Exhibit 4.1
DESCRIPTION
OF the registrant’s securities registered pursuant to section 12
of the securities exchange act of 1934
General
The descriptions of our capital stock and
certain provisions of our amended and restated certificate of incorporation and amended and restated bylaws are summaries and are
qualified by reference to the amended and restated certificate of incorporation and amended and restated bylaws that are currently
in effect.
Our amended and restated certificate of
incorporation provides for Common Stock and preferred stock, the rights, preferences and privileges of which may be designated
from time to time by our board of directors.
Our authorized capital stock consists of
110,000,000 shares, all with a par value of $0.001 per share, of which 100,000,000 shares are designated as Common Stock and 10,000,000
shares are designated as preferred stock.
Common Stock
The holders of our Common Stock are entitled
to one vote per share on all matters submitted to a vote of our stockholders. Subject to preferences that may be applicable to
any preferred stock outstanding at the time, the holders of outstanding shares of Common Stock are entitled to receive ratably
any dividends declared by our board of directors out of assets legally available therefor. In the event that we liquidate, dissolve
or wind up, holders of our Common Stock are entitled to share ratably in all assets remaining after payment of liabilities and
the liquidation preference of any then outstanding shares of preferred stock. Holders of Common Stock have no preemptive or conversion
rights or other subscription rights. There are no redemption or sinking fund provisions applicable to the Common Stock. As discussed
in “Risk Factors” above, certain provisions in our amended and restated certificate of incorporation and our amended
and restated bylaws may discourage, delay or prevent a merger, acquisition or other change of control involving us that our stockholders
may consider favorable. All outstanding shares of Common Stock are fully paid and non-assessable.
Except as otherwise required by Delaware
law, all stockholder action, other than the election of directors or certain amendments of our amended and restated certificate
of incorporation, is taken by the vote of a majority of the voting power of the shares present in person or represented by proxy
at the meeting and entitled to vote on the subject matter, at a meeting in which a quorum, consisting of a majority of the outstanding
shares of Common Stock is present in person or by proxy. The election of directors by our stockholders is determined by a plurality
of the voting power of the shares present in person or represented by proxy at the meeting and entitled to vote, at a meeting held
for such purposes at which a quorum, consisting of a majority of the outstanding shares of Common Stock, is present in person or
by proxy. Certain amendments to our amended and restated certificate of incorporation require the approval of holders of at least
sixty-six and two-third percent (66 2/3%) of the voting power of all then-outstanding shares of our Common Stock entitled to vote
generally in the election of directors, voting together as a single class.
We have never declared or paid any cash
dividends on our capital stock. We currently intend to retain all available funds and any future earnings to support our operations
and finance the growth and development of our business. We do not intend to pay cash dividends on our Common Stock for the foreseeable
future. Any future determination related to our dividend policy will be made at the discretion of our board of directors and will
depend upon, among other factors, our results of operations, financial condition, capital requirements, contractual restrictions,
business prospects and other factors our board of directors may deem relevant.
Preferred Stock
Our amended and restated certificate of
incorporation provides that our board of directors may, without further action by our stockholders, fix the rights, preferences,
privileges and restrictions of up to an aggregate of 10,000,000 shares of preferred stock in one or more series and authorize their
issuance. These rights, preferences and privileges could include dividend rights, conversion rights, voting rights, terms of redemption,
liquidation preferences, sinking fund terms and the number of shares constituting any series or the designation of such series,
any or all of which may be greater than the rights of our Common Stock. The issuance of our preferred stock could adversely affect
the voting power of holders of our Common Stock and the likelihood that such holders will receive dividend payments and payments
upon liquidation. In addition, the issuance of preferred stock could have the effect of delaying, deferring or preventing a change
of control or other corporate action. We have no present plan to issue any shares of preferred stock.
Description of the Warrants
Common Stock Warrants Issued in July
2019 Equity Offering (“July 2019 Warrant”)
On July 16, 2019, in connection with a
secondary public offering of shares of the Company’s Common Stock, the Company issued to H.C. Wainwright & Co., LLC,
as placement agent, a warrant to purchase 8,334 shares of Common Stock. The warrant was issued in reliance on the exemption from
registration provided by Section 4(a)(2) of the Securities Act and Rule 506(b) of Regulation D promulgated thereunder. Terms used
but not otherwise defined herein will have the meaning given them in the warrant, attached as Exhibit 4.1 to our Form 8-K filed
on July 17, 2019.
Duration and Exercise Price. The
warrant has an exercise price of $33.75 per share and will expire July 11, 2024.
Adjustment. For so long as the warrant
remains outstanding, the exercise price and number of shares of Common Stock issuable upon exercise of the warrant is subject to
adjustment as follows: (a) upon payment of a stock dividend or other distribution on a class or series of shares Common Stock,
not including shares issued under this warrant; (b) upon subdivision (by stock spilt, stock dividend, recapitalization, or otherwise)
or combination (by reverse stock split or otherwise) of shares of Common Stock; or (c) upon the issuance of any shares of capital
stock by reclassification of shares of the Common Stock.
Rights upon Distribution of Assets.
In the event that the Company declares or makes any dividend or other distribution of its assets to holders of its Common Stock,
the warrant holder will be entitled to participate in such distribution to the same extent that such holder would have participated
therein if the holder had held the number of shares of Common Stock acquirable upon exercise of the warrant.
Fundamental Transaction. In the
event of a Fundamental Transaction, as described in the warrant and generally including the sale, transfer or other disposition
of all or substantially all of our properties or assets; our consolidation or merger with or into another person or reorganization;
a recapitalization, reorganization or reclassification in which our Common Stock is converted into other securities, cash or property;
or any acquisition of our outstanding Common Stock that results in any person or group becoming the beneficial owner of 50% of
the voting power represented by our outstanding Common Stock, then the holders of the warrant will be entitled to receive upon
exercise of the warrant the kind and amount of securities, cash, assets or other property that the holders would have received
had they exercised the warrant immediately prior to such Fundamental Transaction. Subject to certain limitations, in the event
of a Fundamental Transaction the warrant holder may at its option require the Company or any Successor Entity to purchase the warrant
from the holder by paying to the holder an amount of cash equal to the Black Scholes Value of the remaining unexercised portion
of the warrant on the date of the consummation of the Fundamental Transaction.
Purchase Right. Any time that the
Company grants, issues, or sells any securities pro rata to all of the record holders of the Common Stock (the “July 2019
Purchase Right”), the holder of the warrant will be entitled to acquire the aggregate July 2019 Purchase Rights that the
holder could have acquired if the holder had held the number of shares of Common Stock acquirable upon exercise of the warrant.
However, to the extent that an exercise of the July 2019 Purchase Right would exceed the Beneficial Ownership Limitation (defined
below), then to such extent the July 2019 Purchase Right will be held in abeyance until such time, if ever, that complete exercise
of the July 2019 Purchase Right would not exceed the Beneficial Ownership Limitation.
Transferability. Subject to applicable
laws and restrictions on transfer, the warrant may be transferred at the option of the holder. The warrant is not listed on any
securities exchange or nationally recognized trading system.
Exercisability. After the Initial
Exercisability Date, the warrant will be exercisable, at the option of each holder, in whole or in part, by delivering to us a
duly executed exercise notice accompanied by payment in full for the number of shares of our Common Stock purchased upon such exercise.
If, at the time a holder exercises its warrant (but not sooner than six months following the date of the warrant), a registration
statement registering the issuance of the shares of Common Stock underlying the warrant under the Securities Act is not then effective
or available, nor is any current prospectus thereto available, and an exemption from registration under the Securities Act is not
available for the issuance of such shares, then in lieu of making the cash payment otherwise contemplated to be made to us upon
such exercise in payment of the aggregate exercise price, the holder may elect instead to receive upon such exercise (either in
whole or in part) the number of shares of Common Stock determined according to a formula set forth in the warrant.
Limitations on Exercise. A holder
(together with its affiliates) may not exercise any portion of the warrant to the extent that the holder would own more than 4.99%
of the outstanding Common Stock after exercise (the “Beneficial Ownership Limitation”), except that upon at least 61
days’ prior notice from the holder to us, the holder may increase the Beneficial Ownership Limitation up to 9.99% of the
number of shares of our Common Stock outstanding immediately after giving effect to the exercise, as such percentage ownership
is determined in accordance with the terms of the warrants. No fractional shares of Common Stock will be issued in connection with
the exercise of a warrant. In lieu of fractional shares, we will either pay the holder an amount in cash equal to the fractional
amount multiplied by the exercise price or round up to the next whole share.
Right as a Stockholder. Except as
otherwise provided in the warrant or by virtue of such holder’s ownership of shares of our Common Stock, the holders of the
warrant do not have the rights or privileges of holders of our Common Stock, including any voting rights, unless and until they
exercise their warrant.
Waivers and Amendments. Subject
to certain exceptions, any term of the warrant may be amended or waived with our written consent and the written consent of the
holders.
Compensation for Buy-In on Failure to
Timely Deliver Securities. Upon exercise of the warrant by the holder, if the Company fails to cause its transfer agent to
deliver the securities to holder by the required share delivery date set forth in the warrant, and as result the holder or the
holder’s broker must purchase shares of Common Stock in satisfaction of a sale by the holder of Common Stock that the holder
anticipated receiving upon an exercise of the warrant (a “July 2019 Buy-In”), then, generally, the holder may require
the Company to (1) pay to the holder the difference, if any, between the price at which the holder or its broker purchased Common
Stock to cover the July 2019 Buy-In and the price at which the same number of shares could have been purchased under the warrant
and (2) at the option of the holder, either reinstate the portion of the warrant that the holder exercised and the Company failed
to honor or issue the number of shares requested in such exercise.
Common Stock Warrants Issued in August
2018 Rights Offering
On August 13, 2018, in connection with
a rights offering of 267,853 shares of its Common Stock (the “2018 Rights Offering”), the Company issued to investors
warrants to purchase 267,853 shares of its Common Stock. Terms used but not otherwise defined herein will have the meaning given
them in the warrant, attached as Exhibit 4.1 to our Form 10-Q filed on August 14, 2018. This warrant has substantially similar
terms as the July 2019 Warrant described above, except that this warrant has an exercise price of $23.00 per share and will expire
August 13, 2023. In addition, this warrant has the following terms:
Right of Redemption. Subject to
certain limitations in the warrant, the Company may redeem for consideration equal to $0.01 all of the outstanding warrants for
which a Notice of Exercise has not been delivered if, six months after the warrants become exercisable, (1) the VWAP for each of
five consecutive trading days is $57.50 and (2) the holders of the warrants have no material, non-public information from the Company.
The Company must provide at least thirty days’ notice of the date of such redemption. Following such notice and prior to
the date of redemption, the warrants may be exercised for cash in accordance with the terms therein.
Common Stock Warrants Issued to Dealer-Manager
in August 2018 Rights Offering
In connection with the closing of the 2018
Rights Offering, the Company also issued a warrant to purchase 13,393 shares of Common Stock to Maxim Partners LLC, an affiliate
of the dealer-manager of the 2018 Rights Offering. The warrant was issued in reliance on the exemption from registration provided
by Section 4(a)(2) of the Securities Act and Rule 506(b) of Regulation D promulgated thereunder. Terms used but not otherwise defined
herein will have the meaning given them in the warrant, attached as Exhibit 4.2 to our Form 10-Q filed on August 14, 2018. This
warrant has substantially similar terms as the warrants described in the August 2018 Rights Offering described above, except that
this warrant has an exercise price of $34.50 per share, will expire July 25, 2023, and does not have a redemption feature.
Common Stock Warrants Issued in June
2018 Private Placement
On June 20, 2018, the Company issued warrants
to purchase a total of 56,696 shares of Common Stock to an investor in a private placement. The warrants were issued in reliance
on the exemption from registration provided by Section 4(a)(2) of the Securities Act and Rule 506(b) of Regulation D promulgated
thereunder. Terms used but not otherwise defined herein will have the meaning given them in the warrant, attached as Exhibit 4.1
to our Form 8-K filed on June 20, 2018.
Duration and Exercise Price. The
warrants have an exercise price of $36.40 per share and are exercisable after December 20, 2018. The warrants will expire in December
2023.
Adjustment. For so long as the warrants
remain outstanding, the exercise price and number of shares of Common Stock issuable upon exercise of the warrant is subject to
adjustment as follows: (a) as the Company’s board of directors deems appropriate, or (b) upon subdivision (by stock spilt,
stock dividend, recapitalization, or otherwise) or combination (by reverse stock split or otherwise) of shares of Common Stock.
Rights upon Distribution of Assets.
In the event that the Company declares or makes any dividend or other distribution of its assets to holders of its Common Stock,
the warrant holder will be entitled to participate in such distribution to the same extent that such holder would have participated
therein if the holder had held the number of shares of Common Stock acquirable upon exercise of the warrant.
Fundamental Transaction. In the
event of a Fundamental Transaction, as described in the warrants and generally including the sale, transfer or other disposition
of all or substantially all of our properties or assets, our consolidation or merger with or into another person or reorganization,
recapitalization or reclassification or the acquisition of our outstanding Common Stock which results in any person or group becoming
the beneficial owner of 50% of the voting power represented by our outstanding Common Stock, the holders of the warrants will be
entitled to receive upon exercise of the warrants the kind and amount of securities, cash, assets or other property that the holders
would have received had they exercised the warrants immediately prior to such Fundamental Transaction. Subject to certain limitations,
in the event of a Fundamental Transaction the warrant holder may at its option require the Company or any Successor Entity to purchase
the warrant from the holder by paying to the holder an amount of cash equal to the Black Scholes Value of the remaining unexercised
portion of the warrant on the date of the consummation of the Fundamental Transaction.
Purchase Right. Any time that the
Company grants, issues, or sells any securities pro rata to all of the record holders of the Common Stock (the “June 2018
Purchase Right”), the holder of the warrant will be entitled to acquire the aggregate June 2018 Purchase Rights which the
holder could have acquired if the holder had held the number of shares of Common Stock acquirable upon exercise of the warrant.
Transferability. Subject to applicable
laws and restrictions on transfer, the warrant may be transferred at the option of the holder. The warrants are not listed on any
securities exchange or nationally recognized trading system.
Exercisability. After the Initial
Exercisability Date, the warrants will be exercisable, at the option of each holder, in whole or in part, by delivering to us a
duly executed exercise notice accompanied by payment in full for the number of shares of our Common Stock purchased upon such exercise.
If, at the time a holder exercises its warrant, a registration statement registering the issuance of the shares of Common Stock
underlying the warrants under the Securities Act is not then effective or available and an exemption from registration under the
Securities Act is not available for the issuance of such shares, then in lieu of making the cash payment otherwise contemplated
to be made to us upon such exercise in payment of the aggregate exercise price, the holder may elect instead to receive upon such
exercise (either in whole or in part) the net number of shares of Common Stock determined according to a formula set forth in the
warrant.
Limitations on Exercise. A holder
(together with its affiliates) may not exercise any portion of the warrant to the extent that the holder would own more than 4.99%
of the outstanding Common Stock after exercise, except that upon at least 61 days’ prior notice from the holder to us, the
holder may increase the amount of ownership of outstanding stock after exercising the holder’s warrants up to 9.99% of the
number of shares of our Common Stock outstanding immediately after giving effect to the exercise, as such percentage ownership
is determined in accordance with the terms of the warrants. No fractional shares of Common Stock will be issued in connection with
the exercise of a warrant. In lieu of fractional shares, we will round up to the next whole share.
Right as a Stockholder. Except as
otherwise provided in the warrants or by virtue of such holder’s ownership of shares of our Common Stock, the holders of
the warrants do not have the rights or privileges of holders of our Common Stock, including any voting rights, unless and until
they exercise their warrants.
Waivers and Amendments. Subject
to certain exceptions, any term of the warrants may be amended or waived with our written consent and the written consent of the
holders.
Failure to Timely Deliver Securities.
Upon exercise of the warrant by the holder, if the Company or its transfer agent fails to deliver the securities to holder by the
required share delivery date set forth in the warrant, then, generally, the holder may require the Company to pay to the holder
an amount in cash to make the investor whole in connection with the Company’s failure to timely deliver securities.
Common Stock Warrants Issued to Participants
in November 2017 Offering
On November 21, 2017, in its public offering
of Common Stock, the Company issued warrants to purchase a total of 232,875 shares of Common Stock to investors. Terms used but
not otherwise defined herein will have the meaning given them in the warrant, attached as Exhibit 4.2 to our Form 8-K filed on
November 17, 2017.
Duration and Exercise Price. The
warrants have an exercise price of $30.00 per share, are exercisable immediately and will expire in November 2022, on the fifth
anniversary of the original issuance date.
Adjustment. For so long as the warrants
remain outstanding, the exercise price and number of shares of Common Stock issuable upon exercise of the warrant is subject to
adjustment as follows: (a) as the Company’s board of directors deems appropriate, (b) upon subdivision (by stock spilt, stock
dividend, recapitalization, or otherwise) or combination (by reverse stock split or otherwise) of shares of Common Stock, (c) upon
the issuance or announcement of contemplated issuance (“Dilutive Issuance”) of shares of Common Stock, options or convertible
securities for consideration per share less than the price equal to the exercise price of the warrants, except for certain Excluded
Securities issued in connection with an Approved Equity Plan, (d) at the option of the warrant holder upon the Company’s
entering into an agreement to issue securities that are issuable at a price which varies or may vary with the market price of the
Company’s Common Stock (the “Variable Price”), and (e) in certain cases upon granting of stock appreciation rights,
phantom stock rights or other rights with equity features, except for those granted pursuant to an Approved Equity Plan. For the
adjustments summarized in (c) above, the exercise price of the warrants outstanding generally will adjust upon the record date
of such issuance to the New Issuance Price (as defined in the warrant, and which will be based on the net price at which new securities
in the Dilutive Issuance are issued or subsequently adjusted, and in some cases, the lower of such price or the weighted average
trading price of the Common Stock for the four trading days immediately following public announcement of the Dilutive Issuance).
For the adjustments summarized in (d) above, the holder may, at its option, elect to adjust the exercise price of the warrants
to the Variable Price of securities sold by the Company pursuant to the agreement. Any adjustment made upon announcement or pursuant
to a Dilutive Issuance will not be readjusted in the event that such Dilutive Issuance does not occur.
Rights upon Distribution of Assets.
In the event that the Company declares or makes any dividend or other distribution of its assets to holders of its Common Stock,
the warrant holder will be entitled to participate in such distribution to the same extent that such holder would have participated
therein if the holder had held the number of shares of Common Stock acquirable upon exercise of the warrant.
Fundamental Transaction. In the
event of a Fundamental Transaction, as described in the warrants and generally including the sale, transfer or other disposition
of all or substantially all of our properties or assets, our consolidation or merger with or into another person or reorganization,
recapitalization or reclassification or the acquisition of our outstanding Common Stock which results in any person or group becoming
the beneficial owner of 50% of the voting power represented by our outstanding Common Stock, the holders of the warrants will be
entitled to receive upon exercise of the warrants the kind and amount of securities, cash, assets or other property that the holders
would have received had they exercised the warrants immediately prior to such Fundamental Transaction. Subject to certain limitations,
in the event of a Fundamental Transaction the warrant holder may at its option require the Company or any Successor Entity to purchase
the warrant from the holder by paying to the holder an amount of cash equal to the Black Scholes Value of the remaining unexercised
portion of the warrant on the date of the consummation of the Fundamental Transaction.
Purchase Right. Any time that the
Company grants, issues, or sells any securities pro rata to all of the record holders of the Common Stock (the “November
2017 Purchase Right”), the holder of the warrant will be entitled to acquire the aggregate November 2017 Purchase Rights
which the holder could have acquired if the holder had held the number of shares of Common Stock acquirable upon exercise of the
warrant.
Transferability. Subject to applicable
laws and restrictions on transfer, the warrant may be transferred at the option of the holder. The warrants are not listed on any
securities exchange or nationally recognized trading system.
Exercisability. The warrants will
be exercisable, at the option of each holder, in whole or in part, by delivering to us a duly executed exercise notice accompanied
by payment in full for the number of shares of our Common Stock purchased upon such exercise. If, at the time a holder exercises
its warrant, a registration statement registering the issuance of the shares of Common Stock underlying the warrants under the
Securities Act is not then effective or available and an exemption from registration under the Securities Act is not available
for the issuance of such shares, then in lieu of making the cash payment otherwise contemplated to be made to us upon such exercise
in payment of the aggregate exercise price, the holder may elect instead to receive upon such exercise (either in whole or in part)
the net number of shares of Common Stock determined according to a formula set forth in the warrant.
Limitations on Exercise. A holder
(together with its affiliates) may not exercise any portion of the warrant to the extent that the holder would own more than 4.99%
of the outstanding Common Stock after exercise, except that upon at least 61 days’ prior notice from the holder to us, the
holder may increase the amount of ownership of outstanding stock after exercising the holder’s warrants up to 9.99% of the
number of shares of our Common Stock outstanding immediately after giving effect to the exercise, as such percentage ownership
is determined in accordance with the terms of the warrants. No fractional shares of Common Stock will be issued in connection with
the exercise of a warrant. In lieu of fractional shares, we will either pay the holder an amount in cash equal to the fractional
amount multiplied by the exercise price or round up to the next whole share.
Right as a Stockholder. Except as
otherwise provided in the warrants or by virtue of such holder’s ownership of shares of our Common Stock, the holders of
the warrants do not have the rights or privileges of holders of our Common Stock, including any voting rights, unless and until
they exercise their warrants.
Limitation on Variable Rate Transactions.
The Company may not effect or enter into any agreement to sell securities in a Variable Rate Transaction.
Waivers and Amendments. Subject
to certain exceptions, any term of the warrants may be amended or waived with our written consent and the written consent of the
holders.
Failure to Timely Deliver Securities.
Upon exercise of the warrant by the holder, if the Company or its transfer agent fails to deliver the securities to holder by the
required share delivery date set forth in the warrant, or if the Company did not provide the required notice to holder that a registration
statement covering the issuance of the warrant shares subject to the exercise notice is not available and the Company is unable
to deliver the securities without any restrictive legend (each, an Exercise Failure), then, generally, the holder may rescind the
exercise in whole or in part or may require the Company to pay to the holder an amount in cash to make the investor whole in connection
with the Company’s failure to timely deliver securities.
Common Stock Warrant Issued to Underwriter
of November 2017 Offering
In November 2017, the Company issued to
Roth Capital Partners, LLC, as underwriter, a warrant to purchase 27,000 shares of Common Stock, which shares include a warrant
(in the form of warrant issued to the public) to purchase an additional 20,250 shares of Common Stock in connection with our November
2017 offering. The warrant was issued in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities
Act and Rule 506(b) of Regulation D promulgated thereunder. Terms used but not otherwise defined herein will have the meaning given
them in the warrant.
Duration and Exercise Price. The
warrants have an exercise price of $30.00 per share, are exercisable immediately and will expire in November 2022, on the fifth
anniversary of the original issuance date. The terms of the warrant are limited by FINRA Rule 5110(f)(2)(G), which provide, among
others, that the warrant may not be exercised more than five years from the date that the registration statement registering the
warrant was declared effective by the SEC.
Adjustment. The exercise price and
number of shares of Common Stock issuable upon exercise of the warrant is subject to adjustment as follows: (a) as the Company’s
board of directors deems appropriate, or (b) upon a stock dividend, stock split, reorganization, subdivision or combination of
shares of Common Stock.
Fundamental Transaction. In the
event of a Fundamental Transaction, as described in the warrants and generally including any reorganization, recapitalization or
reclassification of our Common Stock, the sale, transfer or other disposition of all or substantially all of our properties or
assets, our consolidation or merger with or into another person, the acquisition of more than 50% of our outstanding Common Stock,
or any person or group becoming the beneficial owner of 50% of the voting power represented by our outstanding Common Stock, the
holders of the warrants will be entitled to receive upon exercise of the warrants the kind and amount of securities, cash or other
property that the holders would have received had they exercised the warrants immediately prior to such Fundamental Transaction.
Purchase Right. Any time that the
Company grants, issues, or sells any securities pro rata to all of the record holders of the Common Stock (the “November
Purchase Right”), the holder of the warrant will be entitled to acquire the aggregate November Purchase Rights which the
holder could have acquired if the holder had held the number of shares of Common Stock acquirable upon exercise of the warrant.
Transferability. Subject to applicable
laws and restrictions on transfer, the warrant may be transferred at the option of the holder after the expiration of the Lock-Up
Period, which is 180 days after the registration statement registering the warrant became effective. The warrants are not listed
on any securities exchange or nationally recognized trading system.
Exercisability. The warrants will
be exercisable, at the option of each holder, in whole or in part, by delivering to us a duly executed exercise notice accompanied
by payment in full for the number of shares of our Common Stock purchased upon such exercise. If, at the time a holder exercises
its warrant, a registration statement registering the issuance of the shares of Common Stock underlying the warrants under the
Securities Act is not then effective or available and an exemption from registration under the Securities Act is not available
for the issuance of such shares, then in lieu of making the cash payment otherwise contemplated to be made to us upon such exercise
in payment of the aggregate exercise price, the holder may elect instead to receive upon such exercise (either in whole or in part)
the net number of shares of Common Stock determined according to a formula set forth in the warrant.
Limitations on Exercise. A holder
(together with its affiliates) may not exercise any portion of the warrant to the extent that the holder would own more than 4.99%
of the outstanding Common Stock after exercise, except that upon at least 61 days’ prior notice from the holder to us, the
holder may increase the amount of ownership of outstanding stock after exercising the holder’s warrants up to 9.99% of the
number of shares of our Common Stock outstanding immediately after giving effect to the exercise, as such percentage ownership
is determined in accordance with the terms of the warrants. No fractional shares of Common Stock will be issued in connection with
the exercise of a warrant. In lieu of fractional shares, we will either pay the holder an amount in cash equal to the fractional
amount multiplied by the exercise price or round up to the next whole share.
Right as a Stockholder. Except as
otherwise provided in the warrants or by virtue of such holder’s ownership of shares of our Common Stock, the holders of
the warrants do not have the rights or privileges of holders of our Common Stock, including any voting rights, unless and until
they exercise their warrants.
Waivers and Amendments. Subject
to certain exceptions, any term of the warrants may be amended or waived with our written consent and the written consent of the
holder.
Other Warrants
Prior to our initial public offering and
in connection with entering into a license agreement, we issued warrants to purchase 750 shares of Common Stock to the University
of Arizona. Terms used but not otherwise defined herein will have the meaning given them in the warrant.
Duration and Exercise Price. The
warrants expire in June 2020 and have an exercise price of $150.00 per share.
Adjustment. The exercise price and
number of shares of Common Stock issuable upon exercise of the warrant is subject to adjustment upon a stock dividend, stock split,
reorganization, subdivision, combination, reclassification or reorganization of shares of Common Stock.
Terminating Change. In the event
of a Terminating Change, defined to include any consolidation, merger, sale of all or substantially all of the assets of the Company,
or capital reorganization or certain reclassifications of the Company’s stock, the Company will pay to the holder the fair
market value of the warrant shares immediately prior to the Terminating Change.
Notice. The warrant holder is entitled
to notice of certain transactions, including when: (i) the Company takes a record of holders of its Common Stock for the purpose
of entitling or enabling them to receive any dividend or other distribution, or to receive any right to subscribe for or purchase
any shares of stock or any class or other securities, (ii) the Company offers to sell certain Company securities, (iii) the Company’s
Common Stock is reorganized or reclassified, (iv) any consolidation or merger of the Company or any conveyance of all or substantially
all of the assets of the Company, (v) the Company undergoes a voluntary or involuntary dissolution, liquidation or winding up of
the Company.
Transferability. Subject to applicable
laws and restrictions on transfer, the warrant may be transferred at the option of the holder.
Exercisability. The warrants will
be exercisable, at the option of each holder, in whole or in part, by delivering to us a duly executed exercise notice accompanied
by payment in full for the number of shares of our Common Stock purchased upon such exercise. At the election of the holder, in
lieu of making the cash payment otherwise contemplated to be made to us upon such exercise in payment of the aggregate exercise
price, the holder may elect instead to receive upon such exercise (either in whole or in part) the net number of shares of Common
Stock determined according to a formula set forth in the warrant.
Right as a Stockholder. Except as
otherwise provided in the warrants or by virtue of such holder’s ownership of shares of our Common Stock, the holders of
the warrants do not have the rights or privileges of holders of our Common Stock, including any voting rights, unless and until
they exercise their warrants.
Waivers and Amendments. Subject
to certain exceptions, any term of the warrants may be amended or waived with our written consent and the written consent of the
holder.
IPO Underwriter Warrant
In connection with our initial public offering
in December 2016, we issued warrants to purchase 9,375 shares of our Common Stock to Roth Capital Partners LLC.
Duration and Exercise Price. The
warrants have an exercise price of $192.00 per share. The warrant was fully vested and exercisable on the date of grant and will
expire in December 2021, on the fifth anniversary of the original issuance date.
Adjustment. The exercise price and
number of shares of Common Stock issuable upon exercise of the warrant is subject to adjustment as follows: (a) as the Company’s
board of directors deems appropriate, or (b) upon a stock dividend, stock split, reorganization, subdivision or combination of
shares of Common Stock.
Rights upon Distribution of Assets.
In the event that the Company declares or makes any dividend or other distribution of its assets to holders of its Common Stock,
the warrant holder will be entitled to participate in such distribution to the same extent that such holder would have participated
therein if the holder had held the number of shares of Common Stock acquirable upon exercise of the warrant.
Fundamental Transaction. In the
event of a Fundamental Transaction, as described in the warrants and generally including any reorganization, recapitalization or
reclassification of our Common Stock, the sale, transfer or other disposition of all or substantially all of our properties or
assets, our consolidation or merger with or into another person, the acquisition of more than 50% of our outstanding Common Stock,
or any person or group becoming the beneficial owner of 50% of the voting power represented by our outstanding Common Stock, the
holders of the warrants will be entitled to receive upon exercise of the warrants the kind and amount of securities, cash or other
property that the holders would have received had they exercised the warrants immediately prior to such Fundamental Transaction.
The Company may not enter into a Fundamental Transaction unless the successor entity assumes all obligations of the Company under
the warrant pursuant to an agreement in form and substance reasonably satisfactory to the holder.
Purchase Right. Any time that the
Company grants, issues, or sells any securities pro rata to all of the record holders of the Common Stock (the “December
2016 Purchase Right”), the holder of the warrant will be entitled to acquire the aggregate December 2016 Purchase Rights
which the holder could have acquired if the holder had held the number of shares of Common Stock acquirable upon exercise of the
warrant.
Transferability. Subject to applicable
laws and restrictions on transfer, the warrant may be transferred at the option of the holder. The warrants are not listed on any
securities exchange or nationally recognized trading system.
Exercisability. The warrants will
be exercisable, at the option of each holder, in whole or in part, by delivering to us a duly executed exercise notice accompanied
by payment in full for the number of shares of our Common Stock purchased upon such exercise. If, at the time a holder exercises
its warrant, a registration statement registering the issuance of the shares of Common Stock underlying the warrants under the
Securities Act is not then effective or available and an exemption from registration under the Securities Act is not available
for the issuance of such shares, then in lieu of making the cash payment otherwise contemplated to be made to us upon such exercise
in payment of the aggregate exercise price, the holder may elect instead to receive upon such exercise (either in whole or in part)
the net number of shares of Common Stock determined according to a formula set forth in the warrant.
Limitations on Exercise. A holder
(together with its affiliates) may not exercise any portion of the warrant to the extent that the holder would own more than 4.99%
of the outstanding Common Stock after exercise, except that upon at least 61 days’ prior notice from the holder to us, the
holder may increase the amount of ownership of outstanding stock after exercising the holder’s warrants up to 9.99% of the
number of shares of our Common Stock outstanding immediately after giving effect to the exercise, as such percentage ownership
is determined in accordance with the terms of the warrants. No fractional shares of Common Stock will be issued in connection with
the exercise of a warrant. In lieu of fractional shares, we will either pay the holder an amount in cash equal to the fractional
amount multiplied by the exercise price or round up to the next whole share.
Right as a Stockholder. Except as
otherwise provided in the warrants or by virtue of such holder’s ownership of shares of our Common Stock, the holders of
the warrants do not have the rights or privileges of holders of our Common Stock, including any voting rights, unless and until
they exercise their warrants.
Waivers and Amendments. Subject
to certain exceptions, any term of the warrants may be amended or waived with our written consent and the written consent of the
holder.
For additional information about outstanding
warrants, please read “Item 1. Financial Statements — Notes to Condensed Financial Statements — Note 11. Common
Stock Warrants and Common Stock Warrant Liability” in our Quarterly Report on Form 10-Q filed with the SEC on May 15, 2018,
as amended by Form 10-Q/A filed with the SEC on May 22, 2018.
Registration Rights
The Common Stock warrants issued under
our 2018 Rights Offering provide for a registration right. During any period that the holders of these warrants wish to exercise
their warrants and (1) we do not have an effective registration statement or current prospectus relating thereto (2) and an exemption
to registration is not available in the opinion of the holder’s counsel, then we must immediately file a registration statement
and use our best efforts to have it declared effective within 30 days.
Anti-Takeover Provisions
Certificate of Incorporation and
Bylaws
Because our stockholders do not have cumulative
voting rights, our stockholders holding a majority of the outstanding shares of Common Stock outstanding will be able to satisfy
the quorum requirement and be able to elect all of our directors by a plurality of the voting power of the shares present in person
or by proxy. Our amended and restated certificate of incorporation and amended and restated bylaws provide that all stockholder
actions must be effected at a duly called meeting of stockholders and not by written consent. A special meeting of stockholders
may be called by a resolution adopted by a majority of our board, our chair of the board, our chief executive officer or the president
in absence of the chief executive officer. Any power of the stockholders to call a special meeting is specifically denied by the
terms of our amended and restated certificate of incorporation.
Our board of directors is divided into
three classes with staggered three-year terms. These provisions make it more difficult for our existing stockholders to replace
our board of directors as well as for another party to obtain control of us by replacing our board of directors. Since our board
of directors has the power to retain and discharge our officers, these provisions could also make it more difficult for existing
stockholders or another party to effect a change in management. In addition, the authorization of 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 obtain control of us.
These provisions are intended to enhance
the likelihood of continued stability in the composition of our board of directors and its policies and to discourage certain types
of transactions that may involve an actual or threatened acquisition of us. These provisions are also designed to reduce our vulnerability
to an unsolicited acquisition proposal and to discourage certain tactics that may be used in proxy fights. However, such provisions
could have the effect of discouraging others from making tender offers for our shares and may have the effect of deterring hostile
takeovers or delaying changes in our control or management. As a consequence, these provisions also may inhibit fluctuations in
the market price of our stock that could result from actual or rumored takeover attempts.
Section 203 of the Delaware General
Corporation Law
We are subject to Section 203 of the Delaware
General Corporation Law, which prohibits a Delaware corporation from engaging in any business combination with any interested stockholder
for a period of three years after the date that such stockholder became an interested stockholder, with the following exceptions:
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Before such date, the board of directors of the corporation approved either the business combination or the transaction that resulted in the stockholder becoming an interested stockholder;
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Upon closing of the transaction that resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction began, excluding for purposes of determining the voting stock outstanding (but not the outstanding voting stock owned by the interested stockholder) those shares owned by (i) persons who are directors and also officers and (ii) employee stock plans in which employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer; or
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On or after such date, the business combination is approved by the board of directors and authorized at an annual or special meeting of the stockholders, and not by written consent, by the affirmative vote of at least sixty-six and two-third percent (66 2/3%) of the outstanding voting stock that is not owned by the interested stockholder.
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In general, Section 203 defines business
combination to include the following:
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Any merger or consolidation involving the corporation and the interested stockholder;
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Any sale, lease, exchange, mortgage, transfer, pledge or other disposition of 10% or more of the assets of the corporation involving the interested stockholder;
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Subject to certain exceptions, any transaction that results in the issuance or transfer by the corporation of any stock of the corporation to the interested stockholder;
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Any transaction involving the corporation that has the effect of increasing the proportionate share of the stock or any class or series of the corporation beneficially owned by the interested stockholder; or
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The receipt by the interested stockholder of the benefit of any loss, advances, guarantees, pledges or other financial benefits by or through the corporation.
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In general, Section 203 defines an “interested
stockholder” as an entity or person who, together with the person’s affiliates and associates, beneficially owns, or
within three years prior to the time of determination of interested stockholder status did own, 15% or more of the outstanding
voting stock of the corporation.
Choice of Forum
Our amended and restated certificate of
incorporation provides that the Court of Chancery of the State of Delaware is the exclusive forum for any derivative action or
proceeding brought on our behalf; any action asserting a claim of a breach of fiduciary duty owed by any director, officer or other
employee to the Company or the Company’s stockholders; any action asserting a claim against us or any of our directors, officers
or other employees arising pursuant to the Delaware General Corporation Law, our amended and restated certificate of incorporation
or our amended and restated bylaws; or any action or proceeding asserting a claim against us or any of our directors, officers
or other employees that is governed by the internal affairs doctrine.
However, this exclusive forum provision
would not apply to suits brought to enforce any duty or liability created by the Securities Exchange Act of 1934, as amended, or
the rules and regulations thereunder, or any other claim for which the federal courts have exclusive jurisdiction. Furthermore,
this provision may apply to Securities Act claims and federal courts have concurrent jurisdiction over all suits brought to enforce
any duty or liability created by the Securities Act or the rules and regulations thereunder. Accordingly, there is uncertainty
as to whether a court would enforce this provision and that our stockholders cannot waive compliance with the federal securities
laws and the rules and regulations thereunder.
Listing of our Common Stock
Our Common Stock is listed on The Nasdaq
Capital Market under the symbol “SNES.”
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