•

members of our current board cease to constitute a majority of our board without the approval of our current board (or those elected with the approval of the directors on the board at the time of such member’s election) or

 

 

•

we are a party to a merger, consolidation, liquidation, dissolution or sale of all or substantially all of our assets, other than a merger in which we are the surviving corporation and such merger does not result in any other manner in a change in control.


The Merger has been expressly excluded from a transaction which would trigger a change of control under the 2015 Plan.


Reusage


If a stock option expires or is terminated, surrendered or canceled without having been fully exercised or if restricted stock or SARs are forfeited or terminated without the issuance of all of the shares subject to such award, the shares covered by such awards again will be available for use under the 2015 Plan.  Shares covered by an award granted under the 2015 Plan will not be counted as used unless and until they are actually and unconditionally issued and delivered to a participant.  The number of shares which are transferred to us by a participant to pay the exercise or purchase price of an award will be subtracted from the number of shares issued with respect to such award for the purpose of counting shares used.  Shares covered by an award granted under the 2015 Plan which is settled in cash will not be counted as used.


Termination of Options


Upon the termination of an optionee’s employment or other service with us, the optionee will have three months to exercise options to the extent exercisable as of the date of termination, except where such termination is for cause, in which event the option will expire immediately.  However, if, the termination is due to the optionee’s death or disability, then the optionee or the optionee’s estate or legal representative shall have the right to exercise any vested options for twelve months after such death or disability.  The administrator, in its discretion, may delay the termination of such an option, but only for up to the earlier of: (x) five years from such termination or (y) the option’s original expiration date.


Federal Income Tax Consequences


The following is a general summary, as of the date of this Current Report on Form 8-K, of the federal income tax consequences to us and participants under the 2015 Plan.  Federal tax laws may change and the federal, state and local tax consequences for any such participant will depend upon his, her or its individual circumstances.  Each participant shall be encouraged to seek the advice of a qualified tax advisor regarding the tax consequences of participation in the 2015 Plan.


ISOs


An optionee generally does not recognize taxable income upon the grant or upon the exercise of an ISO.  


If an optionee sells ISO shares before having held them for at least one year after the date of exercise and two years after the date of grant, the optionee recognizes ordinary income to the extent of the lesser of: (x) the gain realized upon the sale or (y) the difference between the fair market value of the shares on the date of exercise and the exercise price.  Any additional gain is treated as long-term or short-term capital gain depending upon how long the optionee has held the ISO shares prior to disposing of them in a disqualifying disposition.  In the year of disposition, we will receive a federal income tax deduction in an amount equal to the ordinary income which the optionee recognizes as a result of the disposition.


- 90 -


If an optionee sells ISO shares after having held them for at least one year from exercise and two years from the date of grant, the optionee recognizes income in an amount equal to the difference, if any, between the fair market value of those shares on the date of sale and the exercise price of the ISO shares.  Such income will be taxed at long-term capital gains rates.  In such an event, we will not be entitled to a federal income tax deduction.  The holding period requirements generally are waived when an optionee dies.


The exercise of an ISO may, in some cases, trigger liability for the alternative minimum tax.


NSOs


An optionee does not recognize taxable income upon the grant of an NSO.  Upon the exercise of an NSO, the optionee recognizes ordinary income to the extent the fair market value of the shares received upon exercise of the NSO on the date of exercise exceeds the exercise price, unless the optionee is subject to the provisions of Section 16 of the Securities Exchange Act of 1934.  We will receive an income tax deduction in an amount equal to the ordinary income which the optionee recognizes upon the exercise of the stock option.  If an optionee sells shares received upon the exercise of an NSO, the optionee recognizes capital gain income to the extent the sales proceeds exceed the fair market value of such shares on the date of exercise.  If the optionee is subject to Section 16, absent an election to be taxed at the time of exercise, the optionee will be taxed when the insider trading restrictions of Section 16 lapse and then based upon the value of the shares at the time the trading restrictions lapse.


Restricted Stock


A participant who receives an award of restricted stock does not generally recognize taxable income at the time of the award or payment.  Instead, the participant recognizes ordinary income in the taxable year in which his or her interest in the shares becomes either: (x) freely transferable or (y) no longer subject to substantial risk of forfeiture.  On the date restrictions lapse, the participant includes in taxable income the fair market value of the shares less the cash, if any, paid for the shares.


A participant may elect to recognize income at the time he or she receives restricted stock in an amount equal to the fair market value of the restricted stock, less any cash paid for the shares, on the date of the award.


We will receive a compensation expense deduction in the taxable year in which restrictions lapse or in the taxable year of the award if, at that time, the participant had filed a timely election to accelerate recognition of income.


Other Benefits


In the case of an exercise of an SAR or an award of a performance grant or stock bonus, the participant will generally recognize ordinary income in an amount equal to any cash received and the fair market value of any shares received on the date of payment or delivery.  In that taxable year, we will receive a federal income tax deduction in an amount equal to the ordinary income which the participant has recognized.


Million Dollar Deduction Limit


We may not deduct compensation of more than $1 million that is paid to an individual who, on the last day of the taxable year, is either our chief executive officer or is among one of the four other most highly-compensated officers for that taxable year.  The limitation on deductions does not apply to certain types of compensation, including qualified performance-based compensation.  We believe that awards in the form of stock options constitute qualified performance-based compensation and, as such, will be exempt from the $1 million limitation on deductible compensation.


Registration and Effect of Stock Issuance


We intend to register under the Securities Act the shares of our common stock issuable under the 2015 Plan.  This will make such shares immediately eligible for resale in the public market.


The issuance of shares of our common stock under the 2015 Plan will dilute the voting power of our stockholders.


Miscellaneous


A new benefits table is not provided because no grants have been made under the 2015 Plan and all benefits are discretionary.  Accordingly, benefits are not determinable with respect to our chief executive officers, other named executive officers, all current executive officers as a group, all current directors and all executive officer as a group and all employees, including all current officers who are not executive officers, as a group.


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DESCRIPTION OF SECURITIES


We have authorized capital stock consisting of 300 million shares of Common Stock and 10 million shares of preferred stock. As of the date of this Current Report on Form 8-K, we had 86 million shares of our Common Stock and no shares of preferred stock issued and outstanding.


Common Stock


The holders of outstanding shares of our Common Stock are entitled to receive dividends out of assets or funds legally available for the payment of dividends at such times and in such amounts as our Board of Directors from time to time may determine. Holders of our Common Stock are entitled to one vote for each share held on all matters submitted to a vote of stockholders. There is no cumulative voting of the election of directors then standing for election. Holders of our Common Stock are not entitled to pre-emptive rights and shares of our Common Stock are not subject to conversion or redemption. Upon liquidation, dissolution or winding up of our Company, the assets legally available for distribution to stockholders are distributable ratably among the holders of our Common Stock after payment of liquidation preferences, if any, on any outstanding payment of other claims of creditors. Each outstanding share of our Common Stock that is issued and outstanding is duly and validly issued, fully paid and non-assessable.


Preferred Stock


Shares of our preferred stock may be issued from time to time in one or more series and/or classes, each of which will have such distinctive designation or title as shall be determined by our Board of Directors prior to the issuance of any shares of such series or class.  Our preferred stock will have such voting powers, full or limited or no voting powers and such preferences and relative, participating, optional or other special rights and such qualifications, limitations or restrictions thereof, as shall be stated in such resolution or resolutions providing for the issue of such series or class of preferred stock as may be adopted from time to time by our Board of Directors prior to the issuance of any shares thereof.   No shares of our preferred stock are currently issued or outstanding and our Board has not, as of the date of this Current Report on Form 8-K, designated any class or series of preferred stock for use in the future.


While we do not currently have any plans for the issuance of shares of our preferred stock, the issuance of  preferred stock could adversely affect the rights of the holders of our Common Stock and, therefore, reduce the value of our Common Stock. It is not possible to state the actual effect of the issuance of any shares of preferred stock on the rights of holders of our Common Stock until our Board determines the specific rights of the holders of such shares of preferred stock; however, these effects may include:


•

restricting dividends on our Common Stock;

 

 

•

diluting the voting power of our Common Stock;

 

 

•

impairing the liquidation rights of our Common Stock; and/or

 

 

•

delaying or preventing a change in control of our Company without further action by our stockholders.


Other than in connection with shares of preferred stock (as explained above), which preferred stock is not currently designated nor contemplated by us, we do not believe that any provision of our charter or By-Laws would delay, defer or prevent a change in control.


Options


No options or other awards have been granted to date under our 2015 Plan or otherwise.  Accordingly, as of the date of this Current Report on Form 8-K, we have outstanding no options or warrants to purchase shares of our Common Stock.


Registration Rights


See Item 2.01, “Completion of Acquisition or Disposition of Assets - The Merger and Related Transactions - Registration Rights” for a description of the registration rights granted to investors in the PPO, the designee of the former holder of the Bridge Note, the holders of the Tyme Stockholders Registrable Shares and a consultant, which description is incorporated herein by reference.


Other Convertible Securities


As of the date of this Current Report on Form 8-K, other than the securities described above, our Company does not have any outstanding convertible or derivative securities.


- 92 -


Transfer Agent


The transfer agent for our Common Stock is Continental Stock Transfer & Trust Company.  The transfer agent’s address is 17 Battery Place - 8 th Floor, New York, New York 10004 and its telephone number is (212) 509-4000.


LEGAL PROCEEDINGS


From time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties and an adverse result in these or other matters may arise from time to time that may harm business.


We are currently not aware of any pending legal proceedings to which we are a party or of which any of our property is the subject, nor are we aware of any such proceedings that are contemplated by any governmental authority.


INDEMNIFICATION OF DIRECTORS AND OFFICERS


Delaware Law allows us to indemnify our officers and directors from certain liabilities.  Pursuant to our Certificate of Incorporation, we shall indemnify, to the fullest extent permitted by applicable law any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative in nature by reason of the fact that he or she is or was a director, officer, employee or agent of our Company or, while a director, officer, employee or agent of our Company, is or was serving at the request of our Company as a director, officer, trustee, employee or agent of or in any other capacity with another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise, against expenses (including attorneys’ fees), judgments, fines, penalties and amounts paid in settlement in connection with such action, suit or proceeding.


Pursuant to our Certificate of Incorporation, we shall advance to a director, officer, employee or agent of our Company expenses incurred in connection with defending any action, suit or proceeding referred to above or in our By-Laws at any time before the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of the indemnified person to repay such amount if it shall ultimately be determined that he or she is not entitled to be indemnified by us as authorized in our Certificate of Incorporation or as provided in the By-Laws.


The indemnification and other rights provided for in our Certificate of Incorporation shall not be exclusive of any provision with respect to indemnification or the payment of expenses in our By-Laws or any other contract or agreement between us and any officer, director, employee or agent of our Company or any other person.


Other than discussed above, neither our Certificate of Incorporation or By-Laws includes any specific indemnification provisions for our officers or directors against liability under the Securities Act. Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of our Company pursuant to the foregoing provisions or otherwise, our Company has been advised that, in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable.


Item 3.02

Unregistered Sales of Equity Securities


The Bridge Note and the PPO


The information regarding the Bridge Notes and the PPO set forth in Item 2.01, “Completion of Acquisition or Disposition of Assets - The Merger and Related Transactions - The Bridge Financing” and ” - The PPO” are incorporated herein by reference.


Shares Issued in Connection with the Merger


On March 5, 2015, pursuant to the terms of the Merger Agreement, all of the issued and outstanding shares of Tyme common stock were exchanged for 68 million shares of our Common Stock.  This transaction was exempt from registration under Section 4(2) of the Securities Act as not involving any public offering.  None of the securities were sold through an underwriter and, accordingly, there were no underwriting discounts or commissions involved.


- 93 -


Consultant’s Shares


We retained a consultant to provide investor relations services to us, effective as of the consummation of the Merger.  In connection with such retention, we issued to the consultant 250,000 shares of our Common Stock.  This transaction was exempt from registration under Section 4(2) of the Securities Act as not involving any public offering.  None of the securities were sold through an underwriter and, accordingly, there were no underwriting discounts or commissions involved.


Sales of Unregistered Securities of Tyme


On July 26, 2013, Tyme issued to each of Steve Hoffman and Michael Demurjian 1,000 shares of Tyme’s common stock (34 million shares of our Common Stock) in exchange for their assignment to Tyme of all of their membership interests in Luminant.  Each of such assigned membership interests represented one-third of the then outstanding membership interests of Luminant.  Each of these issuances was exempt from registration under Section 4(2) of the Securities Act as transactions by an issuer not involving any public offering.


Effective as of August 28, 2014, U.S. VC Partners, LLC (“USVC”) converted its convertible promissory note in the amended principal amount of $1.126 million into 102.6 shares of Tyme’s common stock (3,624,400 shares of our Common Stock).  This issuance was exempt from registration under Section 4(2) of the Securities Act as a transaction by an issuer not involving any public offering.


Subsequent to their acquisitions of their individual shares of Tyme’s common stock, at various times between July 2013 and August 2014, each of Messrs. Hoffman and Demurjian sold and transferred certain of their shares to a total of eight persons or entities, as well as each surrendering to us for cancellation 53.3 shares of Tyme’s common stock (1,812,200 shares of our Common Stock) in connection with the issuance to USVC of 102.6 shares of Tyme’s common stock (3,624,400 shares of our Common Stock) upon USVC’s conversion of Tyme’s $1.126 million debt owed to it, resulting in their ownership of shares of our Common Stock as reflected in the “Principal Stockholders Table” set forth above. Each of such sales and transfers was exempt from registration under Section 4(1) of the Securities Act as transactions by a person other than the issuer, underwriter or dealer and Section 4(2) of the Securities Act as transactions by an issuer not involving any public offering.


Item 4.01

Changes in Registrant’s Certifying Accountant.


On March 6, 2015, DKM Certified Public Accountants (“DKM”) was dismissed as our independent registered public accounting firm.  On the same date, WithumSmith+Brown, PC (“WSB”) was engaged as our new independent registered public accounting firm.  WSB acted as the independent registered public accounting firm of Tyme, with respect to Tyme’s fiscal year ended December 31, 2013 and Luminant, with respect to Luminant’s fiscal years ended December 31,  2013, 2012 and 2011, and has been engaged to act as Tyme’s independent registered public accounting firm for Tyme’s fiscal year ended December 31, 2014.  Our Board of Directors approved the dismissal of DKM and approved the engagement of WSB as our independent registered public accounting firm to be effective upon consummation of the Merger, which occurred on March 5, 2015.


None of the reports of DKM on our financial statements for either of the past two years or subsequent interim period contained an adverse opinion or disclaimer of opinion or was qualified or modified as to uncertainty, audit scope or accounting principles, except that our audited financial statements contained in our Annual Reports on Form 10-K for the fiscal years ended November 30, 2014 and 2013 included a going concern qualification in the reports.


During our Company’s two most recent fiscal years ended November 30, 2014 and 2013 and the subsequent interim periods preceding their dismissal, there were no disagreements with DKM, whether or not resolved, on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure, which, if not resolved to the satisfaction of DKM would have caused them to make reference to the subject matter of the disagreement in connection with their reports on our Company’s financial statements.


The Company provided DKM with a copy of the disclosures it is making in this Current Report on Form 8-K and has requested that DKM furnish it with a letter addressed to the SEC stating whether they agree with the above statements.  The letter furnished by DKM has been made an exhibit to this Form 8-K.


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During the two most recent fiscal years and the interim periods preceding the engagement and through the date of this Form 8-K, neither the Company nor anyone on its behalf has previously consulted with WSB regarding either (a) the application of accounting principles to a specified transaction, either completed or proposed; or the type of audit opinion that might be rendered on our Company’s financial statements and neither a written report was provided nor oral advice was provided to the Company that WSB concluded was an important factor considered by the Company in reaching a decision as to the accounting, auditing or financial reporting issue; or (b) any matter that was either the subject of a disagreement (as defined in paragraph 304(a)(1)(iv) of Regulation S-K and the related instructions thereto) or a reportable event (as described in paragraph 304(a)(1)(v)) of Regulation S-K). 


Item 5.01

Changes in Control of Registrant.


The information regarding change of control of the Company in connection with the Merger set forth in Item 2.01, “Completion of Acquisition or Disposition of Assets—The Merger and Related Transactions” is incorporated herein by reference.


Item 5.02

Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers; Compensatory Arrangements of Certain Officers.


The information regarding departure and election of directors and departure and appointment of principal officers of the Company in connection with the Merger set forth in Item 2.01, “Completion of Acquisition or Disposition of Assets - The Merger and Related Transactions” is incorporated herein by reference.


Item 5.03

Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.


On March 5, 2015, we changed our fiscal year from a fiscal year ending on November 30 th of each year, which was used in our most recent filing with the SEC, to one ending on December 31st  of each year, which is the fiscal year end of Tyme.  We intend to file a Form 10-K with respect to our fiscal year ended December 31, 2014 within the time period required of a smaller reporting company and, thereafter, file our periodic reports based on the new fiscal year.


Item 5.06

Change in Shell Company Status.


Prior to the Merger, we were a “shell company” (as such term is defined in Rule 12b-2 promulgated under the Exchange Act).  As a result of the Merger, we have ceased to be a shell company.  The information contained in this Current Report on Form 8-K, together with the information contained in our Annual Report on Form 10-K for the fiscal year ended November 30, 2013 and our subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, as filed with the SEC, constitute the current “Form 10 information” necessary to satisfy the conditions contained in Rule 144(i)(2) under the Securities Act.


Item 9.01

Financial Statements and Exhibits.


(a)   Financial statements of business acquired.


In accordance with Item 9.01(a) of Form 8-K, Tyme’s audited financial statements as of and for the fiscal years ended December 31, 2013 and 2012 and Tyme’s unaudited condensed financial statements as of and for the three and nine months ended, September 30, 2014 and 2013 and the accompanying notes, are included in this Current Report in Form 8-K beginning on Page F-1.


(b)   Pro forma financial information.


In accordance with Item 9.01(b) of Form 8-K, unaudited pro forma condensed combined financial information as of and for the fiscal years ended, December 31, 2013 and as of and for the nine months ended September 30, 2014 and 2013 and the accompanying notes, are included in this Current Report on Form 8-K beginning on Page F-28.


(d)   Exhibits


In reviewing the agreements included or incorporated by reference as exhibits to this Current Report on Form 8-K, please remember that they are included to provide the reader with information regarding their terms and are not intended to provide any other factual or disclosure information about our Company or the other parties to the agreements. The agreements may contain representations and warranties by each of the parties to the applicable agreement. These representations and warranties have been made solely for the benefit of the parties to the applicable agreement and:


- 95 -


•

should not in all instances be treated as categorical statements of fact, but rather as a way of allocating the risk to one of the parties if those statements prove to be inaccurate;

 

 

•

have been qualified by disclosures that were made to the other party in connection with the negotiation of the applicable agreement, which disclosures are not necessarily reflected in the agreement;

 

 

•

may apply standards of materiality in a way that is different from what may be viewed as material to readers of this Form 8-K or other investors; and

 

 

•

were made only as of the date of the applicable agreement or such other date or dates as may be specified in the agreement and are subject to more recent developments.


Accordingly, such representations and warranties may not describe the actual state of affairs as of the date they were made or at any other time. Additional information about our Company may be found elsewhere in this Form 8-K and our other public filings, which are available without charge through the SEC’s website at http://www.sec.gov.


Exhibit
Number

 

Description

 

 

 

2.1*

 

Agreement and Plan of Merger and Reorganization, dated as of March 5, 2015, by and among Tyme Technologies, Tyme Acquisition Corp., Tyme, Inc. and other signatories thereto.

 

 

 

2.2

 

Agreement and Plan of Merger, dated September 12, 2014, between Global Group Enterprises Corp. and Tyme Technologies, Inc.  [Incorporated by reference to Exhibit 2.1 to our Current Report on Form 8-K (Date of Report: September 12, 2014), filed with the SEC on September 19, 2014.]

 

 

 

3.1

 

Amended and Restated Certificate of Incorporation of Tyme Technologies, Inc. [Incorporated by reference to Exhibit 3.1 to our Current Report on Form 8-K (Date of Report: September 12, 2014), filed with the SEC on September 19, 2014.]

 

 

 

3.2

 

Articles of Merger of Global Group Enterprises Corp. with and into Tyme Technologies, Inc., filed with the Secretary of State of the State of Florida on September 18, 2014.  [Incorporated by reference to Exhibit 3.3 to our Current Report on Form 8-K (Date of Report: September 12, 2014), filed with the SEC on September 19, 2014.]

 

 

 

3.3

 

Certificate of Merger of Global Group Enterprises Corp. with and into Tyme Technologies, Inc., filed with the Secretary of State of the State of Delaware on September 18, 2014.  [Incorporated by reference to Exhibit 3.4 to our Current Report on Form 8-K (Date of Report: September 12, 2014), filed with the SEC on September 19, 2014.]

 

 

 

3.4*

 

Certificate of Merger of Tyme Acquisition Corp. with and into Tyme Inc., filed with the Secretary of State of the State of Delaware on March 5, 2015.

 

 

 

3.5

 

By-Laws of Tyme Technologies, Inc.  [Incorporated by reference to Exhibit 3.2 to our Current Report on Form 8-K (Date of Report: September 12, 2014), filed with the SEC on September 19, 2014.]

 

 

 

10.1*

 

Split-Off Agreement, dated as of March 5, 2015, among Global Group Enterprises Corp., Tyme Technologies, Inc. and Andrew Keck.

 

 

 

10.2*

 

General Release Agreement, dated as of March 5, 2015, among Global Group Enterprises Corp., Tyme Technologies, Inc. and Andrew Keck.

 

 

 

10.3*

 

Lock-Up and No Shorting Agreement, dated as of March 5, 2015, between Tyme Technologies, Inc. and Steven Hoffman.

 

 

 

10.4*

 

Lock-Up and No Shorting Agreement, dated as of March 5, 2015, between Tyme Technologies, Inc. and Michael Demurjian.


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Exhibit
Number

 

Description

 

 

 

10.5*

 

Form of Subscription Agreement between Tyme Technologies, Inc. and GEM Global Yield Fund LLC SCS.

 

 

 

10.6*

 

Subscription Note of GEM Global Yield Fund LLC SCS, dated March 5, 2015, in the amount of $2.5 million and payable to Tyme Technologies, Inc.

 

 

 

10.7*

 

Subscription Note Shares Escrow Agreement, dated March 5, 2015, between GEM Global Yield Fund LLC SCS and Tyme Technologies, Inc. and CKR Law LLP (as Escrow Agent).

 

 

 

10.8*†

 

2015 Equity Incentive Plan of Tyme Technologies, Inc.

 

 

 

10.9*

 

Form of Registration Rights Agreement, dated as of March 5, 2015, among Tyme Technologies, Inc. and the other parties thereto.

 

 

 

10.10*

 

Indemnification Shares Escrow Agreement, dated as of March 5, 2015, among Tyme Technologies, Inc., Steven Hoffman (as Indemnification Representative) and CKR Law LLP.

 

 

 

10.11*

 

License Agreement, dated as of July 9, 2014, between Steven Hoffman and Tyme Inc.

 

 

 

10.12*†

 

Employment Agreement, dated as of March 5, 2015, between Tyme Technologies, Inc. and Steven Hoffman.

 

 

 

10.13*†

 

Employment Agreement, dated as of March 5, 2015, between Tyme Technologies, Inc. and Michael Demurjian.

 

 

 

10.14*†

 

Consulting Agreement, dated as of March 5, 2015, between Tyme Technologies, Inc. and Beryllium Advisory Consulting, Limited Liability Company.

 

 

 

10.15*

 

Adjustment Shares Escrow Agreement, dated as of March 5, 2015, among Tyme Technologies, Inc., the depositor parties thereto, CKR Law LLP (as Escrow Agent).

 

 

 

10.16*

 

10% Secured Convertible Promissory Note of Tyme Inc. in the principal amount of $1,100,000, issued on July 11, 2014.

 

 

 

10.17*

 

Amended and Restated 10% Secured Convertible Promissory Note of Tyme Inc. in the principal amount of $1,350,000 issued on November 24, 2014.

 

 

 

10.18*

 

Second Amended and Restated 10% Secured Convertible Promissory Note of Tyme Inc. in the principal amount of $2,310,000 issued on January 15, 2015.

 

 

 

10.19*

 

Letter Agreement, dated as of March 5, 2015, among Christopher Brown, Tyme Technologies, Inc. and Tyme Inc.

 

 

 

16.*

 

Letter of DKM, dated March 10, 2015

 

 

 

21.*

 

Subsidiaries of the Registrant.

 

 

 

*

 

Filed herewith.

†

 

Management contract or compensatory plan or arrangement.


- 97 -


FINANCIAL STATEMENTS


Table of Contents


 

Page

 

Number

Tyme Inc.

 

 

 

Report of Independent Registered Public Accounting Firm

F-1

 

 

Audited Consolidated Financial Statements for the Fiscal Years Ended December 31, 2013 and 2012

 

 

 

Balance Sheets

F-2

 

 

Statement of Operations

F-3

 

 

Statement of Stockholders’ Equity

F-4

 

 

Statement of Cash Flows

F-5

 

 

Notes to Financial Statements

F-6

 

 

Consolidated Financial Statements for the Three and Nine Months Ended September 30, 2014 (Unaudited)

 

 

 

Balance Sheets

F-14

 

 

Statement of Operations

F-15

 

 

Statement of Stockholders’ Equity

F-16

 

 

Statement of Cash Flows

F-17

 

 

Notes to Financial Statements

F-18

 

 

Pro Forma Financial Information (Unaudited)

 

 

 

Unaudited Pro Forma Combined Consolidated Financial Data Information

F-28

 

 

Pro Forma Balance Sheet as of September 30, 2014

F-29

 

 

Pro Forma Statements of Operations as of November 30, 2014 and December 31, 2013

F-30

 

 

Pro Forma Statements of Operations as of August 31, 2014 and September 30, 2013

F-31

 

 

Notes to Pro Forma Financial Information

F-32


- 98 -


Report of Independent Registered Public Accounting Firm



To the Board of Directors and Shareholders of

Tyme Inc. and Subsidiary


We have audited the accompanying consolidated balance sheets of Tyme Inc. and Subsidiary (the “Company”) as of December 31, 2013 and 2012, and the related statements of operations, changes in stockholders’ deficit, and cash flows for the years then ended.  These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.  


We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement.  An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements.  An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.


In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Tyme Inc. and Subsidiary as of December 31, 2013 and 2012, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.


The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern.  As discussed in Note 1 to the consolidated financial statements, the Company has incurred losses and negative cash flows since inception and has a stockholders’ deficit of $850,281 as of December 31, 2013.  The Company anticipates incurring additional losses until such time, if ever, that it can generate significant revenues from its product candidates currently in development. These factors raise substantial doubt about the Company’s ability to continue as a going concern.   Management’s plan in regards to these matters is also described in Note 1. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.


As disclosed in Note 2 to the financial statements, the Company elected to early adopt amended guidance related to Accounting Standards Codification Topic 915, Development Stage Entities, which eliminates the requirements to present inception-to-date information for the consolidated statement of operations, cash flows, and stockholders’ equity, along with certain other disclosures which were historically required for development stage entities. Our opinion has not been modified with respect to this matter.



/s/ WithumSmith+Brown, PC

New Brunswick, New Jersey

November 14, 2014


F - 1


TYME INC. AND SUBSIDIARY


Consolidated Balance Sheets


December 31, 2013 and 2012


 

 

2013

 

2012

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

 

Cash

 

$

92,620

 

$

—

 

Prepaid assets

 

 

110,180

 

 

100

 

Total current assets

 

 

202,800

 

 

100

 

 

 

 

 

 

 

 

 

Property and equipment, net of accumulated depreciation of $724 and $210, respectively

 

 

21,429

 

 

1,990

 

Total assets

 

$

224,229

 

$

2,090

 

 

 

 

 

 

 

 

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

Accounts payable and other current liabilities

 

$

148,510

 

$

180,518

 

Current maturities of convertible notes

 

 

347,249

 

 

—

 

Total current liabilities

 

 

495,759

 

 

180,518

 

 

 

 

 

 

 

 

 

Convertible notes less current maturities

 

 

578,751

 

 

—

 

Total liabilities

 

 

1,074,510

 

 

180,518

 

 

 

 

 

 

 

 

 

Commitments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders’ deficit

 

 

 

 

 

 

 

Common stock, $0.001 par value, 1,000,000 shares authorized, 2,000 shares issued and outstanding at December 31, 2013

 

 

2

 

 

—

 

Additional paid in capital

 

 

2,008

 

 

2,010

 

Accumulated deficit

 

 

(1,522,746

)

 

(750,921

)

Total Tyme Inc stockholders’ deficit

 

 

(1,520,736

)

 

(748,911

)

 

 

 

 

 

 

 

 

Noncontrolling interests

 

 

1,976,693

 

 

1,166,140

 

Due from stockholders/members

 

 

(1,306,238

)

 

(595,657

)

Total stockholders’ deficit

 

 

(850,281

)

 

(178,428

)

Total liabilities and stockholders’ deficit

 

$

224,229

 

$

2,090

 


The Notes to Consolidated Financial Statements are an integral part of this statement.


F - 2


TYME INC. AND SUBSIDIARY


Consolidated Statements of Operations


Years ended December 31, 2013 and 2012


 

 

2013

 

2012

 

Operating expenses:

 

 

 

 

 

 

 

Research and development

 

$

744,717

 

$

602,981

 

General and administrative

 

 

307,100

 

 

284,598

 

Total operating expenses

 

 

1,051,817

 

 

887,579

 

Loss from operations

 

 

(1,051,817

)

 

(887,579

)

 

 

 

 

 

 

 

 

Interest expense

 

 

5,855

 

 

—

 

 

 

 

 

 

 

 

 

Net loss

 

 

(1,057,672

)

 

(887,579

)

Loss attributable to noncontrolling interests

 

 

285,847

 

 

295,860

 

Loss attributable to controlling interests

 

$

(771,825

)

$

(591,719

)


The Notes to Consolidated Financial Statements are an integral part of this statement.


F - 3


TYME INC. AND SUBSIDIARY


Consolidated Statements of Stockholders’ Deficit


Years Ended December 31, 2013 and 2012


 

 

 

Additional

 

 

 

Non

 

Due from

 

Total

 

 

Common stock

 

Paid-in-

 

Accumulated

 

Controlling

 

Stockholders/

 

Stockholders’

 

 

Shares

 

Amount

 

capital

 

deficit

 

interests

 

Members

 

Deficit

 

Balance January 1, 2012

—

 

$

—

 

$

2,010

 

$

(159,202

)

$

233,000

 

$

(72,000

)

$

3,808

 

Capital Contributions

—

 

 

—

 

 

—

 

 

—

 

 

1,229,000

 

 

—

 

 

1,229,000

 

Advances to stockholders/members

—

 

 

—

 

 

—

 

 

—

 

 

—

 

 

(523,657

)

 

(523,657

)

Net Loss

—

 

 

—

 

 

—

 

 

(591,719

)

 

(295,860

)

 

—

 

 

(887,579

)

Balance , December 31, 2012

—

 

 

—

 

 

2,010

 

 

(750,921

)

 

1,166,140

 

 

(595,657

)

 

(178,428

)

Shares Issued

2,000

 

 

2

 

 

(2

)

 

—

 

 

—

 

 

—

 

 

—

 

Capital Contributions

—

 

 

—

 

 

—

 

 

—

 

 

1,096,400

 

 

—

 

 

1,096,400

 

Advances to stockholders/members

—

 

 

—

 

 

—

 

 

—

 

 

—

 

 

(710,581

)

 

(710,581

)

Net Loss

—

 

 

—

 

 

—

 

 

(771,825

)

 

(285,847

)

 

—

 

 

(1,057,672

)

Balance, December 31, 2013

2,000

 

$

2

 

$

2,008

 

$

(1,522,746

)

$

1,976,693

 

$

(1,306,238

)

$

(850,281

)


The Notes to Consolidated Financial Statements are an integral part of this statement.


F - 4


TYME INC. AND SUBSIDIARY


Consolidated Statements of Cash Flows


Years Ended December 31, 2013 and 2012


 

 

2013

 

2012

 

Cash flows from operating activities:

 

 

 

 

 

 

 

Net loss

 

$

(1,057,672

)

$

(887,579

)

Adjustments to reconcile net loss to net cash from operating activities

 

 

 

 

 

 

 

Depreciation

 

 

514

 

 

210

 

Changes in operating assets and liabilities

 

 

 

 

 

 

 

Prepaid assets

 

 

(110,080

)

 

11,103

 

Accounts payable and other current liabilities

 

 

(32,008

)

 

169,570

 

Net cash used in operating activities

 

 

(1,199,246

)

 

(706,696

)

 

 

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

 

 

Purchases of property and equipment

 

 

(19,953

)

 

(2,200

)

Net cash used in investing activities

 

 

(19,953

)

 

(2,200

)

 

 

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

 

 

Capital contributions

 

 

1,096,400

 

 

1,229,000

 

Changes in due from stockholders/members

 

 

(710,581

)

 

(523,657

)

Proceeds from issuance of convertible notes

 

 

926,000

 

 

—

 

Net cash provided by financing activities

 

 

1,311,819

 

 

705,343

 

 

 

 

 

 

 

 

 

Net increase (decrease) in cash

 

 

92,620

 

 

(3,553

)

 

 

 

 

 

 

 

 

Cash - beginning of year

 

 

—

 

 

3,553

 

 

 

 

 

 

 

 

 

Cash - end of year

 

$

92,620

 

$

—

 

 

 

 

 

 

 

 

 

Supplemental Cash Flow Information:

 

 

 

 

 

 

 

Cash paid for interest and income taxes are as follows:

 

 

 

 

 

 

 

Interest

 

$

—

 

$

—

 

Income taxes

 

$

—

 

$

—

 

 

 

 

 

 

 

 

 

Noncash investing and financing activities:

 

 

 

 

 

 

 

Issuance of common stock as a result of contribution of member interest in Luminant Biosciences LLC

 

$

2

 

$

—

 


The Notes to Consolidated Financial Statements are an integral part of this statement.


F - 5


TYME INC. AND SUBSIDIARY


Notes to Consolidated Financial Statements


December 31, 2013 and 2012


(1) Background and Nature of Business


Tyme Inc. and Subsidiary (the “Company”) is a clinical-stage biopharmaceutical company focused on the development and commercialization of highly targeted cancer therapeutics with a broad range of oncology indications. Tyme Inc. (“Tyme”) was incorporated in Delaware in 2013 and its operations to date have been directed primarily toward developing business strategies, research and development activities and preparing for clinical trials for its product candidates.   The Company has focused its research and development efforts on a proprietary platform technology for which it retains global intellectual property (IP) and commercial rights.


The Company is currently formulating its regulatory and drug development program for SM-88, working towards the initiation of its first phase II clinical trial.  


Assignment of Interest in Luminant


On July 26, 2013, the founding stockholders (“the Founders”) of the Company entered into a Founder Contribution and Exchange Agreement under which the Founders contributed their membership units in Luminant Biosciences, LLC. (“Luminant”) to the Company in exchange for 2,000 shares of common stock, par value $0.001 per share (the “Company Common Stock”) of the Company.  As a result of the transaction, as of December 31, 2013, Luminant Biosciences, LLC is 66 2/3% owned by the Company. The two Founders are two executive officers of the Company and collectively own more than 50 percent of the Company’s outstanding stock as of December 31, 2013. Since this transaction is among entities under common control, no gain or loss is recognized in the consolidated financial statements and the carrying amounts of the net assets are eliminated in consolidation.


Going Concern


The Company has incurred losses and negative cash flows from operations since inception and has an accumulated deficit of $850 thousand as of December 31, 2013. The Company anticipates incurring additional losses until such time, if ever, that it can generate significant revenues from its product candidates currently in development. The Company’s primary sources of liquidity to date has been the issuance of a convertible promissory note on August 2, 2013 and contributed capital by a member of Luminant.  The Company received $926 thousand from the issuance of a convertible promissory note in 2013 and approximately $2.6 million of historical capital contributions in Luminant by one of its members. Substantial additional financing will be needed by the Company to fund its operations, gain regulatory approval of and to commercially develop its technologies and product candidates. There can be no assurance that such financing will be available when needed or on acceptable terms. These factors raise substantial doubt about the Company’s ability to continue as a going concern.


The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of this uncertainty.


Management is currently evaluating different strategies to obtain the required funding of future operations. These strategies may include, but are not limited to: additional funding from current or new investors, borrowings of debt, a public offering of the Company’s equity or debt securities, and/or a merger with a publically traded company with available cash and liquid assets. There can be no assurance that these future funding efforts will be successful.


The Company is subject to those risks associated with any specialty pharmaceutical company that has substantial expenditures for research and development. There can be no assurance that the Company’s research and development projects will be successful, that products developed will obtain necessary regulatory approval, or that any approved product will be commercially viable. In addition, the Company operates in an environment of rapid technological change, and is largely dependent on the services of its employees and consultants.


F - 6


TYME INC. AND SUBSIDIARY


Notes to Consolidated Financial Statements (Continued)


December 31, 2013 and 2012


(2) Summary of Significant Accounting Policies


Basis of Presentation


On July 26, 2013, the controlling members of Luminant elected to transfer their membership units in Luminant to a newly formed company, Tyme Inc., in exchange for 2,000 shares of Company Common Stock (see Note 1). The Company has evaluated this transaction in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and has concluded that this transaction represents a recapitalization of entities under common control. Accordingly, the consolidated financial statements presented herein have been adjusted to reflect this recapitalization, by reporting assets, liabilities and equity at their carrying values and operations as of beginning of the year of the earliest comparative financial statements. The Company’s consolidated financial statements have been prepared in conformity with U.S. GAAP and include the accounts of Tyme Inc. and its subsidiary Luminant Biosciences, LLC. All significant intercompany accounts have been eliminated in consolidation.


Since its inception, the Company has not generated any significant revenues related to its operations. In June 2014, the Financial Accounting Standards Board released Accounting Standards Update No. 2014-10, which amended Topic 915 of the Accounting Standards Codification, Development Stage Entities, to eliminate the requirements to present inception-to-date information for the consolidated statement of operations, cash flows, and stockholders’ equity, along with certain other disclosures, which were historically required for development stage entities. This guidance is effective for annual reporting periods beginning after December 15, 2014 (for both public and nonpublic entities) and interim reporting periods beginning after December 15, 2014 for public entities and interim reporting periods beginning after December 15, 2015 for other entities. Early application of this amended guidance is permitted, provided that the entity’s financial statements have either not yet been issued (for public business entities) or made available for issuance (for other entities). The Company has evaluated this amended guidance and has elected to early adopt the amended guidance. This early adoption has no impact on the consolidated financial condition, results of operations, or cash flows of the Company.


Use of Estimates


The preparation of the consolidated financial statements in conformity with U.S. GAAP, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and reported amounts of revenues and expenses during the reporting period. Significant items subject to such estimation include the stated value of the Company underlying the conversion feature of the outstanding convertible notes payable. Actual results could differ from such estimates.


Fair Value of Financial Instruments


The carrying amounts of the Company’s financial instruments, including accounts payable and accrued expenses approximates fair value given their short-term nature. The carrying amount of the convertible promissory notes payable approximates fair value because the interest rates on these instruments are reflective of rates that the Company could obtain on unaffiliated third party debt with similar terms and conditions.


Prepaid Assets


Prepaid assets represents expenditures made in advance of when the economic benefit of the cost will be realized, and which will be expensed in future periods with the passage of time or when a triggering event occurs.  


Property and Equipment, Net


Property and equipment are recorded at cost and are depreciated on a straight-line basis over their estimated useful lives. The Company estimates a life of five to seven years for equipment and furniture and fixtures. Upon sale or retirement, the cost and related accumulated depreciation are removed from the accounts and the resulting gain or loss is included in operating expenses. Repairs and maintenance costs are expensed as incurred.


F - 7


TYME INC. AND SUBSIDIARY


Notes to Consolidated Financial Statements (Continued)


December 31, 2013 and 2012


(2) Summary of Significant Accounting Policies (Continued)


Impairment of Long-Lived Assets


The Company assesses the recoverability of its long-lived assets, which include fixed assets whenever significant events or changes in circumstances indicate impairment may have occurred. If indicators of impairment exist, projected future undiscounted cash flows associated with the asset are compared to its carrying amount to determine whether the asset’s value is recoverable. Any resulting impairment is recorded as a reduction in the carrying value of the related asset in excess of fair value and a charge to operating results. For the years ended December 31, 2013 and 2012, the Company determined that there was no impairment of its long-lived assets.


Research and Development


Research and development costs are expensed as incurred and are primarily comprised of, but not limited to, external research and development expenses incurred under arrangements with third parties, such as contract research organizations (CROs), contract manufacturing organizations (CMOs) and consultants that conduct clinical and preclinical studies, costs associated with preclinical and development activities, costs associated with regulatory operations, depreciation expense for assets used in research and development activities and employee related expenses including salaries and benefits for research and development personnel. Costs for certain development activities, such as clinical studies, are recognized based on an evaluation of the progress to completion of specific tasks using data such as patient enrollment, clinical site activations, or information provided to the Company by its vendors on their actual costs incurred. Payments for these activities are based on the terms of the individual arrangements, which may differ from the patterns of costs incurred, and are reflected in the consolidated financial statements as prepaid or accrued expense, which are reported in prepaid assets or accounts payable and other current liabilities.


Noncontrolling Interests


Noncontrolling interests represents the minority member’s interest in the Company’s subsidiary, Luminant (see Note 1). At December 31, 2013, the Company owned 66 2/3 percent of Luminant representing 66 2/3 percent of the voting control which requires that Luminant’s operations be included in the consolidated financial statements. The 33 1/3 percent interest of Luminant that is not owned by the Company is shown as noncontrolling interests in the 2013 and 2012 consolidated statement of operations and consolidated balance sheet.


Income Taxes


The Company’s subsidiary, Luminant, operates as a limited liability corporation for federal and state income tax purposes. Accordingly, the taxable income or loss of Luminant passes to the individual members rather than pay taxes at the corporate level through the date the Founders contributed their 66 2/3 ownership in Luminant to the Company and accordingly there is no provision for income or deferred taxes for the year ended December 31, 2012.  


From the date of inception July 26, 2013 through December 31, 2013, the Company operates as a C-Corporation and includes in its income its share of the income of Luminant.  Deferred tax assets or liabilities are recorded for temporary differences between financial reporting and tax basis of assets and liabilities, using enacted rates in effect for the year in which the differences are expected to reverse.


A valuation allowance is recorded if it is more likely than not that a deferred tax asset will not be realized. The Company has provided a full valuation allowance on its deferred tax assets that consists of cumulative net operating losses of $666 thousand for the period from inception (July 26, 2013) to December 31, 2013. Due to its cumulative loss position, history of operating losses and losses expected to be incurred in the foreseeable future, a full valuation allowance was considered necessary (Note 6).


F - 8


TYME INC. AND SUBSIDIARY


Notes to Consolidated Financial Statements (Continued)


December 31, 2013 and 2012


(2) Summary of Significant Accounting Policies (Continued)


Income Taxes (Continued)


The utilization of net operating losses for Federal income tax purposes sustained by the Company could be substantially limited annually if there were an “ownership change” (as defined by Section 382 of the Internal Revenue Code of 1986, as amended).  If it were determined that there is a change in ownership, or if the Company undergoes a change of ownership in the future, the utilization of the Company’s net operating loss carry-forward may be materially limited. This could result in a reduction in equal amounts to the deferred tax assets and the related valuation reserves.


The Company is required to evaluate uncertain tax positions taken or expected to be taken in the course of preparing the Company’s consolidated financial statements to determine whether the tax positions are more likely than not of being sustained by the applicable tax authority. Tax positions with respect to tax at the Company level deemed not to meet the “more-likely than-not” threshold would be recorded as a tax expense in the current year. The Company has concluded that no provision for uncertain tax positions is required in the Company’s consolidated financial statements.


The Company had no unrecognized tax benefits at December 31, 2013 and 2012. The tax years which currently remain subject to examination by major tax jurisdictions as of December 31, 2013 are the years ended December 31, 2011 through 2013. In addition, the Company had no income tax related penalties or interest for periods presented in these consolidated financial statements.


Segment Information


Operating segments are defined as components of an enterprise about which separate discrete information is available for evaluation by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance. The Company views their operations and manages their business in one segment.


(3) Property and Equipment, Net


Property and equipment consisted of equipment and furniture and fixtures that had a net book value of $21,429 and $1,990 as of December 31, 2013 and 2012, respectively. Depreciation expense was $514 and $210 for the years ended December 31, 2013 and 2012, respectively.


(4) Accounts Payable and Other Current Liabilities


Accounts payable and other current liabilities consisted of the following:


 

 

December 31,

 

 

 

2013

 

2012

 

Interest

 

$

5,855

 

$

—

 

Legal

 

 

67,908

 

 

161,502

 

Consulting

 

 

7,730

 

 

—

 

Research and development

 

 

58,750

 

 

11,000

 

Other

 

 

8,267

 

 

8,016

 

 

 

$

148,510

 

$

180,518

 


F - 9


TYME INC. AND SUBSIDIARY


Notes to Consolidated Financial Statements (Continued)


December 31, 2013 and 2012


(5) Convertible Notes Payable


On August 2, 2013, the Company entered into a Convertible Promissory Note Agreement (“Convertible Notes”) to be funded in a series of loans up to a maximum principal amount of $997,000. As of December 31, 2013, the Company received $926,000 in proceeds under the Convertible Notes. The Convertible Notes accrue interest at a rate of 2.5% per year.  Principal repayments commence on April 30, 2014 equal to 1/24th of the then outstanding balance, with the entire principal amount due and payable on April 30, 2016.


If, prior to April 30, 2014, the Company enters into any financing transaction with the lender or an affiliate thereof, upon the closing the outstanding principal balance of the Convertible Notes shall automatically convert on a dollar for dollar basis into the securities being issued and sold at a conversion price equal to the purchase price per share implied by a pre-investment valuation of the Company equal to $20 million, (“Conversion Price”), Further, if the Company enters into an agreement with a third party, other than the lender or affiliate thereof, into any debt or equity financing, exclusive license of any portion of the IP Rights, a sale of substantially all of the assets of the Company, or subsidiary thereof, or any transaction or series of transactions resulting in the current stockholders holding less than a majority of the voting interests, then, at the lender’s option, effective immediately prior to closing of the third party transaction the outstanding principal balance of the Convertible Notes shall be converted on a dollar for dollar basis into shares of Company Common Stock. In the case of conversion of principal under either scenario, the Company would have no further obligations or liabilities under the Convertible Notes.


In connection with the issuance of the Convertible Notes the Company determined that the conversion feature was not an embedded derivative requiring bifurcation and separate accounting treatment as the conversion feature was indexed to the Company’s own stock.  The Company also determined the conversion feature did not result in a beneficial conversion feature requiring separate accounting treatment because the conversion rate approximated the fair value of the Company Common Stock at the commitment date.


The Company recorded interest expense of $5,855 during 2013, on the Convertible Notes. This amount is included in Accounts payable and other current liabilities. The Convertible Notes outstanding principal and accrued interest balance at December 31, 2013 was $931,855. As of December 31, 2013, future maturities of the Convertible Notes are $347,250 in 2014, $463,000 in 2015 and $115,750 in 2016.


In January 2014, the lender increased the aggregate principal amount of the Convertible Notes from $997 thousand to $1.126 million and advanced funds to the Company to the effect, that the total amount funded to the Company was equal to the increased principal amount of the Convertible Notes. On August 28, 2014, the Company was notified by the lender that the lender was exercising the conversion feature in the Convertible Notes (See Note 10).


(6) Income Taxes


No provision for U.S. federal or state income taxes has been recorded as the Company has incurred net operating losses since inception. Significant components of the Company’s net deferred income tax assets as of December 31, 2013 and 2012 consist of the following:


 

 

 

2013

 

 

2012

 

Net deferred tax assets

 

 

 

 

 

 

 

Tax loss carry-forwards

 

$

266,000

 

$

—

 

Other assets

 

 

—

 

 

—

 

Research and development credits

 

 

—

 

 

—

 

Other liabilities

 

 

—

 

 

—

 

Valuation allowance

 

 

(266,000

)

 

—

 

 

 

 

 

 

 

 

 

Total net deferred income taxes

 

$

—

 

$

—

 


F - 10


TYME INC. AND SUBSIDIARY


Notes to Consolidated Financial Statements (Continued)


December 31, 2013 and 2012


(6) Income Taxes (Continued)


A reconciliation of the statutory tax rates and the effective tax rates for the years ended December 2013 and 2012 is as follows:


 

 

2013

 

 

2012

 

U.S. federal tax rate

 

 

35.00

%

 

 

—

%

State tax rate

 

 

5.00

%

 

 

—

%

Valuation allowance

 

 

(40.00

)%

 

 

—

%

 

 

 

 

 

 

 

 

 

 

 

 

—

%

 

 

—

%


Realization of the future tax benefits is dependent on the Company’s ability to generate sufficient taxable income within the carry-forward period. Due to the Company’s history of operating losses, the deferred tax assets arising from the aforementioned future tax benefits are currently not likely to be realized and, accordingly, are offset by a full valuation allowance. The income tax provision varies from the expected provision determined by applying the federal statutory income tax rate to income (loss).


As of December 31, 2013, the Company has net operating loss carry-forwards of approximately $ 666 thousand available to offset federal and state income tax, which expire through 2033. Utilization of the net operating loss carry-forwards may be subject to a substantial annual limitation due to the ownership change limitations provided by the Internal Revenue Code of 1986, as amended, or the IRC, and similar state provisions. The effect of an ownership change could be an imposition of an annual limitation on the use of net operating loss carry-forwards attributable to periods before the change.


(7) Stockholders’ Deficit


Common Stock


Authorized, Issued and Outstanding


The Company is authorized to issue 1,000,000 shares of common stock, with a par value of $0.001, of which 2,000 shares were issued and outstanding at December 31, 2013.  As a result of the recapitalization as described in Note 2, stockholders’ deficiency has been presented to reflect this recapitalization as of the earliest period presented in these consolidated financial statements.


Voting


Each holder of Company Common Stock is entitled to one vote for each share thereof held by such holder at all meetings of stockholders (and written action in lieu of meetings). The number of authorized shares of Company Common Stock may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of majority of the combined number of issued and outstanding shares of the Company.


Dividends


Dividends may be declared and paid on the Company Common Stock from funds lawfully available therefore, as and when determined by the board of directors.


Liquidation


In the event of the liquidation, dissolution, or winding-up of the Company, holders of Company Common Stock will be entitled to receive all assets of the Company available for distribution to its stockholders.


F - 11


TYME INC. AND SUBSIDIARY


Notes to Consolidated Financial Statements (Continued)


December 31, 2013 and 2012


(8) Commitments


Contract Service Providers


In the course of the Company’s normal business operations, it has agreements with contract service providers to assist in the performance of its research and development and clinical research activities. Substantially all of these arrangements are on an as needed basis.


(9) Related Party Transactions


Due from Stockholders/Members


The Company obtains from and grants cash advances to certain of its stockholders.  These net advances are non-interest bearing and have no terms for repayment. The amounts due as of December 31, 2013 and 2012 were $1,306,238 and $595,657, respectively.  Such amounts have been reflected as a reduction of stockholders’ equity. For financial statement presentation, $20,000 has been reclassified from accounts payable relating to amounts owed to stockholders in arriving at the amount presented for 2013.  Certain amounts due at December 31, 2013 have been satisfied subsequent to year end (see Note 10).


(10) Subsequent Events


The Company evaluates events or transactions that occur after the balance sheet date but prior to the issuance of the consolidated financial statements to provide additional evidence relative to certain estimates or to identify matters that require additional disclosure. For its consolidated financial statements as of December 31, 2013 and for the year then ended, the Company evaluated subsequent events through the date of the issuance of the consolidated financial statements. There are no subsequent events to be recognized or reported are as follows:


During January 2014, the Convertible Notes which provided for funding in a series of loans up to a maximum principal amount of $997,000 was increased to a maximum principal amount of $1,126,000 and the lender made additional advances under the Convertible Notes totaling $200,000.


In May 2014, certain stockholders of the Company individually purchased 100 percent of the noncontrolling interest in the Company’s subsidiary, Luminant, which in turn was contributed to the Company by them in satisfaction of certain outstanding amounts included in due from stockholders/members as of December 31, 2013.


On June 6, 2014, the Company entered into a Term Sheet (the “GEM Term Sheet”) whereby GEM Global Yield Fund, LLC SCS and/or its affiliates and assigns (GEM) will assist the Company and Global Group Enterprises Corp., a U.S. publicly traded company, in connection with a merger and private placement offering (PPO). The proposed date of the merger and the First PPO was to be August 31, 2014. This date has since been extended to November 15, 2014.   The GEM Term Sheet also contemplated a fifteen month bridge loan which would convert into Company Common Stock upon completion of the PPO.


On July 3, 2014, a stockholder conveyed personal ownership of certain patents relating to the field of cancer treatment to the Company, which were filed and disclosed in the US Patent Office.  On July 9, 2014 the Company entered into a License Agreement with this stockholder as the stockholder desired to retain the right to certain assigned patents to use and commercialize the patents in all other fields other than the treatment of cancer. Pursuant to the License Agreement, the Company has granted the stockholder an exclusive, worldwide, royalty-free license to develop, make, have made, use, sell, offer to sell, import, export and distribute products or services in fields other than the treatment of cancer.  This license is to include the right to sublicense to any third party so long as such sublicense is consistent with the terms of the License Agreement and contains terms reasonably sufficient for the third party to satisfy its obligations thereunder.


F - 12


TYME INC. AND SUBSIDIARY


Notes to Consolidated Financial Statements (Continued)


December 31, 2013 and 2012


(10) Subsequent Events (Continued)


On July 11, 2014, the Company entered into a Securities Purchase Agreement (SPA) and received $1,100,000 in proceeds from the issuance of a convertible promissory note (the “Bridge Note”) from an investor who is an affiliate of GEM. The Bridge Note bears interest at a rate of 10% per year, maturing fifteen months from the date of issue and is secured by all assets of the Company.  The Bridge Note is mandatorily convertible upon the closing of the PPO. The Company issued in the name of the purchaser of the Bridge Note but placed into escrow 100 shares of Company Common Stock. These shares currently are not deemed outstanding, but will either be delivered to the Bridge Note purchaser or returned to the Company for cancellation pursuant to the terms of the Termination Shares Escrow Agreement, dated as of July 3, 2014.


On August 28, 2014, the lender converted its Convertible Notes in the aggregate principal amount of $1.126 million into 106.6 shares of the Company’s Common Stock.  Simultaneous with the issuance of the 106.6 shares to the Lender, the two principal stockholders of the Company, as capital contributions, surrendered to the Company for cancellation an aggregate of 106.6 shares of Company Common Stock. The net effect of such issuance and cancellations resulted ins no change in the total number of shares of Company Common Stock issued (2,100) and outstanding (2,000).


F - 13


TYME INC. AND SUBSIDIARY


Consolidated Balance Sheets


 

 

September 30,

 

December 31,

 

 

 

2014

 

2013

 

 

 

(Unaudited)

 

 

 

 

Assets

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

Cash

 

$

289,628

 

$

92,620

 

Prepaid assets

 

 

118,905

 

 

110,180

 

Total current assets

 

 

408,533

 

 

202,800

 

 

 

 

 

 

 

 

 

Property and equipment, net

 

 

20,503

 

 

21,429

 

Total assets

 

$

429,036

 

$

224,229

 

 

 

 

 

 

 

 

 

Liabilities and Stockholders’ Deficiency

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

Accounts payable and other current liabilities

 

$

347,309

 

$

148,510

 

Current maturities of convertible notes

 

 

—

 

 

347,249

 

Current maturities of senior secured bridge notes

 

 

1,100,000

 

 

—

 

Total current liabilities

 

 

1,447,309

 

 

495,759

 

 

 

 

 

 

 

 

 

Convertible notes less current maturities

 

 

—

 

 

578,751

 

Total liabilities

 

 

1,447,309

 

 

1,074,510

 

 

 

 

 

 

 

 

 

Commitments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders’ deficit

 

 

 

 

 

 

 

Common stock, $0.001 par value, 1,000,000 shares authorized, 2,100 shares issued and 2,000 shares outstanding at September 30, 2014 and 2,000 shares issued and outstanding at December 31, 2013, respectively

 

 

2

 

 

2

 

Additional paid in capital

 

 

2,044,914

 

 

2,008

 

Accumulated deficit

 

 

(2,707,424

)

 

(1,522,746

)

Total Tyme Inc stockholders’ deficit

 

 

(662,508

)

 

(1,520,736

)

 

 

 

 

 

 

 

 

Noncontrolling interests

 

 

—

 

 

1,976,693

 

Due from stockholders/members

 

 

(355,765

)

 

(1,306,238

)

Total stockholders’ deficit

 

 

(1,018,273

)

 

(850,281

)

Total liabilities and stockholders’ deficiency

 

$

429,036

 

$

224,229

 


See accompanying notes to condensed financial statements.


F - 14


TYME INC. AND SUBSIDIARY


Consolidated Statements of Operations


 

 

(Unaudited)

 

(Unaudited)

 

 

 

For the three months ended
September 30,

 

For the nine months ended
September 30,

 

 

 

2014

 

2013

 

2014

 

2013

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

$

286,979

 

$

167,494

 

$

431,274

 

$

455,944

 

General and administrative

 

 

601,473

 

 

126,003

 

 

719,851

 

 

198,634

 

Total operating expenses

 

 

888,452

 

 

293,497

 

 

1,151,125

 

 

654,578

 

Loss from operations

 

 

(888,452

)

 

(293,497

)

 

(1,151,125

)

 

(654,578

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

30,544

 

 

2,037

 

 

44,509

 

 

2,037

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

 

(918,996

)

 

(295,534

)

 

(1,195,634

)

 

(656,615

)

Loss attributable to noncontrolling interests

 

 

(83

)

 

(68,213

)

 

(10,956

)

 

(188,573

)

Loss attributable to controlling interests

 

$

(918,913

)

$

(227,321

)

$

(1,184,678

)

$

(468,042

)


See accompanying notes to condensed financial statements.


F - 15


TYME INC. AND SUBSIDIARY


Consolidated Statements of Changes in Stockholders’ Deficiency


For the periods ended September 30, 2014


(Unaudited)


 

 

 

 

 

 

Additional

 

 

 

Non

 

Due from

 

Total

 

 

Common stock

 

paid-in-

 

Accumulated

 

Controlling

 

stockholders/

 

stockholders’

 

 

Shares

 

Amount

 

capital

 

deficit

 

interests

 

members

 

deficiency

 

Balance, January 1, 2013

—

 

$

—

 

$

2,010

 

$

(750,921

)

$

1,166,140

 

$

(595,657

)

$

(178,428

)

Shares issued

2,000

 

 

2

 

 

(2

)

 

—

 

 

—

 

 

—

 

 

—

 

Capital contributions

—

 

 

—

 

 

—

 

 

—

 

 

1,096,400

 

 

—

 

 

1,096,400

 

Advances to stockholders/members

—

 

 

—

 

 

—

 

 

—

 

 

—

 

 

(710,581

)

 

(710,581

)

Net loss

—

 

 

—

 

 

—

 

 

(771,825

)

 

(285,847

)

 

—

 

 

(1,057,672

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, December 31, 2013

2,000

 

 

2

 

 

2,008

 

 

(1,522,746

)

 

1,976,693

 

 

(1,306,238

)

 

(850,281

)

Conversion of $1.126 million plus interest of conversion debt into 106.6 shares of common stock

106.6

 

 

—

 

 

1,152,242

 

 

—

 

 

—

 

 

—

 

 

1,152,242

 

Surrender of common stock by two principal shareholders of the Company for cancellation of 106.6 shares of Company common stock

(106.6

)

 

—

 

 

—

 

 

—

 

 

—

 

 

—

 

 

—

 

Capital contributions

—

 

 

—

 

 

—

 

 

—

 

 

25,000

 

 

—

 

 

25,000

 

Advances to stockholders/members

—

 

 

—

 

 

—

 

 

—

 

 

—

 

 

(149,600

)

 

(149,600

)

Luminant stockholder loans assigned in buyout of noncontrolling interests by certain stockholders of Tyme

—

 

 

—

 

 

(1,100,073

)

 

—

 

 

—

 

 

1,100,073

 

 

—

 

Net loss

—

 

 

—

 

 

—

 

 

(1,184,678

)

 

(10,956

)

 

—

 

 

(1,195,634

)

Contribution of noncontrolling interest

—

 

 

—

 

 

1,990,737

 

 

—

 

 

(1,990,737

)

 

—

 

 

—

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, September 30, 2014

2,000

 

$

2

 

$

2,044,914

 

$

(2,707,424

)

$

—

 

$

(355,765

)

$

(1,018,273

)


See accompanying notes to condensed financial statements.


F - 16


TYME INC. AND SUBSIDIARY


Consolidated Statements of Cash Flows


(Unaudited)


 

 

For the nine months ended
September 30,

 

 

 

2014

 

2013

 

Cash flows from operating activities:

 

 

 

 

 

 

 

Net loss

 

$

(1,195,634

)

$

(656,615

)

Adjustments to reconcile net loss to net cash from operating activities:

 

 

 

 

 

 

 

Depreciation

 

 

3,635

 

 

376

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

Prepaid assets

 

 

(8,725

)

 

(110,080

)

Accounts payable and other current liabilities

 

 

225,042

 

 

27,431

 

Net cash used in operating activities

 

 

(975,682

)

 

(738,888

)

 

 

 

 

 

 

 

 

Cash flows from investing activity:

 

 

 

 

 

 

 

Purchases of property and equipment

 

 

(2,710

)

 

(12,473

)

Net cash used in investing activities

 

 

(2,710

)

 

(12,473

)

 

 

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

 

 

Capital contributions - noncontrolling interest

 

 

25,000

 

 

831,400

 

Proceeds from issuance of convertible notes

 

 

200,000

 

 

500,000

 

Proceeds from secured bridge note

 

 

1,100,000

 

 

—

 

Changes in due from stockholders/members

 

 

(149,600

)

 

(436,052

)

Net cash provided by financing activities

 

 

1,175,400

 

 

895,348

 

 

 

 

 

 

 

 

 

Net increase in cash

 

 

197,008

 

 

143,987

 

 

 

 

 

 

 

 

 

Cash - beginning of year

 

 

92,620

 

 

—

 

 

 

 

 

 

 

 

 

Cash - end of year

 

$

289,628

 

$

143,987

 

 

 

 

 

 

 

 

 

Supplemental Cash Flow Information:

 

 

 

 

 

 

 

Cash paid for interest and income taxes are as follows:

 

 

 

 

 

 

 

Interest

 

$

—

 

$

—

 

Income taxes

 

$

—

 

$

—

 

 

 

 

 

 

 

 

 

Noncash investing and financing activities:

 

 

 

 

 

 

 

Issuance of common stock as a result of contribution of member interest in Luminant Biosciences LLC

 

$

—

 

$

2

 

Conversion of $1.126 million of convertible debt into 106.6 shares of common stock. Simultaneously, stockholders surrendered an equal amount of their own common stock, thereby having no change in the total number of shares outstanding.

 

$

1,152,242

 

$

—

 

Luminant stockholder loans assigned in buyout of noncontrolling interests by certain stockholders of Tyme

 

$

1,100,703

 

$

—

 

Contribution of noncontrolling interests by stockholders of Tyme

 

$

1,990,737

 

$

—

 


See accompanying notes to condensed financial statements.


F - 17


TYME INC. AND SUBSIDIARY


Notes to Unaudited Interim Consolidated Financial Statements


September 30, 2014


(1) Background and Nature of Business


Tyme Inc. and Subsidiary (the “Company”) is a clinical-stage biopharmaceutical company focused on the development and commercialization of highly targeted cancer therapeutics with a broad range of oncology indications. Tyme Inc. (“Tyme”) was incorporated in Delaware in 2013 and its operations to date have been directed primarily toward developing business strategies, research and development activities and preparing for clinical trials for its product candidates. The Company has focused its research and development efforts on a proprietary platform technology for which it retains global intellectual property (IP) and commercial rights.


The Company is currently formulating its regulatory and drug development program for SM-88, working towards the initiation of its first phase II clinical trial.


Assignment of Interest in Luminant


On July 26, 2013, the founding stockholders (“the Founders”) of the Company entered into a Founder Contribution and Exchange Agreement under which the Founders contributed their membership units in Luminant Biosciences, LLC. (“Luminant”) to the Company in exchange for 2,000 shares of common stock, par value $0.001 per share (the “Company Common Stock”) of the Company. As a result of the transaction, as of December 31, 2013, Luminant Biosciences, LLC is 66 2/3% owned by the Company. The two Founders are two executive officers of the Company and collectively own more than 50 percent of the Company’s outstanding stock as of December 31, 2013. Since this transaction is among entities under common control, no gain or loss is recognized in the consolidated financial statements and the carrying amounts of the net assets are eliminated in consolidation.


In May 2014, the Founders of the Company individually acquired the noncontrolling interest in Luminant and contributed it to the Company making Luminant a wholly owned subsidiary of the Company (See Noncontrolling Interests).


Term Sheet for Pending Merger


On June 6, 2014, the Company entered into a Term Sheet (the “GEM Term Sheet”) whereby GEM Global Yield Fund, LLC SCS and/or its affiliates and assigns (GEM) will assist the Company and Global Group Enterprises Corp., a U.S. publicly traded company, in connection with a merger and private placement offering (PPO). The proposed date of the merger and the First PPO was to be August 31, 2014. This date was extended to November 15, 2014. The GEM Term Sheet also contemplated a fifteen month bridge loan which would convert into Company Common Stock upon completion of a contemplated offering of securities. Such Bridge Loan was consummated as of July 11, 2014 (See Note 6).


(2) Summary of Significant Accounting Policies


Basis of Presentation


The accompanying unaudited interim financial statements of the Company have been prepared on the accrual basis of accounting in accordance with U.S. generally accepted accounting principles (U.S. GAAP) for interim financial information. In the opinion of management, the accompanying financial statements of the Company, include all normal and recurring adjustments (which consist primarily of accruals, estimates and assumptions that impact the financial statements) considered necessary to present fairly the Company’s financial position as of September 30, 2014 and its results of operations and cash flows for the nine months ended September 30, 2014 and 2013. Operating results for the nine months ended September 30, 2014 are not necessarily indicative of the results that may be expected for the year ending December 31, 2014. The interim financial statements, presented herein, do not contain the required disclosures under U.S. GAAP for annual financial statements. The accompanying unaudited interim financial statements should be read in conjunction with the annual audited financial statements and related notes as of and for the year ended December 31, 2013.


F - 18


TYME INC. AND SUBSIDIARY


Notes to Unaudited Interim Consolidated Financial Statements (continued)


September 30, 2014


(2) Summary of Significant Accounting Policies (continued)


Liquidity and Going Concern


The Company has incurred losses and negative cash flows from operations since inception (July 26, 2013) and has an accumulated deficit of approximately $1.0 million and $850 thousand as of September 30, 2014 and December 31, 2013, respectively. The Company anticipates incurring additional losses until such time, if ever, that it can generate significant revenues from its product candidates currently in development. The Company’s primary sources of liquidity to date has been the issuance of convertible promissory notes on August 2, 2013 and July 3, 2014 and contributed capital by the founders.  The Company received approximately $2.2 million from the issuance of convertible promissory notes and approximately $2.7 million in of historical capital contributions in Luminant by one of its members. Substantial additional financing will be needed by the Company to fund its operations and to commercially develop its technologies and product candidates. There is no assurance that such financing will be available when needed or on acceptable terms. These factors raise substantial doubt about the Company’s ability to continue as a going concern.


The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets amounts or the amounts and classification of liabilities the might result from the outcome of this uncertainty.


Notwithstanding the Bridge Note and Merger as further discussed in Note 11, management is evaluating different strategies to obtain the required additional funding of future operations. These strategies may include, but are not limited to: additional funding from current or new investors, borrowings of debt, and/or a public offering of the Company’s equity or debt securities s. There can be no assurance that these future funding efforts will be successful.


The Company is subject to those risks associated with any specialty pharmaceutical company that has substantial expenditures for research and development. There can be no assurance that the Company’s research and development projects will be successful, that products developed will obtain necessary regulatory approval, or that any approved product will be commercially viable. In addition, the Company operates in an environment of rapid technological change and is largely dependent on the services of its employees and consultants.


Use of Estimates


The preparation of financial statements in conformity with U.S. GAAP, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Significant items subject to such estimation include the stated value of the Company underlying the conversion feature of the outstanding convertible notes payable. Actual results could differ from such estimates.


Fair Value of Financial Instruments


The carrying amounts of the Company’s financial instruments, including accounts payable and accrued expenses approximates fair value given their short-term nature. The carrying amount of the convertible promissory notes payable approximates fair value because the interest rates on these instruments are reflective of rates that the Company could obtain on unaffiliated third party debt with similar terms and conditions.


Prepaid Assets


Prepaid assets represents expenditures made in advance of when the economic benefit of the cost will be realized, and which will be expensed in future periods with the passage of time or when a triggering event occurs.


F - 19


TYME INC. AND SUBSIDIARY


Notes to Unaudited Interim Consolidated Financial Statements (continued)


September 30, 2014


(2) Summary of Significant Accounting Policies (continued)


Property and Equipment, Net


Property and equipment are recorded at cost and are depreciated on a straight-line basis over their estimated useful lives. The Company estimates a life of five to seven years for equipment and furniture and fixtures. Upon sale or retirement, the cost and related accumulated depreciation are removed from the accounts and the resulting gain or loss is included in operating expenses. Repairs and maintenance costs are expensed as incurred.


Intangible Assets


The Company’s intangible assets consist of patents and patent applications contributed by the founders.  This intellectual property value has been recorded as a de Minimis amount of $2,000 and included in the respective stockholder receivable accounts since no monies have been transferred.  The patents have not been amortized and have a useful life of twenty years.


Impairment of Long-Lived Assets


The Company assesses the recoverability of its long-lived assets, which include fixed assets whenever significant events or changes in circumstances indicate impairment may have occurred. If indicators of impairment exist, projected future undiscounted cash flows associated with the asset are compared to its carrying amount to determine whether the asset’s value is recoverable. Any resulting impairment is recorded as a reduction in the carrying value of the related asset in excess of fair value and a charge to operating results. For the periods ended September 30, 2014 and 2013, the Company determined that there was no impairment of its long-lived assets.


Research and Development


Research and development costs are expensed as incurred and are primarily comprised of, but not limited to, external research and development expenses incurred under arrangements with third parties, such as contract research organizations (CROs), contract manufacturing organizations (CMOs) and consultants that conduct clinical and preclinical studies, costs associated with preclinical and development activities, costs associated with regulatory operations, depreciation expense for assets used in research and development activities and employee related expenses including salaries and benefits for research and development personnel. Costs for certain development activities, such as clinical studies, are recognized based on an evaluation of the progress to completion of specific tasks using data such as patient enrollment, clinical site activations, or information provided to the Company by its vendors on their actual costs incurred. Payments for these activities are based on the terms of the individual arrangements, which may differ from the patterns of costs incurred, and are reflected in the consolidated financial statements as prepaid or accrued expense, which are reported in prepaid assets or accounts payable and other current liabilities.


Noncontrolling interest


Noncontrolling interests represents the minority member’s interest in the Company’s subsidiary, Luminant. At December 31, 2013, the Company owned 66 2/3 percent of Luminant representing 66 2/3 percent of the voting control, which requires that Luminant’s operations be included in the consolidated financial statements. The 33 1/3 percent interest of Luminant that is not owned by the Company is shown as noncontrolling interests in the 2014 and 2013 consolidated statement of operations and consolidated balance sheet.


In May 2014, certain stockholders of the Company individually purchased 100 percent of the noncontrolling interest in the Company’s subsidiary, Luminant, which in turn was contributed to the Company by them in satisfaction of certain outstanding amounts included in due from stockholders/members’ as of December 31, 2013.  As the result of the contribution of the noncontrolling interest, Luminant became a wholly owned subsidiary of the Company.


F - 20


TYME INC. AND SUBSIDIARY


Notes to Unaudited Interim Consolidated Financial Statements (continued)


September 30, 2014


(2) Summary of Significant Accounting Policies (continued)


Income Taxes


The Company’s subsidiary, Luminant, operates as a limited liability corporation for federal and state income tax purposes. Accordingly, the taxable income or loss of Luminant passes to the individual members rather than pay taxes at the corporate level through the date the Founders contributed their 66 2/3 ownership in Luminant to the Company and accordingly there is no provision for income or deferred taxes for the year ended December 31, 2013.


From the date of inception (July 26, 2013) through September 30, 2014, the Company operates as a C-Corporation and includes in its income its share of the income/loss of Luminant.  Deferred tax assets or liabilities are recorded for temporary differences between financial reporting and tax basis of assets and liabilities, using enacted rates in effect for the year in which the differences are expected to reverse.


A valuation allowance is recorded if it is more likely than not that a deferred tax asset will not be realized. The Company has provided a full valuation allowance on its deferred tax assets that consists of cumulative net operating losses of $1.829 million for the period from inception (July 26, 2013) to September 30, 2014. Due to its cumulative loss position, history of operating losses and losses expected to be incurred in the foreseeable future, a full valuation allowance was considered necessary.


The utilization of net operating losses for Federal income tax purposes sustained by the Company could be substantially limited annually if there were an “ownership change” (as defined by Section 382 of the Internal Revenue Code of 1986, as amended).  If it were determined that there is a change in ownership, of if the Company undergoes a change of ownership in the future, the utilization of the Company’s net operating loss carry-forward may be materially limited. This could result in a reduction in equal amounts to the deferred tax assets and the related valuation reserves.


The Company is required to evaluate uncertain tax positions taken or expected to be taken in the course of preparing the Company’s consolidated financial statements to determine whether the tax positions are more likely than not of being sustained by the applicable tax authority. Tax positions with respect to tax at the Company level deemed not to meet the “more-likely than-not” threshold would be recorded as a tax expense in the current year. The Company has concluded that no provision for uncertain tax positions is required in the Company’s consolidated financial statements.


The Company had no unrecognized tax benefits at September 30, 2014 and 2013. The tax years which currently remain subject to examination by major tax jurisdictions as of September 30, 2014 are the years ended December 31, 2011 through 2013. In addition, the Company had no income tax related penalties or interest for periods presented in these consolidated financial statements.


Segment Information


Operating segments are defined as components of an enterprise about which separate discrete information is available for evaluation by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance. The Company views their operations and manages their business in one segment.


Concentration of Credit Risk


Financial instruments that potentially expose Tyme to concentration of credit risk consist primarily of cash.  Cash is deposited with major banks and at times, such balances with any one financial institution may be in excess of FDIC insurance limits.  The Company believes no significant concentration of credit risk exists.


F - 21


TYME INC. AND SUBSIDIARY


Notes to Unaudited Interim Consolidated Financial Statements (continued)


September 30, 2014


(3) Property and Equipment, Net


Property and equipment, net consisted of the following:


 

September 30,

 

December 31,

 

 

2014

 

2013

 

 

(Unaudited)

 

 

 

Furniture and fixtures

$

2,200

 

$

2,200

 

Machinery and equipment

 

22,662

 

 

1,200

 

Construction in process

 

—

 

 

18,753

 

 

 

24,862

 

 

22,153

 

Less: accumulated depreciation

 

4,359

 

 

724

 

 

$

20,503

 

$

21,429

 


Depreciation expense was $3,635 and $-0- for the nine months ended September 30, 2014 and 2013, respectively.  Depreciation expense was $1,073 and $139 for the three months ended September 30, 2014 and 2013, respectively.


(4) Intangible Assets


On July 3, 2014, a stockholder conveyed personal ownership of certain patents and patent applications relating to the field of cancer treatment to the Company, which were filed and disclosed in the US Patent Office. On July 9, 2014 the Company entered into a License Agreement with this stockholder as the stockholder desired to retain the right to certain assigned patents and patent applications to use and commercialize the patents in all other fields other than the treatment of cancer. Pursuant to the License Agreement, the Company has granted the stockholder an exclusive, worldwide, royalty-free license to develop, make, have made, use, sell, offer to sell, import, export and distribute products or services in fields other than the treatment of cancer. This license includes the right to sublicense to any third party so long as such sublicense is consistent with the terms of the License Agreement and contains terms reasonably sufficient for the third party to satisfy its obligations thereunder.


(5) Accounts Payable and Other Current Liabilities


Accounts payable and other current liabilities consisted of the following:


 

September 30,

 

December 31,

 

 

2014

 

2013

 

 

(Unaudited)

 

 

 

Interest

$

24,122

 

$

5,855

 

Legal

 

206,025

 

 

67,908

 

Consulting

 

7,730

 

 

7,730

 

Research and development

 

58,750

 

 

58,750

 

Professional

 

42,263

 

 

—

 

Other

 

8,419

 

 

8,267

 

 

$

347,309

 

$

148,510

 


F - 22


TYME INC. AND SUBSIDIARY


Notes to Unaudited Interim Consolidated Financial Statements (continued)


September 30, 2014


(6) Debt


Convertible Notes Payable


On August 2, 2013, the Company entered into a Convertible Promissory Note Agreement (the” Convertible Note Agreement”) to be funded in a series of loans up to a maximum principal amount of $997,000 (“Convertible Notes”). As of December 31, 2013, the Company received $926,000 in proceeds under the Convertible Notes. The Convertible Notes accrue interest at a rate of 2.5% per year.  Principal repayments were to commence on April 30, 2014 equal to 1/24th of the then outstanding balance, with the entire principal amount due and payable on April 30, 2016.


The Convertible Note Agreement provided that if, prior to April 30, 2014, the Company enters into any financing transaction with the lender or an affiliate thereof, upon the closing the outstanding principal balance of the Convertible Notes shall automatically convert on a dollar for dollar basis into the securities being issued and sold at a conversion price equal to the purchase price per share implied by a pre-investment valuation of the Company equal to $20 million (“Conversion Price”).  The Convertible Note Agreement further provided that if the Company enters into an agreement with a third party, other than the lender or affiliate thereof, into any debt or equity financing, exclusive license of any portion of the IP Rights, a sale of substantially all of the assets of the Company, or subsidiary thereof, or any transaction or series of transactions resulting in the current stockholders holding less than a majority of the voting interests, then, at the lender’s option, effective immediately prior to closing of the third party transaction the outstanding principal balance of the Convertible Notes shall be converted on a dollar for dollar basis into shares of Company Common Stock. The Convertible Note Agreement provided that in the case of conversion of principal under either scenario, the Company would have no further obligations or liabilities under the Convertible Notes.


In January 2014, the lender increased the aggregate principal amount of the Convertible Notes from $997 thousand to $1.126 million and advanced funds to the Company to the effect, that the total amount funded to the Company was equal to the increased principal amount of the Convertible Notes.


On August 28, 2014, the lender converted the Convertible Notes in the aggregate principal amount of $1.126 million into 106.6 shares of the Company Common Stock.  Simultaneous with the issuance of the 106.6 shares to the Lender, the two principal stockholders of the Company, as capital contributions, surrendered to the Company for cancellation an aggregate of 106.6 shares of Company Common Stock. The net effect of such issuance and cancellations resulted in no change in the total number of shares of Company Common Stock issued (2,100) and outstanding (2,000).


The Company recorded interest expense relating to these Convertible Notes of $20,387 and $2,037 during the nine months ended September 30, 2014 and 2013, respectively.  The Company recorded interest expense relating to these Convertible Notes of $6,422 and $2,037 during the three months ended September 30, 2014 and 2013, respectively.  The outstanding principal and accrued interest balance at September 30, 2014 and 2013 was $-0- and $502,037, respectively.


On July 11, 2014, the Company entered into a Securities Purchase Agreement (SPA) and received $1,100,000 in proceeds from the issuance of a convertible promissory note (the “Bridge Note”) from an investor who is an affiliate of GEM. The Bridge Note bears interest at a rate of 10% per year, maturing fifteen months from the date of issue and is secured by all assets of the Company.  The Bridge Note is mandatorily convertible upon the closing of the PPO at the conversion price as defined in the merger agreement contemplated in the GEM Term Sheet.  The Company issued in the name of the purchaser of the Bridge Note but placed into escrow 100 shares of Company Common Stock. These shares currently are not deemed outstanding, but will either be delivered to the Bridge Note purchaser or returned to the Company for cancellation pursuant to the terms of a Termination Shares Escrow Agreement, dated as of July 3, 2014 among the Company, the holder of the Bridge Note, and the escrow agents.


On November 24, 2014, the Bridge Note was amended and revised to increase the principal amount to $1.35 million. On January 15, 2015, the Bridge Notes was further amended and revised to increase the principal amount to $2.31 million (see Note 11).


The Company recorded interest expense of $24,122 and $-0- during the nine months ended September 30, 2014 and 2013, respectively, on this convertible promissory note. The Company recorded interest expense of $24,122 and $-0- during the three months ended September 30, 2014 and 2013, respectively, on this convertible promissory note. The outstanding principal and accrued interest balance at September 30, 2014 and 2013 was $1,124,122 and $-0-, respectively.


F - 23


TYME INC. AND SUBSIDIARY


Notes to Unaudited Interim Consolidated Financial Statements (continued)


September 30, 2014


(7) Income Taxes


No provision for U.S. federal or state income taxes has been recorded as the Company has incurred net operating losses since inception. Significant components of the Company’s net deferred income tax assets as of September 30, 2014 and December 31, 2013 consist of the following:


 

 

September 30,
2014

 

December 31,
2013

 

 

 

(Unaudited)

 

 

 

Net deferred tax assets

 

 

 

 

 

 

 

Tax loss carry-forwards

 

$

731,500

 

$

266,000

 

Other assets

 

 

—

 

 

—

 

Research and development credits

 

 

—

 

 

—

 

Other liabilities

 

 

—

 

 

—

 

Valuation allowance

 

 

(731,500

)

 

(266,000

)

 

 

 

 

 

 

 

 

Total net deferred income taxes

 

$

—

 

$

—

 


A reconciliation of the statutory tax rates and the effective tax rates for the periods ended September 30, 2014 and December 2013 is as follows:


 

 

September 30,
2014

 

 

December 31,
2013

 

 

 

(Unaudited)

 

 

 

 

U.S. federal tax rate

 

 

35.00

%

 

 

35.0

%

State tax rate

 

 

5.00

%

 

 

5.0

%

Valuation allowance

 

 

(40.00

)%

 

 

(40.0

)%

 

 

 

 

 

 

 

 

 

 

 

 

—

%

 

 

—

%


Realization of the future tax benefits is dependent on the Company’s ability to generate sufficient taxable income within the carry-forward period.  Due to the Company’s history of operating losses, the deferred tax assets arising from the aforementioned future tax benefits are currently not likely to be realized and, accordingly, are offset by a full valuation allowance.  The income tax provision varies from the expected provision determined by applying the federal statutory income tax rate to income (loss).


As of September 30, 2014 and December 31, 2013, the Company has net operating loss carry-forwards of approximately $1.829 million available to offset federal and state income tax, which expire through 2033. Utilization of the net operating loss carry-forwards may be subject to a substantial annual limitation due to the ownership change limitations provided by the Internal Revenue Code of 1986, as amended, or the IRC, and similar state provisions. The effect of an ownership change could be an imposition of an annual limitation on the use of net operating loss carry-forwards attributable to periods before the change.


F - 24


TYME INC. AND SUBSIDIARY


Notes to Unaudited Interim Consolidated Financial Statements (continued)


September 30, 2014


(8) Stockholders’ Deficit


Common Stock


Authorized, Issued and Outstanding


The Company is authorized to issue 1,000,000 shares of common stock, with a par value of $0.001, of which 2,100 and 2,000 shares were issued and 2,000 and 2,000 shares were outstanding at September 30, 2014 and December 31, 2013, respectively.  As a result of the recapitalization, stockholders’ deficiency has been presented to reflect this recapitalization as of the earliest period presented in these consolidated financial statements.


Voting


Each holder of Company Common Stock is entitled to one vote for each share thereof held by such holder at all meetings of stockholders (and written action in lieu of meetings). The number of authorized shares of Company Common Stock may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of majority of the combined number of issued and outstanding shares of the Company.


Dividends


Dividends may be declared and paid on the Company Common Stock from funds lawfully available therefore, as and when determined by the board of directors.


Liquidation


In the event of the liquidation, dissolution, or winding-up of the Company, holders of Company Common Stock will be entitled to receive all assets of the Company available for distribution to its stockholders.


(9) Commitments


Contract Service Providers


In the course of the Company’s normal business operations, it has agreements with contract service providers to assist in the performance of its research and development and clinical research activities. Substantially all of these arrangements are on an as needed basis.


(10) Related Party Transactions


Due from Stockholders/Members


The Company obtains from and grants cash advances to certain of its stockholders. These net advances are non-interest bearing and have no terms for repayment. The amounts due as of September 30, 2014 and December 31, 2013 were $355,765 and $1,306,238, respectively. Such amounts have been reflected as a reduction of stockholders’ equity.  For financial statement presentation, $20,000 has been reclassified from accounts payable relating to amounts owed to stockholders in arriving at the amount presented for September 30, 2014 and December 31, 2013.


In May 2014, certain stockholders of the Company individually purchased 100 percent of the noncontrolling interest in the Company’s subsidiary, Luminant, which in turn was contributed to the Company by them in satisfaction of certain outstanding amounts included in due from stockholders/members as of December 31, 2013.


F - 25


TYME INC. AND SUBSIDIARY


Notes to Unaudited Interim Consolidated Financial Statements (continued)


September 30, 2014


(11) Subsequent Events


The Company evaluates events or transactions that occur after the balance sheet date but prior to the issuance of financial statements to provide additional evidence relative to certain estimates or to identify matters that require additional disclosure. For its interim financial statements as of September 30, 2014 and for the quarter then ended, the Company evaluated subsequent events through the date of the issuance of the financial statements. There are no subsequent events to be recognized or reported that are not already previously disclosed including the following:


On November 24, 2014, the holder of the Bridge Note loaned the Company an additional $250,000.  In connection with the funding of such loan, the Bridge Note was amended and restated to reflect a principal amount of $1.35 million.  On January 15, 2015, the holder of the Bridge Note loaned the Company a further $960,000.  In connection with the funding of such further loan, the Bridge Note was amended and restated to reflect a principal amount of $2.31 million.  On March 5, 2015, the Bridge Note was further amended and restated to the effect that the mandatory conversion feature was amended to a set fixed conversion amount such that, upon mandatory conversion, the Bridge Note holder would receive one share of a specified company’s common stock for each $1.00 of principal of the Bridge Note outstanding as of the date of the mandatory conversion. The Company has evaluated the modification to the conversion rate as an inducement to convert the Bridge Note and has concluded that it provided the holder of the Bridge Note an incremental value of $3.465 million which will be charged as interest expense at the time of modification.


On March 5, 2015, the Company consummated a reverse triangular merger (the “Merger”) whereby a newly formed subsidiary of Tyme Technologies, Inc. (“Parent”) merged with and into the Company.  The Merger resulted in the Company becoming a wholly-owned subsidiary of Parent and the stockholders of the Company as of immediately prior to the effective time of the Merger, receiving, in the aggregate, common stock of Parent equal to approximately 79% of the total number of shares of Parent common stock outstanding immediately following such issuance to such former Company stockholders.  Contemporaneous with the closing of the Merger, among other matters, Parent completed a private placement of 2.716 million shares of Parent common stock for gross proceeds of $6.79 million (of which, $4.29 million was tendered in cash and the remaining subscription price paid by the delivery of a three-month promissory note in the principal amount of


$2.5 million (“PPO Note”) and the Bridge Note was converted into 2.31 million shares of Parent common stock. Parent common stock was the only equity securities of Parent outstanding prior to and immediately following consummation of the Merger, Parent’s private placement and the Bridge Note conversion.  The foregoing aggregate 79% ownership of the post-Merger Parent by the former Company stockholders was calculated giving effect to the issuances of Parent common stock in Parent’s private placement and the conversion of the Bridge Note.


The PPO Note is secured by the escrow of 5 million shares of the post-merger Parent Common Stock. To the extent that the PPO Note is not paid at or prior to the Maturity Date, the escrowed shares will be forfeited to us for cancellation at the rate of one share for every $0.50 of PPO Note principal not paid to us.


Another condition to consummating the Merger is that Parent will retain a firm (the “IR Firm”) to provide investor relations services to the post-Merger Parent and the Parent has allocated 250,000 shares (the “IR Firm Shares”) of the Parents Common Stock for issuance to such firm. The appropriate accounting for the IR Firm Shares, which represents in substance a payment to a service provider, will be reflected as a charge to operations.


The investors in the PPO, along with the Bridge Note holder who received the Bridge Note Conversion Shares upon the automatic conversion of the Bridge Note which occured simultaneous with the closing of the PPO, will have anti-dilution protection on the shares purchased in the PPO or Bridge Note Conversion Shares (as the case may be) such that, if within two years after the closing of the Merger, Parent shall issue additional shares of Common Stock or common stock equivalents, for a consideration per share less than $0.50 (the “Lower Price”), each such investor and holder will be entitled to receive from the post-Merger Parent, additional shares, (“Lower Price Shares”) of Parent common stock in an amount such that, when added to the number of shares initially purchased by such investor or received upon conversion of the Bridge Note, will equal the number of shares that such investor’s PPO subscription amount would have purchased or the Bridge Note holder would have received upon conversion of the Bridge Note at the Lower Price.   Management has not completed its assessment of the embedded feature related to the price protection provision and therefore has not included any adjustment(s) that may be required as a result of that analysis.  


F - 26


TYME INC. AND SUBSIDIARY


Notes to Unaudited Interim Consolidated Financial Statements (continued)


September 30, 2014


(11) Subsequent Events (continued)


In connection with the PPO, post-merger Parent entered into a Registration Rights Agreement (the “Registration Rights Agreement”) with the purchasers in the PPO, holder of the Bridge Note and the IR Firm, pursuant to which Parent agreed that promptly, but no later than 90 calendar days following the maturity date of the PPO Note (such maturity date being 90 calendar days after the closing of the PPO), the Parent will file a registration statement with the SEC (the “Registration Statement”) covering (a) all of the PPO Shares issued in the PPO, (b) the Bridge Note Conversion Shares issued upon conversion of the Bridge Note, (c) the Lower Price Shares, if any, (d) the IR Firm Shares and (e) any shares of the Parent Common Stock issued or issuable with respect to the PPO Shares, Conversion Shares and Lower Price Shares upon any stock split, dividend or other distribution, recapitalization or similar event (collectively, the “PPO/Bridge Note Conversion Registrable Shares”). The Registration Statement will also cover 9% of the total number of shares issued to the former stockholders of the Company in connection with the Merger. The Parent is required to use commercially reasonable efforts to ensure that the Registration Statement is declared effective within 180 calendar days of filing with the SEC. If the Parent is late in filing the Registration Statement or if the Registration Statement is not declared effective within 180 days of its filing with the SEC, liquidated damages payable in cash by the post-Merger Parent to the holders of the PPO/Bridge Note Conversion Registrable Shares that have not been so registered will commence to accrue at a rate equal to $0.01 per Conversion Share and $0.025 per PPO Share for each full month that (i) Parent is late in filing the Registration Statement or (ii) the Registration Statement is late in being declared effective by the SEC; provided, however, that in no event shall the aggregate of any such per share liquidated damages exceed $0.08 per Conversion Share and $0.20 per PPO Share. Management has not completed its assessment of the embedded feature related to the registration rights provision and therefore has not included any adjustment(s) that may be required as a result of that analysis.  


At the point of Merger and since inception, Parent was essentially a “Public Reporting Shell” with no substantive business operations. As such, Parent had negligible revenues and operating profits that require separate identification.


The Merger will begin to establish a public forum for the Company. Subject to executing on our goals, Management envisages that the public forum may help the Company secure necessary future funding in the public markets as it develops further its principal business focus as a clinical-stage biopharmaceutical enterprise focused on the development and commercialization of highly targeted cancer therapeutics with a broad range of oncology indications.


The transaction costs associated with the Merger relate to professional fees incurred in respect of Legal, Accounting and Audit. All such transaction costs, being associated with the final merger and issuance of equity, will be expensed as incurred and total approximately $1 million.


For accounting purposes the acquisition of the Company by Parent was considered a reverse acquisition, an acquisition transaction where the acquired company, the Company, is considered the acquirer for accounting purposes, notwithstanding the form of the transaction. The primary reason the transaction was treated as a purchase by the Company rather than a purchase by Parent was because Parent was a Public Reporting Shell company with limited operations and the Company’s stockholders gaining control of the voting power and outstanding share of Parent. Consequently, reverse acquisition accounting will be applied to the transaction. No additional goodwill or intangible assets are anticipated to be recognized in conjunction with the completion of the transaction..


On February 27, 2015, consistent with the Merger Agreement terms, non-interest bearing advances made to stockholders totaling $355,765 (See Note 10. Related Party Transactions) were settled by bonus compensation due to such stockholders being retained by the Company in lieu of payment.


F - 27


UNAUDITED PRO FORMA COMBINED CONSOLIDATED FINANCIAL DATA INFORMATION


On June 6, 2014 Global Group Enterprise Corp. (“Global”) entered into a combination agreement contemplating a plan of arrangement with Tyme Inc. (“Tyme”). Global is a Florida corporation and Tyme is a Delaware corporation. Global formed a Delaware subsidiary, Tyme Technologies, Inc. (“Technologies”) the surviving company in the merger, to facilitate the plan of arrangement. On March 5, 2015 Technologies and Tyme completed the transaction contemplated by the plan of arrangement. The combined companies now operate under the name “Tyme Inc.”.


The unaudited pro forma combined consolidated statement of operations of Tyme has been prepared by management after giving effect to the reverse merger transaction between Tyme and Technologies.  The unaudited pro forma combined consolidated balance sheet has been presented as of September 30, 2014 and gives effect to the transaction as if it occurred on that date.  The unaudited combined consolidated statement of operations for the fiscal year ended December 31, 2013 and the nine months ended September 30, 2014 are presented as if the merger occurred at the beginning of the respective periods.


The unaudited pro forma combined consolidated balance sheet has been constructed from the audited balance sheet of Tyme as of September 30, 2014 prepared in accordance with U.S. Generally Accepted Accounting Principles and the audited balance sheet of Technologies as of August 31, 2014 prepared in accordance with U.S. Generally Accepted Accounting Principles.


The unaudited pro forma combined consolidated statement of operations for the year ended December 31, 2013 has been constructed using the following:


•  Audited statement of operations for the year ended December 31, 2013 of Tyme

 

•  Audited statement of operations for the year ended November 30, 2014 of Technologies


The unaudited pro forma combined consolidated statement of operations for the nine months ended September 30, 2014 has been constructed using the following:


•  Unaudited interim statement of operations for the nine months ended September 30, 2014 of Tyme

 

•  Unaudited interim statement of operations for the nine months ended August 31, 2014 of Technologies


The unaudited pro forma combined consolidated financial statements should be read in conjunction with the audited consolidated financial statements of Tyme as of and for the year ended December 31, 2013 and 2012 and the audited financial statements of Technologies for the year ended November 30, 2014 and 2013.


The unaudited pro forma combined consolidated financial statements are prepared for illustrative purposes only and, are not necessarily indicative of the actual financial position and result of operations that would have been for the periods presented, nor do such financial statements purport to represent the result of future periods.  The pro forma adjustments are based upon available information.


It is management’s opinion that these pro forma financial statements include all known adjustments necessary for the fair presentation, in all material respects, of the proposed transaction described above in accordance with U.S. GAAP applied on a consistent basis with the Company’s accounting policies.  At the time of the preparation of the pro forma financial statements, management has not completed its assessment of certain embedded features related to price protection and registration rights as contemplated in the merger agreement and therefore has not included pro forma adjustment(s) that may be required as a result of that analysis.  No potential cost savings, non-recurring charges, or credits are anticipated by the Company’s management subsequent to completion of the transaction.


For accounting purposes the acquisition of Tyme by Technologies was considered a reverse acquisition, an acquisition transaction where the acquired company, Tyme is considered the acquirer for accounting purposes, notwithstanding the form of the transaction. The primary reason the transaction was treated as a purchase by Tyme rather than a purchase of Tyme, by Technologies was because Technologies was a shell company.


Consequently, reverse acquisition accounting was applied to the transaction. No additional goodwill or intangible assets were recognized on completion of the transaction. The capital structure, including the number and type of shares issued, appearing in the consolidated balance sheet reflects that of the legal parent, Technologies now known as Tyme, including the shares issued to affect the reverse acquisition. The assets, liabilities and dollar amounts attributable to share capital are those of Tyme.  Future financial statements will present a continuation of as Tyme’s financial statements with the adjustments described above.


F - 28


Tyme Inc.

(Formerly Tyme Technologies, Inc.)

Pro Forma Combined Consolidated Balance Sheet

As of September 30, 2014

(Unaudited)


 

Nine Months

 

Nine Months

 

 

 

 

 

 

 

 

 

Ended

 

Ended

 

 

 

 

 

 

 

 

 

August 31,

 

September 30,

 

 

 

 

 

 

 

 

 

2014

 

2014

 

 

 

 

 

 

Tyme Inc.

 

 

Technologies

 

Tyme

 

 

 

 

 

 

Pro Forma

 

 

(Unaudited)

 

(Unaudited)

 

Combined

 

Adjustments

 

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

(Note 1)

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

$

—

 

$

289,628

 

$

289,628

 

$

250,000

 

c

$

5,789,628

 

 

 

 

 

 

 

 

 

 

 

 

960,000

 

d

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4,290,000

 

h

 

 

 

Prepaid assets

 

—

 

 

118,905

 

 

118,905

 

 

—

 

 

 

118,905

 

Total current assets

 

—

 

 

408,533

 

 

408,533

 

 

5,500,000

 

 

 

5,908,533

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Property and equipment, net

 

—

 

 

20,503

 

 

20,503

 

 

—

 

 

 

20,503

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total assets

$

—

 

$

429,036

 

$

429,036

 

$

5,500,000

 

 

$

5,929,036

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ DEFICIT

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accounts payable and accrued liabilities

$

11,627

 

$

347,309

 

$

358,936

 

$

(11,627

)

a

$

323,187

 

 

 

 

 

 

 

 

 

 

 

 

(91,295

)

i

 

 

 

 

 

 

 

 

 

 

 

 

 

 

67,173

 

f

 

 

 

Shareholder advances

 

70,990

 

 

—

 

 

70,990

 

 

(70,990

)

a

 

—

 

Current maturities of senior secured bridge notes

 

—

 

 

1,100,000

 

 

1,100,000

 

 

250,000

 

c

 

—

 

 

 

 

 

 

 

 

 

 

 

 

(2,310,000

)

i

 

 

 

 

 

 

 

 

 

 

 

 

 

 

960,000

 

d

 

 

 

Total current liabilities

 

82,617

 

 

1,447,309

 

 

1,529,926

 

 

(1,206,739

)

 

 

323,187

 

Total liabilities

 

82,617

 

 

1,447,309

 

 

1,529,926

 

 

(1,206,739

)

 

 

323,187

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders’ Deficit:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common stock

 

5,200

 

 

2

 

 

5,202

 

 

(5,200

)

b

 

7,578

 

 

 

 

 

 

 

 

 

 

 

 

6,798

 

j

 

 

 

 

 

 

 

 

 

 

 

 

 

 

231

 

i

 

 

 

 

 

 

 

 

 

 

 

 

 

 

522

 

h

 

 

 

 

 

 

 

 

 

 

 

 

 

 

25

 

l

 

 

 

Additional paid-in capital

 

38,300

 

 

2,044,914

 

 

2,083,214

 

 

(38,300

)

b

 

15,318,633

 

 

 

 

 

 

 

 

 

 

 

 

2,401,064

 

i

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(6,798

)

j

 

 

 

 

 

 

 

 

 

 

 

 

 

 

6,789,478

 

h

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3,465,000

 

k

 

 

 

 

 

 

 

 

 

 

 

 

 

 

624,975

 

l

 

 

 

Subscriptions receivable

 

—

 

 

—

 

 

—

 

 

(2,500,000

)

h

 

(2,500,000

)

Accumulated deficit

 

(126,117

)

 

(2,707,424

)

 

(2,833,541

)

 

82,617

 

a

 

(7,220,362

)

 

 

 

 

 

 

 

 

 

 

 

43,500

 

b

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(67,173

)

f

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(355,765

)

e

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(3,465,000

)

k

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(625,000

)

l

 

 

 

Stockholder’s deficiency

 

(82,617

)

 

(662,508

)

 

(745,125

)

 

6,350,974

 

 

 

5,605,849

 

Due from stockholders/members

 

—

 

 

(355,765

)

 

(355,765

)

 

355,765

 

e

 

—

 

Total stockholders’ deficit

 

(82,617

)

 

(1,018,273

)

 

(1,100,890

)

 

6,706,739

 

 

 

5,605,849

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total liabilities and stockholders’ deficit

$

—

 

$

429,036

 

$

429,036

 

$

5,500,000

 

 

$

5,929,036

 


F - 29


Tyme Inc.

(Formerly Tyme Technologies, Inc.)

Pro Forma Combined Consolidated Statement of Operations

As of November 30, 2014 and December 31, 2013

(Audited)


 

Year Ended

 

Year Ended

 

 

 

 

 

 

 

 

 

November 30,

 

December 31,

 

 

 

 

 

 

Tyme Inc.

 

 

2014

 

2013

 

 

 

 

 

 

Pro Forma

 

 

Technologies

 

Tyme

 

Combined

 

Adjustments

 

 

(Unaudited)

 

 

 

 

 

 

 

 

(Note 1)

 

 

 

 

Revenue

$

—

 

$

—

 

$

—

 

$

—

 

 

$

—

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

—

 

 

744,717

 

 

744,717

 

 

 

 

 

 

744,717

 

General and administrative

 

14,653

 

 

307,100

 

 

321,753

 

 

141,472

 

e

 

1,302,518

 

 

 

 

 

 

 

 

 

 

 

 

214,293

 

e

 

 

 

 

 

 

 

 

 

 

 

 

 

 

625,000

 

l

 

 

 

Professional fees

 

39,260

 

 

—

 

 

39,260

 

 

—

 

 

 

39,260

 

Total operating expenses

 

53,913

 

 

1,051,817

 

 

1,105,730

 

 

980,765

 

 

 

2,086,495

 

Loss from operations

 

(53,913

)

 

(1,051,817

)

 

(1,105,730

)

 

(980,765

)

 

 

(2,086,495

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

—

 

 

5,855

 

 

5,855

 

 

67,173

 

f

 

3,538,028

 

 

 

 

 

 

 

 

 

 

 

 

3,465,000

 

k

 

 

 

Loss before income taxes

 

(53,913

)

 

(1,057,672

)

 

(1,111,585

)

 

(4,512,938

)

 

 

(5,624,523

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Provision for income taxes

 

—

 

 

—

 

 

—

 

 

 

 

 

 

—

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

(53,913

)

 

(1,057,672

)

 

(1,111,585

)

 

(4,512,938

)

 

 

(5,624,523

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss attributable to noncontrolling interests

 

—

 

 

(285,847

)

 

(285,847

)

 

285,847

 

g

 

—

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss attributable to controlling interests

$

(53,913

)

$

(771,825

)

$

(825,738

)

$

(4,798,785

)

 

$

(5,624,523

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings (loss) per common share

$

(0.00

)

$

(0.02

)

$

(0.01

)

 

 

 

 

$

(0.07

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings (loss) per common share

$

(0.00

)

$

(0.02

)

$

(0.01

)

 

 

 

 

$

(0.07

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

12,724,000

*

 

68,000,000

 

 

80,724,000

 

 

5,276,000

**

 

 

86,000,000

 

Diluted

 

12,724,000

*

 

68,000,000

 

 

80,724,000

 

 

5,276,000

**

 

 

86,000,000

 


*    The shares reflected have been adjusted to the capital structure of Technologies in anticipation of the Merger.

**  The shares indicated are the shares issued in conjunction with the pro forma adjustments reflected above.


F - 30


Tyme Inc.

(Formerly Tyme Technologies, Inc.)

Pro Forma Combined Consolidated Statement of Operations

As of August 31, 2014 and September 30, 2014

(Unaudited)


 

Nine Months

 

Nine Months

 

 

 

 

 

 

 

 

 

Ended

 

Ended

 

 

 

 

 

 

 

 

 

August 31,

 

September 30,

 

 

 

 

 

 

Tyme Inc.

 

 

2014

 

2014

 

 

 

 

 

 

Pro Forma

 

 

Technologies

 

Tyme

 

Combined

 

Adjustments

 

 

(Unaudited)

 

 

 

 

 

 

 

 

(Note 1)

 

 

 

 

Revenue

$

—

 

$

—

 

$

—

 

$

—

 

 

$

—

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

—

 

 

431,274

 

 

431,274

 

 

 

 

 

 

431,274

 

General and administrative

 

8,659

 

 

719,851

 

 

728,510

 

 

141,472

 

e

 

1,709,275

 

 

 

 

 

 

 

 

 

 

 

 

214,293

 

e

 

 

 

 

 

 

 

 

 

 

 

 

 

 

625,000

 

l

 

 

 

Professional fees

 

31,343

 

 

—

 

 

31,343

 

 

 

 

 

 

31,343

 

Total operating expenses

 

40,002

 

 

1,151,125

 

 

1,191,127

 

 

980,765

 

 

 

2,171,892

 

Loss from operations

 

(40,002

)

 

(1,151,125

)

 

(1,191,127

)

 

(980,765

)

 

 

(2,171,892

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

—

 

 

44,509

 

 

44,509

 

 

67,173

 

f

 

3,576,682

 

 

 

 

 

 

 

 

 

 

 

 

3,465,000

 

k

 

 

 

Loss before income taxes

 

(40,002

)

 

(1,195,634

)

 

(1,235,636

)

 

(4,512,938

)

 

 

(5,748,574

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Provision for income taxes

 

—

 

 

—

 

 

—

 

 

 

 

 

 

—

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

(40,002

)

 

(1,195,634

)

 

(1,235,636

)

 

(4,512,938

)

 

 

(5,748,574

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss attributable to noncontrolling interests

 

—

 

 

(10,956

)

 

(10,956

)

 

10,956

 

g

 

—

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss attributable to controlling interests

$

(40,002

)

$

(1,184,678

)

$

(1,224,680

)

$

(4,523,894

)

 

$

(5,748,574

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings (loss) per common share

$

(0.00

)

$

(0.02

)

$

(0.02

)

 

 

 

 

$

(0.07

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings (loss) per common share

$

(0.00

)

$

(0.02

)

$

(0.02

)

 

 

 

 

$

(0.07

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

12,724,000

*

 

68,000,000

 

 

80,724,000

 

 

5,276,000

**

 

 

86,000,000

 

Diluted

 

12,724,000

*

 

68,000,000

 

 

80,724,000

 

 

5,276,000

**

 

 

86,000,000

 


*    The shares reflected have been adjusted to the capital structure of Technologies in anticipation of the Merger.

**  The shares indicated are the shares issued in conjunction with the pro forma adjustments reflected above.


F - 31


NOTES TO PRO FORMA FINANCIAL INFORMATION


1.    PRO FORMA ADJUSTMENTS AND ASSUMPTIONS


The unaudited pro forma financial statements incorporate the following pro forma assumptions and adjustments:


 

a.

Outstanding liabilities of Technologies have been assumed by certain stockholders of Technologies in a separate transaction in contemplation of the reverse merger with Tyme.

 

 

 

 

b.

Technologies historic deficit, common stock and additional paid in capital, after the adjustment for the assumption of outstanding liabilities by certain stockholders of Technologies, have been eliminated.

 

 

 

 

c.

On November 24, 2014, the Company received an additional $250,000 under an amendment to the Bridge Note.

 

 

 

 

d.

On January 15, 2015, the Company received an additional $960,000 under an amendment to the Bridge Note.

 

 

 

 

e.

Tyme’s amounts due from shareholders/members were distributed as compensation to such shareholders on February 27, 2015 and therefore have been reclassified.

 

 

 

 

f.

Additional interest relating to Bridge Note from October 1, 2014 through March 5, 2015 has been recorded as the Bridge Note was converted at the time of the Merger.

 

 

 

 

g.

Tyme acquired the noncontrolling interest in its subsidiary in May 2014 therefore all amounts related to noncontrolling interest have been eliminated.

 

 

 

 

h.

Contemporaneous with the closing of the Merger, Technologies completed a private placement of 2.716 million shares of common stock for gross proceeds of $6.79 million of which, $4.29 million was tendered in cash and the remaining subscription price will be paid by the delivery of a three-month promissory note in the principal amount of $2.5 million.  The 2.716 million shares have been recorded at the $.0001 par value per share of Technologies common stock.

 

 

 

 

i.

Contemporaneous with the closing of the Merger, the Bridge Note converted to shares of common stock at a fixed conversion of one share of Technologies common stock for each $1.00 of principal of the Bridge Note outstanding as of the date of the conversion.  All accrued interested, which in the event of conversion is not due or payable was converted to additional paid in capital for no additional share issuance.

 

 

 

 

j.

The 68,000,000 shares of common stock of Technologies issued to the shareholders of Tyme in exchange for the 2,000 shares of Tyme’s common stock outstanding at the date of the merger have been recorded at the $0.0001 par value per share of Technologies common stock.

 

 

 

 

k.

The $3.465 million represents the incremental value of the modification to the Bridge Note conversion rate as an inducement to convert the Bridge Note.

 

 

 

 

l.

Pursuant to a separate consulting agreement included in the merger agreement, 250,000 shares of Technologies’ common stock  were issued to the consultant as part of its compensation under such consulting agreement.  The fair value of the shares issued ($625,000) has been recorded as an operating expense with a corresponding offset to common stock and additional paid in capital.


2.    EARNINGS (LOSS) PER SHARE


Basic loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during each period.  Diluted loss per share includes the effect, if any, from the potential exercise or conversion of securities, such as convertible notes payable, which would result in the issuance or vesting of incremental shares of common stock.  In computing the basic and diluted net loss per share, the weighted average number of shares remains the same for both calculations due to the fact that when a net loss exists, dilutive shares are not included in the calculation.


The unaudited pro forma net loss per share is computed using the weighted average number of shares of common stock outstanding after giving effect to the conversion of convertible notes, the issuance of shares sold in the PPO and shares issued in conjunction with a consulting agreement resulting in an aggregate of 86,000,000 shares of common stock, as if they had occurred at the beginning of the period.


F - 32


SIGNATURES


Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Form 8-K to be signed on its behalf by the undersigned hereunto duly authorized.


 

Tyme Technologies, Inc.

 

 

 

Dated:  March 11, 2015

By:

/s/ Steve Hoffman

 

 

Steve Hoffman, Chief Executive Officer



Exhibit 2.1
 
 
AGREEMENT AND PLAN OF MERGER AND REORGANIZATION
 
among
 
TYME TECHNOLOGIES, INC.
 
 TYME ACQUISITION CORP.
 
and
 
TYME INC.
 
AND WITH RESPECT TO SECTION 6.3(f) ONLY,
 
STEVEN HOFFMAN, AS INDEMNIFICATION REPRESENTATIVE
 
AND, WITH RESPECT TO SECTIONS 1.14, 4.8(b) AND 5.1(k) ONLY,
 
GEM GLOBAL YIELD FUND LLC SCS
 
March 5, 2015
 
 
 
 

 

 
TABLE OF CONTENTS
 
         
Page
ARTICLE I        THE MERGER  
2
 
1.1
 
The Merger
 
2
 
1.2
 
The Closing
 
2
 
1.3
 
Actions at the Closing
 
2
 
1.4
 
Additional Actions
 
3
 
1.5
 
Conversion of Company Securities
 
3
 
1.6
 
Dissenting Shares
 
4
 
1.7
 
Fractional Shares
 
5
 
1.8
 
Options and Warrants
 
5
 
1.9
 
Post-Closing Adjustment
 
6
 
1.10
 
Certificate of Incorporation and Bylaws
 
7
 
1.11
 
No Further Rights
 
7
 
1.12
 
Closing of Transfer Books
 
7
 
1.13
 
Exemption from Registration; Rule 144
 
7
 
1.14
 
Adjustments to Parent Stockholders
 
8
           
ARTICLE II      REPRESENTATIONS AND WARRANTIES OF THE COMPANY  
9
 
2.1
 
Organization, Qualification and Corporate Power
 
9
 
2.2
 
Capitalization
 
10
 
2.3
 
Authorization of Transaction
 
10
 
2.4
 
Non-contravention
 
11
 
2.5
 
Subsidiaries
 
11
 
2.6
 
Compliance with Laws
 
12
 
2.7
 
Financial Statements
 
13
 
2.8
 
Absence of Certain Changes
 
13
 
2.9
 
Undisclosed Liabilities
 
14
 
2.10
 
Tax Matters
 
14
 
2.11
 
Assets
 
15
 
2.12
 
Owned Real Property
 
15
 
2.13
 
Real Property Leases
 
15
 
2.14
 
Contracts
 
16
 
2.15
 
Accounts Receivable
 
18
 
2.16
 
Powers of Attorney
 
18
 
2.17
 
Insurance
 
18
 
2.18
 
Warranties
 
18
 
2.19
 
Litigation
 
18
 
2.20
 
Employees
 
19
 
2.21
 
Employee Benefits
 
19
 
2.22
 
Environmental Matters
 
21
 
2.23
 
Legal Compliance
 
22
 
2.24
 
Customers
 
22
 
2.25
 
Permits
 
22
 
2.26
 
Certain Business Relationships with Affiliates
 
22
 
2.27
 
Brokers ’ Fees
 
23
 
2.28
 
Books and Records
 
23
 
2.29
 
Intellectual Property
 
23
 
2.30
 
Disclosure
 
24
 
2.31
 
Duty to Make Inquiry
 
24
 
 
 

 

 
 
2.32
 
Accountants
 
24
 
2.33
 
FDA and Related Matters
 
24
           
ARTICLE III      REPRESENTATIONS AND WARRANTIES OF THE PARENT AND THE ACQUISITION SUBSIDIARY  
25
 
3.1
 
Organization, Qualification and Corporate Power
 
25
 
3.2
 
Capitalization
 
26
 
3.3
 
Authorization of Transaction
 
26
 
3.4
 
Noncontravention
 
27
 
3.5
 
Subsidiaries
 
27
 
3.6
 
Exchange Act Reports
 
28
 
3.7
 
Compliance with Laws
 
28
 
3.8
 
Financial Statements
 
29
 
3.9
 
Absence of Certain Changes
 
29
 
3.10
 
Undisclosed Liabilities
 
29
 
3.11
 
Off-Balance Sheet Arrangements
 
29
 
3.12
 
Tax Matters
 
29
 
3.13
 
Assets
 
30
 
3.14
 
Owned Real Property
 
30
 
3.15
 
Real Property Leases
 
30
 
3.16
 
Contracts
 
31
 
3.17
 
Accounts Receivable
 
32
 
3.18
 
Powers of Attorney
 
32
 
3.19
 
Insurance
 
32
 
3.20
 
Warranties
 
32
 
3.21
 
Litigation
 
33
 
3.22
 
Employees
 
33
 
3.23
 
Employee Benefits
 
33
 
3.24
 
Environmental Matters
 
35
 
3.25
 
Permits
 
35
 
3.26
 
Certain Business Relationships with Affiliates
 
36
 
3.27
 
Tax-Free Reorganization
 
36
 
3.28
 
Split-Off
 
37
 
3.29
 
Brokers ’ Fees
 
37
 
3.30
 
Disclosure
 
37
 
3.31
 
Interested Party Transactions
 
37
 
3.32
 
Duty to Make Inquiry
 
37
 
3.33
 
Accountants
 
37
 
3.34
 
Minute Books
 
38
 
3.35
 
Board Action
 
38
           
ARTICLE IV      COVENANTS  
38
 
4.1
 
Closing Efforts
 
38
 
4.2
 
Governmental and Thirty Party Notices and Consents
 
38
 
4.3
 
Super 8-K
 
39
 
4.4
 
Operation of Company Business
 
39
 
4.5
 
Access to Company Information
 
40
 
4.6
 
Operation of Parent Business
 
41
 
4.7
 
Access to Parent Information
 
42
 
4.8
 
Expenses
 
43
 
4.9
 
Indemnification
 
43
 
 
 

 

 
 
4.10
 
Listing of Merger Shares
 
43
 
4.11
 
Name Change
 
43
 
4.12
 
Split-Off
 
44
 
4.14
 
Parent Board; Amendment of Charter Documents
 
44
 
4.14
 
Parent Equity Plan
 
44
 
4.15
 
Information Provided to Stockholders
 
44
 
4.16
 
No Registration
 
44
           
ARTICLE V       CONDITIONS TO CONSUMMATION OF MERGER  
45
 
5.1
 
Conditions to Each Party ’ s Obligations
 
45
 
5.2
 
Conditions to Obligations of the Parent and the Acquisition Subsidiary
 
46
 
5.3
 
Conditions to Obligations of the Company
 
47
           
ARTICLE VI      INDEMNIFICATION  
49
 
6.1
 
Indemnification by the Company Stockholders
 
49
 
6.2
 
Indemnification by the Parent
 
50
 
6.3
 
Indemnification Claims
 
51
 
6.4
 
Survival of Representations and Warranties
 
53
 
6.5
 
Limitations on Claims for Indemnification
 
53
           
ARTICLE VII     DEFINITIONS  
54
           
ARTICLE VIII   TERMINATION  
56
 
8.1
 
Termination by Mutual Agreement
 
56
 
8.2
 
Termination for Failure to Close
 
57
 
8.3
 
Termination by Operation of Law
 
57
 
8.4
 
Termination for Failure to Perform Covenants or Conditions
 
57
           
ARTICLE IX      MISCELLANEOUS  
57
 
9.1
 
Press Releases and Announcements
 
57
 
9.2
 
No Third Party Beneficiaries
 
57
 
9.3
 
Entire Agreement
 
57
 
9.4
 
Succession and Assignment
 
57
 
9.5
 
Counterparts and Facsimile Signature
 
58
 
9.6
 
Headings
 
58
 
9.7
 
Notices
 
58
 
9.8
 
Governing Law
 
58
 
9.9
 
Amendments and Waivers
 
58
 
9.10
 
Severability
 
59
 
9.11
 
Submission to Jurisdiction
 
59
 
9.12
 
Waiver of Jury Trial
 
59
 
9.12
 
Construction
 
59

EXHIBITS
   
     
Exhibit A
 
Form of Split-Off Agreement
Exhibit B
 
Form of General Release Agreement
Exhibit C
 
Form of Indemnification Escrow Agreement
Exhibit D
 
Form of 2015 Equity Incentive Plan
Exhibit E
 
Signatories to Lock-Up and No-Shorting Agreements
 
 
 

 

 
Exhibit F
 
Form of Lock-Up and No-Shorting Agreement
Exhibit G
 
Form of Legal Opinion of Company Counsel
Exhibit H
 
Form of Legal Opinion of Parent Counsel
Exhibit I
 
Indemnifying Stockholders
Exhibit J
 
Form of Subscription Note
Exhibit K
 
Form of Subscription Note Shares Escrow Agreement
Exhibit L
 
Form of Registration Rights Agreement
Exhibit M
 
Form of Adjustment Shares Escrow Agreement

 
 

 


AGREEMENT AND PLAN OF MERGER AND REORGANIZATION
 
AGREEMENT AND PLAN OF MERGER AND REORGANIZATION (this “Agreement”), dated as of March 5, 2015, by and among Tyme Technologies, Inc. (f/k/a Global Group Enterprises Corp.), a Delaware corporation (“Parent”), Tyme Acquisition Corp. , a Delaware corporation (“Acquisition Subsidiary”), Tyme Inc. , a Delaware corporation (the “Company”), and, solely with respect to Section 6.3(f), Steven Hoffman , as Indemnification Representative, and, solely with respect to Sections 1.14, 4.8(b) and 5.1(k), GEM Global Yield Fund LLC SCS , a “société en commandite simple” formed under the laws of Luxembourg (“GEM”).  Parent, Acquisition Subsidiary and the Company are referred herein each as a “Party” and collectively as the “Parties.”
 
WHEREAS , this Agreement contemplates a merger of Acquisition Subsidiary with and into the Company, with the Company remaining as the surviving entity after the merger (the “Merger”), whereby the stockholders of the Company will receive Parent Common Stock (as defined below) in exchange for their capital stock of the Company; and
 
WHEREAS , the Company previously issued to Christopher Brown a senior secured convertible note of the Company, as amended, in the principal amount of $2,310,000 (the “Bridge Note”), which, by its terms, will automatically convert into 2,310,000 shares of Parent Common Stock upon the closing of the Merger; and
 
WHEREAS , simultaneously with the closing of the Merger, Parent will complete a closing of a private placement offering (the “First PPO”) of 2,716,000 shares (the “First PPO Shares”) of its common stock, $0.0001 par value per share (the “Parent Common Stock”), at a purchase price of $2.50 per share (the “First PPO Offering Price”), for gross proceeds of $6,790,000 (the “First PPO Amount”); and
 
WHEREAS , immediately preceding the Effective Time (as defined below), Parent shall split-off its existing business and its wholly owned subsidiary, Global Group Enterprises Corp., a Florida corporation (the “Split-Off Subsidiary”), through the assignment of all of Parent’s assets and liabilities (other than those under this Agreement and the other related agreements and transactions contemplated hereby) to, and the sale of all of the outstanding capital stock of, the Split-Off Subsidiary (the “Split-Off”) in exchange for the surrender to the Company for cancellation of 13,000,200 shares of Parent Common Stock (the “Split-Off Shares”) (all of the foregoing collectively, the “Split-Off Transaction”) upon the terms and conditions of a split-off agreement by and among Parent, the Split-Off Subsidiary and Andrew Keck (the “Split-Off Purchaser”), substantially in the form of Exhibit A attached hereto (the “Split-Off Agreement”); and
 
WHEREAS , in connection with the closing of the Split-Off Transaction, Parent, Split-Off Subsidiary and Split-Off Purchaser shall enter into a general release agreement in substantially the form of  Exhibit B  attached hereto (the “General Release Agreement”); and
 
WHEREAS , in connection with the closing of the Merger, GEM will surrender and/or cause to be surrendered to Parent for cancellation an aggregate of 26,276,600 shares of Parent Common Stock; and
 
WHEREAS , Parent, Acquisition Subsidiary and the Company desire that the Merger qualify as a “reorganization” under Section 368(a) (a “reverse subsidiary merger”) of the Internal Revenue Code of 1986, as amended (the “Code”), and that this Agreement constitutes a “plan of reorganization” within the meaning of Sections 1.368-2(g) and 1.368-3(a) of the United States Treasury Regulation and that the holders of equity securities of the Company will not be subject to tax liability under the Code as a result of the Merger;
 
 
 

 

 
NOW, THEREFORE , in consideration of the representations, warranties and covenants herein contained, and for other good and valuable consideration, the receipt, adequacy and sufficiency of which are hereby acknowledged, the Parties hereto, intending legally to be bound, agree as follows:
 
ARTICLE I
THE MERGER
 
1.1            The Merger .  Upon and subject to the terms and conditions set forth in this Agreement, Acquisition Subsidiary shall merge with and into the Company at the Effective Time (as defined below).  From and after the Effective Time, the separate corporate existence of Acquisition Subsidiary shall cease and the Company shall continue as the surviving corporation in the Merger (the “Surviving Corporation”).  The “Effective Time” shall be the time at which a certificate of merger in proper form and duly executed, reflecting the Merger (the “Certificate of Merger”) pursuant to Section 251(c) of General Corporation Law of the State of Delaware (the “Delaware Act”) is filed with the Secretary of State of the State of Delaware.  The Merger shall have the effects set forth herein and in the applicable provisions of the Delaware Act.
 
1.2            The Closing . The closing of the transactions contemplated by this Agreement (the “Closing”) shall take place at the offices of CKR Law LLP, in New York, New York, commencing at 10:00 a.m. local time on or before March 5, 2015, or, if all of the conditions to the obligations of the Parties to consummate the transactions contemplated hereby have not been satisfied or waived by such date and the Parties agree to adjourn the Closing, on such mutually agreeable later date as soon as practicable (and in any event, unless the Parties otherwise agree in writing,  not later than three (3) Business Days) after the satisfaction or waiver of all conditions (excluding the delivery of any documents to be delivered at the Closing by any of the Parties) set forth in Article V hereof (the “Closing Date”).  As used in this Agreement, the term “Business Day” means any day other than a Saturday, a Sunday or a day on which banks in the State of New York are required or authorized by applicable Law to close.
 
1.3            Actions at the Closing .  At the Closing:
 
(a)            the Company shall deliver to Parent and Acquisition Subsidiary the various certificates, instruments and documents to be delivered by the Company pursuant to Sections 5.1 and 5.2;
 
(b)            Parent and Acquisition Subsidiary shall deliver to the Company the various certificates, instruments and documents to be delivered by Parent and/or Acquisition Subsidiary pursuant to Sections 5.1 and 5.3;
 
(c)            the Surviving Corporation shall file the Certificate of Merger with the Secretary of State of the State of Delaware;
 
(d)            the Split-Off Transaction shall be consummated and the Split-Off Purchaser shall surrender to Parent for cancellation 13,000,200 shares of Parent Common Stock (the “Share Contribution”) in connection with the Split-Off ;
 
(e)            the Bridge Note shall be converted into 2,310,000 shares of Parent Common Stock;
 
(f)            a closing of the First PPO shall be consummated for aggregate gross proceeds equal to the First PPO Amount of $6,790,000, of which at least $4,290,000 shall have been paid in cash and the balance of the First PPO Amount (up to $2,500,000) paid by delivery by the purchaser thereof of 
 
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a limited recourse promissory note therefor, in the form attached as Exhibit J to this Agreement (the “Subscription Note”); the Subscription Note being secured by the escrow of a number of shares of Parent Common Stock equal to the principal amount of the Subscription Note multiplied by two (2), pursuant to a Subscription Note Shares Escrow Agreement in the form attached as Exhibit K to this Agreement (the “Note Shares Escrow Agreement”);
 
(g)            GEM and the other Parent Record Holders (as defined below) shall surrender for cancellation the number of shares of Parent Common Stock required by Section 1.14(a);
 
(h)            Parent, Steven Hoffman, as indemnification representative (the “Indemnification Representative”), and CKR Law LLP, as escrow agent (the “Indemnification Escrow Agent”), shall execute and deliver the Indemnification Shares Escrow Agreement, in substantially the form attached hereto as Exhibit C (the “Indemnification Escrow Agreement”), and Parent shall deliver to the Indemnification Escrow Agent a certificate or certificates for the Indemnification Escrow Shares (as defined below) being placed in escrow on the Closing Date pursuant to the Indemnification Escrow Agreement; and
 
(i)             Parent shall enter onto a Registration Rights Agreement, in the form attached as Exhibit L to this Agreement (the “ Registration Rights Agreement ”), with each of the stockholders of record of the common stock, par value $0.001 per share (the “Company Common Stock”), of the Company immediately prior to the Effective Time (each, a “Company Stockholder”), with respect to 9% of the number of shares of Parent Common Stock each such Company Stockholder is entitled to receive under Section 1.5(a).
 
1.4            Additional Actions .  If at any time after the Effective Time the Surviving Corporation shall consider or be advised that any deeds, bills of sale, assignments or assurances or any other acts or things are necessary, desirable or proper (a) to vest, perfect or confirm, of record or otherwise, in the Surviving Corporation, its right, title or interest in, to or under any of the rights, privileges, powers, franchises, properties or assets of either the Company or Acquisition Subsidiary or (b) otherwise to carry out the purposes of this Agreement, the Surviving Corporation and its proper officers and directors or their designees shall be authorized (to the fullest extent allowed under applicable Law) to execute and deliver, in the name and on behalf of either or both the Company or Acquisition Subsidiary, all such deeds, bills of sale, assignments and assurances and do, in the name and on behalf of the Company and/or Acquisition Subsidiary, all such other acts and things necessary, desirable or proper to vest, perfect or confirm its right, title or interest in, to or under any of the rights, privileges, powers, franchises, properties or assets of the Company or Acquisition Subsidiary, as applicable, and otherwise to carry out the purposes of this Agreement.
 
1.5            Conversion of Company Securities .  At the Effective Time, by virtue of the Merger and without any action on the part of any Party or the holder of any of the following securities:
 
(a)            Each share of Company Common Stock issued and outstanding immediately prior to the Effective Time (other than any Company Stock owned beneficially by Parent or Acquisition Subsidiary and other than Dissenting Shares (as defined below)), shall be converted into and represent the right to receive (subject to the provisions of Section 1.6) such number of shares of Parent Common Stock as is equal to the Conversion Ratio.  The “Conversion Ratio” shall be determined as of the Closing and shall be equal to the quotient resulting from dividing (x) 68,000,000 by (y) the number of shares of Company Common Stock issued and outstanding as of  immediately prior to the Effective Time; provided that no more than an aggregate of 68,000,000 shares of Parent Common Stock (including Indemnification Escrow Shares (as defined below) and Dissenting Shares), subject to adjustment as necessary due to rounding as set forth in Section 1.5(b), shall be issuable to the Company Stockholders in connection with
 
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the Merger.  The shares of Parent Common Stock into which the shares of Company Common Stock are converted pursuant to this Section shall be referred to herein as the “Merger Shares.”
 
(b)            Notwithstanding the foregoing, as of the Closing Date, the Company Stockholders shall be entitled to receive immediately   only   95% of the shares of Parent Common Stock into which their shares of Company Common Stock were converted pursuant to Section 1.5(a) (the “Initial Shares”), pro rata in accordance with their respective holdings of Company Common Stock immediately prior to the Closing; and the remaining   5%   of the shares of Parent Common Stock into which their shares of Company Common Stock were converted pursuant to Section 1.5(a), rounded, with respect to the Merger Shares of each Company Stockholder, up or down to the nearest whole number (with 0.5 shares rounded upward to the nearest whole number) (the “Indemnification Escrow Shares”), shall be deposited in escrow pursuant to the Indemnification Escrow Agreement and shall be held and released in accordance with the terms of the Indemnification Escrow Agreement.
 
(c)            Parent shall deliver stock certificates for the Initial Shares to each Company Stockholder entitled thereto who shall have presented a certificate that immediately prior to the Effective Time represented Company Common Stock convertible into Merger Shares pursuant to this Section 1.5 (the “Company Stock Certificates”) to Parent or the Surviving Corporation or Parent’s transfer agent.
 
(d)            Each issued and outstanding share of common stock, par value $0.001 per share, of Acquisition Subsidiary shall be converted into one validly issued, fully paid and nonassessable share of common stock of the Surviving Corporation.
 
(e)            Parent shall cause to be included in the Registration Rights Agreement a total of 6,120,000 Merger Shares so as to entitle the Company Stockholders, on a pro rata basis in proportion to numbers of Company Common Stock held by each of them immediately prior to the Effective Time, to have registered under the Securities Act such Merger Shares for resale thereunder.
 
1.6            Dissenting Shares .
 
(a)            For purposes of this Agreement, “Dissenting Shares” means shares of Company Common Stock held as of the Effective Time by a Company Stockholder who has not voted (nor provided written consent with respect to) such Company Stock in favor of the adoption of this Agreement and the Merger and with respect to which appraisal shall have been duly demanded and perfected in accordance with Section 262 of the Delaware Act and not effectively withdrawn or forfeited prior to the Effective Time.  Dissenting Shares shall not be converted into or represent the right to receive shares of Parent Common Stock unless such Company Stockholder’s right to appraisal shall have ceased in accordance with the Delaware Act.  If such Company Stockholder has so forfeited or withdrawn his, her or its right to appraisal of Dissenting Shares, then (i) as of the occurrence of such event, such holder’s Dissenting Shares shall cease to be Dissenting Shares and shall be converted into and represent the right to receive the Merger Shares issuable in respect of such holder’s Company Common Stock pursuant to Section 1.5(a), and (ii) promptly following the occurrence of such event and, if requested by Parent, the proper surrender of such person’s Company Stock Certificate, Parent shall deliver to such Company Stockholder a certificate representing the Initial Shares to which such holder is entitled pursuant to Section 1.5(a) and shall deliver to the Indemnification Escrow Agent a certificate representing the remaining 5% of the Merger Shares to which such holder is entitled pursuant to Section 1.5(b) (which shares shall be considered Indemnification Escrow Shares for all purposes of this Agreement).
 
(b)            The Company shall give Parent prompt notice of any written demands for appraisal of any Company Stock, withdrawals of such demands, and any other instruments that relate to such demands received by the Company.  The Company shall not, except with the prior written consent of
 
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Parent, make any payment with respect to any demands for appraisal of Company Stock or offer to settle or settle any such demands unless required by the court of the State of Delaware having jurisdiction thereof.
 
1.7            Fractional Shares .  No certificates or scrip representing fractional Merger Shares shall be issued to Company Stockholders on the surrender for exchange of shares of Company Common Stock, and such Company Stockholders shall not be entitled to any voting rights, rights to receive any dividends or distributions or other rights as a stockholder of Parent with respect to any fractional Merger Shares that would have otherwise been issued to such Company Stockholders.  In lieu of any fractional Merger Shares that would have otherwise been issuable, each former Company Stockholder that would have been entitled to receive a fractional share shall, on proper surrender of such person’s Company Stock Certificate(s), receive such whole number of Merger Shares as is equal to the precise number of Merger Shares to which such Company Stockholder would be entitled, rounded up to the nearest whole number, and receive the stock certificate for such Merger Shares in accordance with Section 1.5(c).
 
1.8            Options and Warrants .  
 
(a)            As of the Effective Time, all outstanding Company Options (as defined below) that remain unexercised, whether vested or unvested, shall be canceled and exchanged for options to purchase shares of Parent Common Stock (each, a “Parent Option”) under Parent Equity Plan (as defined below), if the holder is eligible to be granted an option under the Parent Equity Plan, or outside of the Parent Equity Plan, if the Holder is not eligible to be granted an option under the Parent Equity Plan, in either case, without further action by the holder thereof.  Each Parent Option shall constitute an option to acquire such number of shares of Parent Common Stock as is equal to the number of shares of Company Common Stock subject to the unexercised portion of the Company Option multiplied by the Conversion Ratio (with any fraction resulting from such multiplication to be rounded up to the nearest whole number, unless such Company Option provides for different treatment of fractions of a share in such circumstances, in which case the terms of such Company Option pertaining to the treatment of a fraction of a share shall control).  The exercise price per share of each Parent Option shall be equal to the exercise price of the Company Option prior to conversion divided by the Conversion Ratio (rounded up to the nearest whole tenth of a cent, unless such Company Option provides for different treatment of fractions of a cent in such circumstance, in which case the terms of such Company Option pertaining to the treatment of a fraction of a cent shall control), and the vesting schedule shall be the same as that of the Company Option that is exchanged for Parent Option.
 
(b)            As soon as practicable after the Effective Time, Parent or the Surviving Corporation shall take appropriate actions (i) to collect the Company Options and the agreements evidencing the Company Options, which shall be deemed to be canceled but shall entitle the holder to exchange the Company Options for Parent Options in Parent, and (ii) to issue in lieu thereof new Parent Options pursuant to Section 1.8(a), including the delivery by Parent to such holders of new option agreements.
 
(c)            As of the Effective Time, all outstanding Company Warrants (as defined below) that remain unexercised shall terminate as of the Effective Date, and Parent shall issue new warrants (each, a “Parent Warrant”) in substitution for the Company Warrants, on substantially the same terms and conditions of the Company Warrants, but representing the right to acquire such number of shares of Parent Common Stock as is equal to the number of shares of Company Common Stock subject to the unexercised portion of the Company Warrant multiplied by the Conversion Ratio (with any fraction resulting from such multiplication to be rounded up to the nearest whole number, unless such Company Warrant provides for different treatment of fractions of a share in such circumstance, in which case the terms of such Company Warrant pertaining to the treatment of a fraction of a cent shall control). The
 
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exercise price per share of each Parent Warrant shall be equal to the exercise price of the Warrant prior to substitution divided by the Conversion Ratio (rounded to the nearest whole cent, and with $0.005 rounded upward to the nearest whole cent, unless such Company Warrant provides for different treatment of fractions of a cent in such circumstance, in which case the terms of such Company Warrant pertaining to the treatment of a fraction of a cent shall control).
 
(d)            Parent shall take all corporate action necessary to reserve for issuance a sufficient number of shares of Parent Common Stock for delivery upon exercise of (i) Parent Options to be issued for the Company Options and (ii) Parent Warrants to be issued for the Company Warrants, in accordance with this Section 1.8.
 
1.9            Post-Closing Adjustments .
 
(a)            In the event that, during the period commencing from the Closing Date and ending on the second anniversary of the Closing Date, (i) Parent or the Surviving Corporation incurs any Damages (as defined below) with respect to, in connection with, or arising from any Parent Liabilities (as defined below), or (ii) a Company Stockholder shall be entitled to be indemnified for Damages under ARTICLE VI hereof, then, in the case of clause (i) above, promptly following Parent or Surviving Corporation incurring such Damages, or, in the case of clause (ii) above, promptly after such Company Stockholder becomes entitled to receive payment for such indemnification pursuant to ARTICLE VI, Parent shall issue to, in the case of clause (i) above, all of the Company Stockholders and/or their respective designees, or, in the case of clause (ii) above, such Company Stockholder so entitled to indemnification and/or his designees, such number of shares of Parent Common Stock (in addition to the Merger Shares to which any such person was or is entitled under this ARTICLE I) as would result from dividing (x) the whole dollar amount of such Damages by (y) $0.50 (subject to equitable adjustment in the event of any stock split, stock dividend, reverse stock split or similar event affecting Parent Common Stock after the Effective Time), rounded up to the nearest whole number.   Notwithstanding the foregoing, the limit on the aggregate number of shares of Parent Common Stock issuable under this Section shall be 1,000,000 shares.  Any shares of Parent Common Stock that are issuable under clause (i) above shall be issued to the Company Stockholders pro rata in accordance with their respective holdings of Company Common Stock immediately prior to the Closing.
 
(b)            As used in this Section, “Parent Liabilities” shall mean all liabilities, obligations or indebtedness of any nature whatsoever (i) of the Split-Off Subsidiary, whenever accruing, including without limitation liabilities, obligations and indebtedness, whenever incurred, that are transferred to Split-Off Subsidiary in connection with the Split-Off Transaction, and (ii) of Parent or Acquisition Subsidiary, accruing or resulting from actions taken or not taken by Parent and/or Acquisition Subsidiary prior to the Effective Time, whether or not set forth in Parent Disclosure Schedule (as defined below), including, but not limited to, (A) any breach by Parent or Acquisition Subsidiary of any of their respective representations or warranties set forth in Article III herein, (B) any litigation threatened, pending or for which a basis exists, (C) any and all outstanding debts, (D) any and all employee-related disputes, arbitrations or administrative proceedings threatened, pending or otherwise outstanding, (E) any and all liens, foreclosures, settlements, or other threatened, pending or otherwise outstanding financial, legal or similar obligations of Parent or Acquisition Subsidiary, (F) any and all Taxes for which Parent or Acquisition Subsidiary or any of their direct or indirect assets may be liable or subject, for any taxable period (or portion thereof) ending on or before the Effective Time, including, without limitation, any and all Taxes resulting from or attributable to Parent’s ownership or operation of the Split-Off Subsidiary’s assets, (G) any and all Taxes (as defined below) for which Parent or its direct or indirect assets may be liable or subject (including, without limitation, the interests and assets of the Surviving Corporation and any Parent Subsidiary) as a consequence of Parent’s acquisition, formation, capitalization, ownership, and Split-Off of the Split-Off Subsidiary, whether related to a taxable period (or portion thereof) ending
 
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before, on or after the Closing Date, and (H) all fees and expenses incurred in connection with effecting the adjustments contemplated by this Section.
 
1.10          Certificate of Incorporation and Bylaws .
 
(a)            The certificate of incorporation of Acquisition Subsidiary in effect immediately prior to the Effective Time shall be the certificate of incorporation of the Surviving Corporation until duly amended or repealed, and the Surviving Corporation may make any necessary filings in the State of Delaware as shall be necessary or appropriate to effectuate or carry out fully the purpose of this Section 1.10(a).
 
(b)            The bylaws of Acquisition Subsidiary in effect immediately prior to the Effective Time shall be the bylaws of the Surviving Corporation until duly amended or repealed.
 
1.11          No Further Rights .  From and after the Effective Time, no shares of Company Common Stock shall be deemed to be outstanding, and holders of Company Common Stock, certificated or uncertificated, shall cease to have any rights with respect thereto, except as provided herein or by law.
 
1.12          Closing of Transfer Books .  At the Effective Time, the stock transfer books of the Company shall be closed and no transfer of Company Common Stock shall thereafter be made.  If, after the Effective Time, Company Stock Certificates are presented to Parent or the Surviving Corporation, they shall be cancelled and exchanged for certificates evidencing the appropriate numbers of Merger Shares in accordance with Section 1.5, subject to the provisions hereof and applicable Law in the case of Dissenting Shares.
 
1.13          Exemption from Registration; Rule 144 .
 
(a)            Parent and the Company intend that the shares of Parent Common Stock to be issued pursuant to Section 1.5 hereof (including the Indemnification Escrow Shares) or upon exercise of Parent Options and Parent Warrants granted pursuant to Section 1.8 hereof, and any shares of Parent Common Stock that may be issued pursuant to Section 1.9 hereof (if any), in connection with the Merger will be issued in a transaction exempt from registration under the Securities Act of 1933, as amended (“Securities Act”), by reason of Section 4(2) of the Securities Act, Rule 506 of Regulation D promulgated by the SEC thereunder and/or Regulation S promulgated by the SEC.  The shares of Parent Common Stock to be issued pursuant to Section 1.5 hereof (including the Indemnification Escrow Shares) or upon exercise of Parent Options and Parent Warrants granted pursuant to Section 1.8 hereof, and any shares of Parent Common Stock that may be issued pursuant to Section 1.9 hereof, will be “restricted securities” within the meaning of Rule 144 under the Securities Act (“Rule 144”) and may not be offered, sold, pledged, assigned or otherwise transferred unless (a) a registration statement with respect thereto is effective under the Securities Act and any applicable state securities laws, or (b) an exemption from such registration exists and either Parent receives an opinion of counsel to the holder of such securities, which counsel and opinion are reasonably satisfactory to Parent, that such securities may be offered, sold, pledged, assigned or transferred in the manner contemplated without an effective registration statement under the Securities Act or applicable state securities laws, or the holder complies with the requirements of Regulation S, if applicable; and the certificates representing such shares of Parent Common Stock will bear an appropriate legend and restriction on the books of Parent’s transfer agent to that effect.
 
(b)            Parent is a “shell company” as defined in Rule 12b-2 under the Exchange Act of 1934).  The Company acknowledges that pursuant to Rule 144(i), securities issued by a former shell company (such as the Merger Shares and the shares of Parent Common Stock outstanding as of the Effective Date that are restricted securities) that otherwise meet the holding period and other requirements
 
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of Rule 144 nevertheless cannot be sold in reliance on Rule 144 until one year after the Company (a) is no longer a shell company; and (b) has filed current “Form 10 information” (as defined in Rule 144(i)) with the SEC reflecting that it is no longer a shell company, and provided that at the time of a proposed sale pursuant to Rule 144, Parent is subject to the reporting requirements of section 13 or 15(d) of the Exchange Act and has filed all reports and other materials required to be filed by section 13 or 15(d) of the Exchange Act, as applicable, during the preceding 12 months (or for such shorter period that the issuer was required to file such reports and materials), other than Form 8-K reports. As a result, the restrictive legends on certificates for the Merger Shares cannot be removed except in connection with an actual transaction meeting the foregoing requirements of Rule 144 or pursuant to an effective registration statement.

1.14          Adjustments to Parent Stockholders
 
(a)            The total number of shares of Parent Common Stock outstanding as of the date of this Agreement is 52,000,800.  The Parties agree that such number of shares shall be adjusted, at or immediately prior to the Effective Time, as follows:
 
(i)             the 13,000,200 Split-Off Shares issued and outstanding as of the date of this Agreement will be surrendered by the Split-Off Purchaser to the Parent for cancellation pursuant to the Split-Off Agreement, such being the Share Contribution; and
 
(ii)           of the remaining 39,000,600 shares of Parent Common Stock issued and outstanding as of the date of this Agreement, GEM shall, immediately prior to the Effective Time, surrender to Parent and/or cause to be surrendered to Parent for cancellation, without consideration, an aggregate of 26,276,600 shares of Parent Common Stock.
 
(b)            In the event that, after the final closing of the First PPO, Parent raises additional capital through a second financing in a public or private offering (in one or more closings) for gross proceeds of at least $20,000,000 (a “Qualified Offering”) based on a pre-money valuation of at least $200,000,000, provided that subscription documents therefor have been delivered to Parent and countersigned by Parent with the consent of the Company and full subscription amounts therefor are in escrow within five (5) months of the earlier of (x) the date on which the Subscription Note is fully satisfied or (y) the maturity date of the Subscription Note, Parent will issue to all holders of record of Parent Common Stock immediately prior to the Effective Time (other than the Split-Off Purchaser) (the “Parent Record Holders”), pro rata, an aggregate of 1,333,333 restricted shares of Parent Common Stock.
 
(c)               If the pre-money valuation of Parent in connection with a Qualified Offering is between $150,000,000 and $199,999,999, the Parent Record Holders will surrender, pro rata, to Parent for cancellation without consideration an aggregate of 1,000,000 shares of Parent Common Stock.  If the pre-money valuation of Parent in connection with a Qualified Offering is between $100,000,000 and $149,999,999, the Parent Record Holders will surrender, pro rata, to Parent for cancellation without consideration an aggregate of 2,000,000 shares of Parent Common Stock.  If the pre-money valuation of Parent in connection with a Qualified Offering is less than $100,000,000 (which Qualified Offering may be rejected in Parent’s sole and absolute discretion) or if no Qualified Offering occurs within five (5) months of the earlier of (x) the date on which the Subscription Note is fully satisfied or (y) the maturity date of the Subscription Note, the Parent Record Holders will surrender, pro rata, to Parent for cancellation without consideration an aggregate of 3,500,000 shares of Parent Common Stock .   The Parent Record Holders’ obligations under this paragraph 1.14(c) shall be secured by an escrow of 3,500,000 shares of Parent Common Stock pursuant to an Adjustment Shares Escrow Agreement in the form attached as Exhibit M to this Agreement (the   “Adjustment Escrow Agreement”).
 
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(d)            For avoidance of doubt, the issuance or surrender of Parent Common Stock that may be called for by paragraph (b) or (c) of this Section 1.14 shall apply and be an obligation of the Parent or GEM, as the case may be, regardless of the source of funds in a Qualified Offering and whether or not any investor, placement agent, broker, finder or underwriter in the Qualified Offering was introduced to Parent by GEM or any of its affiliates.
 
(e)            Parent and GEM hereby acknowledge, represent, warrant and covenant that (w) neither GEM or GEM’s affiliates, including, without limitation, Christopher Brown, are required to register or are registered broker/dealers and are not receiving any payment or compensation hereunder, or with respect to the First PPO and Qualified Offering, in connection with the sale of any security of Parent or the Company, (x) GEM and GEM’s affiliates shall not be required to, and Parent and GEM understand, that GEM and GEM’s affiliates do not intend to, negotiate the terms of any transaction between Parent (whether prior to or following the closing of the Merger) and the parties introduced to Parent by GEM and GEM’s affiliates, (y) GEM’s activities on behalf of, and services to, Parent shall not require registration by GEM or any GEM affiliate as a broker-dealer under the Exchange Act, any rules and regulations promulgated thereunder or relevant state laws, rules and regulations, and (z) all transactions involving Parent Common Stock by GEM and GEM’s affiliates shall be in compliance with all applicable federal and state securities laws.
 
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
 
The Company represents and warrants to Parent that the statements contained in this Article II are true and correct, except as set forth in the disclosure schedule provided by the Company to Parent on the date hereof (the “Company Disclosure Schedule”).  The Company Disclosure Schedule shall be arranged in paragraphs corresponding to the numbered and lettered paragraphs contained in this Article II; and to the extent that it is clear from the context thereof that such disclosure also applies to any other numbered paragraph contained in this Article II, the disclosures in any numbered paragraph of the Disclosure Schedule shall qualify such other corresponding numbered paragraph in this Article II.   For purposes of this Article II, the phrase “to the knowledge of the Company” or any phrase of similar import shall be deemed to refer to the actual knowledge of any officer of the Company as well as any other knowledge which such person would have possessed had such person made reasonable inquiry of appropriate officers, directors and key employees of the Company and the accountants and attorneys of the Company.
 
2.1            Organization, Qualification and Corporate Power .  The Company is a corporation duly organized, validly existing and in corporate and tax good standing under the laws of the State of Delaware.  The Company is duly qualified to conduct business and is in corporate and tax good standing under the laws of each jurisdiction in which the nature of its businesses or the ownership or leasing of its properties requires such qualification, except where the failure to be so qualified or in good standing, individually or in the aggregate, has not had and would not reasonably be expected to have a Company Material Adverse Effect (as defined below).  The Company has all requisite corporate power and authority to carry on the businesses in which it is engaged and to own and use the properties owned and used by it.  The Company has furnished or made available to Parent complete and accurate copies of its certificate of incorporation and bylaws.  The Company is not in default under or in violation of any provision of its certificate of incorporation, as amended to date, or its bylaws, as amended to date.  For purposes of this Agreement, “Company Material Adverse Effect” means a material adverse effect on the assets, business, financial condition, or results of operations or future prospects of the Company and the Company Subsidiaries (as defined below) taken as a whole.
 
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2.2            Capitalization .  The authorized capital stock of the Company consists of 1,000,000 shares of Company Common Stock.  As of the date of this Agreement and as of immediately prior to the Effective Time, and without giving effect to the transactions contemplated by this Agreement or any of the other Transaction Documentation, 2,000 shares of Company Common Stock are issued and outstanding, and no shares of Company  Common Stock are held in the treasury of the Company.  As of the date of this Agreement and as of immediately prior to the Effective Time, there are no outstanding options to purchase shares of Company Common Stock (“Company Options”).  As of the date of this Agreement and as of immediately prior to the Effective Time, there are no outstanding warrants to purchase shares of Company Common Stock (“Company Warrants”).  Section 2.2 of the Company Disclosure Schedule sets forth a complete and accurate list of (i) all stockholders of the Company, indicating the number of shares of Company Common Stock held by each stockholder, (ii) all stock option plans and other stock or equity-related plans of the Company (“Company Equity Plans”) and the number of shares of Company Common Stock remaining available for future awards thereunder, (iii) all outstanding Company Options and Company Warrants, indicating (A) the holder thereof, (B) the number of shares of Company Common Stock subject to each Company Option and Company Warrant, (C) the Company Equity Plan under which each Company Option issued, (D) the exercise price, date of grant, vesting schedule and expiration date for each Company Option or Company Warrant, and (E) any terms regarding the acceleration of vesting, and (iv) all outstanding debt convertible into Company stock, indicating (A) the date of issue, (B) the holder thereof, (C) the unpaid principal amount thereof, (D) the interest rate thereon, (E) the accrued and unpaid interest thereon, (F) the number and class of Company stock into which such debt is convertible, and (G) the conversion price thereof.  All of the issued and outstanding shares of Company Common Stock are, and all shares of Company Common Stock that may be issued upon exercise of Company Options or Company Warrants or conversion of convertible debt will be (upon issuance in accordance with their terms), duly authorized, validly issued, fully paid, nonassessable and, effective as of the Effective Time, free of all preemptive rights.  Other than the Company Options and Company Warrants and convertible debt listed in Section 2.2 of the Company Disclosure Schedule, there are no outstanding or authorized options, warrants, securities, rights, agreements or commitments to which the Company is a party or which are binding upon the Company providing for the issuance or redemption of any of its capital stock.  There are no outstanding or authorized stock appreciation, phantom stock or similar rights with respect to the Company.  Other than as listed in Section 2.2 of the Company Disclosure Schedule, there are no agreements to which the Company is a party or by which it is bound with respect to the voting (including without limitation voting trusts or proxies), registration under the Securities Act, or sale or transfer (including without limitation agreements relating to pre-emptive rights, rights of first refusal, co-sale rights or “drag-along” rights) of any securities of the Company.  To the knowledge of the Company, there are no agreements among other parties, to which the Company is not a party and by which it is not bound, with respect to the voting (including without limitation voting trusts or proxies) or sale or transfer (including without limitation agreements relating to rights of first refusal, co-sale rights or “drag-along” rights) of any securities of the Company.  All of the issued and outstanding shares of Company Common Stock were issued in compliance with applicable securities laws.
 
2.3            Authorization of Transaction .  The Company has all requisite power and authority to execute and deliver this Agreement and to perform its obligations hereunder.  The execution and delivery by the Company of this Agreement and, subject to the adoption of this Agreement and (a) the approval of the Merger by the vote of stockholders of the Company required by the Delaware Act and (b) the approvals and waivers set forth in Section 2.3 of the Company Disclosure Schedule (collectively, the “Company Consents”), the consummation by the Company of the transactions contemplated hereby have been duly and validly authorized by all necessary corporate action on the part of the Company.  Without limiting the generality of the foregoing, the board of directors of the Company (i) determined that the Merger is fair and in the best interests of the Company and the Company Stockholders, (ii) adopted this Agreement in accordance with the provisions of the Delaware Act, and (iii) directed that this Agreement
 
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and the Merger be submitted to the Company Stockholders for their adoption and approval and resolved to recommend that the Company Stockholders vote in favor of the adoption of this Agreement and the approval of the Merger.  This Agreement has been duly and validly executed and delivered by the Company and constitutes a valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, except as such enforceability may be limited under applicable bankruptcy, insolvency and similar laws, rules or regulations affecting creditors’ rights and remedies generally and to general principles of equity, whether applied in a court of law or a court of equity.
 
2.4            Non-contravention .  Subject to the receipt of Company Consents and the filing of the Certificate of Merger as required by the Delaware Act, neither the execution and delivery by the Company of this Agreement nor the consummation by the Company of the transactions contemplated hereby will (a) conflict with or violate any provision of the certificate of incorporation or bylaws of the Company, as amended to date, (b) require on the part of the Company or any Company Subsidiary any filing with, or any permit, authorization, consent or approval of, any court, arbitrational tribunal, administrative agency or commission or other governmental or regulatory authority or agency (a “Governmental Entity”), except for such permits, authorizations, consents and approvals for which the Company is obligated to use its Reasonable Best Efforts to obtain pursuant to Section 4.2(a), (c) conflict with, result in a breach of, constitute (with or without due notice or lapse of time or both) a default under, result in the acceleration of obligations under, create in any party the right to terminate, modify or cancel, or require any notice, consent or waiver under, any contract or instrument to which the Company or any Company Subsidiary is a party or by which the Company or any Company Subsidiary is bound or to which any of their assets is subject, except for (i) any conflict, breach, default, acceleration, termination, modification or cancellation in any contract or instrument set forth in Section 2.4 of the Company Disclosure Schedule, for which the Company is obligated to use its Reasonable Best Efforts to obtain waiver, consent or approval pursuant to Section 4.2(b), (ii) any conflict, breach, default, acceleration, termination, modification or cancellation which would not reasonably be expected to have a Company Material Adverse Effect and would not reasonably be expected to adversely affect the consummation of the transactions contemplated hereby or (iii) any notice, consent or waiver the absence of which would not have a Company Material Adverse Effect and would not adversely affect the consummation of the transactions contemplated hereby, (d) result in the imposition of any Security Interest (as defined below) upon any assets of the Company or any Company Subsidiary or (e) violate any federal, state, local, municipal, foreign, international, multinational, Governmental Entity or other constitution, law, statute, ordinance, principle of common law, rule, regulation, code, governmental determination, order, writ, injunction, decree, treaty, convention, governmental certification requirement or other public limitation, U.S. or non-U.S., including Tax and U.S. antitrust laws (collectively, “Laws”) applicable to the Company, any Company Subsidiary or any of their properties or assets.  For purposes of this Agreement: “Security Interest” means any mortgage, pledge, security interest, encumbrance, charge or other lien (whether arising by contract or by operation of law), other than (i) mechanic’s, materialmen’s and similar liens, (ii) liens arising under worker’s compensation, unemployment insurance, social security, retirement and similar legislation, and (iii) liens on goods in transit incurred pursuant to documentary letters of credit, in each case arising in the Ordinary Course of Business (as defined below) of the Company and not material to the Company; and “Ordinary Course of Business” means the ordinary course of the Company’s business, consistent with past custom and practice (including with respect to frequency and amount).
 
2.5            Subsidiaries .
 
(a)            Section 2.5(a) of the Company Disclosure Schedule sets forth: (i) the name of each Company Subsidiary; (ii) the number and type of outstanding equity securities of each Company Subsidiary and a list of the holders thereof; (iii) the jurisdiction of organization of each Company Subsidiary; (iv) the names of the officers and directors of each Company Subsidiary; and (v) the jurisdictions in which each Company Subsidiary is qualified or holds licenses to do
 
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business as a foreign corporation or other entity.  For purposes of this Agreement, a “Subsidiary” shall mean any corporation, partnership, joint venture or other entity in which a Party has, directly or indirectly, an equity interest representing 50% or more of the equity securities thereof or other equity interests therein; a “Company Subsidiary” is a Subsidiary of the Company and a “Parent Subsidiary” is a Subsidiary of Parent.
 
(b)            Each Company Subsidiary is an entity duly organized, validly existing and in corporate and tax good standing under the laws of the jurisdiction of its incorporation.  Each Company Subsidiary is duly qualified to conduct business and is in good standing under the laws of each jurisdiction in which the nature of its businesses or the ownership or leasing of its properties requires qualification to do business, except where the failure to be so qualified or in good standing, individually or in the aggregate, has not had and would not reasonably be expected to have a Company Material Adverse Effect.  Each Company Subsidiary has all requisite power and authority to carry on the businesses in which it is engaged and to own and use the properties owned and used by it.  The Company has delivered or made available to Parent complete and accurate copies of the charter, bylaws or other organizational documents of each Company Subsidiary.  No Company Subsidiary is in default under or in violation of any provision of its charter, bylaws or other organizational documents.  All of the issued and outstanding equity securities of each Company Subsidiary are duly authorized, validly issued, fully paid, nonassessable and free of preemptive rights.  Except at set forth in Section 2.5(b) of the Company Disclosure Schedule, all equity securities of each Company Subsidiary that are held of record or owned beneficially by either the Company or any other Company Subsidiary are held or owned free and clear of any restrictions on transfer (other than restrictions under the Securities Act and state or other applicable securities laws), claims, Security Interests, options, warrants, rights, contracts, calls, commitments, equities and demands.  Except as set forth in Section 2.5(b) of the Company Disclosure Schedule, there are no outstanding or authorized options, warrants, rights, agreements or commitments to which the Company or any Company Subsidiary is a party or which are binding on any of them providing for the issuance, disposition or acquisition of any equity securities of any Company Subsidiary.  There are no outstanding stock appreciation, phantom stock or similar rights with respect to any Company Subsidiary.  Except as set forth in Section 2.5(b) of the Company Disclosure Schedule, to the knowledge of the Company, there are no voting trusts, proxies or other agreements or understandings with respect to the voting of any equity securities of any Company Subsidiary.
 
(c)            Except as set forth in Section 2.5(c) of the Company Disclosure Schedule, the Company does not control directly or indirectly or have any direct or indirect equity participation or similar interest in any corporation, partnership, limited liability company, joint venture, trust or other business association which is not a Company Subsidiary.
 
2.6            Compliance with Laws .  To the knowledge of the Company, each of the Company and its Subsidiaries:
 
(a)            and the conduct and operations of their respective businesses, are in compliance with each Law applicable to the Company, any Company Subsidiary or any of their properties or assets, except for any violations or defaults that, individually or in the aggregate, have not had and would not reasonably be expected to have a Company Material Adverse Effect;
 
(b)            has complied with all federal and state securities laws and regulations, including being current in all of its reporting obligations under such federal and state securities laws and regulations;
 
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(c)            has not, and the past and present officers, directors and Affiliates of the Company have not, been the subject of, nor does any officer or director of the Company have any reason to believe that the Company or any of its officers, directors or Affiliates will be the subject of, any civil or criminal proceeding or investigation by any federal or state agency alleging a violation of securities laws;
 
(d)            has not been the subject of any voluntary or involuntary bankruptcy proceeding, nor has it been a party to any material litigation;
 
(e)            has not, and the past and present officers, directors and Affiliates have not, been the subject of, nor does any officer or director of the Company have any reason to believe that the Company or any of its officers, directors or Affiliates will be the subject of, any civil, criminal or administrative investigation or proceeding brought by any federal or state agency having regulatory authority over such entity or person;
 
(f)             will not, at the Effective Time, have any liabilities, contingent or otherwise, including but not limited to notes payable and accounts payable, and is not a party to any executory agreements, except as reflected on the Company Financial Statements (as defined below) or, with respect to liabilities incurred subsequent to the Company’s Interim Balance Sheet Date, not incurred in the normal course of business;
 
(g)            is not a “blank check company” as such term is defined by Rule 419 of the Securities Act.
 
2.7            Financial Statements .  The Company has provided or made available to Parent: (a) the audited consolidated balance sheet of the Company (the “Company Balance Sheet”) at December 31, 2013 (the “Company Balance Sheet Date”), and the related consolidated statements of operations and cash flows for the year ended December 31, 2013 (the “Company Year-End Financial Statements”); and (b) the unaudited balance sheet of the Company (the “Company Interim Balance Sheet”) at September 30, 2014 (the “Company Interim Balance Sheet Date”) and the related statement of operations and cash flows for the nine months ended September 30, 2014 (the “Company Interim Financial Statements” and together with the Company Balance Sheet and the Company Year-End Financial Statements, the “Company Financial Statements”).  The Company Financial Statements have been prepared in accordance with United States generally accepted accounting principles (“GAAP”) applied on a consistent basis throughout the periods covered thereby, fairly present in all material respects the financial condition, results of operations and cash flows of the Company and the Company Subsidiaries on a consolidated basis as of the respective dates thereof and for the periods referred to therein, comply as to form with the applicable rules and regulations of the SEC for inclusion of such Company Financial Statements in Parent’s filings with the SEC as required by the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and are consistent in all material respects with the books and records of the Company and the Company Subsidiaries (except as indicated therein or in the notes thereto and, with respect to the Company Interim Financial Statements, as permitted by Form 10-Q and Regulation S–X promulgated by the SEC).
 
2.8            Absence of Certain Changes .  Since the Company Balance Sheet Date, and except as set forth in Section 2.8 of the Company Disclosure Schedule, (a) to the knowledge of the Company, there has occurred no event or development which, individually or in the aggregate, has had, or could reasonably be expected to have in the future, a Company Material Adverse Effect, and (b) neither the Company nor any Company Subsidiary has taken any of the actions set forth in paragraphs (a) through (m) of Section 4.4.
 
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2.9            Undisclosed Liabilities .  Except as set forth in Section 2.9 of the Disclosure Schedule, none of the Company and the Company Subsidiaries has any liability (whether known or unknown, whether absolute or contingent, whether liquidated or unliquidated and whether due or to become due), except for (a) liabilities shown on the Company Interim Balance Sheet, (b) liabilities not exceeding $1,100,000 in the aggregate that have arisen since the Company Interim Balance Sheet Date in the Ordinary Course of Business and (c) contractual and other liabilities incurred in the Ordinary Course of Business which are not required by GAAP to be reflected on a balance sheet.
 
2.10            Tax Matters .
 
(a)            For purposes of this Agreement, the following terms shall have the following meanings:
 
 (i)            “Taxes” means all taxes, charges, fees, levies or other similar assessments or liabilities, including without limitation income, gross receipts, ad valorem, premium, value-added, excise, real property, personal property, sales, use, transfer, withholding, employment, unemployment insurance, social security, business license, business organization, environmental, workers compensation, payroll, profits, license, lease, service, service use, severance, stamp, occupation, windfall profits, customs, duties, franchise and other taxes imposed by the United States of America or any state, local or foreign government, or any agency thereof, or other political subdivision of the United States or any such government, and any interest, fines, penalties, assessments or additions to tax resulting from, attributable to or incurred in connection with any tax or any contest or dispute thereof.
 
 (ii)            “Tax Returns” means all United States of America, state, local or foreign government reports, returns, declarations, statements or other information required to be supplied to a taxing authority in connection with the Taxes.
 
(b)            Except as set forth in Section 2.10 of the Company Disclosure Schedule, each of the Company and the Company Subsidiaries has filed on a timely basis (taking into account any valid extensions) all material Tax Returns that it was required to file, and all such Tax Returns were complete and accurate in all material respects.  Neither the Company nor any Company Subsidiary is or has ever been a member of a group of corporations with which it has filed (or been required to file) consolidated, combined or unitary Tax Returns, other than a group of which only the Company and the Company Subsidiaries are or were members.  Each of the Company and the Company Subsidiaries has paid on a timely basis all Taxes that were due and payable in accordance with the Tax Returns.  The unpaid Taxes of the Company and the Company Subsidiaries for tax periods through the Company Balance Sheet Date do not exceed the accruals and reserves for Taxes (excluding accruals and reserves for deferred Taxes established to reflect timing differences between book and Tax income) set forth on the Company Balance Sheet.  Neither the Company nor any Company Subsidiary has any actual or potential liability for any Tax obligation of any taxpayer other than the Company and the Company Subsidiaries (including without limitation any affiliated group of corporations or other entities that included the Company or any Company Subsidiary during a prior period).  All Taxes that the Company or any Company Subsidiary is or was required by law to withhold or collect have been duly withheld or collected and, to the extent required, have been paid to the proper Governmental Entity.
 
(c)            Except as set forth in Section 2.10 of the Company Disclosure Schedule, the Company has delivered or made available to Parent complete and accurate copies of all federal income Tax Returns, examination reports and statements of deficiencies assessed against or agreed to by the Company or any Company Subsidiary since the date of the Company’s incorporation (the “Organization Date”).  No examination or audit of any Tax Return of the Company or any Company Subsidiary by any
 
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Governmental Entity is currently in progress or, to the knowledge of the Company, threatened or contemplated.  Neither the Company nor any Company Subsidiary has been informed by any jurisdiction that the jurisdiction believes that the Company or Company Subsidiary was required to file any Tax Return that was not filed.  Neither the Company nor any Company Subsidiary has waived any statute of limitations with respect to Taxes or agreed to an extension of time with respect to a Tax assessment or deficiency.
 
(d)            Neither the Company nor any Company Subsidiary: (i) is a “consenting corporation” within the meaning of Section 341(f) of the Code, and none of the assets of the Company or any Company Subsidiary are subject to an election under Section 341(f) of the Code; (ii) has been a United States real property holding corporation within the meaning of Section 897(c)(2) of the Code during the applicable period specified in Section 897(c)(l)(A)(ii) of the Code; (iii) has made any payments, is obligated to make any payments, or is a party to any agreement that could obligate it to make any payments that may be treated as an “excess parachute payment” under Section 280G of the Code; (iv) has any actual or potential liability for any Taxes of any person (other than the Company and the Company Subsidiaries) under Treasury Regulation Section 1.1502-6 (or any similar provision of federal, state, local, or foreign law), or as a transferee or successor, by contract, or otherwise; or (v) is or has been required to make a basis reduction pursuant to Treasury Regulation Section 1.1502-20(b) or Treasury Regulation Section 1.337(d)-2(b).
 
(e)             None of the assets of the Company or any Company Subsidiary: (i) is property that is required to be treated as being owned by any other person pursuant to the provisions of former Section 168(f)(8) of the Code; (ii) is “tax-exempt use property” within the meaning of Section 168(h) of the Code; or (iii) directly or indirectly secures any debt the interest on which is tax exempt under Section 103(a) of the Code.
 
(f)             Neither the Company nor any Company Subsidiary has undergone a change in its method of accounting resulting in an adjustment to its taxable income pursuant to Section 481 of the Code.
 
(g)            No state or federal “net operating loss” of the Company determined as of the Closing Date is subject to limitation on its use pursuant to Section 382 of the Code or comparable provisions of state law as a result of any “ownership change” within the meaning of Section 382(g) of the Code or comparable provisions of any state law occurring prior to the Closing Date.
 
2.11          Assets .  Each of the Company and the Company Subsidiaries owns or leases all tangible assets reasonably necessary for the conduct of its businesses as presently conducted and as presently proposed to be conducted.  Except as set forth in Section 2.11 of the Company Disclosure Schedule, each such tangible asset is free from material defects, has been maintained in accordance with normal industry practice, is in good operating condition and repair (subject to normal wear and tear) and is suitable for the purposes for which it presently is used.  Except as set forth in Section 2.11 of the Company Disclosure Schedule, no asset of the Company or any Company Subsidiary (tangible or intangible) (including without limitation any shares or other equity interests in or securities of any Company Subsidiary or any corporation, partnership, association or other business organization or division thereof), is subject to any Security Interest.
 
2.12          Owned Real Property .  Neither the Company nor any Company Subsidiary owns any real property.
 
2.13          Real Property Leases .  Section 2.13 of the Company Disclosure Schedule lists all real property leased or subleased to or by the Company or any Company Subsidiary and lists the term of such
 
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lease, any extension and expansion options, and the rent payable thereunder.  The Company has delivered or made available to Parent complete and accurate copies of the leases and subleases listed in Section 2.13 of the Company Disclosure Schedule.  Except as set forth in Section 2.13 of the Company Disclosure Schedule, with respect to each lease and sublease listed in Section 2.13 of the Company Disclosure Schedule:
 
(a)            the lease or sublease is a legal, valid, binding and enforceable obligation of the Company or Company Subsidiary party thereto and is in full force and effect;
 
(b)            the lease or sublease will continue to be legal, valid, binding, enforceable and in full force and effect immediately following the Closing in accordance with the terms thereof as in effect immediately prior to the Closing, and the Closing will not, after the giving of notice, with lapse of time, or otherwise, result in a breach or default by the Company or any Company Subsidiary or, to the knowledge of the Company, any other party under such lease or sublease;
 
(c)            neither the Company nor any Company Subsidiary nor, to the knowledge of the Company, any other party, is in breach or violation of, or default under, any such lease or sublease, and no event has occurred, is pending or, to the knowledge of the Company, is threatened, which, after the giving of notice, with lapse of time, or otherwise, would constitute a breach or default by the Company or any Company Subsidiary or, to the knowledge of the Company, any other party under such lease or sublease, except for any breach, violation or default that has not had and would not reasonably be anticipated to have a Company Material Adverse Effect;
 
(d)            neither the Company nor any Company Subsidiary has assigned, transferred, conveyed, mortgaged, deeded in trust or encumbered any interest in the leasehold or subleasehold; and
 
(e)            to the knowledge of the Company, there is no Security Interest, easement, covenant or other restriction applicable to the real property subject to such lease, except for recorded Security Interests, leases, easements, covenants and other restrictions which do not materially impair the current uses or the occupancy by the Company or a Company Subsidiary of the property subject thereto.
 
2.14          Contracts .
 
(a)           Section 2.14 of the Company Disclosure Schedule lists the following agreements (written or oral) to which the Company or any Company Subsidiary is a party as of the date of this Agreement (other than the Transaction Documentation (as hereinafter defined)):
 
(i)            any agreement (or group of related agreements) for the lease of personal property from or to third parties (A) which provides for lease payments in excess of $25,000 per annum or (B) which has a remaining term longer than 12 months and is not cancellable without penalty by the Company on sixty (60) days or less prior written notice;
 
(ii)            any agreement (or group of related agreements) for the purchase or sale of products or for the furnishing or receipt of services (A) which calls for performance over a period of more than one year, is not cancellable without penalty by the Company on sixty (60) days or less prior written notice and involves more than the sum of $25,000, or (B) in which the Company or any Company Subsidiary has granted manufacturing
 
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rights, “most favored nation” pricing provisions or exclusive marketing or distribution rights relating to any products or territory or has agreed to purchase a minimum quantity of goods or services or has agreed to purchase goods or services exclusively from a certain party;
 
(iii)            any agreement which, to the knowledge of the Company, establishes a material joint venture or legal partnership;
 
(iv)           any agreement (or group of related agreements) under which it has created, incurred, assumed or guaranteed (or may create, incur, assume or guarantee) indebtedness (including capitalized lease obligations) involving more than $25,000 or under which it has imposed (or may impose) a Security Interest on any of its assets, tangible or intangible;
 
(v)             any agreement that purports to limit in any material respect the right of the Company to engage in any line of business, or to compete with any person or operate in any geographical location ;
 
(vi)            any employment agreement or consulting agreement which provides for payments in excess of $50,000 per annum (other than employment or consulting agreements terminable on less than thirty (30) days’ notice);
 
(vii)           any agreement involving any officer, director or stockholder of the Company or any affiliate (as defined in Rule 12b-2 under the Exchange Act) thereof (an “Affiliate”) (other than stock subscription or stock purchase agreements the forms of which have been made available to Parent);
 
(viii)          any agreement or commitment for capital expenditures in excess of $25,000, for a single project (it being represented and warranted that the liability under all undisclosed agreements and commitments for capital expenditures does not exceed $100,000 in the aggregate for all projects);
 
(ix)            any agreement under which the consequences of a default or termination would reasonably be expected to have a Company Material Adverse Effect;
 
(x)             any agreement which contains any provisions requiring the Company or any Company Subsidiary to indemnify any other party thereto (excluding indemnities contained in agreements for the purchase, sale or license of products entered into in the Ordinary Course of Business);
 
(xi)            any agreement, other than as contemplated by this Agreement, relating to the future sales of securities of the Company or any Company Subsidiary; and
 
(xii)           any other agreement (or group of related agreements) (A) under which the Company is obligated to make payments or incur costs in excess of $25,000 in any year or (B) not entered into in the Ordinary Course of Business, in each case which is not otherwise described in clauses (i) through (xi).
 
(b)           The Company has delivered or made available to Parent a complete and accurate copy of each agreement listed in Section 2.14 of the Company Disclosure Schedule.  With respect to each agreement so listed, and except as set forth in Section 2.13 of the Company Disclosure
 
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Schedule:  (i) the agreement is legal, valid, binding and enforceable and in full force and effect; (ii) the agreement will continue to be legal, valid, binding and enforceable and in full force and effect immediately following the Closing in accordance with the terms thereof as in effect immediately prior to the Closing; and (iii) neither the Company nor any Company Subsidiary nor, to the knowledge of the Company, any other party, is in breach or violation of, or default under, any such agreement, and no event has occurred, is pending or, to the knowledge of the Company, is threatened, which, after the giving of notice, with lapse of time, or otherwise, would constitute a breach or default by the Company or any Company Subsidiary or, to the knowledge of the Company, any other party under such contract, except for any breach, violation or default that has not had and would not reasonably be anticipated to have a Company Material Adverse Effect.
 
2.15          Accounts Receivable .  All accounts receivable of the Company and the Company Subsidiaries reflected on the Company Balance Sheet are valid receivables subject to no setoffs or counterclaims and are current and collectible (within 90 days after the date on which it first became due and payable), net of the applicable reserve for bad debts on the Company Balance Sheet.  All accounts receivable reflected in the financial or accounting records of the Company that have arisen since the Company Balance Sheet Date are valid receivables subject to no setoffs or counterclaims and are collectible (within 90 days after the date on which it first became due and payable), net of a reserve for bad debts in an amount proportionate to the reserve shown on the Company Balance Sheet.
 
2.16          Powers of Attorney .  Except as set forth in Section 2.16 of the Company Disclosure Schedule, there are no outstanding powers of attorney executed on behalf of the Company or any Company Subsidiary.
 
2.17          Insurance .  Section 2.17 of the Company Disclosure Schedule lists each insurance policy (including fire, theft, casualty, general liability, workers compensation, business interruption, environmental, product liability and automobile insurance policies and bond and surety arrangements) to which the Company or any Company Subsidiary is a party.  Such insurance policies are of the type and in amounts customarily carried by organizations conducting businesses or owning assets similar to those of the Company and the Company Subsidiaries.  There is no material claim pending under any such policy as to which coverage has been questioned, denied or disputed by the underwriter of such policy.  All premiums due and payable under all such policies have been paid, neither the Company nor any Company Subsidiary may be liable for retroactive premiums or similar payments, and the Company and the Company Subsidiaries are otherwise in compliance in all material respects with the terms of such policies.  The Company has no knowledge of any threatened termination of, or material premium increase with respect to, any such policy.  Each such policy will continue to be enforceable and in full force and effect immediately following the Effective Time in accordance with the terms thereof as in effect immediately prior to the Effective Time.
 
2.18          Warranties .  No product or service sold or delivered by Parent or any of its Subsidiaries is subject to any guaranty, warranty, right of credit or other indemnity other than the applicable standard terms and conditions of sale of Company or the appropriate Subsidiary. 
 
2.19          Litigation .   Except as set forth in Section 2.19 of the Company Disclosure Schedule, as of the date of this Agreement, there is no action, suit, proceeding, claim, arbitration or investigation before any Governmental Entity or before any arbitrator (a “Legal Proceeding”) which is pending or, to the Company’s knowledge, threatened against the Company or any Company Subsidiary which (a) seeks either damages in excess of $25,000 individually or $50,000 in the aggregate, (b) if determined adversely to the Company or such Company Subsidiary, could have, individually or in the aggregate, a Company Material Adverse Effect or (c) in any manner challenges or seeks to prevent, enjoin, alter or delay the transactions contemplated by this Agreement.
 
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2.20          Employees .
 
(a)            Section 2.20 of the Company Disclosure Schedule contains a list of all employees of the Company and each Company Subsidiary whose annual rate of compensation exceeds   $50,000   per year, along with the position of each such person.  Each such person is a party to a non-disclosure and assignment of inventions agreement with the Company or a Company Subsidiary.  To the knowledge of the Company, no key employee (within the meaning of Section 416 of the Code) or group of employees acting in concert has any plans to terminate employment with the Company or any Company Subsidiary.
 
(b)            Neither the Company nor any Company Subsidiary is a party to or bound by any collective bargaining agreement, nor has any of them experienced any strikes, grievances, claims of unfair labor practices or other collective bargaining disputes.  To the knowledge of the Company, (i) no organizational effort has been made or threatened, either currently or within the past two years, by or on behalf of any labor union with respect to employees of the Company or any Company Subsidiary, and (ii) to the Company’s knowledge, there are no circumstances or facts which could individually or collectively give rise to a suit against the Company or any Company Subsidiary by any current or former employee or applicant for employment based on discrimination prohibited by fair employment practices laws.
 
2.21          Employee Benefits .
 
(a)            For purposes of this Agreement, the following terms shall have the following meanings:
 
(i)            “Employee Benefit Plan” means any “employee pension benefit plan” (as defined in Section 3(2) of ERISA), any “employee welfare benefit plan” (as defined in Section 3(1) of ERISA), and any other written or oral plan, agreement or arrangement providing  direct or indirect compensation for services rendered, including without limitation insurance coverage, severance benefits, disability benefits, deferred compensation, bonuses, stock options, stock purchase, phantom stock, stock appreciation or other forms of incentive compensation or post-retirement compensation.
 
(ii)            “ERISA” means the Employee Retirement Income Security Act of 1974, as amended.
 
(iii)            “ERISA Affiliate” means any entity which is, or at any applicable time was, a member of (1) a controlled group of corporations (as defined in Section 414(b) of the Code), (2) a group of trades or businesses under common control (as defined in Section 414(c) of the Code), or (3) an affiliated service group (as defined under Section 414(m) of the Code or the regulations under Section 414(o) of the Code), any of which includes or included the Company or a Company Subsidiary.
 
(b)            Section 2.21(b) of the Company Disclosure Schedule contains a complete and accurate list of all Employee Benefit Plans maintained, or contributed to, by the Company, any Company Subsidiary or any ERISA Affiliate (collectively, the “Company Benefit Plans”).  Complete and accurate copies of (i) all Company Benefit Plans which have been reduced to writing, (ii) written summaries of all unwritten Company Benefit Plans, (iii) all related trust agreements, insurance contracts and summary plan descriptions, and (iv) all annual reports filed on IRS Form 5500, 5500C or 5500R and (for all funded plans) all plan financial statements for the last five plan years for each Company Benefit Plan, have been made available to Parent.  Except as set forth on Section 2.21(b) of the Company Disclosure Schedule, each Company Benefit Plan has been administered in all material respects in accordance with its terms
 
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and each of the Company, the Company Subsidiaries and the ERISA Affiliates has in all material respects met its obligations with respect to such Company Benefit Plan and has made all required contributions thereto not later than the due date therefor (including extensions).  The Company, each Company Subsidiary, each ERISA Affiliate and each Company Benefit Plan are in compliance in all material respects with the currently applicable provisions of ERISA and the Code and the regulations thereunder (including without limitation Section 4980B of the Code, Subtitle K, Chapter 100 of the Code and Sections 601 through 608 and Section 701 et seq. of ERISA).  All filings and reports as to each Company Benefit Plan required to have been submitted to the Internal Revenue Service or to the United States Department of Labor have been duly submitted.
 
(c)            To the knowledge of the Company, there are no Legal Proceedings (except claims for benefits payable in the normal operation of the Company Benefit Plans and proceedings with respect to qualified domestic relations orders, qualified medical support orders or similar benefit directives) against or involving any Company Benefit Plan or asserting any rights or claims to benefits under any Company Benefit Plan that could give rise to any material liability.
 
(d)            All the Company Benefit Plans that are intended to be qualified under Section 401(a) of the Code have received a determination, advisory or opinion letter from the Internal Revenue Service to the effect that such Company Benefit Plans are qualified and the plans and the trusts related thereto are exempt from federal income taxes under Sections 401(a) and 501(a), respectively, of the Code, no such determination letter has been revoked and revocation has not been threatened, and no such Company Benefit Plan has been amended since the date of its most recent determination letter or application therefor in any respect (other than amendments required by law or which are not reasonable expected to result in loss of such plan’s qualified status), and no act or omission has occurred, that would adversely affect its qualification or materially increase its cost.  Each Company Benefit Plan which is required to satisfy Section 401(k)(3) or Section 401(m)(2) of the Code has been tested for compliance with, and satisfies the requirements of, Section 401(k)(3) and Section 401(m)(2) of the Code for each plan year ending prior to the Closing Date.
 
(e)            Neither the Company, any Company Subsidiary nor any ERISA Affiliate has ever maintained an Employee Benefit Plan subject to Section 412 of the Code or Title IV of ERISA.
 
(f)            At no time has the Company, any Company Subsidiary or any ERISA Affiliate been obligated to contribute to any “multiemployer plan” (as defined in Section 4001(a)(3) of ERISA).
 
(g)            There are no unfunded obligations under any Company Benefit Plan providing benefits after termination of employment to any employee of the Company or any Company Subsidiary (or to any beneficiary of any such employee), including but not limited to retiree health coverage and deferred compensation, but excluding continuation of health coverage required to be continued under Section 4980B of the Code or other applicable Law and insurance conversion privileges under state law.  The assets of each Company Benefit Plan which is funded are reported at their fair market value on the books and records of such Company Benefit Plan.
 
(h)            No act or omission has occurred and no condition exists with respect to any Company Benefit Plan maintained by the Company, any Company Subsidiary or any ERISA Affiliate that would subject the Company, any Company Subsidiary or any ERISA Affiliate to (i) any material fine, penalty, tax or liability of any kind imposed under ERISA or the Code or (ii) any contractual indemnification or contribution obligation protecting any fiduciary, insurer or service provider with respect to any Company Benefit Plan.
 
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(i)             No Company Benefit Plan is funded by, associated with or related to a “voluntary employee’s beneficiary association” within the meaning of Section 501(c)(9) of the Code.
 
(j)             Each Company Benefit Plan is amendable and terminable unilaterally by the Company at any time without liability to the Company as a result thereof and no Company Benefit Plan, plan documentation or agreement, summary plan description or other written communication distributed generally to employees by its terms prohibits the Company from amending or terminating any such Company Benefit Plan.
 
(k)            Section 2.21(k) of the Company Disclosure Schedule discloses each: (i) agreement with any stockholder, director, executive officer or other key employee of the Company or any Company Subsidiary (A) the benefits of which are contingent, or the terms of which are materially altered, upon the occurrence of a transaction involving the Company or any Company Subsidiary of the nature of any of the transactions contemplated by this Agreement, (B) providing any term of employment or compensation guarantee or (C) providing severance benefits or other benefits after the termination of employment of such director, executive officer or key employee; (ii) agreement, plan or arrangement under which any person may receive payments from the Company or any Company Subsidiary that may be subject to the tax imposed by Section 4999 of the Code or included in the determination of such person’s “parachute payment” under Section 280G of the Code; and (iii) agreement or plan binding the Company or any Company Subsidiary, including without limitation any stock option plan, stock appreciation right plan, restricted stock plan, stock purchase plan, severance benefit plan or Company Benefit Plan, any of the benefits of which will be increased, or the vesting of the benefits of which will be accelerated, by the occurrence of any of the transactions contemplated by this Agreement or the value of any of the benefits of which will be calculated on the basis of any of the transactions contemplated by this Agreement.  The accruals for vacation, sickness and disability expenses are accounted for on the Company Interim Balance Sheet and are adequate and materially reflect the expenses associated therewith in accordance with GAAP.
 
2.22          Environmental Matters .
 
(a)            Each of the Company and the Company Subsidiaries has complied with all applicable Environmental Laws (as defined below), except for violations of Environmental Laws that, individually or in the aggregate, have not had and would not reasonably be expected to have a Company Material Adverse Effect.  There is no pending or, to the knowledge of the Company, threatened civil or criminal litigation, written notice of violation, formal administrative proceeding, or investigation, inquiry or information request by any Governmental Entity, relating to any Environmental Law involving the Company or any Company Subsidiary, except for litigation, notices of violations, formal administrative proceedings or investigations, inquiries or information requests that, individually or in the aggregate, have not had and would not reasonably be expected to have a Company Material Adverse Effect.  For purposes of this Agreement, “Environmental Law” means any Law relating to the environment, including without limitation any Law pertaining to (i) treatment, storage, disposal, generation and transportation of industrial, toxic or hazardous materials or substances or solid or hazardous waste; (ii) air, water and noise pollution; (iii) groundwater and soil contamination; (iv) the release or threatened release into the environment of industrial, toxic or hazardous materials or substances, or solid or hazardous waste, including without limitation emissions, discharges, injections, spills, escapes or dumping of pollutants, contaminants or chemicals; (v) the protection of wild life, marine life and wetlands, including without limitation all endangered and threatened species; (vi) storage tanks, vessels, containers, abandoned or discarded barrels, and other closed receptacles; (vii) the reclamation of mines; (viii) health and safety of employees and other persons; and (ix) manufacturing, processing, using, distributing, treating, storing, disposing, transporting or handling of materials regulated under any law as pollutants, contaminants, toxic or hazardous materials or substances or oil or petroleum products or solid or hazardous waste.  As used
 
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above, the terms “release” and “environment” shall have the meaning set forth in the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended (“CERCLA”).
 
(b)            To the knowledge of the Company, without independent investigation, there are no documents that contain any environmental reports, investigations or audits relating to premises currently or previously owned or operated by the Company or a Company Subsidiary (whether conducted by or on behalf of the Company or a Company Subsidiary or a third party, and whether done at the initiative of the Company or a Company Subsidiary or directed by a Governmental Entity or other third party) which were issued or conducted during the past five years and which the Company has possession of or access to.
 
(c)            To the knowledge of the Company, there is no material environmental liability with respect to any solid or hazardous waste transporter or treatment, storage or disposal facility that has been used by the Company or any Company Subsidiary.
 
2.23          Legal Compliance .  Each of the Company and the Company Subsidiaries, and the conduct and operations of their respective businesses, are in compliance with each Law applicable to the Company, any Company Subsidiary or any of their properties or assets, except for any violations or defaults that, individually or in the aggregate, have not had and would not reasonably be expected to have a Company Material Adverse Effect.
 
2.24          Customers .  Section 2.24 of the Company Disclosure Schedule sets forth a list of each customer that accounted for more than 5% of the consolidated revenues of the Company during the last full fiscal year and the amount of revenues accounted for by such customer during such period.  No such customer has notified the Company in writing within the past year that it will stop buying services from the Company or any Company Subsidiary.
 
2.25          Permits .  Section 2.25 of the Company Disclosure Schedule sets forth a list of all authorizations, approvals, clearances, licenses, permits, certificates or exemptions (including, without limitation, manufacturing approvals and authorizations, pricing and reimbursement approvals, labeling approvals, registration notifications or their foreign equivalent, and including those issued or required under Environmental Laws and those relating to the occupancy or use of owned or leased real property) from any Governmental Entity (“Permits”) issued to or held by the Company or any Company Subsidiary.  Such listed Permits are the only material Permits that are required for the Company and the Company Subsidiaries to conduct their respective businesses as presently conducted except for those the absence of which, individually or in the aggregate, have not had and would not reasonably be expected to have a Company Material Adverse Effect.  Each such Permit is in full force and effect and, to the knowledge of the Company, no suspension or cancellation of such Permit is threatened and, to the knowledge of the Company, there is no reasonable basis for believing that such Permit will not be renewable upon expiration.  Except for such instances as would not reasonably be expected to have a Company Material Adverse Effect, each such Permit will continue in full force and effect immediately following the Closing.
 
2.26          Certain Business Relationships with Affiliates .  Except as listed in Section 2.26 of the Company Disclosure Schedule, no Affiliate of the Company or of any Company Subsidiary (a) owns any material property or right, tangible or intangible, which is used in the business of the Company or any Company Subsidiary, (b) to the knowledge of the Company, has any claim or cause of action against the Company or any Company Subsidiary, or (c) owes any money to, or is owed any money by, the Company or any Company Subsidiary.  Section 2.26 of the Company Disclosure Schedule describes any transactions involving the receipt or payment in excess of $25,000 in any fiscal year between the Company or a Company Subsidiary and any Affiliate of the Company or of any Company Subsidiary
 
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thereof which have occurred or existed since the Organization Date, other than employment agreements or other compensation arrangements.
 
2.27          Brokers’ Fees . Except as listed in Section 2.27 of the Company Disclosure Schedule, neither the Company nor any Subsidiary has any liability or obligation to pay any fees or commissions to any broker, finder or agent with respect to the transactions contemplated by this Agreement.
 
2.28          Books and Records .  The minute books and other similar records of the Company and each Company Subsidiary contain, in all material respects, complete and accurate records in all material respects of all actions taken at any meetings of the Company’s or such Company Subsidiary’s stockholders, board of directors or any committees thereof and of all written consents executed in lieu of the holding of any such meetings.
 
2.29          Intellectual Property .
 
(a)            Each of the Company and any Company Subsidiary owns, is licensed or otherwise possesses legally enforceable rights to use, license and exploit all issued patents, copyrights, trademarks, service marks, trade names, trade secrets, and registered domain names and all applications for registration therefor (collectively, the “Intellectual Property Rights”) and all computer programs and other computer software, databases, know-how, proprietary technology, formulae, and development tools, together with all goodwill related to any of the foregoing (collectively, the “Intellectual Property”), in each case as is necessary to conduct their respective businesses as presently conducted, the absence of which would be considered reasonably likely to result in a Company Material Adverse Effect.
 
(b)            Section 2.29(b) of the Company Disclosure Schedule sets forth, with respect to all issued patents and all registered copyrights, trademarks, service marks and domain names registered with any Governmental Entity by the Company or any Company Subsidiary or for which an application for registration has been filed with any Governmental Entity by the Company or any Company Subsidiary, (i) the registration or application number, the date filed and the title, if applicable, of the registration or application and (ii) the names of the jurisdictions covered by the applicable registration or application.  Section 2.27(b) of the Company Disclosure Schedule identifies each agreement currently in effect containing any ongoing royalty or payment obligations of the Company and any Company Subsidiary in excess of $25,000 per annum with respect to Intellectual Property Rights and Intellectual Property that are licensed or otherwise made available to the Company and any Company Subsidiary.
 
(c)            Except as set forth on Section 2.29(c) of the Company Disclosure Schedule, all Intellectual Property Rights of the Company and the Company Subsidiaries that have been registered by them with any Governmental Entity are valid and subsisting, except as would not reasonably be expected to have a Company Material Adverse Effect. As of the Effective Date, in connection with such registered Intellectual Property Rights, to the knowledge of the Company, all necessary registration, maintenance and renewal fees will have been paid and all necessary documents and certificates will have been filed with the relevant Governmental Entities.
 
(d)            Neither the Company nor any Company Subsidiary is, or will as a result of the consummation of the Merger or other transactions contemplated by this Agreement be, in breach in any material respect of any license, sublicense or other agreement relating to the Intellectual Property Rights of the Company and the Company Subsidiaries, or any licenses, sublicenses or other agreements as to which the Company or any Company Subsidiary is a party and pursuant to which the Company or any Company Subsidiary uses any patents, copyrights (including software), trademarks or other intellectual property rights of or owned by third parties (the “Third Party Intellectual Property Rights”), the breach of which would be reasonably likely to result in a Company Material Adverse Effect.
 
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(e)            Except as set forth on Section 2.29(e) of the Company Disclosure Schedule, neither the Company nor any Company Subsidiary has been named as a defendant in any suit, action or proceeding which involves a claim of infringement or misappropriation of any Third Party Intellectual Property Right and neither the Company nor any Company Subsidiary has received any notice or other communication (in writing or otherwise) of any actual or alleged infringement, misappropriation or unlawful or unauthorized use of any Third Party Intellectual Property Right.  With respect to its product candidates and products in research or development, after the same are marketed, the Company will not, to its knowledge, infringe any Third Party Intellectual Property Rights in any material manner.
 
(f)            To the knowledge of the Company, except as set forth on Section 2.29(f) of the Company Disclosure Schedule, no other person is infringing, misappropriating or making any unlawful or unauthorized use of any Intellectual Property Rights of the Company and the Company Subsidiaries in a manner that has a material impact on the business of the Company or any Company Subsidiary, except for such infringement, misappropriation or unlawful or unauthorized use as would not be reasonably expected to have a Company Material Adverse Effect.
 
2.30          Disclosure .  No representation or warranty by the Company contained in this Agreement, and no statement contained in the Company Disclosure Schedule, or any other document, certificate or other instrument delivered or to be delivered by or on behalf of the Company pursuant to this Agreement, contains or will contain any untrue statement of a material fact or omits or will omit to state any material fact necessary, in light of the circumstances under which it was or will be made, in order to make the statements herein or therein not misleading.
 
2.31          Duty to Make Inquiry .  To the extent that any of the representations or warranties in this Article II are qualified by “knowledge” or “belief,” the Company represents and warrants that it has made reasonable inquiry and investigation concerning the matters to which such representations and warranties relate, including, but not limited to, reasonable inquiry by its directors, officers and key personnel.
 
2.32          Accountants .  WithumSmith+Brown, PC (the “Company Auditor”) is and has been throughout the periods covered by the Company Financial Statements (a) a registered public accounting firm (as defined in Section 2(a)(12) of the Sarbanes-Oxley Act of 2002) and (b) “independent” with respect to the Company within the meaning of Regulation S-X.  Except as set forth on Section 2.32 of the Company Disclosure Schedule, the reports of the Company Auditor on the financial statements of the Company for the past three fiscal years (or shorter period in which the Company has been in existence) and any subsequent interim period did not contain an adverse opinion or a disclaimer of opinion, or were qualified as to uncertainty, audit scope, or accounting principles.  During the Company’s most recent fiscal year and the subsequent interim periods, there were no disagreements with the Company Auditor on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedures.  None of the reportable events listed in Item 304(a)(1)(iv) or (v) of Regulation S-K occurred with respect to the Company Auditor.
 
2.33          FDA and Related Matters .   The conduct of business by the Company complies, and at all times has substantially complied, in all material respects with the Federal Food, Drug and Cosmetic Act (the “FDCA”) and similar federal, state and foreign laws applicable to the evaluation, testing, manufacturing, distribution, advertising and marketing of each of the Company’s products, in whatever stage of development or commercialization except to the extent that the failure to so comply would not have a Material Adverse Effect.   To the knowledge of the Company, as of the date hereof, neither the United States Food and Drug Administration (the “FDA”) nor any comparable regulatory authority or governmental agency is considering limiting, suspending or revoking any such Permit or changing the marketing classification or labeling of the products of the Company or any of its Subsidiaries.  To the knowledge of the Company, there is no false or misleading information or material omission in any
 
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product application or other submission by the Company or any of its Subsidiaries to the FDA or any comparable regulatory authority or governmental agency.  The Company or its Subsidiaries have fulfilled and performed in all material respects their obligations under each Permit, and, as of the date hereof, to the knowledge of the Company, no event has occurred or condition or state of facts exists which would constitute a breach or default or would cause revocation or termination of any such Permit except to the extent that such breach, default, revocation or termination would not have a Material Adverse Effect.  To the knowledge of the Company, any third party that is a manufacturer or contractor for the Company or any of its Subsidiaries is in compliance in all material respects with all Permits insofar as they pertain to the manufacture of product components or products for the Company. The Company and its Subsidiaries have not received any Form FDA-483, notice of adverse finding, FDA warning letter, notice of violation or “untitled letter,” notice of FDA action for import detention or refusal, or any other notice from the FDA or other governmental agency alleging or asserting noncompliance with any applicable laws or Permits.  The Company and its Subsidiaries are not subject to any obligation arising under an administrative or regulatory action, FDA inspection, FDA warning letter, FDA notice of violation letter or other notice, response or commitment made to or with the FDA or any comparable regulatory authority or governmental agency.  The Company and its Subsidiaries have made all notifications, submissions and reports required by the FDCA or similar federal, state and foreign laws, except to the extent that the failure to make such notifications, submission or reports would not have a Material Adverse Effect.
 
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PARENT
AND ACQUISITION SUBSIDIARY
 
Parent represents and warrants to the Company that the statements contained in this Article III are true and correct, except as set forth in the disclosure schedule provided by Parent to the Company on the date hereof (the “Parent Disclosure Schedule”).   Parent Disclosure Schedule shall be arranged in paragraphs corresponding to the numbered and lettered paragraphs contained in this Article III; and to the extent that it is clear from the context thereof that such disclosure also applies to any other numbered paragraph contained in this Article III, the disclosures in any numbered paragraph of the Disclosure Schedule shall qualify such other corresponding numbered paragraph in this Article III.   For purposes of this Article III, the phrase “to the knowledge of Parent” or any phrase of similar import shall be deemed to refer to the actual knowledge of any officer or director of Parent as well as any other knowledge which such person would have possessed had such person made reasonable inquiry of appropriate officers, directors, key employees, accountants and attorneys of Parent with respect to the matter in question.
 
3.1            Organization, Qualification and Corporate Power .  Parent is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and Acquisition Subsidiary is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware.  Parent is duly qualified to conduct business and is in good standing under the laws of each jurisdiction in which the nature of its businesses or the ownership or leasing of its properties requires such qualification, except where the failure to be so qualified or in good standing has not had and would not reasonably be expected to have a Parent Material Adverse Effect (as defined below).  Parent has all requisite corporate power and authority to carry on the businesses in which it is engaged and to own and use the properties owned and used by it.  Parent has furnished or made available to the Company complete and accurate copies of its articles of incorporation and bylaws.  Neither Parent nor Acquisition Subsidiary is in default under or in violation of any provision of its certificate or articles of incorporation, as amended to date, or its bylaws, as amended to date.  For purposes of this Agreement, “Parent Material Adverse Effect” means a material adverse effect on the assets, business, condition (financial or otherwise), or results of operations of Parent and its subsidiaries, taken as a whole.
 
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3.2            Capitalization .  As of immediately prior to the Effective Time, but prior to giving effect to the (a) issuance of the Merger Shares, (b) issuance of the First PPO Shares, (c) conversion of the Bridge Note, (d) the Share Contribution and (e) the surrender of Parent Common Stock as provided in Section 1.14(a), the authorized capital stock of Parent will consist of 300,000,000 shares of Parent Common Stock, of which 52,000,800 shares will be issued and outstanding, and 10,000,000 shares of preferred stock, $0.001 par value per share, of which no shares are outstanding.  Parent Common Stock is presently eligible for quotation and trading on the OTC Markets Group Inc. QB Tier and is not subject to any notice of suspension or delisting.  All of the issued and outstanding shares of Parent Common Stock are duly authorized, validly issued, fully paid, nonassessable and free of all preemptive rights.  Except as contemplated by the Transaction Documentation or as described in Section 3.2 of Parent Disclosure Schedule, there are no outstanding or authorized options, warrants, rights, agreements or commitments to which Parent is a party or which are binding upon Parent providing for the issuance or redemption of any of its capital stock.  There are no outstanding or authorized stock appreciation, phantom stock or similar rights with respect to Parent.  Except as contemplated by the Transaction Documentation, there are no agreements to which Parent is a party or by which it is bound with respect to the voting (including without limitation voting trusts or proxies), registration under the Securities Act, or sale or transfer (including without limitation agreements relating to pre-emptive rights, rights of first refusal, co-sale rights or “drag-along” rights) of any securities of Parent.  There are no agreements among other parties, to which Parent is not a party and by which it is not bound, with respect to the voting (including without limitation voting trusts or proxies) or sale or transfer (including without limitation agreements relating to rights of first refusal, co-sale rights or “drag-along” rights) of any securities of Parent.  All of the issued and outstanding shares of Parent Common Stock were issued in compliance with applicable federal and state securities laws.  The Merger Shares to be issued at the Closing pursuant to Section 1.5 hereof, when issued and delivered in accordance with the terms hereof and of the Certificate of Merger, shall be duly and validly issued, fully paid and nonassessable and free of all preemptive rights and will be issued in compliance with applicable federal and state securities laws.  At the Effective Time, after giving effect to the (v) surrender by the Split-Off Purchaser of the Split-Off Shares in the Share Contribution, (w) issuance of the First PPO Shares, (x) conversion of the Bridge Note, (y) issuance of 250,000 shares of Parent Common Stock to Beryllium Advisory Consulting Limited Liability Company (“Consultant”) pursuant to a Consulting Agreement between the Parent and Consultant, and (z) surrender of shares of Parent Common Stock as provided for in Section 1.14(a), but prior to giving effect to the issuance of the Merger Shares (including the Indemnification Escrow Shares), there will be 17,750,000 shares of Parent Common Stock issued and outstanding.
 
3.3            Authorization of Transaction .  Each of Parent and Acquisition Subsidiary has all requisite power and authority to execute and deliver this Agreement and (in the case of Parent) the Split-Off Agreement, the General Release Agreement and the Indemnification Escrow Agreement and to perform its obligations hereunder and thereunder.  The execution and delivery by Parent and Acquisition Subsidiary of this Agreement and (in the case of Parent) the Split-Off Agreement, the General Release Agreement and the Indemnification Escrow Agreement, and the agreements contemplated hereby and thereby (collectively, the “Transaction Documentation”), and the consummation by Parent and Acquisition Subsidiary of the transactions contemplated hereby and thereby have been duly and validly authorized by all necessary corporate action on the part of Parent and Acquisition Subsidiary, respectively.  Each of the documents included in the Transaction Documentation has been duly and validly executed and delivered by Parent or Acquisition Subsidiary, as the case may be, and constitutes a valid and binding obligation of Parent or Acquisition Subsidiary, as the case may be, enforceable against them in accordance with its terms, except as such enforceability may be limited under applicable bankruptcy, insolvency and similar laws, rules or regulations affecting creditors’ rights and remedies generally and to general principles of equity, whether applied in a court of law or a court of equity.
 
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3.4            Noncontravention .  Subject to the filing of the Certificate of Merger as required by the Delaware Act, neither the execution and delivery by Parent or Acquisition Subsidiary, as the case may be, of this Agreement or the Transaction Documentation, nor the consummation by Parent or Acquisition Subsidiary, as the case may be, of the transactions contemplated hereby or thereby, will (a) conflict with or violate any provision of the organizational documents or bylaws of Parent or Acquisition Subsidiary, as the case may be, (b) require on the part of Parent or Acquisition Subsidiary, as the case may be, any filing with, or permit, authorization, consent or approval of, any Governmental Entity, other than required notification to the Financial Industry Regulatory Authority (“FINRA”), (c) conflict with, result in a breach of, constitute (with or without due notice or lapse of time or both) a default under, result in the acceleration of obligations under, create in any party any right to terminate, modify or cancel, or require any notice, consent or waiver under, any contract or instrument to which Parent or Acquisition Subsidiary, as the case may be, is a party or by which either is bound or to which any of their assets are subject, except for (i) any conflict, breach, default, acceleration, termination, modification or cancellation which would not reasonably be expected to have a Parent Material Adverse Effect and would not reasonably be expected to adversely affect the consummation of the transactions contemplated hereby or (ii) any notice, consent or waiver the absence of which would not reasonably be expected to have a Parent Material Adverse Effect and would not reasonably be expected to adversely affect the consummation of the transactions contemplated hereby, (d) result in the imposition of any Security Interest upon any assets of Parent or Acquisition Subsidiary or (e) violate any Laws applicable to Parent or Acquisition Subsidiary or any of their properties or assets.
 
3.5            Subsidiaries.
 
(a)            Parent has no Subsidiaries other than Acquisition Subsidiary and the Split-Off Subsidiary.  Each of Acquisition Subsidiary and the Split-Off Subsidiary is an entity duly organized, validly existing and in corporate and tax good standing under the laws of the jurisdiction of its organization.  Acquisition Subsidiary was formed solely to effectuate the Merger, the Split-Off Subsidiary was formed solely to effectuate the Split-Off, and neither of them has conducted any business operations since its organization.  Parent has delivered or made available to the Company complete and accurate copies of the charter, bylaws or other organizational documents of Acquisition Subsidiary and the Split-Off Subsidiary.  Acquisition Subsidiary has no assets other than minimal paid-in capital, has no liabilities or other obligations, and is not in default under or in violation of any provision of its charter, bylaws or other organizational documents.  All of the issued and outstanding shares of capital stock of Acquisition Subsidiary are duly authorized, validly issued, fully paid, nonassessable and free of preemptive rights.  All shares of Acquisition Subsidiary are owned by Parent free and clear of any restrictions on transfer (other than restrictions under the Securities Act and state securities laws), claims, Security Interests, options, warrants, rights, contracts, calls, commitments, equities and demands.  There are no outstanding or authorized options, warrants, rights, agreements or commitments to which Parent or Acquisition Subsidiary is a party or which are binding on any of them providing for the issuance, disposition or acquisition of any capital stock of Parent, Acquisition Subsidiary or the Split-Off Subsidiary (except as contemplated by this Agreement and the Split-Off Agreement).  There are no outstanding stock appreciation, phantom stock or similar rights with respect to Acquisition Subsidiary.  There are no voting trusts, proxies or other agreements or understandings with respect to the voting of any capital stock of Acquisition Subsidiary.
 
(b)            At all times from November 22, 2011 (inception) through the date of this Agreement, the business and operations of Parent have been conducted exclusively through Parent.
 
(c)            Parent does not control directly or indirectly or have any direct or indirect participation or similar interest in any corporation, partnership, limited liability company, joint venture, trust or other business association which is not a Subsidiary.
 
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3.6            SEC Reports .  Parent has furnished or made available to the Company complete and accurate copies, as amended or supplemented, of its (a) Annual Report on Form 10-K for the fiscal year ended November 30, 2014, as filed with the SEC, which contained audited balance sheets of Parent as of November 30, 2014 and 2013, and the related statements of operation, changes in shareholders’ equity and cash flows for the years then ended; and (b) all other reports filed by Parent under Section 13 or subsections (a) or (c) of Section 14 of the Exchange Act with the SEC (such reports are collectively referred to herein as the “Parent Reports”).  Parent Reports constitute all of the documents required to be filed or furnished by Parent with the SEC, including under Section 13 or subsections (a) or (c) of Section 14 of the Exchange Act, through the date of this Agreement.  Parent Reports complied in all material respects with the requirements of the Exchange Act and the rules and regulations thereunder when filed.  As of the date hereof, there are no outstanding or unresolved comments in comment letters received from the staff of the SEC with respect to any of Parent Reports.  As of their respective dates, Parent Reports , including any financial statements, schedules or exhibits included or incorporated by reference therein, did not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading.   None of Parent Subsidiaries is required to file or furnish any forms, reports or other documents with the SEC.
 
3.7            Compliance with Laws .  Each of Parent and its Subsidiaries:
 
(a)            and the conduct and operations of their respective businesses, are in compliance with each Law applicable to Parent, any Parent Subsidiary or any of their properties or assets, except for any violations or defaults that, individually or in the aggregate, have not had and would not reasonably be expected to have a Parent Material Adverse Effect;
 
(b)            has complied with all federal and state securities laws and regulations, including being current in all of its reporting obligations under such federal and state securities laws and regulations;
 
(c)            has not, and the past and present officers, directors and Affiliates of Parent have not, been the subject of, nor does any officer or director of Parent have any reason to believe that Parent or any of its officers, directors or Affiliates will be the subject of, any civil or criminal proceeding or investigation by any federal or state agency alleging a violation of securities laws;
 
(d)            has not been the subject of any voluntary or involuntary bankruptcy proceeding, nor has it been a party to any material litigation;
 
(e)            has not, and the past and present officers, directors and Affiliates have not, been the subject of, nor does any officer or director of Parent have any reason to believe that Parent or any of its officers, directors or Affiliates will be the subject of, any civil, criminal or administrative investigation or proceeding brought by any federal or state agency having regulatory authority over such entity or person;
 
(f)            does not and will not on the Closing, have any liabilities, contingent or otherwise, including but not limited to notes payable and accounts payable, and is not a party to any executory agreements; and
 
(g)            is not a “blank check company” as such term is defined by Rule 419 of the Securities Act.
 
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3.8            Financial Statements .  The audited financial statements and unaudited interim financial statements of Parent included in Parent Reports (collectively, the “Parent Financial Statements”) (i) complied as to form in all material respects with applicable accounting requirements and, as appropriate, the published rules and regulations of the SEC with respect thereto when filed, (ii) were prepared in accordance with GAAP applied on a consistent basis throughout the periods covered thereby (except as may be indicated therein or in the notes thereto, and in the case of quarterly financial statements, as permitted by Form 10-Q and Regulation S-X promulgated by the SEC), (iii) fairly present in all material respects the financial condition, results of operations and cash flows of Parent as of the respective dates thereof and for the periods referred to therein, and (iv) are consistent in all material respects with the books and records of Parent.
 
3.9            Absence of Certain Changes .  Since the date of the balance sheet contained in the most recent Parent Report, (a) there has occurred no event or development which, individually or in the aggregate, has had, or could reasonably be expected to have in the future, a Parent Material Adverse Effect and (b) neither Parent nor Acquisition Subsidiary has taken any of the actions set forth in paragraphs (a) through (m) of Section 4.6.
 
3.10          Undisclosed Liabilities .  None of Parent and its Subsidiaries has any liability (whether known or unknown, whether absolute or contingent, whether liquidated or unliquidated and whether due or to become due), except for liabilities which do not exceed $25,000 in the aggregate.
 
3.11          Off-Balance Sheet Arrangements . Neither Parent nor any of its Subsidiaries is a party to, or has any commitment to become a party to, any joint venture, off balance sheet partnership or any similar contract or arrangement (including any contract or arrangement relating to any transaction or relationship between or among Parent and any of its Subsidiaries, on the one hand, and any unconsolidated affiliate, including any structured finance, special purpose or limited purpose entity or person, on the other hand, or any “off balance sheet arrangements” (as defined in Item 303(a) of Regulation S-K under the Exchange Act)), where the result, purpose or intended effect of such contract is to avoid disclosure of any material transaction involving, or material liabilities of, Parent or any of its Subsidiaries in Parent’s or such Subsidiary’s published financial statements or other Parent Reports .
 
3.12          Tax Matters .
 
(a)            Each of Parent and its Subsidiaries has filed on a timely basis all Tax Returns that it was required to file, and all such Tax Returns were complete and accurate in all material respects.  Neither Parent nor any of its Subsidiaries is or has ever been a member of a group of corporations with which it has filed (or been required to file) consolidated, combined or unitary Tax Returns, other than a group of which only Parent and its Subsidiaries are or were members.  Each of Parent and its Subsidiaries has paid on a timely basis all Taxes that were due and payable.  The unpaid Taxes of Parent and its Subsidiaries for tax periods through the date of the balance sheet contained in the most recent Parent Report do not exceed the accruals and reserves for Taxes (excluding accruals and reserves for deferred Taxes established to reflect timing differences between book and Tax income) set forth on such balance sheet.  Neither Parent nor any of its Subsidiaries has any actual or potential liability for any Tax obligation of any taxpayer (including without limitation any affiliated group of corporations or other entities that included Parent or any of its Subsidiaries during a prior period) other than Parent and its Subsidiaries.  All Taxes that Parent or any of its Subsidiaries is or was required by law to withhold or collect have been duly withheld or collected and, to the extent required, have been paid to the proper Governmental Entity.
 
(b)            Parent has delivered or made available to the Company complete and accurate copies of all federal income Tax Returns, examination reports and statements of deficiencies assessed
 
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against or agreed to by Parent or any of its Subsidiaries since November 22, 2011 (which was the date of Parent’s incorporation).  No examination or audit of any Tax Return of Parent or any of its Subsidiaries by any Governmental Entity is currently in progress or, to the knowledge of Parent, threatened or contemplated.  Neither Parent nor any of its Subsidiaries has been informed by any jurisdiction that the jurisdiction believes that Parent or its Subsidiaries was required to file any Tax Return that was not filed.  Neither Parent nor any of its Subsidiaries has waived any statute of limitations with respect to Taxes or agreed to an extension of time with respect to a Tax assessment or deficiency.
 
(c)            Neither Parent nor any of its Subsidiaries: (i) has been a United States real property holding corporation within the meaning of Section 897(c)(2) of the Code during the applicable period specified in Section 897(c)(l)(A)(ii) of the Code; (ii) has made any payments, is obligated to make any payments, or is a party to any agreement that could obligate it to make any payments that may be treated as an “excess parachute payment” under Section 280G of the Code; (iii) has any actual or potential liability for any Taxes of any person (other than Parent and its Subsidiaries) under Treasury Regulation Section 1.1502-6 (or any similar provision of federal, state, local or foreign law), or as a transferee or successor, by contract or otherwise; or (iv) is or has been required to make a basis reduction pursuant to Treasury Regulation Section 1.1502-20(b) or Treasury Regulation Section 1.337(d)-2(b).
 
(d)            None of the assets of Parent or any of its Subsidiaries: (i) is property that is required to be treated as being owned by any other person pursuant to the provisions of former Section 168(f)(8) of the Code; (ii) is “tax-exempt use property” within the meaning of Section 168(h) of the Code; or (iii) directly or indirectly secures any debt the interest of which is tax exempt under Section 103(a) of the Code.
 
(e)            Neither Parent nor any of its Subsidiaries has undergone a change in its method of accounting resulting in an adjustment to its taxable income pursuant to Section 481 of the Code.
 
(f)             No state or federal “net operating loss” of Parent determined as of the Closing Date is subject to limitation on its use pursuant to Section 382 of the Code or comparable provisions of state law as a result of any “ownership change” within the meaning of Section 382(g) of the Code or comparable provisions of any state law occurring prior to the Closing Date.
 
3.13          Assets .  Each of Parent and Acquisition Subsidiary owns or leases all tangible assets necessary for the conduct of its businesses as presently conducted and as presently proposed to be conducted.  Each such tangible asset is free from material defects, has been maintained in accordance with normal industry practice, is in good operating condition and repair (subject to normal wear and tear) and is suitable for the purposes for which it presently is used.  No asset of Parent or Acquisition Subsidiary (tangible or intangible) is subject to any Security Interest.
 
3.14          Owned Real Property .  Neither Parent nor any of its Subsidiaries owns any real property.
 
3.15          Real Property Leases .  Section 3.15 of Parent Disclosure Schedule lists all real property leased or subleased to or by Parent or any of its Subsidiaries and lists the term of such lease, any extension and expansion options, and the rent payable thereunder.  Parent has delivered or made available to the Company complete and accurate copies of the leases and subleases listed in Section 3.15 of Parent Disclosure Schedule.  With respect to each lease and sublease listed in Section 3.15 of Parent Disclosure Schedule:
 
(a)            the lease or sublease is legal, valid, binding, enforceable and in full force and effect;
 
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(b)            the lease or sublease will continue to be legal, valid, binding, enforceable and in full force and effect immediately following the Closing in accordance with the terms thereof as in effect immediately prior to the Closing, and the Closing will not, after the giving of notice, with lapse of time, or otherwise, result in a breach or default by Parent or any of its Subsidiaries or, to the knowledge of Parent, any other party under such lease or sublease;
 
(c)            neither Parent nor any of its Subsidiaries nor, to the knowledge of Parent, any other party, is in breach or violation of, or default under, any such lease or sublease, and no event has occurred, is pending or, to the knowledge of Parent, is threatened, which, after the giving of notice, with lapse of time or otherwise, would constitute a breach or default by Parent or any of its Subsidiaries or, to the knowledge of Parent, any other party under such lease or sublease;
 
(d)            neither Parent nor any of its Subsidiaries has assigned, transferred, conveyed, mortgaged, deeded in trust or encumbered any interest in the leasehold or subleasehold; and
 
(e)            to the knowledge of Parent, there is no Security Interest, easement, covenant or other restriction applicable to the real property subject to such lease, except for recorded easements, covenants and other restrictions which do not materially impair the current uses or the occupancy by Parent or any of its Subsidiaries of the property subject thereto.
 
3.16          Contracts .
 
(a)            Section 3.16 of Parent Disclosure Schedule lists the following agreements (written or oral) to which Parent or any of its Subsidiaries is a party as of the date of this Agreement:
 
(i)             any agreement (or group of related agreements) for the lease of personal property from or to third parties;
 
(ii)            any agreement (or group of related agreements) for the purchase or sale of products or for the furnishing or receipt of services;
 
(iii)           any agreement establishing a partnership or joint venture;
 
(iv)           any agreement (or group of related agreements) under which it has created, incurred, assumed or guaranteed (or may create, incur, assume or guarantee) indebtedness (including capitalized lease obligations) or under which it has imposed (or may impose) a Security Interest on any of its assets, tangible or intangible;
 
(v)            any agreement that purports to limit in any material respect the right of the Company to engage in any line of business, or to compete with any person or operate in any geographical location;
 
(vi)           any employment or consulting agreement;
 
(vii)          any agreement involving any current or former officer, director or stockholder of Parent or any Affiliate thereof;
 
(viii)         any agreement under which the consequences of a default or termination would reasonably be expected to have a Parent Material Adverse Effect;
 
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(ix)            any agreement which contains any provisions requiring Parent or any of its Subsidiaries to indemnify any other party thereto (excluding indemnities contained in agreements for the purchase, sale or license of products entered into in the Ordinary Course of Business);
 
(x)             any other agreement involving more than $5,000; and
 
(xi)            any agreement, other than as contemplated by this Agreement and the Split-Off, relating to the sales of securities of Parent or any of its Subsidiaries to which Parent or such Subsidiary is a party.
 
(b)            Parent has delivered or made available to the Company a complete and accurate copy of each agreement listed in Section 3.16 of Parent Disclosure Schedule.  With respect to each agreement so listed:  (i) the agreement is legal, valid, binding and enforceable and in full force and effect; (ii) the agreement will continue to be legal, valid, binding and enforceable and in full force and effect immediately following the Closing in accordance with the terms thereof as in effect immediately prior to the Closing; and (iii) neither Parent nor any of its Subsidiaries nor, to the knowledge of Parent, any other party, is in breach or violation of, or default under, any such agreement, and no event has occurred, is pending or, to the knowledge of Parent, is threatened, which, after the giving of notice, with lapse of time or otherwise, would constitute a breach or default by Parent or any of its Subsidiaries or, to the knowledge of Parent, any other party under such contract.
 
3.17          Accounts Receivable .  All accounts receivable of Parent and its Subsidiaries reflected on Parent Reports are valid receivables subject to no setoffs or counterclaims and are current and collectible (within 90 days after the date on which it first became due and payable), net of the applicable reserve for bad debts on the balance sheet contained in the most recent Parent Report.  All accounts receivable reflected in the financial or accounting records of Parent that have arisen since the date of the balance sheet contained in the most recent Parent Report are valid receivables subject to no setoffs or counterclaims and are collectible (within 90 days after the date on which it first became due and payable), net of a reserve for bad debts in an amount proportionate to the reserve shown on the balance sheet contained in the most recent Parent Report.
 
3.18          Powers of Attorney .  There are no outstanding powers of attorney executed on behalf of Parent or any of its Subsidiaries.
 
3.19          Insurance .  Section 3.19 of Parent Disclosure Schedule lists each insurance policy (including fire, theft, casualty, general liability, workers compensation, business interruption, environmental, product liability and automobile insurance policies and bond and surety arrangements) to which Parent or any of its Subsidiaries is a party.  Such insurance policies are of the type and in amounts customarily carried by organizations conducting businesses or owning assets similar to those of Parent and its Subsidiaries.  There is no material claim pending under any such policy as to which coverage has been questioned, denied or disputed by the underwriter of such policy.  All premiums due and payable under all such policies have been paid, neither Parent nor any of its Subsidiaries may be liable for retroactive premiums or similar payments, and Parent and its Subsidiaries are otherwise in compliance in all material respects with the terms of such policies.  Parent has no knowledge of any threatened termination of, or material premium increase with respect to, any such policy.  Each such policy will continue to be enforceable and in full force and effect immediately following the Closing in accordance with the terms thereof as in effect immediately prior to the Closing.
 
3.20          Warranties .  No product or service sold or delivered by Parent or any of its Subsidiaries is subject to any guaranty, warranty, right of credit or other indemnity other than the applicable standard
 
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terms and conditions of sale of Parent or the appropriate Subsidiary, which are set forth in Section 3.20 of Parent Disclosure Schedule.
 
3.21          Litigation .  Except as disclosed in Section 3.10 of Parent Disclosure Schedule,  as of the date of this Agreement, there is no Legal Proceeding which is pending or, to Parent’s knowledge, threatened against Parent or any Subsidiary of Parent which, if determined adversely to Parent or such Subsidiary, could have, individually or in the aggregate, a Parent Material Adverse Effect or which in any manner challenges or seeks to prevent, enjoin, alter or delay the transactions contemplated by this Agreement. For purposes of this Section 3.10, any such pending or threatened Legal Proceedings where the amount at issue exceeds or could reasonably be expected to exceed the lesser of $10,000 per Legal Proceeding or $25,000 in the aggregate shall be considered to possibly result in a Parent Material Adverse Effect hereunder.
 
3.22          Employees .
 
(a)            Parent and Parent Subsidiaries have no employees.
 
(b)            Neither Parent nor any of its Subsidiaries is a party to or bound by any collective bargaining agreement, nor have any of them experienced any strikes, grievances, claims of unfair labor practices or other collective bargaining disputes.  Parent has no knowledge of any organizational effort made or threatened, either currently or since the date of organization of Parent, by or on behalf of any labor union with respect to employees of Parent or any of its Subsidiaries.
 
3.23          Employee Benefits .
 
(a)            Section 3.23(a) of Parent Disclosure Schedule contains a complete and accurate list of all Employee Benefit Plans maintained, or contributed to, by Parent, any of its Subsidiaries or any ERISA Affiliate (collectively, the “Parent Benefit Plans”).  Complete and accurate copies of (i) all Parent Benefit Plans which have been reduced to writing, (ii) written summaries of all unwritten Parent Benefit Plans, (iii) all related trust agreements, insurance contracts and summary plan descriptions, and (iv) all annual reports filed on IRS Form 5500, 5500C or 5500R and (for all funded plans) all plan financial statements for the last five plan years for each Parent Benefit Plan, have been delivered or made available to Parent.  Each Parent Benefit Plan has been administered in all material respects in accordance with its terms and each of Parent, its Subsidiaries and the ERISA Affiliates has in all material respects met its obligations with respect to such Parent Benefit Plan and has made all required contributions thereto not later than the due date therefor (including extensions).  Parent, each of its Subsidiaries, each ERISA Affiliate and each Parent Benefit Plan are in compliance in all material respects with the currently applicable provisions of ERISA and the Code and the regulations thereunder (including without limitation Section 4980B of the Code, Subtitle K, Chapter 100 of the Code and Sections 601 through 608 and Section 701 et seq. of ERISA).  All filings and reports as to each Parent Benefit Plan required to have been submitted to the Internal Revenue Service or to the United States Department of Labor have been duly submitted.
 
(b)            To the knowledge of Parent, there are no Legal Proceedings (except claims for benefits payable in the normal operation of Parent Benefit Plans and proceedings with respect to qualified domestic relations orders, qualified medical support orders or similar benefit directives) against or involving any Parent Benefit Plan or asserting any rights or claims to benefits under any Parent Benefit Plan that could give rise to any material liability.
 
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(c)            All Parent Benefit Plans that are intended to be qualified under Section 401(a) of the Code have received a determination, advisory or opinion letter from the Internal Revenue Service to the effect that such Parent Benefit Plans are qualified and the plans and the trusts related thereto are exempt from federal income taxes under Sections 401(a) and 501(a), respectively, of the Code, no such determination letter has been revoked and revocation has not been threatened, and no such Parent Benefit Plan has been amended since the date of its most recent determination letter or application therefor in any respect, and no act or omission has occurred, that would adversely affect its qualification or materially increase its cost.  Each Parent Benefit Plan which is required to satisfy Section 401(k)(3) or Section 401(m)(2) of the Code has been tested for compliance with, and satisfies the requirements of, Section 401(k)(3) and Section 401(m)(2) of the Code for each plan year ending prior to the Closing Date.
 
(d)            Neither Parent, any of its Subsidiaries, nor any ERISA Affiliate has ever maintained an Employee Benefit Plan subject to Section 412 of the Code or Title IV of ERISA.
 
(e)            At no time has Parent, any of its Subsidiaries or any ERISA Affiliate been obligated to contribute to any “multiemployer plan” (as defined in Section 4001(a)(3) of ERISA).
 
(f)             There are no unfunded obligations under any Parent Benefit Plan providing benefits after termination of employment to any employee of Parent or any of its Subsidiaries (or to any beneficiary of any such employee), including but not limited to retiree health coverage and deferred compensation, but excluding continuation of health coverage required to be continued under Section 4980B of the Code or other applicable Law and insurance conversion privileges under state law.  The assets of each Parent Benefit Plan which is funded are reported at their fair market value on the books and records of such Parent Benefit Plan.
 
(g)            No act or omission has occurred and no condition exists with respect to any Parent Benefit Plan maintained by Parent, any of its Subsidiaries or any ERISA Affiliate that would subject Parent, any of its Subsidiaries or any ERISA Affiliate to (i) any material fine, penalty, tax or liability of any kind imposed under ERISA or the Code or (ii) any contractual indemnification or contribution obligation protecting any fiduciary, insurer or service provider with respect to any Parent Benefit Plan.
 
(h)            No Parent Benefit Plan is funded by, associated with or related to a “voluntary employee’s beneficiary association” within the meaning of Section 501(c)(9) of the Code.
 
(i)             Each Parent Benefit Plan is amendable and terminable unilaterally by Parent at any time without liability to Parent as a result thereof and no Parent Benefit Plan, plan documentation or agreement, summary plan description or other written communication distributed generally to employees by its terms prohibits Parent from amending or terminating any such Parent Benefit Plan.
 
(j)             Section 3.23(j) of Parent Disclosure Schedule discloses each:  (i) agreement with any stockholder, director, executive officer or other employee of Parent or any of its Subsidiaries (A) the benefits of which are contingent, or the terms of which are materially altered, upon the occurrence of a transaction involving Parent or any of its Subsidiaries of the nature of any of the transactions contemplated by this Agreement, (B) providing any term of employment or compensation guarantee or (C) providing severance benefits or other benefits after the termination of employment of such director, executive officer or employee; (ii) agreement, plan or arrangement under which any person may receive payments from Parent or any of its Subsidiaries that may be subject to the tax imposed by Section 4999 of the Code or included in
 
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the determination of such person’s “parachute payment” under Section 280G of the Code; and (iii) agreement or plan binding Parent or any of its Subsidiaries, including without limitation any stock option plan, stock appreciation right plan, restricted stock plan, stock purchase plan, severance benefit plan or Parent Benefit Plan, any of the benefits of which will be increased, or the vesting of the benefits of which will be accelerated, by the occurrence of any of the transactions contemplated by this Agreement or the value of any of the benefits of which will be calculated on the basis of any of the transactions contemplated by this Agreement.  The accruals for vacation, sickness and disability expenses are accounted for on the balance sheet contained in the most recent Parent Report and are adequate and materially reflect the expenses associated therewith in accordance with GAAP.
 
3.24          Environmental Matters .
 
(a)            Each of Parent and its Subsidiaries has complied with all applicable Environmental Laws, except for violations of Environmental Laws that, individually or in the aggregate, have not had and would not reasonably be expected to have a Parent Material Adverse Effect.  There is no pending or, to the knowledge of Parent, threatened civil or criminal litigation, written notice of violation, formal administrative proceeding, or investigation, inquiry or information request by any Governmental Entity, relating to any Environmental Law involving Parent or any of its Subsidiaries, except for litigation, notices of violations, formal administrative proceedings or investigations, inquiries or information requests that, individually or in the aggregate, have not had and would not reasonably be expected to have a Parent Material Adverse Effect.
 
(b)            Set forth in Section 3.24(b) of Parent Disclosure Schedule is a list of all documents (whether in hard copy or electronic form) that contain any environmental reports, investigations and audits relating to premises currently or previously owned or operated by Parent or any of its Subsidiaries (whether conducted by or on behalf of Parent or its Subsidiaries or a third party, and whether done at the initiative of Parent or any of its Subsidiaries or directed by a Governmental Entity or other third party) which were issued or conducted during the past five years and which Parent has possession of or access to.  A complete and accurate copy of each such document has been provided to the Company.
 
(c)            Parent is not aware of any material environmental liability of any solid or hazardous waste transporter or treatment, storage or disposal facility that has been used by Parent or any of its Subsidiaries.
 
3.25          Permits .  Section 3.25 of Parent Disclosure Schedule sets forth a list of all authorizations, approvals, clearances, permits, licenses, registrations, certificates, orders, approvals or exemptions from any Governmental Entity (including without limitation those issued or required under Environmental Laws and those relating to the occupancy or use of owned or leased real property) (“Parent Permits”) issued to or held by Parent or any of its Subsidiaries.  Such listed permits are the only Parent Permits that are required for Parent and any of its Subsidiaries to conduct their respective businesses as presently conducted except for those the absence of which, individually or in the aggregate, have not had and would not reasonably be expected to have a Parent Material Adverse Effect.  Each such Parent Permit is in full force and effect and, to the knowledge of Parent, no suspension or cancellation of such Parent Permit is threatened and there is no basis for believing that such Parent Permit will not be renewable upon expiration.  Each such Parent Permit will continue in full force and effect immediately following the Closing.
 
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3.26          Certain Business Relationships with Affiliates .  No Affiliate of Parent or of any of its Subsidiaries (a) owns any property or right, tangible or intangible, which is used in the business of Parent or any of its Subsidiaries, (b) has any claim or cause of action against Parent or any of its Subsidiaries, or (c) owes any money to, or is owed any money by, Parent or any of its Subsidiaries.  Section 3.26 of Parent Disclosure Schedule describes any transactions involving the receipt or payment in excess of $1,000 in any fiscal year between Parent or any of its Subsidiaries and any Affiliate thereof which have occurred or existed since the beginning of the time period covered by Parent Financial Statements.
 
3.27          Tax-Free Reorganization .
 
(a)            Parent (i) is not an “investment company” as defined in Section 368(a)(2)(F)(iii) and (iv) of the Code; (ii) has no present plan or intention to liquidate the Surviving Corporation or to merge the Surviving Corporation with or into any other corporation or entity, or to sell or otherwise dispose of the stock of the Surviving Corporation which Parent will acquire in the Merger, or to cause the Surviving Corporation to sell or otherwise dispose of its assets, all except in the ordinary course of business or if such liquidation, merger or disposition is described in Section 368(a)(2)(C) or Treasury Regulation Section 1.368-2(d)(4) or Section 1.368-2(k); and (iii) has no present plan or intention, following the Merger, to issue any additional shares of stock of the Surviving Corporation or to create any new class of stock of the Surviving Corporation.
 
(b)            Acquisition Subsidiary is a wholly-owned subsidiary of Parent, formed solely for the purpose of engaging in the Merger, and will carry on no business prior to the Merger.
 
(c)            Immediately prior to the Merger, Parent will be in control of Acquisition Subsidiary within the meaning of Section 368(c) of the Code.
 
(d)            Immediately following the Merger, the Surviving Corporation will hold at least 90% of the fair market value of the net assets and at least 70% of the fair market value of the gross assets held by the Company immediately prior to the Merger (for purposes of this representation, amounts used by the Company to pay reorganization expenses, if any, will be included as assets of the Company held immediately prior to the Merger).
 
(e)            Parent has no present plan or intention to reacquire any of the Merger Shares.
 
(f)             Acquisition Subsidiary will have no liabilities assumed by the Surviving Corporation and will not transfer to the Surviving Corporation any assets subject to liabilities in the Merger.
 
(g)            Following the Merger, the Surviving Corporation will continue the Company’s historic business or use a significant portion of the Company’s historic business assets in a business as required by Section 368 of the Code and the Treasury Regulations promulgated thereunder.
 
(h)            Each of the Split-Off Agreement and the General Release Agreement will constitute a legally binding obligation among Parent, the Split-Off Subsidiary and the Split-Off Purchaser prior to the Effective Time; immediately preceding consummation of the Merger, Parent will distribute the stock of the Split-Off Subsidiary to the Split-Off Purchaser in cancellation of the Split-Off Shares; no property other than the capital stock of Split-Off Subsidiary will be distributed by Parent to the Split-Off Purchaser in connection with or following the Merger; upon execution and delivery of the Split-Off Agreement and the General Release Agreement, the Split-Off Purchaser will have no right to sell or transfer the Split-Off
 
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Shares to any person without Parent’s prior written consent, and Parent will not consent (nor will it permit others to consent) to any such sale or transfer; upon execution of the Split-Off Agreement and the General Release Agreement, there will be no other plan, arrangement, agreement, contract, intention or understanding, whether written or verbal and whether or not enforceable in law or equity, that would permit the Split-Off Purchaser to vote the  Split-Off Shares or receive any property or other distributions from Parent with respect to the Split-Off Shares other than the capital stock of the Split-Off Subsidiary.
 
3.28          Split-Off .  As of the Effective Time, Parent will have discontinued all of its business operations which it conducted prior to the Effective Time by closing the Split-Off Transaction contemplated by the Split-Off Agreement and the General Release Agreement.  Upon the closing of the Split-Off Transaction contemplated by the Split-Off Agreement and the General Release Agreement, Parent will have no liabilities, contingent or otherwise, in any way related to its pre-Effective Time existence, actions and/or business operations or to the Split-Off Subsidiary.
 
3.29          Brokers’ Fees .  Except as set forth on Section 3.29 of Parent Disclosure Schedule, neither Parent nor any of its Subsidiaries has any liability or obligation to pay any fees or commissions to any broker, finder or agent with respect to the transactions contemplated by this Agreement.
 
3.30          Disclosure .  No representation or warranty by Parent or Acquisition Subsidiary contained in this Agreement, and no statement contained in the any document, certificate or other instrument delivered or to be delivered by or on behalf of Parent or Acquisition Subsidiary pursuant to this Agreement, contains or will contain any untrue statement of a material fact or omits or will omit to state any material fact necessary, in light of the circumstances under which it was or will be made, in order to make the statements herein or therein not misleading.  Parent has disclosed to the Company all material information relating to the business of Parent and any of its Subsidiaries and the transactions contemplated by this Agreement.
 
3.31          Interested Party Transactions .  Except for the Split-Off Agreement and the General Release Agreement, to the knowledge of Parent, no officer, director or stockholder of Parent or any “affiliate” (as such term is defined in Rule 12b-2 under the Exchange Act) or “associate” (as such term is defined in Rule 405 under the Securities Act) of any such person currently has or has had, either directly or indirectly, (a) an interest in any person that (i) furnishes or sells services or products that are furnished or sold or are proposed to be furnished or sold by Parent or any of its Subsidiaries or (ii) purchases from or sells or furnishes to Parent or any of its Subsidiaries any goods or services, or (b) a beneficial interest in any contract or agreement to which Parent or any of its Subsidiaries is a party or by which it may be bound or affected.  Neither Parent nor any of its Subsidiaries has extended or maintained credit, arranged for the extension of credit, or renewed an extension of credit, in the form of a personal loan to or for any director or executive officer (or equivalent thereof) of Parent or any of its Subsidiaries.
 
3.32          Duty to Make Inquiry .  To the extent that any of the representations or warranties in this Article III are qualified by “knowledge” or “belief,” each of Parent and Acquisition Subsidiary represents and warrants that it has made due and reasonable inquiry and investigation concerning the matters to which such representations and warranties relate, including, but not limited to, diligent inquiry by its directors, officers and key personnel and the directors, officers and key personnel of any Subsidiary.
 
3.33          Accountants .  DKM Certified Public Accountants (the “Parent Auditor”) is and has been throughout the periods covered by the financial statements of Parent for the most recently completed fiscal year and through the date hereof (a) a registered public accounting firm (as defined in Section 2(a)(12) of the Sarbanes-Oxley Act of 2002), (b) “independent” with respect to Parent within the meaning of Regulation S-X and (c) in compliance with subsections (g) through (l) of Section 10A of the Exchange
 
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Act and the related rules of the SEC and the Public Company Accounting Oversight Board.  Schedule 3.32 of Parent Disclosure Schedule lists all non-audit services performed by Parent Auditor for Parent and/or any of its Subsidiaries.  Except as set forth on Section 3.33 of Parent Disclosure Schedule, the report of Parent Auditor on the financial statements of Parent for the past two completed fiscal years did not contain an adverse opinion or a disclaimer of opinion, or was qualified as to uncertainty, audit scope, or accounting principles, although it did express uncertainty as to Parent’s ability to continue as a going concern.  During Parent’s most recently completed fiscal year and the subsequent interim periods, there were no disagreements with Parent Auditor on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedures.  None of the reportable events listed in Item 304(a)(1)(iv) or (v) of Regulation S-K occurred with respect to Parent Auditor.
 
3.34          Minute Books .  The minute books and other similar records of Parent and each of its Subsidiaries contain, in all material respects, complete and accurate records of all actions taken at any meetings of directors (or committees thereof) and stockholders or actions by written consent in lieu of the holding of any such meetings since the time of organization of each such corporation through the date of this Agreement.  Parent has provided true and complete copies of all such minute books and other similar records to the Company’s representatives.
 
3.35          Board Action .  Parent’s Board of Directors (a) has unanimously determined that the Merger is advisable and in the best interests of Parent’s stockholders and is on terms that are fair to such Parent stockholders and (b) has caused Parent, in its capacity as the sole stockholder of Acquisition Subsidiary, and the Board of Directors of Acquisition Subsidiary, to approve the Merger and this Agreement by unanimous written consent.
 
3.36          First PPO Conducted in Accordance with Applicable Laws .   The First PPO was conducted in compliance with all applicable federal and state securities laws and the offer, sale and issuance of the First PPO Shares was exempt from registration under the Securities Act under Rule 506 promulgated under the Securities Act.
 
ARTICLE IV
COVENANTS
 
4.1            Closing Efforts .  Each of the Parties shall use its best efforts, to the extent commercially reasonable in light of the circumstances (“Reasonable Best Efforts”), to take all actions and to do all things necessary, proper or advisable to consummate the transactions contemplated by this Agreement, including without limitation using its Reasonable Best Efforts to ensure that (i) its representations and warranties remain true and correct in all material respects through the Closing Date and (ii) the conditions to the obligations of the other Parties to consummate the Merger are satisfied.
 
4.2            Governmental and Third-Party Notices and Consents .
 
(a)            Each Party shall use its Reasonable Best Efforts to obtain, at its expense, all waivers, permits, consents, approvals or other authorizations from Governmental Entities, and to effect all registrations, filings and notices with or to Governmental Entities, as may be required for such Party to consummate the transactions contemplated by this Agreement and to otherwise comply with all applicable Laws in connection with the consummation of the transactions contemplated by this Agreement.
 
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(b)            The Company shall use its Reasonable Best Efforts to obtain, at its expense, all such waivers, consents or approvals from third parties, and to give all such notices to third parties, as are required to be listed in Section 2.4 of the Company Disclosure Schedule.
 
4.3            Current Reports on Form 8-K .
 
(a)           Promptly after the execution of this Agreement (unless this Agreement is executed on the Closing Date), the Parties shall prepare a Current Report on Form 8-K relating to this Agreement and the transactions contemplated hereby (the “First Form 8-K”).  Each of the Company and Parent shall use its Reasonable Best Efforts to cause the First Form 8-K to be filed with the SEC within four Business Days of the execution of this Agreement and to otherwise comply with all requirements of applicable federal and state securities laws.
 
(b)            Promptly after the execution of this Agreement, the Parties shall prepare a Current Report on Form 8-K relating to the Merger, Split-Off Transaction, First PPO and this Agreement and the transactions contemplated hereby (including the “Form 10 information” required by Items 2.01(f) and 5.01(a)(8) of Form 8-K and the financial statements required thereby) (the “Super 8-K”).  Each of the Company and Parent shall use its Reasonable Best Efforts to cause the Super 8-K to be filed with the SEC within four Business Days of the Closing Date and to otherwise comply with all requirements of applicable federal and state securities laws.  Further, Parent shall prepare and file with the SEC an amendment to the Super 8-K within four Business Days after the Closing Date, if such Super 8-K was filed before the Closing Date.
 
4.4            Operation of Company Business .  Except as contemplated by this Agreement, during the period from the date of this Agreement to the Effective Time, the Company shall (and shall cause each Company Subsidiary to) conduct its operations in the Ordinary Course of Business and in material compliance with all Laws applicable to the Company, any Company Subsidiary or any of their properties or assets and, to the extent consistent therewith, use its Reasonable Best Efforts to preserve intact its current business organization, keep its physical assets in good working condition, keep available the services of its current officers and employees and preserve its relationships with customers, suppliers and others having business dealings with it to the end that its goodwill and ongoing business shall not be impaired in any material respect.  Without limiting the generality of the foregoing, prior to the Effective Time, the Company shall not (and shall cause each Company Subsidiary not to), without the written consent of Parent (which shall not be unreasonably withheld or delayed) and except as contemplated by this Agreement:
 
(a)            issue or sell, or redeem or repurchase, any stock or other securities of the Company or any warrants, options or other rights to acquire any such stock or other securities (except pursuant to the conversion or exercise of outstanding convertible securities or Company Options or Company Warrants outstanding on the date hereof), or amend any of the terms of (including without limitation the vesting of) any such convertible securities or options or warrants;
 
(b)            split, combine or reclassify any shares of its capital stock; declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stock;
 
(c)            create, incur or assume any indebtedness for borrowed money (including obligations in respect of capital leases) except in the Ordinary Course of Business or in connection with the transactions contemplated by this Agreement; assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person or
 
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entity; or make any loans, advances or capital contributions to, or investments in, any other person or entity;
 
(d)            enter into, adopt or amend any Employee Benefit Plan or any employment or severance agreement or arrangement or (except for normal increases in the Ordinary Course of Business for employees who are not Affiliates) increase in any manner the compensation or fringe benefits of, or materially modify the employment terms of, its directors, officers or employees, generally or individually, or pay any bonus or other benefit to its directors, officers or employees;
 
(e)            acquire, sell, lease, license or dispose of any assets or property (including without limitation any shares or other equity interests in or securities of any Company Subsidiary or any corporation, partnership, association or other business organization or division thereof), other than purchases and sales of assets in the Ordinary Course of Business;
 
(f)             mortgage or pledge any of its property or assets (including without limitation any shares or other equity interests in or securities of any Company Subsidiary or any corporation, partnership, association or other business organization or division thereof), or subject any such property or assets to any Security Interest;
 
(g)            discharge or satisfy any Security Interest or pay any obligation or liability other than in the Ordinary Course of Business or in connection with the consummation of the First PPO and the conversion of the Bridge Note;
 
(h)            amend its charter, by-laws or other organizational documents;
 
(i)             change in any material respect its accounting methods, principles or practices, except insofar as may be required by a generally applicable change in GAAP;
 
(j)             enter into, amend, terminate, take or omit to take any action that would constitute a violation of or default under, or waive any rights under, any material contract or agreement;
 
(k)            institute or settle any Legal Proceeding;
 
(l)             take any action or fail to take any action permitted by this Agreement with the knowledge that such action or failure to take action would result in (i) any of the representations and warranties of the Company set forth in this Agreement becoming untrue in any material respect or (ii) any of the conditions to the Merger set forth in Article V not being satisfied; or
 
(m)           agree in writing or otherwise to take any of the foregoing actions.
 
4.5           Access to Company Information .
 
(a)            The Company shall (and shall cause each Company Subsidiary to) permit representatives of Parent to have full access (at all reasonable times, and in a manner so as not to interfere with the normal business operations of the Company and the Company Subsidiaries) to all premises, properties, financial and accounting records, contracts, other records and documents, and personnel, of or pertaining to the Company and each Company Subsidiary.
 
(b)            Parent and each of its Subsidiaries (i) shall treat and hold as confidential any Company Confidential Information (as defined below), (ii) shall not use any of the Company Confidential Information except in connection with this Agreement, and (iii) if this Agreement is terminated for any
 
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reason whatsoever, shall return to the Company all tangible embodiments (and all copies) thereof which are in its possession.  For purposes of this Agreement, “Company Confidential Information” means any information of the Company or any Company Subsidiary that is furnished to Parent or any of its Subsidiaries by the Company or any Company Subsidiary in connection with this Agreement; provided, however, that it shall not include any information (A) which, at the time of disclosure, is available publicly other than as a result of non-permitted disclosure by Parent, any of its Subsidiaries or their respective directors, officers, or employees or by third parties that Parent knows are subject to obligations not to disclose such information or is subject to restrictions similar to those provided in this paragraph 4.5(b), (B) which, after disclosure, becomes available publicly through no fault of Parent, any of its Subsidiaries or their respective directors, officers, or employees, (C) which Parent or any of its Subsidiaries knew or to which Parent or any of its Subsidiaries had access prior to disclosure, provided that the source of such information is not known by Parent or any of its Subsidiaries to be bound by a confidentiality obligation to the Company or any Company Subsidiary, or (D) which Parent or any of its Subsidiaries rightfully obtains from a source other than the Company or a Company Subsidiary, provided that the source of such information is not known by Parent or any of its Subsidiaries to be bound by a confidentiality obligation to the Company or any Company Subsidiary.
 
4.6            Operation of Parent Business .  Except as contemplated by this Agreement, during the period from the date of this Agreement to the Effective Time, Parent shall (and shall cause each of its Subsidiaries to) conduct its operations in the Ordinary Course of Business and in material compliance with all Laws applicable to Parent, any Parent Subsidiary or any of their properties or assets and, to the extent consistent therewith, use its Reasonable Best Efforts to preserve intact its current business organization, keep its physical assets in good working condition, keep available the services of its current officers and employees and preserve its relationships with customers, suppliers and others having business dealings with it to the end that its goodwill and ongoing business shall not be impaired in any material respect.  Without limiting the generality of the foregoing, prior to the Effective Time, Parent shall not (and shall cause each of its Subsidiaries not to), without the written consent of the Company:
 
(a)            issue or sell, or redeem or repurchase, any stock or other securities of Parent or any rights, warrants or options to acquire any such stock or other securities, except as contemplated by, and in connection with, the Merger, the Split-Off, the conversion of the Bridge Note and the First PPO;
 
(b)            split, combine or reclassify any shares of its capital stock; declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stock;
 
(c)            create, incur or assume any indebtedness (including obligations in respect of capital leases); assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person or entity; or make any loans, advances or capital contributions to, or investments in, any other person or entity;
 
(d)            enter into, adopt or amend any Parent Benefit Plan or any employment or severance agreement or arrangement or increase in any manner the compensation or fringe benefits of, or materially modify the employment terms of, its directors, officers or employees, generally or individually, or pay any bonus or other benefit to its directors, officers or employees, except the adoption of Parent Equity Plan (as defined below);
 
(e)            acquire, sell, lease, license or dispose of any assets or property (including without limitation any shares or other equity interests in or securities of any Subsidiary of Parent or any corporation, partnership, association or other business organization or division thereof), except as contemplated by, and in connection with, the Split-Off;
 
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(f)             mortgage or pledge any of its property or assets or subject any such property or assets to any Security Interest;
 
(g)            discharge or satisfy any Security Interest or pay any obligation or liability other than in the Ordinary Course of Business;
 
(h)            amend its charter, by-laws or other organizational documents;
 
(i)             change in any material respect its accounting methods, principles or practices, except insofar as may be required by a generally applicable change in GAAP;
 
(j)             enter into, amend, terminate, take or omit to take any action that would constitute a violation of or default under, or waive any rights under, any contract or agreement;
 
(k)            institute or settle any Legal Proceeding;
 
(l)             take any action or fail to take any action permitted by this Agreement with the knowledge that such action or failure to take action would result in (i) any of the representations and warranties of Parent and/or Acquisition Subsidiary set forth in this Agreement becoming untrue in any material respect or (ii) any of the conditions to the Merger set forth in Article V not being satisfied; or
 
(m)            agree in writing or otherwise to take any of the foregoing actions.
 
4.7           Access to Parent Information .
 
(a)            Parent shall (and shall cause Acquisition Subsidiary to) permit representatives of the Company to have full access (at all reasonable times, and in a manner so as not to interfere with the normal business operations of Parent and Acquisition Subsidiary) to all premises, properties, financial and accounting records, contracts, other records and documents, and personnel of or pertaining to Parent, Acquisition Subsidiary and the Split-Off Subsidiary.
 
(b)            Each of the Company and any Company Subsidiary (i) shall treat and hold as confidential any Parent Confidential Information (as defined below), (ii) shall not use any of Parent Confidential Information except in connection with this Agreement, and (iii) if this Agreement is terminated for any reason whatsoever, shall return to Parent all tangible embodiments (and all copies) thereof which are in its possession.  For purposes of this Agreement, “Parent Confidential Information” means any information of Parent or any Parent Subsidiary that is furnished to the Company or any Company Subsidiary by Parent or its Subsidiaries in connection with this Agreement; provided, however, that it shall not include any information (A) which, at the time of disclosure, is available publicly other than as a result of non-permitted disclosure by the Company, any Company Subsidiary or their respective directors, officers, or employees, or by third parties that the Company knows are subject to obligations not to disclose such information is subject to restrictions similar to those provided in this paragraph 4.7(b), (B) which, after disclosure, becomes available publicly through no fault of the Company or any Company Subsidiary or their respective directors, officers, or employees, (C) which the Company or any Company Subsidiary knew or to which the Company or Company Subsidiary had access prior to disclosure, provided that the source of such information is not known by the Company or any Company Subsidiary to be bound by a confidentiality obligation to Parent or any Subsidiary of Parent or (D) which the Company or any Company Subsidiary rightfully obtains from a source other than Parent or a Subsidiary of Parent, provided that the source of such information is not known by the Company or any Company Subsidiary to be bound by a confidentiality obligation to Parent or any Subsidiary of Parent.
 
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4.8            Expenses .
 
(a)            The costs and expenses of the Company (including legal fees and expenses of the Company) incurred in connection with this Agreement and the transactions contemplated hereby shall be payable at Closing from the proceeds of the First PPO.
 
(b)            Notwithstanding anything to the contrary contained in this Agreement, GEM shall pay for and hereby agrees to indemnify Parent, Acquisition Subsidiary and the Company, for all of Parent’s and Acquisition Subsidiary’s (but not the Company’s) legal, accounting and other expenses, fees and costs relating to the Merger, the drafting of this Agreement and all Transaction Documentation, the First PPO and the Split-Off Transaction and all of legal and accounting expenses, fees and costs relating to the Merger, as well as all liabilities arising in connection with any breach of the representations and warranties contained in Sections 3.6, 3.26, 3.29 and/or 3.36; provided, that the Company agrees to pay at the Closing the sum of $25,000 to CKR Law LLP, Parent’s legal counsel, to be credited against the legal fees incurred by Parent relating to the Merger, First PPO, the Split-Off Transaction and the drafting of this Agreement and all Transaction Documents.  The provisions of this Section 4.8(b) shall survive the Closing and remain in effect for the three years following the filing of the Super 8-K.
 
4.9            Indemnification .
 
(a)            Parent shall not, after the Effective Time, take any action to alter or impair any exculpatory or indemnification provisions now existing in the certificate of incorporation or bylaws of the Company for the benefit of any individual who served as a director or officer of the Company at any time prior to the Effective Time, except for any changes which may be required to conform with changes in applicable Law and any changes which do not affect the application of such provisions to acts or omissions of such individuals prior to the Effective Time.
 
(b)            From and after the Effective Time, Parent agrees that it will, and will cause the Surviving Corporation to, indemnify and hold harmless each present and former director and officer of the Company (the “Indemnified Executives”) against any costs or expenses (including reasonable attorneys’ fees), judgments, fines, losses, claims, damages, liabilities or amounts paid in settlement incurred in connection with any claim, action, suit, proceeding or investigation, whether civil, criminal, administrative or investigative, arising out of or pertaining to matters existing or occurring at or prior to the Effective Time, whether asserted or claimed prior to, at or after the Effective Time, to the fullest extent permitted under Delaware law (and Parent and the Surviving Corporation shall also advance expenses as incurred to the fullest extent permitted under Delaware law, provided the Indemnified Executive to whom expenses are advanced provides an undertaking to repay such advances if it is ultimately determined that such Indemnified Executive is not entitled to indemnification).
 
4.10          Quotation of Merger Shares .  Parent shall take whatever steps are necessary to cause the Merger Shares, the First PPO Shares, the shares issuable upon conversion of the Bridge Note and any shares of Parent Common Stock that may be issued pursuant to Section 1.8, 1.9 or 1.14 to be eligible for quotation on the OTC Markets Group Inc. QB Tier.
 
4.11          Name and Fiscal Year Change .  Parent shall take all necessary steps to enable it to change its corporate name to such name as is agreeable to the Company as of the Effective Time, if Parent has not already done so prior to the Effective Time.  Parent shall change its fiscal year end to December 31 on or promptly after the Effective Date, if Parent’s fiscal year end is not December 31 prior to the Effective Time.
 
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4.12          Split-Off .  Parent shall take, and shall cause Acquisition Subsidiary to take, whatever steps are necessary to enable it to effect the Split-Off Transaction pursuant to the terms of the Split-Off Agreement prior to or as of the Effective Time.
 
4.13          Parent Board; Amendment of Charter Documents .  To the extent it has not done so prior to the execution of this Agreement, Parent shall take such actions as are necessary to (a) authorize Parent’s Board of Directors to consist of five members, and (b) amend its articles of incorporation and bylaws in a manner satisfactory to the Company.
 
4.14          Parent Equity Plan .  Prior to or as of the Effective Time, the Board of Directors and shareholders of Parent shall adopt and approve the equity incentive plan attached hereto as Exhibit D (the “Parent Equity Plan”) reserving for issuance 10,000,000 shares of Parent Common Stock for equity awards to be made thereunder.  No options shall be granted under the Parent Equity Plan prior to the Closing.
 
4.15          Information Provided to Stockholders .  The Company shall prepare, with the cooperation of Parent, information to be sent to the holders of shares of Company Common Stock in connection with receiving their approval of the Merger, this Agreement and related transactions, and Parent shall prepare, with the cooperation of the Company, information to be sent to the holders of shares of Parent Common Stock in connection with receiving their approval of the Merger, this Agreement and related transactions.  Parent and the Company shall each use Reasonable Best Efforts to cause information provided to such party’s stockholders to comply with applicable federal and state securities laws requirements.  Each of Parent and the Company agrees to provide promptly to the other such information concerning its business and financial statements and affairs as, in the reasonable judgment of the providing party or its counsel, may be required or appropriate for inclusion in the information sent, or in any amendments or supplements thereto, and to cause its counsel and auditors to cooperate with the other’s counsel and auditors in the preparation of the information to be sent to the stockholders of  each party and the SEC as required by applicable law.  The Company will promptly advise Parent, and Parent will promptly advise the Company, in writing if at any time prior to the Effective Time either the Company or Parent shall obtain knowledge of any facts that might make it necessary or appropriate to amend or supplement the information sent in order to make the statements contained or incorporated by reference therein not misleading or to comply with applicable Law.  The information sent by the Company shall contain the recommendation of the Board of Directors of the Company that the holders of shares of Company Common Stock approve the Merger, the Split-Off Transaction and this Agreement and the conclusion of the Board of Directors of the Company that the terms and conditions of the Merger are advisable and fair and in the best interests of the Company and such holders.  The information sent by Parent shall contain the recommendation of the Board of Directors of Parent that the holders of shares of Parent Common Stock approve the Split-Off Transaction, the Merger and this Agreement and the conclusion of the Board of Directors of Parent that the terms and conditions of the Merger are advisable and fair and in the best interests of Parent and such holders.  Anything to the contrary contained herein notwithstanding, neither the Company nor Parent shall include in the information sent to its stockholders any information with respect to the other party or its affiliates or associates, the form and content of which information shall not have been approved by such party in its reasonable discretion prior to such inclusion; provided , however , that nothing in this sentence or in this Section 4.15 shall prohibit any party from complying with all applicable laws.
 
4.16          No Registration .  For a period of 24 months following the Effective Time, Parent shall not register, nor shall it take any action to facilitate registration of, under the Securities Act, the Merger Shares issued to the individuals set forth on Exhibit E or any shares of Parent Common Stock issuable to the individuals set forth on Exhibit E upon exercise of Parent Options and Parent Warrants or that may be issued pursuant to Section 1.9, except (x) as provided in Section 1.5(e) and (y) to the extent provided in
 
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the Registration Rights Agreement entered into in connection with the First PPO.   In addition, the Company shall use its Reasonable Best Efforts to cancel any agreements, understandings or undertakings (other than the Registration Rights Agreement and the undertakings therein and the undertakings set forth in the Lock-Up and No-Shorting Agreements) to register Company securities under the federal securities laws, which agreements, understandings or undertakings might otherwise survive the Closing.
 
ARTICLE V
CONDITIONS TO CONSUMMATION OF MERGER
 
5.1            Conditions to Each Party’s Obligations .  The respective obligations of each Party to consummate the Merger are subject to the satisfaction of the following conditions:
 
(a)            the Company shall have obtained (and shall have provided copies thereof to Parent) the written consents of (i) all of the members of its Board of Directors, (ii) Company Common Stockholders holding shares of Company Stock representing at least 90.0% of the votes represented by the outstanding shares of Company Stock entitled to vote on this Agreement and the Merger, to approve the execution, delivery and performance by the Company of this Agreement and the other Transaction Documentation to which it is a party, in form and substance satisfactory to Parent;
 
(b)            Parent, the Indemnification Representative and the Indemnification Escrow Agent, shall have executed and delivered the Indemnification Shares Escrow Agreement;
 
(c)            Parent, Split-Off Subsidiary and the Split-Off Purchaser shall have executed and delivered the Split-Off Agreement and a General Release Agreement, and all other documents anticipated by such agreements, and the Split-Off shall be effective simultaneous with the Effective Time;
 
(d)            the Split-Off Purchaser shall have surrendered to Parent the certificates for Parent Common Stock representing the Split-Off Shares, duly endorsed to Parent or in blank, with signatures guaranteed by a member of one of the “Medallion” guarantee programs (Securities Transfer Agents Medallion Program (STAMP), Stock Exchanges Medallion Program (SEMP), or New York Stock Exchange Medallion Signature Program (MSP));
 
(e)            Parent shall have delivered to the Split-Off Purchaser certificates representing the Shares (as defined in the Split-Off Agreement) of stock of Split-Off Subsidiary deliverable to the Split-Off Purchaser under the Split-Off Agreement, duly registered in the name of the Split-Off Purchaser or as directed by the Split-Off Purchaser;
 
(f)             GEM shall have surrendered to Parent, or cause to be surrendered to Parent, for cancellation, certificates representing an aggregate of   26,276,600 shares of Parent Common Stock, duly endorsed to Parent or in blank, as appropriate, with signatures guaranteed by a member of one of the “Medallion” guarantee programs (Securities Transfer Agents Medallion Program (STAMP), Stock Exchanges Medallion Program (SEMP), or New York Stock Exchange Medallion Signature Program (MSP));
 
(g)            Parent and the Company shall have completed all necessary legal due diligence satisfactorily to each of them in their sole discretion;
 
(h)            each of Steven Hoffman, as Chief Executive Officer, Michael Demurjian, as Chief Operating Officer, and such other employees as are designated by the Company shall have entered into employment agreements with Parent mutually satisfactory to the Company, Parent and to the respective employees;
 
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(i)             the closings of the First PPO and conversion of the Bridge Note as contemplated by this Agreement, shall have occurred, or shall occur simultaneously with the Closing;
 
(j)             GEM and/or the subscribers to the First PPO shall have (i) executed and delivered to Parent the Subscription Note and the Note Shares Escrow Agreement (each as provided for in this Agreement), and (ii) delivered to CKR Law, as Escrow Agent under the Note Shares Escrow Agreement, certificates representing a number of shares of Parent Common Stock equal to the principal amount of the Subscription Note multiplied by two (2) shares of Parent Common Stock in accordance with the terms of the Note Shares Escrow Agreement, duly endorsed in blank with signatures guaranteed by a member of one of the “Medallion” guarantee programs (Securities Transfer Agents Medallion Program (STAMP), Stock Exchanges Medallion Program (SEMP), or New York Stock Exchange Medallion Signature Program (MSP)); and
 
(k)            GEM and, to the extent necessary, the other Parent Record Holders, shall have (i) executed and delivered to Parent the Adjustment Escrow Agreement (as provided for in Section 1.14(c) of this Agreement), and (ii) delivered to CKR Law, as Escrow Agent under the Adjustment Escrow Agreement, certificates representing 3,500,000 shares of Parent Common Stock owned of record by such Parent Record Holders in accordance with the terms of the Adjustment Escrow Agreement, duly endorsed in blank with signatures guaranteed by a member of one of the “Medallion” guarantee programs (Securities Transfer Agents Medallion Program (STAMP), Stock Exchanges Medallion Program (SEMP), or New York Stock Exchange Medallion Signature Program (MSP)).
 
5.2            Conditions to Obligations of Parent and Acquisition Subsidiary .  The obligation of each of Parent and Acquisition Subsidiary to consummate the Merger is subject to the satisfaction (or waiver by Parent) of the following additional conditions:
 
(a)            the number of Dissenting Shares shall not exceed 10.0% of the number of outstanding shares of Company Stock as of the Effective Time;
 
(b)            the Company and the Company Subsidiaries shall have obtained (and shall have provided copies thereof to Parent) all other waivers, permits, consents, approvals or other authorizations, and effected all of the registrations, filings and notices, referred to in Section 4.2 which are required on the part of the Company or any Company Subsidiary, except such waivers, permits, consents, approvals or other authorizations the failure of which to obtain or effect does not, individually or in the aggregate, have a Company Material Adverse Effect or a material adverse effect on the ability of the Parties to consummate the transactions contemplated by this Agreement;
 
(c)            the representations and warranties of the Company set forth in this Agreement (when read without regard to any qualification as to materiality or Company Material Adverse Effect contained therein) shall be true and correct as of the date of this Agreement and shall be true and correct as of the Effective Time as though made as of the Effective Time ( provided , however , that, to the extent such representation and warranty expressly relates to an earlier date, such representation and warranty shall be true and correct as of such earlier date), except for any untrue or incorrect representations and warranties that, individually or in the aggregate, do not have a Company Material Adverse Effect or a material adverse effect on the ability of the Parties to consummate the transactions contemplated by this Agreement;
 
(d)            the Company shall have performed or complied with its agreements and covenants required to be performed or complied with under this Agreement as of or prior to the Effective Time, except for such non-performance or non-compliance as does not have a Company Material Adverse
 
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Effect or a material adverse effect on the ability of the Parties to consummate the transactions contemplated by this Agreement;
 
(e)            no Legal Proceeding shall be pending wherein an unfavorable judgment, order, decree, stipulation or injunction would (i) prevent consummation of any of the transactions contemplated by this Agreement or (ii) cause any of the transactions contemplated by this Agreement to be rescinded following consummation, and no such judgment, order, decree, stipulation or injunction shall be in effect;
 
(f)             the Company shall have delivered to Parent and Acquisition Subsidiary a copy of each written consent received from a Company Stockholder approving  this Merger Agreement;
 
(g)            the Company shall have delivered to Parent and Acquisition Subsidiary a certificate (the “Company Certificate”) to the effect that each of the conditions specified in clauses (a) and (g) (with respect to the Company’s due diligence of Parent) of Section 5.1 and clauses (a) through (e) (insofar as clause (e) relates to Legal Proceedings involving the Company or a Company Subsidiary) of this Section 5.2 is satisfied in all respects, and covering such other matters as Parent shall reasonably request;
 
(h)            each of the individuals set forth on Exhibit E to this Agreement shall have executed and delivered to Parent an agreement substantially in the form of Exhibit F attached hereto (the “Lock-Up and No-Shorting Agreements”);
 
(i)             the Company shall have obtained the written agreement of three (3) individuals having a business background, experience and reputation reasonably satisfactory to GEM, all of whom meet the applicable independent director standards of the SEC and the Nasdaq Stock Market, to serve as directors of the Parent after the Merger (out of a total of five (5) directors), continent upon the Parent obtaining directors’ and officers’ liability insurance coverage reasonably acceptable to each such nominee;
 
(j)             the Company shall have delivered to Parent audited and interim unaudited financial statements of the Company pro forma the Merger, compliant with applicable SEC regulations for inclusion under Item 2.01 (f) and/or 5.01(a)(8) of Form 8-K; and
 
(k)            Parent shall have received from Moritt, Hock & Hamroff LLP, counsel to the Company, an opinion on the matters set forth in Exhibit G attached hereto, addressed to Parent and dated as of the Closing Date.
 
5.3            Conditions to Obligations of the Company .  The obligation of the Company to consummate the Merger is subject to the satisfaction of the following additional conditions:
 
(a)            Parent shall have obtained (and shall have provided copies thereof to the Company) the written consents of (i) all of the members of its Board of Directors, (ii) all of the members of the Board of Directors of Acquisition Subsidiary, (iii) the sole stockholder of Acquisition Subsidiary, (iv) all of the members of the Board of Directors of Split-Off Subsidiary, (v) the sole stockholder of Split-Off Subsidiary, and (vi) holders of more than 50% of Parent Common Stock outstanding immediately prior to the Effective Time, in each case to the execution, delivery and performance by the each such entity of this Agreement and/or the other Transaction Documentation to which each such entity a party, in form and substance satisfactory to Parent;
 
(b)            Parent shall have obtained (and shall have provided copies thereof to the Company) all of the other waivers, permits, consents, approvals or other authorizations, and effected all of the registrations, filings and notices, referred to in Section 4.2 which are required on the part of Parent
 
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or any of its Subsidiaries, except for waivers, permits, consents, approvals or other authorizations the failure of which to obtain or effect does not, individually or in the aggregate, have a Parent Material Adverse Effect or a material adverse effect on the ability of the Parties to consummate the transactions contemplated by this Agreement;
 
(c)            the representations and warranties of Parent set forth in this Agreement  (when read without regard to any qualification as to materiality or Parent Material Adverse Effect contained therein) shall be true and correct as of the date of this Agreement and shall be true and correct as of the Effective Time as though made as of the Effective Time ( provided , however , that, to the extent such representation and warranty expressly relates to an earlier date, such representation and warranty shall be true and correct as of such earlier date), except for any untrue or incorrect representations and warranties that, individually or in the aggregate, do not have a Parent Material Adverse Effect or a material adverse effect on the ability of the Parties to consummate the transactions contemplated by this Agreement;
 
(d)            each of Parent and Acquisition Subsidiary shall have performed or complied with its agreements and covenants required to be performed or complied with under this Agreement as of or prior to the Effective Time, except for such non-performance or non-compliance as does not have a Parent Material Adverse Effect or a material adverse effect on the ability of the Parties to consummate the transactions contemplated by this Agreement;
 
(e)            no Legal Proceeding shall be pending wherein an unfavorable judgment, order, decree, stipulation or injunction would (i) prevent consummation of any of the transactions contemplated by this Agreement or (ii) cause any of the transactions contemplated by this Agreement to be rescinded following consummation, and no such judgment, order, decree, stipulation or injunction shall be in effect;
 
(f)             the Board of Directors of Parent shall have adopted, and the shareholders of Parent shall have approved, the Parent Equity Plan;
 
(g)            Parent shall have delivered to the Company a certificate (the “Parent Certificate”) to the effect that each of the conditions specified in clauses (a) and (g) (with respect to Parent’s due diligence of the Company) of Section 5.1 and clauses (a) through (f) (insofar as clause (e) relates to Legal Proceedings involving Parent or Acquisition Subsidiary) of this Section 5.3 is satisfied in all respects, and covering such other matters as the Company shall reasonably request;
 
(h)            the Company shall have received a certificate of Parent’s transfer agent and registrar certifying that as of the Closing Date there are 52,000,800 shares of Parent Common Stock issued and outstanding (without giving effect to the (i) surrender by the Split-Off Purchaser of the Split-Off Shares in the Share Contribution, (ii) issuance of the First PPO Shares, (iii) conversion of the Bridge Note, (iv) surrender of shares of Parent Common Stock as provided for in Section 1.14(a), and (v) the issuance of the Merger Shares (including the Indemnification Escrow Shares));
 
(i)             Parent shall have delivered to the Company (i) evidence that Parent’s Board of Directors is authorized to consist of five (5) individuals, (ii) evidence of the resignations of all individuals who served as directors and/or officers of Parent immediately prior to the Effective Time, which resignations shall be effective as of the Effective Time, (iii) evidence of the appointment of the following two (2) directors to serve immediately following the Effective Time: Michael Demurjian and Steve Hoffman, and (iv) evidence of the appointment of such executive officers of Parent to serve immediately following the Effective Time as shall have been designated by the Company, including Steven Hoffman as Chief Executive Officer, and Michael Demurjian as Chief Operating Officer and Akber Pabini as Chief Financial Officer;
 
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(j)             the Company shall have received from CKR Law LLP, counsel to Parent and Acquisition Subsidiary, an opinion with respect to the matters set forth in Exhibit H attached hereto, addressed to the Company and dated as of the Closing Date.
 
(k)             the Split-Off Transaction shall have been consummated, including without limitation, the Share Contribution; and
 
(l)             Parent and each Company Stockholder (other than holders of Dissenting Shares) shall have executed and delivered the Registration Rights Agreement as provided in Section 1.5(e).
 
ARTICLE VI
INDEMNIFICATION
 
6.1           Indemnification by the Company Stockholders .  The Company Stockholders identified on Exhibit J hereto receiving Merger Shares pursuant to Section 1.5 (the “Indemnifying Stockholders”) shall, for a period commencing from the Closing Date and ending eighteen (18) months the Closing Date, severally, not jointly, pro rata in such proportion as the number of Merger Shares received by each Indemnifying Stockholder pursuant to Section 1.5 bears to the total number of Merger Shares received by all Indemnifying Stockholders pursuant to Section 1.5, indemnify Parent in respect of, and hold it harmless against, any and all debts, obligations losses, liabilities, deficiencies, damages, fines, fees, penalties, interest obligations, expenses or costs (whether absolute, accrued, contingent, fixed or otherwise, or whether known or unknown, or due or to become due or otherwise) (including without limitation amounts paid in settlement, interest, court costs, costs of investigators, fees and expenses of attorneys, accountants, financial advisors and other experts, and other expenses of litigation) (collectively, “Damages”) incurred or suffered by the Surviving Corporation or Parent or any Affiliate thereof resulting from:
 
(a)            any misrepresentation or breach of warranty by, or failure to perform any covenant or agreement of, the Company contained in this Agreement or the Company Certificate;
 
(b)            any claim by a stockholder or former stockholder of the Company, or any other person or entity, seeking to assert, or based upon: (i) ownership or rights to ownership of any shares of stock of the Company prior to the Effective Time; (ii) any rights of a stockholder prior to the Effective Time (in the case of both (i) and (ii), other than the right to receive the Merger Shares pursuant to this Agreement or appraisal rights under the applicable provisions of the Delaware Act), including any option, preemptive rights or rights to notice or to vote; (iii) any rights under the certificate of incorporation or bylaws of the Company prior to the Effective Time; or (iv) any claim that his, her or its shares were wrongfully repurchased by the Company prior to the Effective Time; and
 
(c)             any claim for brokers’ or finders’ fees or agents’ commissions arising from or through the Company, any of its pre-Merger Affiliates or any Company Stockholder in connection with the negotiation or consummation of the transactions contemplated by this Agreement.
 
(d)            any violation of, or any liability under, any Environmental Law (an “Environmental Claim”) relating to or arising from the activities and operations of the Company or any of its Subsidiaries prior to the Effective Time, regardless of when the environmental hazard giving rise to such Environmental Claim is discovered, and any liability in regards to any Mining Interests, for any all obligations, whether arising under contract, applicable Laws or otherwise, to abandon mines and close, decommission, dismantle and remove structures, buildings, equipment and other facilities and to restore
 
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and reclaim the sites for any of the foregoing and any lands used to gain access thereto (collectively, “Abandonment and Reclamation Liabilities”) of the Company or any of its Subsidiaries (or their respective successors) relating to any mines, structures, buildings, equipment and other facilities or any lands that were, or were required pursuant to applicable Law to have been, abandoned, decommissioned or reclaimed, as the case may be, prior to the Effective Time.
 
Notwithstanding the foregoing, except with respect to any fraud or willful misconduct by the Company in connection with this Agreement, Parent’s sole and exclusive right to collect any Damages with respect to claims resulting from or relating to any misrepresentation or breach of warranty of or failure to perform any covenant or agreement by the Company Stockholders contained in this Agreement shall be pursuant to a sale, in the manner set forth in the Indemnification Escrow Agreement, of Indemnification Escrow Shares issued to such Indemnifying Stockholder by Parent pursuant to Section 1.5(b) above. Notwithstanding anything to the contrary contained herein, except with respect to any fraud or willful misconduct by an Indemnifying Stockholder in connection with this Agreement, the indemnification of Parent by the Indemnifying Stockholders shall be without personal liability of or personal recourse against any Indemnifying Stockholder and the sole recourse of Parent and the Surviving Company against any Company Stockholder shall be the Indemnification Escrow Shares pursuant to the Indemnification Escrow Agreement.

6.2            Indemnification by Parent .  Subject to the limitations provided herein, Parent shall, for a period commencing from the Closing Date and ending on the first anniversary of the Closing Date, indemnify the Company Stockholders in respect of, and hold them harmless against, any and all Damages incurred or suffered by the Company Stockholders resulting from:
 
(a)           any misrepresentation or breach of warranty by or failure to perform any covenant or agreement of Parent or Acquisition Subsidiary contained in this Agreement or Parent Certificate;
 
(b)           any claim by a stockholder or former stockholder of Parent, or any other person or entity, seeking to assert, or based upon: (i) ownership or rights to ownership of any shares of stock of Parent prior to the Effective Time; (ii) any rights of a stockholder prior to the Effective Time, including any option, preemptive rights or rights to notice or to vote; (iii) any rights under the certificate of incorporation or bylaws of Parent prior to the Effective Time or (iv) any claim that his, her or its shares were wrongfully repurchased by the Company prior to the Effective Time; and
 
(c)            any claim for brokers’ or finders’ fees or agents’ commissions arising from or through Parent or any of its pre-Merger Affiliates in connection with the negotiation or consummation of the transactions contemplated by this Agreement, including for claims arising under any placement agency agreement with a placement agent engaged by Parent for the First PPO that are not satisfied by GEM; and
 
(d)           any Environmental Claim relating to or arising from the activities and operations of the Company, the Surviving Corporation or any of their Subsidiaries after the Effective Time, regardless of when the environmental hazard giving rise to such Environmental Claim is discovered, and any liability for any Abandonment and Reclamation Obligations of the Company, the Surviving Corporation or any of their Subsidiaries (or their respective successors) other than those relating to any mines, structures, buildings, equipment and other facilities or any lands that were, or were required pursuant to applicable Law to have been, abandoned, decommissioned or reclaimed, as the case may be, prior to  the Effective Time.
 
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Notwithstanding the foregoing, except with respect to any fraud or willful misconduct by Parent or any of its Affiliates in connection with this Agreement, the post-Closing adjustment mechanism set forth in Section 1.9 shall be the exclusive means for the Company Stockholders to collect any Damages for which they are entitled to indemnification under this Article VI.
 
6.3            Indemnification Claims .
 
(a)            In the event Parent or the Company Stockholders are entitled, or seek to assert rights, to indemnification under this Article VI, Parent or the Company Stockholders (as the case may be) shall give written notification to the Company Stockholders or Parent (as the case may be) of the commencement of any suit or proceeding relating to a third party claim for which indemnification pursuant to this Article VI may be sought.  Such notification shall be given within 20 Business Days after receipt by the party seeking indemnification of notice of such suit or proceeding, and shall describe in reasonable detail (to the extent known by the party seeking indemnification) the facts constituting the basis for such suit or proceeding and the amount of the claimed damages; provided , however , that no delay on the part of the party seeking indemnification in notifying the indemnifying party shall relieve the indemnifying party of any liability or obligation hereunder except to the extent of any damage or liability caused by or arising out of such failure.  Within 20 days after delivery of such notification, the indemnifying party may, upon written notice thereof to the party seeking indemnification, assume control of the defense of such suit or proceeding with counsel reasonably satisfactory to the party seeking indemnification; provided that the indemnifying party may not assume control of the defense of a suit or proceeding involving criminal liability or in which equitable relief is sought against the party seeking indemnification.  If the indemnifying party does not so assume control of such defense, the party seeking indemnification shall control such defense.  The party not controlling such defense (the “Non-Controlling Party”) may participate therein at its own expense; provided that if the indemnifying party assumes control of such defense and the party seeking indemnification reasonably concludes that the indemnifying party and the party seeking indemnification have conflicting interests or different defenses available with respect to such suit or proceeding, the reasonable fees and expenses of counsel to the party seeking indemnification shall be considered “Damages” for purposes of this Agreement.  The party controlling such defense (the “Controlling Party”) shall keep the Non-Controlling Party advised of the status of such suit or proceeding and the defense thereof and shall consider in good faith recommendations made by the Non-Controlling Party with respect thereto.  The Non-Controlling Party shall furnish the Controlling Party with such information as it may have with respect to such suit or proceeding (including copies of any summons, complaint or other pleading which may have been served on such party and any written claim, demand, invoice, billing or other document evidencing or asserting the same) and shall otherwise cooperate with and assist the Controlling Party in the defense of such suit or proceeding.  The indemnifying party shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the party seeking indemnification, which shall not be unreasonably withheld or delayed; provided that the consent of the party seeking indemnification shall not be required if the indemnifying party agrees in writing to pay any amounts payable pursuant to such settlement or judgment and such settlement or judgment includes a complete release of the party seeking indemnification from further liability and has no other materially adverse effect on the party seeking indemnification.  The party seeking indemnification shall not agree to any settlement of, or the entry of any judgment arising from, any such suit or proceeding without the prior written consent of the indemnifying party, which shall not be unreasonably withheld or delayed.
 
(b)            In order to seek indemnification under this Article VI, the party seeking indemnification shall give written notification (a “Claim Notice”) to the indemnifying party which contains (i) a description and the amount (the “Claimed Amount”) of any Damages incurred or reasonably expected to be incurred by the party seeking indemnification, (ii) a statement that the party seeking indemnification is entitled to indemnification under this Article VI for such Damages and a reasonable
 
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explanation of the basis therefor, and (iii) a demand for payment (in the manner provided in paragraph (c) below) in the amount of the Claimed Amount.
 
(c)            Within 20 days after delivery of a Claim Notice, the indemnifying party shall deliver to the party seeking indemnification a written response (the “Response”) in which the indemnifying party shall:  (i) agree that the party seeking indemnification is entitled to receive all of the Claimed Amount, (ii) agree that the party seeking indemnification is entitled to receive part, but not all, of the Claimed Amount (the “Agreed Amount”) or (iii) dispute that the party seeking indemnification is entitled to receive any of the Claimed Amount.  If the indemnifying party in the Response disputes its liability for all or part of the Claimed Amount, the indemnifying party and the party seeking indemnification shall follow the procedures set forth in Section 6.3(d) for the resolution of such dispute (a “Dispute”).
 
(d)            During the 60-day period following the delivery of a Response that reflects a Dispute, the indemnifying party and the party seeking indemnification shall use good faith efforts to resolve the Dispute.  If the Dispute is not resolved within such 60-day period, the indemnifying party and the party seeking indemnification shall discuss in good faith the submission of the Dispute to a mutually acceptable alternative dispute resolution procedure (which may be non-binding or binding upon the parties, as they agree in advance) (the “ADR Procedure”).  In the event the indemnifying party and the party seeking indemnification agree upon an ADR Procedure, such parties shall, in consultation with the chosen dispute resolution service (the “ADR Service”), promptly agree upon a format and timetable for the ADR Procedure, agree upon the rules applicable to the ADR Procedure, and promptly undertake the ADR Procedure.  The provisions of this Section 6.3(d) shall not obligate the indemnifying party and the party seeking indemnification to pursue an ADR Procedure or prevent either such Party from pursuing the Dispute in a court of competent jurisdiction; provided that, if the indemnifying party and the party seeking indemnification agree to pursue an ADR Procedure, neither the indemnifying party nor the party seeking indemnification may commence litigation or seek other remedies with respect to the Dispute prior to the completion of such ADR Procedure.  Any ADR Procedure undertaken by the indemnifying party and the party seeking indemnification shall be considered a compromise negotiation for purposes of federal and state rules of evidence, and all statements, offers, opinions and disclosures (whether written or oral) made in the course of the ADR Procedure by or on behalf of the indemnifying party, the party seeking indemnification or the ADR Service shall be treated as confidential and, where appropriate, as privileged work product.  Such statements, offers, opinions and disclosures shall not be discoverable or admissible for any purposes in any litigation or other proceeding relating to the Dispute (provided that this sentence shall not be construed to exclude from discovery or admission any matter that is otherwise discoverable or admissible).  The fees and expenses of any ADR Service used by the indemnifying party and the party seeking indemnification shall be considered to be Damages; provided, that if the indemnifying party are determined not to be liable for Damages in connection with such Dispute, the party seeking indemnification shall pay all such fees and expenses.
 
(e)            For purposes of this Section 6.3 , any references to the Company Stockholders or the Indemnifying Stockholders (except provisions relating to an obligation to make, or a right to receive, any payments provided for in Section 6.3 or Section 6.4) shall be deemed to refer to the Indemnification Representative.
 
(f)             The Indemnification Representative shall have full power and authority on behalf of each Company Stockholder or Indemnifying Stockholder to take any and all actions on behalf of, execute any and all instruments on behalf of, and execute or waive any and all rights of, the Company Stockholders or Indemnifying Stockholders under this Article VI.  The Indemnification Representative shall have no liability to any Company Stockholder or Indemnifying Stockholder for any action taken or omitted on behalf of the Company Stockholders or Indemnifying Stockholders pursuant to this Article VI.
 
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6.4            Survival of Representations and Warranties .  All representations and warranties contained in this Agreement, the Company Certificate or Parent Certificate shall (a) survive the Closing and any investigation at any time made by or on behalf of Parent or the Company and (b) shall expire on the date eighteen (18) months following the Closing Date.  If a party entitled to indemnification delivers to a party from whom it may seek indemnification hereunder, before expiration of a representation or warranty, either a Claim Notice based upon a breach of such representation or warranty, or a notice that, as a result a legal proceeding instituted by or written claim made by a third party, the party entitled to indemnification reasonably expects to incur Damages as a result of a breach of such representation or warranty (an “Expected Claim Notice”), then such representation or warranty shall survive until, but only for purposes of, the resolution of the matter covered by such Expected Claim Notice.
 
6.5            Limitations on Claims for Indemnification .
 
(a)            (i)           Notwithstanding anything to the contrary herein, Parent shall not be entitled to recover, or be indemnified for, Damages under this Article VI unless and until the aggregate of all such Damages paid or payable by the Indemnifying Stockholders collectively exceeds $50,000 (the “Damages Threshold”) and then, if such aggregate Damages Threshold is reached, Parent shall only be entitled to recover for Damages in excess of such Damages Threshold.
 
(ii)            Except with respect to claims based on fraud or willful misconduct, after the Closing, the rights of Parent under this Article VI shall be the exclusive remedy of Parent with respect to claims resulting from or relating to any misrepresentation or breach of warranty of or failure to perform any covenant or agreement by the Company Stockholders contained in this Agreement.
 
(iii)            Parent shall only have the right to recover any Damages to which  it is entitled from any Indemnifying Stockholder under this Article VI, in whole or in part, pursuant to a sale, in the manner set forth in the Indemnification Escrow Agreement, of Indemnification Escrow Shares issued to such Indemnifying Stockholder by Parent pursuant to Section 1.5 above.
 
(b)            (i)           Notwithstanding anything to the contrary herein, the Company Stockholders shall not be entitled to recover, or be indemnified for, Damages under this Article VI unless and until the aggregate of all such Damages paid or payable by Parent collectively exceeds the Damages Threshold and then, if such aggregate Damages Threshold is reached, the Company Stockholders shall only be entitled to recover for Damages in excess of such Damages Threshold.
 
(ii)            Except with respect to claims based on fraud or willful misconduct, after the Closing, the rights of the Company Stockholders under this Article VI shall be the exclusive remedy of the Company Stockholders with respect to claims resulting from or relating to any misrepresentation or breach of warranty of or failure to perform any covenant or agreement by Parent contained in this Agreement.
 
(iii)            Notwithstanding anything in this Agreement to the contrary, except with respect to any fraud or willful misconduct by Parent or its Affiliates in connection with this Agreement, the delivery to a Company Stockholder entitled to indemnification by Parent under this Article VI of shares of Parent Common Stock pursuant to Section 1.9 shall be the exclusive means for the Company Stockholders to collect any Damages for which they are entitled to indemnification under this Article VI.
 
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(c)            No Indemnifying Stockholder shall have any right of contribution against the Surviving Corporation with respect to any breach by the Company of any of its representations, warranties, covenants or agreements.  The amount of Damages recoverable by Parent under this Article VI with respect to an indemnity claim shall be reduced by (i) any proceeds received by Parent with respect to the Damages to which such indemnity claim relates, from an insurance carrier and (ii) the amount of any tax savings actually realized by Parent, for the tax year in which such Damages are incurred, which are clearly attributable to the Damages to which such indemnity claim relates (net of any increased tax liability which may result from the receipt of the indemnity payment or any insurance proceeds relating to such Damages).
 
ARTICLE VII
DEFINITIONS
 
For purposes of this Agreement, each of the following defined terms is defined in the Section of this Agreement indicated below.
 
Defined Term
   
Section
 
     
Abandonment and Reclamation Obligations
 
6.1(d)
Acquisition Subsidiary
 
Introduction
ADR Procedure
 
6.3(d)
ADR Service
 
6.3(d)
Affiliate
 
2.12(a)(vii)
Agreed Amount
 
6.3(c)
Agreement
 
Introduction
Business Day
 
1.2
CERCLA
 
2.20
Certificate of Merger
 
1.1
Claim Notice
 
6.3(b)
Claimed Amount
 
6.3(b)
Closing
 
1.2
Closing Date
 
1.2
Code
 
Introduction
Company
 
Introduction
Company Auditor
 
2.30
Company Balance Sheet
 
2.6
Company Balance Sheet Date
 
2.6
Company Benefit Plans
 
2.19(b)
Company Certificate
 
5.2(g)
Company Common Stock
 
1.5(a)
Company Confidential Information
 
4.5(b)
Company Consents
 
2.3
Company Disclosure Schedule
 
Article II
Company Equity Plan
 
2.2
Company Financial Statements
 
2.6
Company Interim Balance Sheet
 
2.6
Company Interim Balance Sheet Date
 
2.6
Company Interim Financial Statements
 
2.6
Company Material Adverse Effect
 
2.1
Company Options
 
2.2
 
54
 

 

 
Defined Term
   
Section
 
     
Company Stockholder
 
1.3(i)
Company Stock Certificate
 
1.5(c)
Company Subsidiary
 
2.5(a)
Company Warrants
 
2.2
Company Year-End Financial Statements
 
2.6
Contemplated Transactions
 
8.3
Controlling Party
 
6.3(a)
Conversion Ratio
 
1.5(a)
Damages
 
6.1
Damages Threshold
 
6.5(a)
Defaulting Party
 
8.6
Delaware Act
 
1.1
Dispute
 
6.3(c)
Dissenting Shares
 
1.6(a)
Effective Time
 
1.1
Employee Benefit Plan
 
2.19(a)(i)
Environmental Law
 
2.20(a)
ERISA
 
2.19(a)(ii)
ERISA Affiliate
 
2.19(a)(iii)
Exchange Act
 
2.6
Expected Claim Notice
 
6.4
FDA
 
2.31
FDCA
 
2.31
First PPO
 
Introduction
First PPO Amount
 
Introduction
First PPO Offering Price
 
Introduction
First PPO Shares
 
Introduction
GAAP
 
2.6
GEM
 
Introduction
Governmental Entity
 
2.4
Indemnification Escrow Agreement
 
1.3(e)
Indemnification Escrow Agent
 
1.3(e)
Indemnification Escrow Shares
 
1.5(b)
Indemnification Representative
 
6.3(f)
Indemnified Executives
 
4.9(b)
Indemnifying Stockholders
 
6.1
Initial Shares
 
1.5(b)
Intellectual Property
 
2.27(a)
Intellectual Property Rights
 
2.27(a)
Laws
 
2.4
Legal Proceeding
 
2.17
Merger
 
Introduction
Merger Shares
 
1.5(a)
Non-Controlling Party
 
6.3(a)
Non-Defaulting Party
 
8.6
Ordinary Course of Business
 
2.4
Organization Date
 
2.9(c)
Parent
 
Introduction
Parent Certificate
 
5.3(e)
 
55
 

 

 
Defined Term
   
Section
 
     
Parent Common Stock
 
Introduction
Parent Confidential Information
 
4.7(b)
Parent Disclosure Schedule
 
Article III
Parent Equity Plan
 
4.14
Parent Financial Statements
 
3.8
Parent Material Adverse Effect
 
3.1
Parent Option
 
1.8(a)
Parent Permits
 
3.24
Parent Benefit Plans
 
3.22(a)
Parent Liabilities
 
1.9
Parent Record Holders
 
1.14(b)
Parent Reports
 
3.6
Parent Preferred Stock
 
1.5(a)
Parent Subsidiary
 
2.5(a)
Parent Warrants
 
1.8(c)
Party
 
Introduction
Permits
 
2.23
Qualified Offering
 
1.14(a)
Reasonable Best Efforts
 
4.1
Registration Rights Agreement
 
1.3(i)
Response
 
6.3(c)
SEC
 
1.9(a)
Securities Act
 
1.12
Security Interest
 
2.4
Share Contribution
 
1.3(d)
Split-Off
 
Introduction
Split-Off Agreement
 
Introduction
Split-Off Purchaser
 
Introduction
Split-Off Subsidiary
 
Introduction
Split-Off Shares
 
Introduction
Split-Off Transaction
 
Introduction
Subscription Agreement
 
1.3(f)
Subscription Note
 
1.3(f)
Subsidiary
 
2.5(a)
Super 8-K
 
4.3
Surviving Corporation
 
1.1
Tax Returns
 
2.9(a)(ii)
Taxes
 
2.9(a)(i)
Third Party Intellectual Property Rights
 
2.27(d)
Transaction Documentation
 
3.3

ARTICLE VIII
TERMINATION
 
8.1            Termination by Mutual Agreement .  This Agreement may be terminated at any time by mutual consent of the Parties, provided that such consent to terminate is in writing and is signed by each of the Parties.
 
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8.2            Termination for Failure to Close .  This Agreement shall automatically be terminated if the Closing shall not have occurred by March 30, 2015, unless such date is extended by the Parties in writing.
 
8.3            Termination by Operation of Law .  This Agreement may be terminated by any Party hereto if there shall be any statute, rule or regulation that renders consummation of the transactions contemplated by this Agreement (the “Contemplated Transactions”) illegal or otherwise prohibited, or a court of competent jurisdiction or any government (or governmental authority) shall have issued an order, decree or ruling, or has taken any other action restraining, enjoining or otherwise prohibiting the consummation of such transactions and such order, decree, ruling or other action shall have become final and non-appealable.
 
8.4            Termination for Failure to Perform Covenants or Conditions .  This Agreement may be terminated prior to the Effective Time:
 
(a)            by Parent and Acquisition Subsidiary if: (i) any of the conditions set forth in Section 5.2 hereof have not been fulfilled in all material respects by the Closing Date; (ii) the Company shall have breached or failed to observe or perform in any material respect any of its covenants or obligations under this Agreement or (iii) as otherwise set forth herein; or
 
(b)            by the Company if: (i) any of the conditions set forth in Section 5.3 hereof have not been fulfilled in all material respects by the Closing Date; (ii) Parent or Acquisition Subsidiary shall have breached or failed to observe or perform in any material respect any of its covenants or obligations under this Agreement or (iii) as otherwise set forth herein.
 
ARTICLE IX
MISCELLANEOUS
 
9.1            Press Releases and Announcements .  No Party shall issue any press release or public announcement relating to the subject matter of this Agreement without the prior written approval of the other Parties; provided , however , that any Party may make any public disclosure it believes in good faith is required by applicable Law or stock market rule (in which case the disclosing Party shall use reasonable efforts to advise the other Parties and provide them with a copy of the proposed disclosure prior to making the disclosure).
 
9.2            No Third Party Beneficiaries .  This Agreement shall not confer any rights or remedies upon any person other than the Parties and their respective successors and permitted assigns; provided , however , that (a) the provisions in Article I concerning issuance of the Merger Shares and Article VI concerning indemnification are intended for the benefit of the Company Stockholders and (b) the provisions in Section 4.9 concerning indemnification are intended for the benefit of the individuals specified therein and their successors and assigns.
 
9.3            Entire Agreement .  This Agreement (including the documents referred to herein) constitutes the entire agreement among the Parties and supersedes any prior or (other than as set forth in the Transaction Documentation) contemporaneous understandings, agreements or representations by or among the Parties, written or oral, with respect to the subject matter hereof.
 
9.4            Succession and Assignment .  This Agreement shall be binding upon and inure to the benefit of the Parties named herein and their respective successors and permitted assigns.  No Party may
 
57
 

 

 
assign either this Agreement or any of its rights, interests or obligations hereunder without the prior written approval of the other Parties; provided that Acquisition Subsidiary may assign its rights, interests and obligations hereunder to a wholly-owned subsidiary of Parent (other than Split-Off Subsidiary).
 
9.5            Counterparts and Facsimile Signature .  This Agreement may be executed in two or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument.  Facsimile signatures delivered by fax and/or e-mail/.pdf transmission shall be sufficient and binding as if they were originals and such delivery shall constitute valid delivery of this Agreement.
 
9.6            Headings .  The section headings contained in this Agreement are inserted for convenience only and shall not affect in any way the meaning or interpretation of this Agreement.
 
9.7            Notices .  All notices, requests, demands, claims and other communications hereunder shall be in writing.  Any notice, request, demand, claim or other communication hereunder shall be deemed duly delivered four Business Days after it is sent by registered or certified mail, return receipt requested, postage prepaid, or one Business Day after it is sent for next Business Day delivery via a reputable nationwide overnight courier service (or two Business Days if deposited with such a courier service on a day other than a Business Day), in each case to the intended recipient as set forth below:
 
If to the Company or the Company Stockholders:
 
Tyme Inc.
c/o Moritt Hock & Hamroff LLP
450 Seventh Avenue, 15 th floor
New York, NY 10123
Attn:  Steven Hoffman, CEO
 
Copy to (which copy shall not constitute notice hereunder):
 
Keith S. Braun, Esq.
Moritt Hock & Hamroff LLP
400 Garden City Plaza
Garden City, NY   11530
 
If to Parent or Acquisition Subsidiary (prior to the Closing):
 
Tyme Technologies, Inc.
c/o CKR Law LLP
1330 Avenue of the Americas
New York, NY  10019
Attn:  Peter E. deSvastich, CEO
Facsimile: [_______________]
Copy to (which copy shall not constitute   notice hereunder):
 
CKR Law LLP
1330 Avenue, of the Americas
New York, NY  10019
 
Attn:  Barrett S. DiPaolo
Facsimile: (212) 400-6930
 
9.8            Governing Law .  This Agreement shall be governed by and construed in accordance with the internal laws of the State of New York without giving effect to any choice or conflict of law provision or rule (whether of the State of New York   or any other jurisdiction) that would cause the application of laws of any jurisdictions other than those of the State of New York, except that the provisions of the laws of the State of Delaware shall apply with respect to the rights and duties of the stockholders and Board of Directors of the Company, Parent and Acquisition Subsidiary and where such provisions are otherwise mandatorily applicable.
 
9.9            Amendments and Waivers .  The Parties may mutually amend any provision of this Agreement at any time prior to the Effective Time.  No amendment of any provision of this Agreement shall be valid unless the same shall be in writing and signed by all of the Parties.  No waiver of any right
 
58
 

 

 
or remedy hereunder shall be valid unless the same shall be in writing and signed by the Party giving such waiver.  No waiver by any Party with respect to any default, misrepresentation or breach of warranty or covenant hereunder shall be deemed to extend to any prior or subsequent default, misrepresentation or breach of warranty or covenant hereunder or affect in any way any rights arising by virtue of any prior or subsequent such occurrence.
 
9.10          Severability .  Any term or provision of this Agreement that is invalid or unenforceable in any situation in any jurisdiction shall not affect the validity or enforceability of the remaining terms and provisions hereof or the validity or enforceability of the offending term or provision in any other situation or in any other jurisdiction.  If the final judgment of a court of competent jurisdiction declares that any term or provision hereof is invalid or unenforceable, the Parties agree that the court making the determination of invalidity or unenforceability shall have the power to limit the term or provision, to delete specific words or phrases, or to replace any invalid or unenforceable term or provision with a term or provision that is valid and enforceable and that comes closest to expressing the intention of the invalid or unenforceable term or provision, and this Agreement shall be enforceable as so modified.
 
9.11          Submission to Jurisdiction .  Each of the Parties (a) submits to the jurisdiction of any state or federal court sitting in the County of New York in the State of New York in any action or proceeding arising out of or relating to this Agreement, (b) agrees that all claims in respect of such action or proceeding may be heard and determined in any such court, and (c) agrees not to bring any action or proceeding arising out of or relating to this Agreement in any other court.  Each of the Parties waives any defense of inconvenient forum to the maintenance of any action or proceeding so brought and waives any bond, surety or other security that might be required of any other Party with respect thereto.  Any Party may make service on another Party by sending or delivering a copy of the process to the Party to be served at the address and in the manner provided for the giving of notices in Section 9.7.  Nothing in this Section 9.11, however, shall affect the right of any Party to serve legal process in any other manner permitted by law.
 
9.12          WAIVER OF JURY TRIAL . EACH OF THE PARTIES IRREVOCABLY WAIVES ANY AND ALL RIGHTS TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING BETWEEN THE PARTIES ARISING OUT OF OR RELATING TO THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.
 
9.13          Construction .
 
(a)            The language used in this Agreement shall be deemed to be the language chosen by the Parties to express their mutual intent, and no rule of strict construction shall be applied against any Party.
 
(b)            Any reference to any federal, state, local or foreign statute or law shall be deemed also to refer to all rules and regulations promulgated thereunder, unless the context requires otherwise.
 
[SIGNATURE PAGE FOLLOWS]
 
59
 

 

 
IN WITNESS WHEREOF, the Parties have executed this Agreement and Plan of Merger and Reorganization as of the date first above written.
       
 
PARENT:
 
TYME TECHNOLOGIES, INC.
 
(f/k/a GLOBAL GROUP ENTERPRISES CORP.)
     
 
By:
/s/ Peter de Svastich
 
Name:
Peter de Svastich
 
Title:
President
     
 
ACQUISITION SUBSIDIARY:
 
TYME ACQUISITION CORP.
     
 
By:
/s/ Peter de Svastich
 
Name:
Peter de Svastich
 
Title:
President
     
 
COMPANY:
 
TYME INC.
     
 
By:
/s/ Steven Hoffman
 
Name:
Steven Hoffman
 
Title:
Chief Executive Officer
     
 
Solely with respect to Section 6.3(f):
     
 
/s/ Steven Hoffman
 
Steven Hoffman, as Indemnification
 
Representative
     
 
Solely with respect to Sections 1.14, 4.8(b) and 5.1(k):
     
 
GEM GLOBAL YIELD FUND LLC SCS
     
 
By:
/s/ Christopher Brown
 
Name:
Christopher Brown
 
Title:
Manager
 
[SIGNATURE PAGE TO AGREEMENT AND PLAN OF MERGER AND REORGANIZATION]
 
 

 


 

Exhibit 3.4


STATE OF DELAWARE

CERTIFICATE OF MERGER

OF

DOMESTIC CORPORATIONS

_______________________


Pursuant to Title 8, Section 251(c) of the Delaware General Corporation Law, the undersigned corporation executed the following Certificate of Merger:


FIRST:                The name of the surviving corporation is Tyme Inc. , a Delaware corporation (the “Surviving Corporation”), and the name of the corporation being merged into the Surviving Corporation is Tyme Acquisition Corp ., a Delaware corporation (“Acquisition Subsidiary”).


SECOND:           The Agreement and Plan of Merger and Reorganization, dated as of March 5, 2015 by and among Tyme Technologies, Inc., a Delaware corporation, the Acquisition Subsidiary, the Surviving Corporation, Steven Hoffman, as Indemnification Representative (with respect to Section 6.3(f) thereof only), and GEM Global Yield Fund LLC SCS, a “société en commandite simple” formed under the laws of Luxembourg (with respect to Sections 1.14, 4.8(b) and 5.1(k) thereof only) (the “Agreement of Merger”), has been approved, adopted, executed and acknowledged by each of the constituent corporations.


THIRD :              The name of the surviving corporation is Tyme Inc. , a Delaware corporation.


FOURTH :          The Certificate of Incorporation of the Surviving Corporation, as in effect immediately prior to the merger, shall be the Certificate of Incorporation of the Surviving Corporation.  The Certificate of Incorporation of the Surviving Corporation shall be amended to read, in its entirety, as follows:


 

1.

Name .  The name of the corporation is Tyme Inc.

 

 

 

 

2.

Registered Office and Registered Agent .  The address of the registered office of the corporation in Delaware is 1811 Silverside Road, Wilmington, DE 19810, County of New Castle.  The name of the registered agent at that address is Vcorp Services, LLC.

 

 

 

 

3.

Purposes .  The purpose of the corporation is to engage in any lawful act or activity for which corporations may be organized under the DGCL.

 

 

 

 

4.

Capital Stock .   The total number of shares that the corporation is authorized to issue is 100 shares of common stock, par value $0.001 per share.  

 

 

 

 

5.

Bylaws .  The board of directors of the corporation is expressly authorized to adopt, amend or repeal bylaws of the corporation.

 

 

 

 

6.

Director Liability .  


 

a)

Limitation . To the fullest extent permitted by law, a director of the corporation shall not be personally liable to the corporation or its stockholders for monetary damages for breach of fiduciary duty as a director. If the DGCL or any other law of the State of Delaware is amended after the date hereof to authorize corporate action further eliminating or limiting the personal liability of directors, then the liability of a director of the corporation shall be eliminated or limited to the fullest extent permitted by the DGCL as so amended. Any repeal or modification of the foregoing provisions of this Section 6 by the stockholders of the corporation shall not adversely affect any right or protection of a director of the corporation existing at the time of, or increase the liability of any director of the corporation with respect to any acts or omissions of such director occurring prior to, such repeal or modification.


- 1 -


 

b)

Indemnification . To the fullest extent permitted by applicable law, the corporation is authorized to provide indemnification of (and advancement of expenses to) directors, officers and agents of the corporation (and any other persons to which DGCL permits the corporation to provide indemnification) through bylaw provisions, agreements with such agents or other persons, vote of stockholders or disinterested directors or otherwise, in excess of the indemnification and advancement otherwise permitted by Section 145 of the DGCL.

 

 

 

 

c)

Modification . Any amendment, repeal or modification of the foregoing provisions of this section 6 shall not adversely affect any right or protection of any director, officer, or other agent of the corporation existing at the time of such amendment, repeal or modification.


 

7.

Incorporator .  The name and mailing address of the incorporator is as follows:



Linda Kalayjian

CKR Law LLP

1330 Avenue of the Americas

New York, NY  10019”


FIFTH:                 The merger is to become effective upon filing of this Certificate of Merger with the Secretary of State of the State of Delaware.


SIXTH:                The executed Agreement of Merger is on file at 48 Wall Street, New York, NY 10005, the place of business of the Surviving Corporation.


SEVENTH:          A copy of the Agreement of Merger will be furnished by the surviving corporation on request, without cost, to any stockholder of the constituent corporations.


IN WITNESS WHEREOF , said Surviving Corporation has caused this certificate to be signed by an authorized officer, the 5 th day of March, 2015.


TYME INC.



By:   /s/ Steven Hoffman

Name: Steven Hoffman

Title: President


- 2 -


Exhibit 10.1
 
SPLIT-OFF AGREEMENT
 
This SPLIT-OFF AGREEMENT, dated as of March 5, 2015 (this “ Agreement ”), is entered into by and among Tyme Technologies, Inc. (f/k/a Global Group Enterprises Corp.), a Delaware corporation (the “ Seller ”), Global Group Enterprises Global Group Enterprises Inc.,   a Florida corporation(“ Split-Off Subsidiary ”), and Andrew Keck (“ Buyer ”).
 
R E C I T A L S:
 
WHEREAS, Seller is the owner of all of the issued and outstanding capital stock of Split-Off Subsidiary; Split-Off Subsidiary is a wholly owned subsidiary of Seller which has acquired the business assets and liabilities previously held by Seller; and Seller has no other businesses or operations prior to the Merger (as defined herein);
 
WHEREAS, contemporaneously with the execution of this Agreement, Seller, Tyme Inc. , a Delaware corporation (“ PrivateCo ”), a newly-formed wholly-owned subsidiary of Seller, Tyme Acquisition Corp. (“ Acquisition Sub ”), and certain other parties thereto, will enter into an Agreement and Plan of Merger and Reorganization (the “ Merger Agreement ”) pursuant to which Acquisition Sub will merge with and into PrivateCo with PrivateCo remaining as the surviving entity (the “ Merger ”); and the equity holders of PrivateCo will receive securities of Seller in exchange for their equity interests in PrivateCo;
 
WHEREAS, the execution, delivery of this Agreement, and the consummation of the assignment, assumption, purchase and sale transactions contemplated by this Agreement are conditions to the completion of the Merger pursuant to the Merger Agreement, and Seller has represented to PrivateCo in the Merger Agreement that the transactions contemplated by this Agreement will be consummated prior to or contemporaneously with the closing of the Merger, and PrivateCo relied on such representation in entering into the Merger Agreement;
 
WHEREAS, Buyer desires to purchase the Shares (as defined in Section 2.1) from Seller, and to assume, as between Seller and Buyer, all responsibility for any debts, obligations and liabilities of Seller (prior to the Merger) and Split-Off Subsidiary, on the terms and subject to the conditions specified in this Agreement; and
 
WHEREAS, Seller desires to sell and transfer the Shares to Buyer, on the terms and subject to the conditions specified in this Agreement;
 
NOW, THEREFORE, in consideration of the premises and the covenants, promises and agreements herein set forth and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending legally to be bound, agree as follows:
 
I.              ASSIGNMENT AND ASSUMPTION OF SELLER’S ASSETS AND LIABILITIES.
 
Subject to the terms and conditions provided below:
 
1
 

 

 
1.1            Assignment of Assets .  Seller hereby contributes, assigns, conveys and transfers to Split-Off Subsidiary, and Split-Off Subsidiary hereby receives, acquires and accepts, all assets and properties of Seller as of the Closing Date (as defined below) immediately prior to giving effect to the Effective Time, including but not limited to the following, but excluding in all cases (i) the right, title and assets of Seller in, to and under the Merger Agreement and all other agreements and instruments referred to therein and in the Subscription Agreement dated March 5, 2015, and all other agreements and instruments referred to therein (collectively, the “Transaction Documents”), and (ii) the capital stock of PrivateCo and Split-Off Subsidiary :
 
(a)           all cash and cash equivalents (having an approximate value of $0);
 
(b)           all accounts receivable (having an approximate value of $0);
 
(c)           all inventories of raw materials, work in process, parts, supplies and finished products;
 
(d)            all right, title and interest, of record, beneficial or otherwise, in and to and stock, membership interests, partnership interests or other equity or ownership interests in any corporation, limited liability company, partnership or other entity, and all bonds, debentures, notes or other securities;
 
(e)            all of Seller’s rights, title and interests in, to and under all contracts, agreements, leases, licenses (including software licenses), supply agreements, consulting agreements, commitments, purchase orders, customer orders and work orders, and including all of Seller’s rights thereunder to use and possess equipment provided by third parties, and all representations, warranties, covenants and guarantees related to the foregoing (provided that, to the extent any of the foregoing or any claim or right or benefit arising thereunder or resulting therefrom is not assignable by its terms or the assignment thereof shall require the consent or approval of another party thereto, this Agreement shall not constitute an assignment thereof if an attempted assignment would be in violation of the terms thereof or if such consent is not obtained prior to the Effective Time, and in lieu thereof Seller shall reasonably cooperate with Split-Off Subsidiary in any reasonable arrangement designed to provide Split-Off Subsidiary the benefits thereunder or any claim or right arising thereunder);
 
(f)           all intellectual property, including but not limited to issued patents, patent applications (whether or not patents are issued thereon and whether modified, withdrawn or resubmitted), unpatented inventions, product designs, copyrights (whether registered or unregistered), know-how, technology, trade secrets, technical information, notebooks, drawings, software, computer coding (both object and source) and all documentation, manuals and drawings related thereto, trademarks or service marks and applications therefor, unregistered trademarks or service marks, trade names, logos and icons and all rights to sue or recover for the infringement or misappropriation thereof;
 
(g)           all fixed assets, including but not limited to the machinery, equipment, furniture, vehicles, office equipment and other tangible personal property owned or leased by Seller;
 
2
 

 

 
(h)          all customer lists, business records, customer records and files, customer financial records, and all other files and information related to customers, all customer proposals, all open service agreements with customers and all uncompleted customer contracts and agreements; and
 
(i)           to the extent legally assignable, all licenses, permits, certificates, approvals and authorizations issued by Governmental Entities and necessary to own, lease or operate the assets and properties of Seller and to conduct Seller’s business as it is presently conducted;
 
all of the foregoing being referred to herein as the “ Assigned Assets .”
 
1.2            Assignment and Assumption of Liabilities . Seller hereby assigns to Split-Off Subsidiary, and Split-Off Subsidiary hereby assumes and agrees to pay, honor and discharge all debts, adverse claims, liabilities, judgments and obligations, including tax obligations, of Seller as of the Closing Date immediately prior to the Effective Time, whether accrued, contingent or otherwise and whether known or unknown, including those arising under any law (including the common law) or any rule or regulation of any Governmental Entity or imposed by any court or any arbitrator in a binding arbitration resulting from, arising out of or relating to the assets, activities, operations, actions or omissions of Seller, or products manufactured or sold thereby or services provided thereby, or under contracts, agreements (whether written or oral), leases, commitments or undertakings thereof, but excluding in all cases the obligations of Seller under the Transaction Documentation (all of the foregoing being referred to herein as the “ Assigned Liabilities ”).
 
The assignment and assumption of Seller’s assets and liabilities provided for in this Article I is referred to as the “ Assignment .”
 
II.             PURCHASE AND SALE OF STOCK.
 
2.1            Purchased Shares .  Subject to the terms and conditions provided below, Seller shall sell and transfer to Buyer and Buyer shall purchase from Seller, on the Closing Date (as defined in Section 3.1), all of the issued and outstanding shares of capital stock of Split-Off Subsidiary (the “Shares”), as set forth in Exhibit A attached hereto.
 
2.2            Purchase Price .  The purchase price for the Shares shall consist of the transfer and delivery by Buyer to Seller of the type and number of shares of common stock and other securities of Seller that Buyer owns (the “ Purchase Price Securities ”), as set forth in Exhibit A attached hereto, deliverable as provided in Section 3.3.
 
III.            CLOSING.
 
3.1            Closing .  The closing of the transactions contemplated in this Agreement (the “ Closing ”) shall take place prior to or contemporaneously with the closing of the Merger immediately prior to the Effective Time.  The date on which the Closing occurs shall be referred to herein as the “ Closing Date .”
 
3
 

 

 
3.2            Transfer of Shares .  At the Closing, Seller shall deliver to Buyer certificates representing the Shares purchased by Buyer, duly endorsed to Buyer or as directed by Buyer, which delivery shall vest Buyer with good and marketable title to such Shares, free and clear of all liens and encumbrances.
 
3.3            Payment of Purchase Price .  At the Closing, Buyer shall deliver to Seller a certificate or certificates representing Buyer’s Purchase Price Securities duly endorsed to Seller, which delivery shall vest Seller with good and marketable title to the Purchase Price Securities, free and clear of all liens and encumbrances.
 
3.4            Transfer of Records .  On or before the Closing, Seller shall transfer to Split-Off Subsidiary all existing corporate books and records in Seller’s possession relating to Split-Off Subsidiary and its business, including but not limited to all agreements, litigation files, real estate files, personnel files and filings with governmental agencies; provided, however , when any such documents relate to both Seller and Split-Off Subsidiary, only copies of such documents need be furnished. On or before the Closing, Buyer and Split-Off Subsidiary shall transfer to Seller all existing corporate books and records in the possession of Buyers or Split-Off Subsidiary relating to Seller, including but not limited to all corporate minute books, stock ledgers, certificates and corporate seals of Seller and all agreements, litigation files, real property files, personnel files and filings with governmental agencies; provided, however , when any such documents relate to both Seller and Split-Off Subsidiary or its business, only copies of such documents need be furnished.
 
3.5            Instruments of Assignment . At the Closing, Seller and Split-Off Subsidiary shall deliver to each other such instruments providing for the Assignment as the other may reasonably request (the “ Instruments of Assignment ”).
 
IV.            BUYER’S REPRESENTATIONS AND WARRANTIES .  Buyer represents and warrants to Seller and Split-Off Subsidiary that:
 
4.1            Capacity and Enforceability .  Buyer has the legal capacity to execute and deliver this Agreement and the documents to be executed and delivered by Buyer at the Closing pursuant to the transactions contemplated hereby. This Agreement and all such documents constitute valid and binding agreements of Buyer, enforceable in accordance with their terms.
 
4.2            Compliance .  Neither the execution and delivery of this Agreement nor the consummation of the transactions contemplated hereby by Buyer will result in the breach of any term or provision of, or constitute a default under, or violate any agreement, indenture, instrument, order, law or regulation to which Buyer is a party or by which Buyer is bound.
 
4.3            Purchase for Investment .  Buyer is financially able to bear the economic risks of acquiring the Shares and the other transactions contemplated hereby, and has no need for liquidity in his or her investment in the Shares. Buyer has such knowledge and experience in financial and business matters in general, and with respect to businesses of a nature similar to the business of Split-Off Subsidiary (after giving effect to the Assignment), so as to be capable of evaluating the merits and risks of, and making an informed business decision with regard to, the acquisition of the Shares and the other transactions contemplated hereby. Buyer is acquiring the
 
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Shares solely for his or her own account and not with a view to or for resale in connection with any distribution or public offering thereof, within the meaning of any applicable securities laws and regulations, unless such distribution or offering is registered under the Securities Act of 1933, as amended (the “Securities Act”), or an exemption from such registration is available. Buyer has (i) received all the information he or she has deemed necessary to make an informed decision with respect to the acquisition of the Shares and the other transactions contemplated hereby; (ii) had an opportunity to make such investigation as he or she has desired pertaining to Split-Off Subsidiary (after giving effect to the Assignment) and the acquisition of an interest therein and the other transactions contemplated hereby, and to verify the information which is, and has been, made available to him or her; and (iii) had the opportunity to ask questions of Seller concerning Split-Off Subsidiary (after giving effect to the Assignment). Buyer acknowledges that Buyer is a former director and officer of Seller, and a current director and officer of Split-Off Subsidiary and, as such, has actual knowledge of the business, operations and financial affairs of Split-Off Subsidiary (after giving effect to the Assignment). Buyer has received no public solicitation or advertisement with respect to the offer or sale of the Shares. Buyer realizes that the Shares are “restricted securities” as that term is defined in Rule 144 promulgated by the Securities and Exchange Commission under the Securities Act, the resale of the Shares is restricted by federal and state securities laws and, accordingly, the Shares must be held indefinitely unless their resale is subsequently registered under the Securities Act or an exemption from such registration is available for their resale. Buyer understands that any resale of the Shares by him or her must be registered under the Securities Act (and any applicable state securities law) or be effected in circumstances that, in the opinion of counsel for Split-Off Subsidiary at the time, create an exemption or otherwise do not require registration under the Securities Act (or applicable state securities laws). Buyer acknowledges and consents that certificates now or hereafter issued for the Shares will bear a legend substantially as follows:
 
THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR QUALIFIED UNDER ANY APPLICABLE STATE SECURITIES LAWS (THE “STATE ACTS”), HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO A REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND QUALIFICATION UNDER THE STATE ACTS OR PURSUANT TO EXEMPTIONS FROM SUCH REGISTRATION OR QUALIFICATION REQUIREMENTS (INCLUDING, IN THE CASE OF THE SECURITIES ACT, THE EXEMPTIONS AFFORDED BY SECTION 4(1) OF THE SECURITIES ACT AND RULE 144 THEREUNDER). AS A PRECONDITION TO ANY SUCH TRANSFER, THE ISSUER OF THESE SECURITIES SHALL BE FURNISHED WITH AN OPINION OF COUNSEL OPINING AS TO THE AVAILABILITY OF EXEMPTIONS FROM SUCH REGISTRATION AND QUALIFICATION AND/OR SUCH OTHER EVIDENCE AS MAY BE SATISFACTORY THERETO THAT ANY SUCH TRANSFER WILL NOT VIOLATE THE SECURITIES LAWS.
 
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Buyer understands that the Shares are being sold to him or her pursuant to the exemption from registration contained in Section 4(1) of the Securities Act and that Seller is relying upon the representations made herein as one of the bases for claiming the Section 4(1) exemption.
 
4.4            Liabilities .  Following the Closing, Seller will have no liability for any debts, liabilities or obligations of Split-Off Subsidiary or its business or activities, or the business or activities of Seller prior to the Closing that are unrelated to the business of PrivateCo, and there are no outstanding guaranties, performance or payment bonds, letters of credit or other contingent contractual obligations that have been undertaken by Seller directly or indirectly in relation to Split-Off Subsidiary or its business, or the business of Seller prior to the Closing that are unrelated to the business of PrivateCo, and that may survive the Closing.
 
4.5            Title to Purchase Price Securities .  Buyer is the sole record and beneficial owner of the Purchase Price Securities. At Closing, Buyer will have good and marketable title to the Purchase Price Securities, which Purchase Price Securities are, and at the Closing will be, free and clear of all options, warrants, pledges, claims, liens and encumbrances, and any restrictions or limitations prohibiting or restricting transfer to Seller, except for restrictions on transfer as contemplated by applicable securities laws.
 
V.            SELLER’S AND SPLIT-OFF SUBSIDIARY’S REPRESENTATIONS AND WARRANTIES .  Seller and Split-Off Subsidiary, as applicable, represent and warrant to Buyer that:
 
5.1            Organization and Good Standing .  Each of Seller and Split-Off Subsidiary is a corporation duly incorporated, validly existing, and in good standing under the laws of the State of Delaware and the State of Florida, respectively.
 
5.2            Authority and Enforceability .  The execution and delivery of this Agreement and the documents to be executed and delivered at the Closing pursuant to the transactions contemplated hereby, and performance in accordance with the terms hereof and thereof, have been duly authorized by Seller and Split-Off Subsidiary and all such documents constitute valid and binding agreements of Seller and Split-Off Subsidiary enforceable in accordance with their terms.
 
5.3            Title to Shares .  Seller is the sole record and beneficial owner of the Shares.  At Closing, Seller will have good and marketable title to the Shares, which Shares are, and at the Closing will be, free and clear of all options, warrants, pledges, claims, liens and encumbrances, and any restrictions or limitations prohibiting or restricting transfer to Buyer, except for restrictions on transfer as contemplated by Section 4.3 above.  The Shares constitute all of the issued and outstanding shares of capital stock of Split-Off Subsidiary.
 
5.4            WARN Act .  Split-Off Subsidiary does not have a sufficient number of employees to make it subject to the Worker Adjustment and Retraining Notification Act.
 
5.5            Representations in Merger Agreement .  Split-Off Subsidiary represents and warrants that all of the representations and warranties by Seller, insofar as they relate to Split-Off Subsidiary, contained in the Merger Agreement are true and correct.
 
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VI.            OBLIGATIONS OF BUYER PENDING CLOSING .  Buyer covenants and agrees that between the date hereof and the Closing:
 
6.1            Not Impair Performance .  Buyer shall not take any intentional action that would cause the conditions upon the obligations of the parties hereto to effect the transactions contemplated hereby not to be fulfilled, including, without limitation, taking or causing to be taken any action that would cause the representations and warranties made by any party herein not to be true, correct and accurate as of the Closing, or in any way impairing the ability of Seller to satisfy its obligations as provided in Article VII.
 
6.2            Assist Performance .  Buyer shall exercise its reasonable best efforts to cause to be fulfilled those conditions precedent to Seller’s obligations to consummate the transactions contemplated hereby which are dependent upon actions of Buyer and to make and/or obtain any necessary filings and consents in order to consummate the transactions contemplated by this Agreement.
 
VII.           OBLIGATIONS OF SELLER AND SPLIT-OFF SUBSIDIARY PENDING CLOSING .  Seller and Split-Off Subsidiary covenant and agree that between the date hereof and the Closing:
 
7.1            Business as Usual .  Split-Off Subsidiary shall operate and Seller shall cause Split-Off Subsidiary to operate in accordance with past practices and shall use best efforts to preserve its goodwill and the goodwill of its employees, customers and others having business dealings with Split-Off Subsidiary. Without limiting the generality of the foregoing, from the date of this Agreement until the Closing Date, Split-Off Subsidiary shall (a) make all normal and customary repairs to its equipment, assets and facilities, (b) keep in force all insurance, (c) preserve in full force and effect all material franchises, licenses, contracts and real property interests and comply in all material respects with all laws and regulations, (d) collect all accounts receivable and pay all trade creditors in the ordinary course of business at intervals historically experienced, and (e) preserve and maintain Split-Off Subsidiary’s assets in their current operating condition and repair, ordinary wear and tear excepted. From the date of this Agreement until the Closing Date, Split-Off Subsidiary shall not (i) amend, terminate or surrender any material franchise, license, contract or real property interest, or (ii) sell or dispose of any of its assets except in the ordinary course of business. Neither Split-Off Subsidiary nor Seller shall take or omit to take any action that results in Buyer incurring any liability or obligation prior to or in connection with the Closing.
 
7.2            Not Impair Performance .  Seller shall not take any intentional action that would cause the conditions upon the obligations of the parties hereto to effect the transactions contemplated hereby not to be fulfilled, including, without limitation, taking or causing to be taken any action which would cause the representations and warranties made by any party herein not to be materially true, correct and accurate as of the Closing, or in any way impairing the ability of Buyer to satisfy his obligations as provided in Article VI.
 
7.3            Assist Performance .  Seller shall exercise its reasonable best efforts to cause to be fulfilled those conditions precedent to Buyer’s obligations to consummate the transactions contemplated hereby which are dependent upon the actions of Seller and to work with Buyer to
 
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make and/or obtain any necessary filings and consents. Seller shall cause Split-Off Subsidiary to comply with its obligations under this Agreement.
 
VIII.         SELLER’S AND SPLIT-OFF SUBSIDIARY’S CONDITIONS PRECEDENT TO CLOSING .  The obligations of Seller and Split-Off Subsidiary to close the transactions contemplated by this Agreement are subject to the satisfaction at or prior to the Closing of each of the following conditions precedent (any or all of which may be waived by Seller and PrivateCo in writing):
 
8.1            Representations and Warranties; Performance .  All representations and warranties of Buyer contained in this Agreement shall have been true and correct, in all material respects, when made and shall be true and correct, in all material respects, at and as of the Closing, with the same effect as though such representations and warranties were made at and as of the Closing. Buyer shall have performed and complied with all covenants and agreements and satisfied all conditions, in all material respects, required by this Agreement to be performed or complied with or satisfied by Buyer at or prior to the Closing.
 
8.2            Additional Documents .  Buyer shall deliver or cause to be delivered such additional documents as may be necessary in connection with the consummation of the transactions contemplated by this Agreement and the performance of their obligations hereunder.
 
8.3            Release by Split-Off Subsidiary .  At the Closing, Split-Off Subsidiary shall execute and deliver to Seller a general release which in substance and effect releases Seller and PrivateCo from any and all liabilities and obligations that Seller and PrivateCo may owe to Split-Off Subsidiary in any capacity, and from any and all claims that Split-Off Subsidiary may have against Seller, PrivateCo or their respective managers, members, officers, directors, stockholders, employees and agents (other than those arising pursuant to this Agreement or any document delivered in connection with this Agreement).
 
8.4            Completion of Merger .  The closing of the Merger pursuant to the Merger Agreement, and all of the transactions contemplated thereby, shall occur simultaneously.
 
IX.            BUYERS’ CONDITIONS PRECEDENT TO CLOSING .  The obligation of Buyer to close the transactions contemplated by this Agreement is subject to the satisfaction at or prior to the Closing of each of the following conditions precedent (any and all of which may be waived by Buyer in writing):
 
9.1            Representations and Warranties; Performance .  All representations and warranties of Seller and Split-Off Subsidiary contained in this Agreement shall have been true and correct, in all material respects, when made and shall be true and correct, in all material respects, at and as of the Closing with the same effect as though such representations and warranties were made at and as of the Closing. Seller and Split-Off Subsidiary shall have performed and complied with all covenants and agreements and satisfied all conditions, in all material respects, required by this Agreement to be performed or complied with or satisfied by them at or prior to the Closing.
 
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X.             OTHER AGREEMENTS .
 
10.1          Expenses .  Each party hereto shall bear its expenses separately incurred in connection with this Agreement and with the performance of its obligations hereunder.
 
10.2          Confidentiality .  Buyer shall not make any public announcements concerning this transaction without the prior written agreement of PrivateCo, other than as may be required by applicable law or judicial process. If for any reason the transactions contemplated hereby are not consummated, then Buyer shall return any information received by Buyer from Seller or Split-Off Subsidiary, and Buyer shall cause all confidential information obtained by Buyer concerning Split-Off Subsidiary and its business to be treated as such.
 
10.3          Brokers’ Fees .  In connection with the transaction specifically contemplated by this Agreement, no party to this Agreement has employed the services of a broker and each agrees to indemnify the other against all claims of any third parties for fees and commissions of any brokers claiming a fee or commission related to the transactions contemplated hereby.
 
10.4          Access to Information Post-Closing; Cooperation .
 
(a)           Following the Closing, Buyer and Split-Off Subsidiary shall afford to Seller and its authorized accountants, counsel and other designated representatives, reasonable access (and including using reasonable efforts to give access to persons or firms possessing information) and duplicating rights during normal business hours to allow records, books, contracts, instruments, computer data and other data and information (collectively, “ Information ”) within the possession or control of Buyer or Split-Off Subsidiary insofar as such access is reasonably required by Seller. Information may be requested under this Section 10.4(a) for, without limitation, audit, accounting, claims, litigation and tax purposes, as well as for purposes of fulfilling disclosure and reporting obligations and performing this Agreement and the transactions contemplated hereby. No files, books or records of Split-Off Subsidiary existing at the Closing Date shall be destroyed by Buyer or Split-Off Subsidiary after Closing but prior to the expiration of any period during which such files, books or records are required to be maintained and preserved by applicable law without giving Seller at least 30 days’ prior written notice, during which time Seller shall have the right to examine and to remove any such files, books and records prior to their destruction.
 
(b)           Following the Closing, Seller shall afford to Split-Off Subsidiary and its authorized accountants, counsel and other designated representatives reasonable access (including using reasonable efforts to give access to persons or firms possessing information) and duplicating rights during normal business hours to Information within Seller’s possession or control relating to the business of Split-Off Subsidiary insofar as such access is reasonably required by Buyer. Information may be requested under this Section 10.4(b) for, without limitation, audit, accounting, claims, litigation and tax purposes as well as for purposes of fulfilling disclosure and reporting obligations and for performing this Agreement and the transactions contemplated hereby. No files, books or records of Split-Off Subsidiary existing at the Closing Date shall be destroyed by Seller after Closing but prior to the expiration of any period during which such files, books or records are required to be maintained and preserved by applicable law without giving Buyer at least 30 days’ prior written notice, during which time Buyer shall have the right to examine and to remove any such files, books and records prior to their destruction.
 
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(c)           At all times following the Closing, Seller, Buyer and Split-Off Subsidiary shall use their reasonable efforts to make available to the other on written request, the current and former officers, directors, employees and agents of Seller or Split-Off Subsidiary for any of the purposes set forth in Section 10.4(a) or (b) above or as witnesses to the extent that such persons may reasonably be required in connection with any legal, administrative or other proceedings in which Seller or Split-Off Subsidiary may from time to be involved.
 
(d)          The party to whom any Information or witnesses are provided under this Section 10.4 shall reimburse the provider thereof for all out-of-pocket expenses actually and reasonably incurred in providing such Information or witnesses.
 
(e)           Seller, Buyer, Split-Off Subsidiary and their respective employees and agents shall each hold in strict confidence all Information concerning the other party in their possession or furnished by the other or the other’s representative pursuant to this Agreement with the same degree of care as such party utilizes as to such party’s own confidential information (except to the extent that such Information is (i) in the public domain through no fault of such party or (ii) later lawfully acquired from any other source by such party), and each party shall not release or disclose such Information to any other person, except such party’s auditors, attorneys, financial advisors, bankers, other consultants and advisors or persons to whom such party has a valid obligation to disclose such Information, unless compelled to disclose such Information by judicial or administrative process or, as advised by its counsel, by other requirements of law.
 
(f)           Seller, Buyer and Split-Off Subsidiary shall each use their best efforts to forward promptly to the other party all notices, claims, correspondence and other materials which are received and determined to pertain to the other party.
 
10.5          Guarantees, Surety Bonds and Letter of Credit Obligations .  In the event that Seller is obligated for any debts, obligations or liabilities of Split-Off Subsidiary by virtue of any outstanding guarantee, performance or surety bond or letter of credit provided or arranged by Seller on or prior to the Closing Date, Buyer and Split-Off Subsidiary shall use their best efforts to cause to be issued replacements of such bonds, letters of credit and guarantees and to obtain any amendments, novations, releases and approvals necessary to release and discharge fully Seller from any liability thereunder following the Closing. Buyer and Split-Off Subsidiary, jointly and severally, shall be responsible for, and shall indemnify, hold harmless and defend Seller from and against, any costs or losses incurred by Seller arising from such bonds, letters of credit and guarantees and any liabilities arising therefrom and shall reimburse Seller for any payments that Seller may be required to pay pursuant to enforcement of its obligations relating to such bonds, letters of credit and guarantees.
 
10.6          Filings and Consents .  Buyer, at its risk, shall determine what, if any, filings and consents must be made and/or obtained prior to Closing to consummate the purchase and sale of the Shares. Buyer shall indemnify the Seller Indemnified Parties (as defined in Section 12.1 below) against any Losses (as defined in Section 12.1 below) incurred by such Seller Indemnified Parties by virtue of the failure to make and/or obtain any such filings or consents. Recognizing that the failure to make and/or obtain any filings or consents may cause Seller to incur Losses or otherwise adversely affect Seller, Buyer and Split-Off Subsidiary confirm that
 
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the provisions of this Section 10.6 will not limit Seller’s right to treat such failure as the failure of a condition precedent to Seller’s obligation to close pursuant to Article VIII above.
 
10.7          Insurance .  Buyer acknowledges that on the Closing Date, effective as of the Closing, any insurance coverage and bonds provided by Seller for Buyer or for Split-Off Subsidiary, and all certificates of insurance evidencing that Buyers or Split-Off Subsidiary maintain any required insurance by virtue of insurance provided by Seller, will terminate with respect to any insured damages resulting from matters occurring subsequent to Closing.
 
10.8          Agreements Regarding Taxes .
 
(a)            Tax Sharing Agreements .  Any tax sharing agreement between Seller and Split-Off Subsidiary is terminated as of the Closing Date and will have no further effect for any taxable year (whether the current year, a future year or a past year).
 
(b)            Returns for Periods Through the Closing Date .  Seller will include the income and loss of Split-Off Subsidiary (including any deferred income triggered into income by Reg. §1.1502-13 and any excess loss accounts taken into income under Reg. §1.1502-19) on Seller’s consolidated federal income tax returns for all periods through the Closing Date and pay any federal income taxes attributable to such income. Seller and Split-Off Subsidiary agree to allocate income, gain, loss, deductions and credits between the period up to Closing (the “ Pre-Closing Period ”) and the period after Closing (the “ Post-Closing Period ”) based on a closing of the books of Split-Off Subsidiary, and both Seller and Split-Off Subsidiary agree not to make an election under Reg. §1.1502-76(b)(2)(ii) to ratably allocate the year’s items of income, gain, loss, deduction and credit. Seller, Split-Off Subsidiary and Buyer agree to report all transactions not in the ordinary course of business occurring on the Closing Date after Buyers’ purchase of the Shares on Split-Off Subsidiary’s tax returns to the extent permitted by Reg. §1.1502-76(b)(1)(ii)(B). Buyer agrees to indemnify Seller for any additional tax owed by Seller (including tax owed by Seller due to this indemnification payment) resulting from any transaction engaged in by Split-Off Subsidiary or Seller (not related to the Merger) during the Pre-Closing Period or on the Closing Date before Buyer’s purchase of the Shares. Split-Off Subsidiary will furnish tax information to Seller for inclusion in Seller’s consolidated federal income tax return for the period which includes the Closing Date in accordance with Split-Off Subsidiary’s past custom and practice.
 
(c)            Audits .  Seller will allow Split-Off Subsidiary and its counsel to participate at Split-Off Subsidiary’s expense in any audit of Seller’s consolidated federal income tax returns to the extent that such audit raises issues that relate to and increase the tax liability of Split-Off Subsidiary. Seller shall have the absolute right, in its sole discretion, to engage professionals and direct the representation of Seller in connection with any such audit and the resolution thereof, without receiving the consent of Buyer or Split-Off Subsidiary or any other party acting on behalf of Buyer or Split-Off Subsidiary, provided that Seller will not settle any such audit in a manner which would materially adversely affect Split-Off Subsidiary after the Closing Date unless such settlement would be reasonable in the case of a person that owned Split-Off Subsidiary both before and after the Closing Date. In the event that after Closing any tax authority informs Buyer or Split-Off Subsidiary of any notice of proposed audit, claim, assessment or other dispute concerning an amount of taxes which pertain to Seller, or to Split-
 
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Off Subsidiary during the period prior to Closing, Buyer or Split-Off Subsidiary must promptly notify Seller of the same within 15 calendar days of the date of the notice from the tax authority. In the event Buyers or Split-Off Subsidiary do not notify Seller within such 15 day period, Buyer and Split-Off Subsidiary, jointly and severally, will indemnify Seller for any incremental interest, penalty or other assessments resulting from the delay in giving notice. To the extent of any conflict or inconsistency, the provisions of this Section 10.8 shall control over the provisions of Section 12.2 below.
 
(d)            Cooperation on Tax Matters .  Buyer, Seller and Split-Off Subsidiary shall cooperate fully, as and to the extent reasonably requested by any party, in connection with the filing of tax returns pursuant to this Section and any audit, litigation or other proceeding with respect to taxes. Such cooperation shall include the retention and (upon the other party’s request) the provision of records and information which are reasonably relevant to any such audit, litigation or other proceeding and making employees available on a mutually convenient basis to provide additional information and explanation of any material provided hereunder. Split-Off Subsidiary shall (i) retain all books and records with respect to tax matters pertinent to Split-Off Subsidiary and Seller relating to any taxable period beginning before the Closing Date until the expiration of the statute of limitations (and, to the extent notified by Seller, any extensions thereof) of the respective taxable periods, and abide by all record retention agreements entered into with any taxing authority, and (ii) give Seller reasonable written notice prior to transferring, destroying or discarding any such books and records and, if Seller so requests, Buyer agrees to cause Split-Off Subsidiary to allow Seller to take possession of such books and records.
 
10.9          ERISA .  Effective as of the Closing Date, Split-Off Subsidiary shall terminate its participation in, and withdraw from, any employee benefit plans sponsored by Seller, and Seller and Buyer shall cooperate fully in such termination and withdrawal. Without limitation, Split-Off Subsidiary shall be solely responsible for (i) all liabilities under those employee benefit plans notwithstanding any status as an employee benefit plan sponsored by Seller, and (ii) all liabilities for the payment of vacation pay, severance benefits, and similar obligations, including, without limitation, amounts which are accrued but unpaid as of the Closing Date with respect thereto. Buyer and Split-Off Subsidiary acknowledge and agree that Split-Off Subsidiary is solely responsible for providing continuation health coverage, as required under the Consolidated Omnibus Reconciliation Act of 1985, as amended (“ COBRA ”), to each person, if any, participating in an employee benefit plan subject to COBRA with respect to such employee benefit plan as of the Closing Date, including, without limitation, any person whose employment with Split-Off Subsidiary is terminated after the Closing Date.
 
XI.            TERMINATION .  This Agreement may be terminated at, or at any time prior to, the Closing by mutual written consent of Seller, Buyers and PrivateCo.
 
If this Agreement is terminated as provided herein, it shall become wholly void and of no further force and effect and there shall be no further liability or obligation on the part of any party except to pay such expenses as are required of such party.
 
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XII.          INDEMNIFICATION .
 
12.1           Indemnification by Buyer and Split-Off Subsidiary .  Buyer and Split-Off Subsidiary, jointly and severally, covenant and agree to indemnify, defend, protect and hold harmless Seller and PrivateCo, and their respective officers, directors, employees, stockholders, agents, representatives and Affiliates (collectively, the “ Seller Indemnified Parties ”) at all times from and after the date of this Agreement from and against all losses, liabilities, damages, claims, actions, suits, proceedings, demands, assessments, adjustments, costs and expenses (including specifically, but without limitation, reasonable attorneys’ fees and expenses of investigation), whether or not involving a third party claim and regardless of any negligence of any Seller Indemnified Party (collectively, “ Losses ”), incurred by any Seller Indemnified Party as a result of or arising from (i) any breach of the representations and warranties of such Buyer set forth herein or in certificates delivered in connection herewith, (ii) any breach or nonfulfillment of any covenant or agreement (including any other agreement of Buyers to indemnify set forth in this Agreement) on the part of Buyer under this Agreement, (iii) any Assigned Asset or Assigned Liability or any other debt, liability or obligation of Split-Off Subsidiary, (iv) the conduct and operations, (A) prior to Closing, of the business of Seller unrelated to the assets that are the subject of the Merger, (B) whether before or after Closing, of (X) the business of Seller pertaining to the Assigned Assets and Assigned Liabilities or (Y) the business of Split-Off Subsidiary, (v) claims asserted (including claims for payment of taxes), whether before or after Closing, (A) against Split-Off Subsidiary or (B) pertaining to the Assigned Assets and Assigned Liabilities or to the business of Seller prior to the Closing, or (vi) any federal or state income tax payable by Seller or PrivateCo and attributable to the transactions contemplated by this Agreement or to the business of Seller prior to the Closing.  For the purposes of this Agreement, an “Affiliate” is a person or entity that directly, or indirectly through one or more intermediaries, controls or is controlled by, or is under common control with, another specified person or entity.
 
12.2          Third Party Claims .
 
(a)            Defense .  If any claim or liability (a “ Third-Party Claim ”) should be asserted against any of the Seller Indemnified Parties (the “ Indemnitees ”) by a third party after the Closing for which Buyer has an indemnification obligation under the terms of Section 12.1, then the Indemnitee shall notify Buyer (collectively, the “ Indemnitor ”) within 20 days after the Third-Party Claim is asserted by a third party (said notification being referred to as a “ Claim Notice ”) and give the Indemnitor a reasonable opportunity to take part in any examination of the books and records of the Indemnitee relating to such Third-Party Claim and to assume the defense of such Third-Party Claim and, in connection therewith, to conduct any proceedings or negotiations relating thereto and necessary or appropriate to defend the Indemnitee and/or settle the Third-Party Claim. The expenses (including reasonable attorneys’ fees) of all negotiations, proceedings, contests, lawsuits or settlements with respect to any Third-Party Claim shall be borne by the Indemnitor. If the Indemnitor agrees to assume the defense of any Third-Party Claim in writing within 20 days after the Claim Notice of such Third-Party Claim has been delivered, through counsel reasonably satisfactory to Indemnitee, then the Indemnitor shall be entitled to control the conduct of such defense, and any decision to settle such Third-Party Claim, and shall be responsible for any expenses of the Indemnitee in connection with the defense of such Third-Party Claim so long as the Indemnitor continues such defense until the final resolution of such Third-Party Claim. The Indemnitor shall be responsible for paying all settlements made or judgments entered with respect to any Third-Party Claim the defense of
 
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which has been assumed by the Indemnitor.  Except as provided in subsection (b) below, both the Indemnitor and the Indemnitee must approve any settlement of a Third-Party Claim. A failure by the Indemnitee to timely give the Claim Notice shall not excuse Indemnitor from any indemnification liability except only to the extent that the Indemnitor is materially and adversely prejudiced by such failure.
 
(b)            Failure to Defend .  If the Indemnitor shall not agree to assume the defense of any Third-Party Claim in writing within 20 days after the Claim Notice of such Third-Party Claim has been delivered, or shall fail to continue such defense until the final resolution of such Third-Party Claim, then the Indemnitee may defend against such Third-Party Claim in such manner as it may deem appropriate and the Indemnitee may settle such Third-Party Claim, in its sole discretion, on such terms as it may deem appropriate; provided however, that the Indemnitor shall (i) promptly reimburse the Indemnitee for the amount of all settlement payments and expenses, legal and otherwise, incurred by the Indemnitee in connection with the defense or settlement of such Third-Party Claim, or (ii) shall pay, in advance of any settlement or proceedings and in installments as reasonably agreed to by the parties, such sums and expenses reasonably expected to be incurred in connection with the defense of the Third-Party Claim and any settlement thereof. If no settlement of such Third-Party Claim is made, then the Indemnitor shall satisfy any judgment rendered with respect to such Third-Party Claim before the Indemnitee is required to do so, and pay all expenses, legal or otherwise, incurred by the Indemnitee in the defense against such Third-Party Claim.
 
12.3           Non-Third-Party Claims .  Upon discovery of any claim for which Buyer has an indemnification obligation under the terms of Section 12.1 which does not involve a claim by a third party against the Indemnitee, the Indemnitee shall give prompt notice to Buyer of such claim and, in any case, shall give Buyer such notice within 30 days of such discovery. A failure by Indemnitee to timely give the foregoing notice to Buyer shall not excuse Buyer from any indemnification liability except to the extent that Buyer is materially and adversely prejudiced by such failure.
 
12.4           Survival .  Except as otherwise provided in this Section 12.4, all representations and warranties made by Buyer, Split-Off Subsidiary and Seller in connection with this Agreement shall survive the Closing. Anything in this Agreement to the contrary notwithstanding, the liability of all Indemnitors under this Article XII shall terminate on the third (3rd) anniversary of the Closing Date, except with respect to (a) liability for any item as to which, prior to the third (3rd) anniversary of the Closing Date, any Indemnitee shall have asserted a Claim in writing, which Claim shall identify its basis with reasonable specificity, in which case the liability for such Claim shall continue until it shall have been finally settled, decided or adjudicated, (b) liability of any party for Losses for which such party has an indemnification obligation, incurred as a result of such party’s breach of any covenant or agreement to be performed by such party after the Closing, (c) liability of Buyer for Losses incurred by a Seller Indemnified Party due to breaches of its representations and warranties in Article IV of this Agreement, and (d) liability of Buyer for Losses arising out of Third-Party Claims for which Buyer has an indemnification obligation, which liability shall survive until the statute of limitation applicable to any third party’s right to assert a Third-Party Claim bars assertion of such claim.
 
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XIII.         MISCELLANEOUS .
 
13.1           Definitions .  Capitalized terms used herein without definition have the meanings ascribed to them in the Merger Agreement.
 
13.2           Notices .  All notices and communications required or permitted hereunder shall be in writing and deemed given when received by means of the United States mail, addressed to the party to be notified, postage prepaid and registered or certified with return receipt requested, or personal delivery, or overnight courier, as follows:
 
 (a)         If to Seller, addressed to:
 
Tyme Technologies, Inc.
590 Madison Avenue, 36th Floor
New York, NY 10022
Attn: Peter de Svastich
Telephone:
Facsimile:

 With a copy to (which shall not constitute notice hereunder):
 
CKR Law LLP
1330 Avenue of the Americas, 35th Floor
New York, NY  10022
Attention: Barrett S. DiPaolo, Esq.
Telephone:  212-400-6900
Facsimile:  212-400-6901
 
 (b)         If to Buyer or Split-Off Subsidiary, addressed to:
 
Andrew Keck
3572 Shady Brook Lane
Sarasota, Florida 34242
Telephone: 941 284 5053
Facsimile:

or to such other address as any party hereto shall specify pursuant to this Section 13.2 from time to time.
 
13.3           Exercise of Rights and Remedies .  Except as otherwise provided herein, no delay of or omission in the exercise of any right, power or remedy accruing to any party as a result of any breach or default by any other party under this Agreement shall impair any such right, power or remedy, nor shall it be construed as a waiver of or acquiescence in any such breach or default, or of any similar breach or default occurring later; nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default occurring before or after that waiver.
 
13.4           Time .  Time is of the essence with respect to this Agreement.
 
15
 

 

 
13.5          Reformation and Severability .  In case any provision of this Agreement shall be invalid, illegal or unenforceable, it shall, to the extent possible, be modified in such manner as to be valid, legal and enforceable but so as to most nearly retain the intent of the parties, and if such modification is not possible, such provision shall be severed from this Agreement, and in either case the validity, legality and enforceability of the remaining provisions of this Agreement shall not in any way be affected or impaired thereby.
 
13.6           Further Acts and Assurances .  From and after the Closing, Seller, Buyer and Split-Off Subsidiary agree that each will act in a manner supporting compliance, including compliance by its Affiliates, with all of its obligations under this Agreement and, from time to time, shall, at the request of another party hereto, and without further consideration, cause the execution and delivery of such other instruments of conveyance, transfer, assignment or assumption and take such other action or execute such other documents as such party may reasonably request in order more effectively to convey, transfer to and vest in Buyer, and to put Split-Off Subsidiary in possession of, all Assigned Assets and Assigned Liabilities, and to convey, transfer to and vest in Seller and Buyer, and to them in possession of, the Purchase Price Securities and the Shares (respectively), and, in the case of any contracts and rights that cannot be effectively transferred without the consent or approval of another person that is unobtainable, to use its best reasonable efforts to ensure that Split-Off Subsidiary receives the benefits thereof to the maximum extent permissible in accordance with applicable law or other applicable restrictions, and shall perform such other acts which may be reasonably necessary to effectuate the purposes of this Agreement.
 
13.7          Entire Agreement; Amendments .  This Agreement contains the entire understanding of the parties relating to the subject matter contained herein. This Agreement cannot be amended or changed except through a written instrument signed by all of the parties hereto and by PrivateCo. No provisions of this Agreement or any rights hereunder may be waived by any party without the prior written consent of PrivateCo.
 
13.8           Assignment .  No party may assign his, her or its rights or obligations hereunder, in whole or in part, without the prior written consent of the other parties.
 
13.9          Governing Law .  This Agreement shall be governed by and construed in accordance with the laws of the State of Florida, without giving effect to principles of conflicts or choice of laws thereof.
 
13.10        Counterparts .  This Agreement may be executed in one or more counterparts, with the same effect as if all parties had signed the same document. Each such counterpart shall be an original, but all such counterparts taken together shall constitute a single agreement. In the event that any signature is delivered by facsimile transmission, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) the same with the same force and effect as if such facsimile signature page was an original thereof.
 
13.11        Section Headings and Gender .  The section headings used herein are inserted for reference purposes only and shall not in any way affect the meaning or interpretation of this Agreement. All personal pronouns used in this Agreement shall include the other genders,
 
16
 

 

 
whether used in the masculine, feminine or neuter and the singular shall include the plural, and vice versa, whenever and as often as may be appropriate.
 
13.12        Third-Party Beneficiary .  Each of Seller, Buyer and Split-Off Subsidiary acknowledges and agrees that this Agreement is entered into for the express benefit of PrivateCo, and that PrivateCo is relying hereon and on the consummation of the transactions contemplated by this Agreement in entering into and performing its obligations under the Merger Agreement, and that PrivateCo shall be in all respects entitled to the benefit hereof and to enforce this Agreement as a result of any breach hereof.
 
13.13        Specific Performance; Remedies .  Each of the parties to this Agreement acknowledges and agrees that, if any provision of this Agreement is not performed in accordance with its specific terms or is otherwise breached, irreparable damages would be incurred by the other parties to this Agreement and by PrivateCo.  Accordingly, the parties to this Agreement agree that any party or PrivateCo will be entitled to seek an injunction or injunctions to prevent breaches of the provisions of this Agreement and to enforce specifically this Agreement and its terms and provisions in any action instituted in any court of the United States or any state thereof having jurisdiction over the parties and the matter, subject to Section 13.9, in addition to any other remedy to which they may be entitled, at law or in equity. Except as expressly provided herein, the rights, obligations and remedies created by this Agreement are cumulative and are in addition to any other rights, obligations or remedies otherwise available at law or in equity, and nothing herein will be considered an election of remedies.
 
13.14        Submission to Jurisdiction; Process Agent; No Jury Trial .
 
(a)           Each party to the Agreement hereby submits to the jurisdiction of any state or federal court sitting in the Borough of Manhattan, City and State of New York, in any action arising out of or relating to this Agreement, and agrees that all claims in respect of the action may be heard and determined in any such court. Each party to the Agreement also agrees not to bring any action arising out of or relating to this Agreement in any other court. Each party to the Agreement agrees that a final judgment in any action so brought will be conclusive and may be enforced by action on the judgment or in any other manner provided at law or in equity. Each party to the Agreement waives any defense of inconvenient forum to the maintenance of any action so brought and waives any bond, surety or other security that might be required of any other party with respect thereto.
 
(b)            EACH PARTY TO THIS AGREEMENT HEREBY AGREES TO WAIVE ITS RIGHTS TO JURY TRIAL OF ANY DISPUTE BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY OTHER AGREEMENTS RELATING TO THE SUBJECT MATTER OF THIS AGREEMENT OR ANY DEALINGS AMONG THEM RELATING TO THE TRANSACTIONS CONTEMPLATED HEREBY. The scope of this waiver is intended to be all encompassing of any and all actions that may be filed in any court and that relate to the subject matter of the transactions, including contract claims, tort claims, breach of duty claims and all other common law and statutory claims. Each party to the Agreement hereby acknowledges that this waiver is a material inducement to enter into a business relationship and that they will continue to rely on the waiver in their related future dealings. Each party to the Agreement further represents and warrants that it has reviewed this
 
17
 

 

 
waiver with its legal counsel, and that each knowingly and voluntarily waives its jury trial rights following consultation with legal counsel. NOTWITHSTANDING ANYTHING TO THE CONTRARY HEREIN, THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED ORALLY OR IN WRITING, AND THE WAIVER WILL APPLY TO ANY AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING HERETO. In the event of commencement of any action, this Agreement may be filed as a written consent to trial by a court.
 
13.15            Construction .  The parties hereto have participated jointly in the negotiation and drafting of this Agreement. If an ambiguity or question of intent or interpretation arises, this Agreement will be construed as if drafted jointly by the parties hereto and no presumption or burden of proof will arise favoring or disfavoring any party because of the authorship of any provision of this Agreement. Any reference to any federal, state, local or foreign law will be deemed also to refer to law as amended and all rules and regulations promulgated thereunder, unless the context requires otherwise. The words “ include ,” “ includes ,” and “ including ” will be deemed to be followed by “ without limitation .”  The words “ this Agreement ,” “ herein ,” “ hereof ,” “ hereby ,” “ hereunder ,” and words of similar import refer to this Agreement as a whole and not to any particular subdivision unless expressly so limited. The parties hereto intend that each representation, warranty and covenant contained herein will have independent significance. If any party hereto has breached any representation, warranty or covenant contained herein in any respect, the fact that there exists another representation, warranty or covenant relating to the same subject matter (regardless of the relative levels of specificity) which that party has not breached will not detract from or mitigate the fact that such party is in breach of the first representation, warranty or covenant.
 
[Signature page follows this page.]
 
18
 

 

 
IN WITNESS WHEREOF, the parties hereto have duly executed this Split-Off Agreement as of the day and year first above written.
           
  Company:  
       
  TYME TECHNOLOGIES, INC.
     
 
By: 
/s/ Peter de Svastich  
   
Name: Peter de Svastich
   
Title: President
 
       
  GLOBAL GROUP ENTERPRISES CORP.
       
  By: /s/ Andrew Keck    
   
Name: Andrew Keck
   
Title: President
 
       
 
BUYER:
 
       
  /s/ Andrew Keck      
  Andrew Keck  
 
19
 

 

 
EXHIBIT A
 
Buyer
Purchase Price
Security
Number of Shares
Certificate No(s).
Andrew Keck
 
Common Stock
13,200,000
book entry
 
 
Split-Off Subsidiary
Shares
Number of Shares
Certificate No(s).
Global Group Enterprises, Inc.
Common Stock
100
1
 
 
20

 


 

Exhibit 10.2


GENERAL RELEASE AGREEMENT


This GENERAL RELEASE AGREEMENT (this “ Agreement ”), dated as of March 5, 2015, is entered into by and among Tyme Technologies, Inc. (f/k/a Global Group Enterprises Corp.), a Delaware corporation (“Seller”), Global Group Enterprises Corp ., a Florida corporation (“Split-Off Subsidiary”), and Andrew Keck (the “ Buyer ”).  In consideration of the mutual benefits to be derived from this Agreement, the covenants and agreements set forth herein, and other valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the execution and delivery hereof, the parties hereto hereby agree as follows:


1.            Split-Off Agreement .  This Agreement is executed and delivered by Split-Off Subsidiary pursuant to the requirements of Section 8.3 of that certain Split-Off Agreement (the “ Split-Off Agreement ”) by and among Seller, Split-Off Subsidiary and Buyer, as a condition to the closing of the purchase and sale transaction contemplated thereby (the “ Transaction ”).


2.            Release and Waiver by Split-Off Subsidiary .   For and in consideration of the covenants and promises contained herein, in the Split-Off Agreement and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Split-Off Subsidiary, on behalf of itself and its assigns, representatives and agents, if any, hereby covenants not to sue and fully, finally and forever completely releases Seller and Tyme Inc., a Delaware corporation (“ PrivateCo ”), along with their respective present, future and former officers, directors, stockholders, members, employees, agents, attorneys and representatives (collectively, the “ Seller Released Parties ”), of and from any and all claims, actions, obligations, liabilities, demands and/or causes of action, of whatever kind or character, whether now known or unknown, which Split-Off Subsidiary has or might claim to have against the Seller Released Parties for any and all injuries, harm, damages (actual and punitive), costs, losses, expenses, attorneys’ fees and/or liability or other detriment, if any, whenever incurred or suffered by Split-Off Subsidiary arising from, relating to, or in any way connected with, any fact, event, transaction, action or omission that occurred or failed to occur at or prior to the closing of the Transaction.


3.            Release and Waiver by Buyer .   For and in consideration of the covenants and promises contained herein, in the Split-Off Agreement and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Buyer on behalf of itself and its assigns, representatives and agents, if any, hereby covenants not to sue and fully, finally and forever completely releases the Seller Released Parties of and from any and all claims, actions, obligations, liabilities, demands and/or causes of action, of whatever kind or character, whether now known or unknown, which such Buyer has or might claim to have against the Seller Released Parties for any and all injuries, harm, damages (actual and punitive), costs, losses, expenses, attorneys’ fees and/or liability or other detriment, if any, whenever incurred or suffered by such Buyer arising from, relating to, or in any way connected with, any fact, event, transaction, action or omission that occurred or failed to occur on or prior to the date of the Closing.


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4.            Additional Covenants and Agreements .


(a)          Each of Split-Off Subsidiary and Buyer, on the one hand, and Seller, on the other hand, waives and releases the other from any claims that this Agreement was procured by fraud or signed under duress or coercion so as to make this Agreement not binding.


(b)          Each of the parties hereto acknowledges and agrees that the releases set forth herein do not include any claims the other party hereto may have against such party for such party’s failure to comply with or breach of any provision in this Agreement or the Split-Off Agreement.


(c)          Notwithstanding anything contained herein to the contrary, this Agreement shall not release or waive, or in any manner affect or void, any party’s rights and obligations under the following:


(i)          the Split-Off Agreement; and


(ii)         the Agreement and Plan of Merger and Reorganization among Seller, PrivateCo and Tyme Acquisition Corp., a Delaware corporation, and with Respect to Section 6.3(f) thereof only, Steven Hoffman, as Indemnification Representative, and with respect to Sections 1.14, 4.8(b) and 5.1(k) thereof only, GEM Global Yield Fund LLC SCS, and the other parties thereto (the “ Merger Agreement ”), and the other Transaction Documentation.


5.            Modification .  This Agreement cannot be modified orally and can only be modified through a written document signed by all parties and PrivateCo.


6.            Severability .   If any provision contained in this Agreement is determined to be void, illegal or unenforceable, in whole or in part, then the other provisions contained herein shall remain in full force and effect as if the provision that was determined to be void, illegal or unenforceable had not been contained herein.


7.            Expenses .  The parties hereto agree that each party shall pay its respective costs, including attorneys’ fees, if any, associated with this Agreement.


8.            Further Acts and Assurances .  Split-Off Subsidiary and Buyer each agrees that it will act in a manner supporting compliance, including compliance by its Affiliates, with all of its obligations under this Agreement and, from time to time, shall, at the request of Seller or PrivateCo, and without further consideration, cause the execution and delivery of such other instruments of release or waiver and take such other action or execute such other documents as such party may reasonably request in order to confirm or effect the releases, waivers and covenants contained herein, and, in the case of any claims, actions, obligations, liabilities, demands and/or causes of action that cannot be effectively released or waived without the consent or approval of other Persons that is unobtainable, to use its best reasonable efforts to ensure that the Seller Released Parties receive the benefits thereof to the maximum extent permissible in accordance with applicable law or other applicable restrictions, and shall perform such other acts which may be reasonably necessary to effectuate the purposes of this Agreement.


- 2 -


9.            Governing Law .  This Agreement shall be governed by and construed in accordance with the laws of the State of New York, without giving effect to principles of conflicts or choice of laws thereof.


10.          Third-Party Beneficiary .  Each of Seller, Buyer and Split-Off Subsidiary acknowledges and agrees that this Agreement is entered into for the express benefit of PrivateCo, and that PrivateCo is relying hereon and on the consummation of the transactions contemplated by this Agreement in entering into and performing its obligations under the Merger Agreement, and that PrivateCo shall be in all respects entitled to the benefit hereof and to enforce this Agreement as a result of any breach hereof.


11.          Specific Performance; Remedies .  Each of Seller, Buyer and Split-Off Subsidiary acknowledges and agrees that PrivateCo would be damaged irreparably if any provision of this Agreement is not performed in accordance with its specific terms or is otherwise breached. Accordingly, each of Seller, Buyer and Split-Off Subsidiary agrees that PrivateCo will be entitled to seek an injunction or injunctions to prevent breaches of the provisions of this Agreement and to enforce specifically this Agreement and its terms and provisions in any action instituted in any court of the United States or any state thereof having jurisdiction over the parties and the matter, subject to Section 9 , in addition to any other remedy to which they may be entitled, at law or in equity. Except as expressly provided herein, the rights, obligations and remedies created by this Agreement are cumulative and are in addition to any other rights, obligations or remedies otherwise available at law or in equity, and nothing herein will be considered an election of remedies.


12.          Entire Agreement . This Agreement constitutes the entire understanding and agreement of Seller, Split-Off Subsidiary and Buyer and supersedes prior understandings and agreements, if any, among or between Seller, Split-Off Subsidiary and Buyer with respect to the subject matter of this Agreement, other than as specifically referenced herein. This Agreement does not, however, operate to supersede or extinguish any confidentiality, non-solicitation, non-disclosure or non-competition obligations owed by Split-Off Subsidiary to Seller under any prior agreement.


13.          Definitions .  Capitalized terms used herein without definition have the meanings ascribed to them in the Merger Agreement.


[Signature page follows this page.]


- 3 -


IN WITNESS WHEREOF , the undersigned have executed this General Release Agreement as of the day and year first above written.



TYME TECHNOLOGIES, INC.



By:   /s/ Peter de Svastich

Name:       Peter de Svastich

Title:         President



GLOBAL GROUP ENTERPRISES CORP.



By:   /s/ Andrew Keck

Name:       Andrew Keck

Title:         President



BUYER



/s/Andrew Keck

Andrew Keck


- 4 -


Exhibit 10.3


LOCK-UP AGREEMENT


This LOCK-UP AGREEMENT (this “Agreement”) is made as of March 5, 2015 (the “Effective Date”), by and between the undersigned person or entity (the “Restricted Holder”) and Tyme Technologies, Inc., a Delaware corporation formerly known as Global Group Enterprises Corp. (the “Company”).  Capitalized terms used and not otherwise defined herein shall have the meanings given to such terms in the Merger Agreement (as defined herein).


WHEREAS, pursuant to the transactions contemplated under that certain Agreement and Plan of Merger and Reorganization, dated as of March 5, 2015 (the “Merger Agreement”), by and between the Company, Tyme Acquisition Corp., a Delaware corporation (“Merger Sub”), Tyme, Inc., a Delaware corporation (“Tyme”), and, solely with respect to Section 6.3(f), Steven Hoffman, as Indemnification Representative, and, solely with respect to Sections 1.14, 4.8(b) and 5.1(k), GEM Global Yield Fund LLC SCS (“GEM”), and the other parties thereto, Merger Sub will merge with and into Tyme, with the result of such merger being that Tyme will be the surviving entity and become a wholly-owned subsidiary of the Company, with all the shareholders of Tyme exchanging their shares in Tyme for shares of common stock of the Company (the “Common Stock”), all pursuant to the terms of the Merger Agreement (the “Merger”); and


WHEREAS, simultaneously with the closing of the Merger, the Company will complete a private placement offering (the “First PPO”) of shares of its Common Stock for gross proceeds of $6,790,000; and


WHEREAS, it is anticipated that within five (5) months after the earlier of (x) the date on which the Subscription Note (as defined in the Merger Agreement) is fully satisfied or (y) the maturity date of the Subscription Note, GEM will assist the Company in raising additional capital totaling $20,000,000 in an equity financing at a valuation of at least $200,000,000 but not greater than $400,000,000, based upon best efforts (the “Second PPO”); and


WHEREAS, the Restricted Holder will be (a) an officer and/or director of the Company immediately after the closing of the Merger, and/or (b) a beneficial owner of ten percent (10%) or more of the outstanding shares of Common Stock of the Company immediately after the closing of the Merger, and/or (c) a key employee of the Company, as agreed to by the Company and Tyme, immediately after the closing of the Merger; and


WHEREAS, the Merger Agreement provides that, among other things, as a condition to the consummation of the Merger, that Restricted Holder execute this Lock-Up Agreement with respect to all the shares of Common Stock owned by the Restricted Holder, other than (x) shares of Common Stock acquired by Restricted Holder in the First PPO or Second PPO, (y) shares subject to the Registration Rights Agreement, dated as of the Effective Date, among the Company, Restricted Holder and the other parties thereto (the “Registration Rights Agreement”) when such shares are included in the effective registration statement under the Securities Act of 1933, as amended, and (z) 1,000,000 shares of Common Stock which may be sold in a private transaction, provided such private sale is at or above the sale price of $2.00 per share (the shares referred to in clauses (x), (y) and (z) being the “Exempt Shares”), such shares, exclusive of the Exempt Shares, constituting a total of 24,732,798 shares of Common Stock as of the Effective Date (the “Restricted Securities”).


- 1 -


NOW, THEREFORE, as an inducement to and in consideration of the Company’s agreement to enter into the Merger Agreement and proceed with the Merger, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereby agree as follows:


1.            Lock Up Period .


(a)         During the twelve (12) month period following the Effective Date, as extended for an additional the twelve (12) month period following the closing date of the Second PPO (assuming that such closing occurs within five (5) months of the closing of the First PPO) (the “Restricted Period”), the Restricted Holder will not, directly or indirectly: (i) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant for the sale of, make any short sale, lend or otherwise dispose of or transfer any Restricted Securities or any securities convertible into or exercisable or exchangeable for Restricted Securities, or (ii) enter into any swap or any other agreement or any transaction that transfers, in whole or in part, directly or indirectly, any of the economic consequences of ownership of any Restricted Securities (with the actions described in clause (i) or (ii) above being hereinafter referred to as a “Disposition”); provided , however , that if the Company engages in an underwritten public offering of its equity or convertible securities prior to the end of the Restricted Period, the managing underwriter may waive the balance of the Restricted Period.  The foregoing restrictions are expressly agreed to preclude the Restricted Holder from engaging in any hedging or other transaction which is designed to or which reasonably could be expected to lead to or result in a sale or disposition of any of the Restricted Securities of the Restricted Holder during the Restricted Period, even if such securities would be disposed of by someone other than the Restricted Holder.  


(b)         In addition, during the period of eighteen (18) months immediately following the Closing Date, as extended for an additional eighteen (18) months following the closing date of the Second PPO (assuming that such closing is within five (5) months of the closing of the First PPO), the Restricted Holder will not, directly or indirectly, effect or agree to effect any short sale (as defined in Rule 200 under Regulation SHO of the Securities Exchange Act of 1934 (the “Exchange Act”)), whether or not against the box, establish any “put equivalent position” (as defined in Rule 16a-1(h) under the Exchange Act) with respect to the Common Stock, borrow or pre-borrow any shares of Common Stock, or grant any other right (including, without limitation, any put or call option) with respect to the Common Stock or with respect to any security that includes, is convertible into or exercisable for or derives any significant part of its value from the Common Stock or otherwise seek to hedge the Restricted Holder’s position in the Common Stock.


(c)         Notwithstanding anything contained herein to the contrary, the Restricted Holder shall be permitted to engage in any Disposition (i) where the other party to such Disposition is another Restricted Holder and the transferee agrees in writing that the Restricted Securities shall continue to be subject to the restrictions on transfer set forth in this Agreement, (ii) where such Disposition is a bona fide gift or gifts and the donee takes title to such Restricted Securities


- 2 -


subject to the restrictions on transfer set forth in this Agreement, (iii) where such Disposition is in connection with estate planning purposes, including, without limitation to an inter-vivos trust, and the transferee takes title to such Restricted Securities subject to the restrictions on transfer set forth in this Agreement, or (iv) where such Disposition is to an affiliate of such Restricted Holder (including entities wholly owned by such Restricted Holder or one or more trusts where such Restricted Holder is the grantor of such trust(s)) as long as such affiliate executes a copy of this Agreement.


2.            Legends; Stop Transfer Instructions .


(a)          In addition to any legends to reflect applicable transfer restrictions under federal or state securities laws, each stock certificate representing Restricted Securities shall be stamped or otherwise imprinted with the following legend:


“THE SECURITIES REPRESENTED HEREBY ARE SUBJECT TO THE TERMS AND CONDITIONS OF A LOCK-UP AGREEMENT, DATED AS OF MARCH 5, 2015, BETWEEN THE HOLDER HEREOF AND TYME TECHNOLOGIES, INC. AND MAY ONLY BE SOLD OR TRANSFERRED IN ACCORDANCE WITH THE TERMS THEREOF.”


(b)         The Restricted Holder hereby agrees and consents to the entry of stop transfer instructions with the Company’s transfer agent and registrar against the transfer of the Restricted Securities or securities convertible into or exchangeable for Restricted Securities held by the Restricted Holder except in compliance with this Agreement.


3.            Miscellaneous .


(a)           Specific Performance .  The Restricted Holder agrees that in the event of any breach or threatened breach by the Restricted Holder of any covenant, obligation or other provision contained in this Agreement, then the Company shall be entitled (in addition to any other remedy that may be available to the Company) to: (i) a decree or order of specific performance or mandamus to enforce the observance and performance of such covenant, obligation or other provision; and (ii) an injunction restraining such breach or threatened breach.  The Restricted Holder further agrees that neither the Company nor any other person or entity shall be required to obtain, furnish or post any bond or similar instrument in connection with or as a condition to obtaining any remedy referred to in this Section 3, and the Restricted Holder irrevocably waives any right that he, she, or it may have to require the obtaining, furnishing or posting of any such bond or similar instrument.


(b)           Other Agreements .  Nothing in this Agreement shall limit any of the rights or remedies of the Company under the Merger Agreement, or any of the rights or remedies of the Company or any of the obligations of the Restricted Holder under any other agreement between the Restricted Holder and the Company or any certificate or instrument executed by the Restricted Holder in favor of the Company; and nothing in the Merger Agreement or in any other agreement, certificate or instrument shall limit any of the rights or remedies of the Company or any of the obligations of the Restricted Holder under this Agreement.


- 3 -


(c)           Notices .  All notices hereunder shall be in writing.  Any notice, request, demand, claim or other communication hereunder shall be deemed duly delivered four Business Days after it is sent by registered or certified mail, return receipt requested, postage prepaid, or one Business Day after it is sent for next Business Day delivery via a reputable nationwide overnight courier service (or two Business Days if deposited with such a courier service on a day other than a Business Day), in each case to the intended recipient as set forth below:


If to the Company:



Tyme Technologies, Inc.

48 Wall Street

New York, NY 10005

Attn:  Steven Hoffman, President

 

Copy to (which copy shall not constitute

notice hereunder):


Keith S. Braun, Esq.

Moritt Hock & Hamroff LLP

400 Garden City Plaza

Garden City, NY   11530

 

 

 

If to the Restricted Holder:


To the address set forth on the signature

page hereto.

 

With a copy (which copy shall not

constitute notice hereunder):



Any Party may give any notice, request, demand, claim or other communication hereunder using any other means (including personal delivery, expedited courier, messenger service, telecopy, telex, ordinary mail or electronic mail), but no such notice, request, demand, claim or other communication shall be deemed to have been duly given unless and until it actually is received by the Party for whom it is intended.  Any Party may change the address to which notices, requests, demands, claims, and other communications hereunder are to be delivered by giving the other Parties notice in the manner herein set forth.


(d)           Severability .  Any term or provision of this Agreement that is invalid or unenforceable in any situation in any jurisdiction shall not affect the validity or enforceability of the remaining terms and provisions hereof or the validity or enforceability of the offending term or provision in any other situation or in any other jurisdiction.  If the final judgment of a court of competent jurisdiction declares that any term or provision hereof is invalid or unenforceable, the parties hereto agree that the court making such determination shall have the power to limit the term or provision, to delete specific words or phrases, or to replace any invalid or unenforceable term or provision with a term or provision that is valid and enforceable and that comes closest to expressing the intention of the invalid or unenforceable term or provision, and this Agreement shall be enforceable as so modified.  In the event such court does not exercise the power granted to it in the prior sentence, the parties hereto agree to replace such invalid or unenforceable term or provision with a valid and enforceable term or provision that will achieve, to the extent possible, the economic, business and other purposes of such invalid or unenforceable term.  


(e)           Applicable Law; Jurisdiction .  THIS AGREEMENT IS MADE UNDER, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED SOLELY THEREIN, WITHOUT GIVING EFFECT TO PRINCIPLES OF


- 4 -


CONFLICTS OF LAW.  In any action between or among any of the parties arising out of this Agreement, (i) each of the parties irrevocably and unconditionally consents and submits to the exclusive jurisdiction and venue of the state and federal courts having jurisdiction over New York County, New York; (ii) if any such action is commenced in a state court, then, subject to applicable law, no party shall object to the removal of such action to any federal court having jurisdiction over New York County, New York; (iii) each of the parties irrevocably waives the right to trial by jury; and (iv) each of the parties irrevocably consents to service of process by first class certified mail, return receipt requested, postage prepared, to the address at which such party is to receive notice in accordance with this Agreement.


(f)           Waiver; Termination .  No failure on the part of the Company to exercise any power, right, privilege or remedy under this Agreement, and no delay on the part of the Company in exercising any power, right, privilege or remedy under this Agreement, shall operate as a waiver of such power, right, privilege or remedy; and no single or partial exercise of any such power, right, privilege or remedy shall preclude any other or further exercise thereof or of any other power, right, privilege or remedy.  The Company shall not be deemed to have waived any claim arising out of this Agreement, or any power, right, privilege or remedy under this Agreement, unless the waiver of such claim, power, right, privilege or remedy is expressly set forth in a written instrument duly executed and delivered on behalf of the Company; and any such waiver shall not be applicable or have any effect except in the specific instance in which it is given.  If the Merger Agreement is terminated, this Agreement shall thereupon terminate.


(g)          Captions .  The captions contained in this Agreement are for convenience of reference only, shall not be deemed to be a part of this Agreement and shall not be referred to in connection with the construction or interpretation of this Agreement.  


(h)           Further Assurances .  The Restricted Holder hereby represents and warrants that the Restricted Holder has full power and authority to enter into this Agreement and that this Agreement constitutes the legal, valid and binding obligation of the Restricted Holder, enforceable in accordance with its terms.  The Restricted Holder shall execute and/or cause to be delivered to the Company such instruments and other documents and shall take such other actions as the Company may reasonably request to effectuate the intent and purposes of this Agreement.


(i)           Entire Agreement .  This Agreement and the Merger Agreement collectively set forth the entire understanding of the Company and the Restricted Holder relating to the subject matter hereof and supersedes all other prior agreements and understandings between the Company and the Restricted Holder relating to the subject matter hereof.


(j)            Non-Exclusivity .  The rights and remedies of the Company hereunder are not exclusive of or limited by any other rights or remedies which the Company may have, whether at law, in equity, by contract or otherwise, all of which shall be cumulative (and not alternative).


(k)           Amendments .  This Agreement may not be amended, modified, altered or supplemented other than by means of a written instrument duly executed and delivered on behalf of the Company and the Restricted Holder.


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(l)           Assignment .  This Agreement and all obligations of the Restricted Holder hereunder are personal to the Restricted Holder and may not be transferred or delegated by the Restricted Holder at any time.  The Company may freely assign any or all of its rights under this Agreement, in whole or in part, to any successor entity without obtaining the consent or approval of the Restricted Holder.


(m)         Binding Nature .  Subject to Section 3(l) above, this Agreement will inure to the benefit of the Company and its successors and assigns and will be binding upon the Restricted Holder and the Restricted Holder’s representatives, executors, administrators, estate, heirs, successors and assigns.


(n)           Survival .  Each of the representations, warranties, covenants and obligations contained in this Agreement shall survive the consummation of the Merger.


(o)           Counterparts .  This Agreement may be executed in separate counterparts, each of which shall be deemed an original and both of which shall constitute one and the same instrument.



[SIGNATURE PAGE FOLLOWS]



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IN WITNESS WHEREOF, the parties hereto have executed and delivered this Agreement as of the date first set forth above.


TYME TECHNOLOGIES, INC.



/s/ Peter de Svastich

By:  Peter de Svastich

Its:   President



RESTRICTED HOLDER:


STEVEN HOFFMAN



/s/ Steven Hoffman


Address: 15 Knichel Road


Mahwah, New Jersey 07430


Fax:  ___________________________________



Address for copy of notice pursuant to Section 3(c):


________________________________________


________________________________________


________________________________________


Fax:  ___________________________________


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Exhibit 10.4


LOCK-UP AGREEMENT


This LOCK-UP AGREEMENT (this “Agreement”) is made as of March 5, 2015 (the “Effective Date”), by and between the undersigned person or entity (the “Restricted Holder”) and Tyme Technologies, Inc., a Delaware corporation formerly known as Global Group Enterprises Corp. (the “Company”).  Capitalized terms used and not otherwise defined herein shall have the meanings given to such terms in the Merger Agreement (as defined herein).


WHEREAS, pursuant to the transactions contemplated under that certain Agreement and Plan of Merger and Reorganization, dated as of March 5, 2015 (the “Merger Agreement”), by and between the Company, Tyme Acquisition Corp., a Delaware corporation (“Merger Sub”), Tyme, Inc., a Delaware corporation (“Tyme”), and, solely with respect to Section 6.3(f), Steven Hoffman, as Indemnification Representative, and, solely with respect to Sections 1.14, 4.8(b) and 5.1(k), GEM Global Yield Fund LLC SCS (“GEM”), and the other parties thereto, Merger Sub will merge with and into Tyme, with the result of such merger being that Tyme will be the surviving entity and become a wholly-owned subsidiary of the Company, with all the shareholders of Tyme exchanging their shares in Tyme for shares of common stock of the Company (the “Common Stock”), all pursuant to the terms of the Merger Agreement (the “Merger”); and


WHEREAS, simultaneously with the closing of the Merger, the Company will complete a private placement offering (the “First PPO”) of shares of its Common Stock for gross proceeds of $6,790,000; and


WHEREAS, it is anticipated that within five (5) months after the earlier of (x) the date on which the Subscription Note (as defined in the Merger Agreement) is fully satisfied or (y) the maturity date of the Subscription Note, GEM will assist the Company in raising additional capital totaling $20,000,000 in an equity financing at a valuation of at least $200,000,000 but not greater than $400,000,000, based upon best efforts (the “Second PPO”); and


WHEREAS, the Restricted Holder will be (a) an officer and/or director of the Company immediately after the closing of the Merger, and/or (b) a beneficial owner of ten percent (10%) or more of the outstanding shares of Common Stock of the Company immediately after the closing of the Merger, and/or (c) a key employee of the Company, as agreed to by the Company and Tyme, immediately after the closing of the Merger; and


WHEREAS, the Merger Agreement provides that, among other things, as a condition to the consummation of the Merger, that Restricted Holder execute this Lock-Up Agreement with respect to all the shares of Common Stock owned by the Restricted Holder, other than (x) shares of Common Stock acquired by Restricted Holder in the First PPO or Second PPO, (y) shares subject to the Registration Rights Agreement, dated as of the Effective Date, among the Company, Restricted Holder and the other parties thereto (the “Registration Rights Agreement”) when such shares are included in the effective registration statement under the Securities Act of 1933, as amended, and (z) 1,000,000 shares of Common Stock which may be sold in a private transaction, provided such private sale is at or above the sale price of $2.00 per share (the shares referred to in clauses (x), (y) and (z) being the “Exempt Shares”), such shares, exclusive of the Exempt Shares, constituting a total of 24,732,798 shares of Common Stock as of the Effective Date (the “Restricted Securities”).


- 1 -


NOW, THEREFORE, as an inducement to and in consideration of the Company’s agreement to enter into the Merger Agreement and proceed with the Merger, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereby agree as follows:


1.            Lock Up Period .


(a)         During the twelve (12) month period following the Effective Date, as extended for an additional the twelve (12) month period following the closing date of the Second PPO (assuming that such closing occurs within five (5) months of the closing of the First PPO) (the “Restricted Period”), the Restricted Holder will not, directly or indirectly: (i) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant for the sale of, make any short sale, lend or otherwise dispose of or transfer any Restricted Securities or any securities convertible into or exercisable or exchangeable for Restricted Securities, or (ii) enter into any swap or any other agreement or any transaction that transfers, in whole or in part, directly or indirectly, any of the economic consequences of ownership of any Restricted Securities (with the actions described in clause (i) or (ii) above being hereinafter referred to as a “Disposition”); provided , however , that if the Company engages in an underwritten public offering of its equity or convertible securities prior to the end of the Restricted Period, the managing underwriter may waive the balance of the Restricted Period.  The foregoing restrictions are expressly agreed to preclude the Restricted Holder from engaging in any hedging or other transaction which is designed to or which reasonably could be expected to lead to or result in a sale or disposition of any of the Restricted Securities of the Restricted Holder during the Restricted Period, even if such securities would be disposed of by someone other than the Restricted Holder.  


(b)         In addition, during the period of eighteen (18) months immediately following the Closing Date, as extended for an additional eighteen (18) months following the closing date of the Second PPO (assuming that such closing is within five (5) months of the closing of the First PPO), the Restricted Holder will not, directly or indirectly, effect or agree to effect any short sale (as defined in Rule 200 under Regulation SHO of the Securities Exchange Act of 1934 (the “Exchange Act”)), whether or not against the box, establish any “put equivalent position” (as defined in Rule 16a-1(h) under the Exchange Act) with respect to the Common Stock, borrow or pre-borrow any shares of Common Stock, or grant any other right (including, without limitation, any put or call option) with respect to the Common Stock or with respect to any security that includes, is convertible into or exercisable for or derives any significant part of its value from the Common Stock or otherwise seek to hedge the Restricted Holder’s position in the Common Stock.


(c)         Notwithstanding anything contained herein to the contrary, the Restricted Holder shall be permitted to engage in any Disposition (i) where the other party to such Disposition is another Restricted Holder and the transferee agrees in writing that the Restricted Securities shall continue to be subject to the restrictions on transfer set forth in this Agreement, (ii) where such Disposition is a bona fide gift or gifts and the donee takes title to such Restricted Securities


- 2 -


subject to the restrictions on transfer set forth in this Agreement, (iii) where such Disposition is in connection with estate planning purposes, including, without limitation to an inter-vivos trust, and the transferee takes title to such Restricted Securities subject to the restrictions on transfer set forth in this Agreement, or (iv) where such Disposition is to an affiliate of such Restricted Holder (including entities wholly owned by such Restricted Holder or one or more trusts where such Restricted Holder is the grantor of such trust(s)) as long as such affiliate executes a copy of this Agreement.


2.            Legends; Stop Transfer Instructions .


(a)          In addition to any legends to reflect applicable transfer restrictions under federal or state securities laws, each stock certificate representing Restricted Securities shall be stamped or otherwise imprinted with the following legend:


“THE SECURITIES REPRESENTED HEREBY ARE SUBJECT TO THE TERMS AND CONDITIONS OF A LOCK-UP AGREEMENT, DATED AS OF MARCH 5, 2015, BETWEEN THE HOLDER HEREOF AND TYME TECHNOLOGIES, INC. AND MAY ONLY BE SOLD OR TRANSFERRED IN ACCORDANCE WITH THE TERMS THEREOF.”


(b)         The Restricted Holder hereby agrees and consents to the entry of stop transfer instructions with the Company’s transfer agent and registrar against the transfer of the Restricted Securities or securities convertible into or exchangeable for Restricted Securities held by the Restricted Holder except in compliance with this Agreement.


3.            Miscellaneous .


(a)           Specific Performance .  The Restricted Holder agrees that in the event of any breach or threatened breach by the Restricted Holder of any covenant, obligation or other provision contained in this Agreement, then the Company shall be entitled (in addition to any other remedy that may be available to the Company) to: (i) a decree or order of specific performance or mandamus to enforce the observance and performance of such covenant, obligation or other provision; and (ii) an injunction restraining such breach or threatened breach.  The Restricted Holder further agrees that neither the Company nor any other person or entity shall be required to obtain, furnish or post any bond or similar instrument in connection with or as a condition to obtaining any remedy referred to in this Section 3, and the Restricted Holder irrevocably waives any right that he, she, or it may have to require the obtaining, furnishing or posting of any such bond or similar instrument.


(b)           Other Agreements .  Nothing in this Agreement shall limit any of the rights or remedies of the Company under the Merger Agreement, or any of the rights or remedies of the Company or any of the obligations of the Restricted Holder under any other agreement between the Restricted Holder and the Company or any certificate or instrument executed by the Restricted Holder in favor of the Company; and nothing in the Merger Agreement or in any other agreement, certificate or instrument shall limit any of the rights or remedies of the Company or any of the obligations of the Restricted Holder under this Agreement.


- 3 -


(c)           Notices .  All notices hereunder shall be in writing.  Any notice, request, demand, claim or other communication hereunder shall be deemed duly delivered four Business Days after it is sent by registered or certified mail, return receipt requested, postage prepaid, or one Business Day after it is sent for next Business Day delivery via a reputable nationwide overnight courier service (or two Business Days if deposited with such a courier service on a day other than a Business Day), in each case to the intended recipient as set forth below:


If to the Company:



Tyme Technologies, Inc.

48 Wall Street

New York, NY 10005

Attn:  Steven Hoffman, President

 

Copy to (which copy shall not constitute

notice hereunder):


Keith S. Braun, Esq.

Moritt Hock & Hamroff LLP

400 Garden City Plaza

Garden City, NY   11530

 

 

 

If to the Restricted Holder:


To the address set forth on the signature

page hereto.

 

With a copy (which copy shall not

constitute notice hereunder):



Any Party may give any notice, request, demand, claim or other communication hereunder using any other means (including personal delivery, expedited courier, messenger service, telecopy, telex, ordinary mail or electronic mail), but no such notice, request, demand, claim or other communication shall be deemed to have been duly given unless and until it actually is received by the Party for whom it is intended.  Any Party may change the address to which notices, requests, demands, claims, and other communications hereunder are to be delivered by giving the other Parties notice in the manner herein set forth.


(d)           Severability .  Any term or provision of this Agreement that is invalid or unenforceable in any situation in any jurisdiction shall not affect the validity or enforceability of the remaining terms and provisions hereof or the validity or enforceability of the offending term or provision in any other situation or in any other jurisdiction.  If the final judgment of a court of competent jurisdiction declares that any term or provision hereof is invalid or unenforceable, the parties hereto agree that the court making such determination shall have the power to limit the term or provision, to delete specific words or phrases, or to replace any invalid or unenforceable term or provision with a term or provision that is valid and enforceable and that comes closest to expressing the intention of the invalid or unenforceable term or provision, and this Agreement shall be enforceable as so modified.  In the event such court does not exercise the power granted to it in the prior sentence, the parties hereto agree to replace such invalid or unenforceable term or provision with a valid and enforceable term or provision that will achieve, to the extent possible, the economic, business and other purposes of such invalid or unenforceable term.  


(e)           Applicable Law; Jurisdiction .  THIS AGREEMENT IS MADE UNDER, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED SOLELY THEREIN, WITHOUT GIVING EFFECT TO PRINCIPLES OF


- 4 -


CONFLICTS OF LAW.  In any action between or among any of the parties arising out of this Agreement, (i) each of the parties irrevocably and unconditionally consents and submits to the exclusive jurisdiction and venue of the state and federal courts having jurisdiction over New York County, New York; (ii) if any such action is commenced in a state court, then, subject to applicable law, no party shall object to the removal of such action to any federal court having jurisdiction over New York County, New York; (iii) each of the parties irrevocably waives the right to trial by jury; and (iv) each of the parties irrevocably consents to service of process by first class certified mail, return receipt requested, postage prepared, to the address at which such party is to receive notice in accordance with this Agreement.


(f)           Waiver; Termination .  No failure on the part of the Company to exercise any power, right, privilege or remedy under this Agreement, and no delay on the part of the Company in exercising any power, right, privilege or remedy under this Agreement, shall operate as a waiver of such power, right, privilege or remedy; and no single or partial exercise of any such power, right, privilege or remedy shall preclude any other or further exercise thereof or of any other power, right, privilege or remedy.  The Company shall not be deemed to have waived any claim arising out of this Agreement, or any power, right, privilege or remedy under this Agreement, unless the waiver of such claim, power, right, privilege or remedy is expressly set forth in a written instrument duly executed and delivered on behalf of the Company; and any such waiver shall not be applicable or have any effect except in the specific instance in which it is given.  If the Merger Agreement is terminated, this Agreement shall thereupon terminate.


(g)          Captions .  The captions contained in this Agreement are for convenience of reference only, shall not be deemed to be a part of this Agreement and shall not be referred to in connection with the construction or interpretation of this Agreement.  


(h)           Further Assurances .  The Restricted Holder hereby represents and warrants that the Restricted Holder has full power and authority to enter into this Agreement and that this Agreement constitutes the legal, valid and binding obligation of the Restricted Holder, enforceable in accordance with its terms.  The Restricted Holder shall execute and/or cause to be delivered to the Company such instruments and other documents and shall take such other actions as the Company may reasonably request to effectuate the intent and purposes of this Agreement.


(i)           Entire Agreement .  This Agreement and the Merger Agreement collectively set forth the entire understanding of the Company and the Restricted Holder relating to the subject matter hereof and supersedes all other prior agreements and understandings between the Company and the Restricted Holder relating to the subject matter hereof.


(j)            Non-Exclusivity .  The rights and remedies of the Company hereunder are not exclusive of or limited by any other rights or remedies which the Company may have, whether at law, in equity, by contract or otherwise, all of which shall be cumulative (and not alternative).


(k)           Amendments .  This Agreement may not be amended, modified, altered or supplemented other than by means of a written instrument duly executed and delivered on behalf of the Company and the Restricted Holder.


- 5 -


(l)           Assignment .  This Agreement and all obligations of the Restricted Holder hereunder are personal to the Restricted Holder and may not be transferred or delegated by the Restricted Holder at any time.  The Company may freely assign any or all of its rights under this Agreement, in whole or in part, to any successor entity without obtaining the consent or approval of the Restricted Holder.


(m)         Binding Nature .  Subject to Section 3(l) above, this Agreement will inure to the benefit of the Company and its successors and assigns and will be binding upon the Restricted Holder and the Restricted Holder’s representatives, executors, administrators, estate, heirs, successors and assigns.


(n)           Survival .  Each of the representations, warranties, covenants and obligations contained in this Agreement shall survive the consummation of the Merger.


(o)           Counterparts .  This Agreement may be executed in separate counterparts, each of which shall be deemed an original and both of which shall constitute one and the same instrument.



[SIGNATURE PAGE FOLLOWS]



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IN WITNESS WHEREOF, the parties hereto have executed and delivered this Agreement as of the date first set forth above.


TYME TECHNOLOGIES, INC.



/s/ Peter de Svastich

By:  Peter de Svastich

Its:   President



RESTRICTED HOLDER:


MICHAEL DEMURJIAN



/s/ Michael Demurjian


Address: 1400 Winesap Drive


Manasquan, New Jersey 08736


Fax:  ___________________________________



Address for copy of notice pursuant to Section 3(c):


________________________________________


________________________________________


________________________________________


Fax:  ___________________________________


- 7 -


Exhibit 10.5
 
SUBSCRIPTION AGREEMENT

Tyme Technologies, Inc.
c/o CKR Law LLP
1330 Avenue of the Americas
New York, NY 10019
 
Dear Sirs and Madams:
 
This Subscription Agreement (this “ Agreement ”) has been executed by the subscriber set forth on the signature page hereof (the “ Subscriber ”) in connection with the private placement offering (the “ Offering ”) of 2,716,000 shares (each, a  “ Share ”) of the common stock, par value $0.0001 per share (“ Common Stock ”), of Tyme Technologies, Inc.   (formerly known as Global Group Enterprises Corp.), a Delaware corporation (the “ Company ”), at a purchase price of $2.50 per share (the “ Per Share Purchase Price ”) for gross proceeds of $6,790,000 (the “ Required Offering Proceeds ”).   By executing and delivering to the Company this Subscription Agreement, the undersigned subscriber acknowledges that:
 
 
●
The Shares being offered and sold in the Offering and the Shares being subscribed for pursuant to this Agreement have not been registered under the Securities Act of 1933, as amended (the “ Securities Act ”).  The Offering is being made on an “all or none” best efforts basis to “accredited investors,” as defined in Regulation D under the Securities Act.
 
 
●
The Shares are being offered and sold as a condition precedent to the consummation of and in connection with a reverse triangular merger (the “ Merger ”) between a subsidiary of the Company and Tyme, Inc., a Delaware corporation (“ Tyme ”), and certain other transactions, pursuant to which Tyme will become a wholly owned subsidiary of the Company, and all of the outstanding Tyme stock will be converted into shares of the Company’s Common Stock, and Tyme stock options and warrants will be converted into options and warrants to purchase shares of the Company’s Common Stock.
 
 
●
Prior to the Closing (as defined below), the Company will cancel certain outstanding shares of Common Stock (the “ Share Cancellations ”) so as to result in the capitalization described in Section 4.c below. (For avoidance of doubt, the number of Shares reflected herein and the Per Share Purchase Price are based on having given effect to the Share Cancellations.)
 
 
●
On July 11, 2014, Tyme completed a private placement to an accredited investor of a $1,100,000 principal amount 10% secured convertible note of Tyme; on November 24, 2014, an additional $250,000 was advanced to the Company under such note, and such note was amended and restated; on January 15, 2015, an additional $960,000 was advanced to the Company under such note, and such note was further amended and restated; and on March 5, 2015, such note was further amended pursuant to a letter agreement among such investor/holder of such note, Tyme and the Company (the “ Letter Agreement ”) (as so amended and restated and giving effect to the Letter Agreement, the “ Bridge Note ”).  Upon closing of the Merger and the Offering, the Bridge Note will convert into shares of Common Stock at a conversion rate of $1.00 of principal per share, or 2,310,000 shares.  Upon such conversion, all accrued interest on the Bridge Note will be cancelled in accordance with the terms of the Bridge Note.
 
 
●
The undersigned acknowledges receipt of a copy of the Registration Rights Agreement, substantially in the form of Exhibit A hereto (the “ Registration Rights Agreement ”).
 
1
 

 

 
 
●
The closing of the Offering (the “ Closing ,” and the date on which the Closing occurs is hereinafter referred to as the “ Closing Date ”) shall take place at the offices of CKR Law LLP, at 1330 Avenue of the Americas, New York, New York 10019 (or such other place as is agreed to by the Company).
 
 
●
The Closing will not occur unless:
 
 
a.
funds deposited in escrow plus the principal amount of the Subscription Note (as defined below) equal $6,790,000 and the Subscription Note has been executed and delivered as described in Section 2(b) below and Subscription Documents (as defined below) with respect to such amounts have been delivered to the Company by Subscribers as described in Section 2(a) below; and
 
 
b.
the Merger shall have been effected (or is simultaneously effected).
 
Accordingly, the Company and the undersigned Subscriber agree as follows:
 
 
1.
Subscription.   The undersigned Subscriber hereby subscribes to purchase the number of Shares set forth on the Omnibus Signature Page attached hereto, for the aggregate Purchase Price as set forth on such Omnibus Signature Page, subject to the terms and conditions of this Agreement and on the basis of the representations, warranties, covenants and agreements contained herein.

 
2.
Subscription Procedure.   To complete a subscription for the Shares, the Subscriber must fully comply with the subscription procedure provided in this Section on or before the Closing Date.

 
a.
Subscription Documents.   On or before the Closing Date, the Subscriber shall review, complete and execute the Omnibus Signature Page to this Agreement, the Investor Profile, Anti-Money Laundering Form and Investor Certification, attached hereto following the Omnibus Signature Page and the Subscription Shares Escrow Agreement (as defined below) (collectively, the “ Subscription Documents ”), and deliver the Subscription Documents to the Company’s attorneys, CKR Law LLP (“ CKR ”), at the address set forth under the caption “ How to subscribe for Shares in the private offering of Tyme Technologies, Inc. ” below.  Executed documents may be delivered to CKR by facsimile or electronic mail (e-mail), if the Subscriber delivers the original copies of the documents to CKR as soon as practicable thereafter.

 
b.
Purchase Price .  Simultaneously with the delivery of the Subscription Documents to CKR as provided herein, and in any event on or prior to the Closing Date, the Subscriber shall (i) deliver the full Subscriber’s Purchase Price as follows:  (A) by certified or other bank check or by wire transfer of at least $4,290,000 in immediately available funds, to Delaware Trust Company, in its capacity as escrow agent (the “ Escrow Agent ”), pursuant to the instructions set forth under the caption “ How to subscribe for Shares in the private offering of Tyme Technologies, Inc. ” below (the “ Cash Payment ”), and (B) by execution and delivery to the Company of the limited recourse promissory note in the principal amount of up to $2,500,000 substantially in the form of Exhibit B hereto (the “Subscription Note”) (the amount of the Cash Payment and the principal amount of the Subscription Note totaling $6,790,000); and (ii) execute and deliver to the Company the Subscription Note Shares Escrow Agreement substantially in the form of Exhibit C hereto (the “Subscription Shares Escrow Agreement”), and deliver to the Escrow Agent (as defined in the Subscription Shares Escrow Agreement) the Deposit Shares (as defined and in the manner specified in the Subscription Shares Escrow Agreement).
 
2
 

 

 
 
3.
[RESERVED]
 
 
4.
Representations and Warranties of the Company .  The Company hereby represents and warrants to the Subscriber the following:
 
 
a.
Organization and Qualification .  The Company is and, after the Merger, each of its subsidiaries will be, a corporation or other business entity duly organized and validly existing in good standing under the laws of the jurisdiction of its formation, and the Company and, after the Merger, each of its subsidiaries, has or will have the requisite corporate power to own its properties and to carry on its business as now being conducted.  The Company is and, after the Merger, each of its subsidiaries will be duly qualified as a foreign corporation to do business and is in good standing in every jurisdiction in which the nature of the business conducted by it makes such qualification necessary, except to the extent that the failure to be so qualified or be in good standing would not have a material adverse effect on the assets, business, condition (financial or otherwise), results of operations or future prospects of the Company and its Subsidiaries taken as a whole (a “ Material Adverse Effect ”).  Each subsidiary of the Company, after giving effect to the Merger, is identified on Schedule 4a attached hereto.  (For purposes of the representations and warranties contained in this Section 4, the term “ Subsidiary ” as applied to the Company includes Tyme and Tyme’s subsidiaries after giving effect to the Merger.)   Immediately prior to the closing of the Merger, under the terms of a split-off agreement and a general release agreement, the Company will transfer all of its pre-Merger operating assets, if any, and liabilities, if any, to a wholly-owned special-purpose subsidiary to be formed (“Split-Off Subsidiary”), and the Company will transfer all of the outstanding shares of capital stock of Split-Off Subsidiary to  a pre-Merger stockholder of the Company (the “Split-Off”), in consideration of and in exchange for (i) the surrender and cancellation of an aggregate of 13,000,200 shares of our Common Stock held by such stockholder (which will be cancelled and will resume the status of authorized but unissued shares of our Common Stock) and (ii) certain representations, covenants and indemnities.
 
 
b.
Authorization, Enforcement, Compliance with Other Instruments .  (i) The Company has the requisite corporate power and authority to enter into and perform its obligations under this Agreement, the Registration Rights Agreement and each of the other agreements and documents that are exhibits hereto or thereto or are contemplated hereby or thereby or necessary or desirable to effect the transactions contemplated hereby or thereby (the “ Transaction Documents ”) and to issue the Shares in accordance with the terms hereof and thereof, (ii) the execution and delivery by the Company of each of the Transaction Documents and the consummation by the Company of the transactions contemplated hereby and thereby, including, without limitation, the issuance of the Shares,   have been, or will be at the time of execution of such Transaction Document, duly authorized by the Company’s Board of Directors, and no further consent or authorization is, or will be at the time of execution of such Transaction Document, required by the Company, its respective Board of Directors or its stockholders, (iii) each of the Transaction Documents will be duly executed and delivered by the Company, (iv) the Transaction Documents when executed will constitute the valid and binding obligations of the Company enforceable against the Company in accordance with their terms, except as such enforceability may be limited by general principles of equity or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally, the enforcement of creditors’ rights and remedies.
 
3
 

 

 
 
c.
Capitalization .  The authorized capital stock of the Company consists of 300,000,000 shares of Common Stock and 10,000,000 shares of preferred stock.  All of the outstanding shares of Common Stock and, after the Merger, of the stock of each of the Company’s Subsidiaries have been duly authorized, validly issued and are fully paid and nonassessable.  After giving effect to the Share Cancellations, the Split-Off and the Merger: (i) except as set forth on Schedule 4c(i) , no shares of capital stock of the Company or any of its Subsidiaries will be subject to preemptive rights or any other similar rights or any liens or encumbrances suffered or permitted by the Company; (ii)  except as set forth in Schedule 4c(ii) and in Section 1.14 of the Agreement and Plan of Merger and Reorganization among the Company, Tyme Acquisition Corp., Tyme and the other parties thereto, dated as of March 5, 2015, there will be no outstanding options, warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities or rights convertible into, any shares of capital stock of the Company or any of its Subsidiaries, or contracts, commitments, understandings or arrangements by which the Company or any of its subsidiaries is or may become bound to issue additional shares of capital stock of the Company or any of its subsidiaries,  (iii) there will be no outstanding debt securities of the Company or any of its subsidiaries, other than indebtedness as set forth in Schedule 4c(iii) , (iv) other than pursuant to the Registration Rights Agreement or as set forth in Schedule 4c(iv) , there will be no agreements or arrangements under which the Company or any of its Subsidiaries is obligated to register the sale of any of their securities under the Securities Act, (v) there will be no outstanding registration statements, and there will be no outstanding comment letters from the SEC or any other regulatory agency; (vi) except as provided in this Agreement or as set forth in Schedule 4c(vi) , there will be no securities or instruments containing anti-dilution or similar provisions, including the right to adjust the exercise, exchange or reset price under such securities, that will be triggered by the issuance of the Shares as described in this Agreement; and (vii) no co-sale right, right of first refusal or other similar right will exist with respect to the Shares  or the issuance and sale thereof.  After giving effect to the Stock Split, the Share Cancellations, the Split-Off and the Merger and the Closing of the Offering, the pro forma outstanding capitalization of the Company will be as set forth in Schedule 4c under “ Pro Forma Capitalization ”.  Upon request, the Company will make available to  Subscriber true and correct copies of the Company’s Certificate of Incorporation, and as to be in effect after giving effect to the Merger (the “ Certificate of Incorporation ”), and the Company’s By-laws, as to be in effect after giving effect to the Merger   (the “ By-laws ”), and the terms of all securities exercisable for Common Stock and the material rights of the holders thereof in respect thereto other than stock options issued to officers, directors, employees and consultants.
 
 
d.
Issuance of Shares .  The Shares are duly authorized and, upon issuance in accordance with the terms hereof, shall be duly issued, fully paid and nonassessable, and are and shall be upon issuance free from all taxes, liens and charges with respect to the issue thereof.
 
 
e.
No Conflicts .  The execution, delivery and performance of each of the Transaction Documents by the Company, and the consummation by the Company of the transactions contemplated hereby and thereby will not (i) result in a violation of the Certificate of Incorporation or the By-laws (or equivalent constitutive document) of the Company or any of its Subsidiaries or (ii) violate or conflict with, or result in a breach of any provision of, or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to which the Company or any Subsidiary is a party, or result in a violation of any law, rule, regulation, order, judgment or decree (including U.S. federal and state securities laws and regulations) applicable to the
 
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Company or any Subsidiary or by which any property or asset of the Company or any Subsidiary is bound or affected except for those which could not reasonably be expected to have a Material Adverse Effect.  Except those which could not reasonably be expected to have a Material Adverse Effect, neither the Company nor any Subsidiary is in violation of any term of or in default under its constitutive documents.  Except those which could not reasonably be expected to have a Material Adverse Effect, neither the Company nor any Subsidiary is in violation of any term of or in default under any material contract, agreement, mortgage, indebtedness, indenture, instrument, judgment, decree or order or any statute, rule or regulation applicable to the Company or any Subsidiary.  The business of the Company and its Subsidiaries is not being conducted, and shall not be conducted in violation of any material law, ordinance, or regulation of any governmental entity, except for any violation which could not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect.  Except as specifically contemplated by this Agreement and as required under the Securities Act and any applicable state securities laws, neither the Company nor any of its Subsidiaries is required to obtain any consent, authorization or order of, or make any filing or registration with, any court or governmental agency in order for it to execute, deliver or perform any of its obligations under or contemplated by this Agreement or the other Transaction Documents in accordance with the terms hereof or thereof.  Except as set forth on Schedule 4e , neither the execution and delivery by the Company of the Transaction Documents, nor the consummation by the Company of the transactions contemplated hereby or thereby, will require any notice, consent or waiver under any contract or instrument to which the Company or any Subsidiary is a party or by which the Company or any Subsidiary is bound or to which any of their assets is subject, except for any notice, consent or waiver the absence of which would not have a Material Adverse Effect and would not adversely affect the consummation of the transactions contemplated hereby or thereby.  All consents, authorizations, orders, filings and registrations which the Company or any of its Subsidiaries is required to obtain pursuant to the preceding two sentences have been or will be obtained or effected on or prior to the Closing.  The Company is unaware of any facts or circumstance, which might give rise to any of the foregoing.
 
 
f.
Absence of Litigation .  There is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body now pending or, to the knowledge of the Company, threatened, against or affecting the Company or any of its Subsidiaries, wherein an unfavorable decision, ruling or finding would (i) adversely affect the validity or enforceability of, or the authority or ability of the Company or any of its Subsidiaries to perform its obligations under, this Agreement or any of the other Transaction Documents, or (ii) have a Material Adverse Effect.
 
 
g.
Acknowledgment Regarding Subscriber’s Purchase of the Shares .  The Company acknowledges and agrees that Subscriber is acting solely in the capacity of an arm’s length purchaser with respect to the Transaction Documents and the transactions contemplated hereby and thereby.  The Company further acknowledges that Subscriber is not acting as a financial advisor or fiduciary of the Company (or in any similar capacity) with respect to the Transaction Documents and the transactions contemplated hereby and thereby and any advice given by Subscriber or any of his representatives or agents in connection with the Transaction Documents and the transactions contemplated hereby and thereby is merely incidental to Subscriber’s purchase of the Shares.  The Company further represents to Subscriber that the Company’s decision to enter into the Transaction Documents has been based solely on the independent evaluation by the Company and its representatives.
 
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h.
No General Solicitation .  Neither the Company, nor any of its affiliates, nor, to the knowledge    of the Company, any person acting on its or their behalf, has engaged in any form of general solicitation or general advertising (within the meaning of Regulation D) in connection with the offer or sale of the Shares.
 
 
i.
No Integrated Offering .  Neither the Company, nor any of its affiliates, nor to the knowledge of the Company, any person acting on its or their behalf has, directly or indirectly, made any offers or sales of any security or solicited any offers to buy any security, under circumstances that would require registration of the Shares under the Securities Act or cause the Offering of the Shares to be integrated with prior offerings by the Company for purposes of the Securities Act.
 
 
j.
Employee Relations .  Neither Company nor any Subsidiary is involved in any labor dispute nor, to the knowledge of the Company, is any such dispute threatened.  Neither Company nor any Subsidiary is party to any collective bargaining agreement.  The Company’s and/or its Subsidiaries’ employees are not members of any union, and the Company believes that its and its Subsidiaries’ relationship with their respective employees is good.
 
 
k.
Intellectual Property Rights .  After giving effect to the Merger, except as set forth on Schedule 4k , the Company and its Subsidiaries own or possess all patents, trademarks, domain names (whether or not registered) and any patentable improvements or copyrightable derivative works thereof, websites and intellectual property rights relating thereto, service marks, trade names, copyrights, licenses and authorizations, and all rights with respect to the foregoing, which are necessary for the conduct of its business as now conducted without any conflict with the rights of others except for such conflicts that would not result in a Material Adverse Effect.  Neither Company nor any Subsidiary has received any notice of infringement of, or conflict with, the asserted rights of others with respect to any intellectual property that it utilizes.
 
 
l.
Environmental Laws .
 
(i)
The Company and each Subsidiary has complied with all applicable Environmental Laws (as defined below), except for violations of Environmental Laws that, individually or in the aggregate, have not had and would not reasonably be expected to have a Material Adverse Effect.  There is no pending or, to the knowledge of the Company, threatened civil or criminal litigation, written notice of violation, formal administrative proceeding, or investigation, inquiry or information request, relating to any Environmental Law involving the Company or any Subsidiary, except for litigation, notices of violations, formal administrative proceedings or investigations, inquiries or information requests that, individually or in the aggregate, have not had and would not reasonably be expected to have a Material Adverse Effect.  For purposes of this Agreement, “Environmental Law” means any national, state, provincial or local law, statute, rule or regulation or the common law relating to the environment or occupational health and safety, including without limitation any statute, regulation, administrative decision or order pertaining to (i) treatment, storage, disposal, generation and transportation of industrial, toxic or hazardous materials or substances or solid or hazardous waste; (ii) air, water and noise pollution; (iii) groundwater and soil contamination; (iv) the release or threatened release into the environment of industrial, toxic or hazardous materials or substances, or solid or hazardous waste, including without limitation emissions, discharges, injections, spills, escapes or dumping of pollutants, contaminants or chemicals; (v) the protection of wild life, marine life and wetlands, including without limitation all endangered and threatened
 
6
 

 

 
 
 
species; (vi) storage tanks, vessels, containers, abandoned or discarded barrels, and other closed receptacles; (vii) health and safety of employees and other persons; and (viii) manufacturing, processing, using, distributing, treating, storing, disposing, transporting or handling of materials regulated under any law as pollutants, contaminants, toxic or hazardous materials or substances or oil or petroleum products or solid or hazardous waste.  As used above, the terms “release” and “environment” shall have the meaning set forth in the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended.
 
 
(ii)
To the knowledge of the Company there is no material environmental liability with respect to any solid or hazardous waste transporter or treatment, storage or disposal facility that has been used by the Company or any Subsidiary.
 
 
(iii)
The Company and its Subsidiaries (i) have received all permits, licenses or other approvals required of them under applicable Environmental Laws to conduct their respective businesses and (ii) are in compliance, in all material respects, with all terms and conditions of any such permit, license or approval.
 
 
m.
Permits; FDA Compliance . The Company and its Subsidiaries have all authorizations, approvals, clearances, licenses, permits, certificates or exemptions (including manufacturing approvals and authorizations, pricing and reimbursement approvals, labeling approvals, registration notifications or their foreign equivalent) issued by any regulatory authority or governmental agency (collectively, “ Permits ”) required to conduct their respective businesses as currently conducted except to the extent that the failure to have such Permits would not have a Material Adverse Effect.  The conduct of business by the Company complies, and at all times has substantially complied, in all material respects with the Federal Food, Drug and Cosmetic Act (the “ FDCA ”) and similar federal, state and foreign laws applicable to the evaluation, testing, manufacturing, distribution, advertising and marketing of each of the Company’s products, in whatever stage of development or commercialization except to the extent that the failure to so comply would not have a Material Adverse Effect.  To the knowledge of the Company, as of the date hereof, neither the United States Food and Drug Administration (the “ FDA ”) nor any comparable regulatory authority or governmental agency is considering limiting, suspending or revoking any such Permit or changing the marketing classification or labeling of the products of the Company or any of its Subsidiaries.  To the knowledge of the Company, there is no false or misleading information or material omission in any product application or other submission by the Company or any of its Subsidiaries to the FDA or any comparable regulatory authority or governmental agency.  The Company or its Subsidiaries have fulfilled and performed in all material respects their obligations under each Permit, and, as of the date hereof, to the knowledge of the Company, no event has occurred or condition or state of facts exists which would constitute a breach or default or would cause revocation or termination of any such Permit except to the extent that such breach, default, revocation or termination would not have a Material Adverse Effect.  To the knowledge of the Company, any third party that is a manufacturer or contractor for the Company or any of its Subsidiaries is in compliance in all material respects with all Permits insofar as they pertain to the manufacture of product components or products for the Company. The Company and its Subsidiaries have not received any Form FDA-483, notice of adverse finding, FDA warning letter, notice of violation or “untitled letter,” notice of FDA action for import detention or refusal, or any other notice from the FDA or other governmental agency alleging or asserting noncompliance with any applicable laws or Permits.  The Company and its Subsidiaries are not subject to any obligation arising under an administrative or regulatory action, FDA inspection, FDA warning letter, FDA notice of
 
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violation letter or other notice, response or commitment made to or with the FDA or any comparable regulatory authority or governmental agency.  The Company and its Subsidiaries have made all notifications, submissions and reports required by the FDCA or similar federal, state and foreign laws, except to the extent that the failure to make such notifications, submission or reports would not have a Material Adverse Effect.
 
 
n.
Title .  After giving effect to the Merger, neither the Company nor any of its Subsidiaries owns any real property.  After giving effect to the Merger, except as set forth on Schedule 4n , each of the Company and its Subsidiaries has good and marketable title to all of its personal property and assets, free and clear of any material restriction, mortgage, deed of trust, pledge, lien, security interest or other charge, claim or encumbrance which would have a Material Adverse Effect .   After giving effect to the Merger, except as set forth on Schedule 4n , with respect to properties and assets it leases, each of the Company and its Subsidiaries is in material compliance with such leases and holds a valid leasehold interest free of any liens, claims or encumbrances which would have a Material Adverse Effect.
 
 
o.
No Material Adverse Breaches, etc .  Neither Company nor any Subsidiary is subject to any charter, corporate or other legal restriction, or any judgment, decree, order, rule or regulation which in the judgment of the Company’s officers has had, or is reasonably expected in the future to have, a Material Adverse Effect.  Neither Company nor any Subsidiary is in breach of any contract or agreement which breach, in the judgment of the Company’s officers, has had, or is reasonably expected to have a Material Adverse Effect.
 
 
p.
Tax Status .  The Company and each Subsidiary has made and filed (taking into account any valid extensions) all federal and state income and all other tax returns, reports and declarations required by any jurisdiction to which it is subject and (unless and only to the extent that the Company or such Subsidiary has set aside on its books provisions reasonably adequate for the payment of all unpaid and unreported taxes) has paid all taxes and other governmental assessments and charges that are material in amount, shown or determined to be due on such returns, reports and declarations, except those being contested in good faith and has set aside on its books provision reasonably adequate for the payment of all taxes for periods subsequent to the periods to which such returns, reports or declarations apply.  To the knowledge of the Company, there are no unpaid taxes in any material amount claimed to be due from the Company or any Subsidiary by the taxing authority of any jurisdiction, and the officers of the Company know of no basis for any such claim.
 
 
q.
Certain Transactions . Except as set forth on Schedule 4q , and except for arm’s length transactions pursuant to which the Company or any Subsidiary makes payments in the ordinary course of business upon terms no less favorable than it could obtain from third parties, none of the officers, directors, or employees of the Company or any Subsidiary is presently a party to any transaction with the Company or any Subsidiary (other than for services as employees, officers and directors), including any contract, agreement or other arrangement providing for the furnishing of services to or by, providing for rental of real or personal property to or from, or otherwise requiring payments to or from any officer, director or such employee or, to the knowledge of the Company, any corporation, partnership, trust or other entity in which any officer, director, or any such employee has a substantial interest or is an officer, director, trustee or partner.
 
 
r.
Rights of First Refusal .  Except as set forth on Schedule 4c(i) or Schedule 4r , the Company is not obligated to offer the securities offered hereunder on a right of first refusal basis or
 
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otherwise to any third parties including, but not limited to, current or former stockholders of the Company, underwriters, brokers, agents or other third parties.
 
 
s.
Reliance .  The Company acknowledges that the Subscriber is relying on the representations and warranties made by the Company hereunder and that such representations and warranties are a material inducement to the Subscriber purchasing the Shares.  The Company further acknowledges that without such representations and warranties of the Company made hereunder, the Subscribers would not enter into this Agreement.
 
 
t.
Brokers’ Fees .  Except as set forth in Section 3 or Schedule 4(t) , the Company does not have any liability or obligation to pay any fees or commissions to any broker, finder or agent with respect to the transactions contemplated by this Agreement.

 
u.
SEC Reports . The Company has filed all reports, schedules, forms, statements and other documents required to be filed by the Company under the Securities Exchange Act of 1934, as amended, including pursuant to Section 13(a) or 15(d) thereof, for the two years preceding the date hereof (or such shorter period as the Company was required by law or regulation to file such material).

 
5.
Representations, Warranties and Agreements of the Subscriber.   The Subscriber represents and warrants to, and agrees with,  the Company the following:

 
a.
The Subscriber, its advisers, if any, and its designated representatives, if any, have the knowledge and experience in financial and business matters necessary to evaluate the merits and risks of its prospective investment in the Company, and have carefully reviewed and understand the risks of, and other considerations relating to, the purchase of Shares and the tax consequences of the investment, and have the ability to bear the economic risks of the investment.

 
b.
The Subscriber is acquiring the Shares being subscribed for pursuant to this Agreement for investment for its own account and not with the view to, or for resale in connection with, any distribution thereof.  The Subscriber understands and acknowledges that the Shares have not been registered under the Securities Act or any state securities laws, by reason of a specific exemption from the registration provisions of the Securities Act and applicable state securities laws, which depends upon, among other things, the bona fide nature of the investment intent as expressed herein.  The Subscriber further represents that it does not have any contract, undertaking, agreement or arrangement with any person to sell, transfer or grant participation to any third person with respect to any of the Shares.  The Subscriber understands and acknowledges that the Offering of the Shares will not be registered under the Securities Act nor under the state securities laws on the ground that the sale of the Shares to Subscriber as provided for in this Agreement and the issuance of securities hereunder is exempt from the registration requirements of the Securities Act and any applicable state securities laws.

 
c.
The Subscriber is an “accredited investor” as defined in Rule 501 of Regulation D as promulgated by the Securities and Exchange Commission under the Securities Act, for the reason(s) specified on the Accredited Investor Certification attached hereto as completed by Subscriber, and Subscriber shall submit to the Company such further assurances of such status as may be reasonably requested by the Company.  The Subscriber resides in the jurisdiction set forth on the Subscriber’s Omnibus Signature Page affixed hereto.
 
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d.
The Subscriber (i) if a natural person, represents that he or she is the greater of (A) 21 years of age or (B) the age of legal majority in his or her jurisdiction of residence, and has full power and authority to execute and deliver this Agreement and all other related agreements or certificates and to carry out the provisions hereof and thereof; (ii) if a corporation, partnership, or limited liability company or partnership, or association, joint stock company, trust, unincorporated organization or other entity, represents that such entity was not formed for the specific purpose of acquiring any of the Shares, such entity is duly organized, validly existing and in good standing under the laws of the state or jurisdiction of its organization, the consummation of the transactions contemplated hereby is authorized by, and will not result in a violation of state law or its charter or other organizational documents, such entity has full power and authority to execute and deliver this Agreement and all other related agreements or certificates and to carry out the provisions hereof and thereof and to purchase and hold the Shares being subscribed for pursuant to this Agreement, the execution and delivery of this Agreement has been duly authorized by all necessary action, this Agreement has been duly executed and delivered on behalf of such entity and is a legal, valid and binding obligation of such entity; or (iii) if executing this Agreement in a representative or fiduciary capacity, represents that it has full power and authority to execute and deliver this Agreement in such capacity and on behalf of the subscribing individual, ward, partnership, trust, estate, corporation, or limited liability company or partnership, or other entity for whom the Subscriber is executing this Agreement, and such individual, partnership, ward, trust, estate, corporation, or limited liability company or partnership, or other entity has full right and power to perform pursuant to this Agreement and make an investment in the Company, and represents that this Agreement constitutes a legal, valid and binding obligation of such entity.  The execution and delivery of this Agreement will not violate or be in conflict with any order, judgment, injunction, agreement or controlling document to which the Subscriber is a party or by which it is bound.
 
 
e.
The Subscriber understands that the Shares are being offered, and any Shares sold to it are being sold, in reliance on specific exemptions from the registration requirements of United States federal and state securities laws and that the Company is relying in part upon the truth and accuracy of, and such Subscriber’s compliance with, the representations, warranties, agreements, acknowledgments and understandings of such Subscriber set forth herein in order to determine the availability of such exemptions and the eligibility of such Subscriber to acquire such securities.  The Subscriber further acknowledges and understands that the Company is relying on the representations and warranties made by the Subscriber hereunder and that such representations and warranties are a material inducement to the Company to sell the Shares to the Subscriber.  The Subscriber further acknowledges that without such representations and warranties of the Subscriber made hereunder, the Company would not enter into this Agreement with the Subscriber.
 
 
f.
The Subscriber understands that no public market now exists, and there never will be a public market for, the Shares, that only a limited public market for the Company’s Common Stock exists and that there can be no assurance that an active public market for the Common Stock will exist or continue to exist.

 
g.
The Subscriber, its advisers, if any, and its designated representatives, if any, have received, reviewed and understood the information about the Company, Tyme and the Offering and have had an opportunity to discuss the Company’s and Tyme’s business, management and financial affairs with the Company’s management.  The Subscriber understands that such discussions were intended to describe the aspects of the Company’s business and prospects and the Offering which the Company believes to be material, but were not necessarily a
 
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thorough or exhaustive description, and except as expressly set forth in this Agreement, the Company makes no representation or warranty with respect to the completeness of such information and makes no representation or warranty of any kind with respect to any information provided by any entity other than the Company.  Some of such information may include projections as to the future performance of the Company and/or Tyme, which projections may not be realized, may be based on assumptions which may not be correct and may be subject to numerous factors beyond the Company’s control.  Additionally, the Subscriber understands and represents that it is purchasing the Shares being subscribed for pursuant to this Agreement notwithstanding the fact that the Company and/or Tyme may disclose in the future certain material information the Subscriber has not received, including (without limitation) financial statements of the Company and/or Tyme for the current or prior fiscal periods, and any subsequent period financial statements that will be filed with the Securities and Exchange Commission, that it is not relying on any such information in connection with its purchase of the Shares being subscribed for pursuant to this Agreement and that it waives any right of action with respect to the nondisclosure to it prior to its purchase of such Shares of any such information.  Each Subscriber has sought such accounting, legal and tax advice as it has considered necessary to make an informed investment decision with respect to its acquisition of the Shares being subscribed for pursuant to this Agreement.
 
 
h.
The Subscriber acknowledges that the Company is not acting as a financial advisor or fiduciary of the Subscriber (or in any similar capacity) with respect to the Transaction Documents and the transactions contemplated hereby and thereby and no investment advice has been given by the Company or any of its representatives or agents in connection with the Transaction Documents and the transactions contemplated hereby and thereby.  The Subscriber further represents to the Company that the Subscriber’s decision to enter into the Transaction Documents has been based solely on the independent evaluation by the Subscriber and its representatives.

 
i.
As of the Closing, all actions on the part of Subscriber, and its officers, directors and partners, if applicable, necessary for the authorization, execution and delivery of this Agreement and the Registration Rights Agreement and the performance of all obligations of the Subscriber hereunder and thereunder shall have been taken, and this Agreement and the Registration Rights Agreement, assuming due execution by the other parties hereto and thereto, constitute valid and legally binding obligations of the Subscriber, enforceable in accordance with their respective terms, subject to: (i) judicial principles limiting the availability of specific performance, injunctive relief, and other equitable remedies and (ii) bankruptcy, insolvency, reorganization, moratorium or other similar laws now or hereafter in effect generally relating to or affecting creditors’ rights.

 
j.
Subscriber represents that neither it nor, to its knowledge, any person or entity controlling, controlled by or under common control with it, nor any person having a beneficial interest in it, nor any person on whose behalf the Subscriber is acting: (i) is a person listed in the Annex to Executive Order No. 13224 (2001) issued by the President of the United States (Executive Order Blocking Property and Prohibiting Transactions with Persons Who Commit, Threaten to Commit, or Support Terrorism); (ii) is named on the List of Specially Designated Nationals and Blocked Persons maintained by the U.S. Office of Foreign Assets Control; (iii) is a non-U.S. shell bank or is providing banking services indirectly to a non-U.S. shell bank; (iv) is a senior non-U.S. political figure or an immediate family member or close associate of such figure; or (v) is otherwise prohibited from investing in the Company pursuant to applicable U.S. anti-money laundering, anti-terrorist and asset control laws, regulations, rules or orders
 
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(categories (i) through (v), each a “ Prohibited Subscriber ”). The Subscriber agrees to provide the Company, promptly upon request, all information that the Company reasonably deems necessary or appropriate to comply with applicable U.S. anti-money laundering, anti-terrorist and asset control laws, regulations, rules and orders.  The Subscriber consents to the disclosure to U.S. regulators and law enforcement authorities by the Company and its affiliates and agents of such information about the Subscriber as the Company reasonably deems necessary or appropriate to comply with applicable U.S. antimony laundering, anti-terrorist and asset control laws, regulations, rules and orders. If the Subscriber is a financial institution that is subject to the USA Patriot Act, the Subscriber represents that it has met all of its obligations under the USA Patriot Act. The Subscriber acknowledges that if, following its investment in the Company, the Company reasonably believes that the Subscriber is a Prohibited Subscriber or is otherwise engaged in suspicious activity or refuses to promptly provide information that the Company requests, the Company has the right or may be obligated to prohibit additional investments, segregate the assets constituting the investment in accordance with applicable regulations or immediately require the Subscriber to transfer the Shares.  The Subscriber further acknowledges that the Subscriber will have no claim against the Company or any of its affiliates or agents for any form of damages as a result of any of the foregoing actions.
 
 
If the Subscriber is affiliated with a non-U.S. banking institution (a “ Foreign Bank ”), or if the Subscriber receives deposits from, makes payments on behalf of, or handles other financial transactions related to a Foreign Bank, the Subscriber represents and warrants to the Company that: (1) the Foreign Bank has a fixed address, other than solely an electronic address, in a country in which the Foreign Bank is authorized to conduct banking activities; (2) the Foreign Bank maintains operating records related to its banking activities; (3) the Foreign Bank is subject to inspection by the banking authority that licensed the Foreign Bank to conduct banking activities; and (4) the Foreign Bank does not provide banking services to any other Foreign Bank that does not have a physical presence in any country and that is not a regulated affiliate.

 
k.
The Subscriber or its duly authorized representative realizes that because of the inherently speculative nature of businesses of the kind conducted and contemplated by the Company, the Company’s financial results may be expected to fluctuate from month to month and from period to period and will, generally, involve a high degree of financial and market risk that could result in substantial or, at times, even total losses for investors in securities of the Company.

 
l.
The Subscriber has adequate means of providing for its current and anticipated financial needs and contingencies, is able to bear the economic risk for an indefinite period of time and has no need for liquidity of the investment in the Shares and could afford complete loss of such investment.

 
m.
The Subscriber is not subscribing for Shares as a result of or subsequent to any advertisement, article, notice or other communication, published in any newspaper, magazine or similar media or broadcast over television, radio, or the internet, or presented at any seminar or meeting, or any solicitation of a subscription by a person not previously known to the Subscriber in connection with investments in securities generally.

 
n.
The Subscriber acknowledges that no U.S. federal or state agency or any other government or governmental agency has passed upon the Shares or made any finding or determination as to the fairness, suitability or wisdom of any investments therein.
 
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o.
The Subscriber agrees to be bound by all of the terms and conditions of the Registration Rights Agreement and to perform all obligations thereby imposed upon it.

 
p.
All of the information that the Subscriber has heretofore furnished or which is set forth herein is true, correct and complete as of the date of this Agreement, and, if there should be any material change in such information prior to the admission of the undersigned to the Company, the Subscriber will immediately furnish revised or corrected information to the Company.

 
q.
(For ERISA plans only)   The fiduciary of the ERISA plan (the “ Plan ”) represents that such fiduciary has been informed of and understands the Company’s investment objectives, policies and strategies, and that the decision to invest “plan assets” (as such term is defined in ERISA) in the Company is consistent with the provisions of ERISA that require diversification of plan assets and impose other fiduciary responsibilities.  The Subscriber fiduciary or Plan (a) is responsible for the decision to invest in the Company; (b) is independent of the Company or any of its affiliates; (c) is qualified to make such investment decision; and (d) in making such decision, the Purchaser fiduciary or Plan has not relied primarily on any advice or recommendation of the Company or any of its affiliates.
 
 
6.
Transfer Restrictions .  The Subscriber acknowledges and agrees as follows:

 
a.
The Shares have not been registered for sale under the Securities Act, in reliance on the private offering exemption in Section 4(a)(2) thereof; other than as expressly provide in the Registration Rights Agreement, the Company does not currently intend to register the Shares under the Securities Act at any time in the future; and the undersigned will not immediately be entitled to the benefits of Rule 144 with respect to the Shares.

 
b.
The Subscriber understands that there are substantial restrictions on the transferability of the Shares, accordingly, that  the certificates representing the Shares shall bear a restrictive legend in substantially the following form (and a stop-transfer order may be placed against transfer of such certificates or other instruments):

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAWS, AND NEITHER SUCH SECURITIES NOR ANY INTEREST THEREIN MAY BE OFFERED, SOLD, PLEDGED, ASSIGNED OR OTHERWISE TRANSFERRED UNLESS (1) A REGISTRATION STATEMENT WITH RESPECT THERETO IS EFFECTIVE UNDER THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS, OR (2) AN EXEMPTION FROM SUCH REGISTRATION EXISTS AND THE COMPANY RECEIVES AN OPINION OF COUNSEL TO THE HOLDER OF SUCH SECURITIES, WHICH COUNSEL AND OPINION ARE SATISFACTORY TO THE COMPANY, THAT SUCH SECURITIES MAY BE OFFERED, SOLD, PLEDGED, ASSIGNED OR TRANSFERRED IN THE MANNER CONTEMPLATED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR APPLICABLE STATE SECURITIES LAWS.   HEDGING TRANSACTIONS INVOLVING THESE SECURITIES MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE SECURITIES ACT.

The legend set forth above shall be removed and the Company shall issue a certificate without such legend to the holder of the Shares upon which it is stamped, if (a) such Shares are sold pursuant to a registration statement under the Securities Act, or (b) such holder
 
13
 

 

 
delivers to the Company an opinion of counsel, such counsel and opinion reasonably acceptable to the Company, that a disposition of the Shares is being made pursuant to an exemption from such registration.
 
 
c.
Subscriber understands that prior to the Merger, the Company is a “shell company” as defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”), and that upon the filing of a Current Report on Form 8-K reporting the consummation of the Merger and the other transactions described herein and otherwise containing Form 10 information discussed below, the Company will cease to be a shell company.  Pursuant to Rule 144(i), the Shares will be deemed securities issued by a current or former shell company and, even where the Shares otherwise meet the holding period and other requirements of Rule 144, nevertheless the Shares cannot be sold in reliance on Rule 144 until one year after the Company (a) is no longer a shell company; and (b) has filed current “Form 10 information” (as defined in Rule 144(i)) with the SEC reflecting that it is no longer a shell company, and provided that at the time of a proposed sale pursuant to Rule 144, the Company is subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act and has filed all reports and other materials required to be filed by Section 13 or 15(d) of the Exchange Act, as applicable, during the preceding 12 months (or for such shorter period that the issuer was required to file such reports and materials), other than Form 8-K reports.   As a result, the restrictive legends on certificates for the Shares cannot be removed except in connection with an actual sale meeting the foregoing requirements or pursuant to an effective registration statement .

 
7.
Indemnification.   The Subscriber agrees to indemnify and hold harmless the Company, and its officers, directors, employees, agents, control persons and affiliates from and against all losses, liabilities, claims, damages, costs, fees and expenses whatsoever (including, but not limited to, any and all expenses incurred in investigating, preparing or defending against any litigation commenced or threatened) based upon or arising out of the Subscriber’s actual or alleged false acknowledgment, representation or warranty, or misrepresentation or omission to state a material fact, or breach by the Subscriber of any covenant or agreement made by the Subscriber, contained herein or in any other document delivered by the Subscriber in connection with this Agreement.

 
8.
Revocability; Binding Effect.   The subscription hereunder may be revoked prior to the Closing thereon, provided that written notice of revocation is sent and is received by the Company at least two business days prior to the Closing on such subscription.  The Subscriber hereby acknowledges and agrees that this Agreement shall survive the death or disability of the Subscriber and shall be binding upon and inure to the benefit of the parties and their heirs, executors, administrators, successors, legal representatives and permitted assigns.  If the Subscriber is more than one person, the obligations of the Subscriber hereunder shall be joint and several and the agreements, representations, warranties and acknowledgments herein shall be deemed to be made by and be binding upon each such person and such person’s heirs, executors, administrators, successors, legal representatives and permitted assigns.

 
9.
Modification.   This Agreement shall not be modified or waived except by an instrument in writing signed by the party against whom any such modification or waiver is sought to be enforced.
 
14
 

 

 
 
10.
Immaterial Modifications to the Registration Rights Agreement.   The Company may, at any time prior to the Closing, amend the Registration Rights Agreement if necessary to clarify any provision therein, without first providing notice or obtaining prior consent of the Subscriber.

 
11.
Notices.   Any notice or other communication required or permitted to be given hereunder shall be in writing and shall be mailed by certified mail, return receipt requested, or delivered against receipt to the party to whom it is to be given (a) if to the Company, at the address set forth above, with a copy to CKR Law LLP, 1330 Avenue of the Americas, New York, NY 10019, Attention: Barrett S. DiPaolo, facsimile +1-212-400-6901, or (b) if to the Subscriber, at the address set forth on the Omnibus Signature Page hereof (or, in either case, to such other address as the party shall have furnished in writing in accordance with the provisions of this Section).  Any notice or other communication given by certified mail shall be deemed given at the time of certification thereof, except for a notice changing a party’s address which shall be deemed given at the time of receipt thereof .
 
 
12.
Assignability.   This Agreement and the rights, interests and obligations hereunder are not transferable or assignable by the Subscriber, and the transfer or assignment of the Shares shall be made only in accordance with all applicable laws.

 
13.
Applicable Law.   This Agreement shall be governed by and construed in accordance with the laws of the State of New York, without reference to the principles thereof relating to the conflict of laws.

 
14.
Arbitration.   The parties agree to submit all controversies to arbitration in accordance with the provisions set forth below and understand that:

 
a.
Arbitration shall be final and binding on the parties.

 
b.
The parties are waiving their right to seek remedies in court, including the right to a jury trial.

 
c.
Pre-arbitration discovery is generally more limited and different from court proceedings.

 
d.
The arbitrator’s award is not required to include factual findings or legal reasoning and any party’s right to appeal or to seek modification of rulings by arbitrators is strictly limited.

 
e.
The panel of arbitrators will typically include a minority of arbitrators who were or are affiliated with the securities industry.

 
f.
All controversies which may arise between the parties concerning this Agreement shall be determined by arbitration pursuant to the rules then pertaining to the Financial Industry Regulatory Authority in New York, New York.  Judgment on any award of any such arbitration may be entered in the Supreme Court of the State of New York or in any other court having jurisdiction of the person or persons against whom such award is rendered.  Any notice of such arbitration or for the confirmation of any award in any arbitration shall be sufficient if given in accordance with the provisions of this Agreement.  The parties agree that the determination of the arbitrators shall be binding and conclusive upon them. The prevailing party, as determined by such arbitrators, in a legal proceeding shall be entitled to collect any costs, disbursements and reasonable attorney’s fees from the other party.  Prior to filing an arbitration, the parties hereby agree that they will attempt to resolve their differences first by submitting the matter for resolution to a mediator, acceptable to all parties, and whose expenses will be borne equally by all parties.  The mediation will be held in the County of
 
15
 

 

 
 
 
New York, State of New York, on an expedited basis.  If the parties cannot successfully resolve their differences through mediation, the matter will be resolved by arbitration.  The arbitration shall take place in the County of New York, State of New York, on an expedited basis.
 
 
15.
Blue Sky Qualification.   The purchase of Shares under this Agreement is expressly conditioned upon the exemption from qualification of the offer and sale of the Shares from applicable federal and state securities laws.  The Company shall not be required to qualify this transaction under the securities laws of any jurisdiction and, should qualification be necessary, the Company shall be released from any and all obligations to maintain its offer, and may rescind any sale contracted, in the jurisdiction.

 
16.
Use of Pronouns.   All pronouns and any variations thereof used herein shall be deemed to refer to the masculine, feminine, neuter, singular or plural as the identity of the person or persons referred to may require.

 
17.
Confidentiality.   The Subscriber acknowledges and agrees that any information or data the Subscriber has acquired from or about the Company or may acquire in the future, not otherwise properly in the public domain, including, without limitation, the Transaction Documents, was received in confidence.  The Subscriber agrees not to divulge, communicate or disclose, except as may be required by law or for the performance of this Agreement, or use to the detriment of the Company or for the benefit of any other person, or misuse in any way, any confidential information of the Company, including any scientific, technical, trade or business secrets of the Company and any scientific, technical, trade or business materials that are treated by the Company as confidential or proprietary, including, but not limited to, internal personnel and financial information of the Company or its affiliates, the manner and methods of conducting the business of the Company or its affiliates and confidential information obtained by or given to the Company about or belonging to third parties.  The Subscriber understands that the Company may rely on Subscriber’s agreement of confidentiality to comply with the exemptive provisions of Regulation FD under the Securities Act as set forth in Rule 100(a)(b)(2)(ii) of Regulation FD.  In addition, the Subscriber acknowledges that it is aware that the United States securities laws generally prohibit any person who is in possession of material nonpublic information about a public company such as the Company from purchasing or selling securities of such company.  The provisions of this Section 17 are in addition to and not in lieu of any other confidentiality agreement between the Company and the Subscriber.

 
18.
Anti-Dilution.   The Shares shall have anti-dilution protection such that if, within twenty-four (24) months after the Closing, the Company shall issue Additional Shares of Common Stock (as defined below) without consideration or for a consideration per share, or with an exercise or conversion price per share, less than $0.50, the Subscriber shall be entitled to receive from the Company (for no additional consideration) additional Shares in an amount such that, when added to the number of  Shares purchased by Subscriber under this Agreement, will equal the number of Shares that the Subscriber’s Purchase Price for the Shares set forth on the Subscriber’s signature page hereof would have purchased at the Adjusted Price (as defined below).  The “ Adjusted Price ” shall be a price (calculated to the nearest cent) determined by multiplying the Adjusted Price per share in effect immediately prior to such issue (which, for avoidance of doubt, shall be equal $0.50 prior to the first such issue) by a fraction, (A) the numerator of which shall be (1) the number of shares of Common Stock outstanding immediately prior to such issue plus (2) the number of shares of Common Stock which the aggregate consideration received or to be received by the Company for the total number of Additional Shares of Common Stock so issued would purchase at such Adjusted Price; and (B) the denominator of which shall be (1) the number of
 
16
 

 

 
 
 
Shares of Common Stock outstanding immediately prior to such issue plus (2) the number of such Additional Shares of Common Stock so issued; provided that, (i) for the purpose of this Section, all shares of Common Stock issuable upon conversion or exchange of convertible securities outstanding immediately prior to such issue shall be deemed to be outstanding, and (ii) the number of shares of Common Stock deemed issuable upon conversion or exchange of such outstanding convertible securities shall be determined without giving effect to any adjustments to the conversion or exchange price or conversion or exchange rate of such convertible securities resulting from the issuance of Additional Shares of Common Stock that is the subject of this calculation.
   
“ Additional Shares of Common Stock ” shall mean all shares of Common Stock issued by the Company after the Closing of the Offering (including without limitation any shares of Common Stock issuable upon conversion or exchange of any convertible securities or upon exercise of any option or warrant, on an as-converted basis), other than: (i) shares of Common Stock issuable in connection with the Merger; (ii) shares of Common stock issuable in connection with the conversion of the Bridge Note; (iii) shares of Common Stock issued or issuable upon conversion or exchange of any convertible securities or exercise of any options or warrants outstanding as of immediately following the Merger and the Closing; (iv) shares of Common Stock issued or issuable by reason of a dividend, stock split, split-up or other distribution on shares of Common Stock relating to any recapitalization, reclassification or reorganization of the capital stock of the Company, or any consolidation or merger of the Company with another corporation, or the sale of all or substantially all of its assets or other transaction effected in such a way that there is no change of control of the Company; (v) shares of Common Stock (or options, restricted stock units or other awards with respect thereto) issued or issuable to officers, employees or directors of, or consultants to, the Company or any of its Subsidiaries pursuant to an incentive compensation plan, agreement or arrangement approved by the Board of Directors of the Company; (vi) securities issued or issuable pursuant to the acquisition of another entity or business by the Company by merger, purchase of substantially all of the assets or other reorganization or pursuant to a joint venture or technology license agreement, but not including a transaction in which the Company is issuing securities primarily for the purpose of raising capital or to an entity whose primary business is investing in securities; (vii) any securities issued or issuable by the Company pursuant to the Subscription Agreements; and (viii) securities issued to financial institutions, institutional investors or lessors in connection with credit arrangements, equipment financings, lease arrangements or similar transactions, in the aggregate not exceeding ten percent (10%) of the number of shares of Common Stock outstanding at any time, and in case of clauses (v) through (viii) above, such issuance is approved by a majority of disinterested directors of the Company and includes no “death spiral” provision of any kind.

 
19. Miscellaneous.
 
 
a.
This Agreement, together with the Registration Rights Agreement and any confidentiality agreement between the Company or Tyme and the Subscriber, constitute the entire agreement between the Subscriber and the Company with respect to the Offering and supersede all prior oral or written agreements and understandings, if any, relating to the subject matter hereof.  The terms and provisions of this Agreement may be waived, or consent for the departure therefrom granted, only by a written document executed by the party entitled to the benefits of such terms or provisions.

 
b.
The representations and warranties of the Company and the Subscriber made in this Agreement shall survive the execution and delivery hereof and delivery of the Shares for a period of twelve (12) months following the Closing Date.
 
17
 

 

 
 
c.
Each of the parties hereto shall pay its own fees and expenses (including the fees of any attorneys, accountants, appraisers or others engaged by such party) in connection with this Agreement and the transactions contemplated hereby, whether or not the transactions contemplated hereby are consummated.

 
d.
This Agreement may be executed in one or more original or facsimile counterparts, each of which shall be deemed an original, but all of which shall together constitute one and the same instrument and which shall be enforceable against the parties actually executing such counterparts. The exchange of copies of this Agreement and of signature pages by facsimile transmission or in .pdf format shall constitute effective execution and delivery of this Agreement as to the parties and may be used in lieu of the original Agreement for all purposes. Signatures of the parties transmitted by facsimile or in pdf format shall be deemed to be their original signatures for all purposes.

 
e.
Each provision of this Agreement shall be considered separable and, if for any reason any provision or provisions hereof are determined to be invalid or contrary to applicable law, such invalidity or illegality shall not impair the operation of or affect the remaining portions of this Agreement.

 
f.
Paragraph titles are for descriptive purposes only and shall not control or alter the meaning of this Agreement as set forth in the text.

 
g.
The Subscriber hereby agrees to furnish the Company such other information as the Company may request prior to the Closing with respect to its subscription hereunder.

        20.
Omnibus Signature Page.   This Agreement is intended to be read and construed in conjunction with the Registration Rights Agreement.  Accordingly, pursuant to the terms and conditions of this Agreement and the Registration Rights Agreement, it is hereby agreed that the execution by the Subscriber of this Agreement, in the place set forth on the Omnibus Signature Page below, shall constitute agreement to be bound by the terms and conditions hereof and the terms and conditions of the Registration Rights Agreement, with the same effect as if each of such separate but related agreement were separately signed.

        21.
Public Disclosure.   Neither the Subscriber nor any officer, manager, director, member, partner, stockholder, employee, affiliate, affiliated person or entity of the Subscriber shall make or issue any press releases or otherwise make any public statements or make any disclosures to any third person or entity with respect to the transactions contemplated herein and will not make or issue any press releases or otherwise make any public statements of any nature whatsoever with respect to the Company without the Company’s express prior approval.  The Company has the right to withhold such approval in its sole discretion.

        22.
Potential Conflicts.   CKR is counsel to the Company and has represented the Company in the proposed transaction, for which it will receive legal fees in accordance with an executed retainer agreement.  CKR and/or its affiliates, principals, representatives or employees may now or hereafter own shares of the Company.
 
18
 

 

 
IN WITNESS WHEREOF, the Company has duly executed this Subscription Agreement as of the 5th day of March, 2015.
         
  TYME TECHNOLOGIES, INC.
       
  By:      
    Name: Peter E. de Svastich
    Title:  President
 
19

 


Exhibit 10.6


LIMITED RECOURSE PROMISSORY NOTE


THIS NOTE IS NOT INTENDED TO BE A NEGOTIABLE INSTRUMENT UNDER THE UNIFORM COMMERCIAL CODE, AND NEITHER THIS NOTE NOR THE COLLATERAL PLEDGED TO SECURE THIS NOTE MAY BE ASSIGNED, PLEDGED, TRANSFERRED OR HYPOTHECATED BY THE LENDER.


THIS NOTE WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933, AND THIS NOTE MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM.


$2,500,000.00

DATED: March 5. 2015


FOR VALUE RECEIVED, the undersigned, GEM Global Yield Fund LLC SCS (the “Borrower”) HEREBY PROMISES TO PAY to the order of Tyme Technologies, Inc. (the “Lender”), on June 5, 2015 (the “Maturity Date”) the principal amount of Two Million Five Hundred Thousand dollars ($2,500,000.00).  No interest shall accrue or be payable on the principal amount of this Note.


1.

Reference is made to the Subscription Agreement of even date herewith between the Lender and the Borrower with respect to the purchase by the Borrower of an aggregate of 2,716,000 shares of common stock, par value $0.0001 per share, of the Lender (the “Subscription Agreement”).  Capitalized terms not otherwise defined herein shall have the meanings ascribed to them in the Subscription Agreement.  This Note represents the obligation of the Borrower to pay the Purchase Price not paid by Borrower on the Closing Date in accordance with the terms of the Subscription Agreement.

 

 

2.

The obligations of the Borrower to the Lender hereunder are secured pursuant to a Subscription Note Shares Escrow Agreement of even date herewith (“Escrow Agreement”) between the Borrower and the Lender.

 

 

3.

In the event that


 

(i)

the Borrower shall fail to pay any principal under this Note when due and payable hereunder, and such failure shall continue for a period of three (3) Business Days (as defined below) after receipt by Borrower of written notice by the Lender thereof; or

 

 

 

 

(ii)

a default shall occur and be continuing under the Escrow Agreement after any time provided therein for curing the same shall have expired, or the Escrow Agreement shall fail to remain in full force and effect, or any action shall be taken to discontinue the Escrow Agreement or to assert the invalidity thereof; or

 

 

 

 

(iii)

a receiver, trustee or other similar official shall be appointed over the Borrower or a material part of its assets and such appointment shall remain uncontested for twenty (20) days or shall not be dismissed or discharged within sixty (60) days; or

 

 

 

 

(iv)

the Borrower shall become insolvent or generally fails to pay, or admits in writing its inability to pay, its debts as they become due, subject to applicable grace periods, if any; or


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(v)

the Borrower shall make a general assignment for the benefit of creditors; or

 

 

 

 

(vi)

the Borrower shall file a petition for relief under any bankruptcy, insolvency or similar law (domestic or foreign); or

 

 

 

 

(vii)

an involuntary proceeding shall be commenced or filed against the Borrower under any bankruptcy, insolvency or similar law (domestic or foreign) and such petition shall not be dismissed within sixty (60) days after commencement or filing


(each event specified in clauses (i) through (vii) above, an “Event of Default”); then, in the case of any of the events specified in clauses (iv), (v), (vi) or (vii), the outstanding principal amount under this Note shall become immediately due and payable without any action on the part of the Lender, and in the case of any of the other events specified above, the Lender may by written notice to the Borrower declare the outstanding principal amount under this Note to be immediately due and payable, whereupon the same shall become immediately due and payable, and, except for the notices specified in this sentence, Borrower waives demand, presentment, protest, notice of protest, dishonor, notice of dishonor or any other notice of any kind.  Any notice specified in this paragraph by Lender to Borrower of the occurrence of a failure to pay or other default must be delivered as specified below and must clearly specify that it is a notice of default under this paragraph.


4.

No delay on the part of Lender in exercise of any right, power or remedy shall operate as a waiver thereof, nor shall any single or partial exercise by Lender of any right, power or remedy preclude other or further exercise thereof, or the exercise of any other right, power or remedy.  No waiver of, or consent with respect to, any provision of this Note shall in any event be effective unless the same shall be in writing and signed and delivered by Lender, and then any such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given.

 

 

5.

Unless otherwise agreed by the Lender and the Borrower, the principal amount hereof is payable to the Lender at:


Tyme Technologies, Inc.

48 Wall Street – Suite 1100

New York, New York 10005


in immediately available funds on the Maturity Date, in the lawful currency of the United States of America. Whenever any payment to be made hereunder shall be due on a Saturday, Sunday or public or bank holiday in New York City (any other day being a “Business Day”), such payment shall be made on the next succeeding Business Day.


6.

The Borrower has the right at any time and from time to time to prepay in whole or in part the principal amount hereof, without premium or penalty.  Any amounts so prepaid may not be reborrowed hereunder.

 

 

7.

Neither the Lender nor the Borrower shall have the right to assign its rights and obligations under this Note without the prior written consent of the other party.

 

 

8.

Notices, confirmations and demands hereunder shall be in writing and will be sufficient if delivered by hand, by first class mail or nationally recognized courier service postage prepaid, or by tested cable, or facsimile transmission, at the following addresses, or to such other address as the recipient shall have designated to the sender by written notice hereunder.


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If to the Borrower:


GEM Global Yield Fund LLC SCS

390 Madison Avenue, 36 th Floor

New York, NY 10019

Attn: Christopher Brown



If to the Lender:


Tyme Technologies, Inc.

48 Wall Street – Suite 1100

New York, New York 10005

Attn.: President



9.

LIMITED RECOURSE .  Notwithstanding anything contained in this Note to the contrary, the Lender agrees that (i) the Borrower shall be liable upon the indebtedness evidenced by this Note to the full extent (but only to the extent) of Borrower’s interest in that certain stock of the Lender owned by Borrower (the “Escrowed Securities”) that the Borrower has deposited with the Escrow Agent (as defined in the Escrow Agreement) pursuant to the Escrow Agreement, (ii) if any default occurs under this Note, or under the Subscription Agreement with respect to the payment of the Purchase Price, any judicial proceedings brought by the Lender against the Borrower shall be limited to the preservation, enforcement and foreclosure, or any thereof, of the liens, rights, benefits and interests of the Lender under the Escrow Agreement, and no attachment, execution or other writ of process shall be sought, issued or levied upon any assets, properties or funds of the Borrower other than the Escrowed Securities, and (iii) in the event of a foreclosure of such liens, rights, benefits or security interests under the Escrow Agreement, whether by judicial proceedings or exercise of power of sale or otherwise, no judgment for any deficiency upon the indebtedness evidenced by this Note shall be sought or obtained by the Lender against the Borrower.

 

 

10.

This Note shall be governed by and construed in accordance with the laws of the State of New York applicable to contracts made and to be performed entirely within such State.  Any judicial proceeding brought to enforce this Note may only be brought in a federal or New York State court located in the County of New York, State of New York.  Each party to this Note waives any objection to jurisdiction of and venue in such courts in any action instituted hereunder and shall not assert any defense based on lack of jurisdiction of or improper venue in any such court or based upon forum non conveniens .

 

 

11.

THE BORROWER HEREBY WAIVES ANY RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING UNDER OR RELATED TO THIS NOTE.


[Signature page follows.]


- 3 -


IN WITNESS WHEREOF , with the intent to be legally bound hereby, the Borrower has executed this Note as of the date first written above.


GEM GLOBAL YIELD FUND LLC SCS



By: /s/ Christopher Brown

Name:  Christopher Brown

Title:  Manager




Acknowledged and agreed:


TYME TECHNOLOGIES, INC.



By: /s/ Peter de Svastich

Name:  Peter de Svastich

Title:  President


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Exhibit 10.7


SUBSCRIPTION NOTE SHARES ESCROW AGREEMENT


This Subscription Note Shares Escrow Agreement, dated March 5, 2015 (this “ Agreement ”), is by and among Tyme Technologies, Inc., a Delaware corporation (the “ Company ”), GEM Global Yield Fund LLC SCS (“ Depositor ”) and CKR Law LLP, a California limited liability partnership, as escrow agent (in such capacity, “ Escrow Agent ”).


W I T N E S S E T H :


WHEREAS, pursuant to that certain Subscription Agreement, dated of even date herewith (the “ Subscription Agreement ”), Depositor purchased from the Company 2,716,000 shares (the “ Subscription Shares ”) of the common stock, par value $0.0001 per share (the “ Common Stock ”), of the Company for consideration consisting of cash and a Limited Recourse Promissory Note, dated of even date herewith, payable to the Company and in the principal amount of $2,500,000.00 (the “ Note ”), a copy of the forms of the Subscription Agreement and Note being attached as Exhibits A and B hereto, respectively, and delivered the Note to the Company; and


WHEREAS, pursuant to the Subscription Agreement, Depositor is required to deposit with the Escrow Agent 5,000,000 shares of Common Stock (each, an “ Deposit Share ”), the disposition of which is to made in accordance with the terms of this Agreement; and


WHEREAS, the Company would not have entered into the Subscription Agreement, sell to Depositor the Subscription Shares, and accepted the Note in partial payment of the consideration for the sale of the Subscription Shares had Depositor not entered into this Agreement and deposited all of the Deposit Shares and Deposit Stock Certificates (as defined below) with the Escrow Agent to be disposed of in accordance with this Agreement.


NOW, THEREFORE , in consideration of the premises and agreements set forth in this Agreement, and for other good and valuable consideration, the sufficiency and receipt of which each of the parties to this Agreement hereby acknowledges the parties to this Agreement agree as follows:


1.           Appointment of Escrow Agent.   The Company and Depositor hereby appoint Escrow Agent to serve as, and Escrow Agent hereby agrees to act as, escrow agent upon the terms and conditions set forth in this Agreement.  The Company and Depositor acknowledge and agree that CKR Law, LLP (in all capacities other than as Escrow Agent, “ CKR ”) is not providing any legal services to either the Company and Depositor pursuant to this Agreement, but is acting merely in a ministerial capacity as Escrow Agent as requested by the Company and Depositor.


2.           Establishment of Escrow .


(a)           Escrow of Deposit Shares . Simultaneously with the execution of this Agreement, Depositor shall deposit with the Escrow Agent a stock certificate or certificates registered in the Depositor’s name representing all of the 5,000,000 Deposit Shares, each such certificate accompanied by a stock power duly endorsed in blank with signature(s) guaranteed by a member of one of the “Medallion” guarantee programs (Securities Transfer Agents Medallion Program (STAMP), Stock Exchanges Medallion Program (SEMP), or New York Stock Exchange Medallion Signature Program (MSP)).  Each such stock certificate and accompanying stock power deposited with the Escrow Agent pursuant to this section 2(a) are collectively referred to herein as a “ Deposit Stock Certificate .”  The Deposit Shares and Deposit Stock Certificates shall be held as a trust fund and shall not be subject to any lien, attachment, trustee process or any other judicial process of any creditor of any party hereto.  The Escrow Agent agrees to hold the Deposit Stock Certificate(s) evidencing the Deposit Shares in an escrow account (the “ Escrow Account ”) subject to the terms and conditions of this Agreement.


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(b)          Security for Depositor’s Satisfaction of the Note .  The Deposit Shares shall be (i) security for the Depositor’s compliance with its payment obligations under the Note and (ii) the exclusive means for the Company to enforce such obligations upon the failure of Depositor to make the required payments under the Note in accordance with the terms of the Note (the “ Surrender Event ”).


(c)          Dividends, Etc.  Any securities of the Company distributed in respect of or in exchange for any of the Deposit Shares, whether by way of stock dividends, stock splits or otherwise, shall be issued in the name of the Depositor or its nominee specified in writing and shall be delivered to the Escrow Agent, who shall hold such securities in the Escrow Account.  Such securities shall be considered Deposit Shares for purposes hereof.


3.           Disposition of the Escrow Funds .


(a)         Upon the occurrence of the Surrender Event in the good faith determination of the Board of Directors of the Company, the Company shall provide written notice to the Escrow Agent and Depositor (a “ Surrender Notice ”) that states that there has been an occurrence of the Surrender Event and the nature of such Surrender Event (including the amount of payments not made in accordance with the terms of the Note), and the Escrow Agent shall take the following actions:

 

(i)          In the event that, within ten “ Business Days ” (as defined below) after the giving of the Surrender Notice in accordance with this paragraph 2(a), Depositor has not disputed the basis of the giving of the Surrender Notice ( i.e. , that the Surrender Event has not occurred in that payment(s) under the Note have been made, setting forth in detail the date(s) and amount(s) of such payment(s), accompanied by proof of such payment(s)) by giving written notice thereof to Escrow Agent (a “ Dispute Notice ”), then the Escrow Agent shall deliver the Deposit Stock Certificate(s) representing all of the Deposit Shares then in the Escrow Account to the Company, whereupon the Company shall retain, by utilizing the applicable Deposit Stock Certificate(s), the number of Deposit Shares (the “ Surrendered Shares ”) equal to the quotient of (A) the dollar amount of the principal and/or interest, if any, on the Note that Depositor has failed to pay as of the date of the Surrender Notice divided by (B) $0.50 (the “ Surrender Formula ”).  The Company shall utilize the applicable Deposit Stock Certificate(s) to cause all of the Surrendered Shares to be cancelled and no longer be considered issued.  In the event that the Surrendered Shares constitute less than all of the Deposit Shares, such remaining Deposit Shares, equal to (x) 5,000,000 minus (y) the number of Surrendered Shares, shall be, contemporaneously with the cancellation of the Surrendered Shares, returned (or, if required, arranged for the return) to Depositor along with all Deposit Stock Certificates, if any, not being utilized in connection with the cancellation of the Surrendered Shares and return of such remaining Deposit Shares. For the avoidance of doubt, all Surrendered Shares shall not be retained by the Company in treasury or otherwise, but shall be cancelled and no longer deemed issued and/or outstanding.


(ii)         In the event that, within ten Business Days after the giving of the Surrender Notice in accordance with this paragraph 2(a), Depositor shall have delivered to the Escrow Agent a Dispute Notice (with a copy of the Dispute Notice being given, in the form of a notice, to the Company), the Deposit Stock Certificate(s) evidencing the Deposit Shares shall not be delivered to either the Company or Depositor but retained by the Escrow Agent pending a further agreement executed by both the Company and  Depositor as to the disposition of all or any portion of the Deposit Stock Certificate(s) (and the issued and outstanding nature of such Deposit Shares) or receipt of a final non-appealable judgment or final order of a court of competent jurisdiction as to such disposition (and the issued and outstanding nature of such Deposit Shares), in which case the Escrow Agent shall dispose of such Deposit Stock Certificate(s) in accordance with such written agreement, judgment or order.


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(b)         If the Company, at any time prior to the occurrence of a Surrender Event, (i) pays a stock dividend in or otherwise makes a distribution or distributions payable in shares of Common Stock on Common Stock, (ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines (including by way of a reverse stock split) outstanding shares of Common Stock into a smaller number of shares, or (iv) issues, in the event of a reclassification of shares of Common Stock, any shares of capital stock of the Company, then the number of Deposit Shares shall be, for the purposes of this Agreement, proportionately increased or decreased. Any adjustment made pursuant to this section 2(b) shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or re-classification.  If any event occurs as to which the other provisions of this section 2(b) are not strictly applicable but the lack of any adjustment would not fairly protect the rights of the Company or Depositor in accordance with the basic intent and principles of this Agreement, the Subscription Agreement and the Note, or if strictly applicable would not fairly protect the rights of the Company and/or Depositor in accordance with the basic intent and principles of such provisions, then the Company’s Board of Directors shall, in good faith and subject to applicable law, make an appropriate adjustment to protect the rights of the Company and Depositor.


(c)         Upon the satisfaction of the payment obligations of Depositor under the Note, in whole or part, but only if in accordance with the terms of the Note, provided such satisfaction is on or prior to the maturity date of the Note, Depositor shall give notice (each, a “ Payment Notice ”) to Escrow Agent and the Company of such payment, the amount of such payment and the number of Deposit Shares (determined in accordance with the Release Formula set forth in the immediately succeeding sentence) to be released from the Escrow Account and returned to Depositor (the “ Released Shares ”), each such Payment Notice to be accompanied by reasonable evidence of such payment (which evidence may be in the form of a bank-generated wire transfer advice).  The number of Released Shares to be set forth in a Payment Notice for release shall be equal to the quotient of (A) the dollar amount of the principal on the Note that Depositor states in such Payment Notice that has been paid as of the date of the Payment Notice and not subject to a previous Payment Notice, divided by (B) $0.50 (the “ Release Formula ”).  Upon receipt of a Payment Notice, the Escrow Agent shall take the following actions:

 

(i)          In the event that, within ten Business Days after the giving of the Payment  Notice in accordance with this paragraph 2(c), the Company has not disputed the basis of the giving of the Payment Notice ( e.g. , that payment in the amount set forth in the Payment Notice has not occurred, that the number of Released Shares to be released to Depositor is not correct or that the number of Released Shares to be released to Depositor has not been calculated correctly in accordance with the Payment Formula (a “ Payment Dispute Notice ”), then the Escrow Agent shall deliver the Deposit Stock Certificate(s) representing the Released Shares referenced in such Payment Notice to Depositor.  In the event that the Released Shares constitute less than all of the Deposit Shares in the Escrow Account, such remaining Deposit Shares shall remain in the Escrow Account and subject to all of the provisions of this Agreement.


(ii)         In the event that, within ten Business Days after the giving of the Surrender Notice in accordance with this paragraph 2(c), the Company shall have delivered to the Escrow Agent a Payment Dispute Notice (with a copy of the Payment Dispute Notice being given, in the form of a notice, to the Company), the Deposit Stock Certificate(s) evidencing the Deposit Shares claimed to be Released Shares under such Payment Notice as disputed in the Payment Dispute Notice shall not be delivered to Depositor but retained by the Escrow Agent pending a further agreement executed by both the Company and Depositor as to the disposition of all or any portion of such Deposit Shares and Deposit Stock Certificate(s) evidencing such Deposit Shares or receipt a final non-appealable judgment or final order of a court of competent jurisdiction as to such disposition (and the issued and outstanding nature of such Deposit Shares), in which case the Escrow Agent shall dispose of such Deposit Stock Certificate(s) in accordance with such written agreement, judgment or order.


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(d)         At 6:00 p.m. New York time on the twentieth Business Day following the date that is the earlier of (x) the date on which the Note is fully satisfied or (y) the maturity date of the Note (the “ Termination Date ”), the Deposit Stock Certificate(s) evidencing (or appropriately denominated alternative stock certificate(s) evidencing) any Deposit Shares that remain in the Escrow Account and are not the subject of a pending Surrender Notice or Payment Dispute Notice, shall be returned to Depositor.


(e)         Notwithstanding anything to the contrary contained in paragraphs 2(a), 2(c) and 2(d), the Escrow Agent shall make such other disposition of the Deposit Stock Certificate(s) evidencing the Deposit Shares as is set forth in a written notice to Escrow Agent executed by both the Company and Depositor.


(f)          Notwithstanding anything to the contrary contained in this Agreement, in the event of a dispute between the Company and Depositor as to the return to the Company or release to Depositor of any of the Deposit Shares then represented by Deposit Stock Certificates held in the Escrow account, Escrow Agent shall have the right, but not the duty, to bring an interpleader action in a court of competent jurisdiction to have such court determine the disposition of any Deposit Shares subject to such dispute and the Deposit Stock Certificate(s) evidencing such Deposit Shares (and the issued and outstanding nature of such Deposit Shares) and deposit the applicable Deposit Stock Certificate(s) and all the other properties then held by Escrow Agent in the Escrow Account or otherwise pursuant to this Agreement with such court and shall be reimbursed by Depositor for all of the costs and expenses of Escrow Agent with respect to such interpleader action.  The Company and Depositor agree that any such action shall be brought only in a court of the State of New York located in New York County or in the Federal Court for the Southern District of New York (which courts are acknowledged by both the Company and Depositor as courts of competent jurisdiction).


4.           Duties of Escrow Agent .  


(a)          Escrow Agent shall not be liable to any person or entity for any action taken in good faith and believed by Escrow Agent to be authorized or within the rights and powers conferred upon Escrow Agent under this Agreement.  Escrow Agent shall also have full and complete authorization and protection for any omission or any action taken, or suffered by Escrow Agent, in good faith.  Escrow Agent shall have no duties or obligations other than as expressly stated herein, and shall be protected and not liable for acting upon any notice, certificate or other communication not only with respect to its execution, validity and effectiveness of such notice’s, certificate’s, or other communication’s provisions, but also as to the truth and accuracy of any information therein contained, which notice, certificate or other communication Escrow Agent shall have, in good faith, believed to have been genuine or valid and which Escrow Agent, in good faith, believed to have been signed or presented by a proper person or persons.


(b)          Escrow Agent shall not be bound by any notice or demand with respect hereto, or any waiver, modification, amendment, termination or revision of this Agreement unless signed by both the Company and Depositor (unless such notice or demand is a Surrender Notice, Dispute Notice, Payment Notice or Payment Dispute Notice, in which event the signature of only the party giving such notice under the applicable provisions of Article 2 shall be required) and delivered in writing to Escrow Agent and, if the duties of Escrow Agent are affected, unless Escrow Agent shall have given Escrow Agent’s prior written consent thereto.  Escrow Agent shall not be liable or responsible for anything done or omitted to be done by Escrow Agent in good faith, it being understood that Escrow Agent’s liability hereunder shall be limited solely to willful misconduct or gross negligence on its part.  Escrow Agent may rely conclusively on, and shall be protected from acting or refraining from acting upon, any written notice, instruction or request furnished to Escrow Agent hereunder and reasonably believed by Escrow Agent to be genuine and to have been signed or presented by the proper party or parties.  Escrow Agent shall be under no duty to inquire into the authority of any person acting in connection herewith or into the genuineness of any signature.


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(c)          Escrow Agent or any successor which is hereafter appointed may, at any time, resign by giving written notice to both the Company and Depositor and shall be discharged of Escrow Agent’s duties under this Agreement upon the appointment of a successor escrow agent.  In the event of any such resignation, a successor escrow agent shall be promptly appointed upon the mutual written agreement of the Company and Depositor.  Any such successor escrow agent shall deliver to the Company and Depositor a written instrument accepting such appointment hereunder and thereupon the successor escrow agent shall succeed to all the rights and duties of Escrow Agent and shall be entitled to receive the Deposit Stock Certificate(s) and all the other properties then held by Escrow Agent in the Escrow Account or otherwise pursuant to this Agreement.  In the event that a successor escrow agent is not appointed by the Company and Depositor within 30 calendar days of such written notice, then Escrow Agent shall have the right, but not the duty, to bring an interpleader action in a court of competent jurisdiction to have a successor agent appointed and deposit the Deposit Stock Certificate(s) and all the other properties then held by Escrow Agent in the Escrow Account or otherwise pursuant to this Agreement with such court and shall be reimbursed by Depositor for all of the costs and expenses of Escrow Agent with respect to such interpleader action.  The Company and Depositor agree that any such action shall be brought only in a court of the State of New York located in New York County or in the Federal Court for the Southern District of New York (which courts are acknowledged by both the Company and Depositor as courts of competent jurisdiction).


5.           Fees and Indemnification of Escrow Agent .  


(a)          Depositor agrees to indemnify Escrow Agent and to hold Escrow Agent harmless from and against any loss, cost, liability or expense including reasonable legal fees (including, without limitation, fees generated by Escrow Agent’s internal staff) incurred by Escrow Agent relating to, arising out of, or in connection with the acceptance or administration of Escrow Agent’s duties, or services rendered under this Agreement, including reasonable legal fees, costs and expenses of defending Escrow Agent against claims of liability or incurred in actions of interpleader arising hereunder.


(b)          Escrow Agent shall have a lien for the amount of any such expenses or loss on the monies and other property held by Escrow Agent under this Agreement and shall be entitled to reimburse itself from such monies or property for the amount of any such expense or loss.


(c)          The Company acknowledges that Escrow Agent, as CKR, has acted, and will continue to act, as counsel to Depositor and did act, prior to the Merger (as defined in the Subscription Agreement), as counsel to the Company.  The Company further acknowledges that there may be a potential or actual conflict of interests and agrees that such conflicting interests shall not be a basis for Escrow Agent being disqualified or limited, or not participating, in the exercise of powers or representation with respect to this Agreement, nor shall the Company seek to disqualify CKR from acting as counsel to Depositor in any future matter, whether or not relating to this Agreement, and/or the Note, although both the Company and Depositor acknowledge that disqualification due to its status as a witness may be claimed or, on a court’s own initiative, be made.


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6.           Notice .  Notices or other communications required or permitted to be given hereunder shall be in writing and shall be deemed duly given if (a) personally delivered, against written receipt therefor, (b) forwarded by pre-paid certified or registered mail, return receipt requested, or (c) forwarded via a nationally recognized overnight courier service ( e.g., Federal Express, USPS Express Mail, UPS, DHL, etc.) to the parties to which such notice or other communication is required by this Agreement to be given, at the address of such parties as follows:


If to the Company, to:

Steven Hoffman, President

 

Tyme Technologies, Inc.

 

48 Wall Street - Suite 1100

 

New York, New York 10005

 

 

with a copy to (which shall not

 

constitute notice hereunder):

Keith S. Braun, Esq.

 

Moritt Hock & Hamroff LLP

 

450 Seventh Avenue - 15th Floor

 

New York, New York 10123

 

 

If to Depositor:

Christopher Brown

 

c/o GEM Global Yield Fund LLC SCS

 

590 Madison Avenue - 36th Floor

 

New York, New York 10022

 

 

with a copy to (which shall not

 

constitute notice hereunder):

Barrett DiPaolo, Esq.

 

CKR Law LLP

 

1330 Avenue of the Americas - 35th Floor

 

New York, New York 10019  

 

 

If to the Escrow Agent:

Mark Crone, Esq.

 

CKR Law LLP

 

1330 Avenue of the Americas - 35th Floor

 

New York, New York 10019


or, in the case of any of the parties to this Agreement, at such other address as such party shall furnish to each of the other parties in accordance with this section 6.  Notices and other communications delivered personally shall be deemed given as of the date of actual receipt; mailed notices and other communications shall be deemed given as of the date three Business Days following such mailing; and notices and other communications sent via overnight courier service shall be deemed given as of the date one Business Day after delivery to such courier service.  


7.           Miscellaneous.  


(a)         This Agreement and all of the provisions hereof shall be binding upon and inure to the benefit of the parties hereto and their respective administrators, successors and permitted assigns.  


(b)         This Agreement and the rights and obligations of the parties contained in this Agreement shall be interpreted, construed and enforced in accordance with the laws of the State of New York, without regard to its choice and/or conflict of laws provisions.  Any legal action resulting from, arising under, out of or in connection with, directly or indirectly, this Agreement shall be commenced exclusively in the Supreme Court, State of New York, County of New York, or the U.S. District Court for the Southern District of New York.  All parties to this Agreement hereby submit themselves to the jurisdiction of any such court, and agree that service of process on them in any such action, suit or proceeding may be affected by the means by which notices are to be given under this Agreement.


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(b)         This Agreement sets forth the entire agreement and understanding of the parties hereto in respect of the subject matter contained herein, and supersedes all prior agreements, promises, understandings, letters of intent, covenants, arrangements, communications, representations or warranties, whether oral or written, by any party hereto or by any related or unrelated third party.


(c)         This Agreement may not be changed, modified or rescinded orally.  Any change, modification or rescission need be in writing, signed by the party against whom enforcement of any change, modification or rescission is sought.  Any waiver of any of the provisions of this Agreement, or of any inaccuracy in or non-fulfillment of any of the obligations contemplated by this Agreement or contemplated hereby, shall not be effective unless made in a writing signed by the party against whom the enforcement of any such waiver is sought.  A waiver given in any case shall only apply with respect to that particular act or omission, and shall not be effective as to any further acts or omissions, regardless of whether they are of the same or similar nature.  


(d)         This Agreement may be executed simultaneously in any number of counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument.


(e)         This section and other headings contained in this Agreement are for purposes of reference only, and shall not affect the meaning or interpretation of this Agreement.


(f)          Any term or provision of this Agreement which is invalid or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity or unenforceability without rendering invalid or unenforceable the remaining terms and provisions of this Agreement or affecting the validity or enforceability of any of the terms or provisions of this Agreement in any other jurisdiction.


(g)         Each party hereto shall be responsible for their legal and other fees and expenses relating to the negotiation, execution and delivery of this Agreement and related agreements, and the consummation of the transaction contemplated by this Agreement.


(h)         For purposes of this Agreement, the capitalized term “Business Day” shall mean any calendar day other than a Saturday, Sunday or other day on which banks in the City of New York are authorized or directed to be closed.


(i)          In the event that any portion of the Escrow Account shall be attached, garnished or levied upon by any court order, or the delivery thereof shall be stayed or enjoined by an order of a court, or any order, judgment or decree shall be made or entered by any court order affecting the property deposited under this Agreement, Escrow Agent is hereby expressly authorized, in its sole discretion, to obey and comply with all writs, orders or decrees so entered or issued, which it is advised by legal counsel of its own choosing is binding upon it, whether with or without jurisdiction, and in the event that Escrow Agent obeys or complies with any such writ, order or decree it shall not be liable to any of the parties hereto or to any other person or firm, by reason of such compliance notwithstanding such writ, order or decree be subsequently reversed, modified, annulled, set aside or vacated.


(j)          This Escrow Agreement shall terminate on the date on which all of the Deposit Stock Certificates have been released from the Escrow Account by the Escrow Agent in accordance with this Agreement; provided , however , the provisions of Article 5 shall survive such termination.


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(k)         So long as no Surrender Event shall have occurred, Depositor may exercise any and all voting and other consensual rights pertaining to any and all of the Deposit Shares evidenced by Deposit Stock Certificates held in the Escrow Account.


(l)          Subject to the provisions of paragraph 2(b), any dividends, interests or other distributions made with respect to each Deposit Share then held in the Escrow Account shall attach to and be deemed part of such Deposit Share and shall be returned to the Company or released to Depositor at the same time such Deposit Share is returned to the Company or released to Depositor.


(m)        Unless otherwise expressed, all references in this Agreement to sections and paragraphs shall refer to the specified section or paragraph of this Agreement.


[THE REMAINDER OF THIS PAGE HAS INTENTIONALLY BEEN LEFT BLANK.]


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IN WITNESS WHEREOF , the parties hereto have executed this Agreement on the date first indicated above.



Tyme Technologies, Inc.

 

 

 

 

By:

/s/ Peter de Svastich

 

Name:  Peter de Svastich

 

Title:  President

 

 

 

 

GEM Global Yield Fund LLC SCS

 

 

 

 

By:

/s/ Christopher Brown

 

Name:  Christopher Brown

 

Title:  Manager

 

 

 

 

CKR Law LLP

 

 

 

 

By:

/s/ Mark E. Crone

 

Name:  Mark E. Crone

 

Title:  Co-Managing Partner


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Exhibit 10.8
 
Tyme Technologies, Inc.
2015 Equity Incentive Plan
 
ARTICLE 1.  GENERAL PURPOSE OF PLAN; DEFINITIONS.
 
1.1.
Purpose .  The purposes of this 2015 Equity Incentive Plan are (a) to enable the Company, and the Company’s subsidiaries and affiliates, to attract and retain highly qualified personnel who will contribute to the success of the Company, including the Company’s subsidiaries and certain affiliates, and (b) to provide incentives to participants in this 2015 Equity Incentive Plan that are linked directly to increases in shareholder value which will therefore inure to the benefit of all shareholders of the Company.
 
1.2.
Definitions .  For purposes of this Plan, except as otherwise defined in this Plan, capitalized terms shall have the meanings assigned to them in this Section 1.2.
 
“Administrator” means the Board or, if and to the extent the Board elects to delegate the administration of the Plan or does not administer the Plan, the Committee.
 
“Affiliate” means any entity or person that directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, another entity, where “control” (including the terms “controlled by” and “under common control with”) means the possession, directly or indirectly, of the power to cause the direction of the management and policies of the entity, whether through the ownership of voting securities, by contract or otherwise.
 
“Associated Award” shall have the meaning assigned to the term in Section 8.2.
 
“Award” means any award granted under the Plan.
 
“Award Agreement” means, with respect to each Award, the signed written agreement between the Company and the Participant setting forth the terms and conditions of the Award.
 
“Board” means the Board of Directors of the Company.
 
“Cause” means the commission of any act of a theft, embezzlement or fraud involving the Company or any Parent, Subsidiary or Affiliate of the Company or otherwise, or a breach of fiduciary duty to the Company or any Parent, Subsidiary or Affiliate of the Company.  An Award Agreement or any employment agreement with an Eligible Recipient may further define the term “Cause” with respect to any Award granted under the Plan to such Eligible Recipient.
 
“Change of Control” shall have the meaning assigned to such term in Section 15.2.
 
“Code” means the Internal Revenue Code of 1986, as amended from time to time, or any successor thereto.
 
“Committee” means the compensation committee of the Board or other any committee which the Board may appoint to administer the Plan.  To the extent necessary and desirable, the Committee shall be composed entirely of individuals who meet the qualifications referred to in Section 162(m) of the Code, Rule 16b-3 under the Exchange Act and the applicable rules of any stock exchange, automated quotation system or other quotation system which the Common Stock is primarily quoted or listed.  If at any time or to any extent the Board shall not administer the Plan, then the functions of the Board as specified in the Plan shall be exercised by the Committee.
 
1
 

 

 
“Common Stock” means the common stock, with a par value $0.0001 per share as of the date of adoption of the Plan by the Board, of the Company.
 
“Company” means Tyme Technologies, Inc., a Delaware corporation, or any successor corporation.
 
“Control” shall have the meaning assigned to the term in the definition of Affiliate in this Section 1.2.
 
“Disability” means the inability of a Participant to perform substantially his or her duties and responsibilities to the Company or to any Parent, Subsidiary or Affiliate by reason of a physical or mental disability or infirmity for a continuous period of six months, as determined by the Administrator.  The date of such Disability shall be the last day of such six-month period or the date on which the Participant submits such medical evidence, satisfactory to the Company, that the Participant has a physical or mental disability or infirmity that will likely prevent the Participant from performing the Participant’s work duties for a continuous period of six months or longer, as the case may be.  An Award Agreement or any employment agreement with an Eligible Recipient may further define the term “Disability” with respect to any Award granted under the Plan to such Eligible Recipient.
 
“Eligible Recipient” means an officer, director, employee, consultant or advisor of the Company or of any Parent, Subsidiary or Affiliate.  For purposes of the Plan, the term “employee” shall include all those individuals whose service with or for the Company and/or any Parent, Subsidiary or Affiliate of the Company, is within the definition of “employee” in the “Rule as to the Use of Form S-8” contained in the General Instructions for the registration statement on Form S-8 promulgated by the Securities and Exchange Commission.
 
“Employee Director” means any director of the Company who is also an employee of the Company or of any Parent, Subsidiary or Affiliate.
 
“Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time.
 
“Exercise Price” means the per share price at which a holder of an Award may purchase the Shares issuable upon exercise of such Award.
 
“Fair Market Value” as of a particular date shall mean the fair market value of a share of Common Stock as determined by the Administrator; provided , however , that Fair Market Value shall mean (i) if the Common Stock is listed or admitted to trade on a national securities exchange, the closing price of the Common Stock, as published in The Wall Street Journal, of the principal national securities exchange on which the Common Stock is so listed or admitted to trade, on such date, or, if there is no trading of the Common Stock on such date, then the closing price of the Common Stock as quoted on the next preceding date on which there was trading in such shares; (ii) if the Common Stock is not listed or admitted to trade on a national securities exchange but is quoted on the OTCBB, the last sale price for the Common Stock on such date as reported by the OTCBB, or, if there is no reported trading of the Common Stock on such date, then the last sale price for the Common Stock on the next preceding date on which there was trading in the Common Stock; (iii) if the Common Stock is not listed or admitted to trade on a national securities exchange and is not quoted on the OTCBB, the last sale price, or, if a last sale price is not quoted, the mean between the closing bid and asked prices for the Common Stock on such date, in either case, as furnished by the OTCBB; (iv) if the Common Stock is not listed or admitted to trade on a national securities exchange and the last sale price and closing bid and asked prices are not furnished by the OTCBB, the last sale price, or, if a last sale price is not quoted, the mean between the closing bid and asked prices for the Common Stock on such date, in either case, as furnished by the OTC Markets or similar organization; (v) if the stock is not listed or admitted to trade on a national securities exchange and if the last sale price and bid and asked
 
2
 

 

 
asked prices for the Common Stock are not furnished by the OTC Markets or a similar organization, the value of a share of Common Stock established in good faith by the Administrator; and (vi) in the case of a Limited Stock Appreciation Right, the Fair Market Value of a share of Common Stock shall be the “Change in Control Price” (as defined in the Award Agreement evidencing such Limited Stock Appreciation Right) of a share of Common Stock as of the date of exercise.
 
“Family Member” means, with respect to any Participant, any of the following:
(a)  such Participant’s child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, sister-in-law, including any such person with such relationship to the Participant by adoption;
(b)  any person (other than a tenant or employee) sharing such Participant’s household;
(c)  a trust in which the persons identified in clauses (a) and (b) above have more than fifty percent of the beneficial interest;
(d)  a foundation in which the persons identified in clauses (a) and (b) above or the Participant control the management of assets; or
(e)  any other entity in which the persons identified in clauses (a) and (b) above or the Participant own more than fifty percent of the voting interest.
 
“FINRA” means the Financial Industry Regulatory Authority.
 
“Incentive Stock Option” means any Option intended to be designated as an “incentive stock option” within the meaning of Section 422 of the Code.
 
“Incumbent Board” means (i) all individuals serving on the Board on March 5, 2015, to the extent that they continue to serve as members of the Board, and (ii) all individuals who become members of the Board after March 5, 2015, if such individuals’ election or nomination for election as directors was approved by a vote of at least a majority of the Board prior to such election, to the extent they continue to serve as members of the Board. Individuals elected to the Board in connection with the consummation of the Tyme Merger shall be deemed members of the Incumbent Board.
 
“Limited Stock Appreciation Right” means a Stock Appreciation Right that can be exercised only in the event of a “Change in Control” (as defined in the Award Agreement evidencing such Limited Stock Appreciation Right).
 
“Maximum Value” shall have the meaning assigned to the term in Section 8.2.
 
“Non-Employee Director” means a director of the Company who is not an employee of the Company or of any Parent, Subsidiary or Affiliate.
 
“Non-Qualified Stock Option” means any Option that is not an Incentive Stock Option, including, but not limited to, any Option that provides (as of the time such Option is granted) that it will not be treated as an Incentive Stock Option.
 
“Option” means an option to purchase Shares granted pursuant to Article 5 of the Plan.
 
“OTCBB” means the OTC Bulletin Board.
 
“OTC Markets” means any trading platform operated by OTC Markets Group Inc.
 
“Parent” means any corporation (other than the Company) in an unbroken chain of corporations ending with the Company, if each of the corporations in the chain (other than the Company) owns stock possessing 50% or more of the combined voting power of all classes of stock in one of the other corporations in the chain.
 
3
 

 

 
“Participant” means any Eligible Recipient selected by the Administrator, pursuant to the Administrator’s authority to receive grants of Options, Stock Appreciation Rights, Limited Stock Appreciation Rights, awards of Restricted Stock, Performance Shares, other types of awards, or any combination of the foregoing.
 
“Performance Grant” shall have the meaning assigned to the term in Section 8.1.
 
“Performance Grant Actual Value” shall have the meaning assigned to the term in Section 8.1.
 
“Performance Grant Award Period” shall have the meaning assigned to the term in Section 8.3.
 
“Performance Shares” means Shares that are subject to restrictions based upon the attainment of specified performance objectives granted pursuant to Article 8.
 
“Permitted Transfer” means, as authorized by the Plan and the Administrator, with respect to an interest in a Non-Qualified Stock Option, any transfer effected by the Participant during the Participant’s lifetime of an interest in such Non-Qualified Stock Option but only such transfers which are by gift or pursuant to domestic relations orders.  A permitted transfer does not include any transfer for value and neither transfers under a domestic relations order in settlement of marital property rights or to an entity in which more than 50% of the voting interests are owned by Family Members or the Participant in exchange for an interest in that entity are deemed transfers for value.
 
“Plan” means this 2015 Equity Incentive Plan.
 
“Related Employment” means the employment or performance of services by an individual for an employer that is neither the Company, any Parent, Subsidiary nor Affiliate, provided that (i) such employment or performance of services is undertaken by the individual at the request of the Company or any Parent, Subsidiary or Affiliate, (ii) immediately prior to undertaking such employment or performance of services, the individual was employed by or performing services for the Company or any Parent, Subsidiary or Affiliate or was engaged in Related Employment, and (iii) such employment or performance of services is in the best interests of the Company and is recognized by the Administrator, as Related Employment. The death or Disability of an individual during a period of Related Employment shall be treated, for purposes of this Plan, as if the death or onset of Disability had occurred while the individual was employed by or performing services for the Company or a Parent, Subsidiary or Affiliate.
 
“Restricted Stock” means Shares subject to certain restrictions granted pursuant to Article 7.
 
“Restricted Period” means the period of time Restricted Stock remains subject to restrictions imposed on the Award of such Restricted Stock.
 
“Rule 16b-3” shall have the meaning assigned to the term in Section 2.1.
 
“Securities Act” means the Securities Act of 1933, as amended from time to time.
 
“Shares” means shares of Common Stock reserved for issuance under or issued pursuant to the Plan, as adjusted pursuant to Article 4, and any successor security.
 
“Stock Appreciation Right” means the right pursuant to an Award granted under Article 6 to receive an amount equal to the excess, if any, of (i) the Fair Market Value, as of the date such Stock Appreciation Right or portion thereof is surrendered, of the Shares covered by such right or such portion thereof, over (ii) the aggregate exercise price of such right or such portion thereof as established by the Administrator at the time of the grant of such Award (or such other exercise price thereafter established by the Administrator with the consent of the Participant granted such Award where required by the Plan).
 
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“Stock Bonus” means an Award granted pursuant to Article 9.
 
“Subsidiary” means any corporation (other than the Company) in an unbroken chain of corporations beginning with the Company, if each of the corporations (other than the last corporation) in the unbroken chain owns stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other corporations in the chain.
 
“Ten Percent Shareholder” shall have the meaning assigned to the term in Section 5.4.
 
“Termination” or “Terminated” means, for purposes of the Plan with respect to a Participant, that such Participant has for any reason ceased to provide services as an employee, officer, director, consultant, independent contractor, or advisor to the Company or any Parent, Subsidiary or Affiliate of the Company.  A Participant will not be deemed to have ceased to provide services in the case of (i) sick leave, (ii) military leave, or (iii) any other leave of absence approved by the Administrator, provided , that such leave is for a period of not more than 90 days, unless reemployment or reinstatement upon the expiration of such leave is guaranteed by contract or statute.  In the case of any Participant on an approved leave of absence, the Administrator may make such provisions respecting suspension of vesting of any Award previously granted to such Participant while such Participant is on leave from the Company or any Parent, Subsidiary or Affiliate of the Company as the Administrator may deem appropriate, except that in no event may an Option be exercised after the expiration of the term set forth in the Award Agreement with respect to such Option.  The Administrator will have sole discretion to determine whether a Participant has ceased to provide services and the applicable Termination Date.
 
“Termination Date” means the effective date of Termination, as determined by the Administrator.
 
“Tyme Merger” means the merger of Tyme Acquisition Corp., a subsidiary of the Company, with and into Tyme Inc., a Delaware corporation.
 
ARTICLE 2.  ADMINISTRATION.
 
2.1.
Administration in Accordance with the Code and Exchange Act .  The Plan shall be administered in accordance with the requirements of Section 162(m) of the Code (but only to the extent necessary and desirable to maintain qualification of Awards under the Plan under Section 162(m) of the Code) and, to the extent applicable, Rule 16b-3 under the Exchange Act (“Rule 16b-3”) or the rules of any stock exchange or automated quotation system on which the Common Stock is primarily quoted or listed, by the Board or, at the Board’s sole discretion, by the Committee, which shall be appointed by the Board, and which shall serve at the pleasure of the Board.
 
2.2.
Administrator’s Powers .  Subject to the general purposes, terms and conditions of this Plan, the Administrator will have full power to implement and carry out this Plan.  The Administrator will have the authority to:
 
(a)           construe and interpret this Plan, any Award Agreement and any other agreement or document executed pursuant to this Plan;
(b)           prescribe, amend and rescind rules and regulations relating to this Plan or any Award;
(c)           select persons to receive Awards;
(d)           determine the form and terms of Awards;
(e)           determine the number of Shares or other consideration subject to Awards;
(f)            determine whether Awards will be granted singly, in combination with, in tandem with, in replacement of, or as alternatives to, other Awards under this Plan or any other incentive or compensation plan of the Company or any Parent, Subsidiary or Affiliate of the Company;
(g)           grant waivers of Plan or Award conditions;
 
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(h)           determine the vesting, exercisability and payment of Awards;
(i)            correct any defect, supply any omission or reconcile any inconsistency in the Plan, any Award or any Award Agreement;
(j)            make any adjustments necessary or desirable as a result of the granting of an Award to an Eligible Participant located outside the United States;
(k)           determine whether an Award has been earned; and
(l)            make all other determinations necessary or advisable for the administration of the Plan.
 
2.3.
Administrator’s Discretion Final .  Any determination made by the Administrator with respect to any Award will be made in the Administrator’s sole discretion at the time of grant of the Award or, unless in contravention of any express term of the Plan or Award, at any later time, and such determination will be final and binding on the Company and on all persons having an interest in any Award under the Plan.
 
2.4.
Administrator’s Method of Acting; Liability .  The Administrator may act only by a majority of its members then in office, except that the members thereof may authorize any one or more of their members or any officer of the Company to execute and deliver documents or to take any other ministerial action on behalf of the Committee with respect to Awards made or to be made to Eligible Participants.  No member of the Administrator and no officer of the Company shall be liable for anything done or omitted to be done by such member or officer, by any other member of the Administrator or by any officer of the Company in connection with the performance of duties under the Plan, except for such member’s or officer’s own willful misconduct or as expressly provided by law.
 
ARTICLE 3.  PARTICIPATION.
 
3.1.
Affiliates .  If a Parent, Subsidiary or Affiliate of the Company wishes to participate in the Plan and its participation shall have been approved by the Board, the board of directors or other governing body of the Parent, Subsidiary or Affiliate, as the case may be, shall adopt a resolution in form and substance satisfactory to the Administrator authorizing participation by the Parent, Subsidiary or Affiliate in the Plan.  A Parent, Subsidiary or Affiliate participating in the Plan may cease to be a participating company at any time by action of the Board or by action of the board of directors or other governing body of such Parent, Subsidiary or Affiliate, which latter action shall be effective not earlier than the date of delivery to the Secretary of the Company of a certified copy of a resolution of the Parent, Subsidiary or Affiliate’s board of directors or other governing body taking such action.  If the participation in the Plan of a Parent, Subsidiary or Affiliate shall terminate, such termination shall not relieve the Parent, Subsidiary or Affiliate of any obligations theretofore incurred by the Parent, Subsidiary or Affiliate, except as may be approved by the Administrator.
 
3.2.
Participants .  Incentive Stock Options may only be granted to employees (including officers and directors who are also employees) of the Company, or any Parent, Subsidiary or Affiliate of the Company.  All other Awards may be granted to employees, officers, directors, consultants, independent contractors and advisors of the Company or any Parent, Subsidiary or Affiliate of the Company; provided , that such consultants, contractors and advisors render bona fide services to the Company or such Parent, Subsidiary or Affiliate of the Company not in connection with the offer and sale of securities in a capital-raising transaction.  An Eligible Participant may be granted more than one Award under the Plan.
 
ARTICLE 4.  AWARDS UNDER THE PLAN.
 
4.1.
Types of Awards .  Awards under the Plan may include, but need not be limited to, one or more of the following types, either alone or in any combination thereof:
 
(a)           Options;
(b)           Stock Appreciation Rights;
 
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(c)           Restricted Stock;
(d)           Performance Grants;
(e)           Stock Bonuses; and
(f)           any other type of Award deemed by the Committee to be consistent with the purposes of the Plan (including, but not limited to, Awards of, or options or similar rights granted with respect to, unbundled stock units or components thereof, and Awards to be made to participants who are foreign nationals or are employed or performing services outside the United States).
 
4.2.
Number of Shares Available Under the Plan .  Subject to Section 4.4, the total number of Shares reserved and available for grant and issuance pursuant to the Plan will be 10 million.  To the extent that any Award payable in Shares is forfeited, canceled, returned to the Company for failure to satisfy vesting requirements or upon the occurrence of other forfeiture events, or otherwise terminates without payment being made thereunder, the Shares covered by such Award will no longer be charged against the foregoing 10 million Share maximum limitation and may again be made subject to Award(s) under the Plan.  Notwithstanding anything to the contrary contained in the Plan, the number of Shares that may be subject to Awards granted on or prior to the first anniversary of the approval of the Plan by the stockholders of the Company shall not exceed 3,333,333.
 
Shares may consist, in whole or in part, of authorized and unissued shares or treasury shares.
 
The number of Shares which are transferred to the Company by a Participant to pay the exercise or purchase price of an Award will be subtracted from the number of Shares issued with respect to such Award for the purpose of counting Shares used under the Plan.  Shares withheld to pay withholding taxes in connection with the exercise or repayment of an Award will be counted as used under the Plan.  In addition, shares covered by an Award which is settled in cash will not be counted as used under the Plan.
 
4.3.
Reservation of Shares .  At all times, the Company shall reserve and keep available a sufficient number of Shares as shall be required to satisfy the requirements of all outstanding Options granted under the Plan and all other outstanding but unexercised Awards granted under the Plan.
 
4.4.
Adjustment in Number of Shares Available Under the Plan .  In the event that the number of outstanding shares of Common Stock is changed by a stock dividend, recapitalization, stock split, reverse stock split, subdivision, combination, reclassification or similar change in the capital structure of the Company without consideration, then (a) the number of Shares reserved for issuance under the Plan, (b) the number of Shares that may be granted pursuant to the Plan, and (c) the Exercise Prices of and number of Shares subject to outstanding Options and other Awards, will be proportionately adjusted, subject to any required action by the Board or the shareholders of the Company, if any, and compliance with applicable securities laws; provided , however , that, upon occurrence of such an event, fractions of a Share will not be issued upon exercise of an Award but will, upon such exercise, either be replaced by a cash payment equal to the Fair Market Value of such fraction of a Share on the effective date of such an event or will be rounded down to the nearest whole Share, as determined by the Administrator.
 
4.5.           Rights with Respect to Common Shares and Other Securities .
 
(a)           Unless otherwise determined by the Administrator, a Participant to whom an Award of Restricted Stock has been made (and any person succeeding to such Participant’s rights with respect to such Award pursuant to the Plan) shall have, after issuance of a certificate or copy thereof for the number of Shares so awarded and prior to the expiration of the Restricted Period or the earlier repurchase of such Shares as provided in the Plan or Award Agreement with respect to such Award of Restricted Stock, ownership of such Shares, including the right to vote the same and to receive dividends or other distributions made or paid with respect to such Shares (provided that such Shares, and any new, additional or different shares, or other securities or property of the Company, or other forms of consideration which the Participant may be entitled to receive with respect to such Shares as a result of a stock split, stock dividend or any other change in the corporate or capital structure of the Company, shall be subject to the
 
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restrictions of the Plan as determined by the Administrator), subject, however, to the options, restrictions and limitations imposed thereon pursuant to the Plan.  Notwithstanding the foregoing, unless otherwise determined by the Administrator, a Participant with whom an Award Agreement is made to issue Shares in the future shall have no rights as a shareholder with respect to Shares related to such Award Agreement until a stock certificate evidencing such Shares is issued to such Participant.
(b)           Unless otherwise determined by the Administrator, a Participant to whom a grant of Stock Options, Stock Appreciation Rights, Performance Grants or any other Award is made (and any person succeeding to such Participant’s rights pursuant to the Plan) shall have no rights as a shareholder with respect to any Shares or as a holder with respect to other securities, if any, issuable pursuant to any such Award until the date a stock certificate evidencing such Shares or other instrument of ownership, if any, is issued to such Participant.  Except as provided in Section 4.4, no adjustment shall be made for dividends, distributions or other rights (whether ordinary or extraordinary, and whether in cash, securities, other property or other forms of consideration, or any combination thereof) for which the record date is prior to the date such stock certificate or other instrument of ownership, if any, is issued.
 
ARTICLE 5.  STOCK OPTIONS.
 
5.1.
Grant; Determination of Type of Option .  The Administrator may grant one or more Options to an Eligible Participant and will determine (a) whether each such Option will be an Incentive Stock Option or a Non-Qualified Stock Option, (b) the number of Shares subject to each such Option, (c) the Exercise Price of each such Option, (d) the period during which each such Option may be exercised, and (e) all other terms and conditions of each such Option, subject to the terms and conditions of this Article 5.  The Administrator may grant an Option either alone or in conjunction with Stock Appreciation Rights, Performance Grants or other Awards, either at the time of grant or by amendment thereafter.
 
5.2.
Form of Option Award Agreement .  Each Option granted under the Plan will be evidenced by an Award Agreement which will expressly identify the Option as an Incentive Stock Option or a Non-Qualified Stock Option, and will be in such form and contain such provisions (which need not be the same for each Participant or Option) as the Administrator may from time to time approve, and which will comply with and be subject to the terms and conditions of the Plan.
 
5.3.
Date of Grant .  The date of grant of an Option will be the date on which the Administrator makes the determination to grant such Option, unless otherwise specified by the Administrator.
 
5.4.
Exercise Period .  Each Option shall be exercisable within the times or upon the occurrence of one or more events determined by the Administrator and set forth in the Award Agreement governing such Option; provided , however , that no Option will be exercisable after the expiration of ten years from the date the Option is granted; and provided , further , however , that no Incentive Stock Option granted to a person who directly or by attribution owns more than 10% of the total combined voting power of all classes of stock of the Company or of any Parent, Subsidiary or Affiliate of the Company (each, a “Ten Percent Shareholder”) will be exercisable after the expiration of five years from the date such Incentive Stock Option is granted.  The Administrator also may provide for an Option to become exercisable at one time or from time to time, periodically or otherwise, in such number of Shares or percentage of Shares as the Administrator determines.  Unless otherwise determined by the Administrator, an Option shall be exercisable as follows:
 
(a)               up to 25% of the number of Shares subject to such Option commencing on the first anniversary of the date of grant of such Option;
(b)            up to an additional 25% of the number of Shares subject to such Option commencing on the second anniversary of the date of grant of such Option;
(c)            up to an additional 25% of the number of Shares subject to such Option commencing on the third anniversary of the date of grant of such Option; and
(d)            up to an additional 25% of the number of Shares subject to such Option commencing on the fourth anniversary of the date of grant of such Option.
 
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5.5.
Exercise Price .  The Exercise Price of an Option will be determined by the Administrator when the Option is granted and may be not less than 100% of the per share Fair Market Value of the Shares subject to such Option on the date of grant of such Option; provided , however , the Exercise Price of any Incentive Stock Option granted to a Ten Percent Shareholder will not be less than 110% of the per share Fair Market Value of such Shares on the date of such grant.  Payment for the Shares purchased shall be made in accordance with Article 10 of the Plan.
 
5.6.
Method of Exercise .  An Option may be exercised only by delivery to the Company of an irrevocable written exercise notice (a) identifying the Option being exercised, (b) stating the number of Shares being purchased, (c) providing any other matters required by the Award Agreement with respect to such Option, and (d) containing such representations and agreements regarding Participant’s investment intent and access to information and other matters, if any, as may be required or desirable by the Company to comply with applicable securities laws.  Such exercise notice shall be accompanied by payment in full of the Exercise Price for the number of Shares being purchased in accordance with Article 10 and the executed Award Agreement with respect to such Option.
 
5.7.
Termination .  Unless otherwise provided in an Award Agreement, exercise of Options shall be subject to the following:
 
(a)           If the Participant is Terminated for any reason except death or Disability, then the Participant may exercise each of such Participant’s Options (i) only to the extent that such Options would have been exercisable on the Termination Date and (ii) no later than three months after the Termination Date (or such longer time period not exceeding five years as may be determined by the Administrator, with any exercise beyond three months after the Termination Date deemed to be an exercise of an Non-Qualified Stock Option), but in any event, no later than the original expiration date of such Option;
(b)           If the Participant is Terminated because of Participant’s death or Disability (or the Participant dies within three months after a Termination other than for Cause or because of Participant’s Disability), then each of such Participant’s Options (i) may be exercised only to the extent that such Option would have been exercisable by Participant on the Termination Date and (ii) must be exercised by Participant (or Participant’s legal representative or authorized assignee) no later than twelve months after the Termination Date (or such longer time period not exceeding five years as may be determined by the Administrator, with any such exercise beyond (A) three months after the Termination Date when the Termination is for any reason other than the Participant’s death or Disability or (B) twelve months after the Termination Date when the Termination is because of Participant’s death or Disability, deemed to be an exercise of a Non-Qualified Stock Option), but in any event no later than the original expiration date of such Option;
(c)           Notwithstanding the provisions in paragraphs 5.7(a) and 5.7(b), if a Participant is terminated for Cause, neither the Participant, the Participant’s estate nor such other person who may then hold an Option shall be entitled to exercise such Option whatsoever, whether or not, after the Termination Date, the Participant may receive payment from the Company or any Parent, Subsidiary or Affiliate of the Company for vacation pay, for services rendered prior to the Termination Date, for services rendered for the day on which Termination occurs, for salary in lieu of notice, for severance or for any other benefits; provided , however , in making such a determination, the Administrator shall give the Participant an opportunity to present to the Administrator evidence on Participant’s behalf that the provisions of this paragraph 5.7(c) should not apply and, in the alternative, paragraph 5.7(a) or 5.7(b) shall apply; provided , further , however , that, for the purpose of this paragraph 5.7(c), Termination shall be deemed to occur on the date when the Company dispatches notice or advice to the Participant that such Participant is Terminated.
 
5.8.
Limitations on Exercise .  The Administrator may specify a reasonable minimum number of Shares that may be purchased on any exercise of an Option, provided , that such minimum number will not prevent Participant from exercising the Option for the full number of Shares for which the Option is then exercisable.
 
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5.9.
Limitations on Incentive Stock Options .  The aggregate Fair Market Value (as determined as of the date of grant) of Shares with respect to which an Incentive Stock Option are exercisable for the first time by a Participant during any calendar year (under the Plan or under any other incentive stock option plan of the Company, and any Parent, Subsidiary and Affiliate of the Company) will not exceed $100,000.  This $100,000 limitation shall be applied by taking Options into account in the order in which granted.  An Incentive Stock Option shall be deemed to be a Non-Qualified Stock Option to the extent that the foregoing $100,000 limitation is exceeded.  In the event that the Code or the regulations promulgated thereunder are amended after the effective date of the Plan to provide for a different limit on the Fair Market Value of Shares permitted to be subject to Incentive Stock Options, such different limit will be automatically incorporated herein and will apply to any Options granted after the effective date of such amendment.
 
5.10.
Modification, Extension or Renewal .  The Administrator may modify, extend or renew any outstanding Option and authorize the grant of one or more new Options in substitution therefor; provided that any such action may not, without the written consent of a Participant, impair any of such Participant’s rights under any Option previously granted.  Any outstanding Incentive Stock Option that is modified, extended, renewed or otherwise altered will be treated in accordance with Section 424(h) and other applicable provisions of the Code.
 
5.11.
No Disqualification .  Notwithstanding any other provision in the Plan, no term of the Plan relating to an Incentive Stock Option will be interpreted, amended or altered, nor will any discretion or authority granted under the Plan be exercised, so as to disqualify the Plan under Section 422 of the Code or, without the consent of the Participant affected, to disqualify any Incentive Stock Option under Section 422 of the Code.
 
5.12.
Prohibition Against Transfer .  No Option may be sold, assigned, transferred, pledged, hypothecated or otherwise disposed of, except by will or the laws of descent and distribution or pursuant to a domestic relations order, and a Participant’s Option shall be exercisable during such Participant’s lifetime only by such Participant or such person receiving such Option pursuant to a domestic relations order.
 
ARTICLE 6.  STOCK APPRECIATION RIGHTS.
 
6.1.            Grant of Stock Appreciation Rights .
 
(a)           The Administrator may grant Stock Appreciation Rights either alone, or in conjunction with the grant of an Option, Performance Grant or other Award, either at the time of grant or by amendment thereafter.  Each Award of Stock Appreciation Rights granted under the Plan shall be evidenced by an instrument in such form as the Administrator shall prescribe from time to time in accordance with the Plan and shall comply with the following terms and conditions, and with such other terms and conditions, including, but not limited to, restrictions upon the Award of Stock Appreciation Rights or the Shares issuable upon exercise thereof, as the Administrator shall establish.
(b)           The Administrator shall determine the number of Shares to be subject to each Award of Stock Appreciation Rights.  The number of Shares subject to an outstanding Award of Stock Appreciation Rights may be reduced on a share-for-share or other appropriate basis, as determined by the Administrator, to the extent that Shares under such Award of Stock Appreciation Rights are used to calculate the cash, Shares, or other securities or property of the Company, or other forms of payment, or any combination thereof, received pursuant to exercise of an Option attached to such Award of Stock Appreciation Rights, or to the extent that any other Award granted in conjunction with such Award of Stock Appreciation Rights is paid.
 
6.2.
Prohibition Against Transfer .  No Award of Stock Appreciation Rights may be sold, assigned, transferred, pledged, hypothecated or otherwise disposed of, except by will or the laws of the descent and distribution or pursuant to a domestic relations order, and Stock Appreciation Rights Awarded to a Participant shall be exercisable during such Participant’s lifetime only by such Participant or such person receiving such Option pursuant to a domestic relations order.  Unless the Administrator determines otherwise, the Award of Stock
 
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Appreciation Rights to a Participant shall not be exercisable for at least six months after the date of grant, unless such Participant is Terminated before the expiration of such six-month period by reason of such Participant’s Disability or death.
 
6.3.
Exercise .  The Award of Stock Appreciation Rights shall not be exercisable:
 
(a)          in the case of any Award of Stock Appreciation Rights that are attached to an Incentive Stock Option granted to a Ten Percent Employee, after the expiration of five years from the date such Incentive Stock Option is granted, and, in the case of any other Award of Stock Appreciation Rights, after the expiration of ten years from the date of such Award.  Any Award of Stock Appreciation Rights may be exercised during such period only at such time or times and in such installments as the Administrator may establish;
(b)          unless the Option or other Award to which the Award of Stock Appreciation Rights is attached is at the time exercisable; and
(c)          unless the Participant exercising the Award of Stock Appreciation Rights has been, at all times during the period beginning with the date of the grant thereof and ending on the date of such exercise, employed by or otherwise performing services for the Company or any Parent, Subsidiary or Affiliate of the Company, except that
(i)             in the case of any Award of Stock Appreciation Rights (other than those attached to an Incentive Stock Option), if such Participant is Terminated solely by reason of a period of Related Employment, the Participant may, during such period of Related Employment, exercise the Award of Stock Appreciation Rights as if such Participant had not been Terminated;
(ii)            if such Participant is Terminated by reason of such Participant’s Disability or early, normal or deferred retirement under an approved retirement program of the Company or any Parent, Subsidiary or Affiliate of the Company (or such other plan or arrangement as may be approved by the Administrator for this purpose) while holding an Award of Stock Appreciation Rights which has not expired and has not been fully exercised, such Participant may, at any time within three years (or such other period determined by the Administrator) after the Termination Date (but in no event after the Award of Stock Appreciation Rights has expired), exercise the Award of Stock Appreciation Rights with respect to any Shares as to which such Participant could have exercised the Award of Stock Appreciation Rights on the Termination Date, or with respect to such greater number of Shares as determined by the Administrator;
(iii)           if such Participant is Terminated for reasons other than Related Employment, Disability, early, normal or deferred retirement or death while holding an Award of Stock Appreciation Rights which has not expired and has not been fully exercised, such person may exercise the Award of Stock Appreciation Rights at any time during the period, if any, which the Administrator approves (but in no event after the Award of Stock Appreciation Rights expires) following such Participant’s Termination Date with respect to any Shares as to which such Participant could have exercised the Award of Stock Appreciation Rights on such Participant’s Termination Date or as otherwise permitted by the Administrator; or
(iv)           if any Participant to whom an Award of Stock Appreciation Rights has been granted shall die holding an Award of Stock Appreciation Rights which has not expired and has not been fully exercised, such Participant’s executors, administrators, heirs or distributees, as the case may be, may, at any time within one year (or such other period determined by the Administrator) after the date of death (but in no event after the Award of Stock Appreciation Rights has expired), exercise the Award of Stock Appreciation Rights with respect to any Shares as to which the decedent Participant could have exercised the Award of Stock Appreciation Rights at the time of such death, or with respect to such greater number of Shares as may be determined by the Administrator.
 
6.4.
Exercise .
 
(a)           An Award of Stock Appreciation Rights shall entitle the Participant (or any person entitled to act under the provisions of clause (iv) of Paragraph 6.3(c)) to either (i) exercise such Award and
 
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receive payment in accordance with such Award or (ii) surrender unexercised the Option (or other Award) to which the Stock Appreciation Rights is attached (or any portion of such Option or other Award) to the Company and to receive from the Company in exchange therefor, without payment to the Company, that number of Shares having an aggregate value equal to the excess of the Fair Market Value of one Share, at the time of such exercise, over the Exercise Price per share, times the number of Shares subject to the Award or the Option (or other Award), or portion thereof, which is so exercised or surrendered, as the case may be.  The Administrator shall be entitled to elect to settle the obligation arising out of the exercise of Stock Appreciation Rights by the payment of cash or other securities or property of the Company, or other forms of payment, or any combination thereof, as determined by the Administrator, equal to the aggregate value of the Shares the Company would otherwise be obligated to deliver.  Any such election by the Administrator shall be made as soon as practicable after the receipt by the Company of written notice of the exercise of such Stock Appreciation Rights.  The value of a Share, other securities or property of the Company, or other forms of payment determined by the Administrator for this purpose shall be the Fair Market Value of a Share on the last business day next preceding the date of the election to exercise such Stock Appreciation Rights, unless the Administrator determines otherwise and is set forth in the Award Agreement with respect to such Stock Appreciation Rights.
(b)           An Award of Stock Appreciation Rights may provide that such Stock Appreciation Rights shall be deemed to have been exercised at the close of business on the business day preceding the expiration date of such Stock Appreciation Rights or of the related Option (or other Award), or such other date as specified by the Administrator, if at such time such Stock Appreciation Rights has a positive value.  Such deemed exercise shall be settled or paid in the same manner as a regular exercise thereof as provided in Paragraph 6.4(a).
 
6.5.
Fractional Shares .  No fractional shares may be delivered under this Article 6, but, in lieu thereof, a cash or other adjustment shall be made as determined by the Administrator.
 
ARTICLE 7.  RESTRICTED STOCK.
 
7.1.
Grant .  An Award of Restricted Stock is an offer by the Company to sell to an Eligible Participant Shares that are subject to restrictions.  The Administrator will determine to whom an offer will be made, the number of Shares the person may purchase, the Exercise Price to be paid, the restrictions to which the Shares will be subject, and all other terms and conditions of the Restricted Stock Award, subject to the provisions of this Article 7.
 
7.2.
Form of Restricted Stock Award .  All purchases under an Award of Restricted Stock will be evidenced by an Award Agreement that will be in such form (which need not be the same for each Award of Restricted Stock or Participant) as the Administrator will from time to time approve, and will comply with and be subject to the terms and conditions of the Plan.  The offer of Restricted Stock will be accepted by the Participant’s execution and delivery of the Award Agreement evidencing the offer to purchase the Restricted Stock and full payment for the Shares to the Company within 30 days from the date such Award Agreement is tendered to such Eligible Participant.  If such Eligible Participant does not execute and deliver such Award Agreement along with full payment for the Shares to the Company within such 30 day period, then such offer will terminate, unless otherwise determined by the Administrator.
 
7.3.
Purchase Price .  The Exercise Price of Shares sold pursuant to an Award of Restricted Stock will be determined by the Administrator on the date such Award is granted, except in the case of a sale to a Ten Percent Shareholder, in which case the Exercise Price will be 100% of the per share Fair Market Value on the date such Award is granted of the Shares subject to the Award.  Payment of the Exercise Price may be made in accordance with Article 10 of the Plan.
 
7.4.
Terms of Restricted Stock Awards .  Each Award of Restricted Stock shall be subject to such restrictions as the Administrator may impose.  These restrictions may be based upon completion of a specified number of years of service with the Company or upon completion of the performance goals as set out in advance in the
 
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Participant’s individual Award Agreement.  Awards of Restricted Stock may vary from Participant to Participant and between groups of Participants.  Prior to the grant of an Award of Restricted Stock, the Administrator shall:
 
(a)           determine the nature, length and starting date of any performance period for the Restricted Stock Award;
(b)           select from among the performance factors to be used to measure performance goals, if any; and
(c)           determine the number of Shares that may be awarded to the Participant.
 
Prior to the payment of any Restricted Stock pursuant to an Award, the Administrator shall determine the extent to which such Restricted Stock Award has been earned.  Performance periods may overlap and Participants may participate simultaneously with respect to Restricted Stock Awards that are subject to different performance periods and having different performance goals and other criteria.
 
7.5.
Termination During Performance Period .  If a Participant is Terminated during a performance period with respect to any Award of Restricted Stock for any reason, then such Participant will be entitled to payment (whether in Shares, cash or otherwise) with respect to the Restricted Stock Award only to the extent earned as of the date of Termination in accordance with the Award Agreement with respect to such Restricted Stock, unless the terms of such Award Agreement provide otherwise or the Administrator determines otherwise.
 
ARTICLE 8.  PERFORMANCE GRANTS.
 
8.1.
Award .  The Award of a Performance Grant to a Participant will entitle such Participant to receive a specified amount (the “Performance Grant Actual Value”) as determined by the Administrator; provided that the terms and conditions specified in the Plan and in the Award of such Performance Grant are satisfied.  Each Award of a Performance Grant shall be subject to the terms and conditions set forth in this Article 8 and such other terms and conditions, including, but not limited to, restrictions upon any cash, Shares, other securities or property of the Company, or other forms of payment, or any combination thereof, issued in respect of the Performance Grant, as the Administrator shall establish, shall be embodied in an Award Agreement in such form and substance as is approved by the Administrator.
 
8.2.
Terms .  The Administrator shall determine the value or range of values of a Performance Grant to be awarded to each Participant selected for an Award of a Performance Grant and whether or not such Performance Grant is granted in conjunction with an Award of Options, Stock Appreciation Rights, Restricted Stock or other type of Award, or any combination thereof, under the Plan (which may include, but need not be limited to, deferred Awards) concurrently or subsequently granted to such Participant (the “Associated Award”).  As determined by the Administrator, the maximum value of each Performance Grant (the “Maximum Value”) shall be:
 
(a)           an amount fixed by the Administrator at the time the award is made or amended thereafter;
(b)           an amount which varies from time to time based in whole or in part on the then current Fair Market Value of a Share, other securities or property of the Company, or other securities or property, or any combination thereof; or
(c)           an amount that is determinable from criteria specified by the Administrator.
 
Performance Grants may be issued in different classes or series having different names, terms and conditions.  In the case of a Performance Grant awarded in conjunction with an Associated Award, the Performance Grant may be reduced on an appropriate basis to the extent that the Associated Award has been exercised, paid to or otherwise received by the participant, as determined by the Administrator.
 
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8.3.
Award Period .  The award period (“Performance Grant Award Period”) in respect of any Performance Grant shall be a period determined by the Administrator.  At the time each Performance Grant is made, the Administrator shall establish performance objectives to be attained within the Performance Grant Award Period as the means of determining the Performance Grant Actual Value of such Performance Grant.  The performance objectives shall be based on such measure or measures of performance, which may include, but need not be limited to, the performance of the Participant, the Company, one or more Subsidiary, Parent or Affiliate of the Company, or one or more of divisions or units thereof, or any combination of the foregoing, as the Administrator shall determine, and may be applied on an absolute basis or be relative to industry or other indices, or any combination thereof.  Each Performance Grant Actual Value of a Performance Grant shall be equal to the Performance Grant Maximum Value of such Performance grant only if the performance objectives are attained in full, but the Administrator shall specify the manner in which the Performance Grant Actual Value shall be determined if the performance objectives are met in part.  Such performance measures, the Performance Grant Actual Value or the Performance Grant Maximum Value, or any combination thereof, may be adjusted in any manner by the Administrator at any time and from time to time during or as soon as practicable after the Performance Grant Award Period, if it determines that such performance measures, the Performance Grant Actual Value or the Performance Grant Maximum Value, or any combination thereof, are not appropriate under the circumstances.
 
8.4.
Termination .  The rights of a Participant in Performance Grants awarded to such Participant shall be provisional and may be canceled or paid in whole or in part, all as determined by the Administrator, if such Participant’s continuous employment or performance of services for the Company, any Parent, Subsidiary and Affiliate of the Company shall terminate for any reason prior to the end of the Performance Grant Award Period, except solely by reason of a period of Related Employment.
 
8.5.
Determination of Performance Grant Actual Values .  The Committee shall determine whether the conditions of Sections 8.2 or 8.3 have been met and, if so, shall ascertain the Performance Grant Actual Value of Performance Grants.  If a Performance Grant has no Performance Grant Actual Value, the Award of such Performance Grant shall be deemed to have been canceled and the Associated Award, if any, may be canceled or permitted to continue in effect in accordance with such Associated Award’s terms.  If a Performance Grant has a Performance Grant Actual Value and:
 
(a)           was not awarded in conjunction with an Associated Award, the Administrator shall cause an amount equal to the Performance Grant Actual Value of such Performance Grant to be paid to the Participant or the Participant’s beneficiary as provided below; or
(b)           was awarded in conjunction with an Associated Award, the Administrator shall determine, in accordance with criteria specified by the Administrator, whether to (i) to cancel such Performance Grant, in which event no amount in respect thereof shall be paid to the Participant or the Participant’s beneficiary, and the Associated Award may be permitted to continue in effect in accordance with the Associated Award’s terms, (ii) pay the Performance Grant Actual Value to the Participant or the Participant’s beneficiary as provided below, in which event such Associated Award may be canceled, or (iii) pay to the Participant or the Participant’s beneficiary as provided below, the Performance Grant Actual Value of only a portion of such Performance Grant, in which case a complementary portion of the Associated Award may be permitted to continue in effect in accordance with its terms or be canceled, as determined by the Administrator.
 
Such determination by the Administrator shall be made as promptly as practicable following the end of the Performance Grant Award Period or upon the earlier termination of employment or performance of services, or at such other time or times as the Administrator shall determine, and shall be made pursuant to criteria specified by the Administrator.
 
8.6.
Payment .  Payment of any amount in respect of the Performance Grants which the Administrator determines to pay as provided in this Article 8 shall be made by the Company as promptly as practicable after the end of the Performance Grant Award Period or at such other time or times as the Administrator shall determine, and may be made in cash, Shares, other securities or property of the Company, or other forms of payment,
 
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or any combination thereof or in such other manner, as determined by the Administrator.  Notwithstanding anything in this Article 8 to the contrary, the Administrator may determine and pay out a Performance Grant Actual Value of a Performance Grant at any time during the Performance Grant Award Period.
 
ARTICLE 9.  STOCK BONUSES.
 
9.1.
Awards of Stock Bonuses .  A Stock Bonus is an Award of Shares (which may consist of Restricted Stock) for services rendered to the Company or any Parent, Subsidiary or Affiliate of the Company.  A Stock Bonus may be awarded for services previously rendered to the Company, or any Parent, Subsidiary or Affiliate of the Company, pursuant to an Award Agreement that will be in such form (which need not be the same for each Participant) as the Administrator will from time to time approve, and will comply with and be subject to the terms and conditions of the Plan.  A Stock Bonus may be awarded upon satisfaction of such performance goals as are set out in advance in the Participant’s individual Award Agreement that will be in such form (which need not be the same for each Participant) as the Administrator will from time to time approve, and will comply with and be subject to the terms and conditions of the Plan.  Stock Bonuses may vary from Participant to Participant and between groups of Participants, and may be based upon the achievement of the Company, any Parent,  Subsidiary or Affiliate of the Company and/or individual performance factors or upon such other criteria as the Administrator may determine.
 
9.2.
Terms of Stock Bonuses .  The Administrator will determine the number of Shares to be awarded to the Participant.  If the Stock Bonus is being earned upon the satisfaction of performance goals set forth in an Award Agreement, then the Administrator will:
(a)           determine the nature, length and starting date of any performance period for each Stock Bonus;
(b)           select from among the performance factors to be used to measure the performance, if any; and
(c)           determine the number of Shares that may be awarded to the Participant.
 
Prior to the payment of any Stock Bonus, the Administrator shall determine the extent to which such Stock Bonuses have been earned.  Performance periods may overlap and Participants may participate simultaneously with respect to Stock Bonuses that are subject to different performance periods and different performance goals and other criteria.  The number of Shares may be fixed or may vary in accordance with such performance goals and criteria as may be determined by the Administrator.  The Administrator may adjust the performance goals applicable to the Stock Bonuses to take into account changes in law and accounting or tax rules and to make such adjustments as the Administrator deems necessary or appropriate to reflect the impact of extraordinary or unusual items, events or circumstances to avoid windfalls or hardships.
 
9.3.
Form of Payment .  The earned portion of a Stock Bonus shall be paid currently or on a deferred basis with such interest or dividend equivalent, if any, as the Administrator may determine.  Payment may be made in the form of cash or whole Shares or a combination thereof, either in a lump sum payment or in installments, all as the Administrator will determine.
 
ARTICLE 10.  PAYMENT FOR SHARE PURCHASES.
 
10.1.
Payment .  Payment for Shares purchased pursuant to this Plan may be made in cash (by check) or, where expressly approved for the Participant by the Administrator and where permitted by law:
 
(a)           by cancellation of indebtedness of the Company to the Participant;
(b)           by surrender of shares of Common Stock that either (i) have been owned by the Participant for more than six months and have been paid for within the meaning of Rule 144 promulgated under the Securities Act (and, if such shares were purchased from the Company by use of a promissory note,
 
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such note has been fully paid with respect to such shares) or (ii) were obtained by Participant in the public market;
(c)           by tender of a full recourse promissory note having such terms as may be approved by the Administrator and bearing interest at a rate sufficient to avoid imputation of income under Sections 483 and 1274 of the Code; provided , however , that Participants who are not employees or directors of the Company will not be entitled to purchase Shares with a promissory note unless the note is secured by collateral other than the Shares satisfactory to the Administrator;
(d)           by waiver of compensation due or accrued to the Participant for services rendered;
(e)           with respect only to purchases upon exercise of an Option, and provided that a public market for the Company’s stock exists, (i) through a “same day sale” commitment from the Participant and a broker-dealer that is a member of FINRA whereby the Participant irrevocably elects to exercise the Option and to sell a portion of the Shares so purchased to pay for the Exercise Price, and whereby such broker-dealer irrevocably commits upon receipt of such Shares to forward the Exercise Price directly to the Company, or (ii) through a “margin” commitment from the Participant and such broker-dealer whereby the Participant irrevocably elects to exercise the Option and to pledge the Shares so purchased to such broker-dealer in a margin account as security for a loan from such broker-dealer in the amount of the Exercise Price, and whereby such broker-dealer irrevocably commits upon receipt of such Shares to forward the Exercise Price directly to the Company;
(f)           except with respect to Incentive Stock Options or where otherwise prohibited by applicable law and, in all cases, provided that a public market for the Company’s stock exists, by “cashless exercise,” whereby the holder is credited with the increased market value of the Award and receives the net number of shares of Common Stock after such credit is applied against the aggregate consideration due in connection with the exercise of the Award; or
(g)           by any combination of the foregoing.
 
10.2.
Loan Guarantees .  The Company, in its sole discretion, may assist a Participant in paying for Shares purchased under the Plan by authorizing a guarantee by the Company of a third-party loan to the Participant.
 
ARTICLE 11.  DEFERRAL OF COMPENSATION.
 
11.1.
Deferral of Compensation .  The Administrator shall determine whether or not an Award to a Participant shall be made in conjunction with deferral of such Participant’s salary, bonus or other compensation, or any combination thereof, and whether or not such deferred amounts may be:
 
(a)           forfeited to the Company or to other Participants, or any combination thereof, under certain circumstances (which may include, but need not be limited to, certain types of Termination of employment or performance of services for the Company, or any Parent, Subsidiary or Affiliate of the Company);
(b)           subject to increase or decrease in value based upon the attainment of or failure to attain, respectively, certain performance measures; and/or
(c)           credited with income equivalents (which may include, but need not be limited to, interest, dividends or other rates of return) until the date or dates of payment of such Award, if any.
 
ARTICLE 12.  DEFERRED PAYMENT OF AWARDS.
 
12.1.
Deferred Payment of Awards .  The Administrator may specify that the payment of all or any portion of cash, Shares, other securities or property of the Company, or any other form of payment, or any combination thereof, under an Award shall be deferred until a later date.  Deferrals shall be for such periods or until the occurrence of such events, and upon such terms, as the Administrator shall determine.  Deferred payments of Awards may be made by undertaking to make payment in the future based upon the performance of certain investment equivalents (which may include, but need not be limited to, government securities,
 
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Shares, other securities, property or consideration, or any combination thereof), together with such additional amounts of income equivalents (which may be compounded and may include, but need not be limited to, interest, dividends or other rates of return, or any combination thereof) as may accrue thereon until the date or dates of payment, such investment equivalents and such additional amounts of income equivalents to be determined by the Administrator.
 
ARTICLE 13.  AMENDMENT OR SUBSTITUTION OF AWARDS UNDER THE PLAN.
 
13.1.
Amendment or Substitution of Awards Under the Plan .  The terms of any outstanding Award under the Plan may be amended from time to time by the Administrator in any manner that the Administrator deems appropriate (including, but not limited to, acceleration of the date of exercise of any Award and/or payments thereunder, or reduction of the Exercise Price of an Award); provided , however , that no such amendment shall adversely affect in a material manner any right of a Participant under such Award without the Participant’s written consent.  The Administrator may permit or require holders of Awards to surrender outstanding Awards as a condition precedent to the grant of new Awards under the Plan.
 
ARTICLE 14.  DESIGNATION OF BENEFICIARY BY PARTICIPANT.
 
14.1.
Designation of Beneficiary by Participant .  A Participant may designate one or more beneficiaries to receive any rights and payments to which such Participant may be entitled in respect of any Award in the event of such Participant’s death.  Such designation shall be on a written form acceptable to and filed with the Administrator.  The Administrator shall have the right to review and approve beneficiary designations.  A Participant may change the Participant’s beneficiary(ies) from time to time in the same manner as the original designation, unless such Participant has made an irrevocable designation.  Any designation of beneficiary under the Plan (to the extent it is valid and enforceable under applicable law) shall be controlling over any other disposition, testamentary or otherwise, as determined by the Administrator.  If no designated beneficiary survives the Participant and is living on the date on which any right or amount becomes payable to such Participant’s beneficiary(ies), such payment will be made to the legal representatives of the Participant’s estate, and the term “beneficiary” as used in the Plan shall be deemed to include such person or persons.  If there is any question as to the legal right of any beneficiary to receive a distribution under the Plan, the Administrator may determine that the amount in question be paid to the legal representatives of the estate of the Participant, in which event the Company, the Administrator, the Board and the Committee and the members thereof will have no further liability to any person or entity with respect to such amount.
 
ARTICLE 15.  CHANGE IN CONTROL.
 
15.1.
Effect of a Change in Control .  An Award Agreement may provide that, upon a Change in Control, all or any portion of the Award shall automatically become immediately vested and exercisable, that restrictions relating to the Award shall lapse or that the Award shall become immediately payable.
 
15.2.
Change of Control .  For this purpose, a Change in Control shall be deemed to occur when and only when any of the following events first occurs:
 
(a)           any person who is not currently a shareholder of the Company (or does not currently have the right to acquire pursuant to any agreement, or upon exercise of conversion rights, warrants, options or otherwise, securities of the Company) becomes the beneficial owner, directly or indirectly, of securities of the Company representing 50% or more of the combined voting power of the Company’s then outstanding voting securities;
(b)           members of the Incumbent Board cease to constitute a majority of the Board without the approval of the remaining members of the Incumbent Board; or
 
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(c)           any merger (other than a merger where the Company is the survivor and there is no accompanying Change in Control under clauses (a) or (b) of this Section 15.2), consolidation, liquidation or dissolution of the Company, or the sale of all or substantially all of the assets of the Company.
 
Notwithstanding the foregoing, a Change in Control shall not be deemed to occur pursuant to clause (a) of this Section 15.2 solely because 50% or more of the combined voting power of the Company’s outstanding securities is acquired by one or more employee benefit plans maintained by the Company or by any other employer, the majority interest in which is held, directly or indirectly, by the Company.  For purposes of this Article 15, the terms “person” and “beneficial owner” shall have the meaning set forth in Sections 3(a) and 13(d) of the Exchange Act, and in the regulations promulgated thereunder.
 
15.3
Tyme Merger .  Notwithstanding anything to the contrary contained in this Plan, for the purposes of determining whether a Change of Control has occurred, the Tyme Merger and all issuances and surrenders or Common Stock, elections of directors and other effects of the Tyme Merger, shall be disregarded.
 
ARTICLE 16.  PLAN AMENDMENT OR SUSPENSION.
 
16.1.
Plan Amendment or Suspension .  The Plan may be amended or suspended in whole or in part at any time and from time to time by the Board, but no amendment shall be effective unless and until the same is approved by shareholders of the Company where the failure to obtain such approval would adversely affect the compliance of the Plan with Sections 162 and 422 of the Code, Rule 16b-3 and/or with any other applicable law, rule or regulation.  No amendment of the Plan shall adversely affect in a material manner any right of any Participant with respect to any Award theretofore granted without such Participant’s written consent.
 
ARTICLE 17.  PLAN TERMINATION.
 
17.1.
Method of Plan Termination .  The Plan shall terminate upon the earlier of the following dates or events to occur:
 
(a)           upon the adoption of a resolution of the Board terminating the Plan; or
(b)            March 5, 2025.
 
17.2.
Effect of Termination on Outstanding Awards .  No termination of the Plan shall materially alter or impair any of the rights or obligations of any person, without such person’s consent, under any Award theretofore granted under the Plan, except that subsequent to termination of the Plan, the Administrator may make amendments permitted under Article 13.
 
ARTICLE 18.  STOCKHOLDER APPROVAL.
 
18.1.
Stockholder Approval .  The Plan shall be submitted to the stockholders of the Company for their approval either by vote at a meeting of the stockholders of the Company to be duly held on or before March 5, 2015, or by written consent of holders of a majority of the outstanding voting securities of the Company dated on or before March 5, 2015.
 
18.2.
Effectiveness of Plan Prior to Stockholder Approval .  The Plan shall not be effective and no Award shall be made hereunder unless and until the Plan has been approved by the stockholders of the Company as provided in Section 18.1.  The stockholders shall be deemed to have approved and adopted the Plan only if it is approved in a manner permitted by the laws of the State of Delaware and any applicable federal securities laws.
 
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ARTICLE 19.  TRANSFERABILITY.
 
19.1.
Transferability .  Except as may be approved by the Administrator where such approval shall not adversely affect compliance of the Plan with Sections 162 and 422 of the Code and/or Rule 16b-3, a Participant’s rights and interest under the Plan may not be assigned or transferred, hypothecated or encumbered in whole or in part either directly or by operation of law or otherwise (except in the event of a Participant’s death) including, but not by way of limitation, execution, levy, garnishment, attachment, pledge, bankruptcy or in any other manner; provided , however , except as may be approved by the Administrator, that any Option or similar right (including, but not limited to, a Stock Appreciation Right) offered pursuant to the Plan shall not be transferable other than by will or the laws of descent or pursuant to a domestic relations order and shall be exercisable during the Participant’s lifetime only by such Participant or such person receiving such Option or similar right pursuant to a domestic relations order.
 
ARTICLE 20.  PRIVILEGES OF STOCK OWNERSHIP; RESTRICTIONS ON SHARES.
 
20.1.
Voting and Dividends .  No Participant will have any of the rights of a shareholder with respect to any Shares subject to or issued pursuant to the Plan until such Shares are issued to the Participant.  After Shares are issued to the Participant, the Participant will be a shareholder and have all the rights of a shareholder with respect to such Shares, including the right to vote and receive all dividends or other distributions made or paid with respect to such Shares; provided , however , that if such Shares are Restricted Stock, then any new, additional or different securities the Participant may become entitled to receive with respect to such Shares by virtue of a stock dividend, stock split or any other change in the corporate or capital structure of the Company will be subject to the same restrictions as the Restricted Stock; provided , however , further , that the Participant will have no right to retain such stock dividends or stock distributions with respect to Restricted Stock that is repurchased at the Participant’s Exercise Price in accordance with an Award Agreement with respect to such Restricted Stock.
 
20.2.
Financial Statements .  The Company will provide financial statements to each Participant prior to such Participant’s purchase of Shares under the Plan, and to each Participant annually during the period such Participant has Awards outstanding; provided , however , that the Company will not be required to provide such financial statements to Participants whose services in connection with the Company assure them access to equivalent information.
 
20.3.
Restrictions on Shares .  At the discretion of the Administrator, the Company may reserve to itself and/or its assignee(s) in the Award Agreement a right to repurchase a portion of or all Shares issued pursuant to such Award Agreement and held by a Participant following such Participant’s Termination at any time within 90 days after the later of Participant’s Termination Date or the date Participant purchases Shares under the Plan, for cash and/or cancellation of purchase money indebtedness, at the Participant’s Exercise Price or such other price as the Administrator may determine at the time of the grant of the Award.
 
ARTICLE 21.  CERTIFICATES.
 
21.1.
Certificates .  All Shares or other securities delivered under this Plan will be subject to such stock transfer orders, legends and other restrictions as the Administrator may deem necessary or advisable, including restrictions under any applicable federal, state or foreign securities law, or any rules, regulations and other requirements promulgated under such laws or any stock exchange or automated quotation system upon which the Shares may be listed or quoted and each stock certificate evidencing such Shares and other certificates shall be appropriately legended.
 
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ARTICLE 22.  DEPOSIT OF SHARES; ESCROW.
 
22.1.
Deposit of Shares; Escrow .  To enforce any restrictions on a Participant’s Shares, the Committee may require the Participant to deposit all stock certificates evidencing Shares, together with stock powers or other instruments of transfer approved by the Administrator, appropriately endorsed in blank, with the Company or an agent designated by the Company to hold in escrow until such restrictions have lapsed or terminated, and the Administrator may cause a legend or legends referencing such restrictions to be placed on the certificates.  Any Participant who is permitted to execute a promissory note as partial or full consideration for the purchase of Shares under the Plan will be required to pledge and deposit with the Company all or part of the Shares so purchased as collateral to secure the payment of Participant’s obligation to the Company under the promissory note; provided , however , that the Administrator may require or accept other or additional forms of collateral to secure the payment of such obligation and, in any event, the Company will have full recourse against the Participant under the promissory note notwithstanding any pledge of the Participant’s Shares or other collateral.  In connection with any pledge of the Shares, Participant will be required to execute and deliver a written pledge agreement in such form as the Administrator may from time to time approve.  The Shares purchased with the promissory note may be released from the pledge on a pro rata basis as the promissory note is paid.
 
ARTICLE 23.  EXCHANGE AND BUYOUT OF AWARDS.
 
23.1.
Exchange .  The Administrator may, at any time or from time to time, authorize the Company, with the consent of the respective Participants, to issue new Awards in exchange for the surrender and cancellation of any or all outstanding Awards.
 
23.2.
Buyout of Awards .  The Administrator may, at any time or from time to time, authorize the Company to buy from a Participant an Award previously granted with payment in cash, Shares (including Restricted Stock) or other consideration, based on such terms and conditions as the Administrator and the Participant may agree.
 
ARTICLE 24.  SECURITIES LAW AND OTHER REGULATORY COMPLIANCE.
 
24.1.
Compliance with Applicable Laws .  An Award will not be effective unless such Award is made in compliance with all applicable federal and state securities laws, rules and regulations of any governmental body, and the requirements of any stock exchange or automated quotation system upon which the Shares may then be listed or quoted, as they are in effect on the date of grant of the Award and also on the date of exercise or other issuance. Notwithstanding any other provision in this Plan, the Company will have no obligation to issue or deliver stock certificates for Shares under this Plan prior to:
 
(a)           obtaining any approvals from governmental agencies that the Administrator determines are necessary or advisable; and/or
(b)           completion of any registration or other qualification of such Shares under any state or federal law or ruling of any governmental body that the Administrator determines to be necessary or advisable.
 
24.2.
No Obligation to Register Shares or Awards .  The Company will be under no obligation to register the Shares under the Securities Act or to effect compliance with the registration, qualification or listing requirements of any state securities laws, stock exchange or automated quotation system, and the Company will have no liability for any inability or failure to do so.
 
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ARTICLE 25.  NO RIGHT TO EMPLOYMENT OR CONTINUATION OF RELATIONSHIP.
 
25.1.
No Right to Employment or Continuation of Relationship .  Nothing in this Plan or any Award granted under the Plan will confer or be deemed to confer on any Participant any right to continue in the employ of, or to continue any other relationship with, the Company or any Parent, Subsidiary or Affiliate of the Company or limit in any way the right of the Company or any Parent, Subsidiary or Affiliate of the Company to terminate Participant’s employment or other relationship at any time, with or without cause.
 
ARTICLE 26.  NON-EXCLUSIVITY OF THE PLAN.
 
26.1.
Non-Exclusivity of the Plan .  Neither the adoption of the Plan by the Board, nor any provision of this Plan will be construed as creating any limitations on the power of the Board or the Committee to adopt such additional compensation arrangements as the Board may deem desirable, including, without limitation, the granting of stock options and bonuses otherwise than under the Plan, and such arrangements may be either generally applicable or applicable only in specific cases.
 
ARTICLE 27.  MISCELLANEOUS PROVISIONS.
 
27.1.
No Rights Unless Specifically Granted .  No Eligible Participant, employee or other person shall have any claim or right to be granted an Award under the Plan under any contract, agreement or otherwise.  Determinations made by the Administrator under the Plan need not be uniform and may be made selectively among Eligible Participants under the Plan, whether or not such Eligible Participants are similarly situated.
 
27.2.
No Rights Until Written Evidence Delivered .  No Participant or other person shall have any right with respect to the Plan, the Shares reserved for issuance under the Plan or in any Award, contingent or otherwise, until written evidence of the Award, in the form of an Award Agreement, shall have been delivered to the recipient and all the terms, conditions and provisions of the Plan and the Award applicable to such recipient (and each person claiming under or through such recipient) have been met.
 
27.3.
Compliance with Applicable Law .  No Shares, other Company securities or property, other securities or property, or other forms of payment shall be issued hereunder with respect to any Award unless counsel for the Company shall be satisfied that such issuance will be in compliance with applicable federal, state, local and foreign legal, securities exchange and other applicable requirements.
 
27.4.
Compliance with Rule 16b-3 .  It is the intent of the Company that the Plan comply in all respects with Rule 16b-3 under the Exchange Act, that any ambiguities or inconsistencies in construction of the Plan be interpreted to give effect to such intention and that if any provision of the Plan is found not to be in compliance with Rule 16b-3, such provision shall be deemed null and void to the extent required to permit the Plan to comply with Rule 16b-3.
 
27.5.
Right to Withhold Payments .  The Company and any Parent, Subsidiary and Affiliate of the Company shall have the right to deduct from any payment made under the Plan, any federal, state, local or foreign income or other taxes required by law to be withheld with respect to such payment.  It shall be a condition to the obligation of the Company to issue Shares, other securities or property of the Company, other securities or property, or other forms of payment, or any combination thereof, upon exercise, settlement or payment of any Award under the Plan, that the Participant (or any beneficiary or person entitled to act) pay to the Company, upon its demand, such amount as may be requested by the Company for the purpose of satisfying any liability to withhold federal, state, local or foreign income or other taxes.  If the amount requested is not paid, the Company may refuse to issue Shares, other securities or property of the Company, other securities or property, or other forms of payment, or any combination thereof.  Notwithstanding anything in the Plan to the contrary, the Administrator may permit a Participant (or any beneficiary or person entitled to act) to elect to pay a portion or all of the amount requested by the Company for such taxes with respect to such Award, at such time and in such manner as the Administrator shall deem to be appropriate, including, but not limited to, by authorizing the Company to withhold, or agreeing to surrender to the Company on or
 
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  about the date such tax liability is determinable, Shares, other securities or property of the Company, other securities or property, or other forms of payment, or any combination thereof, owned by such person or a portion of such forms of payment that would otherwise be distributed, or have been distributed, as the case may be, pursuant to such Award to such person, having a fair market value equal to the amount of such taxes.
 
27.6.
Expenses of Administration .  The expenses of the Plan shall be borne by the Company.  However, if an Award is made to an individual employed by or performing services for a Parent, Subsidiary or Affiliate of the Company:
 
(a)           if such Award results in payment of cash to the Participant, such Parent, Subsidiary or Affiliate shall pay to the Company an amount equal to such cash payment unless the Administrator shall otherwise determine;
(b)           if the Award results in the issuance by the Company to the Participant of Shares, other securities or property of the Company, other securities or property, or other forms of payment, or any combination thereof, such Parent, Subsidiary or Affiliate of the Company shall, unless the Administrator shall otherwise determine, pay to the Company an amount equal to the fair market value thereof, as determined by the Administrator, on the date such Shares, other securities or property of the Company, other securities or property, or other forms of payment, or any combination thereof, are issued (or, in the case of the issuance of Restricted Stock or of Shares, other securities or property of the Company, or other securities or property, or other forms of payment subject to transfer and forfeiture conditions, equal to the fair market value thereof on the date on which they are no longer subject to such applicable restrictions), minus the amount, if any, received by the Company in respect of the purchase of such Shares, other securities or property of the Company, other securities or property or other forms of payment, or any combination thereof, all as the Administrator shall determine; and
(c)           the foregoing obligations of any such Parent, Subsidiary or Affiliate of the Company shall survive and remain in effect and binding on such entity even if its status as a Parent, Subsidiary or Affiliate of the Company should subsequently cease, except as otherwise agreed by the Company and such Parent, Subsidiary or Affiliate.
 
27.7.
Unfunded Plan .  The Plan shall be unfunded.  The Company shall not be required to establish any special or separate fund or to make any other segregation of assets to assure the payment of any Award under the Plan, and rights to the payment of Awards shall be no greater than the rights of the Company’s general creditors.
 
27.8.
Acceptance of Award Deemed Consent .  By accepting any Award or other benefit under the Plan, each Participant and each person claiming under or through such Participant shall be conclusively deemed to have indicated such Participant’s (or other person’s) acceptance and ratification of, and consent to, any action taken by the Company,  Administrator, Board or Committee or their respective delegates under the Plan.
 
27.9.
Fair Market Value Determined By the Administrator .  Fair market value in relation to other securities or property of the Company, other securities or property or other forms of payment of Awards under the Plan, or any combination thereof, as of any specific time, shall mean such value as determined by the Administrator in accordance with the Plan and applicable law.
 
27.10.
Use of Terms .  For the purposes of the Plan, in the use of any term, the singular includes the plural and the plural includes the singular wherever appropriate.
 
27.11.
Filing of Reports .  The appropriate officers of the Company shall cause to be filed any reports, returns or other information regarding Awards hereunder or any Shares issued pursuant hereto as may be required by Section 13 or 15(d) of the Exchange Act (or any successor provision) or any other applicable statute, rule or regulation.
 
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27.12.
Validity; Construction; Interpretation .  The validity, construction, interpretation, administration and effect of the Plan, and of its rules and regulations, and rights relating to the Plan and Award Agreements and to Awards granted under the Plan, shall be governed by the substantive laws, but not the choice of law rules, of the State of Delaware.
 
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Exhibit 10.9
 
FORM OF
REGISTRATION RIGHTS AGREEMENT
 
This Registration Rights Agreement (this “ Agreement ”) is made and entered into effective as of March 5, 2015, among Tyme Technologies, Inc. (formerly known as Global Group Enterprises Corp.) , a Delaware corporation (the “ Company ”), each of the persons who have executed omnibus or counterpart signature page(s) hereto (each, a “ Purchaser ” and, collectively, the “ Purchasers ,” which terms, for avoidance of doubt, include the purchaser of the Bridge Note (as defined below) and/or each purchaser of the PPO Shares (as defined below)), and the Tyme Stockholders (as defined below).
 
RECITALS:
 
WHEREAS , Tyme Inc., a Delaware corporation (the “ Tyme ”), has offered and sold in compliance with Rule 506 of Regulation D promulgated under the Securities Act of 1933, as amended (the “ Securities Act ”), to an accredited investor in a private placement offering (the “ Note Offering ”), a 10% Secured Convertible Promissory Note of Tyme with a term of fifteen (15) months (the “ Bridge Note ”), pursuant to that certain Securities Purchase Agreement, dated as of July 11, 2014, between Tyme and the purchaser of the Bridge Note set forth on the signature pages affixed thereto (the “ Bridge Purchase Agreement ”); and
 
WHEREAS , the Company has offered and sold in compliance with Rule 506 of Regulation D promulgated under the Securities Act   to accredited investors in a private placement offering (the “ PPO ”) a total of 2,716,000 shares (the “ PPO Shares” ) of its common stock, par value $0.0001 per share (the “ Common Stock ”), pursuant to Subscription Agreements entered into by and between the Company and each of the accepted subscribers to the PPO (the “ PPO Subscription Agreements ”); and
 
WHEREAS , in connection with the consummation of the PPO and the merger of the Company’s wholly-owned subsidiary with and into Tyme (the “ Merger ”), by its terms, the principal amount of the Bridge Note has automatically been converted (the “ Bridge Note Conversion ”) into shares (the “ Bridge Note Conversion Shares ”) of Common Stock; and
 
WHEREAS , the Company has agreed to enter into a registration rights agreement with (x) each of the accepted subscribers to the PPO who purchased the PPO Shares, (y) the former holder of the Bridge Note who received the Bridge Note Conversion Shares in connection with the Bridge Note Conversion and (z) with respect to certain of their shares of Common Stock as specified below, each of the stockholders of record of the common stock of Tyme immediately prior to the Effective Time as defined in the Merger Agreement (as defined below) who execute a counterpart signature page hereto at any time prior to the Effective Date (the “ Tyme Stockholders ”) ; and
 
WHEREAS , the accepted Subscribers to the PPO who purchased the PPO Shares and the former holder of the Bridge Note who received the Bridge Note Conversion Shares (and, to the extent permitted on this Agreement, their respective successors and assignees who qualify as Permitted Assignees) constitute the Purchasers .
 
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NOW, THEREFORE , in consideration of the mutual promises, representations, warranties, covenants, and conditions set forth herein, the parties mutually agree as follows:
 
1.               Certain Definitions . As used in this Agreement, the following terms shall have the following respective meanings:
 
“ Approved Market ” means the OTC Markets Group, the OTC Bulletin Board, the Nasdaq Stock Market, the New York Stock Exchange or the NYSE Amex.
 
“ Blackout Period ” means, with respect to a registration, a period during which the Company, in the good faith judgment of its board of directors, determines (because of the existence of, or in anticipation of, any acquisition, financing activity, or other transaction involving the Company, or the unavailability for reasons beyond the Company’s control of any required financial statements, disclosure of information which is in its best interest not to publicly disclose, or any other event or condition of similar significance to the Company) that the registration and distribution of the Registrable Securities to be covered by such registration statement, if any, would be seriously detrimental to the Company and its stockholders, in each case commencing on the day the Company notifies the Holders that they are required, because of the determination described above, to suspend offers and sales of Registrable Securities and ending on the earlier of (1) the date upon which the material non-public information resulting in the Blackout Period is disclosed to the public or ceases to be material and (2) such time as the Company notifies the selling Holders that sales pursuant to such Registration Statement or a new or amended Registration Statement may resume.
 
“ Business Day ” means any day of the year, other than a Saturday, Sunday, or other day on which banks in the State of New York are required or authorized to close.
 
“ Commission ” means the U. S. Securities and Exchange Commission or any other federal agency at the time administering the Securities Act.
 
“ Common Stock ” means the common stock, par value $0.001 per share, of the Company and any and all shares of capital stock or other equity securities of: (i) the Company which are added to or exchanged or substituted for the Common Stock by reason of the declaration of any stock dividend or stock split, the issuance of any distribution or the reclassification, readjustment, recapitalization or other such modification of the capital structure of the Company; and (ii) any other corporation, now or hereafter organized under the laws of any state or other governmental authority, with which the Company is merged, which results from any consolidation or reorganization to which the Company is a party, or to which is sold all or substantially all of the shares or assets of the Company, if immediately after such merger, consolidation, reorganization or sale, the Company or the stockholders of the Company own equity securities having in the aggregate more than 50% of the total voting power of such other corporation.
 
“ Effective Date ” means the date that is the earlier of (x) the date on which the Subscription Note is fully satisfied and (y) the maturity date of the Subscription Note.
 
“ Exchange Act ” means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission promulgated thereunder.
 
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“ Family Member ” means (a) with respect to any individual, such individual’s spouse, any descendants (whether natural or adopted), any trust all of the beneficial interests of which are owned by any of such individuals or by any of such individuals together with any organization described in Section 501(c)(3) of the Internal Revenue Code of 1986, as amended, the estate of any such individual, and any corporation, association, partnership or limited liability company all of the equity interests of which are owned by those above described individuals, trusts or organizations and (b) with respect to any trust, the owners of the beneficial interests of such trust.
 
“ Holder ” means (i) each Purchaser and (ii) each Tyme Stockholder; or any of such Purchaser’s or Tyme Stockholder’s respective successors and Permitted Assignees who acquire rights in accordance with this Agreement with respect to any Registrable Securities directly or indirectly from a Purchaser or Tyme Stockholder or from any Permitted Assignee.
 
“ Majority Holders ” means, at any time, Holders of a majority of the Registrable Securities then outstanding.
 
“ Merger Agreement ” means the Agreement and Plan of Merger and Reorganization among the Company, Tyme Acquisition Corp. and Tyme, and the other parties thereto, dated as of March 5, 2015.
 
“ Permitted Assignee ” means (a) with respect to a partnership, its partners or former partners in accordance with their partnership interests, (b) with respect to a corporation, its stockholders in accordance with their interest in the corporation, (c) with respect to a limited liability company, its members or former members in accordance with their interest in the limited liability company, (d) with respect to an individual party, any Family Member of such party, (e) an entity that is controlled by, controls, or is under common control with a transferor, or (f) a party to this Agreement.
 
“ Piggyback Registration ” means, in any registration of Common Stock referenced in Section 3(c), the right of each Holder to include the Registrable Securities of such Holder in such registration.
 
The terms “ register ,” “ registered ,” and “ registration ” refer to a registration effected by preparing and filing a registration statement in compliance with the Securities Act, and the declaration or ordering of the effectiveness of such registration statement.
 
“ Registrable Securities ” means the Shares; but excluding any otherwise Registrable Securities that (i) have been sold or otherwise transferred other than to a Permitted Assignee, (ii) may be sold under the Securities Act without volume limitations either pursuant to Rule 144 of the Securities Act or otherwise during any ninety (90) day period, or (iii) are at the time subject to an effective registration statement under the Securities Act.
 
“ Registration Default Period ” means the period during which any Registration Event occurs and is continuing.
 
“ Registration Effectiveness Date ” means the date that is one hundred and eighty (180) calendar days after the Registration Statement is first filed with the Commission.
 
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“ Registration Event ” means the occurrence of any of the following events:
 
(a)            the Company fails to file with the Commission the Registration Statement on or before the Registration Filing Date; or
 
(b)            the Registration Statement is not declared effective by the Commission on or before the Registration Effectiveness Date.
 
“ Registration Filing Date ” means the date that is ninety (90) calendar days after the Effective Date.
 
“ Registration Statement ” means the registration statement that the Company is required to file pursuant to Section 3 of this Agreement to register the Registrable Securities.
 
“ Rule 144 ” means Rule 144 promulgated by the Commission under the Securities Act, as such rule may be amended or supplemented from time to time, or any similar successor rule that may be promulgated by the Commission.
 
“ Rule 145 ” means Rule 145 promulgated by the Commission under the Securities Act, as such rule may be amended or supplemented from time to time, or any similar successor rule that may be promulgated by the Commission.
 
“ Rule 415 ” means Rule 415 promulgated by the Commission under the Securities Act, as such rule may be amended or supplemented from time to time, or any similar successor rule that may be promulgated by the Commission.
 
“ Securities Act ” means the Securities Act of 1933, as amended, or any similar federal statute promulgated in replacement thereof, and the rules and regulations of the Commission thereunder, all as the same shall be in effect at the time.
 
“ SEC Effective Date ” means the date the Registration Statement is first declared effective by the Commission.
 
“ Shares ” means (a) the PPO Shares, (b) the Bridge Note Conversion Shares and (c) nine percent (9%) of the number of shares of Common Stock that each Tyme Stockholder is entitled to receive under Section 1.5(a) of the Merger Agreement; and any shares of Common Stock issued or issuable at any time on or after the Effective Date and prior to the second anniversary of the SEC Effective Date with respect to any of the foregoing upon any stock split, dividend or other distribution, recapitalization or similar event with respect to the foregoing.
 
“ Subscription Note ” means the Limited Recourse Promissory Note, in the principal amount of $2,500,000 payable and delivered to the Company pursuant to one or more of the PPO Subscription Agreements.
 
“ Trading Day ” means any day on which such national securities exchange, the OTC Markets Group or such other securities market or quotation system, which at the time constitutes the principal securities market for the Common Stock, is open for general trading of securities.
 
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Capitalized terms used herein without definition have the meanings ascribed to them in the Bridge Purchase Agreement (with respect to the Bridge Note Conversion Shares) or the PPO Subscription Agreement (with respect to the PPO Shares).
 
2.               Term . This Agreement shall terminate with respect to each Holder on the earlier of: (i) the second anniversary of the SEC Effective Date, (ii) the date on which all Registrable Securities held by such Holder are either (x) transferred (other than to a Permitted Assignee) or (y) may be sold under Rule 144 without volume limitations during any ninety (90) day period, or (iii) the date otherwise terminated as provided herein.
 
3.               Registration .
 
(a)             Registration on Form S-1 . The Company shall file with the Commission a Registration Statement on Form S-1, or any other form for which the Company then qualifies or which counsel for the Company shall deem appropriate and which form shall be available for the resale by the Holders of all of the Registrable Securities, and the Company shall (i) use its commercially reasonable efforts to make the initial filing of the Registration Statement no later than the Registration Filing Date, (ii) use its commercially reasonable efforts to cause such Registration Statement to be declared effective no later than the Registration Effectiveness Date and (iii) use its commercially reasonable efforts to keep such Registration Statement effective for a period of twenty-four (24) months commencing on the SEC Effective Date or for such shorter period ending on the earlier to occur of (x) the sale of all Registrable Securities and (y) with respect to a Holder, the availability of Rule 144 for such Holder to sell all of the Holder’s Registrable Securities without volume limitations within a 90 day period (the   “ Effectiveness Period ”); provided , however , that the Company shall not be obligated to effect any such registration, qualification or compliance pursuant to this Section, or keep such registration effective pursuant to the terms hereunder, in any particular jurisdiction in which the Company would be required to qualify to do business as a foreign corporation or as a dealer in securities under the securities laws of such jurisdiction or to execute a general consent to service of process in effecting such registration, qualification or compliance, in each case where it has not already done so. Notwithstanding the foregoing, in the event that the staff (the “ Staff ”) of the Commission should limit the number of Registrable Securities that may be sold pursuant to the Registration Statement, the Company may remove from the Registration Statement such number of Registrable Securities as specified by the Staff on behalf of all of the Holders on a pro-rata basis. In such event, the Company shall give the Holders prompt notice of the number of Registrable Securities excluded therefrom. No liquidated damages shall accrue or be payable to any Holder pursuant to Section 3(e) with respect to any Registrable Securities that are excluded by reason of the foregoing sentence.
 
(b)             Restriction on Other Registrations . During the twenty-four (24) month period following the effective date of the Merger, the Company shall not register, nor shall it take any action to facilitate registration, under the Securities Act of, the shares of the Common Stock of the Company issued to the former stockholders of Tyme pursuant to the Merger. The above restriction shall not prohibit the Company from filing and causing to become effective a registration relating solely to employee benefit plans or securities issued or issuable to employees, consultants (to the extent the securities owned or to be owned by such consultants could be registered on Form S-8 (or its then equivalent form) or any of their Family Members
 
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(including a registration on Form S-8 (or its then equivalent form)), or a registration on Form S-4 (or its then equivalent form) in connection with a merger, acquisition, divestiture, reorganization or similar event.
 
(c)             Piggyback Registration . If, after the SEC Effective Date, the Company shall determine to register for sale for cash any of its Common Stock, for its own account or for the account of others (other than the Holders), other than (i) a registration relating solely to employee benefit plans or securities issued or issuable to employees, consultants (to the extent the securities owned or to be owned by such consultants could be registered on Form S-8 (or its then equivalent form) or any of their Family Members (including a registration on Form S-8 (or its then equivalent form)), (ii) a registration relating solely to a Securities Act Rule 145 transaction or a registration on Form S-4 (or its then equivalent form) in connection with a merger, acquisition, divestiture, reorganization or similar event, or (iii) a transaction relating solely to the sale of debt or convertible debt instruments, then the Company shall promptly give to each Holder written notice thereof (the “ Registration Rights Notice ”) (and in no event shall such notice be given less than twenty (20) calendar days prior to the filing of such registration statement), and shall, subject to Section 3(d), include as a Piggyback Registration all of the Registrable Securities (including any Registrable Securities that are removed from the Registration Statement as a result of a requirement by the Staff) specified in a written request delivered by the Holder thereof within ten (10) calendar days after delivery to the Holder of such written notice from the Company. However, the Company may, without the consent of such Holders, withdraw such registration statement prior to its becoming effective if the Company or such other selling stockholders have elected to abandon the proposal to register the securities proposed to be registered thereby. The right contained in this paragraph may be exercised by each Holder only with respect to two (2) qualifying registrations.
 
(d)             Underwriting . If a Piggyback Registration is for a registered public offering that is to be made by an underwriting, the Company shall so advise the Holders as part of the Registration Rights Notice. In that event, the right of any Holder to Piggyback Registration shall be conditioned upon such Holder’s participation in such underwriting and the inclusion of such Holder’s Registrable Securities in the underwriting to the extent provided herein. All Holders proposing to sell any of their Registrable Securities through such underwriting shall (together with the Company and any other stockholders of the Company selling their securities through such underwriting) enter into an underwriting agreement in customary form with the underwriter selected for such underwriting by the Company or such other selling stockholders, as applicable. Notwithstanding any other provision of this Section 3(d), if the underwriter or the Company determines that marketing factors require a limitation on the number of shares of Common Stock or the amount of other securities to be underwritten, the underwriter may exclude some or all Registrable Securities from such registration and underwriting. The Company shall so advise all Holders (except those Holders who failed to timely elect to include their Registrable Securities through such underwriting or have indicated to the Company their decision not to do so), and indicate to each such Holder the number of shares of Registrable Securities that may be included in the registration and underwriting, if any. The number of shares of Registrable Securities to be included in such registration and underwriting shall be allocated among such Holders as follows:
 
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(i)            If the Piggyback Registration was initiated by the Company, the number of shares that may be included in the registration and underwriting shall be allocated first to the Company and then, subject to obligations and commitments existing as of the date hereof, to all persons exercising piggyback registration rights (including the Holders) who have requested to sell in the registration on a pro rata basis according to the number of shares requested to be included therein; and
 
(ii)           If the Piggyback Registration was initiated by the exercise of demand registration rights by a stockholder or stockholders of the Company, then the number of shares that may be included in the registration and underwriting shall be allocated first to such selling stockholders who exercised such demand to the extent of their demand registration rights, and then, subject to obligations and commitments existing as of the date hereof, to the Company and then, subject to obligations and commitments existing as of the date hereof, to all persons exercising piggyback registration rights (including the Holders) who have requested to sell in the registration on a pro rata basis according to the number of shares requested to be included therein.
 
No Registrable Securities excluded from the underwriting by reason of the underwriter’s marketing limitation shall be included in such registration. If any Holder disapproves of the terms of any such underwriting, such Holder may elect to withdraw such Holder’s Registrable Securities therefrom by delivering a written notice to the Company and the underwriter. The Registrable Securities so withdrawn from such underwriting shall also be withdrawn from such registration; provided , however , that, if by the withdrawal of such Registrable Securities, a greater number of Registrable Securities held by other Holders may be included in such registration (up to the maximum of any limitation imposed by the underwriters), then the Company shall offer to all Holders who have included Registrable Securities in the registration the right to include additional Registrable Securities pursuant to the terms and limitations set forth herein in the same proportion used above in determining the underwriter limitation.
 
(e)             Liquidated Damages . If a Registration Event occurs, then the Company will make payments to each Holder of Registrable Securities identified in clause (a) or (b) (but not (c)) of the definition of Shares, as liquidated damages to such Holder by reason of the Registration Event, a cash sum equal to one percent (1%) of the aggregate purchase price paid by such Holder pursuant to the Bridge Purchase Agreement or PPO Subscription Agreement with respect to such Holder’s Registrable Securities which are affected by such Registration Event, for each full month during which such Registration Event continues to affect such Registrable Securities. Notwithstanding the foregoing, the maximum amount of liquidated damages that may be paid by the Company pursuant to this Section 3(e) shall be an amount equal to eight percent (8%) of the aggregate purchase price paid by a Holder pursuant to the Bridge Purchase Agreement or the PPO Subscription Agreement with respect to such Holder’s Registrable Securities that are affected by all Registration Events in the aggregate. Each payment of liquidated damages pursuant to this Section 3(e) shall be due and payable in arrears within five (5) days after the end of each full month during of the Registration Default Period until the termination of the Registration Default Period and, to the extent applicable, within five (5) days after such termination. Such payments shall constitute the Holder’s exclusive remedy for any Registration Event. Notwithstanding anything to the contrary contained in this Agreement, the Registration Default Period shall terminate upon the earlier of such time as the Registrable
 
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Securities that are affected by the Registration Event cease to be Registrable Securities or (i) the filing of the Registration Statement in the case of clause (a) of the definition of Registration Event, or (ii) the SEC Effective Date in the case of clause (b) of the definition of Registration Event. The amounts payable as liquidated damages pursuant to this Section 3(e) shall be payable in lawful money of the United States. Notwithstanding the foregoing, the Company will not be liable for the payment of liquidated damages described in this Section 3(e) for any delay in registration of Registrable Securities that would otherwise be includable in the Registration Statement pursuant to Rule 415 solely as a result of a comment received by the Staff requiring a limit on the number of Registrable Securities included in such Registration Statement in order for such Registration Statement to be able to avail itself of Rule 415 or, with respect to a Holder, such Holder fails to provide to the Company information concerning the Holder and manner of distribution of the Holder’s Registrable Securities that is required by SEC Rules to be disclosed in a registration statement utilized in connection with the registration of the Registrable Securities. In the event of any such delay, the Company will use its commercially reasonable efforts at the first opportunity that is permitted by the Commission to register for resale the Registrable Securities that have been cut back from being registered pursuant to Rule 415 only with respect to that portion of the Holders’ Registrable Securities that are then Registrable Securities.
 
(f)             Notwithstanding the provisions of Section 3(e) above, if (i) the Commission does not declare the Registration Statement effective on or before the Registration Effectiveness Date, or (ii) the Commission allows the Registration Statement to be declared effective at any time before or after the Registration Effectiveness Date, subject to the withdrawal of certain Registrable Securities from the Registration Statement, and the reason for (i) or (ii) is the Commission’s determination that (x) the offering of any of the Registrable Securities constitutes a primary offering of securities by the Company, (y) Rule 415 may not be relied upon for the registration of the resale of any or all of the Registrable Securities, and/or (z) a Holder of any Registrable Securities must be named as an underwriter, the Holders understand and agree that in the case of (ii) the Company may (notwithstanding anything to the contrary contained herein) reduce, on a pro rata basis, the total number of Registrable Securities to be registered on behalf of each such Holder, and in the case of (i) or (ii) the Holder shall not be entitled to liquidated damages with respect to the Registrable Securities not registered for the reason set forth in (i) or so reduced on a pro rata basis for the reason set forth (ii) above.
 
(g)            Notwithstanding the provisions of Section 3(e) above, if the Commission does not declare the Registration Statement effective on or before the Registration Effectiveness Date due to outstanding comments relating to actions relating to a Holder or affiliates of such Holder and such Holder fails to provide necessary information or take (or cause to be taken) actions necessary to enable the Company to comply and/or respond to such Commission’s comments to the satisfaction of the Commission (a “Holder Failure”), each such Holder and any Holder which is an affiliate of such Holder shall not be entitled to liquidated damages with respect to such Holder’s Registrable Securities for such portion of any Registration Default Period attributable to such Holder Failure and shall not be entitled to have the Holder’s Registrable Securities included in the Registration Statement until such Holder Failure is resolved to the satisfaction of the Commission.
 
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4.               Registration Procedures . The Company will keep each Holder reasonably advised as to the filing and effectiveness of the Registration Statement. At its expense with respect to the Registration Statement, the Company will:
 
(a)            prepare and file with the Commission with respect to the Registrable Securities, a Registration Statement in accordance with Section 3(a) hereof, and use its commercially reasonable efforts to cause such Registration Statement to become effective and to remain effective for the   Effectiveness Period;
 
(b)            if the Registration Statement is subject to review by the Commission, promptly respond to all comments and diligently pursue resolution of any comments to the satisfaction of the Commission;
 
(c)            prepare and file with the Commission such amendments and supplements to such Registration Statement as may be necessary to keep such Registration Statement effective during the Effectiveness Period;
 
(d)            furnish, without charge, to each Holder of Registrable Securities covered by such Registration Statement (i) a reasonable number of copies of such Registration Statement (including any exhibits thereto other than exhibits incorporated by reference), each amendment and supplement thereto as such Holder may reasonably request, (ii) such number of copies of the prospectus included in such Registration Statement (including each preliminary prospectus and any other prospectus filed under Rule 424 of the Securities Act) as such Holders may reasonably request, in conformity with the requirements of the Securities Act, and (iii) such other documents as such Holder may reasonably require to consummate the disposition of the Registrable Securities owned by such Holder, but only during the Effectiveness Period;
 
(e)            use its commercially reasonable efforts to register or qualify such registration under such other applicable securities laws of such jurisdictions within the United States as any Holder of Registrable Securities covered by such Registration Statement reasonably requests and as may be necessary for the marketability of the Registrable Securities (such request to be made by the time the applicable Registration Statement is deemed effective by the Commission) and do any and all other acts and things necessary to enable such Holder to consummate the disposition in such jurisdictions of the Registrable Securities owned by such Holder; provided , that the Company shall not be required to (i) qualify generally to do business in any jurisdiction where it would not otherwise be required to qualify but for this paragraph, (ii) subject itself to taxation in any such jurisdiction, or (iii) consent to general service of process in any such jurisdiction.
 
(f)             as promptly as practicable after becoming aware of such event, notify each Holder of Registrable Securities, the disposition of which requires delivery of a prospectus relating thereto under the Securities Act, of the happening of any event, which comes to the Company’s attention, that will after the occurrence of such event cause the prospectus included in such Registration Statement, if not amended or supplemented, to contain an untrue statement of a material fact or an omission to state a material fact required to be stated therein or necessary to make the statements therein not misleading and the Company shall promptly thereafter prepare and furnish to such Holder a supplement or amendment to such prospectus (or prepare
 
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and file appropriate reports under the Exchange Act) so that, as thereafter delivered to the purchasers of such Registrable Securities, such prospectus shall not contain an untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading, unless suspension of the use of such prospectus otherwise is authorized herein or in the event of a Blackout Period, in which case no supplement or amendment need be furnished (or Exchange Act filing made) until the termination of such suspension or Blackout Period;
 
(g)            comply, and continue to comply during the Effectiveness Period, in all material respects with the Securities Act and the Exchange Act and with all applicable rules and regulations of the Commission with respect to the disposition of all securities covered by such Registration Statement;
 
(h)            as promptly as practicable after becoming aware of such event, notify each Holder of Registrable Securities being offered or sold pursuant to the Registration Statement of the issuance by the Commission of any stop order or other suspension of effectiveness of the Registration Statement;
 
(i)             use its commercially reasonable efforts to cause all the Registrable Securities covered by the Registration Statement to be quoted on the OTC Markets Group or such other principal securities market or quotation system on which securities of the same class or series issued by the Company are then listed or traded or quoted;
 
(j)              provide a transfer agent and registrar, which may be a single entity, for the shares of Common Stock at all times;
 
(k)            cooperate with the Holders of Registrable Securities being offered pursuant to the Registration Statement to issue and deliver, or cause its transfer agent to issue and deliver, certificates representing Registrable Securities to be offered pursuant to the Registration Statement within a reasonable time after the delivery of certificates representing the Registrable Securities to the transfer agent or the Company, as applicable, and enable such certificates to be in such denominations or amounts as the Holders may reasonably request and registered in such names as the Holders may request;
 
(l)              during the Effectiveness Period, refrain from bidding for or purchasing any Common Stock or any right to purchase Common Stock or attempting to induce any person to purchase any such security or right if such bid, purchase or attempt would in any way limit the right of the Holders to sell Registrable Securities by reason of the limitations set forth in Regulation M of the Exchange Act; and
 
(m)            take all other commercially reasonable actions necessary to expedite and facilitate the disposition by the Holders of the Registrable Securities pursuant to the Registration Statement during the term of this Agreement; provided , however , the Company is not obligated under this clause (m) to expend any of the Company’s funds, other than the costs and expenses specifically required under Section 6 of this Agreement.
 
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5.               Obligations of the Holders .
 
(a)            Each Holder agrees that, upon receipt of any notice from the Company of the happening of any event of the kind described in Section 4(f) hereof or of the commencement of a Blackout Period, such Holder shall discontinue the disposition of Registrable Securities included in the Registration Statement until such Holder’s receipt of the copies of the supplemented or amended prospectus contemplated by Section 4(f) hereof or notice of the end of the Blackout Period, and, if so directed by the Company, such Holder shall deliver to the Company (at the Company’s expense) all copies (including, without limitation, any and all drafts), other than permanent file copies, then in such Holder’s possession, of the prospectus covering such Registrable Securities current at the time of receipt of such notice.
 
(b)            The Holders of the Registrable Securities shall provide such information as may reasonably be requested by the Company, or the managing underwriter, if any, in connection with the preparation of any registration statement, including amendments and supplements thereto, in order to effect the registration of any Registrable Securities under the Securities Act pursuant to Section 3(a) and/or 3(c) of this Agreement and in connection with the Company’s obligation to comply with federal and applicable state securities laws, including a completed questionnaire in the form attached to this Agreement as Annex A (a “ Selling Securityholder Questionnaire ”) or any update thereto not later than three (3) Business Days following a request therefor from the Company.
 
(c)            Each Holder, by its acceptance of the Registrable Securities, agrees to cooperate with the Company as reasonably requested by the Company in connection with the preparation and filing of any Registration Statement hereunder, unless such Holder has notified the Company in writing of its election to exclude all of its Registrable Securities from such Registration Statement.
 
6.               Registration Expenses . The Company shall pay all expenses in connection with any registration obligation provided herein, including, without limitation, all registration, filing, stock exchange fees, printing expenses, all fees and expenses of complying with applicable securities laws, and the fees and disbursements of counsel for the Company and of its independent accountants; provided , that, in any underwritten registration, the Company shall have no obligation to pay any underwriting discounts, selling commissions or transfer taxes attributable to the Registrable Securities being sold by the Holders thereof, which underwriting discounts, selling commissions and transfer taxes shall be borne by such Holders. Additionally, in an underwritten offering, all selling stockholders and the Company shall bear the expenses of the underwriter pro rata in proportion to the respective amount of shares each is selling in such offering. Except as provided in this Section 6 and Section 8 of this Agreement, the Company shall not be responsible for the expenses of any attorney or other advisor employed by a Holder.
 
7.               Assignment of Rights . No Holder may assign its rights under this Agreement to any party without the prior written consent of the Company; provided , however , that any Holder may assign its rights under this Agreement without such consent to a Permitted Assignee as long as (a) such transfer or assignment is effected in accordance with applicable securities laws; (b) such transferee or assignee agrees in writing to become bound by and subject to the terms of this Agreement; and (c) such Holder notifies the Company in writing of such transfer or assignment,
 
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stating the name and address of the transferee or assignee and identifying the Registrable Securities with respect to which such rights are being transferred or assigned. The Company may assign this Agreement or any rights or obligations hereunder without the prior written consent of any other party hereto.
 
8.               Indemnification .
 
(a)            In the event of the offer and sale of Registrable Securities under the Securities Act, the Company shall, and hereby does, indemnify and hold harmless, to the fullest extent permitted by law, each Holder, its directors, officers, partners, and each other person, if any, who controls or is under common control with such Holder within the meaning of Section 15 of the Securities Act, against any losses, claims, damages or liabilities, joint or several, and expenses to which the Holder or any such director, officer, partner or controlling person may become subject under the Securities Act or otherwise, insofar as such losses, claims, damages, liabilities or expenses (or actions or proceedings, whether commenced or threatened, in respect thereof) arise out of or are based upon any untrue statement of any material fact contained in any registration statement prepared and filed by the Company under which Registrable Securities were registered under the Securities Act, any preliminary prospectus, final prospectus or summary prospectus contained therein, or any amendment or supplement thereto, or any omission to state therein a material fact required to be stated or necessary to make the statements therein in light of the circumstances in which they were made not misleading, and the Company shall reimburse the Holder, and each such director, officer, partner and controlling person for any legal or any other expenses reasonably incurred by them in connection with investigating, defending or settling any such loss, claim, damage, liability, action or proceeding; provided , however , that such indemnity agreement found in this Section 8(a) shall in no event exceed the net proceeds from the PPO received by the Company from such Holder (or Holder’s predecessor-in-interest); and provided further , that the Company shall not be liable in any such case (i) to the extent that any such loss, claim, damage, or liability (or action or proceeding in respect thereof) or expense arises out of or is based upon (x) an untrue statement in or omission from such registration statement, any such preliminary prospectus, final prospectus, summary prospectus, amendment or supplement in reliance upon and in conformity with written information furnished by a Holder or its representative to the Company for use in the preparation thereof or (y) the failure of a Holder to comply with the covenants and agreements contained in Section 5 hereof respecting the sale of Registrable Securities; or (ii) if the person asserting any such loss, claim, damage or liability (or action or proceeding in respect thereof) who purchased the Registrable Securities that are the subject thereof did not receive a copy of an amended preliminary or final prospectus or the final prospectus (or the final prospectus as amended or supplemented) at or prior to the written confirmation of the sale of such Registrable Securities to such person because of the failure of such Holder to so provide such amended preliminary or final prospectus and the untrue statement or omission of a material fact made in such preliminary or final prospectus was corrected in the amended preliminary or final prospectus (or the final prospectus as amended or supplemented). Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of the Holders, or any such director, officer, partner or controlling person and shall survive the transfer of such shares by the Holder.
 
(b)            As a condition to including Registrable Securities in any registration statement filed pursuant to this Agreement, each Holder agrees to be bound by the terms of this
 
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Section 8 and to indemnify and hold harmless, to the fullest extent permitted by law, the Company, each of its directors, officers, partners, legal counsel and accountants and each underwriter, if any, and each other person, if any, who controls the Company within the meaning of Section 15 of the Securities Act, against any losses, claims, damages or liabilities, joint or several, to which the Company or any such director or officer or controlling person may become subject under the Securities Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions or proceedings, whether commenced or threatened, in respect thereof) arise out of or are based upon any untrue statement of a material fact or any omission of a material fact required to be stated in any registration statement, any preliminary prospectus, final prospectus, summary prospectus, amendment or supplement thereto or necessary to make the statements therein not misleading, to the extent that such untrue statement or omission is included or omitted in reliance upon and in conformity with written information furnished by the Holder or its representative to the Company for use in the preparation thereof, and such Holder shall reimburse the Company, and such Holders, directors, officers, partners, legal counsel and accountants, persons, underwriters, or control persons, each such director, officer, and controlling person for any legal or other expenses reasonably incurred by them in connection with investigating, defending, or settling any such loss, claim, damage, liability, action, or proceeding; provided , however , that indemnity obligation contained in this Section 8(b) shall in no event exceed the amount of the net proceeds received by such Holder as a result of the sale of such Holder’s Registrable Securities pursuant to such registration statement, except in the case of fraud or willful misconduct. Such indemnity shall remain in full force and effect, regardless of any investigation made by or on behalf of the Company or any such director, officer or controlling person and shall survive the transfer by any Holder of such shares.
 
(c)            Promptly after receipt by an indemnified party of notice of the commencement of any action or proceeding involving a claim referred to in this Section 8 (including any governmental action), such indemnified party shall, if a claim in respect thereof is to be made against an indemnifying party, give written notice to the indemnifying party of the commencement of such action; provided , that the failure of any indemnified party to give notice as provided herein shall not relieve the indemnifying party of its obligations under this Section, except to the extent that the indemnifying party is actually prejudiced by such failure to give notice. In case any such action is brought against an indemnified party, unless in the reasonable judgment of counsel to such indemnified party a conflict of interest between such indemnified and indemnifying parties may exist or the indemnified party may have defenses not available to the indemnifying party in respect of such claim, the indemnifying party shall be entitled to participate in and to assume the defense thereof, with counsel reasonably satisfactory to such indemnified party and, after notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof, the indemnifying party shall not be liable to such indemnified party for any legal or other expenses subsequently incurred by the latter in connection with the defense thereof, unless in such indemnified party’s reasonable judgment a conflict of interest between such indemnified and indemnifying parties arises in respect of such claim after the assumption of the defenses thereof or the indemnifying party fails to defend such claim in a diligent manner, other than reasonable costs of investigation. Neither an indemnified nor an indemnifying party shall be liable for any settlement of any action or proceeding effected without its consent. No indemnifying party shall, without the consent of the indemnified party, consent to entry of any judgment or enter into any settlement, which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such indemnified party of a
 
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release from all liability in respect of such claim or litigation. Notwithstanding anything to the contrary set forth herein, and without limiting any of the rights set forth above, in any event any party shall have the right to retain, at its own expense, counsel with respect to the defense of a claim. Each indemnified party shall furnish such information regarding itself or the claim in question as an indemnifying party may reasonably request in writing and as shall be reasonably required in connection with defense of such claim and litigation resulting therefrom.
 
(d)            If an indemnifying party does not or is not permitted to assume the defense of an action pursuant to Sections 8(c) or in the case of the expense reimbursement obligation set forth in Sections 8(a) and 8(b), the indemnification required by Sections 8(a) and 8(b) shall be made by periodic payments of the amount thereof during the course of the investigation or defense, as and when bills are received or expenses, losses, damages, or liabilities are incurred.
 
(e)             If the indemnification provided for in Section 8(a) or 8(b) is held by a court of competent jurisdiction to be unavailable to an indemnified party with respect to any loss, liability, claim, damage or expense referred to herein, the indemnifying party, in lieu of indemnifying such indemnified party hereunder, shall contribute to the amount paid or payable by such indemnified party as a result of such loss, liability, claim, damage or expense (i) in such proportion as is appropriate to reflect the proportionate relative fault of the indemnifying party on the one hand and the indemnified party on the other (determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or omission relates to information supplied by the indemnifying party or the indemnified party and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such untrue statement or omission), or (ii) if the allocation provided by clause (i) above is not permitted by applicable law or provides a lesser sum to the indemnified party than the amount herein provided, then in such proportion as is appropriate to reflect not only the proportionate relative fault of the indemnifying party and the indemnified party, but also the relative benefits received by the indemnifying party on the one hand and the indemnified party on the other, as well as any other relevant equitable considerations. No indemnified party guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any indemnifying party who was not guilty of such fraudulent misrepresentation.
 
(f)             Notwithstanding the foregoing, to the extent that the provisions on indemnification and contribution contained in the underwriting agreement entered into in connection with an underwritten public offering are in conflict with the foregoing provisions, the provisions in the underwriting agreement shall control.
 
(g)              Other Indemnification . Indemnification similar to that specified in this Section (with appropriate modifications) shall be given by the Company and each Holder of Registrable Securities with respect to any required registration or other qualification of securities under any federal or state law or regulation or governmental authority other than the Securities Act.
 
9.               Rule 144 . The Company shall file with the Commission “Form 10 information” (as defined in Rule 144(i)(3) under the Securities Act) reflecting its status as an entity that is no
 
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longer an issuer described in Rule 144(i)(1)(i) promptly following the closing of the Merger. For a period of at least twelve (12) months following the Effective Date, the Company will use its commercially reasonable efforts to timely file all reports required to be filed by the Company after the date hereof under the Exchange Act and the rules and regulations adopted by the Commission thereunder, and if the Company is not required to file reports pursuant to such sections, it will prepare and furnish to the Holders and make publicly available in accordance with Rule 144(c) such information as is required for the Holders to sell shares of Common Stock under Rule 144.
 
10.             Independent Nature of Each Holder’s Obligations and Rights . The obligations of each Holder under this Agreement are several and not joint with the obligations of any other Holder, and each Holder shall not be responsible in any way for the performance of the obligations of any other Holder under this Agreement. Nothing contained herein and no action taken by any Holder pursuant hereto, shall be deemed to constitute such Holders as a partnership, an association, a joint venture, or any other kind of entity, or create a presumption that the Holders are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated by this Agreement. Each Holder shall be entitled to independently protect and enforce its rights, including without limitation the rights arising out of this Agreement, and it shall not be necessary for any other Holder to be joined as an additional party in any proceeding for such purpose.
 
11.             Miscellaneous .
 
(a)             Governing Law . This Agreement shall be governed by and construed in accordance with the laws of the United States of America and the State of New York, both substantive and remedial, without regard to New York conflicts of law principles. Any judicial proceeding brought against any of the parties to this Agreement or any dispute arising out of this Agreement or any matter related hereto shall be brought in the courts of the State of New York, New York County, or in the United States District Court for the Southern District of New York and, by its execution and delivery of this Agreement, each party to this Agreement accepts the jurisdiction of such courts. The foregoing consent to jurisdiction shall not be deemed to confer rights on any person other than the parties to this Agreement.
 
(b)             Remedies . Except as otherwise specifically set forth herein with respect to a Registration Event, in the event of a breach by the Company or by a Holder of any of their respective obligations under this Agreement, each Holder or the Company, as the case may be, in addition to being entitled to exercise all rights granted by law and under this Agreement, including recovery of damages, shall be entitled to specific performance of its rights under this Agreement.
 
(c)             Successors and Assigns . Except as otherwise provided herein, the provisions hereof shall inure to the benefit of, and be binding upon, the successors, Permitted Assignees, executors and administrators of the parties hereto.
 
(d)             No Inconsistent Agreements . The Company has not entered, as of the date hereof, and shall not enter, on or after the date of this Agreement, into any agreement with respect to its securities that would have the effect of impairing the rights granted to the Holders
 
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in this Agreement or otherwise conflicts with the provisions hereof. Notwithstanding anything to the contrary contained herewith, except as specifically provided in this Agreement, any action by the Company which could have the effect of diminishing the value of any Registrable Securities, including, without limitation, the issuance of additional Common Stock, or the granting of registration rights to others, and actions in connection with the operation of the business of the Company, shall not by itself, absent bad faith, be deemed an impairment of the rights granted to the Holders in this Agreement.
 
(e)             Entire Agreement . This Agreement and the documents, instruments and other agreements specifically referred to herein or delivered pursuant hereto constitute the full and entire understanding and agreement between the parties with regard to the subjects hereof.
 
(f)              Notices, etc . All notices,   consents, waivers, and other communications which are required or permitted under this Agreement shall be in writing will be deemed given to a party (a) on the date of delivery, if personally delivered against written receipt therefor, (b) on the date of delivery, if forwarded to the appropriate address by a nationally recognized overnight courier service (costs prepaid); (b) the date of transmission if sent by facsimile or e-mail with confirmation of transmission by the transmitting equipment if such notice or communication is delivered prior to 5:00 P.M., New York City time, on a Trading Day, or the next Trading Day after the date of transmission, if such notice or communication is delivered on a day that is not a Trading Day or later than 5:00 P.M., New York City time, on any Trading Day; (c) the date received or rejected by the addressee, if sent by certified mail, return receipt requested; or (d) seven days after the placement of the notice into the mails (first class postage prepaid), to the party at the address, facsimile number, or e-mail address furnished by the such party,
 
If to the Company, to:

Steven Hoffman, President
Tyme Technologies, Inc.
48 Wall Street – Suite 1100
New York, NY 10005

Telephone Number:
E-mail Address:                                 

with copy to:
(which shall not constitute notice)

Keith S. Braun, Esq.
Moritt Hock & Hamroff LLP
400 Garden City Plaza
Garden City, NY 11530

Telephone Number:
E-mail Address:
 
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if to a Purchaser, to:

at the address set forth on such Purchaser’s signature page hereto;

if to a Tyme Stockholder:

at the address set forth on such Tyme Stockholder’s signature page hereto.

or at such other address as any party shall have furnished to the other parties in writing in accordance with this Section 11(f).
 
(g)             Delays or Omissions . No delay or omission to exercise any right, power or remedy accruing to any Holder, upon any breach or default of the Company under this Agreement, shall impair any such right, power or remedy of such Holder nor shall it be construed to be a waiver of any such breach or default, or an acquiescence therein, or of any similar breach or default thereunder occurring; nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default theretofore or thereafter occurring. Any waiver, permit, consent or approval of any kind or character on the part of any Holder of any breach or default under this Agreement, or any waiver on the part of any Holder of any provisions or conditions of this Agreement, must be in writing and shall be effective only to the extent specifically set forth in such writing. All remedies, either under this Agreement, or by law or otherwise afforded to any holder, shall be cumulative and not alternative.
 
(h)             Counterparts . This Agreement may be executed in any number of counterparts, and with respect to any Purchaser, by execution of an Omnibus Signature Page to the Bridge Purchase Agreement (in case of the former Holder of the Bridge Note) or the PPO Subscription Agreement (in the case of Holders of any of the PPO Securities), each of which shall be enforceable against the parties actually executing such counterparts, and all of which together shall constitute one instrument. In the event that any signature is delivered by facsimile transmission or by e-mail, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile signature page were an original thereof.
 
(i)              Severability . In the case any provision of this Agreement shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.
 
(j)              Amendments . Except as otherwise provided herein, the provisions of this Agreement may be amended at any time and from time to time, and particular provisions of this Agreement may be waived, with and only with an agreement or consent in writing signed by the Company and the Majority Holders. The Purchasers and Tyme Stockholders acknowledge that by the operation of this Section, the Majority Holders may have the right and power to diminish or eliminate all rights of the other Holders under this Agreement.
 
[COMPANY AND HOLDERS SIGNATURE PAGES FOLLOW]
 
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This Registration Rights Agreement is hereby executed as of the date first above written.
       
 
The Company:
   
 
TYME TECHNOLOGIES, INC.
   
 
By:
   
 
Name: Peter de Svastich
 
Title: President
   
 
Purchasers
   
 
See Omnibus Signature Pages to the Bridge Purchase Agreement and the PPO Subscription Agreement

[Signature Page(s) for Tyme Stockholders on Following Page(s)]
 
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Tyme Stockholders:
     
 
Name:
 
Title (if applicable):
 
Address:
 
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Annex A
 
Tyme Technologies, Inc.
 
Selling Securityholder Notice and Questionnaire
 
The undersigned beneficial owner of Registrable Securities of Tyme Technologies, Inc. (formerly known as Global Group Enterprises Corp.) , a Delaware corporation (the “ Company ”), understands that the Company has filed or intends to file with the U.S. Securities and Exchange Commission a registration statement (the “ Registration Statement ”) for the registration and resale under Rule 415 of the Securities Act of 1933, as amended, of the Registrable Securities, in accordance with the terms of the Registration Rights Agreement (the “ Registration Rights Agreement ”) to which this document is annexed. A copy of the Registration Rights Agreement is available from the Company upon request at the address set forth below. All capitalized terms not otherwise defined herein shall have the meanings ascribed thereto in the Registration Rights Agreement.
 
Certain legal consequences arise from being named as a selling security holder in the Registration Statement and the related prospectus. Accordingly, holders and beneficial owners of Registrable Securities are advised to consult their own securities law counsel regarding the consequences of being named or not being named as a selling security holder in the Registration Statement and the related prospectus.
 
NOTICE
 
The undersigned beneficial owner (the “ Selling Securityholder ”) of Registrable Securities hereby elects to include the Registrable Securities owned by it in the Registration Statement.
 
The undersigned hereby provides the following information to the Company and represents and warrants that such information is accurate:
 
QUESTIONNAIRE
 
1.   Name:
 
 
(a)
Full Legal Name of Selling Securityholder
 
 
 
 
 
 

 
(b)
Full Legal Name of Registered Holder (holder of record) (if not the same as (a) above) through which Registrable Securities are held:
 
 
 
 
 
 
 
 
(c)
If you are not a natural person, full Legal Name of Natural Control Person (which means a natural person who directly or indirectly alone or with others has power to vote or dispose of the securities covered by this Questionnaire):
 
 
 
 
 
 
 
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2.   Address for Notices to Selling Securityholder:
           
 
 
Telephone:
 
 Fax:
 
Email:
 
Contact Person:
 

3.   Broker-Dealer Status:
 
 
(a)
Are you a broker-dealer?
 
  Yes  ☐ No  ☐
 
 
(b)
If “yes” to Section 3(a), did you receive your Registrable Securities as compensation for investment banking services to the Company?
 
  Yes  ☐ No  ☐
 
 
Note:
If “no” to Section 3(b), the Commission’s staff has indicated that you should be identified as an underwriter in the Registration Statement.
 
 
(c)
Are you an affiliate of a broker-dealer?
 
  Yes  ☐ No  ☐
 
 
(d)
If you are an affiliate of a broker-dealer, do you certify that you purchased the Registrable Securities in the ordinary course of business, and at the time of the purchase of the Registrable Securities to be resold, you had no agreements or understandings, directly or indirectly, with any person to distribute the Registrable Securities?
 
  Yes  ☐ No  ☐
 
 
Note:
If “no” to Section 3(d), the Commission’s staff has indicated that you should be identified as an underwriter in the Registration Statement.
 
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4.   Beneficial Ownership of Securities of the Company Owned by the Selling Securityholder:
 
Except as set forth below in this Item 4, the undersigned is not the beneficial or registered owner of any securities of the Company.
 
 
(a)            Please list the type (common stock, warrants, etc.) and amount of all securities of the Company (including any Registrable Securities) beneficially owned 1 by the Selling Securityholder:
     
     
 
5.   Relationships with the Company:
 
Except as set forth below, neither you nor (if you are a natural person) any member of your immediate family, nor (if you are not a natural person) any of your affiliates 2 , officers, directors or principal equity holders (owners of 5% of more of the equity securities of the undersigned) has held any position or office or has had any other material relationship with the Company (or its predecessors or affiliates) during the past three years.
 
 
State any exceptions here:
   
   
 
1
Beneficially Owned :   A “beneficial owner” of a security includes any person who, directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise has or shares (i)  voting   power , including the power to direct the voting of such security, or (ii)  investment power , including the power to dispose of, or direct the disposition of, such security.  In addition, a person is deemed to have “beneficial ownership” of a security of which such person has the right to acquire beneficial ownership at any time within 60 days, including, but not limited to, any right to acquire such security: (i) through the exercise of any option, warrant or right, (ii) through the conversion of any security or (iii) pursuant to the power to revoke, or the automatic termination of, a trust, discretionary account or similar arrangement.
 
It is possible that a security may have more than one “beneficial owner,” such as a trust, with two co-trustees sharing voting power, and the settlor or another third party having investment power, in which case each of the three would be the “beneficial owner” of the securities in the trust.  The power to vote or direct the voting, or to invest or dispose of, or direct the investment or disposition of, a security may be indirect and arise from legal, economic, contractual or other rights, and the determination of beneficial ownership depends upon who ultimately possesses or shares the power to direct the voting or the disposition of the security.
 
The final determination of the existence of beneficial ownership depends upon the facts of each case.  You may, if you believe the facts warrant it, disclaim beneficial ownership of securities that might otherwise be considered “beneficially owned” by you.
 
2
Affiliate :   An “affiliate” is a company or person that directly, or indirectly through one or more intermediaries, controls you, or is controlled by you, or is under common control with you.
 
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5.   Method of Distribution:
 
Describe below Holder’s intended method of distribution.
   
   
 
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The undersigned agrees to promptly notify the Company of any inaccuracies or changes in the information provided herein that may occur subsequent to the date hereof at any time while the Registration Statement remains effective.
 
By signing below, the undersigned consents to the disclosure of the information contained herein in its answers to Items 1 through 6 and the inclusion of such information in the Registration Statement and the related prospectus and any amendments or supplements thereto. The undersigned understands that such information will be relied upon by the Company in connection with the preparation or amendment of the Registration Statement and the related prospectus and any amendments or supplements thereto.
 
IN WITNESS WHEREOF the undersigned, by authority duly given, has caused this Selling Securityholder Notice and Questionnaire to be executed and delivered either in person or by its duly authorized agent.
         
BENEFICIAL OWNER (individual)
 
BENEFICIAL OWNER (entity)
     
     
Signature
 
Name of Entity
     
     
Print Name
 
Signature
     
   
Print Name: 
 
Signature (if Joint Tenants or Tenants in Common)
   
   
Title: 
 
 
PLEASE E-MAIL OR FAX A COPY OF THE COMPLETED AND EXECUTED SELLING SECURITYHOLDER NOTICE AND QUESTIONNAIRE, AND RETURN THE ORIGINAL BY OVERNIGHT MAIL, TO:

Moritt Hock & Hamroff LLP
400 Garden City Plaza
Garden City, NY 11530
Attention: Kyle M. Lawrence
Facsimile: (516) 873-2010
E-mail Address: klawrence@moritthock.com
 
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Exhibit 10.10
 
INDEMNIFICATION SHARES ESCROW AGREEMENT
 
This Indemnification Shares Escrow Agreement (this “Agreement”) is entered into as of March 5, 2015 by and among Tyme Technologies, Inc. (f/k/a Global Group Enterprises Corp.), a Delaware corporation (“Parent”), Steven Hoffman, a New Jersey resident but solely ion his capacity as Indemnification Representative under thje Merger Agreement (as defined below) (the “Indemnification Representative”), CKR Law LLP, as escrow agent (the “Escrow Agent”), and with respect to Sections 5, 6 and 8, GEM Global Yield Fund LLC SCS, a “société en commandite simple” formed under the laws of Luxembourg (“GEM”). Capitalized terms not otherwise defined herein shall have the meaning ascribed to them in the Merger Agreement.
 
WHEREAS, Parent has entered into an Agreement and Plan of Merger and Reorganization (the “Merger Agreement”), dated as of March 5, 2015 (the “Merger Agreement”), among Parent, Tyme Acquisition Corp., a Delaware corporation (“Acquisition Corp.”), Tyme Inc., a Delaware corporation (the “Company”), Indemnification Representative (with respect to Section 6.3(f) of the Merger Agreement only), and GEM (with respect to Sections 1.14, 4.8(b) and 5.1(k) of the Merger Agreement only), pursuant to which (i) Acquisition Corp. will merge with and into the Company (the “Merger”), with the Company surviving the Merger, (ii) the Company will become a wholly-owned subsidiary of the Parent, and (iii) the Company Stockholders will receive shares of the Parent Common Stock in exchange for their shares of the Company Common Stock issued and outstanding immediately prior to the Effective Time (other than Dissenting Shares, if any), as determined in accordance with the Conversion Ratio (“Merger Shares”); and
 
WHEREAS, the Merger Agreement provides that 95% of the Merger Shares (the “Initial Shares”) to be issued to the Company Stockholders shall be delivered to the Company Stockholders and 5% of the Merger Shares (the “Indemnification Escrow Shares”) (subject to rounding up as provided in the Merger Agreement) shall be delivered to the Escrow Agent to secure the indemnification obligations under the Merger Agreement of the Company Stockholders as of the Closing Date (collectively, the “Indemnifying Stockholders”), to the Parent; and
 
WHEREAS, the Merger Agreement provides for the execution of this Agreement and the establishment of an escrow account and the parties hereto desire to establish the terms and conditions pursuant to which such escrow account will be established and maintained as of the effectiveness of the Merger.
 
NOW, THEREFORE, the parties hereto hereby agree as follows:
 
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1.
Escrow and Indemnification.
 
(a)            Escrow of Shares . Simultaneously with the execution of this Agreement, the Parent shall cause to be issued and shall deposit with the Escrow Agent certificates representing an aggregate number of shares of the Parent Common Stock computed based upon the applicable Conversion Ratio, as determined pursuant to Section 1.5(b) of the Merger Agreement, issued in the name of the Escrow Agent. The shares deposited with the Escrow Agent pursuant to this Section 1(a) are referred to herein as the “Indemnification Escrow Shares.” The Indemnification Escrow Shares are allocated among the Indemnifying Stockholders as set forth on Schedule A to this Agreement. The Indemnification Escrow Agent agrees to hold the Indemnification Escrow Shares in escrow, subject to the terms and conditions of this Agreement.
 
(b)            Indemnification . Section 6.1 of the Merger Agreement provides that the Company Stockholders shall indemnify and hold harmless Parent from and against certain Damages (as defined in Section 6.1 of the Merger Agreement) on the terms and conditions contained in Article VI of the Merger Agreement. The Indemnification Escrow Shares shall be (i) security for such indemnity obligation of the Indemnifying Stockholders, subject to the limitations, and in the manner provided, in this Agreement and the Merger Agreement and (ii) except with respect to any fraud or willful misconduct by the Company in connection with the Merger Agreement, shall be the exclusive means for Parent to collect any Damages with respect to which Parent is entitled to indemnification under Article VI of the Merger Agreement.
 
(c)            Dividends, Etc. Any securities distributed in respect of or in exchange for any of the Indemnification Escrow Shares, whether by way of stock dividends, stock splits or otherwise, shall be issued in the name of the Escrow Agent or its nominee and shall be delivered to the Escrow Agent, who shall hold such securities in escrow. Such securities shall be considered Indemnification Escrow Shares for purposes hereof. Any cash dividends or property (other than securities) distributed in respect of the Indemnification Escrow Shares shall promptly be distributed by the Escrow Agent to the Indemnifying Stockholders in accordance with Section 3(c) hereof.
 
(d)            Voting of Shares . The Indemnification Representative shall have the right, in his sole discretion, on behalf of the Indemnifying Stockholders, to direct the Escrow Agent in writing as to the exercise of any voting rights pertaining to the Indemnification Escrow Shares, and the Escrow Agent shall comply with any such written instructions. In the absence of such instructions, the Escrow Agent shall vote all of the Indemnification Escrow Shares of each Indemnifying Stockholder in the exact proportions as such Indemnifying Stockholder votes its other shares of Parent Common Stock, or shall not vote any of such Indemnifying Stockholder’s Indemnification Escrow Shares if such Indemnifying Stockholder does not vote any of its other shares of Parent Common Stock. The Indemnification Representative shall have no obligation to solicit consents or proxies from the Indemnifying Stockholders for purposes of any such vote.
 
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(e)            Transferability . The respective interests of the Indemnifying Stockholders in the Indemnification Escrow Shares shall not be assignable or transferable, other than by operation of law. Notice of any such assignment or transfer by operation of law shall be given to the Escrow Agent and Parent, and no such assignment or transfer shall be valid until such notice is given.
 
2. 
Intentionally Omitted.
 
3.
Distribution of Indemnification Escrow Shares.
 
(a)          The Escrow Agent shall distribute the Indemnification Escrow Shares only in accordance with (i) a written instrument delivered to the Escrow Agent that is executed by both the Parent and the Indemnification Representative and that instructs the Escrow Agent as to the distribution of some or all of the Indemnification Escrow Shares, (ii) an order of a court of competent jurisdiction, a copy of which is delivered to the Escrow Agent by either the Parent or the Indemnification Representative, that instructs the Escrow Agent as to the distribution of some or all of the Indemnification Escrow Shares, or (iii) the provisions of Section 3(b) hereof.
 
(b)          Within five (5) business days after March 5, 2017 (the “Termination Date”), the Escrow Agent shall distribute to the Indemnifying Stockholders all of the Indemnification Escrow Shares then held in escrow, registered in the names of the Indemnifying   Stockholders in accordance with the Allocation Percentages set forth on Schedule A to this Agreement. Notwithstanding the foregoing, if Parent has previously delivered to the Escrow Agent a copy of a Claim Notice (as hereinafter defined) and the Escrow Agent has not received written notice executed by Parent and the Indemnification Representative of the resolution of the claim covered thereby, or if Parent has previously delivered to the Escrow Agent a copy of an Expected Claim Notice (as hereinafter defined) and the Escrow Agent has not received written notice executed by Parent and Indemnification Representative of the resolution of the anticipated claim covered thereby, the Escrow Agent shall (x) retain in escrow after the Termination Date such number of Indemnification Escrow Shares as have a Value (as defined in Section 4 below) equal to the Claimed Amount (as hereinafter defined) covered by such Claim Notice or equal to the estimated amount of Damages set forth in such Expected Claim Notice, as the case may be. Any Indemnification Escrow Shares so retained in escrow shall be distributed only in accordance with the terms of clauses (i) or (ii) of Section 3(a) hereof. For purposes of this Agreement, a Claim Notice means a written notification under the Merger Agreement given by the Parent to the Indemnifying Stockholders which contains (i) a description and the amount (the “Claimed Amount”) of any Damages incurred or reasonably expected to be incurred by the Parent, (ii) a statement that the Parent is entitled to indemnification under Article VI of the Merger Agreement for such Damages and a reasonable explanation of the basis therefor, and (iii) a demand for payment (in the manner provided in Section 6.3 of the Merger Agreement) in the amount of such Damages. For purposes of this Agreement, an Expected Claim Notice means a notice delivered pursuant to the Merger Agreement by the Parent to an Indemnifying Stockholder, before expiration of a representation or warranty, to the effect that, as a result of a legal proceeding
 
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instituted by or written claim made by a third party, the Parent reasonably expects to incur Damages as a result of a breach of such representation or warranty.
 
(c)           Any distribution of all or a portion of the Indemnification Escrow Shares to the Indemnifying Stockholders shall be made by delivery of stock certificates issued in the name of the Indemnifying Stockholders in proportion to each such Indemnifying Stockholder’s original contribution of Indemnification Escrow Shares pursuant to the terms of the Merger Agreement. Distributions to the Indemnifying Stockholders shall be made by mailing stock certificates to such holders at their respective addresses shown on the stock records of the Company as of the Closing Date (or such other address as may be provided in writing to the Escrow Agent by any such Indemnifying Stockholder). No fractional Indemnification Escrow Shares shall be distributed to Indemnifying Stockholders pursuant to this Agreement. Instead, the number of shares that each Indemnifying Stockholder shall receive shall be rounded up or down to the nearest whole number (provided that the Indemnification Representative shall have the authority to effect such rounding in such a manner that the total number of whole Indemnification Escrow Shares to be distributed equals the number of Indemnification Escrow Shares then held in escrow). In the event of the issuance of securities or distribution of cash dividends or property to Escrow Agent with respect to Indemnification Escrow Shares, such securities, cash and/or property shall be distributed to the Indemnifying Stockholders contemporaneous and proportional with the stock certificates evidencing the Indemnification Escrow Shares being distributed by Escrow Agent pursuant to this Agreement.
 
4.              Valuation of Indemnification Escrow Shares. For purposes of this Agreement, the “Value” of any Indemnification Escrow Shares shall be $0.50 per share, multiplied by the number of such Indemnification Escrow Shares.
 
5.              Fees and Expenses of Escrow Agent. GEM   shall pay the fees of and expenses incurred by the Escrow Agent for the services to be rendered by the Escrow Agent hereunder, including without limitation, all bank charges, courier charges and transfer agent fees, including an advance of $5,000 which shall be applied against such fees and expenses.
 
6.            Limitation of Escrow Agent’s Liability.
 
(a)           The Escrow Agent shall incur no liability with respect to any action taken or suffered by it in reliance upon any notice, direction, instruction, consent, statement or other documents believed by it to be genuine and duly authorized, nor for other action or inaction except its own willful misconduct or gross negligence. The Escrow Agent shall not be responsible for the validity or sufficiency of this Agreement. In all questions arising under this Agreement, the Escrow Agent may rely on the advice of counsel, and the Escrow Agent shall not be liable to anyone for anything done, omitted or suffered in good faith by the Escrow Agent based on such advice. The Escrow Agent shall not be required to take any action hereunder involving any expense unless the payment of such expense is made or provided for in a manner
 
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reasonably satisfactory to it. In no event shall the Escrow Agent be liable for indirect, punitive, special or consequential damages.
 
(b)           GEM agrees to indemnify the Escrow Agent for, and hold it harmless against, any loss, liability or expense incurred without gross negligence or willful misconduct on the part of Escrow Agent, arising out of or in connection with its carrying out of its duties hereunder.
 
7.
Liability and Authority of Indemnification Representative; Successors and Assignees.
 
(a)           The Indemnification Representative shall not incur any liability to the Indemnifying Stockholders with respect to any action taken or suffered by him in reliance upon any note, direction, instruction, consent, statement or other documents believed by him to be genuinely and duly authorized, nor for other action or inaction except his own willful misconduct or gross negligence. The Indemnification Representative may, in all questions arising under this Agreement, rely on the advice of counsel and the Indemnification Representative shall not be liable to the Indemnifying Stockholders for anything done, omitted or suffered in good faith by the Indemnification Representative based on such advice.
 
(b)           In the event of the death or permanent disability of the Indemnification Representative, or his or her resignation or termination as an Indemnification Representative, a successor Indemnification Representative shall be elected by a majority vote of the Indemnifying Stockholders, with each such Indemnifying Stockholder (or his, her or its successors or assigns) to be given a vote equal to the number of votes represented by the shares of Parent Common Stock set forth opposite the Indemnifying Stockholder’s name on Schedule A to this Agreement. Each successor Indemnification Representative shall have all of the power, authority, rights and privileges conferred by this Agreement upon the original Indemnification Representative, and the term “Indemnification Representative” as used herein shall be deemed to include each successor Indemnification Representative.
 
(c)           The Indemnification Representative shall have full power and authority to represent the Indemnifying Stockholders, and their successors, with respect to all matters arising under this Agreement and Article VI of the Merger Agreement and all actions taken by the Indemnification Representative hereunder or under Article VI of the Merger Agreement shall be binding upon the Indemnifying Stockholders, and their successors, as if expressly confirmed and ratified in writing by each of them. Without limiting the generality of the foregoing, the Indemnification Representative shall have full power and authority to interpret all of the terms and provisions of this Agreement, to compromise any claims asserted hereunder and to authorize any release of the Indemnification Escrow Shares to be made with respect thereto, on behalf of the Indemnifying Stockholders and their successors.
 
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(d)           After Closing Date, the majority vote of the Indemnifying Stockholders (in the manner contemplated under Section 7(b) above) may terminate the Indemnification Representative and appoint a successor Indemnification Representative.
 
(e)           The Escrow Agent may rely on the Indemnification Representative as the exclusive agent of the Indemnifying Stockholders under this Agreement and shall incur no liability to any party with respect to any action taken or suffered by it in good faith reliance thereon.
 
8.              Amounts Payable by GEM. The amounts payable by GEM under this Agreement (i.e., fees and the indemnification obligations pursuant to Section 6(b)) shall be payable solely as follows: The Escrow Agent shall notify GEM of any such amount payable by GEM as soon as it becomes aware that any such amount is payable, with a copy of such notice to the Parent and Indemnification Representative.
 
9.              Termination. This Agreement shall terminate upon the distribution by the Escrow Agent of all of the Indemnification Escrow Shares in accordance with this Agreement; provided that the provisions of Sections 5, 6, 7 and 8 shall survive such termination.
 
10.            Notices. All notices, consents, waivers, and other communications which are required or permitted under this Agreement shall be in writing will be deemed given to a party (a) on the date of delivery against written receipt therefor, if delivered to the appropriate address by hand or by nationally recognized overnight courier service (costs prepaid); (b) the date of transmission if sent by facsimile or e-mail with confirmation of transmission by the transmitting equipment if such notice or communication is delivered prior to 5:00 P.M., New York City time, on a Business Day, or the next Business Day after the date of transmission, if such notice or communication is delivered on a day that is not a Trading Day or later than 5:00 P.M., New York City time, on any Business Day; (c) the date received or rejected by the addressee, if sent by certified mail, return receipt requested; or (d) seven days after the placement of the notice into the mails (first class postage prepaid), to the party at the address, facsimile number, or e-mail address furnished by the such party.
 
If to Parent:
 
Tyme Technologies, Inc.
c/o Moritt Hock & Hamroff LLP
450 Seventh Avenue, 15th floor
New York, NY 10123
Attn: Steven Hoffman, CEO
Facsimile: (646) 688-6096
 
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with a copy to (which shall not constitute notice hereunder):
 
Moritt Hock & Hamroff LLP
400 Garden City Plaza
Garden City, NY 11530
Attn: Keith S. Braun, Esq.
Facsimile: (516) 873-2010

If to the Indemnification Representative:

Steven Hoffman
c/o Moritt Hock & Hamroff LLP
450 Seventh Avenue, 15th floor
New York, NY 10123
Facsimile: (646) 688-6096

with a copy to (which shall not constitute notice hereunder):
 
Moritt Hock & Hamroff LLP
400 Garden City Plaza
Garden City, NY 11530
Attn: Keith S. Braun, Esq.
Facsimile: (516) 873-2000

If to the Escrow Agent:
 
CKR Law LLP
1330 Avenue of the Americas, 35 th Floor
New York, NY 10019
Attn: Mark Crone, Esq.
Facsimile: 212.400.6901

If to GEM:
 
GEM Global Yield LLC SCS
c/o CKR Law LLP
1330 Avenue of the Americas, 35 th Floor
New York, NY 10019
Attn: Chris Brown
Facsimile: 212.400.6901

Any party may give any notice, instruction or communication in connection with this Agreement using any other means (including personal delivery, telecopy or ordinary mail), but no such notice, instruction or communication shall be deemed to have been delivered unless and until it is actually received by the party to whom it was sent. Any party may change the address to which
 
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notices, instructions or communications are to be delivered by giving the other parties to this Agreement notice thereof in the manner set forth in this Section 10.
 
11.            Successor Escrow Agent. In the event the Escrow Agent becomes unavailable or unwilling to continue in its capacity herewith, the Escrow Agent may resign and be discharged from its duties or obligations hereunder by delivering a resignation to the parties to this Agreement, not less than 60 days prior to the date when such resignation shall take effect. Parent may appoint a successor Escrow Agent with the consent of the Indemnification Representative, which shall not be unreasonably withheld. If, within such notice period, the Parent provides to the Escrow Agent written instructions with respect to the appointment of a successor Escrow Agent and directions for the transfer of any Indemnification Escrow Shares then held by the Escrow Agent to such successor, the Escrow Agent shall act in accordance with such instructions and promptly transfer such Indemnification Escrow Shares to such designated successor. If no successor Escrow Agent is named as provided in this Section 11 prior to the date on which the resignation of the Escrow Agent is to properly take effect, the Escrow Agent may apply to a court of competent jurisdiction for appointment of a successor Escrow Agent.
 
12.
General.
 
(a)            Governing Law; Assigns . This Agreement shall be governed by and construed in accordance with the internal laws of the State of New York without regard to conflict-of-law principles and shall be binding upon, and inure to the benefit of, the parties hereto and their respective successors and assigns.
 
(b)            Counterparts . This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
 
(c)            Entire Agreement . Except for those provisions of the Merger Agreement referenced herein, this Agreement constitutes the entire understanding and agreement of the parties with respect to the subject matter of this Agreement and supersedes all prior agreements or understandings, written or oral, between the parties with respect to the subject matter hereof.
 
(d)            Waivers . No waiver by any party hereto of any condition or of any breach of any provision of this Agreement shall be effective unless in writing. No waiver by any party of any such condition or breach, in any one instance, shall be deemed to be a further or continuing waiver of any such condition or breach or a waiver of any other condition or breach of any other provision contained herein.
 
(e)            Amendment . This Agreement may be amended only with the written consent of Parent, Escrow Agent, GEM and Indemnification Representative.
 
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(f)            Consent to Jurisdiction and Service . The parties hereby absolutely and irrevocably consent and submit to the jurisdiction of the courts in the State of New York and of any Federal court located in the State of New York in connection with any actions or proceedings brought against any party hereto by the Escrow Agent arising out of or relating to this Agreement.
 
(g)           Binding Effect . This Agreement shall be binding upon the respective parties hereto and their heirs, executors, successors and assigns.
 
[signature page follows]
 
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IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the day and year first above written.
           
 
TYME TECHNOLOGIES, INC.
       
 
By:
/s/ Peter de Svastich  
  Name: Peter de Svastich
  Title: President
   
  STEVEN HOFFMAN , Individually and as Indemnification Representative
 
  /s/ Steven Hoffman  
  (signature)
           
 
CKR LAW LLP
       
 
By:
/s/ Mark E. Crone  
  Name: Mark E. Crone
  Title: Co-Managing Partner
           
 
GEM GLOBAL YIELD FUND LLC SCS
       
 
By:
/s/ Christopher Brown  
  Name: Christopher Brown
  Title: Manager
 
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SCHEDULE A
 
ALLOCATION OF INDEMNIFICATION ESCROW SHARES
 
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Exhibit 10.11

LICENSE AGREEMENT

THIS LICENSE AGREEMENT (the “Agreement”), executed as of July 9, 2014 (“Effective Date”), is made by and between Steven Hoffman, an individual residing at 15 Knichel Road, Mahwah, New Jersey 07430 (hereinafter “Hoffman”), and Tyme, Inc., a corporation organized under the laws of the State of Delaware, having a place of business at 2711 Centerville Road, Suite 400, Wilmington, Delaware 19808 (hereinafter “Tyme”). Hoffman and Tyme are sometimes referred to herein individually as a “Party” and collectively as the “Parties.”

RECITALS

Whereas, Hoffman has made certain inventions that are disclosed in U.S. Patent Application 14/059,837 and U.S. Patent Application 14/062,194 (hereinafter “the SH Applications”);

Whereas, Tyme is interested in owning the SH Applications and in using and commercializing the inventions disclosed therein in the field of cancer treatment;

Whereas, Hoffman is interested in conveying ownership of the SH Applications while retaining the right to use and commercialize the disclosed inventions in all other fields.
 
NOW, THEREFORE , in consideration of the above premises and the mutual covenants and agreements set forth below, the Parties hereto agree as follows.

Article 1
Definitions

As used in this Agreement, the following words and phrases shall have the following meanings:

1.1            “Affiliate” means a corporation, partnership, or other entity that controls, is controlled by or is under common control with such Party. For the purposes of the definition in this Article 1.1, the word “control” (including, with correlative meaning, the terms “controlled by” or “under common control with”) means the actual power, either directly or indirectly through one or more intermediaries, to direct or cause the direction of the management and policies of such entity, whether by the ownership of at least fifty percent (50%) of the voting stock of such entity, or by contract or otherwise.

1.2            “Change of Control” means the occurrence of any of the following: (a) any consolidation or merger of a Party with or into any Third Party, or any other corporate reorganization involving a Third Party, in which those persons or entities that are stockholders of such Party immediately prior to such consolidation, merger or reorganization own less than fifty percent (50%) of the surviving entity’s voting power immediately after such consolidation, merger or reorganization; (b) a change in the legal or beneficial ownership of fifty percent (50%) or more of the voting securities of any Party (whether in a single transaction or series of related
 
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transactions) where, immediately after giving effect to such change, the legal or beneficial owner of more than fifty percent (50%) of the voting securities of such Party is a Third Party; or (c) the sale, transfer, lease, license or other disposition of all or substantially all of a Party’s assets in one or a series of related transactions to a Third Party.

1.3            “Commercialization” shall mean all activities that relate to the commercial manufacture, marketing and/or sale of Licensed Products or Licensed Methods, including but not limited to advertising, education, planning, marketing, promotion, distribution, market and product support studies, product-related public relations, governmental affairs activities for reimbursement and formulary acceptance, sales force training, trademark selection, filing, prosecution and enforcement. The terms “ Commercialize ” and “ Commercializing ” shall have a corresponding meaning.

1.4            “Confidential Information” shall have the meaning assigned to it in Article 4.1.

1.5            “Control” means, with respect to any intellectual property or right therein, that a Party (or, if applicable, Affiliate thereof) owns or has a license to such intellectual property and has the ability to grant a license or sublicense in or to such intellectual property or right as set forth herein without violating the law or the terms of any agreement or other arrangement with any Third Party.

1.6            “Diligent Efforts” means, with respect to a Party’s obligations hereunder, the carrying out of obligations or tasks in a sustained manner consistent with the efforts a Party devotes to a research, development or marketing project for a pharmaceutical product or products of similar market potential, profit potential or strategic value resulting from its own research efforts, based on conditions then prevailing, which efforts shall in any event be no less than those which would be considered reasonable in the pharmaceutical or biotechnology industries.

1.7           “ Effective Date ” shall have the meaning provided at the beginning of this Agreement.

1.8            “Fields” means any and all fields other than the field of cancer treatment.

1.9            “Information” means information, results and data of any type whatsoever, in any tangible, written, documentary, electronic, or digital form, including without limitation, instructions, processes, compositions, materials, expert opinions, databases, inventions, practices, methods, techniques, specifications, formulations, formulae, knowledge, know-how, skill, experience, test data, including without limitation, pharmacological, biological, chemical, biochemical, toxicological and clinical test data, analytical and quality control data, stability data, studies and procedures, and patent and other legal information or descriptions.

1.10          “Licensed Product” means any product that, but for the licenses granted herein, would infringe the SH Patent Rights.

1.11          “Licensed Method” means any method that, but for the licenses granted herein, would infringe the SH Patent Rights.
 
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1.12          “SH Patent Rights” means U.S. Application No. 14/059,837, filed on October 22, 2013, and entitled “High-Speed Centrifugal Mixing Devices And Methods Of Use” and U.S. Application No. 14/062,194, filed on October 24, 2013, with a claim of priority to U.S. Application No. 61/894,279 and entitled “Tyrosine Derivatives And Compositions Comprising Them” (“the subject application”), and any Patents claiming priority thereto or claiming subject matter described therein.

1.13          “Patents” means all (i) patents, including all U.S. and foreign patents (including but not limited to utility patents and certificates of invention), together with any and all substitutions, extensions and term restorations (including but not limited to supplemental protection certificates or pediatric data exclusivity extensions), registrations, confirmations, re-examinations, reissues, renewals, and foreign counterparts thereof, and (ii) pending applications for patents (including all U.S. and foreign patent applications), including but not limited to, provisionals, divisionals, continuations, and continuations-in-part of any of the foregoing, all domestic and foreign counterparts of any of the foregoing and patents issuing therefrom.

1.14          “Sublicensee” means a Third Party that has been granted a sublicense to practice a Licensed Method, or to make, have made, use, offer to sell, distribute, import or sell Licensed Products by Hoffman, Tyme, or any Affiliate of either of them in accordance with this Agreement.

1.15          “Third Party” means any individual, corporation, partnership, limited liability company or other entity other than Hoffman, Tyme, or an Affiliate of either of them.

Article 2
Licenses

2.1            License . Tyme hereby grants to Hoffman an exclusive (even as to Tyme), worldwide, royalty-free license under the SH Patent Rights to develop, make, have made, use, sell, offer to sell, import, export and distribute products or services in the Fields.

2.2            Right to Sublicense; Sublicensees. With respect to the license granted in Article 2.1 above, such license shall include the right to sublicense to any Third Party so long as such sublicense is consistent with the terms of this Agreement and contains terms reasonably sufficient to enable the sublicensing Party to comply with the provisions of this Agreement and satisfy its obligations hereunder.

2.3            Consideration. As consideration for the license granted in Article 2.1, Hoffman shall provide to Tyme fully executed and notarized copies of the assignment documents attached as Exhibit 1 hereto no later than five (5) business days after the Effective Date. Hoffman shall owe to Tyme no other type or form of consideration for the rights granted to Hoffman herein.
 
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Article 3
Intellectual Property

3.1            Patent Prosecution and Maintenance .   Tyme shall have the primary responsibility for, and shall use Diligent Efforts in filing, prosecuting and maintaining the SH Patents Rights. Tyme shall provide Hoffman with a reasonable opportunity to review and comment upon draft patent applications and office action responses for such Patent Rights. If Tyme decides not to file, prosecute, or maintain any SH Patent Rights, Tyme shall give Hoffman reasonable notice of same (such notice to be provided reasonably in advance of any statutory, response, maintenance fee, or similar deadlines) and after receipt of such notice, Hoffman may, upon written election to Tyme, file, prosecute, or maintain such SH Patent Rights in his sole discretion at his own expense and shall be made the exclusive attorney of record for such SH Patents Rights.

3.2           Enforcement of Patent Rights.

(a)           Infringement of Patent Rights. Each Party to this Agreement shall notify the other in writing promptly of any actual, potential or suspected infringement (collectively “alleged infringement”) of SH Patent Rights of which such Party becomes aware and shall promptly provide the other Party with available evidence of such alleged infringement. In such event, the Parties shall discuss the most appropriate action to take.
 
(b)           Hoffman First Right to Pursue Infringers. With respect to any actual, potential or suspected infringement of SH Patent Rights occurring in the Fields, Hoffman shall have the first and primary right, but not the obligation, to, in his sole discretion, initiate, prosecute, and control any action or legal proceedings, and/or enter into a settlement, including any declaratory judgment action, on his behalf or in Tyme’s name, if necessary. If, within six (6) months of the notice above, Hoffman (i) shall have been unsuccessful in persuading the alleged infringer to desist, (ii) shall not have brought and shall not be diligently prosecuting an infringement action, or (iii) has not entered into settlement discussions with respect to such infringement, or if Hoffman notifies Tyme that he has decided not to undertake any of the foregoing against any such alleged infringer, then Tyme shall then have the right to bring suit to enforce such SH Patent Rights at its own expense and, upon written notice from Tyme.
 
(c)           Tyme First Right to Pursue Infringers. With respect to any actual, potential or suspected infringement of SH Patent Rights occurring outside the Fields, Tyme shall have the first and primary right, but not the obligation, to, in its sole discretion, initiate, prosecute, and control any action or legal proceedings, and/or enter into a settlement, including any declaratory judgment action, on its behalf or in Hoffman’s name, if necessary. If, within six (6) months of the notice above, Tyme (i) shall have been unsuccessful in persuading the alleged infringer to desist, (ii) shall not have brought and shall not be diligently prosecuting an infringement action, or (iii) has not entered into settlement discussions with respect to such infringement, or if Tyme notifies Hoffman that it has decided not to undertake any of the foregoing against any such alleged infringer, then Hoffman shall then have the right to bring suit to enforce such SH Patent Rights at his own expense and, upon written notice from Hoffman.
 
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(d)           Cooperation. If either Party brings any infringement action or proceeding hereunder, the other Party agrees to be joined as a plaintiff and, at the expense of the other Party, to give the Party undertaking such infringement suit or other action reasonable assistance and authority to control, file and prosecute the suit as necessary.
 
(e)           Litigation Control. The Party pursuing or controlling any action or defense under Article 3.2 (the “Controlling Party”) shall be free to enter into a settlement, consent judgment, or other voluntary disposition of any such action or defense, provided, however, that (i) the Controlling Party shall consult with the other Party (the “Secondary Party”) prior to entering into any settlement thereof and (ii) any settlement, consent judgment or other voluntary disposition of such actions which (1) materially limits the scope, validity, or enforceability of any SH Patent Rights, (2) subjects the Secondary Party to any non-indemnified liability or obligation, or (3) admits fault or wrongdoing on the part of Secondary Party must, in each case, be approved in writing by Secondary Party. The Secondary Party shall provide the Controlling Party notice of its approval or denial of such approval within ten (10) business days of any request for such approval by the Controlling Party, provided that (i) in the event Secondary Party wishes to deny such approval, such notice shall include a written description of Secondary Party’s reasonable objections to the proposed settlement, consent judgment, or other voluntary disposition and (ii) Secondary Party shall be deemed to have approved such proposed settlement, consent judgment, or other voluntary disposition in the event it fails to provide such notice within such ten (10) business day period. Any recovery or damages received by the Controlling Party with respect to the infringement of the SH Patent Rights as they relate to Licensed Products shall be used first to reimburse the Parties for unreimbursed reasonable, documented expenses incurred in connection with such action, and the remainder shall be split 90% to the Controlling Party and 10% to the Secondary Party. Notwithstanding the foregoing, the Secondary Party, at its expense, shall have the right to be represented by counsel of its choice in any such proceeding.

3.3            Patent Marking. To the extent permitted by applicable laws and regulations, the Party Commercializing any Licensed Product agrees to mark such product (through a marking on containers, packaging or labels, or an Orange Book or like listing) made, sold, or otherwise disposed of by it or them with any notice of patent rights reasonably necessary, in any country where Licensed Products are sold, to (i) enable Patents (to the extent, in each case, relating to Licensed Products) to be enforced to their full extent, or (ii) ensure the availability of all potential legal or equitable remedies with respect to any infringement of any Patents (to the extent, in each case, relating to Licensed Products) by any Third Party.

3.4            Trademarks. Licensed Products and Licensed Methods may be Commercialized under trademarks and/or service marks selected by the Party Developing and Commercializing such Licensed Products and Licensed Methods. As between the Parties, the Party Developing and Commercializing Licensed Products will, except to the extent assigned to the other Party as explicitly contemplated by this Agreement, exclusively own all Product Trademarks and be responsible for the procurement, filing and maintenance of registrations for such marks and all related costs and expenses.
 
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Article 4
Confidential Information

4.1            Nondisclosure of Confidential Information. All Information disclosed by one Party to the other Party pursuant to this Agreement shall be the “Confidential Information” of the disclosing Party. The Parties agree that during the Term, and for a period of five (5) years thereafter, a Party receiving Confidential Information of the other Party will (i) maintain in confidence such Confidential Information to the same extent such Party maintains its own proprietary industrial information of similar kind and value (but at a minimum each Party shall use commercially reasonable efforts to do so), (ii) not publish or otherwise disclose such Confidential Information to any Third Party without prior written consent of the other Party, and (iii) not use such Confidential Information for any purpose except those permitted by this Agreement.

Exceptions . The obligations in Article 4.1 shall not apply with respect to any portion of the Confidential Information that the receiving Party can show by competent written proof:
 
(a)          Was generally available to the public or otherwise part of the public domain at the time it was disclosed to the receiving Party hereunder; or
 
(b)          Was known to the receiving Party or its Affiliate, without obligation to keep it confidential, prior to disclosure by the disclosing Party; or
 
(c)          Is subsequently disclosed to the receiving Party or its Affiliate without obligation to keep it confidential by a Third Party lawfully in possession thereof and having the right to so disclose such Confidential Information without breach of any obligation of confidentiality to the disclosing Party; or
 
(d)          Became generally available to the public or otherwise part of the public domain after its disclosure and other than through any act or omission of the receiving Party; or
 
(e)          Has been or was independently developed or discovered by employees of the receiving Party or its Affiliates without the aid or use of all or any part of such Confidential Information.
 
4.2            Authorized Disclosure. A Party may disclose the other Party’s Confidential Information to the extent such disclosure is reasonably necessary in the following instances:
 
(a)          Filing or prosecuting SH Patent Rights
 
(b)          Regulatory Filings and prosecutions of the same;
 
(c)          Prosecuting or defending litigation;
 
(d)          To the extent such disclosure is required by applicable law or regulation, valid court order or legal process, provided, however, that such Party gives the other Party advance notice of such required disclosure, limits the disclosure to that actually required, and cooperates,
 
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at the other Party’s expense, in the other Party’s attempts to obtain a protective order or confidential treatment of the Confidential Information required to be disclosed; or
 
(e)          Disclosure, in connection with the performance of or exercise of rights under this Agreement, to Sublicensees, manufacturers, collaborators, contractors, employees, consultants, or other agents or representatives of a Party or its Affiliates, each of whom prior to disclosure must be bound by obligations of confidentiality and non-use at least as protective as those set forth in this Article 4.
 
The Parties acknowledge that the terms of this Agreement shall be treated as Confidential Information of both Parties. Such terms may be disclosed by a Party to investment bankers, counsel accountants, financial advisors, potential or actual investors, potential or actual lenders, potential or actual acquirers, acquisition targets, or merger targets, actual or potential Sublicensees, or actual or potential other strategic partners, provided that they are bound by obligations of confidentiality and non-use at least as protective as those set forth in this Article 4. In addition, a copy of this Agreement or a notification thereof may be filed or registered by either Party with any governmental or regulatory authority, including but not limited to the Federal Trade Commission, the Justice Department, or the Securities and Exchange Commission (or any similar foreign entity) if such filing is required by law or regulation. In connection with any such filing, such Party shall (i) provide the other Party a reasonable opportunity to review and comment on any potential disclosure and (ii) use commercially reasonable efforts to obtain confidential treatment of economic, trade secret, and other confidential or proprietary information to the extent permitted by applicable laws, rules, and regulations and the applicable governmental agency(ies). In any event, the Parties agree to take all reasonable action to avoid disclosure of Confidential Information except as permitted hereunder.
 
4.3            Publicity. No written publication, news release or other written public announcement relating to this Agreement or to the performance hereunder, shall be made without the other Party’s written consent; provided, however, that any disclosure which is required by stock exchange regulation or by law as advised by the disclosing Party’s counsel may be made without the prior consent of the other Party, provided that the other Party shall be given prompt notice of any such legally required written disclosure and to the extent reasonably practicable shall provide the other Party an opportunity to comment on the proposed written disclosure prior to its disclosure or release.

Article 5
Representations, Warranties, and Covenants

5.1            Authority; No Conflict; Future Encumbrances. Tyme represents and warrants that (i) it is duly organized and validly existing under the laws of the state or jurisdiction of its incorporation and has full corporate power and authority to enter into this Agreement and to carry out the provisions hereof; and (ii) it has taken all corporate action necessary to authorize the execution and delivery of this Agreement and the performance of its obligations under this Agreement. Each Party represents and warrants that (iii) this Agreement is a legal and valid obligation of such Party, binding upon such Party and enforceable against such Party in accordance with the terms of this Agreement, except as enforcement may be limited by
 
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applicable bankruptcy or other debtor’s rights laws and regulations; (iv) it has the authority and right to enter into and perform this Agreement; and (v) its execution, delivery and performance of this Agreement will not conflict in any material fashion with the terms of any other agreement to which it is a Party or by which it is bound.

5.2            Tyme Representations and Warranties. Tyme represents, warrants, and covenants that during the term of this Agreement, and any period thereafter during which Hoffman has been granted rights under any SH Patent Rights, neither Tyme nor any Affiliate thereof shall grant any right to any Third Party which conflicts with the rights to the SH Patent Rights granted to Hoffman hereunder.

5.3            Disclaimer of Warranties. EXCEPT AS SET FORTH IN ARTICLES 5.1 AND 5.2,, EACH PARTY EXPRESSLY DISCLAIMS ALL WARRANTIES, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, OR NON-INFRINGEMENT OF THIRD PARTY RIGHTS. IN PARTICULAR, ANY LICENSED PRODUCTS OR LICENSED METHODS ARE PROVIDED “AS IS” AND WITHOUT ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION ANY IMPLIED WARRANTY OF MERCHANTABILITY OR OF FITNESS FOR ANY PARTICULAR PURPOSE OR ANY WARRANTY THAT THE USE OF LICENSED PRODUCTS WILL NOT INFRINGE OR VIOLATE ANY PATENT OR OTHER PROPRIETARY RIGHTS OF ANY THIRD PARTY.
 
Article 6
Term and Termination

6.1            Term. Unless sooner terminated as hereinafter provided, this Agreement shall continue in full force and effect on a Licensed Product-by-Licensed Product basis (or Licensed Method-by-Licensed Method basis, as the case might be) and country-by-country basis until the expiration date of the last of the SH Patent Rights to expire.

6.2            Early Termination for Material Breach. Subject to Article 7.1 below, if either Party is in material breach of this Agreement (including without limitation any material breach of a representation or warranty made in this Agreement), then the other Party may deliver notice of such breach to the breaching Party. In such notice, the non-breaching Party shall identify the specific nature of default, require the breaching Party to cure the breach, and state its intention to terminate the Agreement if such breach is not cured. If the allegedly breaching Party has not cured such breach within thirty (30) days after receipt of such notice, then the Party alleging breach will be entitled, in addition to any other rights it may have hereunder, to terminate this License Agreement effective immediately.

6.3            Residual Obligation Upon Termination. Termination of this Agreement for any reason whatsoever will not release or discharge a Party from the performance of any obligation or responsibility for any liability which may have previously accrued and remains to be performed, paid or discharged, at the date of such termination.
 
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6.4            Additional Remedies. Termination of this Agreement under this Article 6 or any other provision of this Agreement providing any right of termination shall not be exclusive or prejudicial to any legal or equitable rights or remedies each Party may have on account of any breach or default of this Agreement or otherwise.
 
Article 7
Dispute Resolution

7.1            Process. The Parties shall use their best efforts to resolve by mutual agreement any disputes, controversies or differences that may arise from, under, out of or in connection with this License Agreement. In the event either Party provides written notice of breach of any provision of this License Agreement, or in the event any other dispute related to or regarding this License Agreement arises, the Parties agree that the following sequential, three step, process shall apply to resolve the dispute:
 
 
1.
Step 1, Meeting : Each Party will each designate one representative with authority to settle the dispute, including, if necessary, by entering into a further license or altering the terms of this License Agreement, and further agree that their representatives will meet face-to-face within sixty (60) days of a request to meet, in a mutually agreeable location in a reasonable effort to resolve the dispute.
 
 
2.
Step 2, Mediation : In the event that the dispute is not resolved by the meeting, or, if a Party refuses or fails to meet, either Party may request mediation, and the Parties will mutually agree to a mediator to conduct the mediation. The mediator will determine the schedule and logistics for the mediation.
 
 
3.
Step 3, Legal Proceedings : In the event that the dispute is not resolved by mediation, or if a Party refuses or fails to participate in mediation, then the Party having standing to bring an action to resolve the dispute may bring such action in an appropriate court in the State of Delaware. The meeting and mediation shall be conditions precedent to any liability related to or regarding this License Agreement and neither Party shall initiate or file any litigation against the other Party related to this License Agreement or the alleged breach until after meeting and mediation have been carried out. In the event a Party refuses or fails to participate in the meeting and/or mediation, their requirements shall be deemed waived.
 
7.2            Governing Law; Jurisdiction. Resolution of all disputes arising out of or related to this Agreement or the performance, enforcement, breach or termination of this Agreement and any remedies relating thereto, shall be governed by and construed under the substantive laws of the State of Delaware, without regard to conflicts of law or choice of law rules that would provide for application of the law of a jurisdiction outside Delaware. Subject to the provisions of this Article 7, all disputes with respect to this Agreement shall be brought and heard either in the Delaware state courts located in New Castle County, Delaware, or the federal district court for the District of Delaware located in Wilmington, Delaware. The Parties to this Agreement each consent to the in personam jurisdiction and venue of such courts. The Parties agree that service
 
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of process upon them in any such action may be made if delivered in person, by courier service, by telegram, by telefacsimile or by first class mail, and shall be deemed effectively given upon receipt.
 
Article 8
Miscellaneous

8.1            Entire Agreement; Amendment. This Agreement sets forth the complete, final and exclusive agreement and all the covenants, promises, agreements, warranties, representations, conditions and understandings between the Parties hereto and supersedes and terminates all prior agreements and understandings between the Parties. There are no covenants, promises, agreements, warranties, representations, conditions or understandings, either oral or written, between the Parties other than as are set forth herein and therein. No subsequent alteration, amendment, change or addition to this Agreement shall be binding upon the Parties unless reduced to writing and signed by an authorized officer of each Party.

8.2            Bankruptcy. All rights and licenses granted under or pursuant to any section of this Agreement are, and shall otherwise be deemed to be, for purposes of Section 365(n) of the U.S. Bankruptcy Code, licenses of rights to “intellectual property” as defined under Section 101(35A) of the U.S. Bankruptcy Code. The Parties shall retain and may fully exercise all of their respective rights and elections under the U.S. Bankruptcy Code. The Parties agree that a Party that is a licensee of such rights under this Agreement shall retain and may fully exercise all of its rights and elections under the U.S. Bankruptcy Code, and that upon commencement of a bankruptcy proceeding by or against the licensing Party (such Party, the “ Involved Party ”) under the U.S. Bankruptcy Code, the other Party (such Party, the “ Noninvolved Party ”) shall be entitled to a complete duplicate of or complete access to (as such Noninvolved Party deems appropriate), any such intellectual property and all embodiments of such intellectual property, provided the Noninvolved Party continues to fulfill its payment or royalty obligations as specified herein in full. Such intellectual property and all embodiments thereof shall be promptly delivered to the Noninvolved Party (a) upon any such commencement of a bankruptcy proceeding upon written request therefore by the Noninvolved Party, unless the Involved Party elects to continue to perform all of its obligations under this Agreement or (b) if not delivered under (a) above, upon the rejection of this Agreement by or on behalf of the Involved Party upon written request therefor by the Noninvolved Party. The foregoing is without prejudice to any rights the Noninvolved Party may have arising under the U.S. Bankruptcy Code or other applicable law.

8.3            Force Majeure. Both Parties shall be excused from the performance of their obligations under this Agreement to the extent that such performance is prevented by force majeure and the nonperforming Party promptly provides notice of the prevention to the other Party (such notice shall specify the nature and extent of the force majeure event, its anticipated duration and any action being taken to avoid or minimize its effect). Such excuse shall be continued so long as the condition constituting force majeure continues and the nonperforming Party takes reasonable efforts to remove the condition. For purposes of this Agreement, force majeure shall include conditions beyond the reasonable control of the Parties, including without
 
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limitation, an act of God, government or regulatory acts or restrictions, change in any standard of medical care, war, acts of terrorism, civil commotion, labor strike or lock-out, epidemic, failure or default of public utilities or common carriers, destruction of facilities or materials by fire, earthquake, flood, storm or like catastrophe; provided, however, the payment of invoices due and owing hereunder shall not be delayed by the Payor because of a force majeure affecting the Payor.

8.4            Notices. Any notice required or permitted to be given under this Agreement shall be in writing, shall specifically refer to this Agreement and shall be deemed to have been sufficiently given for all purposes if transmitted by facsimile transmission (with transmission confirmed), mailed by first class certified or registered mail, postage prepaid (which shall be deemed received by the other Party on the fifth (5th) business day following deposit in the mail), express delivery service with tracking (e.g., FedEx) (which shall be deemed received by the other Party upon delivery) or personally delivered. Unless otherwise specified in writing, the mailing addresses of the Parties shall be as described below.
     
 
 For Hoffman:
Steven Hoffman
   
15 Knichel Road
   
Mahwah, New Jersey 07430
     
 
 For Tyme:
Tyme, Inc.
   
2711 Centerville Road, Suite 400
   
Wilmington, Delaware 19808

8.5            No Strict Construction. This Agreement has been prepared jointly and shall not be strictly construed against either Party.

8.6            Assignment. Except as expressly provided herein, and without limitation of the Parties’ right to license or sublicense their rights to Licensed Products to Third Parties, as contemplated by this Agreement, neither Party may assign or transfer (collectively “assign”) this Agreement, or any rights or obligations under this Agreement, without the prior written consent of the other, which consent may be withheld in the consenting Party’s discretion; provided, however , that a Party may make such an assignment without the other Party’s consent (i) to an Affiliate, provided that such Affiliate agrees in writing to be bound by the terms and conditions of this Agreement and that the assigning Party remains liable for the full and complete performance of its obligations arising hereunder prior to such assignment; (ii) in conjunction with a Change of Control of such Party; or (iii) in conjunction with the sale of a Party, or all or substantially all assets of such Party related to the subject matter of this Agreement, to, or the merger of a Party with, any Third Party.   This Agreement shall be binding upon the successors and permitted assigns of the Parties. Any assignment or attempted assignment by either Party in violation of the terms of this Article 8.6 shall be null and void and of no legal effect.

8.7            Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
 
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8.8            Further Actions. Each Party agrees to execute, acknowledge and deliver such further instruments, and to do all such other reasonable acts, as may be necessary or appropriate in order to carry out the purposes and intent of this Agreement.

8.9            Severability. If any one or more of the provisions of this Agreement is held to be invalid or unenforceable by any court of competent jurisdiction from which no appeal can be or is taken, the provision shall be considered severed from this Agreement and shall not serve to invalidate any remaining provisions hereof. The Parties shall make a good faith effort to replace any invalid or unenforceable provision with a valid and enforceable one such that the objectives contemplated by the Parties when entering this Agreement may be realized.

8.10          Ambiguities. Ambiguities, if any, in this Agreement shall not be construed against any Party, irrespective of which Party may be deemed to have authored the ambiguous provision.

8.11          Headings. The headings for each article and section in this Agreement have been inserted for convenience of reference only and are not intended to limit or expand on the meaning of the language contained in the particular article or section.

8.12          No Waiver. Any delay in enforcing a Party’s rights under this Agreement or any waiver as to a particular default or other matter shall not constitute a waiver of such Party’s rights to the future enforcement of its rights under this Agreement, excepting only as to an express written and signed waiver as to a particular matter for a particular period of time. All rights, remedies, undertakings, obligations and agreements contained in this Agreement shall be cumulative and none of them shall be in limitation of any other remedy, right, undertaking, obligation or agreement of either Party.

8.13          Relationship of the Parties. Nothing herein shall be construed to create any relationship of employer and employee, agent and principal, partnership or joint venture or any other legal entity, between the Parties or to constitute one Party as the agent of the other. Each Party is an independent contractor. Neither Party shall assume, either directly or indirectly, any liability of or for the other Party. Neither Party shall have the authority to bind or obligate the other Party and neither Party shall represent that it has such authority.

8.14          No Use of Name. Except as set forth elsewhere herein, neither Party shall use in writing the name of the other Party without the other Party’s written consent unless such writing simply refers to the existence of this Agreement or other information such concerning this Agreement that has been previously publicly disclosed.

8.15          No Implied Licenses. Except as expressly and specifically provided under this Agreement, the Parties agree that neither Party is granted any implied rights to or under any of the other Party’s current or future patents, trade secrets, copyrights, moral rights, trade or service marks, trade dress, or any other intellectual property rights.

8.16          Indemnification . Hoffman will, and will require its Sublicensees to, indemnify, hold harmless and defend Tyme and its directors, officers, employees and agents against any and all
 
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claims, suits, losses, damages, costs, fees and expenses resulting from, or arising out of, the exercise of this license or any sublicense.
 
[Signature page to follow.]
 
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In Witness Whereof , the Parties have executed this Agreement in duplicate originals by their proper officers as of the date and year first above written.
           
Steven Hoffman
 
Tyme, Inc.
         
/s/ Steven Hoffman
   
By: 
/s/ Michael Demurjian
 
   
Name: Michael Demurjian
   
Title: Vice-President
       
Date: July 10, 2014
 
Date: July 10, 2014

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Exhibit 10.12


TYME TECHNOLOGIES, INC.

48 Wall Street – Suite 1100

New York, New York  10005


March 5, 2015


Mr. Steven Hoffman

15 Knichel Road

Mahwah, New Jersey 07430


Dear Steven:


This letter (this “ letter agreement ”) sets forth our agreement with respect to your employment with Tyme Technologies, Inc., a Delaware corporation (the “ Company ”).


1.            Employment .  You will be employed by the Company upon the terms and conditions set forth in this letter agreement for the period effective as of the date of this letter agreement and ending as provided in Section 4 (the “ Employment Period ”).


2.            Position and Duties .  During the Employment Period, you will serve as President, Chief Executive Officer and Chief Science Officer of the Company and will have the usual and customary duties, responsibilities and authority of a person in such position and such other duties assigned to you by the Board of Directors of the Company (the “ Board ”) which are consistent with your position.  You will report directly to the Board.  You will devote your full working time, efforts and attention to, and diligently and conscientiously perform the duties of, such position.  In addition to performing such duties for the Company, you may be required to perform similar duties for the Company’s existing subsidiaries or affiliates, and/or any subsidiaries and/or affiliates which may be formed or acquired from time to time including, but not limited to, Tyme Inc., a Delaware corporation, and Luminant Biosciences, LLC (collectively, all such subsidiaries and/or affiliates shall be referred to as the “ Affiliates ”).


3.            Compensation .


(a)         During the Employment Period, your base salary will be $450,000.00 per annum (your “ Base Salary ”).  Your Base Salary will be payable in regular installments in accordance with the Company’s general payroll practices and subject to withholding and other payroll taxes.  Your Base Salary may be reviewed annually (beginning on or about January 1, 2016) by the Board in its sole discretion; provided , however , that your Base Salary shall not be decreased by the Board.


(b)         You will also be entitled, conditioned upon your continued employment with the Company or one of the Affiliates through and including the applicable date of payment, to receive a special bonus (your “ Performance Bonus ”), in such amount(s), for such period(s) and based on such criteria as determined from time to time, and if ever, by the Board in the Board’s sole discretion.


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(c)         During the Employment Period, you will be entitled to participate in all employee benefit programs, including without limitation health/medical insurance, for which senior executive employees of the Company are generally eligible, subject to applicable plans and policies as may be amended from time to time, in the sole discretion of the Board.  During the Employment Period, you will be entitled to four weeks paid vacation during each calendar year, with such vacation time pro-rated for any partial years during the Employment Period; provided , however , that no carry-over of unused vacation time shall be permitted and no compensation shall be paid for any such unused vacation time.


(d)         The Company agrees to reimburse you for all reasonable out-of-pocket business expenses incurred by you on behalf of the Company during the Employment Period, provided that you properly account to the Company for all such expenses in accordance with the policies of the Company and the rules, regulations and interpretations of the U.S. Internal Revenue Service relating to reimbursement of business expenses (“ Expenses ”).


(e)         During the Employment Period, the Company will maintain Directors and Officers Liability Insurance coverage that includes coverage of you, subject to the terms and conditions of such policy and with limits customary for similarly situated companies.


4.            Termination .  The Employment Period will end on the fifth anniversary of the date hereof (the “ Expiration Date ”), unless sooner terminated as provided below.  Unless the Employment Period has been terminated in accordance with the following sentence of this Article 4, commencing with the one-year anniversary hereof, and on each subsequent annual anniversary thereafter, the Expiration Date shall automatically be extended by one additional year, such that, on any given day during the Employment Period, the remaining Employment Period shall never be less than four years and one day.  Notwithstanding the foregoing, the Employment Period will (i) will terminate upon your death, (ii) may be terminated by the Company upon Notice of Termination (as defined in Section 5(e) below) delivered to you as a result of your Disability (as defined in Section 5(g) below), (iii) may be terminated by the Company at any time for Cause (as defined in Section 5(f) below) or without Cause and (iv) may be terminated by you for Good Reason.  


5.            Severance .


(a)          If the Employment Period is terminated by the Company without Cause or by you for Good Reason (as defined in Section 5(h) below), you will be entitled to receive (i) your Base Salary as in effect at the time of such termination to the extent such amount has accrued through the Termination Date (as defined in Section 5(e) below) and remains unpaid, (ii) any fully earned and declared but unpaid Performance Bonus as of the Termination Date, (iii) an amount equal to the sum of Base Salary you would have received from the date of such termination through the then applicable Expiration Date, which shall be payable in the same amounts and at the same intervals as if the Employment Period had not ended and (iv) any unpaid Expenses as of the Termination Date. Upon delivery of the payments and benefits described in this Section 5(a), the Company shall have no further obligation to you under this letter agreement or otherwise with respect to your employment with the Company.  The Company’s obligation to make the payments to you described in clause (iv) of this Section 5(a) is conditioned upon your executing and delivering, no later than 14 days following the Termination Date, a release relating to your employment by the Company in favor of the Company, its Affiliates and their respective stockholders, officers, members, managers, directors, employees, subsidiaries and affiliates substantially in the form attached as Exhibit A .


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(b)         If the Employment Period is terminated by the Company for Cause or by you other than for Good Reason, the Company will pay you (i) your Base Salary as in effect at the time of such termination to the extent such amount has accrued through the Termination Date and remains unpaid, (ii) any fully earned and declared but unpaid Performance Bonus as of the Termination Date, and (iii) any unpaid Expenses as of the Termination Date. Upon delivery of the payment described in this Section 5(b), the Company will have no further obligation to you under this letter agreement or otherwise with respect to your employment with the Company.


(c)         If the Employment Period is terminated upon your Disability (as defined in Section 5(g) below) or death, the Company will pay you or your estate or succession, whichever is applicable, (i) your Base Salary as in effect at the time of such termination to the extent such amount has accrued through the Termination Date and remains unpaid, (ii) any fully earned and declared but unpaid Performance Bonus as of the Termination Date, and (iii) any unpaid Expenses as of the Termination Date.


(d)         Except as otherwise required by law or as specifically provided herein, all of your rights to salary, severance, fringe benefits, bonuses and any other amounts hereunder (if any) accruing after the termination of the Employment Period will cease upon the earlier of the date of such termination and your last day of active service.  In the event the Employment Period is terminated, your sole remedy, and the sole remedy of your successors, assigns, heirs, representatives and estate, will be to receive the payments described in this letter agreement.


(e)         Any termination of the Employment Period by the Company (other than termination upon your death) or by you must be communicated by written notice (in either case, a “ Notice of Termination ”) to you.  For purposes of this letter agreement, “ Termination Date ” means (i) if the Employment Period is terminated by your death, the date of your death, (ii) if the Employment Period is terminated upon your Disability, by the Company or by you, the date specified in the Notice of Termination (which may not be earlier than the date of such Notice).  Notwithstanding anything contained herein to the contrary, any termination of the Employment Period by you must be communicated to the Company no less than 30 days prior to the intended Termination Date.  


(f)          For purposes of this letter agreement, “ Cause ” means any one of the following: (i) a breach by you of this letter agreement, (ii) your conviction of, guilty plea to, or confession of guilt of, a felony involving the Company, (iii) materially fraudulent, dishonest or illegal conduct by you in the performance of services for or on behalf of the Company or any of its Affiliates, (iv) any conduct by you in material violation of Company policy, (v) any conduct by you that is materially detrimental to the reputation of the Company or any of its Affiliates, (vi) your misappropriation of funds of the Company or any of its Affiliates, (vii) your gross negligence or wilful misconduct or wilful failure to comply with written directions of the Board which directions are within the scope of your duties hereunder, (viii) your engaging in conduct involving an act of moral turpitude, or (ix)  a breach of your duty of loyalty to the Company or its Affiliates.  


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(g)         For purposes of this letter agreement “ Disability ” means any accident, sickness, incapacity or other physical or mental disability which prevents you from performing substantially all of the duties you have been assigned by the Company or any of its subsidiaries for either (i) 90 consecutive days or (ii) 120 days during any period of 365 consecutive days, in each case as determined in good faith by a physician selected by the Board. During the time periods specified above, the Company will continue to provide you with the compensation stated in Section 3 above.


(h)         For purposes of this letter agreement, “ Good Reason ” means the failure of the Company to make all payments due you under this letter agreement and the continuation thereof for more than five calendar days after notice to the Company of such failure and demand for such outstanding payment(s).


6.            Confidential Information .


(a)         You will not disclose or use at any time any Confidential Information (as defined below in Section 6(c)), whether or not such information is developed by you, except to the extent that such disclosure or use is required in the performance or exercise by you in good faith of (i) duties assigned to you under this letter agreement or otherwise by the Board, (ii) rights as an employee, officer, director or shareholder of the Company or any of its Affiliates or (iii) rights under any agreement with the Company or any Affiliates.


(b)         You will deliver to the Company at the termination of the Employment Period, or at any time the Company may request, all memoranda, notes, plans, designs, records, reports, computer files and software and other documents and data (and copies thereof) that are Confidential Information or Work Product (as defined below) or information relating to the business of the Company or its Affiliates which you may then possess or have under your control.


(c)         As used in this letter agreement, the term “ Confidential Information ” means information that is not generally known or available to the public and that is used, developed or obtained by the Company or any Affiliate in connection with its or their businesses, including but not limited to (i) information, observations and data concerning the business or affairs of the Company or its affiliates, (ii) products or services, (iii) fees, costs and pricing structures, (iv) designs, (v) analyses, (vi) drawings, designs, photographs, artwork and reports, (vii) computer software, including operating systems, applications and program listings, (viii) flow charts, manuals and documentation, (ix) data bases, (x) accounting and business methods, (xi) inventions, devices, new developments, methods and processes, whether patentable or unpatentable and whether or not reduced to practice, (xii) other copyrightable works, (xiii) all production methods, processes, technology and trade secrets, (xiv) Company product and product candidate formulae and any trade secrets with respect to such products and product candidates and (xv) all similar and related information in whatever form.


(d)         Notwithstanding the provisions of this letter agreement to the contrary, you will have no liability to the Company for disclosure of Confidential Information if the Confidential Information:


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(A)         is in the public domain or becomes publicly known in the industry in which the Company operates or is disclosed by the Company other than as the result of a breach of this letter agreement or any other agreement by you; or


(B)         is required to be disclosed by law, court order, or similar compulsion or in connection with any legal proceeding; provided however , that such disclosure will be limited to the extent so required and, subject to the requirements of law, you will give the Company notice of your intent to so disclose such Confidential Information and will cooperate with the Company in seeking confidentiality protections.


7.            Inventions and Patents .  You agree that all inventions, innovations, improvements, technical information, trade secrets, systems, software developments, ideas, results, methods, designs, artwork, analyses, drawings, reports, copyrights, service marks, trademarks, trade names, logos and all similar or related information (whether patentable or unpatentable) which relate to the Company’s or any of its Affiliates’ businesses, research and development or existing products (or products under development) or services and which are conceived, developed or made by you (whether or not during usual business hours and whether or not alone or in conjunction with any other person) during your employment with the Company, together with all intellectual property rights therein, including, but not limited to, any patent applications, letters patent, trademark, trade name and service mark applications or registrations, copyrights and reissues thereof that may be granted for or upon any of the foregoing, but only with respect to the treatment of cancer in humans (collectively referred to herein as “ Work Product ”), is the exclusive property of the Company and/or its Affiliates.  For the avoidance of doubt and without limiting the foregoing, (x) the Company or any of its Affiliates shall be the sole owner of all right, title and interest in such Work Product, including all intellectual property rights relating to such Work Product, without you retaining any license or other residual right whatsoever, and (y) any rights to any new or an existing Work Product are automatically conveyed, assigned and transferred to the Company pursuant to this agreement.  You hereby waive and renounce to all moral rights related, directly or indirectly, to any such existing or new Work Product.  You will take reasonable steps to promptly disclose such Work Product to the Board and perform all actions reasonably requested by the Board (whether during or after the Employment Period) to establish and confirm such ownership (including the execution and delivery of assignments, consents, powers of attorney and other instruments) and to provide reasonable assistance to the Company and its Affiliates in connection with the prosecution of any applications for patents, trademarks, trade names, service marks or reissues thereof or in the prosecution or defense of interferences relating to any Work Product.


8.            Non-Compete; Non-Solicitation; Non-Disparagement .


(a)         You acknowledge that, in the course of your employment with the Company, you will become familiar with the Company’s and its Affiliates’ trade secrets and with other Confidential Information concerning the Company and its Affiliates and that your services will be of special, unique and extraordinary value to the Company and its Affiliates.  Therefore, you agree that, during the Restriction Period (as defined in Section 8(b) below), you will not (x) anywhere the Company or any of its Affiliates conducts business or (y) anywhere the Company or any of its Affiliates has spent time and resources in connection with expanding its business, directly or indirectly, either on your own behalf or on behalf of any other person, firm or entity:


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(A)         own, manage, operate, consult with, provide financing to, or join, control or participate in the ownership, management, operation or control of, or the provision of financing to, any business wherever located (whether in corporate, proprietorship or partnership form or otherwise), if such business is competitive with the business of the Company; or


(B)         say anything which is harmful to the reputation of the Company or any of its Affiliates or which could be reasonably expected to lead any person to cease to deal with the Company or any of its Affiliates on substantially equivalent terms to those previously offered or at all.


(b)         For purposes of this letter agreement, “ Restriction Period ” means (i) during the Employment Period, and for a period of two years following your receipt of the final payment described in Article 5, as applicable.


(c)         Nothing in Section 8(a) will prohibit you from being a passive owner of not more than 2% of the outstanding stock of a publicly-traded corporation, so long as you have no active participation in the business of such corporation.


(d)         During the Restriction Period, you will not:


(A)         induce or attempt to induce any customer, supplier or other business relation of the Company or any of its affiliates to cease doing business with the Company or any of its Affiliates, or in any way interfere with the relationship between any such customer, supplier or business relation, on the one hand, and the Company or any Affiliates, on the other hand; or


(B)         engage, employ, solicit or contact with a view to the engagement or employment of, any employee, officer or manager of, or full-time consultant to, the Company or any Affiliates or any person who has been an employee, officer or manager of, or consultant to, the Company or any Affiliates at any time during the two-year period ending on the date of such determination.


(e)         The Company, on behalf of itself and all Affiliates, agrees that during the Restriction Period they and their executive officers (or other persons acting on their behalf) will not say anything which is harmful to your reputation or which could be reasonably expected to lead any person to cease to deal with you or engage you in any consulting or employment position.


9.            Enforcement .


(a)         Because the employment relationship between you and the Company is unique and because you have access to Confidential Information and Work Product, you agree that money damages would be an inadequate remedy for any breach of Section 6, 7 or 8 of this letter agreement.  Therefore, in the event of a breach or threatened breach of Section 6, 7 or 8 of this letter agreement, the Company may, in addition to its other rights and remedies, apply to any court of competent jurisdiction for specific performance and/or injunctive or other relief in order to enforce, or prevent any violations of, such provisions (without posting a bond or other security).


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(b)         Sections 6, 7, 8 and 9 of this letter agreement will expressly survive termination of this agreement.  The existence of any claim or cause of action by you against the Company and/or any of its Affiliates shall not constitute a defense to the enforcement by the Company of the covenants contained in this Articles 6, 7 or 8, but such claim or cause of action shall be litigated separately.   


10.          Notices .  All notices, requests, demands, claims, and other communications hereunder will be in writing.  Any notice, request, demand, claim or other communication hereunder will be deemed duly given (i) upon delivery, if delivered personally to the recipient, against written receipt therefor, or  (ii) upon the first business day after the date sent, if sent priority next-day delivery to the intended recipient by reputable express courier service (charges prepaid) and addressed to the intended recipient as set forth below:


If to the Company, to:


Michael Demurjian, Chief Operating Officer

Tyme Technologies, Inc.
48 Wall Street – Suite 1100
New York, New York 10005


and with a copy to:


Moritt Hock & Hamroff LLP

450 Seventh Avenue, 15 th Floor

New York, New York 10123

Attention: Keith S. Braun, Esq.


If to you, to the address shown on the first page.


Any party hereto may send any notice, request, demand, claim or other communication hereunder to the intended recipient at the address set forth above using any other means, but no such notice, request, demand, claim or other communication will be deemed to have been duly given unless and until it actually is received and acknowledged by the intended recipient.  Any party hereto may change the address (or add new parties and their addresses) to which notices, requests, demands, claims, and other communications hereunder are to be delivered by giving the other parties hereto notice in the manner set forth in this Section 10.


11.          Representations and Warranties . You hereby represent and warrant to the Company that (a) the execution, delivery and performance of this letter agreement by you does not and will not conflict with, breach, violate or cause a default under any agreement, contract or instrument to which you are a party or any judgment, order or decree to which you are subject, (b) you are not a party to or bound by any employment agreement, consulting agreement, non-compete agreement, confidentiality agreement or similar agreement with any other person or entity that is inconsistent with the provisions of this letter agreement, (c) upon the execution and


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delivery of this letter agreement by the Company and you, this letter agreement will be a valid and binding obligation of you and (d) you are in good health and are not suffering from, and have never suffered from, any serious illness, disease or other physical or mental condition that has prevented or materially interfered with, or might reasonably be expected in the future to prevent or materially interfere with, your ability to perform those services described in this letter agreement.  The Company hereby represents and warrants to you that (i) the execution, delivery and performance of this letter agreement by the Company does not and will not conflict with, breach, violate or cause a default under any agreement, contract or instrument to which it is a party or any judgment, order or decree to which it is subject and (ii) upon the execution and delivery of this letter agreement by the Company and you, this agreement will be a valid and binding obligation of the Company.


12.          General Provisions .


(a)           Severability .  It is the desire and intent of the parties hereto that the provisions of this letter agreement be enforced to the fullest extent permissible under the laws and public policies applied in each jurisdiction in which enforcement is sought.  Accordingly, if any particular provision of this letter agreement will be adjudicated by a court of competent jurisdiction to be invalid, prohibited or unenforceable for any reason, such provision, as to such jurisdiction, will be ineffective, without invalidating the remaining provisions of this agreement or affecting the validity or enforceability of this letter agreement or affecting the validity or enforceability of such provision in any other jurisdiction.  Notwithstanding the foregoing, if such provision could be more narrowly drawn so as not to be invalid, prohibited or unenforceable in such jurisdiction, it will, as to such jurisdiction, be so narrowly drawn, without invalidating the remaining provisions of this letter agreement or affecting the validity or enforceability of such provision in any other jurisdiction.


(b)          Complete Agreement .  This letter agreement and any schedules or exhibits expressly constitute the entire agreement among the parties hereto with respect to the subject matter hereof and supersedes and preempts any prior understandings, agreements or representations by or among the parties, written or oral, which may have related to the subject matter hereof in any way.


(c)           Successors and Assigns .  Except as otherwise provided herein, this letter agreement will be binding upon and inure to the benefit of you and the Company and our respective successors, permitted assigns, personal representatives, heirs and estates, as the case may be; provided , however , that your rights and obligations under this letter agreement will not be assigned without the prior written consent of the Company.


(d)          Governing Law .  This letter agreement will be governed by and construed in accordance with the domestic laws of New York, without giving effect to the choice of law provisions thereof.  The parties agree that the exclusive venue for all disputes under this agreement shall be the federal and state courts sitting in New York County, New York.


(e)          Amendment and Waiver .  The provisions of this letter agreement may be amended and waived only with the prior written consent of the Company (with the approval of the Board) and you, and no course of conduct or failure or delay in enforcing the provisions of this letter agreement will affect the validity, binding effect or enforceability of this letter agreement or any provision hereof.


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(f)           Headings .  The section headings contained in this agreement are inserted for convenience only and will not affect in any way the meaning or interpretation of this agreement.


(g)          Counterparts .  This letter agreement may be executed in counterparts, each of which will be deemed an original and all of which together will constitute one and the same instrument.


(h)          409A Provision .  For purposes of this letter agreement the term “ termination of employment ” and similar terms relating to your termination of employment mean a “ separation from service ” as that term is defined under Section 409A of the Internal Revenue Code of 1986, as amended, and the final regulations issued thereunder (“ Section 409A ”).  The Company and you intend that this letter agreement comply in form and operation with the requirements of Section 409A.  To the extent permitted by applicable Department of Treasury/Internal Revenue Service guidance, or law or regulation, the Company and you will take reasonable actions to reform this letter agreement or any actions taken pursuant to their operation of this letter agreement in order to comply with Section 409A.


[signature page follows]


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If this letter agreement correctly expresses our mutual understanding, please sign and date a copy of this letter agreement and return it to us.


Very truly yours,


Tyme Technologies, Inc.




By: /s/ Michael Demurjian

Name:  Michael Demurjian

Title:   Chief Operating Officer


The terms of this letter agreement are accepted and agreed to


on March 5, 2015 by:




/s/ Steven Hoffman

Steven Hoffman


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EXHIBIT A


Form of Release


RELEASE


This Release is delivered by Steven Hoffman on this __ day of _________, 20__.

 

DEFINITIONS


A.           As used herein, unless otherwise specified, the term “Employer” shall mean Tyme Technologies, Inc., and all of its affiliates, successors, predecessors, assigns, parents, subsidiaries, divisions (whether incorporated or unincorporated), and all of its and their past and present owners, directors, officers, trustees, shareholders, managers, employees and agents (in their individual and representative capacities).


B.           As used herein, unless otherwise specified, the term “Employee” shall mean Steven Hoffman and all of his heirs, family members, executors, accountants, administrators, attorneys, agents, assigns, successors and representatives.


RECITALS


WHEREAS, Employee’s employment ended on ___________, 20__; and


WHEREAS, it is a condition to the Employee’s receipt of certain post-employment benefits (“Conditional Benefits”) under the Employment Agreement, dated as of ____________, 2014 (the “Employment Agreement”), between Employee and Employer that Employee execute this Release.


NOW THEREFORE, in consideration of the promises, representations and mutual covenants contained in this Release, and for other good and valuable consideration, the sufficiency of which is hereby acknowledged, it is agreed as follows:


1.            Consideration .  Employee acknowledges that the Conditional Benefits are in excess of any earned wages or benefits due and owing Employee, and would not be paid or provided unless Employee executed this Release.  Employee acknowledges and agrees that the Conditional Benefits are adequate and independent consideration for Employee executing this Release and releasing any and all claims against Employer.


2.            Release of All Claims .  In consideration of the above, and the other promises set forth in this Release, Employee fully and forever waives, releases, acquits and discharges Employer from and for all manner of claims, actions, suits, charges, grievances and/or causes of action, in law or in equity, existing by reason of and/or based upon any fact or set of facts, known or unknown, existing from the beginning of time through the effective date of this Release relating to and/or arising out of the Employment Agreement, Employee’s employment with Employer and/or the cessation of Employee’s employment with Employer (collectively, the “Released Claims”), including, but not limited to, all claims, actions, suits, charges, grievances and/or causes of action for wages,


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compensation, liquidated damages, commissions, bonuses, benefits, sums of money, damages of every type, costs, attorney fees, judgments, executions, wrongful discharge, breach of contract, breach of implied contract, breach of the covenant of good faith and fair dealing, tortious interference with contract or business relationships, assault, battery, invasion of privacy, misappropriation of trade secrets, promissory estoppel, unjust enrichment, loss of consortium, violation of the penal statutes, negligent or intentional infliction of emotional distress, negligence, defamation, retaliation and/or discrimination and/or harassment on account of age, sex, sexual orientation, creed, religion, race, color, national origin, sensory disability, mental disability, physical disability, veteran or military status, marital status, or any other classification recognized under all applicable discrimination laws, or any other claim or cause of action, which has or could have been alleged under the common law, civil rights statutes, Title VII of the Civil Rights Act of 1964 (“Title VII”), the Age Discrimination in Employment Act (“ADEA”), the Family and Medical Leave Act (“FMLA”), the Employee Retirement Income Security Act (“ERISA”), the Rehabilitation Act of 1973, the Older Workers Benefits Protection Act (“OWBPA”), the Americans with Disabilities Act (“ADA”), The Consolidated Omnibus Budget Reconciliation Act (“COBRA”), the Workers Adjustment Retraining Notification Act (“WARN”), the Equal Pay Act (“EPA”), the Uniformed Services Employment and Reemployment Rights Act (“USERRA”), the National Labor Relations Act (“NLRA”), any and all federal, state, local statutes, ordinances, and laws, and every type of relief, (legal, equitable and otherwise) available to Employee.  Employee covenants and agrees that he will not pursue or allege any claim, matter or cause of action in violation of, and/or released under, this Release.  Nothing in this Release shall be construed as releasing Employer from its obligation to pay those amounts due to Employee under Section 5(a) of the Employment Agreement, subject to the terms and conditions thereof, which obligation is not a Released Claim.


3.            Covenant Not to Sue .  Employee represents that he has not filed any action, charge, suit, or claim against Employer with any federal, state or local agency or court relating to any Released Claim.  Employee further agrees that should any claims, charges, complaints, suits or other actions be filed hereafter on his behalf by any federal, state or local agency or by any other person or entity with respect to a Released Claim, he will immediately withdraw with prejudice, or cause to be withdrawn with prejudice, and/or dismiss with prejudice, or cause to be dismissed with prejudice, any such claims, charges, complaints, suits or other actions filed against Employer.  Employee further agrees that, to the fullest extent permitted by law, Employee shall receive no relief of any type (monetary, equitable, or otherwise) with respect to, relating to and/or on account of any such claims, matters or actions.  Employee agrees to opt-out of any class action or collective action filed against Employer to the extent related to a Released Claim.


4.            Confidentiality .  To the fullest extent permitted by law, Employee agrees to keep confidential all facts, opinions, and information which relate in any way to Employee’s employment and/or cessation of employment with Employer, as well as the terms of this Release; provided however , Employee may discuss the terms of this Release with his spouse, legal representative, and/or tax preparer, each of whom must also agree to maintain confidentiality and comply with this Paragraph 4 of the Release.  


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5.            Return of Employer’s Property .  Employee represents that he has returned to Employer any and all property, records, papers, documents and writings, in whatever form, of Employer in Employee’s possession and/or control, and that he has not retained any copies thereof, in whatever form.


6.            Cooperation .


(a)         To the fullest extent permitted by law, Employee will not cooperate with, or assist in, any claim, charge, lawsuit, or arbitration against Employer with respect to a Released Claim, unless required to do so by a lawfully issued subpoena, by court order or as expressly provided by regulation or statute. In the event Employee is served with a subpoena or is required by court order or otherwise to testify in any type of proceeding involving the Employer and related to a Released Claim, Employee shall immediately advise Employer in writing of same.


(b)         Employee agrees to cooperate with Employer in any internal investigation, administrative, regulatory, or judicial proceeding or any dispute with a third party.  Employee’s cooperation may include being available to Employer upon reasonable notice for interviews and factual investigations, appearing at Employer’s request to give testimony without requiring service of a subpoena or other legal process, volunteering to Employer pertinent information, and turning over to Employer all relevant documents which are or may come into Employee’s possession.  Employee understands that in the event Employer asks for Employee’s cooperation in accordance with this provision, Employer will reimburse him/her for reasonable travel expenses (including lodging and meals) upon submission of receipts acceptable to Employer.


7.            ADEA Notice and Acknowledgement .  Employee acknowledges that he has carefully read this Release and fully understands its contents.  Prior to signing this Release, Employee has been advised in writing hereby and has had an opportunity to consult with his attorney of choice concerning the terms and conditions of this Release with regard to any claim or right Employee may have under the ADEA or otherwise.  Employee has been offered at least 21 days to review and consider this Release.  Employee may voluntarily and knowingly waive this 21 day period, or any part thereof, if he signs this Release prior to the expiration of 21 days.  After signing this Release, Employee shall have seven days from the signing date to revoke this Release.  This Release shall not be effective (including for purposes under the Employment Agreement) until after the seven day revocation period has expired.  Any revocation must be made in writing and delivered to the Chief Financial Officer and Chief Operating Officer of the Employer.  Until all applicable periods set forth in this Section 7 have expired, Employer shall not be required to make any payment to Employee which payment is, under the Employment Agreement, contingent upon the signing and delivery to the Company of this Release.  By signing this Release, Employee agrees and understands that he is waiving and releasing any and all rights he may have to pursue claims against Employer, from the beginning of time up to the effective date of this Release, including, without limitation, all ADEA claims.


8.            Governing Law .  New York law shall govern this Release, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of New York or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of New York.


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10.          Successors and  Assigns .  This Release shall be inure to the benefit of the successors and assigns of Employer.


11.          Severability .  If any portion of this Release is ruled unenforceable, all remaining portions of this Release shall remain valid.


12.          No Reliance; No Waiver .  Employee represents that he is not relying on any representation, statement, or promise of Employer or any other party in giving this Release.  This Release may not be amended, modified, waived, or terminated except in a writing signed by Employee and an authorized representative of Employer.


13.          Headings .  The paragraph and section headings in this Release are inserted merely for the convenience of reference only and shall not be used to construe, affect or modify the terms of any paragraph or provision of this Release.


EMPLOYEE WITHOUT ANY DURESS OR COERCION FREELY, KNOWINGLY AND VOLUNTARILY ENTERS INTO, AND GIVES THIS RELEASE.  EMPLOYEE UNDERSTANDS AND AGREES WITH ALL OF THE PROVISIONS AND THE TERMS STATED IN THIS RELEASE AND HAS BEEN AFFORDED SUFFICIENT AND REASONABLE TIME TO CONSIDER WHETHER TO ENTER INTO THIS RELEASE.  EMPLOYER ADVISES EMPLOYEE TO CONSULT WITH AN ATTORNEY OF EMPLOYEE’S CHOOSING PRIOR TO EXECUTING THIS RELEASE WHICH CONTAINS A RELEASE AND WAIVER.



______________________________

Steven Hoffman



______________________________

Date

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Exhibit 10.13


TYME TECHNOLOGIES, INC.

48 Wall Street – Suite 1100

New York, New York  10005


March 5, 2015


Mr. Michael Demurjian

1400 Winesap Drive

Manasquan, New Jersey 08736


Dear Michael:


This letter (this “ letter agreement ”) sets forth our agreement with respect to your employment with Tyme Technologies, Inc., a Delaware corporation (the “ Company ”).


1.            Employment .  You will be employed by the Company upon the terms and conditions set forth in this letter agreement for the period effective as of the date of this letter agreement and ending as provided in Section 4 (the “ Employment Period ”).


2.            Position and Duties .  During the Employment Period, you will serve as Executive Vice President, Chief Operating Officer of the Company and will have the usual and customary duties, responsibilities and authority of a person in such position and such other duties assigned to you by the Board of Directors of the Company (the “ Board ”) and/or Chief Executive Officer of the Company (the “ CEO ”) which are consistent with your position. You will report directly to the CEO.  You will devote your full working time, efforts and attention to, and diligently and conscientiously perform the duties of, such position. In addition to performing such duties for the Company, you may be required to perform similar duties for the Company’s existing subsidiaries or affiliates, and/or any subsidiaries and/or affiliates which may be formed or acquired from time to time including, but not limited to, Tyme Inc., a Delaware corporation, and Luminant Biosciences, LLC (collectively, all such subsidiaries and/or affiliates shall be referred to as the “ Affiliates ”).


3.            Compensation .


(a)         During the Employment Period, your base salary will be $450,000.00 per annum (your “ Base Salary ”).  Your Base Salary will be payable in regular installments in accordance with the Company’s general payroll practices and subject to withholding and other payroll taxes.  Your Base Salary may be reviewed annually (beginning on or about January 1, 2016) by the Board in its sole discretion; provided , however , that your Base Salary shall not be decreased by the Board.


(b)         You will also be entitled, conditioned upon your continued employment with the Company or one of the Affiliates through and including the applicable date of payment, to receive a special bonus (your “ Performance Bonus ”), in such amount(s), for such period(s) and based on such criteria as determined from time to time, and if ever, by the Board in the Board’s sole discretion.


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(c)         During the Employment Period, you will be entitled to participate in all employee benefit programs, including without limitation health/medical insurance, for which senior executive employees of the Company are generally eligible, subject to applicable plans and policies as may be amended from time to time, in the sole discretion of the Board.  During the Employment Period, you will be entitled to four weeks paid vacation during each calendar year, with such vacation time pro-rated for any partial years during the Employment Period; provided , however , that no carry-over of unused vacation time shall be permitted and no compensation shall be paid for any such unused vacation time.


(d)         The Company agrees to reimburse you for all reasonable out-of-pocket business expenses incurred by you on behalf of the Company during the Employment Period, provided that you properly account to the Company for all such expenses in accordance with the policies of the Company and the rules, regulations and interpretations of the U.S. Internal Revenue Service relating to reimbursement of business expenses (“ Expenses ”).


(e)         During the Employment Period, the Company will maintain Directors and Officers Liability Insurance coverage that includes coverage of you, subject to the terms and conditions of such policy and with limits customary for similarly situated companies.


4.            Termination .  The Employment Period will end on the fifth anniversary of the date hereof (the “ Expiration Date ”), unless sooner terminated as provided below.  Unless the Employment Period has been terminated in accordance with the following sentence of this Article 4, commencing with the one-year anniversary hereof, and on each subsequent annual anniversary thereafter, the Expiration Date shall automatically be extended by one additional year, such that, on any given day during the Employment Period, the remaining Employment Period shall never be less than four years and one day.  Notwithstanding the foregoing, the Employment Period will (i) will terminate upon your death, (ii) may be terminated by the Company upon Notice of Termination (as defined in Section 5(e) below) delivered to you as a result of your Disability (as defined in Section 5(g) below), (iii) may be terminated by the Company at any time for Cause (as defined in Section 5(f) below) or without Cause and (iv) may be terminated by you for Good Reason.  


5.            Severance .


(a)          If the Employment Period is terminated by the Company without Cause or by you for Good Reason (as defined in Section 5(h) below), you will be entitled to receive (i) your Base Salary as in effect at the time of such termination to the extent such amount has accrued through the Termination Date (as defined in Section 5(e) below) and remains unpaid, (ii) any fully earned and declared but unpaid Performance Bonus as of the Termination Date, (iii) an amount equal to the sum of Base Salary you would have received from the date of such termination through the then applicable Expiration Date, which shall be payable in the same amounts and at the same intervals as if the Employment Period had not ended and (iv) any unpaid Expenses as of the Termination Date. Upon delivery of the payments and benefits described in this Section 5(a), the Company shall have no further obligation to you under this letter agreement or otherwise with respect to your employment with the Company.  The Company’s obligation to make the payments to you described in clause (iv) of this Section 5(a) is conditioned upon your executing and delivering, no later than 14 days following the Termination Date, a release relating to your employment by the Company in favor of the Company, its Affiliates and their respective stockholders, officers, members, managers, directors, employees, subsidiaries and affiliates substantially in the form attached as Exhibit A .


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(b)         If the Employment Period is terminated by the Company for Cause or by you other than for Good Reason, the Company will pay you (i) your Base Salary as in effect at the time of such termination to the extent such amount has accrued through the Termination Date and remains unpaid, (ii) any fully earned and declared but unpaid Performance Bonus as of the Termination Date, and (iii) any unpaid Expenses as of the Termination Date. Upon delivery of the payment described in this Section 5(b), the Company will have no further obligation to you under this letter agreement or otherwise with respect to your employment with the Company.


(c)         If the Employment Period is terminated upon your Disability (as defined in Section 5(g) below) or death, the Company will pay you or your estate or succession, whichever is applicable, (i) your Base Salary as in effect at the time of such termination to the extent such amount has accrued through the Termination Date and remains unpaid, (ii) any fully earned and declared but unpaid Performance Bonus as of the Termination Date, and (iii) any unpaid Expenses as of the Termination Date.


(d)         Except as otherwise required by law or as specifically provided herein, all of your rights to salary, severance, fringe benefits, bonuses and any other amounts hereunder (if any) accruing after the termination of the Employment Period will cease upon the earlier of the date of such termination and your last day of active service.  In the event the Employment Period is terminated, your sole remedy, and the sole remedy of your successors, assigns, heirs, representatives and estate, will be to receive the payments described in this letter agreement.


(e)         Any termination of the Employment Period by the Company (other than termination upon your death) or by you must be communicated by written notice (in either case, a “ Notice of Termination ”) to you.  For purposes of this letter agreement, “ Termination Date ” means (i) if the Employment Period is terminated by your death, the date of your death, (ii) if the Employment Period is terminated upon your Disability, by the Company or by you, the date specified in the Notice of Termination (which may not be earlier than the date of such Notice).  Notwithstanding anything contained herein to the contrary, any termination of the Employment Period by you must be communicated to the Company no less than 30 days prior to the intended Termination Date.  


(f)          For purposes of this letter agreement, “ Cause ” means any one of the following: (i) a breach by you of this letter agreement, (ii) your conviction of, guilty plea to, or confession of guilt of, a felony involving the Company, (iii) materially fraudulent, dishonest or illegal conduct by you in the performance of services for or on behalf of the Company or any of its Affiliates, (iv) any conduct by you in material violation of Company policy, (v) any conduct by you that is materially detrimental to the reputation of the Company or any of its Affiliates, (vi) your misappropriation of funds of the Company or any of its Affiliates, (vii) your gross negligence or wilful misconduct or wilful failure to comply with written directions of the Board which directions are within the scope of your duties hereunder, (viii) your engaging in conduct involving an act of moral turpitude, or (ix)  a breach of your duty of loyalty to the Company or its Affiliates.  


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(g)         For purposes of this letter agreement “ Disability ” means any accident, sickness, incapacity or other physical or mental disability which prevents you from performing substantially all of the duties you have been assigned by the Company or any of its subsidiaries for either (i) 90 consecutive days or (ii) 120 days during any period of 365 consecutive days, in each case as determined in good faith by a physician selected by the Board. During the time periods specified above, the Company will continue to provide you with the compensation stated in Section 3 above.


(h)         For purposes of this letter agreement, “ Good Reason ” means the failure of the Company to make all payments due you under this letter agreement and the continuation thereof for more than five calendar days after notice to the Company of such failure and demand for such outstanding payment(s).


6.            Confidential Information .


(a)         You will not disclose or use at any time any Confidential Information (as defined below in Section 6(c)), whether or not such information is developed by you, except to the extent that such disclosure or use is required in the performance or exercise by you in good faith of (i) duties assigned to you under this letter agreement or otherwise by the Board, (ii) rights as an employee, officer, director or shareholder of the Company or any of its Affiliates or (iii) rights under any agreement with the Company or any Affiliates.


(b)         You will deliver to the Company at the termination of the Employment Period, or at any time the Company may request, all memoranda, notes, plans, designs, records, reports, computer files and software and other documents and data (and copies thereof) that are Confidential Information or Work Product (as defined below) or information relating to the business of the Company or its Affiliates which you may then possess or have under your control.


(c)         As used in this letter agreement, the term “ Confidential Information ” means information that is not generally known or available to the public and that is used, developed or obtained by the Company or any Affiliate in connection with its or their businesses, including but not limited to (i) information, observations and data concerning the business or affairs of the Company or its affiliates, (ii) products or services, (iii) fees, costs and pricing structures, (iv) designs, (v) analyses, (vi) drawings, designs, photographs, artwork and reports, (vii) computer software, including operating systems, applications and program listings, (viii) flow charts, manuals and documentation, (ix) data bases, (x) accounting and business methods, (xi) inventions, devices, new developments, methods and processes, whether patentable or unpatentable and whether or not reduced to practice, (xii) other copyrightable works, (xiii) all production methods, processes, technology and trade secrets, (xiv) Company product and product candidate formulae and any trade secrets with respect to such products and product candidates and (xv) all similar and related information in whatever form.


(d)         Notwithstanding the provisions of this letter agreement to the contrary, you will have no liability to the Company for disclosure of Confidential Information if the Confidential Information:


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(A)         is in the public domain or becomes publicly known in the industry in which the Company operates or is disclosed by the Company other than as the result of a breach of this letter agreement or any other agreement by you; or


(B)         is required to be disclosed by law, court order, or similar compulsion or in connection with any legal proceeding; provided however , that such disclosure will be limited to the extent so required and, subject to the requirements of law, you will give the Company notice of your intent to so disclose such Confidential Information and will cooperate with the Company in seeking confidentiality protections.


7.            Inventions and Patents .  You agree that all inventions, innovations, improvements, technical information, trade secrets, systems, software developments, ideas, results, methods, designs, artwork, analyses, drawings, reports, copyrights, service marks, trademarks, trade names, logos and all similar or related information (whether patentable or unpatentable) which relate to the Company’s or any of its Affiliates’ businesses, research and development or existing products (or products under development) or services and which are conceived, developed or made by you (whether or not during usual business hours and whether or not alone or in conjunction with any other person) during your employment with the Company, together with all intellectual property rights therein, including, but not limited to, any patent applications, letters patent, trademark, trade name and service mark applications or registrations, copyrights and reissues thereof that may be granted for or upon any of the foregoing, but only with respect to the treatment of cancer in humans (collectively referred to herein as “ Work Product ”), is the exclusive property of the Company and/or its Affiliates.  For the avoidance of doubt and without limiting the foregoing, (x) the Company or any of its Affiliates shall be the sole owner of all right, title and interest in such Work Product, including all intellectual property rights relating to such Work Product, without you retaining any license or other residual right whatsoever, and (y) any rights to any new or an existing Work Product are automatically conveyed, assigned and transferred to the Company pursuant to this agreement.  You hereby waive and renounce to all moral rights related, directly or indirectly, to any such existing or new Work Product.  You will take reasonable steps to promptly disclose such Work Product to the Board and perform all actions reasonably requested by the Board (whether during or after the Employment Period) to establish and confirm such ownership (including the execution and delivery of assignments, consents, powers of attorney and other instruments) and to provide reasonable assistance to the Company and its Affiliates in connection with the prosecution of any applications for patents, trademarks, trade names, service marks or reissues thereof or in the prosecution or defense of interferences relating to any Work Product.


8.            Non-Compete; Non-Solicitation; Non-Disparagement .


(a)         You acknowledge that, in the course of your employment with the Company, you will become familiar with the Company’s and its Affiliates’ trade secrets and with other Confidential Information concerning the Company and its Affiliates and that your services will be of special, unique and extraordinary value to the Company and its Affiliates.  Therefore, you agree that, during the Restriction Period (as defined in Section 8(b) below), you will not (x) anywhere the Company or any of its Affiliates conducts business or (y) anywhere the Company or any of its Affiliates has spent time and resources in connection with expanding its business, directly or indirectly, either on your own behalf or on behalf of any other person, firm or entity:


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(A)         own, manage, operate, consult with, provide financing to, or join, control or participate in the ownership, management, operation or control of, or the provision of financing to, any business wherever located (whether in corporate, proprietorship or partnership form or otherwise), if such business is competitive with the business of the Company; or


(B)         say anything which is harmful to the reputation of the Company or any of its Affiliates or which could be reasonably expected to lead any person to cease to deal with the Company or any of its Affiliates on substantially equivalent terms to those previously offered or at all.


(b)         For purposes of this letter agreement, “ Restriction Period ” means (i) during the Employment Period, and for a period of two years following your receipt of the final payment described in Article 5, as applicable.


(c)         Nothing in Section 8(a) will prohibit you from being a passive owner of not more than 2% of the outstanding stock of a publicly-traded corporation, so long as you have no active participation in the business of such corporation.


(d)         During the Restriction Period, you will not:


(A)         induce or attempt to induce any customer, supplier or other business relation of the Company or any of its affiliates to cease doing business with the Company or any of its Affiliates, or in any way interfere with the relationship between any such customer, supplier or business relation, on the one hand, and the Company or any Affiliates, on the other hand; or


(B)         engage, employ, solicit or contact with a view to the engagement or employment of, any employee, officer or manager of, or full-time consultant to, the Company or any Affiliates or any person who has been an employee, officer or manager of, or consultant to, the Company or any Affiliates at any time during the two-year period ending on the date of such determination.


(e)         The Company, on behalf of itself and all Affiliates, agrees that during the Restriction Period they and their executive officers (or other persons acting on their behalf) will not say anything which is harmful to your reputation or which could be reasonably expected to lead any person to cease to deal with you or engage you in any consulting or employment position.


9.            Enforcement .


(a)         Because the employment relationship between you and the Company is unique and because you have access to Confidential Information and Work Product, you agree that money damages would be an inadequate remedy for any breach of Section 6, 7 or 8 of this letter agreement.  Therefore, in the event of a breach or threatened breach of Section 6, 7 or 8 of this letter agreement, the Company may, in addition to its other rights and remedies, apply to any court of competent jurisdiction for specific performance and/or injunctive or other relief in order to enforce, or prevent any violations of, such provisions (without posting a bond or other security).


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(b)         Sections 6, 7, 8 and 9 of this letter agreement will expressly survive termination of this agreement.  The existence of any claim or cause of action by you against the Company and/or any of its Affiliates shall not constitute a defense to the enforcement by the Company of the covenants contained in this Articles 6, 7 or 8, but such claim or cause of action shall be litigated separately.   


10.          Notices .  All notices, requests, demands, claims, and other communications hereunder will be in writing.  Any notice, request, demand, claim or other communication hereunder will be deemed duly given (i) upon delivery, if delivered personally to the recipient, against written receipt therefor, or  (ii) upon the first business day after the date sent, if sent priority next-day delivery to the intended recipient by reputable express courier service (charges prepaid) and addressed to the intended recipient as set forth below:


If to the Company, to:


Steven Hoffman, Chief Executive Officer

Tyme Technologies, Inc.
48 Wall Street – Suite 1100
New York, New York 10005


and with a copy to:


Moritt Hock & Hamroff LLP

450 Seventh Avenue, 15 th Floor

New York, New York 10123

Attention: Keith S. Braun, Esq.


If to you, to the address shown on the first page.


Any party hereto may send any notice, request, demand, claim or other communication hereunder to the intended recipient at the address set forth above using any other means, but no such notice, request, demand, claim or other communication will be deemed to have been duly given unless and until it actually is received and acknowledged by the intended recipient.  Any party hereto may change the address (or add new parties and their addresses) to which notices, requests, demands, claims, and other communications hereunder are to be delivered by giving the other parties hereto notice in the manner set forth in this Section 10.


11.          Representations and Warranties . You hereby represent and warrant to the Company that (a) the execution, delivery and performance of this letter agreement by you does not and will not conflict with, breach, violate or cause a default under any agreement, contract or instrument to which you are a party or any judgment, order or decree to which you are subject, (b) you are not a party to or bound by any employment agreement, consulting agreement, non-compete agreement, confidentiality agreement or similar agreement with any other person or entity that is inconsistent with the provisions of this letter agreement, (c) upon the execution and


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delivery of this letter agreement by the Company and you, this letter agreement will be a valid and binding obligation of you and (d) you are in good health and are not suffering from, and have never suffered from, any serious illness, disease or other physical or mental condition that has prevented or materially interfered with, or might reasonably be expected in the future to prevent or materially interfere with, your ability to perform those services described in this letter agreement.  The Company hereby represents and warrants to you that (i) the execution, delivery and performance of this letter agreement by the Company does not and will not conflict with, breach, violate or cause a default under any agreement, contract or instrument to which it is a party or any judgment, order or decree to which it is subject and (ii) upon the execution and delivery of this letter agreement by the Company and you, this agreement will be a valid and binding obligation of the Company.


12.          General Provisions .


(a)           Severability .  It is the desire and intent of the parties hereto that the provisions of this letter agreement be enforced to the fullest extent permissible under the laws and public policies applied in each jurisdiction in which enforcement is sought.  Accordingly, if any particular provision of this letter agreement will be adjudicated by a court of competent jurisdiction to be invalid, prohibited or unenforceable for any reason, such provision, as to such jurisdiction, will be ineffective, without invalidating the remaining provisions of this agreement or affecting the validity or enforceability of this letter agreement or affecting the validity or enforceability of such provision in any other jurisdiction.  Notwithstanding the foregoing, if such provision could be more narrowly drawn so as not to be invalid, prohibited or unenforceable in such jurisdiction, it will, as to such jurisdiction, be so narrowly drawn, without invalidating the remaining provisions of this letter agreement or affecting the validity or enforceability of such provision in any other jurisdiction.


(b)          Complete Agreement .  This letter agreement and any schedules or exhibits expressly constitute the entire agreement among the parties hereto with respect to the subject matter hereof and supersedes and preempts any prior understandings, agreements or representations by or among the parties, written or oral, which may have related to the subject matter hereof in any way.


(c)           Successors and Assigns .  Except as otherwise provided herein, this letter agreement will be binding upon and inure to the benefit of you and the Company and our respective successors, permitted assigns, personal representatives, heirs and estates, as the case may be; provided , however , that your rights and obligations under this letter agreement will not be assigned without the prior written consent of the Company.


(d)          Governing Law .  This letter agreement will be governed by and construed in accordance with the domestic laws of New York, without giving effect to the choice of law provisions thereof.  The parties agree that the exclusive venue for all disputes under this agreement shall be the federal and state courts sitting in New York County, New York.


(e)          Amendment and Waiver .  The provisions of this letter agreement may be amended and waived only with the prior written consent of the Company (with the approval of the Board) and you, and no course of conduct or failure or delay in enforcing the provisions of this letter agreement will affect the validity, binding effect or enforceability of this letter agreement or any provision hereof.


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(f)           Headings .  The section headings contained in this agreement are inserted for convenience only and will not affect in any way the meaning or interpretation of this agreement.


(g)          Counterparts .  This letter agreement may be executed in counterparts, each of which will be deemed an original and all of which together will constitute one and the same instrument.


(h)          409A Provision .  For purposes of this letter agreement the term “ termination of employment ” and similar terms relating to your termination of employment mean a “ separation from service ” as that term is defined under Section 409A of the Internal Revenue Code of 1986, as amended, and the final regulations issued thereunder (“ Section 409A ”).  The Company and you intend that this letter agreement comply in form and operation with the requirements of Section 409A.  To the extent permitted by applicable Department of Treasury/Internal Revenue Service guidance, or law or regulation, the Company and you will take reasonable actions to reform this letter agreement or any actions taken pursuant to their operation of this letter agreement in order to comply with Section 409A.


[signature page follows]


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If this letter agreement correctly expresses our mutual understanding, please sign and date a copy of this letter agreement and return it to us.


Very truly yours,


Tyme Technologies, Inc.




By: /s/ Steven Hoffman

Name:  Steven Hoffman

Title:   Chief Executive Officer


The terms of this letter agreement are accepted and agreed to


on March 5, 2015 by:




/s/ Michael Demurjian

Michael Demurjian


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EXHIBIT A


Form of Release


RELEASE


This Release is delivered by Michael Demurjian on this __ day of _________, 20__.

 

DEFINITIONS


A.           As used herein, unless otherwise specified, the term “Employer” shall mean Tyme Technologies, Inc., and all of its affiliates, successors, predecessors, assigns, parents, subsidiaries, divisions (whether incorporated or unincorporated), and all of its and their past and present owners, directors, officers, trustees, shareholders, managers, employees and agents (in their individual and representative capacities).


B.           As used herein, unless otherwise specified, the term “Employee” shall mean Michael Demurjian and all of his heirs, family members, executors, accountants, administrators, attorneys, agents, assigns, successors and representatives.


RECITALS


WHEREAS, Employee’s employment ended on ___________, 20__; and


WHEREAS, it is a condition to the Employee’s receipt of certain post-employment benefits (“Conditional Benefits”) under the Employment Agreement, dated as of ____________, 2014 (the “Employment Agreement”), between Employee and Employer that Employee execute this Release.


NOW THEREFORE, in consideration of the promises, representations and mutual covenants contained in this Release, and for other good and valuable consideration, the sufficiency of which is hereby acknowledged, it is agreed as follows:


1.            Consideration .  Employee acknowledges that the Conditional Benefits are in excess of any earned wages or benefits due and owing Employee, and would not be paid or provided unless Employee executed this Release.  Employee acknowledges and agrees that the Conditional Benefits are adequate and independent consideration for Employee executing this Release and releasing any and all claims against Employer.


2.            Release of All Claims .  In consideration of the above, and the other promises set forth in this Release, Employee fully and forever waives, releases, acquits and discharges Employer from and for all manner of claims, actions, suits, charges, grievances and/or causes of action, in law or in equity, existing by reason of and/or based upon any fact or set of facts, known or unknown, existing from the beginning of time through the effective date of this Release relating to and/or arising out of the Employment Agreement, Employee’s employment with Employer and/or the cessation of Employee’s employment with Employer (collectively, the “Released Claims”), including, but not limited to, all claims, actions, suits, charges, grievances and/or causes of action for wages,


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compensation, liquidated damages, commissions, bonuses, benefits, sums of money, damages of every type, costs, attorney fees, judgments, executions, wrongful discharge, breach of contract, breach of implied contract, breach of the covenant of good faith and fair dealing, tortious interference with contract or business relationships, assault, battery, invasion of privacy, misappropriation of trade secrets, promissory estoppel, unjust enrichment, loss of consortium, violation of the penal statutes, negligent or intentional infliction of emotional distress, negligence, defamation, retaliation and/or discrimination and/or harassment on account of age, sex, sexual orientation, creed, religion, race, color, national origin, sensory disability, mental disability, physical disability, veteran or military status, marital status, or any other classification recognized under all applicable discrimination laws, or any other claim or cause of action, which has or could have been alleged under the common law, civil rights statutes, Title VII of the Civil Rights Act of 1964 (“Title VII”), the Age Discrimination in Employment Act (“ADEA”), the Family and Medical Leave Act (“FMLA”), the Employee Retirement Income Security Act (“ERISA”), the Rehabilitation Act of 1973, the Older Workers Benefits Protection Act (“OWBPA”), the Americans with Disabilities Act (“ADA”), The Consolidated Omnibus Budget Reconciliation Act (“COBRA”), the Workers Adjustment Retraining Notification Act (“WARN”), the Equal Pay Act (“EPA”), the Uniformed Services Employment and Reemployment Rights Act (“USERRA”), the National Labor Relations Act (“NLRA”), any and all federal, state, local statutes, ordinances, and laws, and every type of relief, (legal, equitable and otherwise) available to Employee.  Employee covenants and agrees that he will not pursue or allege any claim, matter or cause of action in violation of, and/or released under, this Release.  Nothing in this Release shall be construed as releasing Employer from its obligation to pay those amounts due to Employee under Section 5(a) of the Employment Agreement, subject to the terms and conditions thereof, which obligation is not a Released Claim.


3.            Covenant Not to Sue .  Employee represents that he has not filed any action, charge, suit, or claim against Employer with any federal, state or local agency or court relating to any Released Claim.  Employee further agrees that should any claims, charges, complaints, suits or other actions be filed hereafter on his behalf by any federal, state or local agency or by any other person or entity with respect to a Released Claim, he will immediately withdraw with prejudice, or cause to be withdrawn with prejudice, and/or dismiss with prejudice, or cause to be dismissed with prejudice, any such claims, charges, complaints, suits or other actions filed against Employer.  Employee further agrees that, to the fullest extent permitted by law, Employee shall receive no relief of any type (monetary, equitable, or otherwise) with respect to, relating to and/or on account of any such claims, matters or actions.  Employee agrees to opt-out of any class action or collective action filed against Employer to the extent related to a Released Claim.


4.            Confidentiality .  To the fullest extent permitted by law, Employee agrees to keep confidential all facts, opinions, and information which relate in any way to Employee’s employment and/or cessation of employment with Employer, as well as the terms of this Release; provided however , Employee may discuss the terms of this Release with his spouse, legal representative, and/or tax preparer, each of whom must also agree to maintain confidentiality and comply with this Paragraph 4 of the Release.  


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5.            Return of Employer’s Property .  Employee represents that he has returned to Employer any and all property, records, papers, documents and writings, in whatever form, of Employer in Employee’s possession and/or control, and that he has not retained any copies thereof, in whatever form.


6.            Cooperation .


(a)         To the fullest extent permitted by law, Employee will not cooperate with, or assist in, any claim, charge, lawsuit, or arbitration against Employer with respect to a Released Claim, unless required to do so by a lawfully issued subpoena, by court order or as expressly provided by regulation or statute. In the event Employee is served with a subpoena or is required by court order or otherwise to testify in any type of proceeding involving the Employer and related to a Released Claim, Employee shall immediately advise Employer in writing of same.


(b)         Employee agrees to cooperate with Employer in any internal investigation, administrative, regulatory, or judicial proceeding or any dispute with a third party.  Employee’s cooperation may include being available to Employer upon reasonable notice for interviews and factual investigations, appearing at Employer’s request to give testimony without requiring service of a subpoena or other legal process, volunteering to Employer pertinent information, and turning over to Employer all relevant documents which are or may come into Employee’s possession.  Employee understands that in the event Employer asks for Employee’s cooperation in accordance with this provision, Employer will reimburse him/her for reasonable travel expenses (including lodging and meals) upon submission of receipts acceptable to Employer.


7.            ADEA Notice and Acknowledgement .  Employee acknowledges that he has carefully read this Release and fully understands its contents.  Prior to signing this Release, Employee has been advised in writing hereby and has had an opportunity to consult with his attorney of choice concerning the terms and conditions of this Release with regard to any claim or right Employee may have under the ADEA or otherwise.  Employee has been offered at least 21 days to review and consider this Release.  Employee may voluntarily and knowingly waive this 21 day period, or any part thereof, if he signs this Release prior to the expiration of 21 days.  After signing this Release, Employee shall have seven days from the signing date to revoke this Release.  This Release shall not be effective (including for purposes under the Employment Agreement) until after the seven day revocation period has expired.  Any revocation must be made in writing and delivered to the Chief Executive Officer and Chief Financial Officer of the Employer.  Until all applicable periods set forth in this Section 7 have expired, Employer shall not be required to make any payment to Employee which payment is, under the Employment Agreement, contingent upon the signing and delivery to the Company of this Release.  By signing this Release, Employee agrees and understands that he is waiving and releasing any and all rights he may have to pursue claims against Employer, from the beginning of time up to the effective date of this Release, including, without limitation, all ADEA claims.


8.            Governing Law .  New York law shall govern this Release, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of New York or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of New York.


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10.          Successors and  Assigns .  This Release shall be inure to the benefit of the successors and assigns of Employer.


11.          Severability .  If any portion of this Release is ruled unenforceable, all remaining portions of this Release shall remain valid.


12.          No Reliance; No Waiver .  Employee represents that he is not relying on any representation, statement, or promise of Employer or any other party in giving this Release.  This Release may not be amended, modified, waived, or terminated except in a writing signed by Employee and an authorized representative of Employer.


13.          Headings .  The paragraph and section headings in this Release are inserted merely for the convenience of reference only and shall not be used to construe, affect or modify the terms of any paragraph or provision of this Release.


EMPLOYEE WITHOUT ANY DURESS OR COERCION FREELY, KNOWINGLY AND VOLUNTARILY ENTERS INTO, AND GIVES THIS RELEASE.  EMPLOYEE UNDERSTANDS AND AGREES WITH ALL OF THE PROVISIONS AND THE TERMS STATED IN THIS RELEASE AND HAS BEEN AFFORDED SUFFICIENT AND REASONABLE TIME TO CONSIDER WHETHER TO ENTER INTO THIS RELEASE.  EMPLOYER ADVISES EMPLOYEE TO CONSULT WITH AN ATTORNEY OF EMPLOYEE’S CHOOSING PRIOR TO EXECUTING THIS RELEASE WHICH CONTAINS A RELEASE AND WAIVER.



______________________________

Michael Demurjian



______________________________

Date

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Exhibit 10.14
 
CONSULTING AGREEMENT
 
TYME TECHNOLOGIES, INC.
 
BERYLLIUM ADVISORY CONSULTING, LIMITED LIABILITY COMPANY
 
This Consulting Agreement (the “ Agreement ”) is entered into as of March 5, 2015, between Tyme Technologies, Inc. , a Delaware corporation with a place of business at 48 Wall Street – Suite 1100, New York, NY 10005 (“ Tyme ”), and Beryllium Advisory Consulting, Limited Liability Company (“ Consultant ”), a New Jersey limited liability company providing specialty advisory consulting services with a place of business at One Second Street, Apt. 2403, The Portofino, Jersey City, NJ 07302.
 
RECITALS
 
Consultant is willing to provide certain services to Tyme as an independent contractor related to knowledge and experience in the life sciences sector, as this knowledge may relate to various initiatives that are relevant to the core business objectives of Tyme, and Tyme is willing to engage Consultant in such capacity and provide certain compensation in exchange for Consultant’s performance of such services according to the terms and conditions herein.
 
NOW, THEREFORE, Tyme and Consultant wish to enter into an agreement as follows:
 
1. 
Services.
 
 
1.1
Generally . Consultant agrees to provide Tyme with the Services set forth in Exhibit A (the “ Services ”). Consultant agrees that Consultant will, from time to time during the term of this Agreement or any extension thereof, keep Tyme advised as to Consultant’s progress in performing the Services under this Agreement. Consultant also agrees that Consultant will, as reasonably requested by Tyme, prepare written reports with respect to such progress as described in Exhibit A.
 
 
1.2
Authority. Consultant shall be entitled to represent to third parties, including potential investors or subject matter experts that he serves as a consultant to Tyme and, if so instructed in writing by an appropriate officer of Tyme, is authorized to enter into discussions with such third parties on Tyme’s behalf to the extent so specifically authorized. However, Consultant shall not have the authority to make any commitments or enter into any agreements whatsoever on behalf of Tyme or bind Tyme in any way.
 
 
1.3
Access to Consultant. Consultant agrees that all Services, unless otherwise approved by Tyme, shall be performed by Raghuram Selvaraju (“ Selvaraju ”).
 
1
 

 

 
 
1.4
Warranty . Consultant warrants to Tyme that: (i) the Services will be performed in a professional and workmanlike manner and that none of such Services or any obligation of Consultant under this Agreement is inconsistent with any obligation Consultant has or may have to others; (ii) Consultant shall comply with all applicable laws and regulations in the course of performing the Services; and (iii) if Consultant’s work requires a license, Consultant has obtained that license and the license is in full force and effect. Consultant certifies that Consultant has no outstanding agreement or obligation that is in conflict with any of the provisions of this Agreement or that would preclude Consultant from complying with the provisions of this Agreement. Consultant will not enter into any such conflicting agreement during the term of this Agreement.
 
 
1.5
Effective Date . Notwithstanding anything to the contrary contained in this Agreement or the date of this Agreement, this Agreement, and the provision of services hereunder and obligation to compensate Consultant hereunder, shall commence as of the date (the “ Effective Date ”) on which the merger (the “ Merger ”) of Tyme Acquisition Corp., a Delaware corporation and wholly-owned subsidiary of Tyme, with and into Tyme Inc., a Delaware corporation (“ TI ”), is made effective by the filing with the Delaware Secretary of State of a certificate of merger with respect to the Merger; provided that the Board of Directors of Tyme shall have approved this Agreement and the issuance of the shares of Common Stock constituting the Stock Retainer (as such capitalized terms are defined below) prior to the filing of such certificate of merger.
 
2. 
Compensation .
 
 
2.1
Fees . In consideration of the Consultant’s performance of the Services, Tyme agrees to pay Consultant a monthly retainer of eight thousand three hundred thirty-three and 34/100 dollars ($8,333.34), payable in advance via wire transfer or direct deposit commencing on the first business day following the Effective Date and thereafter on the same calendar day of each calendar month for the remainder of the Term (unless such day shall not be a Business Day; in which event, payment shall be made on the next succeeding Business Day) (the “ Cash Retainer ”). In addition, Tyme shall provide to Consultant a one-time issuance of 250,000 shares of the common stock, par value $0.0001 per share (the “Common Stock”), of Tyme (the “ Stock Retainer ”). Consultant acknowledges and agrees that none of such shares of Common Stock shall be issued pursuant to an effective registration statement and, as such, the shares shall be deemed “restricted securities” within the meaning of such term under Rule 144 promulgated under the Securities Act of 1933, as amended (the “ Securities Act ”). Notwithstanding anything to the contrary contained herewith, Tyme agrees to include all of the shares constituting the Stock Retainer in the registration statement Tyme will be required to file with the Securities and Exchange Commission pursuant to the subscription
 
2
 

 

 
 
 
agreement(s) Tyme will enter into in connection with the private placement Tyme is conducting and which shall close simultaneously with the consummation of the Merger (but subject to the same limitations and claw backs as the shares being sold in such private placement). The Cash Retainer and Stock Retainer are designed to cover Consultant’s time spent assessing materials related to specific life sciences projects, interacting with various industry professionals and in contact with Tyme stockholders and potential investors, as and when appropriate, and in providing the Services. Tyme shall be entitled to reclaim from Consultant an amount equal to the profit realized by Consultant with respect to the shares of Common Stock issued to Consultant as the Stock Retainer which Consultant sells or otherwise transfers within twelve (12) months of the Effective Date (such profit being equal to (A) the positive difference between the price per share of the shares actually sold and $3.00 multiplied by (B) the number of shares sold by Consultant during such twelve (12) month period). In furtherance of the foregoing, for so long as the shares of Common Stock constituting the Stock Retainer are not registered for resale under an effective Securities Act registration statement, Tyme shall be entitled to place a legend on each stock certificate evidencing the shares of Common Stock constituting the Stock Retainer to the effect that the shares evidenced thereby have not been registered under the Securities Act and may not be transferred absent registration under the Securities Act or an applicable exemption from the registration requirements of the Securities Act ( i.e., a standard “restricted securities” legend). Consultant represents and warrants that Consultant is an “Accredited Investor” as such term is defined in Rule 501(a) promulgated under the Securities Act. Consultant will be responsible for all necessary tax payments, withholding, and the like with respect to all amounts (cash and Common Stock) paid by Tyme to Consultant under this Agreement. Consultant agrees to indemnify and hold harmless Tyme from any and all claims made by any entity on account of an alleged failure by Consultant to satisfy any tax, withholding, or similar obligation arising in connection with the Services. Consultant shall invoice Tyme for reasonable costs incurred (materials, lodging and/or transportation expenses) in performing any actual Services as described in Exhibit A. All proposed costs shall be subject to review of all relevant documentation and prior approval by Tyme in order to be reimbursable by Tyme. Payment will be due within thirty (30) days of the receipt of an invoice containing such reimbursable costs. If Tyme disputes any invoice amount, it shall pay the undisputed amount and notify the Consultant in writing within twenty (20) days of receipt of such invoice of the dispute. The parties to this Agreement shall cooperate to resolve the dispute and, upon resolution, Tyme shall pay such amounts with no interest or penalty, if paid within ten (10) days of resolution or the issuance of an arbiter’s award. The Federal short-term interest rate under Section 1274(d) of the Internal Revenue Code of 1986, as amended (the “Code”), in effect on the date of resolution or arbiter’s award shall apply to any and all
 
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amounts not paid after such ten-day grace period.
 
 
2.2
Limitation of Liability . Tyme’s sole monetary obligation under this Agreement shall be to pay the Consultant for the Services as set forth in Paragraph 2.1 herein. In no event shall Tyme be liable to the Consultant and/or any other third party for any other payment and/or damage whatsoever incurred in connection with and/or arising out of this Agreement or otherwise, including, but not limited to, loss of profits, incidental, indirect, consequential, punitive or exemplary damages of any kind, even if Tyme has been advised of the possibility of such damages.
 
 
2.3
Up-Front Cash Retainer Payment . Notwithstanding the fact that the Effective Date may not have occurred as of the date of this Agreement, upon the execution of this Agreement by both Consultant and Tyme, TI shall, on behalf of Tyme, make a payment to Consultant of the sum of ten thousand ($10,000), which amount shall be credited against the first (in full) and second (in remaining part) payments of the Cash Retainer payable to Consultant under paragraph 2.1 above.
 
3.
Term and Termination.
 
 
3.1
Term . The term of this Agreement shall commence on the Effective Date and continue for one year thereafter (the “ Term ”), unless earlier terminated pursuant to this Article 3.
 
 
3.2
Termination . Either party may terminate this Agreement for any reason upon thirty (30) days prior written notice to the other party; provided , however , that the obligation of Tyme to pay the Cash Retainer shall terminate immediately upon the death or permanent and total disability (as such term is defined in Section 22(e)(3) of the Code) of Selvaraju.
 
 
3.3
Effect of Termination . Upon termination or expiration of this Agreement, all rights of the parties under this Agreement shall immediately cease (except with respect to those provisions of the Agreement which, by their nature, survive termination), including any right to receive additional Cash Retainer for periods following the effective date of such termination or expiration and Consultant shall within ten (10) days deliver and return to Tyme any Developments or Confidential Information in his possession or control and certify same in writing to Tyme. Upon the termination of this Agreement, or upon Tyme’s earlier request, Consultant will deliver to Tyme all of Tyme’s property, including, but not limited to all electronically stored information and passwords to access such property, or Confidential Information that Consultant may have in Consultant’s possession or control.
 
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4.
Proprietary Rights.
 
 
4.1
Definitions .
 
 
(i)
“ Business ” means the business of Tyme, involving TI and any other subsidiary, direct or indirect, of Tyme, as conducted by Tyme, TI or any other TI subsidiary, direct or indirect, during the term of this Agreement or as planned to be conducted by Tyme pursuant to a product or business plan developed during the term of this Agreement.
 
 
(ii)
“ Technology ” refers to the know-how, data and information  associated with any Tyme and/or TI corporate client focusing on the life sciences domain .
 
 
(iii)
“ Confidential Information ” means any information provided by Tyme and/or TI to Consultant in connection with this Agreement and/or Consultant’s work with Tyme, whether orally or in writing, except to the extent such information (i) is available in the public domain; (ii) is independently developed by Consultant without access to or use of any Confidential Information; or (iii) is lawfully obtained by Consultant from a third party without violation of a confidentiality obligation to Tyme. “Confidential Information” includes, without limitation, any Developments.
 
 
(iv)
“ Developments ” means any work product, including designs, business plans, correspondence (printed or electronic), inventions, improvements, software, works of authorship, information, know-how, or other materials made, conceived, reduced to practice or developed in whole or in part by Consultant during the term of this Agreement in connection with the Services or that relate to the Confidential Information or the Business.
 
 
(v)
“ Intellectual Property Right(s) ” means all forms of intellectual property rights including, without limitation, patents, trademarks, copyrights, mask rights, trade secrets and proprietary know-how related to or covering Property.
 
 
4.2
Ownership of Intellectual Property . Consultant and Tyme intend for this to be a contract for Services to by rendered by the Consultant hereunder (the “ Work ”) to be a work made for hire. Tyme shall own all right, title and interest in and to the Developments, and shall be deemed to be the author of the Developments for copyright purposes. Any and all Intellectual Property Rights therein resulting directly from the work done by Consultant under the scope of this Agreement shall be owned by Tyme and may be registered exclusively in the name of Tyme in the U.S. Copyright Office, the U.S. Patent and Trademark Office, and other similar registries in other
 
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countries.
 
 
4.3
Confidential Information . Consultant agrees not to disclose any Confidential Information to any third party, except to parties designated by Tyme as being party to a confidentiality agreement with Tyme (provided Consultant complies with all procedures required under any such confidentiality agreement) or as may be expressly authorized in writing by Tyme, and to use the same degree of care to protect the confidentiality of the Confidential Information and to prevent its unauthorized use or dissemination as Consultant uses to protect Consultant’s own confidential information of a similar nature. Consultant further agrees to use the Confidential Information only for purposes directly related to the performance of this Agreement. Upon request by Tyme, or termination or expiration of this Agreement, Consultant shall within ten (10) days, at Tyme’s sole option, either return to Tyme or destroy (including deletion from his computer storage systems) all Confidential Information. Consultant acknowledges that it will receive significant value and advantage as a result of the access to such Confidential Information, both old and new, which, if used improperly, would cause irreparable harm to Tyme and negatively impact the good will of Tyme.
 
 
4.4
Non–Competition . In consideration of Tyme’s retention of Consultant under this Agreement, disclosure to Consultant of the Confidential Information, and other valuable consideration, Consultant agrees that during the Term of this Agreement, and for a period of twelve (12) months thereafter, it shall not, directly or indirectly, do any of the following:
 
(i)
Start or establish an oncology-focused drug discovery/development company; nor
 
(ii)
Develop a technology or product that incorporates the essence of any of Tyme’s intellectual property.
 
Consultant acknowledges and agrees that the non-competition covenants set forth in this Section 4.4 imposes a reasonable restraint on the Consultant in light of the activities and business of Tyme, and that such restraint is intended only to protect the goodwill and other legitimate business interests of Tyme. Consultant further agrees that this non-competition agreement is enforceable and is ancillary to and part of this Agreement. Consultant acknowledges and agrees that the consideration given by Tyme under this Agreement gives rise to Tyme’s interest in restraining and prohibiting Consultant from engaging in the prohibited activities described in this section. Consultant further agrees that the limitations imposed upon Consultant in this Section 4.4 as to time and scope of activity prohibited are reasonable and do not impose a greater restraint than is necessary to protect the goodwill and other legitimate business interests of Tyme.
 
 
4.5
Equitable Relief. Consultant acknowledges that Tyme is entitled to obtain
 
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an injunction or other equitable relief, without bond, from a court of competent jurisdiction against Consultant’s breach of the terms of any provision of this Article 4, in addition to any other legal or equitable remedies which may be available to Tyme.
 
 
4.6
Survival. Consultant’s obligations under Article 4 shall survive the termination or expiration of this Agreement for any reason.
 
5.
Indemnification.
 
Consultant does hereby agree to indemnify, defend and hold harmless Tyme, its trustees, officers, employees, staff, and agents from any and all claims, demands, lawsuits, causes of action, damages, liabilities, expenses, costs and attorney’s fees (collectively, “Losses”), whether for personal injury (including serious disease or death), or property damage or otherwise, which arise from or are directly or indirectly related to the performance of the Consultant or any third party engaged by the Consultant under this Agreement, provided that such indemnity shall not apply to any Losses arising from or caused by any material breach of any representations, warranties, covenants or agreements of Tyme hereunder or the gross negligence or willful misconduct by Tyme. In turn, Tyme agrees to indemnify, defend and hold harmless Consultant from and against any and all Losses, whether for personal injury (including serious disease or death), or property damage or otherwise, which arise from or are directly or indirectly incurred by Consultant in connection with Consultant’s activities under this Agreement, provided that such indemnity shall not apply to any Losses arising from or caused by any material breach of any representations, warranties, covenants or agreements of Consultant hereunder or the gross negligence or willful misconduct by Consultant.
 
6.
Miscellaneous.
 
 
6.1
Independent Contractor . Consultant enters into this Agreement as an independent contractor. Nothing in this Agreement shall be construed as creating the relationship of joint ventures, partners, employer and employee, franchiser and franchisee, master and servant, or principal and agent. Consultant shall be solely responsible for all taxes, withholdings and other similar statutory obligations, including without limitation, Workers’ Compensation Insurance.
 
 
6.2
Parties in Interest, Assignment. This Agreement shall be binding upon and inure to the benefit of the parties to this Agreement and their respective successors and assigns. Except as expressly provided in this Agreement, nothing contained in this Agreement is intended to confer upon any third party any rights, benefits or remedies of any kind or character whatsoever under or by reason of this Agreement. Consultant may not assign this Agreement or its obligations hereunder without obtaining the prior written consent of Tyme. However, Tyme, upon prior
 
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written notice to Consultant, may assign this Agreement or any part of its rights or obligations hereunder to any of its affiliates, provided that the party receiving such assignment agrees to be bound by the terms and conditions of this Agreement.
 
 
6.3
Governing Law . This Agreement shall be governed in all respects by the laws of the United States of America and by the laws of the State of New York. Each of the parties irrevocably consents to the exclusive personal jurisdiction of the federal and state courts located in New York, New York, as applicable, for any matter arising out of or relating to this Agreement, except that in actions seeking to enforce any order or any judgment of such federal or state courts located in New York, such personal jurisdiction shall be nonexclusive.
 
 
6.4
Headings . All section headings are provided for convenience only, and shall not be used for purposes of construction of this Agreement.
 
 
6.5
Notices . Except where provided otherwise, notices hereunder shall be in writing and shall be deemed to have been fully given and received (i) when delivered in writing personally, against receipt therefor; (ii) five (5) business days after having been sent by registered or certified mail, return receipt requested, postage prepaid; or (iii) one (1) business day after deposit on a business day for next business day delivery with a commercial overnight carrier guaranteeing overnight delivery, with written verification of such receipt. All communications will be sent to the party’s address as set forth herein, or at such address as the parties may later specify in writing for such purposes.
 
 
6.6
Entire Agreement . This Agreement, including all exhibits or appendices, constitutes the entire agreement between the parties with respect to the subject matter hereof, and supersedes and replaces all prior and contemporaneous understandings or agreements, written or oral, regarding such subject matter. No amendment or modification of this Agreement will be binding unless in writing and signed by a duly authorized representative of both parties.
 
 
6.7
Counterparts. This Agreement may be executed in one or more counterparts, each of which will be deemed an original, but all of which together will constitute one and the same agreement.
 
 
6.8
Dispute Resolution . The Parties agree to attempt to resolve any dispute under this Agreement amicably through negotiations. Nothing in this clause shall preclude any Party from commencing arbitration if said negotiations do not result in a signed written settlement agreement within sixty (60) days after written notice that these amicable resolution negotiations have commenced. Any dispute under this Agreement that cannot be resolved amicably shall be referred to and exclusively resolved by arbitration in accordance with the American Arbitration Association.
 
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The arbitration shall be conducted in New York, New York, by a sole arbitrator. The arbitrator shall be appointed by mutual consent of the parties hereto. In the event that the parties fail to agree upon the arbitrator within fourteen (14) days of either party’s written notice with respect to the referral of a dispute to arbitration, the arbitrator shall be appointed by the American Arbitration Association. The arbitrator’s decisions shall be based upon the provisions of this Agreement. The arbitrator shall have no power or authority to make or issue orders of any kind except as permitted by this Agreement, and in no event shall the arbitrator have the authority to make any award that provides for punitive or exemplary damages. The decision of the arbitrator shall be final and binding on the parties, shall not be subject to appeal, and shall be enforceable in any competent court having jurisdiction. The arbitrator will have the authority to award reasonable attorney’s fees and costs to the prevailing party.
 
 
6.9
Severability . It is the desire and intent of the parties hereto that the provisions of this Agreement be enforced to the fullest extent permissible under the laws and public policies applied in each jurisdiction in which enforcement is sought. Accordingly, if any particular provision of this Agreement will be adjudicated by a court of competent jurisdiction to be invalid, prohibited or unenforceable for any reason, such provision, as to such jurisdiction, will be ineffective, without invalidating the remaining provisions of this Agreement or affecting the validity or enforceability of this Agreement or affecting the validity or enforceability of such provision in any other jurisdiction. Notwithstanding the foregoing, if such provision could be more narrowly drawn so as not to be invalid, prohibited or unenforceable in such jurisdiction, it will, as to such jurisdiction, be so narrowly drawn, without invalidating the remaining provisions of this Agreement or affecting the validity or enforceability of such provision in any other jurisdiction.
 
 
6.10
No Waiver . Failure to exercise, or any delay in exercising, any right or remedy provided under this agreement or by law shall not constitute a waiver of that or any other right or remedy, nor shall it preclude or restrict any further exercise of that or any other right or remedy. No single or partial exercise of any right or remedy provided under this agreement or by law shall preclude or restrict the further exercise of that or any other right or remedy.
 
 
6.11
Business Day.   When used in this Agreement, the term “Business Day” shall mean any calendar day other than a Saturday, Sunday or other day on which commercial banks in New York City are required or authorized to be closed.
 
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ACCEPTED AND AGREED TO AS OF THE DATE FIRST SET FORTH ABOVE:
 
TYME TECHNOLOGIES, INC.
     
By: 
/s/ Peter de Svastich
 
     
Name: 
Peter de Svastich
 
     
Title:
  President
 
 
BERYLLIUM ADVISORY CONSULTING, LIMITED LIABILITY COMPANY:
     
By: 
/s/ Raghuram Selvaraju
 
     
Name: 
Raghuram Selvaraju
 
     
Address:
  1 Second Street
 
     
Apartment  
Apt. 2403, The Portofino
 
   
Jersey City, NJ 07302
 
 
Phone : (646) 784-2027
 
Fax :

E-Mail :
 
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EXHIBIT A
 
Scope of Services
 
Consultant shall render opinions on the viability of the commercial opportunities and clinical development programs being advanced by Tyme within the context of the oncology sector, as well as other areas, e.g., topical drug delivery systems, which Tyme or its related subsidiaries and / or affiliates may elect to enter into in the future:
         
  ☐ Assessment of likelihood of success, practicality of timelines, and costs for:
      o Specific drug candidates
      o  Medical devices
      o Diagnostics
         
  ☐ Market research:
      o Market size (epidemiology and patient stratification)
      o Current therapeutic / device-based / diagnostic options
      o Current and future competitive landscape
      o Reimbursement and pricing considerations
      o Intellectual property protection
         
  ☐ Investor Relations:
      o Field calls and respond to inquiries regarding Tyme and TI from stockholders and potential investors
      o      Provide consultation services regarding press releases, stockholder and investor meetings and public dissemination of Tyme-approved information concerning Tyme and TI, as and to the extent requested by the chief executive and/or chief operating officers of Tyme
         
  ☐ General corporate objectives:
      o  Public relations and outreach
      o Key opinion leader outreach
      o Overall marketability
 
Note: The scope of the Consultant’s services to Tyme shall be restricted solely to provision of the Services as set forth above, and specifically excludes the offering, selling or placement of securities, provision of investment management or advisory services, or deal structuring.
 
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Exhibit 10.15
 
ADJUSTMENT SHARES ESCROW AGREEMENT
 
This Adjustment Shares Escrow Agreement (this “Agreement”) is entered into as of March 5, 2015, by and among Tyme Technologies, Inc. (f/k/a Global Group Enterprises Corp.), a Delaware corporation (the “Company”), each Depositor identified on the signature page hereto (each, a “Depositor” and collectively, the Depositors), and CKR Law LLP , as escrow agent (the “Escrow Agent”).  Capitalized terms not otherwise defined herein shall have the meaning ascribed to them in the Merger Agreement (as defined below).  Capitalized terms used herein without definition have the meanings ascribed to them in the Merger Agreement.
 
WHEREAS , the Company, Tyme Acquisition Corp., a Delaware corporation, Tyme Inc., a Delaware corporation, and the other parties thereto have entered into an Agreement and Plan of Merger and Reorganization dated as of March 5, 2015 (the “Merger Agreement”); and
 
WHEREAS , pursuant to the Merger Agreement, the Depositor is required to deposit in escrow certain shares of stock of the Company to secure certain obligations of the Depositor under Section 1.14(c) of the Merger Agreement;
 
NOW, THEREFORE, the parties hereto hereby agree as follows:
 
1.            Escrow.
 
(a)            Escrow of Shares . Simultaneously with the execution of this Agreement, each Depositor shall deposit with the Escrow Agent a certificate or certificates registered in the Depositor’s name representing the number of shares of Parent Common Stock set forth next to such Depositor’s name on Schedule A attached hereto (the “Deposit Stock Certificate(s)”), each such certificate duly endorsed in blank with signature(s) guaranteed by a member of one of the “Medallion” guarantee programs (Securities Transfer Agents Medallion Program (STAMP), Stock Exchanges Medallion Program (SEMP), or New York Stock Exchange Medallion Signature Program (MSP)).  The shares deposited with the Escrow Agent pursuant to this Section 1(a) are referred to herein as the “Deposit Shares.”  The Company and Depositor acknowledge and agree that the aggregate number of shares of Parent Common Stock constituting the Deposit Shares is Three Million Five Hundred Thousand (3,500,000).  The Deposit Shares shall be held as a trust fund and shall not be subject to any lien, attachment, trustee process or any other judicial process of any creditor of any party hereto.  The Escrow Agent agrees to hold the certificate evidencing the Deposit Shares in an escrow account (the “Escrow Account”) subject to the terms and conditions of this Agreement.
 
(b)            Security for the Depositor’s Compliance .  The Deposit Shares shall be (i) security for the Depositor’s compliance with its obligation to surrender to the Company for cancellation certain numbers of shares of Parent Common Stock in certain circumstances, as set forth in Section 1.14(c) of the Merger Agreement, and (ii) the exclusive means for the Company to enforce such obligations upon the occurrence of any of the events specified in Section 1.14(c) of
 
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the Merger Agreement requiring the surrender for cancellation without consideration of shares of Parent Common Stock by the Parent Record Holders (each, a “Surrender Event”).
 
(c)            Dividends, Etc.   Any securities of the Company distributed in respect of or in exchange for any of the Deposit Shares, whether by way of stock dividends, stock splits or otherwise, shall be issued in the name of the Company or its nominee specified in writing and shall be delivered to the Escrow Agent, who shall hold such securities in the Escrow Account.  Such securities shall be considered Deposit Shares for purposes hereof.
 
2.            Distribution of Deposit Shares.
 
(a)          Upon the occurrence of a Surrender Event in the good faith determination of the Board of Directors of the Company, the Company shall provide written notice to the Escrow Agent and each Depositor (a “Surrender Notice”) that states that there has been an occurrence of the relevant Surrender Event, and the Escrow Agent shall take the following actions:
 
(i)           In the event that, within five (5) Business Days after the giving of the Surrender Notice in accordance with this paragraph 2(a), no Depositor has disputed the basis of the giving of the Surrender Notice ( i.e., that one or more of the Surrender Events stated in the Surrender Notice to have occurred has not occurred) by giving written notice thereof to Escrow Agent (a “Dispute Notice”), then the Escrow Agent shall deliver the certificates representing all of the Deposit Shares to the Company, whereupon the Company shall retain the number of shares of Parent Common Stock specified in Section 1.14(c) of the Merger Agreement with respect to such Surrender Event (adjusted as provided below) (the “Surrendered Shares”), the Surrendered Shares shall be cancelled by the Company and shall no longer be outstanding (for avoidance of doubt, the Surrendered Shares shall not be retained by the Company in treasury or otherwise), and the Company shall, or shall cause its transfer agent to, issue and deliver to each Depositor, or its nominee specified in writing, a certificate, registered in the name of such Depositor or its nominee, representing such Depositor’s share of the difference, if any, between the total number of Deposit Shares and the number of Surrendered Shares so cancelled, pro rata based on each Depositor’s share of the total number of Deposit Shares as reflected on Schedule A; and
 
(ii)          In the event that, within five (5) Business Days after the giving of the Surrender Notice in accordance with this paragraph 2(a), any Depositor shall have delivered to the Escrow Agent a Dispute Notice (with a copy of the Dispute Notice being given, in the form of a notice, to the Company), the stock certificate(s) evidencing the Deposit Shares shall not be delivered to either the Company or the Depositor but retained by the Escrow Agent pending a further agreement executed by both the Company and the Depositor(s) who had delivered such Dispute Notice to the Company as to the disposition of all or any portion of such stock certificate(s) (and the outstanding nature of the Deposit
 
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Shares evidenced by such stock certificate(s)) or receipt of a final non-appealable judgment or final non-appealable order of a court of competent jurisdiction as to such disposition (and the outstanding nature of such Deposit Shares, in which case the Escrow Agent shall dispose of such stock certificate(s) in accordance with such written agreement, judgment or order).
 
(b)           If the Company, at any time prior to the occurrence of a Surrender Event, (i) pays a stock dividend in or otherwise makes a distribution or distributions payable in shares of Parent Common Stock on Parent Common Stock, (ii) subdivides outstanding shares of Parent Common Stock into a larger number of shares, (iii) combines (including by way of a reverse stock split) outstanding shares of Parent Common Stock into a smaller number of shares, or (iv) issues, in the event of a reclassification of shares of the Parent Common Stock, any shares of capital stock of the Corporation, then the number of shares of Parent Common Stock specified in Section 1.14(c) of the Merger Agreement with respect to each Surrender Event shall be deemed to be shall be proportionately increased or decreased. Any adjustment made pursuant to this Section 2(b) shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or re-classification.  If any event occurs as to which the other provisions of this Section 2(b) are not strictly applicable but the lack of any adjustment would not fairly protect the rights of the Depositor in accordance with the basic intent and principles of this Agreement and Section 1.14(c) of the Merger Agreement, or if strictly applicable would not fairly protect the rights of the Company and Depositor in accordance with the basic intent and principles of such provisions, then the Company’s Board of Director shall, in good faith and subject to applicable law, make an appropriate adjustment to protect the rights of the Company and Depositor.
 
(c)           At 6:00 p.m. New York time on the tenth Business Day following the date that is five (5) months after the earlier of (x) the date on which the Subscription Note is fully satisfied or (y) the maturity date of the Subscription Note (the “Termination Date”), the stock certificate(s) evidencing (or appropriately denominated alternative stock certificate(s) evidencing) any Deposit Shares that remain in the Escrow Account and are not the subject of a pending Surrender Notice (regardless of whether any Dispute Notice with respect thereto is then pending), shall be returned to the Depositor, such stock certificate(s) to evidence the Depositor’s share of such remaining Deposit Shares, pro rata based on each Depositor’s share of the total number of Deposit Shares.
 
(d)           Notwithstanding anything to the contrary contained in paragraphs 2(a) and 2(c), the Escrow Agent shall make such other disposition of the stock certificate(s) evidencing the Deposit Shares as is set forth in a written notice to Escrow Agent executed by both the Company and each Depositor.
 
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(e)           Notwithstanding anything to the contrary contained in this Agreement, in the event of a dispute between the Company and Depositor as to the return to the Company or release to Depositor of any of the Deposit Shares then represented by Deposit Stock Certificates held in the Escrow Account, Escrow Agent shall have the right, but not the duty, to bring an interpleader action in a court of competent jurisdiction to have such court determine the disposition of any Deposit Shares subject to such dispute and the Deposit Stock Certificate(s) evidencing such Deposit Shares (and the issued and outstanding nature of such Deposit Shares) and deposit the applicable Deposit Stock Certificate(s) and all the other properties then held by Escrow Agent in the Escrow Account or otherwise pursuant to this Agreement with such court and shall be reimbursed by Depositor for all of the costs and expenses of Escrow Agent with respect to such interpleader action.  The Company and Depositor agree that any such action shall be brought only in a court of the State of New York located in New York County or in the Federal Court for the Southern District of New York (which courts are acknowledged by both the Company and Depositor as courts of competent jurisdiction).
 
3.               Fees and Expenses of Escrow Agent.   The Depositor shall pay the fees of the Escrow Agent for the services to be rendered by the Escrow Agent hereunder.
 
4.            Duties of the Escrow Agent.
 
(a)           Escrow Agent shall not be liable to any person or entity for any action taken in good faith and believed by Escrow Agent to be authorized or within the rights and powers conferred upon Escrow Agent under this Agreement.  Escrow Agent shall also have full and complete authorization and protection for any omission or any action taken, or suffered by Escrow Agent, in good faith.  Escrow Agent shall have no duties or obligations other than as expressly stated herein, and shall be protected and not liable for acting upon any notice, certificate or other communication not only with respect to its execution, validity and effectiveness of such notice’s, certificate’s, or other communication’s provisions, but also as to the truth and accuracy of any information therein contained, which notice, certificate or other communication Escrow Agent shall have, in good faith, believed to have been genuine or valid and which Escrow Agent, in good faith, believed to have been signed or presented by a proper person or persons.
 
(b)           Escrow Agent shall not be bound by any notice or demand with respect hereto, or any waiver, modification, amendment, termination or revision of this Agreement unless signed by both the Company and each Depositor (unless such notice or demand is a Surrender Notice or Dispute Notice, Payment Notice in which event the signature of only the party giving such notice under the applicable provisions of Article 2 shall be required) and delivered in writing to Escrow Agent and, if the duties of Escrow Agent are affected, unless Escrow Agent shall have given Escrow Agent’s prior written consent thereto.  Escrow Agent shall not be liable or responsible for anything done or omitted to be done by Escrow Agent in good faith, it being understood that Escrow Agent’s liability hereunder shall be limited solely to willful misconduct or gross negligence on its part.  Escrow Agent may rely conclusively on, and shall be protected from acting or refraining from acting upon, any written notice, instruction or request furnished to
 
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Escrow Agent hereunder and reasonably believed by Escrow Agent to be genuine and to have been signed or presented by the proper party or parties.  Escrow Agent shall be under no duty to inquire into the authority of any person acting in connection herewith or into the genuineness of any signature.
 
(c)           Escrow Agent or any successor which is hereafter appointed may, at any time, resign by giving written notice to both the Company and each Depositor and shall be discharged of Escrow Agent’s duties under this Agreement upon the appointment of a successor escrow agent.  In the event of any such resignation, a successor escrow agent shall be promptly appointed upon the mutual written agreement of the Company and each Depositor.  Any such successor escrow agent shall deliver to the Company and each Depositor a written instrument accepting such appointment hereunder and thereupon the successor escrow agent shall succeed to all the rights and duties of Escrow Agent and shall be entitled to receive the certificate evidencing the Deposit Shares and all the other properties then held by Escrow Agent in the Escrow Account or otherwise pursuant to this Agreement.  In the event that a successor escrow agent is not appointed by the Company and the Depositor within 30 calendar days of such written notice, then Escrow Agent shall have the right, but not the duty, to bring an interpleader action in a court of competent jurisdiction to have a successor agent appointed and deposit the certificate evidencing the Deposit Shares and all other properties then held by Escrow Agent in the Escrow Account or otherwise pursuant to this Agreement with such court and shall be reimbursed by the Company for all of the costs and expenses of Escrow Agent with respect to such interpleader action.  The Company and the Depositor agree that any such action shall be brought only in a court of the State of New York located in New York County or in the Federal Court for the Southern District of New York (which courts are acknowledged by both the Company and the Depositor as courts of competent jurisdiction).
 
5.            Fees and Indemnification of Escrow Agent.
 
(a)     The Depositor agrees to indemnify Escrow Agent  and to hold Escrow Agent harmless from and against any loss, cost, liability or expense including reasonable legal fees (including, without limitation, fees generated by Escrow Agent’s internal staff) incurred by Escrow Agent relating to, arising out of or in connection with the acceptance or administration of Escrow Agent’s duties, or services rendered under this Agreement, including reasonable legal fees, costs and expenses of defending Escrow Agent against claims of liability or incurred in actions of interpleader arising hereunder.
 
(b)     Escrow Agent shall have a lien for the amount of any such expenses or loss on the monies and other property held by Escrow Agent under this Agreement and shall be entitled to reimburse itself from such monies or property for the amount of any such expense or loss.
 
(c)       The Company acknowledges that Escrow Agent, as CKR, has acted, and will continue to act, as counsel to the Depositor and did act, prior to the Merger (as defined in the Subscription
 
5
 

 

 
Agreement), as counsel to the Company.  The Company further acknowledges that there may be a potential or actual conflict of interests and agrees that such conflicting interests shall not be a basis for Escrow Agent being disqualified or limited, or not participating, in the exercise of powers or representation with respect to this Agreement, nor shall the Company seek to disqualify CKR from acting as counsel to the Depositor in any future matter, whether or not relating to this Agreement, and/or the Note, although both the Company and Depositor acknowledge that disqualification due to its status as a witness may be claimed or, on a court’s own initiative, be made.
 
6.              Termination. This Agreement shall terminate upon the distribution by the Escrow Agent of all of the Deposit Shares in accordance with this Agreement, but any of the obligations of the Company and/or Depositor to the Escrow Agent under this Agreement shall survive such termination.
 
7.              Notices. Notices or other communications required or permitted to be given hereunder shall be in writing and shall be deemed duly given if (a) personally delivered, against written receipt therefor, (b) forwarded by pre-paid certified or registered mail, return receipt requested, or (c) forwarded via a nationally recognized overnight courier service ( e.g., Federal Express, USPS Express Mail, UPS, DHL, etc.) to the parties to which such notice or other communication is required by this Agreement to be given, at the address of such parties as follows:
         
  If to the Company:
     
   
Tyme Technologies, Inc.
   
48 Wall Street - Suite 1100
   
New York, NY 10005
    Attn: Steven Hoffman, President
   
Facsimile:
   
       
  with a copy to (which shall not constitute notice hereunder):
       
   
Keith S. Braun, Esq.
    Moritt Hock & Hamroff LLP
    450 Seventh Avenue - 15 th Floor
    New York, NY  10123
    Facsimile:  646-688-6096
       
  If to the Depositor:
       
    c/o GEM Global Yield Fund LLC SCS
    590 Madison Ave., 36th Fl.
    New York, NY 10022
    Facsimile:  212-265-4035
     
  with a copy to (which shall not constitute notice hereunder):
 
6
 

 

 
       
    CKR Law LLP
    1330 Avenue of the Americas, 35 th Floor
    New York, NY 10019
    Attn:  Mark Crone
    Facsimile:  212-400-6901
       
  If to the Escrow Agent:
       
    CKR Law LLP
    1330 Avenue of the Americas, 35 th Floor
    New York, NY 10019
    Attn:  Mark Crone
    Facsimile:  212-400-6901
 
or, in the case of any of the parties to this Agreement, at such other address as such party shall furnish to each of the other parties in accordance with this Section 7.  Notices and other communications delivered personally shall be deemed given as of the date of actual receipt; mailed notices and other communications shall be deemed given as of the date three Business Days following such mailing; and notices and other communications sent via overnight courier service shall be deemed given as of the date on Business Day after delivery to such courier service.
 
8.     General.
 
This Agreement and all of the provisions hereof shall be binding upon and inure to the benefit of the parties hereto and their respective administrators, successors and permitted assigns.
 
(b)           This Agreement and the rights and obligations of the parties contained in this Agreement shall be interpreted, construed and enforced in accordance with the laws of the State of New York, without regard to its choice and/or conflict of laws provisions.  Any legal action resulting from, arising under, out of or in connection with, directly or indirectly, this Agreement shall be commenced exclusively in the Supreme Court, State of New York, County of New York, or the U.S. District Court for the Southern District of New York.  All parties to this Agreement hereby submit themselves to the jurisdiction of any such court, and agree that service of process on them in any such action, suit or proceeding may be affected by the means by which notices are to be given under this Agreement.
 
(b)           This Agreement sets forth the entire agreement and understanding of the parties hereto in respect of the subject matter contained herein, and supersedes all prior agreements, promises, understandings, letters of intent, covenants, arrangements, communications, representations or warranties, whether oral or written, by any party hereto or by any related or unrelated third party.
 
(c)           This Agreement may not be changed, modified or rescinded orally.  Any change, modification or rescission need be in writing, signed by the party against whom enforcement of any change, modification or rescission is sought.  Any waiver of any of the provisions of this Agreement, or of any inaccuracy in or non-fulfillment of any of the obligations contemplated by this Agreement or
 
7
 

 

 
contemplated hereby, shall not be effective unless made in a writing signed by the party against whom the enforcement of any such waiver is sought.  A waiver given in any case shall only apply with respect to that particular act or omission, and shall not be effective as to any further acts or omissions, regardless of whether they are of the same or similar nature.
 
(d)           This Agreement may be executed simultaneously in any number of counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument.
 
(e)           This section and other headings contained in this Agreement are for purposes of reference only, and shall not affect the meaning or interpretation of this Agreement.
 
(f)            Any term or provision of this Agreement which is invalid or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity or unenforceability without rendering invalid or unenforceable the remaining terms and provisions of this Agreement or affecting the validity or enforceability of any of the terms or provisions of this Agreement in any other jurisdiction.
 
(g)           Each party hereto shall be responsible for their legal and other fees and expenses relating to the negotiation, execution and delivery of this Agreement and related agreements, and the consummation of the transaction contemplated by this Agreement.
 
(h)           For purposes of this Agreement, the capitalized term “Business Day” shall mean any calendar day other than a Saturday, Sunday or other day on which banks in the City of New York are authorized or directed to be closed.
 
(i)            In the event that any portion of the Escrow Account shall be attached, garnished or levied upon by any court order, or the delivery thereof shall be stayed or enjoined by an order of a court, or any order, judgment or decree shall be made or entered by any court order affecting the property deposited under this Agreement, Escrow Agent is hereby expressly authorized, in its sole discretion, to obey and comply with all writs, orders or decrees so entered or issued, which it is advised by legal counsel of its own choosing is binding upon it, whether with or without jurisdiction, and in the event that Escrow Agent obeys or complies with any such writ, order or decree it shall not be liable to any of the parties hereto or to any other person or firm, by reason of such compliance notwithstanding such writ, order or decree be subsequently reversed, modified, annulled, set aside or vacated.
 
(j)            This Escrow Agreement shall terminate on the date on which all of the Deposit Stock Certificates have been released from the Escrow Account by the Escrow Agent in accordance with this Agreement; provided , however , the provisions of Article 5 shall survive such termination.
 
(k)           So long as no Surrender Event shall have occurred, Depositor may exercise any and all voting and other consensual rights pertaining to any and all of the Deposit Shares evidenced by Deposit Stock Certificates held in the Escrow Account.
 
(l)            Subject to the provisions of paragraph 2(b), any dividends, interests or other distributions made with respect to each Deposit Share then held in the Escrow Account shall attach to and be deemed part of such Deposit Share and shall be returned to the Company or released to Depositor at the same time such Deposit Share is returned to the Company or released to Depositor.
 
8
 

 

 
(m)          Unless otherwise expressed, all references in this Agreement to sections and paragraphs shall refer to the specified section or paragraph of this Agreement.
 
[signature page follows]
 
9
 

 


IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the day and year first above written.
           
  COMPANY:
         
  TYME TECHNOLOGIES, INC.
         
  By: /s/ Steven Hoffman  
  Name:   Steven Hoffman
  Title:   President
         
  DEPOSITOR:
       
  GEM GLOBAL YIELD FUND LLC SCS
       
  By: /s/ Christopher Brown  
  Name: Christopher Brown
  Title: Manager
           
  ESCROW AGENT:
         
  CKR LAW LLP
         
  By: /s/ Mark E. Crone  
  Name:   Mark E. Crone
  Title:   Co-Managing Partner
 
10
 

 

 
SCHEDULE A

Depositor
 
Number of
Deposit
Shares
 
Issuer
 
Class
 
Certificate
No(s).
GEM Global Yield Fund LLC
 
3,500,000
 
Tyme Technologies, Inc.
 
Common
   
 
11

 

 

Exhibit 10.16


THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”). THESE SECURITIES MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (A) TO THE COMPANY, (B) IN COMPLIANCE WITH RULE 144 UNDER THE SECURITIES ACT, IF AVAILABLE, AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS, (C) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT, OR (D) IN A TRANSACTION THAT DOES NOT REQUIRE REGISTRATION UNDER THE SECURITIES ACT AND/OR ANY APPLICABLE STATE SECURITIES LAWS, AND THE HOLDER HAS, PRIOR TO SUCH SALE, FURNISHED TO THE COMPANY AN OPINION OF COUNSEL THAT SUCH REGISTRATION IS NOT REQUIRED OR OTHER EVIDENCE OF EXEMPTION, IN EITHER CASE REASONABLY SATISFACTORY TO THE COMPANY. HEDGING TRANSACTIONS INVOLVING THESE SECURITIES MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE SECURITIES ACT.



Tyme Inc.


10% SECURED CONVERTIBLE PROMISSORY NOTE


DUE OCTOBER 11, 2015


Original Issue Date: July 11, 2014

US$1,100,000


This Secured Convertible Promissory Note, one of a series of duly authorized and issued secured convertible promissory notes of Tyme Inc. , a Delaware corporation (the “ Company ”), designated as its 10% Secured Convertible Promissory Notes and in the aggregate principal amount of $1,100,000 (the “ Notes ”), is issued to Christopher Brown (together with his permitted successors and assigns, the “ Holder ”) in accordance with exemptions from registration under the Securities Act of 1933, as amended (the “ Securities Act ”), pursuant to that certain Securities Purchase Agreement relating to the Notes (the “ Purchase Agreement ”), by and among the Company, the Holder and other purchasers of Notes (collectively with the Holder, the “ Holders ”).  Capitalized terms not otherwise defined herein shall have the meanings ascribed to them in the Purchase Agreement.


Article I.


Section 1.01          Principal and Interest .  (a) FOR VALUE RECEIVED, the Company hereby promises to pay to the order of the Holder, in lawful money of the United States of America and in immediately available funds the principal sum of One Million One Hundred Thousand Dollars ($1,100,000) on October 11, 2015 (the “ Maturity Date ”).


(b)         The Company further promises to pay interest in cash on the unpaid principal amount of this Note at a rate per annum equal to ten percent (10%), commencing to accrue on the date hereof and payable on the Maturity Date or earlier prepayment.  Interest will be computed on the basis of a 360-day year of twelve 30-day months for the actual number of days elapsed; provided , however , interest is not payable in the event of the conversion of this Note in accordance with Section 1.02 below.


(c)         The Company may prepay all or any portion of the principal amount of this Note at any time and from time to time without penalty or premium.


- 1 -


Section 1.02          Mandatory Conversion .  (a) Upon the closings of the Merger and the PPO for at least the Minimum PPO amount (which shall include, for purposes of determining such amount, the aggregate outstanding principal amount of the Notes), all of the outstanding principal amount of this Note shall automatically, without the necessity of any action by the Holder or the Company, be converted into PPO Securities of Pubco (such PPO Securities issued upon conversion of the Notes, the “ Conversion Securities ”), at the Conversion Price.  All accrued but unpaid interest on this Note shall be forgiven in full upon such conversion of the principal amount of this Note into Conversion Securities.


(b)         No fraction of shares or scrip representing fractions of shares will be issued on conversion.  Upon any conversion of the entire outstanding principal of and interest on this Note, the number of shares or other securities issuable shall be rounded to the next higher whole number.  


(c)         The date upon which the conversion shall be effective (the “ Conversion Date ”) shall be deemed to be the date on which the Merger and Minimum PPO closes.  The number of Conversion Securities issuable upon conversion of this Note shall be equal to the quotient obtained by dividing (x) the outstanding principal amount of this Note by (y) the Conversion Price then in effect.  The calculation by the Company of the number of Conversion Securities to be received by the Holder upon conversion hereof, and of the applicable Conversion Price, shall be conclusive absent manifest error.  


Section 1.03         [Intentionally Omitted]


Section 1.04          Absolute Obligation/Ranking .  Except as expressly provided herein, no provision of this Note shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of, and liquidated damages (if any) on, this Note at the time, place, and rate, and in the coin or currency, herein prescribed.  This Note is a direct debt obligation of the Company.  This Note ranks pari passu with all other Notes now or hereinafter issued pursuant to the Purchase Agreement.


Section 1.05          Paying Agent and Registrar .  Initially, the Company will act as paying agent and registrar.  The Company may change any paying agent, registrar, or Company-registrar by giving the Holder not less than ten (10) business days’ written notice of its election to do so, specifying the name, address, telephone number and facsimile number of the paying agent or registrar.  The Company may act in any such capacity.


Section 1.06          Different Denominations .  This Note is exchangeable for an equal aggregate principal amount of Notes of different authorized denominations, as reasonably requested by the Holder surrendering the same.  No service charge will be made for such registration of transfer or exchange.  Notwithstanding anything to the contrary contained herein, in the event of a mandatory conversion of the outstanding principal amount of this Note in accordance with Section 1.02 above, the aggregate outstanding principal amount of all Notes owned of record by Holder shall be used in the calculation of the number of Conversion Securities to be issued to Holder in connection with such conversion regardless of the denominations of the individual Notes owned by Holder.


Section 1.07          Investment Representations . This Note has been issued subject to certain investment representations of the original Holder set forth in the Purchase Agreement and may be transferred or exchanged only in compliance with the Purchase Agreement and applicable federal and state securities laws and regulations.


Section 1.08          Reliance on Note Register .  Prior to due presentment to the Company for transfer or conversion of this Note, the Company and any agent of the Company may treat the person in whose name this Note is duly registered on the Note Register as the owner hereof for the purpose of receiving payment as herein provided and for all other purposes, whether or not this Note is overdue, and neither the Company nor any such agent shall be affected by notice to the contrary.


- 2 -


Section 1.09          Security; Other Rights .  The obligations of the Company to the Holder under this Note are secured pursuant to the Security Agreement and the Pledge Agreement and are guaranteed under the Guaranty.  In addition to the rights and remedies given it by this Note, the Purchase Agreement, the Security Agreement, the Pledge Agreement and the Guaranty, the Holder shall have all those rights and remedies allowed by applicable laws.  The rights and remedies of the Holder are cumulative and recourse to one or more right or remedy shall not constitute a waiver of the others.


Article II.


Section 2.01          Events of Default .  Each of the following events shall constitute a default under this Note (each an “ Event of Default ”):


(a)         failure by the Company to pay any principal amount or interest due hereunder within five (5) days of the date such payment is due;


(b)         failure by Pubco to issue, or cause it’s transfer agent to issue, to the Holder the number of shares of PPO Securities (if any) issuable to the Holder as a result of the conversion of this Note within ten (10) days after the Conversion Date;


(c)         any event of default by the Company or any subsidiary under the Security Agreement, the Pledge Agreement or the Guaranty shall have occurred and be continuing beyond all grace and/or cure periods, or the Security Agreement, the Pledge Agreement or the Guaranty shall fail to remain in full force and effect prior to payment in full of all amounts payable under this Note, or any action shall be taken by the Company to discontinue the Security Agreement the Pledge Agreement or the Guaranty or to assert the invalidity thereof prior to payment in full of all amounts payable under this Note;


(d)         the Company shall: (1) make a general assignment for the benefit of its creditors; (2) apply for or consent to the appointment of a receiver, trustee, assignee, custodian, sequestrator, liquidator or similar official for itself or any of its assets and properties; (3) commence a voluntary case for relief as a debtor under the United States Bankruptcy Code; (4) file with or otherwise submit to any governmental authority any petition, answer or other document seeking:  (A) reorganization, (B) an arrangement with creditors or (C) to take advantage of any other present or future applicable law respecting bankruptcy, reorganization, insolvency, readjustment of debts, relief of debtors, dissolution or liquidation; (5) file or otherwise submit any answer or other document admitting or failing to contest the material allegations of a petition or other document filed or otherwise submitted against it in any proceeding under any such applicable law; or (6) be adjudicated a bankrupt or insolvent by a court of competent jurisdiction;


(e)         any case, proceeding or other action shall be commenced against the Company for the purpose of effecting, or an order, judgment or decree shall be entered by any court of competent jurisdiction approving (in whole or in part) anything specified in Section 2.01(d) hereof, or any receiver, trustee, assignee, custodian, sequestrator, liquidator or other official shall be appointed with respect to the Company, or shall be appointed to take or shall otherwise acquire possession or control of all or a substantial part of the assets and properties of the Company, and any of the foregoing shall continue unstayed and in effect for any period of sixty (60) days;


(f)          default shall occur with respect to any indebtedness for borrowed money of the Company (including, without limitation, any other Note(s)) or under any agreement under which such indebtedness may be issued by the Company and such default shall continue for more than the period of grace, if any, therein specified, if the aggregate amount of such indebtedness for which such default shall have occurred exceeds $50,000;


- 3 -


(g)         default shall occur with respect to any contractual obligation of the Company under or pursuant to any contract, lease, or other agreement to which the Company is a party and such default shall continue for more than the period of grace, if any, therein specified, if the aggregate amount of the Company’s contractual liability arising out of such default exceeds or is reasonably estimated to exceed $50,000;


(h)         final judgment for the payment of money in excess of $50,000 shall be rendered against the Company and the same shall remain undischarged for a period of twenty (20) days during which execution shall not be effectively stayed;


(i)          any material breach by the Company of any of its representations or warranties under the Purchase Agreement; or


(j)          any default, whether in whole or in part, shall occur in the due observance or performance of any obligations or other covenants, terms or provisions to be performed under this Note or the Purchase Agreement which is not cured by the Company within five (5) days after receipt of written notice thereof.


Section 2.02         If any Event of Default specified in Section 2.01(d) or Section 2.01(e) occurs, then the full principal amount of this Note, together with any other amounts owing in respect thereof, to the date of the Event of Default, shall become immediately due and payable without any action on the part of the Holder, and if any other Event of Default occurs, the full principal amount of this Note, together with any other amounts owing in respect thereof, to the date of acceleration shall become, at the Majority Holders’ election, immediately due and payable in cash.   Commencing five (5) days after the occurrence of any Event of Default, interest on this Note shall begin to accrue at the rate of interest specified in Section 1.01(b) PLUS five percent (5%) per annum , or such lower maximum amount of interest permitted to be charged under applicable law.  All Notes for which the full amount hereunder shall have been paid in accordance herewith shall promptly be surrendered to or as directed by the Company.  The Holder need not provide, and the Company hereby waives, any presentment, demand, protest or other notice of any kind, and the Holder may immediately and without expiration of any grace period enforce any and all of its rights and remedies hereunder and all other remedies available to it under applicable law.  Such declaration may be rescinded and annulled by the Majority Holders at any time prior to payment hereunder, and the Holder shall have all rights as a Note holder until such time, if any, as the full payment under this Section shall have been received by it.  No such rescission or annulment shall affect any subsequent Event of Default or impair any right consequent thereon.  “ Majority Holders ” means at any time a Holder or Holders then holding in excess of 50% of the then aggregate unpaid principal amount of the Notes.


Article III.


Section 3.01          Negative Covenants .  So long as this Note shall remain in effect and until any outstanding principal and interest and all fees and all other expenses or amounts payable under this Note and the Purchase Agreement have been paid in full, unless the Majority Holders shall otherwise consent in writing, the Company shall not:


- 4 -


(a)          Senior or Pari Passu Indebtedness .  Incur, create, assume, guaranty or permit to exist any indebtedness that ranks senior in priority to, or pari passu with, the obligations under this Note, except for (i) indebtedness existing on the date hereof and set forth in Schedule A attached hereto and only to the extent that such indebtedness ranks senior in priority to or pari passu with the obligations under this Note and the Purchase Agreement on the Original Issue Date, (ii) indebtedness secured by a lien described in paragraph (ix) in the definition of “Permitted Liens” in the Security Agreement in an aggregate amount outstanding not to exceed $50,000; and (iii) indebtedness created as a result of a subsequent financing if the gross proceeds to the Company of such financing are equal to or greater than the aggregate principal amount of the Notes and the Notes are repaid in full upon the closing of such financing.


(b)          Liens .  Create, incur, assume or permit to exist any lien on any property or assets (including stock or other securities of the Company) now owned or hereafter acquired by it or on any income or revenues or rights in respect of any thereof, except Permitted Liens (as defined in the Security Agreement).  


(c)          Dividends and Distributions .  Declare or pay, directly or indirectly, any dividend or make any other distribution (by reduction of capital or otherwise), whether in cash, property, securities or a combination thereof, with respect to any shares of its capital stock or directly or indirectly redeem, purchase, retire or otherwise acquire for value any shares of any class of its capital stock or set aside any amount for any such purpose; provided, however, that the Company may complete the Merger.


(d)          Limitation on Certain Payments and Prepayments .


(i)          Pay in cash any amount in respect of any indebtedness or preferred stock that may at the obligor’s option be paid in kind or in other securities; or


(ii)         Optionally prepay, repurchase or redeem or otherwise defease or segregate funds with respect to any indebtedness of the Company, other than for senior indebtedness existing on the date hereof and set forth in Schedule A attached hereto, indebtedness under this Note or the Purchase Agreement.


Article IV.


Section 4.01          Notices .  Notices regarding this Note shall be sent to the parties at the following addresses, unless a party notifies the other parties, in writing, of a change of address:


 

If to the Company:

At the address set forth in the Purchase Agreement

 

 

 

 

If to the Holder:

At the address set forth in the Purchase Agreement


- 5 -


Section 4.02          Governing Law .  All questions concerning the construction, validity, enforcement and interpretation of this Note shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflicts of law thereof.  Each party agrees that all legal proceedings concerning the interpretations, enforcement and defense of the transactions contemplated by any of the Transaction Documents (whether brought against a party hereto or its respective affiliates, directors, officers, shareholders, employees or agents) shall be commenced in the state and federal courts sitting in the City of New York, Borough of Manhattan (the “ New York Courts ”).  Each party hereto hereby irrevocably submits to the exclusive jurisdiction of the New York Courts for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, or such New York Courts are improper or inconvenient venue for such proceeding.  Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Note and agrees that such service shall constitute good and sufficient service of process and notice thereof.  Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. Each party hereto hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Note or the transactions contemplated hereby.  If either party shall commence an action or proceeding to enforce any provisions of this Note, then the prevailing party in such action or proceeding shall be reimbursed by the other party for its reasonable attorney’s fees and other costs and expenses incurred with the investigation, preparation and prosecution or defense of such action or proceeding.


Section 4.03          Severability .  The invalidity of any of the provisions of this Note shall not invalidate or otherwise affect any of the other provisions of this Note, which shall remain in full force and effect.


Section 4.04          Entire Agreement and Amendments .  This Note, together with the Purchase Agreement and the Transaction Documents, represents the entire agreement between the parties hereto with respect to the subject matter hereof and there are no representations, warranties or commitments, except as set forth herein.  This Note may be amended only by an instrument in writing executed by the parties hereto.


Section 4.05          Transfer .  This Note shall not be transferred or assigned by the Holder except in accordance with the provisions of this Note and the Purchase Agreement.



[Remainder of Page Intentionally Left Blank]



- 6 -


IN WITNESS WHEREOF , with the intent to be legally bound hereby, the Company as executed this Note as of the date first written above.


TYME INC.



By:   /s/ Michael Demurjian

Name:   Michael Demurjian

Title:     Vice President


- 7 -


SCHEDULE A


SENIOR AND PARI PASSU INDEBTEDNESS


All amounts due and owing under that certain Convertible Promissory Note of the Company, dated August 2, 2013, in the principal amount of $997,000 and payable to US VC Partners, L.P. (“USVCP”).  It is noted that, besides funding in full such Note, USVCP made additional advances to the Company or approximately $129,000.  Accordingly, the total principal amount due USVCP from the Company is $1,126,000.  USVCP has filed a UCC Financing Statement with the Delaware Department of State.


- 8 -


Exhibit 10.17


THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”). THESE SECURITIES MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (A) TO THE COMPANY, (B) IN COMPLIANCE WITH RULE 144 UNDER THE SECURITIES ACT, IF AVAILABLE, AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS, (C) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT, OR (D) IN A TRANSACTION THAT DOES NOT REQUIRE REGISTRATION UNDER THE SECURITIES ACT AND/OR ANY APPLICABLE STATE SECURITIES LAWS, AND THE HOLDER HAS, PRIOR TO SUCH SALE, FURNISHED TO THE COMPANY AN OPINION OF COUNSEL THAT SUCH REGISTRATION IS NOT REQUIRED OR OTHER EVIDENCE OF EXEMPTION, IN EITHER CASE REASONABLY SATISFACTORY TO THE COMPANY. HEDGING TRANSACTIONS INVOLVING THESE SECURITIES MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE SECURITIES ACT.



Tyme Inc.


AMENDED & RESTATED 10% SECURED CONVERTIBLE PROMISSORY NOTE


DUE OCTOBER 11, 2015


Original Issue Date: July 11, 2014

US$1,350,000


This Secured Convertible Promissory Note, amends and restates in its entirety and supersedes the 10% Secured Convertible Promissory Note dated July 11, 2014, in the original principal amount of US$1,100,000 of Tyme Inc. , a Delaware corporation (the “ Company ”), issued to Christopher Brown (together with his permitted successors and assigns, the “ Holder ”), and is one of a series of duly authorized and issued secured convertible promissory notes of designated as the Company’s 10% Secured Convertible Promissory Notes (the “ Notes ”), and is issued in accordance with exemptions from registration under the Securities Act of 1933, as amended (the “ Securities Act ”), pursuant to that certain Securities Purchase Agreement relating to the Notes, as amended (the “ Purchase Agreement ”), by and among the Company, the Holder and other purchasers of Notes (collectively with the Holder, the “ Holders ”). Capitalized terms not otherwise defined herein shall have the meanings ascribed to them in the Purchase Agreement.


Article I.


Section 1.01          Principal and Interest .  (a) FOR VALUE RECEIVED, the Company hereby promises to pay to the order of the Holder, in lawful money of the United States of America and in immediately available funds the principal sum of One Million Three Hundred Fifty Thousand Dollars ($1,350,000) on October 11, 2015 (the “ Maturity Date ”).


(b)         The Company further promises to pay interest in cash on the unpaid principal amount of this Note at a rate per annum equal to ten percent (10%) as follows: interest on the principal amount of One Million One Hundred Thousand Dollars ($1,100,000) commenced to accrue on July 11, 2014, and interest on the sum of Two Hundred Fifty Thousand Dollars ($250,000) commenced to accrue on November 24, 2014.  All interest accrued or accruing hereunder is payable on the Maturity Date or earlier prepayment. Interest will be computed on the basis of a 360-day year of twelve 30-day months for the actual number of days elapsed; provided , however , interest is not payable in the event of the conversion of this Note in accordance with Section 1.02 below.


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(c)         The Company may prepay all or any portion of the principal amount of this Note at any time and from time to time without penalty or premium.


Section 1.02          Mandatory Conversion .  (a) Upon the closings of the Merger and the PPO for at least the Minimum PPO amount (which shall include, for purposes of determining such amount, the aggregate outstanding principal amount of the Notes) or lesser amount as agreed to by the Company, all of the outstanding principal amount of this Note shall automatically, without the necessity of any action by the Holder or the Company, be converted into PPO Securities of Pubco (such PPO Securities issued upon conversion of the Notes, the “ Conversion Securities ”), at the Conversion Price.  All accrued but unpaid interest on this Note shall be forgiven in full upon such conversion of the principal amount of this Note into Conversion Securities.


(b)         No fraction of shares or scrip representing fractions of shares will be issued on conversion.  Upon any conversion of the entire outstanding principal of and interest on this Note, the number of shares or other securities issuable shall be rounded to the next higher whole number.  


(c)         The date upon which the conversion shall be effective (the “ Conversion Date ”) shall be deemed to be the date on which the Merger and Minimum PPO closes.  The number of Conversion Securities issuable upon conversion of this Note shall be equal to the quotient obtained by dividing (x) the outstanding principal amount of this Note by (y) the Conversion Price then in effect.  The calculation by the Company of the number of Conversion Securities to be received by the Holder upon conversion hereof, and of the applicable Conversion Price, shall be conclusive absent manifest error.  


Section 1.03         [Intentionally Omitted]


Section 1.04          Absolute Obligation/Ranking .  Except as expressly provided herein, no provision of this Note shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of, and liquidated damages (if any) on, this Note at the time, place, and rate, and in the coin or currency, herein prescribed.  This Note is a direct debt obligation of the Company.  This Note ranks pari passu with all other Notes now or hereinafter issued pursuant to the Purchase Agreement.


Section 1.05          Paying Agent and Registrar .  Initially, the Company will act as paying agent and registrar.  The Company may change any paying agent, registrar, or Company-registrar by giving the Holder not less than ten (10) business days’ written notice of its election to do so, specifying the name, address, telephone number and facsimile number of the paying agent or registrar.  The Company may act in any such capacity.


Section 1.06          Different Denominations .  This Note is exchangeable for an equal aggregate principal amount of Notes of different authorized denominations, as reasonably requested by the Holder surrendering the same.  No service charge will be made for such registration of transfer or exchange.  Notwithstanding anything to the contrary contained herein, in the event of a mandatory conversion of the outstanding principal amount of this Note in accordance with Section 1.02 above, the aggregate outstanding principal amount of all Notes owned of record by Holder shall be used in the calculation of the number of [Conversion Securities] to be issued to Holder in connection with such conversion regardless of the denominations of the individual Notes owned by Holder.


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Section 1.07          Investment Representations . This Note has been issued subject to certain investment representations of the original Holder set forth in the Purchase Agreement and may be transferred or exchanged only in compliance with the Purchase Agreement and applicable federal and state securities laws and regulations.


Section 1.08          Reliance on Note Register .  Prior to due presentment to the Company for transfer or conversion of this Note, the Company and any agent of the Company may treat the person in whose name this Note is duly registered on the Note Register as the owner hereof for the purpose of receiving payment as herein provided and for all other purposes, whether or not this Note is overdue, and neither the Company nor any such agent shall be affected by notice to the contrary.


Section 1.09          Security; Other Rights .  The obligations of the Company to the Holder under this Note are secured pursuant to the Security Agreement and the Pledge Agreement , each as amended pursuant to the Omnibus Amendment, dated as of November 24, 2014 (the “ Omnibus Amendment ”), among the Company, Subscriber and various other parties, and are guaranteed under the Guaranty, as amended by the Omnibus Amendment. In addition to the rights and remedies given it by this Note, the Purchase Agreement, the Security Agreement, the Pledge Agreement and the Guaranty, each as amended by the Omnibus Amendment, the Holder shall have all those rights and remedies allowed by applicable laws. The rights and remedies of the Holder are cumulative and recourse to one or more right or remedy shall not constitute a waiver of the others.


Article II.


Section 2.01          Events of Default .  Each of the following events shall constitute a default under this Note (each an “ Event of Default ”):


(a)         failure by the Company to pay any principal amount or interest due hereunder within five (5) days of the date such payment is due;


(b)         failure by Pubco to issue, or cause it’s transfer agent to issue, to the Holder the number of shares of PPO Securities (if any) issuable to the Holder as a result of the conversion of this Note within ten (10) days after the Conversion Date;


(c)         (c) any event of default by the Company or any subsidiary under the Security Agreement, the Pledge Agreement or the Guaranty, each as amended by the Omnibus Amendment, shall have occurred and be continuing beyond all grace and/or cure periods, or the Security Agreement, the Pledge Agreement or the Guaranty, each as amended by the Omnibus Amendment, shall fail to remain in full force and effect prior to payment in full of all amounts payable under this Note, or any action shall be taken by the Company to discontinue the Security Agreement the Pledge Agreement or the Guaranty, each as amended by the Omnibus Amendment, or to assert the invalidity thereof prior to payment in full of all amounts payable under this Note;


(d)         the Company shall: (1) make a general assignment for the benefit of its creditors; (2) apply for or consent to the appointment of a receiver, trustee, assignee, custodian, sequestrator, liquidator or similar official for itself or any of its assets and properties; (3) commence a voluntary case for relief as a debtor under the United States Bankruptcy Code; (4) file with or otherwise submit to any governmental authority any petition, answer or other document seeking:  (A) reorganization, (B) an arrangement with creditors or (C) to take advantage of any other present or future applicable law respecting bankruptcy, reorganization, insolvency, readjustment of debts, relief of debtors, dissolution or liquidation; (5) file or otherwise submit any answer or other document admitting or failing to contest the material allegations of a petition or other document filed or otherwise submitted against it in any proceeding under any such applicable law; or (6) be adjudicated a bankrupt or insolvent by a court of competent jurisdiction;


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(e)         any case, proceeding or other action shall be commenced against the Company for the purpose of effecting, or an order, judgment or decree shall be entered by any court of competent jurisdiction approving (in whole or in part) anything specified in Section 2.01(d) hereof, or any receiver, trustee, assignee, custodian, sequestrator, liquidator or other official shall be appointed with respect to the Company, or shall be appointed to take or shall otherwise acquire possession or control of all or a substantial part of the assets and properties of the Company, and any of the foregoing shall continue unstayed and in effect for any period of sixty (60) days;


(f)          default shall occur with respect to any indebtedness for borrowed money of the Company (including, without limitation, any other Note(s)) or under any agreement under which such indebtedness may be issued by the Company and such default shall continue for more than the period of grace, if any, therein specified, if the aggregate amount of such indebtedness for which such default shall have occurred exceeds $50,000;


(g)         default shall occur with respect to any contractual obligation of the Company under or pursuant to any contract, lease, or other agreement to which the Company is a party and such default shall continue for more than the period of grace, if any, therein specified, if the aggregate amount of the Company’s contractual liability arising out of such default exceeds or is reasonably estimated to exceed $50,000;


(h)         final judgment for the payment of money in excess of $50,000 shall be rendered against the Company and the same shall remain undischarged for a period of twenty (20) days during which execution shall not be effectively stayed;


(i)          any material breach by the Company of any of its representations or warranties under the Purchase Agreement; or


(j)          any default, whether in whole or in part, shall occur in the due observance or performance of any obligations or other covenants, terms or provisions to be performed under this Note or the Purchase Agreement which is not cured by the Company within five (5) days after receipt of written notice thereof.


Section 2.02         If any Event of Default specified in Section 2.01(d) or Section 2.01(e) occurs, then the full principal amount of this Note, together with any other amounts owing in respect thereof, to the date of the Event of Default, shall become immediately due and payable without any action on the part of the Holder, and if any other Event of Default occurs, the full principal amount of this Note, together with any other amounts owing in respect thereof, to the date of acceleration shall become, at the Majority Holders’ election, immediately due and payable in cash.   Commencing five (5) days after the occurrence of any Event of Default, interest on this Note shall begin to accrue at the rate of interest specified in Section 1.01(b) PLUS five percent (5%) per annum , or such lower maximum amount of interest permitted to be charged under applicable law.  All Notes for which the full amount hereunder shall have been paid in accordance herewith shall promptly be surrendered to or as directed by the Company.  The Holder need not provide, and the Company hereby waives, any presentment, demand, protest or other notice of any kind, and the Holder may immediately and without expiration of any grace period enforce any and all of its rights and remedies hereunder and all other remedies available to it under applicable law.  Such declaration may be rescinded and annulled by the Majority Holders at any time prior to payment hereunder, and the Holder shall have all rights as a Note holder until such time, if any, as the full payment under this Section shall have been received by it.  No such rescission or annulment shall affect any subsequent Event of Default or impair any right consequent thereon.  “ Majority Holders ” means at any time a Holder or Holders then holding in excess of 50% of the then aggregate unpaid principal amount of the Notes.


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Article III.


Section 3.01          Negative Covenants .  So long as this Note shall remain in effect and until any outstanding principal and interest and all fees and all other expenses or amounts payable under this Note and the Purchase Agreement have been paid in full, unless the Majority Holders shall otherwise consent in writing, the Company shall not:


(a)          Senior or Pari Passu Indebtedness .  Incur, create, assume, guaranty or permit to exist any indebtedness that ranks senior in priority to, or pari passu with, the obligations under this Note, except for (i) indebtedness existing on the date hereof and set forth in Schedule A attached hereto and only to the extent that such indebtedness ranks senior in priority to or pari passu with the obligations under this Note and the Purchase Agreement on the Original Issue Date, (ii) indebtedness secured by a lien described in paragraph (ix) in the definition of “Permitted Liens” in the Security Agreement, as amended by the Omnibus Amendment, in an aggregate amount outstanding not to exceed $50,000; and (iii) indebtedness created as a result of a subsequent financing if the gross proceeds to the Company of such financing are equal to or greater than the aggregate principal amount of the Notes and the Notes are repaid in full upon the closing of such financing.


(b)          Liens .  Create, incur, assume or permit to exist any lien on any property or assets (including stock or other securities of the Company) now owned or hereafter acquired by it or on any income or revenues or rights in respect of any thereof, except Permitted Liens (as defined in the Security Agreement, as amended by the Omnibus Amendment).  


(c)          Dividends and Distributions .  Declare or pay, directly or indirectly, any dividend or make any other distribution (by reduction of capital or otherwise), whether in cash, property, securities or a combination thereof, with respect to any shares of its capital stock or directly or indirectly redeem, purchase, retire or otherwise acquire for value any shares of any class of its capital stock or set aside any amount for any such purpose; provided, however, that the Company may complete the Merger.


(d)          Limitation on Certain Payments and Prepayments .


(i)          Pay in cash any amount in respect of any indebtedness or preferred stock that may at the obligor’s option be paid in kind or in other securities; or


(ii)         Optionally prepay, repurchase or redeem or otherwise defease or segregate funds with respect to any indebtedness of the Company, other than for senior indebtedness existing on the date hereof and set forth in Schedule A attached hereto, indebtedness under this Note or the Purchase Agreement.


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Article IV.


Section 4.01          Notices .  Notices regarding this Note shall be sent to the parties at the following addresses, unless a party notifies the other parties, in writing, of a change of address:


 

If to the Company:

At the address set forth in the Purchase Agreement

 

 

 

 

If to the Holder:

At the address set forth in the Purchase Agreement


Section 4.02          Governing Law .  All questions concerning the construction, validity, enforcement and interpretation of this Note shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflicts of law thereof.  Each party agrees that all legal proceedings concerning the interpretations, enforcement and defense of the transactions contemplated by any of the Transaction Documents (whether brought against a party hereto or its respective affiliates, directors, officers, shareholders, employees or agents) shall be commenced in the state and federal courts sitting in the City of New York, Borough of Manhattan (the “ New York Courts ”).  Each party hereto hereby irrevocably submits to the exclusive jurisdiction of the New York Courts for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, or such New York Courts are improper or inconvenient venue for such proceeding.  Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Note and agrees that such service shall constitute good and sufficient service of process and notice thereof.  Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. Each party hereto hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Note or the transactions contemplated hereby.  If either party shall commence an action or proceeding to enforce any provisions of this Note, then the prevailing party in such action or proceeding shall be reimbursed by the other party for its reasonable attorney’s fees and other costs and expenses incurred with the investigation, preparation and prosecution or defense of such action or proceeding.


Section 4.03          Severability .  The invalidity of any of the provisions of this Note shall not invalidate or otherwise affect any of the other provisions of this Note, which shall remain in full force and effect.


Section 4.04          Entire Agreement and Amendments .  This Note, together with the Purchase Agreement and the Transaction Documents, each as amended by the Omnibus Amendment, represents the entire agreement between the parties hereto with respect to the subject matter hereof and there are no representations, warranties or commitments, except as set forth herein.  This Note may be amended only by an instrument in writing executed by the parties hereto.


Section 4.05          Transfer .  This Note shall not be transferred or assigned by the Holder except in accordance with the provisions of this Note and the Purchase Agreement, as amended by the Omnibus Amendment.



[Remainder of Page Intentionally Left Blank]



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IN WITNESS WHEREOF , with the intent to be legally bound hereby, the Company as executed this Note as of the date first written above.


TYME INC.



By:   /s/ Michael Demurjian

Name:   Michael Demurjian

Title:     Vice President


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SCHEDULE A


SENIOR AND PARI PASSU INDEBTEDNESS


None.


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Exhibit 10.18


THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”). THESE SECURITIES MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (A) TO THE COMPANY, (B) IN COMPLIANCE WITH RULE 144 UNDER THE SECURITIES ACT, IF AVAILABLE, AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS, (C) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT, OR (D) IN A TRANSACTION THAT DOES NOT REQUIRE REGISTRATION UNDER THE SECURITIES ACT AND/OR ANY APPLICABLE STATE SECURITIES LAWS, AND THE HOLDER HAS, PRIOR TO SUCH SALE, FURNISHED TO THE COMPANY AN OPINION OF COUNSEL THAT SUCH REGISTRATION IS NOT REQUIRED OR OTHER EVIDENCE OF EXEMPTION, IN EITHER CASE REASONABLY SATISFACTORY TO THE COMPANY. HEDGING TRANSACTIONS INVOLVING THESE SECURITIES MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE SECURITIES ACT.



Tyme Inc.


SECOND AMENDED AND RESTATED

10% SECURED CONVERTIBLE PROMISSORY NOTE


DUE OCTOBER 11, 2015


Original Issue Date: July 11, 2014

US$2,310,000


This Second Amended and Restated 10% Secured Convertible Promissory Note (this “ Note ”) amends and restates in its entirety and supersedes the Amended & Restated 10% Secured Convertible Promissory Note, dated July 11, 2014, in the principal amount of US$1,350,000, of Tyme Inc. , a Delaware corporation (the “ Company ”), which amended and restated in its entirety and superseded the 10% Secured Convertible Promissory Note, dated July 11, 2014, in the original principal amount of US$1,100,000, of the Company (the “ Original Note ”), each issued to Christopher Brown (together with his permitted successors and assigns, the “ Holder ”). The Original Note was issued pursuant to that certain Securities Purchase Agreement, dated as of July 11, 2014 (the “ Purchase Agreement ”), between the Company and Holder. Capitalized terms not otherwise defined herein shall have the meanings ascribed to them in the Purchase Agreement.


Article I.


Section 1.01         Principal and Interest . (a) FOR VALUE RECEIVED, the Company hereby promises to pay to the order of the Holder, in lawful money of the United States of America and in immediately available funds the principal sum of Two Million Three Hundred Ten Thousand Dollars ($2,310,000) on October 11, 2015 (the “ Maturity Date ”).


(b)         The Company further promises to pay interest in cash on the unpaid principal amount of this Note at a rate per annum equal to ten percent (10%) as follows: (i) interest on the principal amount of One Million One Hundred Thousand Dollars ($1,100,000) commenced to accrue on July 11, 2014, (ii) interest on the principal amount of Two Hundred Fifty Thousand Dollars ($250,000) commenced to accrue on November 24, 2014, and (iii) interest on the principal amount of Nine Hundred Sixty Thousand Dollars ($960,000) commenced to accrue on January 15, 2015. All interest accrued or accruing hereunder is payable on the Maturity Date or earlier prepayment. Interest will be computed on the basis of a 360-day year of twelve 30-day months for the actual number of days elapsed ; provided , however , interest is not payable in the event of the conversion of this Note in accordance with Section 1.02 below.


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(c)         The Company may prepay all or any portion of the principal amount of this Note at any time and from time to time without penalty or premium.


Section 1.02          Mandatory Conversion .  (a) Upon the closings of the Merger and the PPO for at least $9,100,000 (which shall include, for purposes of determining such amount, the aggregate outstanding principal amount of this Note) or lesser amount as agreed to by the Company, all of the outstanding principal amount of this Note shall automatically, without the necessity of any action by the Holder or the Company, be converted into PPO Securities of Pubco (such PPO Securities issued upon conversion of the Notes, the “ Conversion Securities ”), at the Conversion Price. All accrued but unpaid interest on this Note shall be forgiven in full upon such conversion of the principal amount of this Note into the Conversion Securities.


(b)         No fraction of shares or scrip representing fractions of shares will be issued on conversion.  Upon any conversion of the entire outstanding principal of and interest on this Note, the number of shares or other securities issuable shall be rounded to the next higher whole number.  


(c)         The date upon which the conversion shall be effective (the “ Conversion Date ”) shall be deemed to be the date on which the Merger and Minimum PPO closes.  The number of Conversion Securities issuable upon conversion of this Note shall be equal to the quotient obtained by dividing (x) the outstanding principal amount of this Note by (y) the Conversion Price then in effect.  The calculation by the Company of the number of Conversion Securities to be received by the Holder upon conversion hereof, and of the applicable Conversion Price, shall be conclusive absent manifest error.  


Section 1.03         [Intentionally Omitted]


Section 1.04          Absolute Obligation/Ranking .  Except as expressly provided herein, no provision of this Note shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of, and liquidated damages (if any) on, this Note at the time, place, and rate, and in the coin or currency, herein prescribed.  This Note is a direct debt obligation of the Company.  This Note ranks pari passu with all other Notes now or hereinafter issued pursuant to the Purchase Agreement.


Section 1.05          Paying Agent and Registrar .  Initially, the Company will act as paying agent and registrar.  The Company may change any paying agent, registrar, or Company-registrar by giving the Holder not less than ten (10) business days’ written notice of its election to do so, specifying the name, address, telephone number and facsimile number of the paying agent or registrar.  The Company may act in any such capacity.


Section 1.06          Different Denominations .  This Note is exchangeable for an equal aggregate outstanding principal amount of notes of different authorized denominations but otherwise substantially identical to this Note (the “ Exchanged Notes ”), as reasonably requested by the Holder surrendering the same. No service charge will be made for such registration of transfer or exchange. Notwithstanding anything to the contrary contained herein, in the event of a mandatory conversion of the outstanding principal amount of this Note in accordance with Section 1.02 above, the aggregate outstanding principal amount of all Exchanged Notes owned of record by Holder shall be used in the calculation of the number of Conversion Securities to be issued to Holder in connection with such conversion regardless of the denominations of the individual Exchanged Notes owned of record by Holder.


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Section 1.07          Investment Representations . This Note has been issued subject to certain investment representations of the original Holder set forth in the Purchase Agreement and may be transferred or exchanged only in compliance with the Purchase Agreement and applicable federal and state securities laws and regulations.


Section 1.08          Reliance on Note Register .  Prior to due presentment to the Company for transfer or conversion of this Note, the Company and any agent of the Company may treat the person in whose name this Note is duly registered on the Note Register as the owner hereof for the purpose of receiving payment as herein provided and for all other purposes, whether or not this Note is overdue, and neither the Company nor any such agent shall be affected by notice to the contrary.


Section 1.09          Security; Other Rights .  The obligations of the Company to the Holder under this Note are secured pursuant to the Security Agreement and the Pledge Agreement, each as amended pursuant to the Second Omnibus Amendment, dated as of January 9, 2015 (the “ Omnibus Amendment ”), among the Company, Subscriber and various other parties, and are guaranteed under the Guaranty, as amended by the Omnibus Amendment. In addition to the rights and remedies given it by this Note, the Purchase Agreement, the Security Agreement, the Pledge Agreement and the Guaranty, each as amended by the Omnibus Amendment, the Holder shall have all those rights and remedies allowed by applicable laws. The rights and remedies of the Holder are cumulative and recourse to one or more right or remedy shall not constitute a waiver of the others.


Article II.


Section 2.01          Events of Default .  Each of the following events shall constitute a default under this Note (each an “ Event of Default ”):


(a)         failure by the Company to pay any principal amount or interest due hereunder within five (5) days of the date such payment is due;


(b)         failure by Pubco to issue, or cause it’s transfer agent to issue, to the Holder the number of shares of PPO Securities (if any) issuable to the Holder as a result of the conversion of this Note within ten (10) days after the Conversion Date;


(c)         (c) any event of default by the Company or any subsidiary under the Security Agreement, the Pledge Agreement or the Guaranty, each as amended by the Omnibus Amendment, shall have occurred and be continuing beyond all grace and/or cure periods, or the Security Agreement, the Pledge Agreement or the Guaranty, each as amended by the Omnibus Amendment, shall fail to remain in full force and effect prior to payment in full of all amounts payable under this Note, or any action shall be taken by the Company to discontinue the Security Agreement the Pledge Agreement or the Guaranty, each as amended by the Omnibus Amendment, or to assert the invalidity thereof prior to payment in full of all amounts payable under this Note;


(d)         the Company shall: (1) make a general assignment for the benefit of its creditors; (2) apply for or consent to the appointment of a receiver, trustee, assignee, custodian, sequestrator, liquidator or similar official for itself or any of its assets and properties; (3) commence a voluntary case for relief as a debtor under the United States Bankruptcy Code; (4) file with or otherwise submit to any governmental authority any petition, answer or other document seeking:  (A) reorganization, (B) an arrangement with creditors or (C) to take advantage of any other present or future applicable law respecting bankruptcy, reorganization, insolvency, readjustment of debts, relief of debtors, dissolution or liquidation; (5) file or otherwise submit any answer or other document admitting or failing to contest the material allegations of a petition or other document filed or otherwise submitted against it in any proceeding under any such applicable law; or (6) be adjudicated a bankrupt or insolvent by a court of competent jurisdiction;


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(e)         any case, proceeding or other action shall be commenced against the Company for the purpose of effecting, or an order, judgment or decree shall be entered by any court of competent jurisdiction approving (in whole or in part) anything specified in Section 2.01(d) hereof, or any receiver, trustee, assignee, custodian, sequestrator, liquidator or other official shall be appointed with respect to the Company, or shall be appointed to take or shall otherwise acquire possession or control of all or a substantial part of the assets and properties of the Company, and any of the foregoing shall continue unstayed and in effect for any period of sixty (60) days;


(f)          default shall occur with respect to any indebtedness for borrowed money of the Company (including, without limitation, any other Note(s)) or under any agreement under which such indebtedness may be issued by the Company and such default shall continue for more than the period of grace, if any, therein specified, if the aggregate amount of such indebtedness for which such default shall have occurred exceeds $50,000;


(g)         default shall occur with respect to any contractual obligation of the Company under or pursuant to any contract, lease, or other agreement to which the Company is a party and such default shall continue for more than the period of grace, if any, therein specified, if the aggregate amount of the Company’s contractual liability arising out of such default exceeds or is reasonably estimated to exceed $50,000;


(h)         final judgment for the payment of money in excess of $50,000 shall be rendered against the Company and the same shall remain undischarged for a period of twenty (20) days during which execution shall not be effectively stayed;


(i)          any material breach by the Company of any of its representations or warranties under the Purchase Agreement; or


(j)          any default, whether in whole or in part, shall occur in the due observance or performance of any obligations or other covenants, terms or provisions to be performed under this Note or the Purchase Agreement which is not cured by the Company within five (5) days after receipt of written notice thereof.


Section 2.02         If any Event of Default specified in Section 2.01(d) or Section 2.01(e) occurs, then the full principal amount of this Note, together with any other amounts owing in respect thereof, to the date of the Event of Default, shall become immediately due and payable without any action on the part of the Holder, and if any other Event of Default occurs, the full principal amount of this Note, together with any other amounts owing in respect thereof, to the date of acceleration shall become, at the Majority Holders’ election, immediately due and payable in cash.   Commencing five (5) days after the occurrence of any Event of Default, interest on this Note shall begin to accrue at the rate of interest specified in Section 1.01(b) PLUS five percent (5%) per annum , or such lower maximum amount of interest permitted to be charged under applicable law.  All Notes for which the full amount hereunder shall have been paid in accordance herewith shall promptly be surrendered to or as directed by the Company.  The Holder need not provide, and the Company hereby waives, any presentment, demand, protest or other notice of any kind, and the Holder may immediately and without expiration of any grace period enforce any and all of its rights and remedies hereunder and all other remedies available to it under applicable law.  Such declaration may be rescinded and annulled by the Majority Holders at any time prior to payment hereunder, and the Holder shall have all rights as a Note holder until such time, if any, as the full payment under this Section shall have been received by it.  No such rescission or annulment shall affect any subsequent Event of Default or impair any right consequent thereon.  “ Majority Holders ” means at any time a Holder or Holders then holding in excess of 50% of the then aggregate unpaid principal amount of the Notes.


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Article III.


Section 3.01          Negative Covenants .  So long as this Note shall remain in effect and until any outstanding principal and interest and all fees and all other expenses or amounts payable under this Note and the Purchase Agreement have been paid in full, unless the Majority Holders shall otherwise consent in writing, the Company shall not:


(a)          Senior or Pari Passu Indebtedness .  Incur, create, assume, guaranty or permit to exist any indebtedness that ranks senior in priority to, or pari passu with, the obligations under this Note, except for (i) indebtedness existing on the date hereof and set forth in Schedule A attached hereto and only to the extent that such indebtedness ranks senior in priority to or pari passu with the obligations under this Note and the Purchase Agreement on the Original Issue Date, (ii) indebtedness secured by a lien described in paragraph (ix) in the definition of “Permitted Liens” in the Security Agreement, as amended by the Omnibus Amendment, in an aggregate amount outstanding not to exceed $50,000; and (iii) indebtedness created as a result of a subsequent financing if the gross proceeds to the Company of such financing are equal to or greater than the aggregate principal amount of the Notes and the Notes are repaid in full upon the closing of such financing.


(b)          Liens .  Create, incur, assume or permit to exist any lien on any property or assets (including stock or other securities of the Company) now owned or hereafter acquired by it or on any income or revenues or rights in respect of any thereof, except Permitted Liens (as defined in the Security Agreement, as amended by the Omnibus Amendment).  


(c)          Dividends and Distributions .  Declare or pay, directly or indirectly, any dividend or make any other distribution (by reduction of capital or otherwise), whether in cash, property, securities or a combination thereof, with respect to any shares of its capital stock or directly or indirectly redeem, purchase, retire or otherwise acquire for value any shares of any class of its capital stock or set aside any amount for any such purpose; provided, however, that the Company may complete the Merger.


(d)          Limitation on Certain Payments and Prepayments .


(i)          Pay in cash any amount in respect of any indebtedness or preferred stock that may at the obligor’s option be paid in kind or in other securities; or


(ii)         Optionally prepay, repurchase or redeem or otherwise defease or segregate funds with respect to any indebtedness of the Company, other than for senior indebtedness existing on the date hereof and set forth in Schedule A attached hereto, indebtedness under this Note or the Purchase Agreement.


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Article IV.


Section 4.01          Notices .  Notices regarding this Note shall be sent to the parties at the following addresses, unless a party notifies the other parties, in writing, of a change of address:


 

If to the Company:

At the address set forth in the Purchase Agreement

 

 

 

 

If to the Holder:

At the address set forth in the Purchase Agreement


Section 4.02          Governing Law .  All questions concerning the construction, validity, enforcement and interpretation of this Note shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflicts of law thereof.  Each party agrees that all legal proceedings concerning the interpretations, enforcement and defense of the transactions contemplated by any of the Transaction Documents (whether brought against a party hereto or its respective affiliates, directors, officers, shareholders, employees or agents) shall be commenced in the state and federal courts sitting in the City of New York, Borough of Manhattan (the “ New York Courts ”).  Each party hereto hereby irrevocably submits to the exclusive jurisdiction of the New York Courts for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, or such New York Courts are improper or inconvenient venue for such proceeding.  Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Note and agrees that such service shall constitute good and sufficient service of process and notice thereof.  Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. Each party hereto hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Note or the transactions contemplated hereby.  If either party shall commence an action or proceeding to enforce any provisions of this Note, then the prevailing party in such action or proceeding shall be reimbursed by the other party for its reasonable attorney’s fees and other costs and expenses incurred with the investigation, preparation and prosecution or defense of such action or proceeding.


Section 4.03          Severability .  The invalidity of any of the provisions of this Note shall not invalidate or otherwise affect any of the other provisions of this Note, which shall remain in full force and effect.


Section 4.04          Entire Agreement and Amendments .  This Note, together with the Purchase Agreement and the Transaction Documents, each as amended by the Omnibus Amendment, represents the entire agreement between the parties hereto with respect to the subject matter hereof and there are no representations, warranties or commitments, except as set forth herein.  This Note may be amended only by an instrument in writing executed by the parties hereto.


Section 4.05          Transfer .  This Note shall not be transferred or assigned by the Holder except in accordance with the provisions of this Note and the Purchase Agreement, as amended by the Omnibus Amendment.



[Remainder of Page Intentionally Left Blank]



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IN WITNESS WHEREOF , with the intent to be legally bound hereby, the Company as executed this Note as of the date first written above.


TYME INC.



By:   /s/ Michael Demurjian

Name:   Michael Demurjian

Title:     Vice President


- 7 -


SCHEDULE A


SENIOR AND PARI PASSU INDEBTEDNESS


None.


- 8 -


Exhibit 10.19


TYME INC.

48 Wall Street - Suite 1100

New York, NY 10005


March 5, 2015

Mr. Christopher Brown

c/o GEM

590 Madison Ave.

36th Floor

New York, NY 10022


Re:          Second Amended and Restated 10% Secured Convertible Promissory Note


Dear Chris:


We refer to the Second Amended and Restated 10% Secured Convertible Promissory Note with Original Issue Date of July 11, 2014, in the principal amount of US$2,310,000 (the “Note”), of Tyme Inc. (the “Company”) payable to you.  This letter agreement amends the Note as follows:


 

(a)

The term “Pubco” as used in the Note is hereby amended to mean “Tyme Technologies, Inc. (f/k/a Global Group Enterprises Corp.), a Delaware corporation.”

 

 

 

 

(b)

The term “PPO Securities” as used in the Note is hereby amended to mean “shares of common stock, par value $0.0001 per share, of Pubco (“Pubco Common Stock”).

 

 

 

 

(c)

The term “Conversion Price” as used in the Note is hereby amended, effective as of the closing of the PPO, to mean a fixed price of $1.00 per share of Pubco Common Stock.


We and you acknowledge and agree that closings of the Merger and of the PPO for at least $9,100,000 (which includes, for purposes of determining such amount, the aggregate outstanding principal amount of this Note) have each occurred as provided in Section 1.02(a) of the Note.  Accordingly, all of the outstanding principal amount of the Note has automatically, without the necessity of any action by you, the Company and/or PubCo, been converted into 2,310,000 shares of Pubco Common Stock on the date hereof, and all accrued but unpaid interest on the Note shall be forgiven in full upon such conversion.


If you agree with the foregoing, please signify your acceptance by signing a copy of this letter in the place indicated below, and return the same to us.


Very truly yours,


TYME INC.


By: /s/ Steven Hoffman

Name:   Steven Hoffman

Title:     President

Acknowledged and agreed:


/s/ Christopher Brown

Christopher Brown



TYME TECHNOLOGIES, INC.


By: /s/ Steven Hoffman

Name:   Steven Hoffman

Title:     President



Exhibit 16


2451 N. McMullen Booth Road

Suite.308

Clearwater, FL 33759


Toll fee: 855.334.0934


Fax: 800.581.1908



Office of the Chief Accountant

Securities and Exchange Commission

100 F Street, NE

Washington, D.C. 20549



March 10, 2015



Dear Sir/Madam:


We have read the statements included in the Form 8-K dated March 11, 2015, of Tyme Technologies, Inc. to be filed with the Securities and Exchange Commission and are in agreement with the statements contained in Item 4.01 insofar as they relate to our audit for November 30, 2014 and 2013 and any subsequent interim period through the date of change in auditor decision by the Board of Directors.


Very truly yours,



/s/ DKM Certified Public Accountants


DKM Certified Public Accountants

Clearwater, Florida



Exhibit 21


SUBSIDIARIES OF TYME TECHNOLOGIES, INC.


Tyme Inc., a Delaware corporation


Luminant Biosciences, LLC, a Delaware limited liability company