|
Delaware
|
| |
2834
|
| |
20-1295171
|
|
|
(State or other jurisdiction
of incorporation or organization) |
| |
(Primary Standard Industrial
Classification Code Number) |
| |
(I.R.S. Employer
Identification Number)
|
|
|
Yvan-Claude Pierre, Esq.
Michael Sanders, Esq. Daniel I. Goldberg, Esq. Reed Smith LLP 599 Lexington Avenue New York, New York 10022 (212) 521-5400 (212) 521-5450 — Facsimile |
| |
Anthony J. Marsico, Esq.
Greenberg Traurig, LLP MetLife Building 200 Park Avenue New York, NY 10166 (212) 801-9200 (212) 801-6400 — Facsimile |
|
|
Large accelerated filer
|
| | ☐ | | | Accelerated filer | | | ☐ | |
| Non-accelerated filer | | | ☐ (Do not check if a smaller reporting company) | | |
Smaller reporting company
|
| | ☒ | |
Title of each class of securities to be registered
|
| |
Proposed Maximum
Aggregate Offering Price (1) |
| |
Amount of
Registration Fee |
| ||||||
Common stock, par value $0.001 per share
(2)
|
| | | $ | 25,116,000 | | | | | $ | 2,918.48 | | |
Representative’s Warrants to Purchase Common Stock
(3)
|
| | | | — | | | | | | — | | |
Common Stock Underlying Representative’s Warrants
(2)(4)
|
| | | $ | 1,092,000 | | | | | $ | 126.89 | | |
Total Registration Fee
|
| | | $ | 26,208,000 | | | | | $ | 3,045.37 (5) | | |
| | | | | | | |
| PRELIMINARY PROSPECTUS | | |
SUBJECT TO COMPLETION
|
| |
DATED MAY 21, 2015
|
|
| | | | | | | | |
| | |
Per Share
|
| |
Total
|
| ||||||
Public offering price
|
| | | $ | | | | | $ | | | ||
Underwriting discounts and commissions
(1)
|
| | | $ | | | | | $ | | | ||
Offering proceeds to us, before expenses
|
| | | $ | | | | | $ | | | |
| Aegis Capital Corp | | |
Chardan Capital Markets, LLC
|
|
| | |
Page
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| | | | 108 | |
| | | | 127 | |
| | | | 129 | |
| | | | 131 | |
| | | | 134 | |
| | | | 137 | |
| | | | 145 | |
| | | | 145 | |
| | | | 145 | |
| | | | F-1 |
| | |
Three Months Ended
March 31, |
| |
Years ended December 31,
|
| ||||||||||||||||||
| | |
2015
|
| |
2014
|
| |
2014
|
| |
2013
|
| ||||||||||||
| | |
(Unaudited)
|
| | | |||||||||||||||||||
Statement of Operations Data: | | | | | | ||||||||||||||||||||
Operating costs and expenses: | | | | | | ||||||||||||||||||||
Research and development
|
| | | $ | 31,460 | | | | | $ | 5,850 | | | | | $ | 113,931 | | | | | $ | 461,551 | | |
Patent costs
|
| | | | 62,274 | | | | | | 36,782 | | | | | | 197,731 | | | | | | 292,358 | | |
General and administrative
|
| | | | 1,302,565 | | | | | | 243,909 | | | | | | 1,969,960 | | | | | | 1,356,888 | | |
Total operating expenses
|
| | | | 1,396,299 | | | | | | 286,541 | | | | | | 2,281,622 | | | | | | 2,110,797 | | |
Loss from operations
|
| | | | (1,396,299 ) | | | | | | (286,541 ) | | | | | | (2,281,622 ) | | | | | | (2,110,797 ) | | |
Other expense (income): | | | | | | ||||||||||||||||||||
Interest income
|
| | | | (2,204 ) | | | | | | (204 ) | | | | | | (525 ) | | | | | | (1,677 ) | | |
Interest expense
|
| | | | — | | | | | | — | | | | | | 213,516 | | | | | | 6,076 | | |
Other income
|
| | | | (7,091 ) | | | | | | — | | | | | | (21,148 ) | | | | | | (19,365 ) | | |
Total other expense (income)
|
| | | | (9,295 ) | | | | | | (204 ) | | | | | | 191,843 | | | | | | (14,966 ) | | |
Net loss
|
| | | | (1,387,004 ) | | | | | | (286,337 ) | | | | | | (2,473,465 ) | | | | | | (2,095,831 ) | | |
Cumulative preferred stock dividends
|
| | | | 149,283 | | | | | | 147,445 | | | | | | 589,462 | | | | | | 547,303 | | |
Accretion of discount on Series C preferred
stock |
| | | | 31,818 | | | | | | — | | | | | | 8,580 | | | | | | — | | |
Net loss applicable to common stockholders
|
| | | $ | (1,568,105 ) | | | | | $ | (433,782 ) | | | | | $ | (3,071,507 ) | | | | | $ | (2,643,134 ) | | |
Net loss per share, basic and diluted
|
| | | $ | (3.37 ) | | | | | $ | (0.96 ) | | | | | $ | (6.79 ) | | | | | $ | (5.86 ) | | |
Weighted average shares outstanding, basic and diluted
|
| | | | 465,384 | | | | | | 451,398 | | | | | | 452,509 | | | | | | 451,398 | | |
Pro forma information (1) | | | | | | ||||||||||||||||||||
Pro forma net loss
|
| | | $ | (1,387,004 ) | | | | | $ | (286,337 ) | | | | | $ | (2,473,465 ) | | | | | $ | (2,095,831 ) | | |
Pro forma net loss per share, basic and diluted (unaudited)
|
| | | $ | (0.37 ) | | | | | $ | (0.09 ) | | | | | $ | (0.73 ) | | | | | $ | (0.64 ) | | |
Pro forma weighted average shares outstanding, basic and diluted
|
| | | | 3,788,061 | | | | | | 3,355,752 | | | | | | 3,384,952 | | | | | | 3,276,426 | | |
| | |
March 31, 2015
|
| |||||||||||||||
| | |
Actual
|
| |
Pro Forma
|
| |
Pro Forma
As Adjusted (1) |
| |||||||||
| | |
(Unaudited)
|
| |||||||||||||||
Balance Sheet Data: | | | | | | | | | | | | | | | | | | | |
Cash and cash equivalents
|
| | | $ | 1,975,313 | | | | | $ | 1,975,313 | | | | | $ | 19,393,713 | | |
Working Capital
|
| | | | 808,628 | | | | | | 808,628 | | | | | | 18,227,028 | | |
Total assets
|
| | | | 2,343,729 | | | | | | 2,343,729 | | | | | | 19,762,129 | | |
Accounts payable, accrued expenses and other liabilities
|
| | | | 1,223,038 | | | | | | 1,223,038 | | | | | | 1,223,038 | | |
Preferred stock subject to redemption
|
| | | | 16,384,715 | | | | | | — | | | | | | — | | |
Common stock and preferred stock
|
| | | | 9,353 | | | | | | 3,788 | | | | | | 5,608 | | |
Additional paid-in capital
|
| | | | 4,199,047 | | | | | | 20,589,327 | | | | | | 38,005,907 | | |
Accumulated deficit
|
| | | | (19,472,424 ) | | | | | | (19,472,424 ) | | | | | | (19,472,424 ) | | |
Total stockholders’ equity (deficit)
|
| | | | (15,264,024 ) | | | | | | 1,120,691 | | | | | | 18,539,091 | | |
| | |
As of March 31, 2015
|
| ||||||||||||||||||
| | |
Actual
|
| |
Pro Forma
|
| |
Pro Forma
As Adjusted (1) |
| ||||||||||||
| | | | | | | | |
(Unaudited)
|
| | | | | | | ||||||
Cash and cash equivalents
|
| | | $ | 1,975,313 | | | | | $ | 1,975,313 | | | | | $ | 19,393,713 | | | |||
Long-term debt (inclusive of current portion)
|
| | | | — | | | | | | — | | | |
|
| ||||||
Preferred stock subject to redemption, $0.001 par value,
16,378,646 shares authorized, 14,869,662 shares issued and outstanding, actual; 16,378,646 shares authorized, no shares issued and outstanding, pro forma; and no shares authorized, no shares issued and outstanding, pro forma as adjusted |
| | | | 16,384,715 | | | | | | — | | | |
|
| ||||||
Preferred stock, $0.001 par value, 8,887,500 shares
authorized, issued and outstanding, actual; 8,887,500 shares authorized, no shares issued and outstanding, pro forma; and 5,000,000 shares authorized, no shares issued and outstanding, pro forma as adjusted |
| | | | 8,888 | | | | | | — | | | |
|
| ||||||
Common stock, $0.001 par value, 50,000,000 shares authorized, 465,384 shares issued and outstanding, actual; 50,000,000 shares authorized, 3,788,060 shares issued and outstanding, pro forma; and 25,000,000 shares authorized, 5,608,060 shares issued and outstanding, pro forma as adjusted
|
| | | | 465 | | | | | | 3,788 | | | | | | 5,608 | | | |||
Additional paid-in capital
|
| | | | 4,199,047 | | | | | | 20,589,327 | | | | | | 38,005,907 | | | |||
Accumulated deficit
|
| | | | (19,472,424 ) | | | | | | (19,472,424 ) | | | | | | (19,472,424 ) | | | |||
Total stockholders’ equity (deficit)
|
| | | | (15,264,024 ) | | | | | | 1,120,691 | | | | | | 18,539,091 | | | |||
Total capitalization
|
| | | $ | 1,120,691 | | | | | $ | 1,120,691 | | | | | $ | 18,539,091 | | | |||
|
|
Assumed initial public offering price per share
|
| | | | | | | | | $ | 11.00 | | | ||
|
Historical net tangible deficit per share as of March 31, 2015
|
| | | $ | (32.80 ) | | | | | | | | | ||
|
Increase per share due to the conversion of all shares of preferred stock
|
| | | $ | 33.10 | | | | | | | | | ||
|
Pro forma net tangible book value per share as of March 31, 2015
|
| | | $ | 0.30 | | | | | | | | | ||
|
Increase per share attributable to new investors
|
| | | $ | 3.01 | | | | | | | | | ||
|
Pro forma net tangible book value per share after this offering
|
| | | | | | | | | | 3.31 | | | ||
|
Dilution per share to new investors
|
| | | | | | | | | $ | 7.69 | | | ||
|
| | |
Shares Purchased
|
| |
Total Consideration
|
| |
Average Price
Per Share |
| ||||||||||||||||||||||||||
| | |
Number
|
| |
Percentage
|
| |
Amount
|
| |
Percentage
|
| |||||||||||||||||||||||
Existing stockholders
|
| | | | 3,788,060 | | | | | | 67.55 % | | | | | $ | 17,140,295 | | | | | | 46.13 % | | | | | $ | 4.52 | | | |||||
New Investors
|
| | | | 1,820,000 | | | | | | 32.45 % | | | | | $ | 20,020,000 | | | | | | 53.87 % | | | | | $ | 11.00 | | | |||||
Total
|
| | | | 5,608,060 | | | | | | 100.00 % | | | | | $ | 37,160,295 | | | | | | 100.00 % | | | | | $ | 6.63 | | | |||||
|
| | |
Three months ended March 31, 2015
|
| |||||||||
| | |
Low
|
| |
High
|
| ||||||
Expected dividend yield
|
| | | | 0.00 % | | | | | | 0.00 % | | |
Expected stock-price volatility
|
| | | | 51.45 % | | | | | | 65.06 % | | |
Risk-free interest rate
|
| | | | 0.77 % | | | | | | 2.00 % | | |
Expected term of options
|
| | | | 5 | | | | | | 10 | | |
Stock price
|
| | | $ | 5.86 | | | | | $ | 5.86 | | |
|
Year
|
| |
Share Class
|
| |
Price per Share
|
|
|
2005
|
| |
Common Stock
(a)
|
| |
$1.79
|
|
|
2006
|
| |
Series A-2 Preferred Stock
(a)(b)
|
| |
$0.40
|
|
|
2008 – 2009
|
| |
Series A-3 Preferred Stock
(b)
|
| |
$0.62
|
|
|
2010 – 2013
|
| |
Series B Preferred Stock
(b)
|
| |
$1.19
|
|
|
2014
|
| |
Series C Preferred Stock
(b)
|
| |
$1.30
|
|
| | |
Valuation Date
|
| |||||||||||||||
| | |
November 7, 2013
|
| |
July 31, 2012
|
| |
December 31, 2010
|
| |||||||||
Risk-free rate
|
| | | | 0.55 % | | | | | | 0.57 % | | | | | | 2.01 % | | |
Maturity (years)
|
| | | | 3.00 | | | | | | 4.00 | | | | | | 5.00 | | |
Volatility
|
| | | | 58.00 % | | | | | | 61.00 % | | | | | | 61.00 % | | |
Grant Date
|
| |
Number of Common
Shares Underlying Options Granted |
| |
Exercise Price
per Common Share |
| |
Estimated Fair Value
per Share of Common Stock |
| |
Intrinsic Value
Option |
| ||||||
2005
|
| | | | 58,321 | | | |
$0.07
|
| | | $ | 1.79 | | | |
$1.72
|
|
2009
|
| | | | 60,559 | | | |
$0.72 – $0.79
|
| | | $ | 4.43 | | | |
$3.71 – $3.64
|
|
2011
|
| | | | 33,846 | | | |
$1.00
|
| | | $ | 1.00 | | | |
$0.00
|
|
2012
|
| | | | 60,019 | | | |
$1.14
|
| | | $ | 1.14 | | | |
$0.00
|
|
2013
|
| | | | 100,000 | | | |
$1.14 – $1.30
|
| | | $ | 1.14 | | | |
$0.00
|
|
2014
|
| | | | 1,626,740 | | | |
$5.86 – $13.23
|
| | | $ | 5.86 | | | |
$0.00
|
|
| | |
Options
|
| |
Weighted Average
Exercise Price |
| ||||||||
Outstanding at December 31, 2014
|
| | | | 1,788,717 | | | | | $ | 7.128 | | | ||
Granted
|
| | | | — | | | | | | — | | | ||
Exercised/Expired/Forfeited
|
| | | | (918 ) | | | | | | (5.863 ) | | | ||
Outstanding at March 31, 2015
|
| | | | 1,787,799 | | | | | $ | 7.131 | | | ||
Exercisable at March 31, 2015
|
| | | | 208,918 | | | | | $ | 4.419 | | | ||
Expected to be vested
|
| | | | 1,578,881 | | | | | $ | 7.490 | | | ||
|
| | |
For the Three Months Ended March 31,
|
| |
Dollar
Change |
| |
Percentage
Change |
| |||||||||||||||||||
| | |
2015
|
| |
2014
|
| ||||||||||||||||||||||
Statement of Operations Data: | | | | | | ||||||||||||||||||||||||
Operating costs and expenses | | | | | | | | | | | | | | | | | | | | | | | | | | ||||
Research and development
|
| | | $ | 31,460 | | | | | $ | 5,850 | | | | | $ | 25,610 | | | | | | 438 % | | | ||||
Patent costs
|
| | | | 62,274 | | | | | | 36,782 | | | | | | 25,492 | | | | | | 69 % | | | ||||
General and administrative
|
| | | | 1,302,565 | | | | | | 243,909 | | | | | | 1,058,656 | | | | | | 434 % | | | ||||
Total operating expenses
|
| | | | 1,396,299 | | | | | | 286,541 | | | | | | 1,109,758 | | | | | | 387 % | | | ||||
Loss from operations
|
| | | | (1,396,299 ) | | | | | | (286,541 ) | | | | | | (1,109,758 ) | | | | | | 387 % | | | ||||
Other income: | | | | | | | | | | | | | | | | | | | | | | | | | | ||||
Interest income
|
| | | | 2,204 | | | | | | 204 | | | | | | 2,000 | | | | | | 980 % | | | ||||
Other income
|
| | | | 7,091 | | | | | | — | | | | | | 7,091 | | | | | | 100 % | | | ||||
Total other income
|
| | | | 9,295 | | | | | | 204 | | | | | | 9,091 | | | | | | 4,456 % | | | ||||
Net Loss
|
| | | $ | (1,387,004 ) | | | | | $ | (286,337 ) | | | | | $ | (1,100,667 ) | | | | | | 384 % | | | ||||
|
| | |
For the Year Ended December 31,
|
| |
Dollar
Change |
| |
Percentage
Change |
| |||||||||||||||||||
| | |
2014
|
| |
2013
|
| ||||||||||||||||||||||
Statement of Operations Data: | | | | | | ||||||||||||||||||||||||
Operating costs and expenses | | | | ||||||||||||||||||||||||||
Research and development
|
| | | $ | 113,931 | | | | | $ | 461,551 | | | | | $ | (347,620 ) | | | | | | (75 )% | | | ||||
Patent costs
|
| | | | 197,731 | | | | | | 292,358 | | | | | | (94,627 ) | | | | | | (32 )% | | | ||||
General and administrative
|
| | | | 1,969,960 | | | | | | 1,356,888 | | | | | | 613,072 | | | | | | 45 % | | | ||||
Total operating expenses
|
| | | | 2,281,622 | | | | | | 2,110,797 | | | | | | 170,825 | | | | | | 8 % | | | ||||
Loss from operations
|
| | | | (2,281,622 ) | | | | | | (2,110,797 ) | | | | | | (170,825 ) | | | | | | 8 % | | | ||||
Other expense (income): | | | | | | ||||||||||||||||||||||||
Interest income
|
| | | | (525 ) | | | | | | (1,677 ) | | | | | | 1,152 | | | | | | (69 )% | | | ||||
Interest expense
|
| | | | 213,516 | | | | | | 6,076 | | | | | | 207,440 | | | | | | 3,414 % | | | ||||
Other income
|
| | | | (21,148 ) | | | | | | (19,365 ) | | | | | | (1,783 ) | | | | | | 9 % | | | ||||
Total other expense (income)
|
| | | | 191,843 | | | | | | (14,966 ) | | | | | | 206,809 | | | | | | (1,382 )% | | | ||||
Net Loss
|
| | | $ | (2,473,465 ) | | | | | $ | (2,095,831 ) | | | | | $ | (377,634 ) | | | | | | 18 % | | | ||||
|
| | |
For the Three Months Ended March 31,
|
| |
For the Year Ended December 31,
|
| ||||||||||||||||||||||
| | |
2015
|
| |
2014
|
| |
2014
|
| |
2013
|
| ||||||||||||||||
Net cash used in: | | | | | | | | | | | | | | | | | | | | | | | | | | ||||
Operating activities
|
| | | $ | (618,526 ) | | | | | $ | (289,072 ) | | | | | $ | (1,157,385 ) | | | | | $ | (1,956,914 ) | | | ||||
Investing activities
|
| | | | — | | | | | | (1,166 ) | | | | | | (1,166 ) | | | | | | (8,692 ) | | | ||||
Financing activities
|
| | | | (153,409 ) | | | | | | (9,000 ) | | | | | | 3,457,573 | | | | | | 643,995 | | | ||||
Net decrease in cash
|
| | | $ | (771,935 ) | | | | | $ | (299,238 ) | | | | | $ | 2,299,022 | | | | | $ | (1,321,611 ) | | | ||||
|
Name
|
| |
Age
|
| |
Position(s)
|
|
Executive Officers: | | | | ||||
Michael D. Step | | |
55
|
| | Chief Executive Officer and Director | |
Samuel O. Lynn | | |
47
|
| | Chief Financial Officer | |
Andrew J. Ritter | | |
32
|
| | President and Director | |
Ira E. Ritter | | |
65
|
| | Executive Chairman, Chief Strategic Officer and Director | |
Non-Employee Directors: | | | | ||||
Noah Doyle | | |
47
|
| | Director | |
Matthew W. Foehr | | |
42
|
| | Director | |
Paul V. Maier | | |
67
|
| | Director | |
Gerald T. Proehl | | |
56
|
| | Director | |
Name and Principal Position
|
| |
Year
|
| |
Salary
($) |
| |
Bonus
($) |
| |
Option
Awards (1) ($) |
| |
All Other
Compensation ($) |
| |
Total
($) |
| ||||||||||||||||||
Michael D. Step
Chief Executive Officer |
| | | | 2014 | | | | | $ | 90,000 | | | | | $ | — | | | | | $ | 2,332,410 | | | | | $ | — | | | | | $ | 2,422,410 | | |
Andrew J. Ritter
President |
| | | | 2014 | | | | | $ | 204,070 | | | | | $ | — | | | | | $ | 1,253,638 | | | | | $ | 7,428 | | | | | $ | 1,465,136 | | |
Ira E. Ritter
Executive Chairman and Chief Strategic Officer |
| | | | 2014 | | | | | $ | 182,922 | | | | | $ | — | | | | | $ | 1,253,638 | | | | | $ | 13,082 | | | | | $ | 1,449,642 | | |
Name
|
| |
Number of
Securities Underlying Unexercised Options Exercisable |
| |
Number of
Securities Underlying Unexercised Options Unexercisable |
| |
Option
Exercise Price ($) |
| |
Option
Expiration Date |
| ||||||||||||
Michael D. Step
|
| | | | 16,352 (1) | | | | | | 9,811 (1) | | | | | $ | 1.14 | | | | | | 8/16/2022 | | |
| | | 646,537 (2) | | | | | | — | | | | | $ | 5.86 | | | | | | 12/2/2024 | | | ||
| | | 73,377 (3) | | | | | | — | | | | | $ | 5.86 | | | | | | 12/2/2024 | | | ||
| | | — | | | | | | (4) | | | | | $ | 5.86 | | | | | | 12/2/2024 | | | ||
Andrew J. Ritter
|
| | | | 3,370 (5) | | | | | | 45,581 (5) | | | | | $ | 1.27 | | | | | | 9/25/2023 | | |
| | | 20,979 (6) | | | | | | — | | | | | $ | 5.86 | | | | | | 12/2/2024 | | | ||
| | | — | | | | | | 432,434 (7) | | | | | | (7) | | | | | | 12/2/2024 | | | ||
Ira E. Ritter
|
| | | | 3,370 (8) | | | | | | 45,581 (8) | | | | | $ | 1.27 | | | | | | 9/25/2023 | | |
| | | 20,979 (9) | | | | | | — | | | | | $ | 5.86 | | | | | | 12/2/2024 | | | ||
| | | — | | | | | | 432,434 (10) | | | | | | (10) | | | | | | 12/2/2024 | | |
Beneficial Owner
|
| |
Number of Shares
Beneficially Owned |
| |
Percentage of Common Stock
Beneficially Owned |
| ||||||||||||
|
Before Offering
|
| |
After Offering
|
| ||||||||||||||
Five Percent Stockholders | | | | | | | | | | | | | | | |||||
Javelin Venture Partners I SPV I, LLC
(1)(2)(3)
|
| | | | 645,507 | | | | | | 17.0 % | | | | | | 11.5 % | | |
Javelin Venture Partners, L.P.
(1)(2)(3)
|
| | | | 1,331,028 | | | | | | 35.1 % | | | | | | 23.7 % | | |
Stonehenge Partners LLC
(5)(6)(7)
|
| | | | 817,272 | | | | | | 21.6 % | | | | | | 14.6 % | | |
Executive Officers, Directors and Director Nominees | | | | | | | | | | | | | | | |||||
Michael D. Step
(8)
|
| | | | 738,991 | | | | | | 16.3 % | | | | | | 11.6 % | | |
Andrew J. Ritter
(6)(9)
|
| | | | 24,776 | | | | | | * | | | | | | * | | |
Ira E. Ritter
(7)(10)
|
| | | | 24,776 | | | | | | * | | | | | | * | | |
Noah Doyle
(3)(11)
|
| | | | 22,727 | | | | | | * | | | | | | * | | |
Matthew W. Foehr
|
| | | | — | | | | | | * | | | | | | * | | |
Paul V. Maier
|
| | | | — | | | | | | * | | | | | | * | | |
Gerald T. Proehl
|
| | | | — | | | | | | * | | | | | | * | | |
All current executive officers and directors as a group (8 persons)
|
| | | | 811,270 | | | | | | 17.4 % | | | | | | 12.4 % | | |
Underwriter
|
| |
Number of
Shares |
| ||||
Aegis Capital Corp
|
| |
|
| ||||
Chardan Capital Markets, LLC
|
| | | | | | | |
Barrington Research Associates, Inc.
|
| | | | | | | |
Total | | | | | 1,820,000 | | | |
|
| | |
Per
Share |
| |
Total Without
Over-Allotment Option |
| |
Total With
Over-Allotment Option |
| |||||||||
Public offering price
|
| | | $ | | | | | $ | | | | | $ | | | |||
Underwriting discount (7%)
|
| | | $ | | | | | $ | | | | | $ | | | |||
Proceeds, before expense, to us
|
| | | $ | | | | | $ | | | | | $ | | | |||
Non-accountable expense allowance (1%)
(1)
|
| | | $ | | | | | $ | | | | | $ | | | |
| | |
Page
|
||
AUDITED FINANCIAL STATEMENTS | | | | | |
| | | | F-2 | |
| | | | F-3 | |
| | | | F-4 | |
| | | | F-5 | |
| | | | F-6 | |
| | | | F-7 |
| | |
Page
|
| |||
| | | | F-26 | | | |
| | | | F-27 | | | |
| | | | F-28 | | | |
| | | | F-29 | | |
| | |
December 31,
|
| |||||||||||
| | |
2014
|
| |
2013
|
| ||||||||
ASSETS | | | | | | | | | | | | | | ||
Current assets
|
| | | | | | | | | | | | | ||
Cash and cash equivalents
|
| | | $ | 2,747,248 | | | | | $ | 448,226 | | | ||
Prepaid expenses
|
| | | | 57,115 | | | | | | 76,636 | | | ||
Total current assets
|
| | | | 2,804,363 | | | | | | 524,862 | | | ||
Other assets
|
| | | | 10,331 | | | | | | 15,359 | | | ||
Deferred offering costs
|
| | | | 143,454 | | | | | | — | | | ||
Property and equipment, net
|
| | | | 5,172 | | | | | | 7,485 | | | ||
Total Assets
|
| | | $ | 2,963,320 | | | | | $ | 547,706 | | | ||
LIABILITIES AND STOCKHOLDERS’ DEFICIT | | | | | | | | | | | | | | ||
Current liabilities | | | | | | | | | | | | | | ||
Accounts payable
|
| | | $ | 1,083,597 | | | | | $ | 834,496 | | | ||
Accrued expenses
|
| | | | 168,635 | | | | | | 27,443 | | | ||
Notes payable
|
| | | | — | | | | | | 31,500 | | | ||
Other liabilities
|
| | | | 2,518 | | | | | | 4,517 | | | ||
Total current liabilities
|
| | | | 1,254,750 | | | | | | 897,956 | | | ||
Preferred stock subject to redemption, $0.001 par value, 16,378,646 and 11,878,646 shares authorized as of December 31, 2014 and December 31, 2013, respectively, 13,399,668 and 10,408,652 shares issued and outstanding at December 31, 2014 and December 2013, respectively. $9.1 million aggregate liquidation preference of Series B cumulative preferred stock at December 31, 2014
|
| | | | 16,203,612 | | | | | | 12,413,876 | | | ||
Stockholders’ deficit | | | | | | | | | | | | | | ||
Preferred stock, par value $0.001, 8,887,500 shares authorized, issued and outstanding as of December 31, 2014 and December 31, 2013
|
| | | | 8,888 | | | | | | 8,888 | | | ||
Common stock, par value $0.001, 50,000,000 and 26,500,000 shares
authorized as of December 31, 2014 and December 31, 2013, respectively; 465,384 and 451,398 shares issued and outstanding as of December 31, 2014 and December 31, 2013, respectively |
| | | | 465 | | | | | | 451 | | | ||
Additional paid-in capital
|
| | | | 3,399,924 | | | | | | 2,059,347 | | | ||
Accumulated deficit
|
| | | | (17,904,319 ) | | | | | | (14,832,812 ) | | | ||
Total stockholders’ deficit
|
| | | | (14,495,042 ) | | | | | | (12,764,126 ) | | | ||
Total Liabilities and Stockholders’ Deficit
|
| | | $ | 2,963,320 | | | | | $ | 547,706 | | | ||
|
| | |
For the Years Ended December 31,
|
| |||||||||||
| | |
2014
|
| |
2013
|
| ||||||||
Operating costs and expenses: | | | | | | | | | | | | | | ||
Research and development
|
| | | $ | 113,931 | | | | | $ | 461,551 | | | ||
Patent costs
|
| | | | 197,731 | | | | | | 292,358 | | | ||
General and administrative
|
| | | | 1,969,960 | | | | | | 1,356,888 | | | ||
Total operating expenses
|
| | | | 2,281,622 | | | | | | 2,110,797 | | | ||
Operating loss
|
| | | | (2,281,622 ) | | | | | | (2,110,797 ) | | | ||
Other expense (income): | | | | | | | | | | | | | | ||
Interest income
|
| | | | (525 ) | | | | | | (1,677 ) | | | ||
Interest expense
|
| | | | 213,516 | | | | | | 6,076 | | | ||
Other income
|
| | | | (21,148 ) | | | | | | (19,365 ) | | | ||
Total other expense (income)
|
| | | | 191,843 | | | | | | (14,966 ) | | | ||
Net loss
|
| | | | (2,473,465 ) | | | | | $ | (2,095,831 ) | | | ||
Cumulative preferred stock dividends
|
| | | | 589,462 | | | | | | 547,303 | | | ||
Accretion of discount on Series C preferred stock
|
| | | | 8,580 | | | | | | — | | | ||
Net loss applicable to common stockholders
|
| | | $ | (3,071,507 ) | | | | | $ | (2,643,134 ) | | | ||
Net loss per common share – basic and diluted
|
| | | $ | (6.79 ) | | | | | $ | (5.86 ) | | | ||
Weighted average common shares outstanding – basic and diluted
|
| | | | 452,509 | | | | | | 451,398 | | | ||
|
| | |
Preferred
Stock Subject to Redemption |
| |
Stockholders’ Deficit
|
| |
Total
Stockholders’ Deficit |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| | |
Preferred Stock
|
| |
Common Stock
|
| |
Additional
Paid-in Capital |
| |
Accumulated
Deficit |
| |||||||||||||||||||||||||||||||||||||||||||||||||||
| | |
Shares
|
| |
Amount
|
| |
Shares
|
| |
Amount
|
| |
Shares
|
| |
Amount
|
| |||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2012
|
| | | | 9,885,423 | | | | | $ | 11,093,677 | | | | | | 8,887,500 | | | | | $ | 8,888 | | | | | | 451,398 | | | | | $ | 451 | | | | | $ | 2,032,697 | | | | | $ | (12,189,678 ) | | | | | $ | (10,147,642 ) | | | |||||||||
Conversion of note payable into shares
|
| | | | 103,234 | | | | | | 122,901 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 12,253 | | | | | | — | | | | | | 12,253 | | | |||||||||
Prepaid forward sale of Series B preferred stock
|
| | | | — | | | | | | 150,000 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | |||||||||
Issuance of shares subject to redemption
|
| | | | 419,995 | | | | | | 499,995 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | |||||||||
Stock based compensation
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 14,397 | | | | | | — | | | | | | 14,397 | | | |||||||||
Cumulative dividends on Series B preferred stock
|
| | | | — | | | | | | 547,303 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (547,303 ) | | | | | | (547,303 ) | | | |||||||||
Net loss
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (2,095,831 ) | | | | | | (2,095,831 ) | | | |||||||||
Balance at December 31, 2013
|
| | | | 10,408,652 | | | | | $ | 12,413,876 | | | | | | 8,887,500 | | | | | $ | 8,888 | | | | | | 451,398 | | | | | $ | 451 | | | | | $ | 2,059,347 | | | | | $ | (14,832,812 ) | | | | | $ | (12,764,126 ) | | | |||||||||
Conversion of notes payable into preferred stock subject to redemption and warrants to purchase common stock
|
| | | | 621,788 | | | | | | 660,635 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 136,733 | | | | | | — | | | | | | 136,733 | | | |||||||||
Issuance of preferred stock subject to
redemption and warrants to purchase common stock, net of offering cost of $68,767 |
| | | | 2,369,228 | | | | | | 2,531,059 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 482,068 | | | | | | — | | | | | | 482,068 | | | |||||||||
Exercise of options on common stock
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 13,986 | | | | | | 14 | | | | | | 14,386 | | | | | | — | | | | | | 14,400 | | | |||||||||
Stock based compensation
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 707,390 | | | | | | — | | | | | | 707,390 | | | |||||||||
Cumulative dividends on Series B preferred stock
|
| | | | — | | | | | | 589,462 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (589,462 ) | | | | | | (589,462 ) | | | |||||||||
Accretion of discount on Series C preferred stock
|
| | | | — | | | | | | 8,580 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (8,580 ) | | | | | | (8,580 ) | | | |||||||||
Net loss
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (2,473,465 ) | | | | | | (2,473,465 ) | | | |||||||||
Balance at December 31, 2014
|
| | | | 13,399,668 | | | | | $ | 16,203,612 | | | | | | 8,887,500 | | | | | $ | 8,888 | | | | | | 465,384 | | | | | $ | 465 | | | | | $ | 3,399,924 | | | | | $ | (17,904,319 ) | | | | | $ | (14,495,042 ) | | | |||||||||
|
| | |
For the Years Ended December 31,
|
| |||||||||
| | |
2014
|
| |
2013
|
| ||||||
Cash flows from operating activities | | | | | | | | | | | | | |
Net loss
|
| | | $ | (2,473,465 ) | | | | | $ | (2,095,831 ) | | |
Adjustments to reconcile net loss to net cash used in operating activities:
|
| | | ||||||||||
Depreciation
|
| | | | 3,479 | | | | | | 2,139 | | |
Stock based compensation
|
| | | | 707,390 | | | | | | 14,397 | | |
Change in fair value of put embedded in convertible debt
|
| | | | (21,148 ) | | | | | | — | | |
Accretion of discount on convertible debt
|
| | | | 10,192 | | | | | | — | | |
Non-cash interest on conversion of debt
|
| | | | 184,445 | | | | | | — | | |
Increase (decrease) in cash attributable to changes in operating assets
and liabilities: |
| | | ||||||||||
Prepaid expenses
|
| | | | 19,521 | | | | | | 1,655 | | |
Other assets
|
| | | | 5,028 | | | | | | (7,903 ) | | |
Accounts payable
|
| | | | 249,101 | | | | | | 119,742 | | |
Accrued expenses
|
| | | | 160,071 | | | | | | 4,370 | | |
Other liabilities
|
| | | | (1,999 ) | | | | | | 4,517 | | |
Net cash used in operating activities
|
| | | | (1,157,385 ) | | | | | | (1,956,914 ) | | |
Cash flows from investing activities | | | | | | | | | | | | | |
Purchase of property and equipment
|
| | | | (1,166 ) | | | | | | (8,692 ) | | |
Net cash used in investing activities
|
| | | | (1,166 ) | | | | | | (8,692 ) | | |
Cash flows from financing activities | | | | | | | | | | | | | |
Deferred offering costs
|
| | | | (143,454 ) | | | | | | — | | |
Proceeds from borrowing under notes payable
|
| | | | 605,000 | | | | | | — | | |
Repayment of borrowing under note payable
|
| | | | (31,500 ) | | | | | | (6,000 ) | | |
Net proceeds from issuance of preferred stock subject to redemption and warrants to purchase common stock
|
| | | | 3,013,127 | | | | | | 499,995 | | |
Proceeds received on prepaid forward sale of preferred stock subject to redemption
|
| | | | — | | | | | | 150,000 | | |
Proceeds from exercise of options on common stock
|
| | | | 14,400 | | | | | | — | | |
Net cash provided by financing activities
|
| | | | 3,457,573 | | | | | | 643,995 | | |
Net increase (decrease) in cash
|
| | | | 2,299,022 | | | | | | (1,321,611 ) | | |
Cash at beginning of period
|
| | | | 448,226 | | | | | | 1,769,837 | | |
Cash at end of period
|
| | | $ | 2,747,248 | | | | | $ | 448,226 | | |
Non-cash financing activities: | | | | | | | | | | | | | |
Conversion of account payable to note payable
|
| | | $ | — | | | | | $ | 37,500 | | |
Conversion of notes payable into preferred stock subject to redemption and warrants to purchase common stock
|
| | | $ | 612,923 | | | | | $ | 135,154 | | |
Cumulative preferred stock dividends
|
| | | $ | 589,462 | | | | | $ | 547,303 | | |
Accretion of Series C
|
| | | $ | 8,580 | | | | |||||
Cash paid for interest
|
| | | $ | — | | | | | $ | — | | |
Cash paid for taxes
|
| | | $ | — | | | | | $ | — | | |
| | | | | |
As of December 31,
|
| |||||||||||
| | |
Estimated Life
|
| |
2014
|
| |
2013
|
| ||||||||
Computers and equipment
|
| |
5 years
|
| | | $ | 5,487 | | | | | $ | 4,320 | | | ||
Furniture and fixtures
|
| |
7 years
|
| | | | 4,270 | | | | | | 4,270 | | | ||
Leasehold improvements
|
| |
7 years
|
| | | | — | | | | | | 3,500 | | | ||
Total property and equipment
|
| | | | | | | 9,757 | | | | | | 12,090 | | | ||
Accumulated depreciation
|
| | | | | | | (4,585 ) | | | | | | (4,605 ) | | | ||
Total property and equipment, net of accumulated depreciation
|
| | | | | | $ | 5,172 | | | | | $ | 7,485 | | | ||
|
| | |
Year ended December 31, 2014
|
| |||||||||
| | |
Low
|
| |
High
|
| ||||||
Expected dividend yield
|
| | | | 0.00 % | | | | | | 0.00 % | | |
Expected stock-price volatility
|
| | | | 51.45 % | | | | | | 64.24 % | | |
Risk-free interest rate
|
| | | | 0.88 % | | | | | | 3.04 % | | |
Expected term of options
|
| | | | 5 | | | | | | 10 | | |
Stock price
|
| | | $ | 1.14 | | | | | $ | 5.86 | | |
|
Year
|
| |
Share Class
|
| |
Price per Share
|
|
|
2005
|
| |
Common Stock
(a)
|
| |
$1.79
|
|
|
2006
|
| |
Series A-2 Preferred Stock
(a)(b)
|
| |
$0.40
|
|
|
2008 – 2009
|
| |
Series A-3 Preferred Stock
(b)
|
| |
$0.62
|
|
|
2010 – 2013
|
| |
Series B Preferred Stock
(b)
|
| |
$1.19
|
|
|
2014
|
| |
Series C Preferred Stock
(b)
|
| |
$1.30
|
|
| | |
Valuation Dates
|
| |||||||||||||||
| | |
November 7, 2013
|
| |
July 31, 2012
|
| |
December 31, 2010
|
| |||||||||
Risk-free rate
|
| | | | 0.55 % | | | | | | 0.57 % | | | | | | 2.01 % | | |
Maturity (years)
|
| | | | 3.00 | | | | | | 4.00 | | | | | | 5.00 | | |
Volatility | | | | | 58.00 % | | | | | | 61.00 % | | | | | | 61.00 % | | |
Grant Date
|
| |
Number of Common
Shares Underlying Options Granted |
| |
Exercise Price
per Common Share |
| |
Estimated Fair Value
per Share of Common Stock |
| |
Intrinsic Value
Option |
| ||||||
2005 | | | | | 58,321 | | | |
$0.07
|
| | | $ | 1.79 | | | |
$1.72
|
|
2009 | | | | | 60,559 | | | |
$0.72 – $0.79
|
| | | $ | 4.43 | | | |
$3.71 – $3.64
|
|
2011 | | | | | 33,846 | | | |
$1.00
|
| | | $ | 1.00 | | | |
$0.00
|
|
2012 | | | | | 60,019 | | | |
$1.14
|
| | | $ | 1.14 | | | |
$0.00
|
|
2013 | | | | | 100,000 | | | |
$1.14 – $1.30
|
| | | $ | 1.14 | | | |
$0.00
|
|
2014 | | | | | 1,626,740 | | | |
$5.86 – $13.23
|
| | | $ | 5.86 | | | |
$0.00
|
|
| | |
Options
|
| |
Weighted Average
Exercise Price |
| ||||||||
Outstanding at December 31, 2013
|
| | | | 226,793 | | | | | $ | 1.083 | | | ||
Granted
|
| | | | 1,626,740 | | | | | | 7.722 | | | ||
Exercised/Expired/Forfeited
|
| | | | (64,816 ) | | | | | | (0.888 ) | | | ||
Outstanding at December 31, 2014
|
| | | | 1,788,717 | | | | | $ | 7.128 | | | ||
Exercisable at December 31, 2014
|
| | | | 162,237 | | | | | $ | 4.053 | | | ||
Expected to be vested
|
| | | | 1,626,480 | | | | | $ | 7.434 | | | ||
|
| | |
December 31,
|
| |||||||||||
| | |
2014
|
| |
2013
|
| ||||||||
Statutory U.S. federal rate
|
| | | | 34.0 % | | | | | | 34.0 % | | | ||
State income tax, net of federal benefit
|
| | | | 3.9 % | | | | | | 3.9 % | | | ||
Meals & entertainment
|
| | | | (0.3 )% | | | | | | (0.4 )% | | | ||
Others | | | | | (0.5 )% | | | | | | (2.8 )% | | | ||
Forward sale of preferred stock
|
| | | | (2.3 )% | | | | | | 0.0 % | | | ||
Non-cash interest on conversion
|
| | | | (2.8 )% | | | | | | 0.0 % | | | ||
Valuation allowance
|
| | | | (32.0 )% | | | | | | (34.7 )% | | | ||
Provision for income taxes
|
| | | | 0.0 % | | | | | | 0.0 % | | | ||
|
| | |
As of December 31,
|
| |||||||||||
| | |
2014
|
| |
2013
|
| ||||||||
Deferred tax assets: | | | | | | | | | | | | | | ||
Net operating loss carry forwards
|
| | | $ | 3,675,012 | | | | | $ | 3,306,227 | | | ||
Patent costs
|
| | | | 318,652 | | | | | | 243,722 | | | ||
Capitalized interest
|
| | | | 85,568 | | | | | | 8,518 | | | ||
Accrued vacation
|
| | | | 10,237 | | | | | | 6,192 | | | ||
Research and development credit
|
| | | | 200,482 | | | | | | 73,484 | | | ||
Stock based compensation
|
| | | | 383,381 | | | | | | 115,314 | | | ||
Other
|
| | | | 4,460 | | | | | | 4,828 | | | ||
Gross deferred tax assets
|
| | | | 4,677,792 | | | | | | 3,758,285 | | | ||
Valuation allowance
|
| | | | (4,677,792 ) | | | | | | (3,758,285 ) | | | ||
Net deferred tax assets
|
| | | $ | — | | | | | $ | — | | | ||
|
| | |
March 31,
2015 |
| |
December 31,
2014 |
| ||||||||
| | |
(unaudited)
|
| | | | | | | |||||
ASSETS | | | | | | | | | | | | | | ||
Current assets | | | | | | | | | | | | | | ||
Cash and cash equivalents
|
| | | $ | 1,975,313 | | | | | $ | 2,747,248 | | | ||
Prepaid expenses
|
| | | | 56,353 | | | | | | 57,115 | | | ||
Total current assets
|
| | | | 2,031,666 | | | | | | 2,804,363 | | | ||
Other assets
|
| | | | 10,331 | | | | | | 10,331 | | | ||
Deferred offering costs
|
| | | | 296,863 | | | | | | 143,454 | | | ||
Property and equipment, net
|
| | | | 4,869 | | | | | | 5,172 | | | ||
Total Assets
|
| | | $ | 2,343,729 | | | | | $ | 2,963,320 | | | ||
LIABILITIES AND STOCKHOLDERS’ DEFICIT | | | | | | | | | | | | | | ||
Current liabilities | | | | | | | | | | | | | | ||
Accounts payable
|
| | | $ | 1,002,723 | | | | | $ | 1,083,597 | | | ||
Accrued expenses
|
| | | | 218,636 | | | | | | 168,635 | | | ||
Other liabilities
|
| | | | 1,679 | | | | | | 2,518 | | | ||
Total current liabilities
|
| | | | 1,223,038 | | | | | | 1,254,750 | | | ||
Preferred stock subject to redemption, $0.001 par value,16,378,646 shares authorized as of March 31, 2015 and December 31, 2014; 14,869,662 and 13,399,668 shares issued and outstanding at March 31, 2015 and December 31, 2014, respectively; million aggregate liquidation preference of Series B cumulative preferred stock at March 31, 2015
|
| | | | 16,384,715 | | | | | | 16,203,612 | | | ||
Stockholders’ deficit | | | | ||||||||||||
Preferred stock, par value $0.001, 8,887,500 shares authorized, issued and outstanding as of March 31, 2015 and December 31, 2014
|
| | | | 8,888 | | | | | | 8,888 | | | ||
Common stock, par value $0.001, 50,000,000 shares authorized as of March 31, 2015 and December 31, 2014; 465,384 shares issued and outstanding as of March 31, 2015 and December 31, 2014
|
| | | | 465 | | | | | | 465 | | | ||
Additional paid-in capital
|
| | | | 4,199,047 | | | | | | 3,399,924 | | | ||
Accumulated deficit
|
| | | | (19,472,424 ) | | | | | | (17,904,319 ) | | | ||
Total stockholders’ deficit
|
| | | | (15,264,024 ) | | | | | | (14,495,042 ) | | | ||
Total Liabilities and Stockholders’ Deficit
|
| | | $ | 2,343,729 | | | | | $ | 2,963,320 | | | ||
|
| | |
For the Three Months Ended March 31,
|
| |||||||||||
| | |
2015
|
| |
2014
|
| ||||||||
Operating costs and expenses: | | | | | | | | | | | | | | ||
Research and development
|
| | | $ | 31,460 | | | | | $ | 5,850 | | | ||
Patent costs
|
| | | | 62,274 | | | | | | 36,782 | | | ||
General and administrative
|
| | | | 1,302,565 | | | | | | 243,909 | | | ||
Total operating expenses
|
| | | | 1,396,299 | | | | | | 286,541 | | | ||
Operating loss
|
| | | | (1,396,299 ) | | | | | | (286,541 ) | | | ||
Other income: | | | | | | | | | | | | | | ||
Interest income
|
| | | | 2,204 | | | | | | 204 | | | ||
Other income
|
| | | | 7,091 | | | | | | — | | | ||
Total other income
|
| | | | 9,295 | | | | | | 204 | | | ||
Net loss
|
| | | $ | (1,387,004 ) | | | | | $ | (286,337 ) | | | ||
Cumulative preferred stock dividends
|
| | | | 149,283 | | | | | | 147,445 | | | ||
Accretion of discount on Series C preferred stock
|
| | | | 31,818 | | | | | | — | | | ||
Net loss applicable to common stockholders
|
| | | $ | (1,568,105 ) | | | | | $ | (433,782 ) | | | ||
Net loss per common share – basic and diluted
|
| | | $ | (3.37 ) | | | | | $ | (0.96 ) | | | ||
Weighted average common shares outstanding – basic and diluted
|
| | | | 465,384 | | | | | | 451,398 | | | ||
|
| | |
For the Three Months Ended March 31,
|
| |||||||||
| | |
2015
|
| |
2014
|
| ||||||
Cash flows from operating activities | | | | | | | | | | | | | |
Net loss
|
| | | $ | (1,387,004 ) | | | | | $ | (286,337 ) | | |
Adjustments to reconcile net loss to net cash used in operating activities:
|
| | | ||||||||||
Depreciation
|
| | | | 303 | | | | | | 1,267 | | |
Stock based compensation
|
| | | | 799,125 | | | | | | 213 | | |
Increase (decrease) in cash attributable to changes in operating assets
and liabilities: |
| | | | | | | | | | | | |
Prepaid expenses
|
| | | | 762 | | | | | | (32,256 ) | | |
Accounts payable
|
| | | | (80,874 ) | | | | | | 35,564 | | |
Accrued expenses
|
| | | | 50,001 | | | | | | (7,137 ) | | |
Other liabilities
|
| | | | (839 ) | | | | | | (386 ) | | |
Net cash used in operating activities
|
| | | | (618,526 ) | | | | | | (289,072 ) | | |
Cash flows from investing activities | | | | | | | | | | | | | |
Purchase of property and equipment
|
| | | | — | | | | | | (1,166 ) | | |
Net cash used in investing activities
|
| | | | — | | | | | | (1,166 ) | | |
Cash flows from financing activities | | | | | | | | | | | | | |
Deferred offering costs
|
| | | | (153,409 ) | | | | | | — | | |
Repayment of borrowing under note payable
|
| | | | — | | | | | | (9,000 ) | | |
Net cash used in financing activities
|
| | | | (153,409 ) | | | | | | (9,000 ) | | |
Net decrease in cash
|
| | | | (771,935 ) | | | | | | (299,238 ) | | |
Cash at beginning of period
|
| | | | 2,747,248 | | | | | | 448,226 | | |
Cash at end of period
|
| | | $ | 1,975,313 | | | | | $ | 148,988 | | |
Non-cash financing activities: | | | | | | | | | | | | | |
Cumulative preferred stock dividends
|
| | | $ | 149,283 | | | | | $ | 147,445 | | |
Accretion of Series C
|
| | | $ | 31,818 | | | | | $ | — | | |
Cash paid for interest
|
| | | $ | — | | | | | $ | — | | |
Cash paid for taxes
|
| | | $ | — | | | | | $ | — | | |
| | |
Estimated Life
|
| |
March 31,
2015 |
| |
December 31,
2014 |
| ||||||||
Computers and equipment
|
| |
5 years
|
| | | $ | 5,487 | | | | | $ | 5,487 | | | ||
Furniture and fixtures
|
| |
7 years
|
| | | | 4,270 | | | | | | 4,270 | | | ||
Total property and equipment
|
| | | | | | | 9,757 | | | | | | 9,757 | | | ||
Accumulated depreciation
|
| | | | | | | (4,888 ) | | | | | | (4,585 ) | | | ||
Total property and equipment, net of accumulated depreciation
|
| | | | | | $ | 4,869 | | | | | $ | 5,172 | | | ||
|
| | |
Warrants
|
| |
Weighted Average
Exercise Price |
| ||||||||
Outstanding at December 31, 2014
|
| | | | 418,323 | | | | | $ | 9.30 | | | ||
Granted
|
| | | | — | | | | | | — | | | ||
Exercised/Expired/Forfeited
|
| | | | — | | | | | | — | | | ||
Outstanding at March 31, 2015
|
| | | | 418,323 | | | | | $ | 9.30 | | | ||
Exercisable at March 31, 2015
|
| | | | 418,323 | | | | | $ | 9.30 | | | ||
|
| | |
Three months ended March 31, 2015
|
| |||||||||
| | |
Low
|
| |
High
|
| ||||||
Expected dividend yield
|
| | | | 0.00 % | | | | | | 0.00 % | | |
Expected stock-price volatility
|
| | | | 51.45 % | | | | | | 65.06 % | | |
Risk-free interest rate
|
| | | | 0.77 % | | | | | | 2.00 % | | |
Expected term of options
|
| | | | 5 | | | | | | 10 | | |
Stock price
|
| | | $ | 5.86 | | | | | $ | 5.86 | | |
|
Year
|
| |
Share Class
|
| |
Price per Share
|
|
|
2005
|
| |
Common Stock
(a)
|
| |
$1.79
|
|
|
2006
|
| |
Series A-2 Preferred Stock
(a)(b)
|
| |
$0.40
|
|
|
2008 – 2009
|
| |
Series A-3 Preferred Stock
(b)
|
| |
$0.62
|
|
|
2010 – 2013
|
| |
Series B Preferred Stock
(b)
|
| |
$1.19
|
|
|
2014
|
| |
Series C Preferred Stock
(b)
|
| |
$1.30
|
|
| | |
Valuation Date
|
| |||||||||||||||
| | |
November 7, 2013
|
| |
July 31, 2012
|
| |
December 31, 2010
|
| |||||||||
Risk-free rate
|
| | | | 0.55 % | | | | | | 0.57 % | | | | | | 2.01 % | | |
Maturity (years)
|
| | | | 3.00 | | | | | | 4.00 | | | | | | 5.00 | | |
Volatility | | | | | 58.00 % | | | | | | 61.00 % | | | | | | 61.00 % | | |
Grant Date
|
| |
Number of Common
Shares Underlying Options Granted |
| |
Exercise Price
per Common Share |
| |
Estimated Fair Value
per Share of Common Stock |
| |
Intrinsic Value
Option |
| ||||||
2005 | | | | | 58,321 | | | |
$0.07
|
| | | $ | 1.79 | | | |
$1.72
|
|
2009 | | | | | 60,559 | | | |
$0.72 – $0.79
|
| | | $ | 4.43 | | | |
$3.71 – $3.64
|
|
2011 | | | | | 33,846 | | | |
$1.00
|
| | | $ | 1.00 | | | |
$0.00
|
|
2012 | | | | | 60,019 | | | |
$1.14
|
| | | $ | 1.14 | | | |
$0.00
|
|
2013 | | | | | 100,000 | | | |
$1.14 – $1.30
|
| | | $ | 1.14 | | | |
$0.00
|
|
2014 | | | | | 1,626,740 | | | |
$5.86 – $13.23
|
| | | $ | 5.86 | | | |
$0.00
|
|
| | |
Options
|
| |
Weighted Average
Exercise Price |
| ||||||||
Outstanding at December 31, 2014
|
| | | | 1,788,717 | | | | | $ | 7.128 | | | ||
Granted
|
| | | | — | | | | | | — | | | ||
Exercised/Expired/Forfeited
|
| | | | (918 ) | | | | | | (5.863 ) | | | ||
Outstanding at March 31, 2015
|
| | | | 1,787,799 | | | | | $ | 7.131 | | | ||
Exercisable at March 31, 2015
|
| | | | 208,918 | | | | | $ | 4.419 | | | ||
Expected to be vested
|
| | | | 1,578,881 | | | | | $ | 7.490 | | | ||
|
| | |
Total
|
| ||||
SEC registration fee
|
| | | $ | 3,045.37 | | | |
FINRA filing fee
|
| | | $ | 4,431.20 | | | |
NASDAQ listing fee
|
| | | $ | 50,000.00 | | | |
Printing and engraving expenses
|
| | | $ | 50,000.00 | | | |
Legal fees and expenses
|
| | | $ | 450,000.00 | | | |
Accounting fees and expenses
|
| | | $ | 200,000.00 | | | |
Transfer agent and registrar fees
|
| | | $ | 5,000.00 | | | |
Miscellaneous
|
| | | $ | 237,523.43 | | | |
Total
|
| | | $ | 1,000,000.00 | | | |
|
| *By: | | |
/s/ Andrew J. Ritter
Andrew J. Ritter
Attorney-in-fact |
|
Exhibit No.
|
| |
Description
|
|
1.1** | | | Form of Underwriting Agreement | |
3.1** | | | Restated Certificate of Incorporation of Ritter Pharmaceuticals, Inc. | |
3.2** | | | Bylaws of Ritter Pharmaceuticals, Inc. | |
3.3 | | | Form of Certificate of Amendment to the Restated Certificate of Incorporation of Ritter Pharmaceuticals, Inc. | |
3.4 | | | Form of Amended and Restated Certificate of Incorporation of Ritter Pharmaceuticals, Inc. | |
3.5 | | | Form of Amended and Restated Bylaws of Ritter Pharmaceuticals, Inc. | |
4.1 | | | Form of Common Stock Certificate of Ritter Pharmaceuticals, Inc. | |
4.2** | | | Amended and Restated Investors’ Rights Agreement, dated as of November 17, 2010, by and among Ritter Pharmaceuticals, Inc. and the persons and entities named therein | |
4.3** | | | Amendment No. 1 to the Amended and Restated Investors’ Rights Agreement, dated as of January 13, 2011, by and among Ritter Pharmaceuticals, Inc. and the persons and entities named therein | |
4.4** | | | Amendment No. 2 to the Amended and Restated Investors’ Rights Agreement, dated as of February 6, 2012, by and among Ritter Pharmaceuticals, Inc. and the persons and entities named therein | |
4.5** | | | Amendment No. 3 to the Amended and Restated Investors’ Rights Agreement, dated as of December 4, 2014, by and among Ritter Pharmaceuticals, Inc. and the persons and entities named therein | |
4.6 | | | Form of Amendment No. 4 to the Amended and Restated Investors’ Rights Agreement, by and among Ritter Pharmaceuticals, Inc. and the persons and entities named therein | |
4.7** | | | Form of Representative’s Warrant Agreement | |
5.1 | | | Opinion of Reed Smith LLP | |
10.1** | | | Office Lease, dated June 25, 2013, by and between Douglas Emmett 1997, LLC and Ritter Pharmaceuticals, Inc. | |
10.2** | | | Offer Letter, dated December 2, 2014, by and between Michael D. Step and Ritter Pharmaceuticals, Inc. | |
10.3** | | | Executive Compensation Plan | |
10.4** | | | Executive Severance & Change in Control Agreement, dated October 1, 2014, by and between Ritter Pharmaceuticals, Inc. and Michael D. Step | |
10.5** | | | 2008 Stock Plan | |
10.6** | | | 2009 Stock Plan | |
10.7** | | | Form of 2015 Stock Plan | |
10.8** | | | Stock Option Agreement, dated December 2, 2014, by and between Ritter Pharmaceuticals, Inc. and Michael D. Step | |
10.9** | | | Stock Option Agreement, dated December 2, 2014, by and between Ritter Pharmaceuticals, Inc. and Michael D. Step | |
10.10** | | | Stock Option Agreement, dated December 2, 2014, by and between Ritter Pharmaceuticals, Inc. and Michael D. Step | |
10.11** | | | Stock Option Agreement, dated September 25, 2013, by and between Ritter Pharmaceuticals, Inc. and Andrew J. Ritter | |
10.12** | | | Stock Option Agreement, dated December 2, 2014, by and between Ritter Pharmaceuticals, Inc. and Andrew J. Ritter | |
10.13** | | | Stock Option Agreement, dated December 2, 2014, by and between Ritter Pharmaceuticals, Inc. and Andrew J. Ritter | |
10.14** | | | Stock Option Agreement, dated September 25, 2013, by and between Ritter Pharmaceuticals, Inc. and Ira E. Ritter | |
Exhibit No.
|
| |
Description
|
| | ||
10.15** | | | Stock Option Agreement, dated December 2, 2014, by and between Ritter Pharmaceuticals, Inc. and Ira E. Ritter | | | ||
10.16** | | | Stock Option Agreement, dated December 2, 2014, by and between Ritter Pharmaceuticals, Inc. and Ira E. Ritter | | | ||
10.17** | | | Research and Development Agreement & License, dated November 30, 2010, by and among Kolu Pohaku Technologies, LLC, Kolu Pohaku Management, LLC and Ritter Pharmaceuticals, Inc. | | | ||
10.18** | | | Amendment No. 1 to Research and Development Agreement & License, dated July 6, 2011, by and among Kolu Pohaku Technologies, LLC, Kolu Pohaku Management, LLC and Ritter Pharmaceuticals, Inc. | | | ||
10.19** | | | Amendment No. 2 to Research and Development Agreement & License, dated September 30, 2011, by and among Kolu Pohaku Technologies, LLC, Kolu Pohaku Management, LLC and Ritter Pharmaceuticals, Inc. | | | ||
10.20** | | | Amendment No. 3 to Research and Development Agreement & License, dated February 6, 2012, by and among Kolu Pohaku Technologies, LLC, Kolu Pohaku Management, LLC and Ritter Pharmaceuticals, Inc. | | | ||
10.21** | | | Amendment No. 4 to Research and Development Agreement & License, dated November 4, 2013, by and among Kolu Pohaku Technologies, LLC, Kolu Pohaku Management, LLC and Ritter Pharmaceuticals, Inc. | | | ||
10.22** | | | Put and Call Option Agreement, dated November 30, 2010, by and between Kolu Pohaku Technologies, LLC and Ritter Pharmaceuticals, Inc. | | | ||
10.23** | | | Subordinated Convertible Promissory Note to SJ Investment Company, LLC, dated May 23, 2014, in the principal amount of $25,000.00 | | | ||
10.24** | | | Subordinated Convertible Promissory Note to Javelin Venture Partners, L.P., dated May 23, 2014, in the principal amount of $350,000.00 | | | ||
10.25** | | | Subordinated Convertible Promissory Note to Javelin Venture Partners, L.P., dated September 8, 2014, in the principal amount of $80,000.00 | | | ||
10.26** | | | Unsecured Promissory Note to Javelin Venture Partners, L.P., dated October 9, 2014, in the principal amount of $70,000.00 | | | ||
10.27** | | | Subordinated Convertible Promissory Note, dated October 20, 2014, in the principal amount of $80,000.00 | | | ||
10.28** | | | Series C Preferred Stock and Warrant Purchase Agreement, dated December 4, 2014, by and among Ritter Pharmaceuticals, Inc. and the Investors named therein | | | ||
10.29** | | | Form of Indemnification Agreement between Ritter Pharmaceuticals, Inc. and each of its directors and executive officers | | | ||
10.30** | | | Clinical Supply and Operation Agreement, dated December 16, 2009, by and among Ritter Pharmaceuticals, Inc. and Ricerche Sperimentali Montale SpA and Inalco SpA | | | ||
10.31** | | | Amendment 1 to the Clinical Supply and Cooperation Agreement, dated September 25, 2010, by and among Ritter Pharmaceuticals, Inc. and Ricerche Sperimentali Montale SpA and Inalco SpA | | | ||
10.32 | | | Form of Offer Letter, by and between Ritter Pharmaceuticals, Inc. and Andrew J. Ritter | | | ||
10.33 | | | Form of Offer Letter, by and between Ritter Pharmaceuticals, Inc. and Ira E. Ritter | | | | |
10.34 | | | Form of Executive Severance & Change in Control Agreement, by and between Ritter Pharmaceuticals, Inc. and Andrew J. Ritter | | | ||
10.35 | | | Form of Executive Severance & Change in Control Agreement, by and between Ritter Pharmaceuticals, Inc. and Ira E. Ritter | | | ||
21.1** | | | Subsidiaries of Registrant | | | ||
23.1 | | | Consent of Mayer Hoffman McCann P.C., independent registered public accounting firm | | | ||
23.2 | | | Consent of Reed Smith LLP (included in Exhibit 5.1) | | | ||
24.1** | | | Power of Attorney (included on applicable signature pages) | | |
Exhibit 3.3
CERTIFICATE OF AMENDMENT
TO
RESTATED CERTIFICATE OF INCORPORATION
OF
RITTER PHARMACEUTICALS, INC.
a Delaware corporation
Ritter Pharmaceuticals, Inc., a corporation organized and existing under the General Corporation Law of the State of Delaware (the “Corporation”), does hereby certify as follows:
Article IV of the Restated Certificate of Incorporation of this Corporation shall be amended to add after the first paragraph thereof the following paragraph:
“Upon the effectiveness of the Certificate of Amendment of the Restated Certificate of Incorporation adding this paragraph (the "Effective Time"), each ___ shares of the Corporation's Common Stock, par value $0.001 per share, issued and outstanding immediately prior to the Effective Time shall automatically be combined into one (1) validly issued, fully paid and non-assessable share of Common Stock, par value $0.001 per share, without any further action by the Corporation or the holder thereof, subject to the treatment of fractional share interests as described below (the "Reverse Stock Split "). The Reverse Stock Split shall be effected on a certificate-by-certificate basis and no fractional shares shall be issued upon or as a result of the Reverse Stock Split. In lieu of any fractional shares to which the holder would otherwise be entitled as a result of the Reverse Stock Split, the Corporation shall pay an amount of cash (without interest or deduction) equal to the product of (i) the fractional share of Common Stock to which the holder would otherwise be entitled multiplied by (ii) the fair market value per share thereof as of the Effective Time as determined in good faith by the Board of Directors of the Corporation. Each certificate or book entry that immediately prior to the Effective Time represented shares of Common Stock shall thereafter be deemed to represent that number of shares of Common Stock into which the shares of Common Stock represented by such certificate or book entry shall have been combined, subject to the elimination of fractional share interests as described above.”
This Certificate of Amendment was duly adopted in accordance with Section 228 and 242 of the General Corporation Law of the State of Delaware.
In witness whereof , Ritter Pharmaceuticals, Inc. has caused this Certificate of Amendment to be signed by its duly authorized officer this ___ day of _________, 2015.
RITTER PHARMACEUTICALS, INC. | ||
By: | ||
Andrew J. Ritter, | ||
President |
- 2 - |
Exhibit 3.4
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
RITTER PHARMACEUTICALS, INC.
Ritter Pharmaceuticals, Inc. (the “ Corporation ”), an organization organized and existing under the laws of the State of Delaware, hereby certifies that:
ONE: The original name of the Corporation is Ritter Pharmaceuticals, Inc., and the Corporation filed its original Certificate of Incorporation with the Secretary of State of the State of Delaware on September 16, 2008.
TWO: This Amended and Restated Certificate of Incorporation has been duly adopted by the Corporation’s Board of Directors and stockholders in accordance with applicable provisions of Section 228, 242 and 245 of the General Corporation Law of the State of Delaware.
THREE: The Corporation’s Certificate of Incorporation is hereby amended and restated to read in its entirety as follows:
ARTICLE I
CORPORATE NAME
The name of the Corporation is Ritter Pharmaceuticals, Inc.
ARTICLE II
REGISTERED ADDRESS AND AGENT
The address of the Corporation’s registered office in the State of Delaware is the Company Corporation, 2711 Centerville Road, Suite 400, Wilmington, New Castle County, Delaware 19808. The name of the registered agent at such address is The Company Corporation.
ARTICLE III
PURPOSE
The purpose of the Corporation is to engage in any lawful act or activity for which a corporation may be organized under the General Corporation Law of the State of Delaware (the “ DGCL ”).
ARTICLE IV
AUTHORIZED CAPITAL STOCK
A. The total number of shares of stock that the Corporation shall have authority to issue is Thirty Million (30,000,000), consisting of Twenty-Five Million (25,000,000) shares of common stock, $0.001 par value per share (the “ Common Stock ”), and Five Million (5,000,000) shares of preferred stock, $0.001 par value per share (the “ Preferred Stock ”).
B. Common Stock .
1. Voting Rights . Each holder of Common Stock, as such, shall be entitled to one vote for each share of Common Stock held of record by such holder on all matters on which stockholders generally are entitled to vote; provided, however, that, except as otherwise required by law, holders of Common Stock, as such, shall not be entitled to vote on any amendment to this Amended and Restated Certificate of Incorporation (including any Certificate of Designations relating to any series of Preferred Stock) that relates solely to the terms of one or more outstanding series of Preferred Stock if the holders of such affected series are entitled, either separately or together with the holders of one or more other such series, to vote thereon pursuant to this Amended and Restated Certificate of Incorporation (including any Certificate of Designations relating to any series of Preferred Stock) or pursuant to DGCL.
1 |
2. Dividend Rights . Subject to the prior rights of holders of all classes of stock at the time outstanding having prior rights as to dividends, the holders of the Common Stock shall be entitled to receive, when and as declared by the Board of Directors, out of any assets of the Corporation legally available therefor, such dividends, distributed ratably among the holders of the Common Stock in proportion to the number of shares of such Common Stock owned by each such holder, as may be declared from time to time by the Board of Directors.
3. Liquidation Rights . Subject to the prior rights of holders of all classes of stock at the time outstanding having prior rights as to distributions in the event of liquidation, dissolution or winding up of the Corporation, and after any and all distributions are made in accordance therewith, in such event, either voluntary or involuntary, the remaining assets and funds of the Corporation legally available for distribution shall be distributed ratably among the holders of the Common Stock in proportion to the number of shares of such Common Stock owned by each such holder.
C. Preferred Stock . The Board of Directors is authorized, subject to any limitations prescribed by law, to provide for the issuance of the shares of Preferred Stock in series and, by filing a certificate pursuant to the applicable law of the State of Delaware, to establish from time to time the number of shares to be included in each such series, and to fix the designation, powers, preferences and rights of the shares of each such series and any qualifications, limitations or restrictions thereon. The number of authorized shares of Preferred Stock may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of a majority of the outstanding shares of Common Stock without a vote of the holders of the Preferred Stock, or of any series thereof, unless a vote of any such holders is required pursuant to the certificate or certificates establishing the series of Preferred Stock.
ARTICLE V
BOARD OF DIRECTORS
A. Number and Election . The business and affairs of the Corporation shall be managed by or under the direction of the Board of Directors. The number of directors of the Corporation shall be as specified in the Bylaws of the Corporation, but such number may from time to time be increased or decreased in such manner as may be prescribed by the Bylaws. In no event shall the number of directors be less than the minimum prescribed by law. The directors of the Corporation need not be elected by written ballot unless the Bylaws so provide. Directors need not be stockholders.
B. Power and Authority . In addition to the powers and authority expressly conferred upon them by statute or by this Amended and Restated Certificate of Incorporation or the Bylaws of the Corporation, the directors are hereby empowered to exercise all such powers and do all such acts and things as may be exercised or done by the Corporation.
ARTICLE VI
AMENDMENTS TO BYLAWS
Except as otherwise provided in this Amended and Restated Certificate of Incorporation, in furtherance and not in limitation of the powers conferred by statute, the Board of Directors is expressly authorized to make, repeal, alter, amend and rescind any or all of the Bylaws of the Corporation.
ARTICLE VIII
LIMITATION OF LIABILITY
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, except for liability (i) for any breach of the director’s duty of loyalty to the Corporation or its stockholders, (ii) for acts or omissions not in good faith or which involved intentional misconduct or a knowing violation of law, (iii) under Section 174 of the DGCL, or (iv) for any transaction from which the director derived an improper personal benefit. No amendment to or repeal of this ARTICLE VIII shall apply to or have any effect on the liability or alleged liability of any director of the Corporation for or with respect to any acts or omissions of such director occurring prior to such amendment.
ARTICLE IX
INDEMNIFICATION
Each person (and the heirs, executors or administrators of such person) who was or is a party or is threatened to
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be made a party to, or is involved in any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that such person is or was a director or officer of the Corporation or is or was serving at the request of the Corporation as a director or officer of another corporation, partnership, joint venture, trust or other enterprise, shall be indemnified and held harmless by the Corporation to the fullest extent permitted by the DGCL. The right to indemnification conferred in this ARTICLE IX shall also include the right to be paid by the Corporation the expenses incurred in connection with any such proceeding in advance of its final disposition to the fullest extent authorized by the DGCL. The right to indemnification conferred in this ARTICLE IX shall be a contract right. The Corporation may, by action of its Board of Directors, provide indemnification to such of the employees and agents of the Corporation to such extent and to such effect as the Board of Directors shall determine to be appropriate and authorized by the DGCL. The rights and authority conferred in this ARTICLE IX shall not be exclusive of any other right which any person may otherwise have or hereafter acquire. Neither the amendment nor repeal of this ARTICLE IX, nor the adoption of any provision of this Amended and Restated Certificate of Incorporation or the Bylaws of the Corporation, nor, to the fullest extent permitted by the DGCL, any modification of law, shall eliminate or reduce the effect of this ARTICLE IX in respect of any acts or omissions occurring prior to such amendment, repeal, adoption or modification.
ARTICLE X
STOCKHOLDER MEETINGS
Meetings of the stockholders of the Corporation may be held within or without the State of Delaware, as the Bylaws of the Corporation may provide. The books of the Corporation may be kept (subject to any provision contained in the DGCL) outside of the State of Delaware at such place or places as may be designated from time to time by the board of directors of the Corporation or in the Bylaws of the Corporation.
ARTICLE XI
AMENDMENTS TO CERTIFICATE OF INCORPORATION
The Corporation reserves the right to amend, alter, change or repeal any provision contained in this Amended and Restated Certificate of Incorporation, in the manner now or hereafter prescribed by statute, and all rights conferred upon stockholders herein are granted subject to this reservation.
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IN WITNESS WHEREOF , this Amended and Restated Certificate of Incorporation has been executed by a duly authorized officer of the Corporation on this ___ day of _______________, 2015.
RITTER PHARMACEUTICALS, INC. | ||
By: | ||
Name: | ||
Title: |
Exhibit 3.5
AMENDED AND RESTATED BYLAWS
OF
RITTER PHARMACEUTICALS, INC.
ARTICLE
1
OFFICES
Section 1.01. Registered Office. The address of the registered office of Ritter Pharmaceuticals, Inc. (hereinafter, the “ Corporation ”) is the Company Corporation, 2711 Centerville Road, Suite 400, Wilmington, New Castle County, Delaware 19808. The name of the registered agent at such address is The Company Corporation.
Section 1.02. Other Offices . The Corporation may also have offices at such other places both within and without the State of Delaware as the board of directors of the Corporation (the “ Board of Directors ”) may from time to time determine or the business of the Corporation may require.
Section 1.03. Books . The books of the Corporation may be kept within or without the State of Delaware as the Board of Directors may from time to time determine or the business of the Corporation may require.
ARTICLE
2
MEETINGS OF STOCKHOLDERS
Section 2.01. Time and Place of Meetings . All meetings of the stockholders shall be held at such place, if any, either within or without the State of Delaware, on such date and at such time as may be determined from time to time by the Board of Directors (or the Chairman in the absence of a designation by the Board of Directors).
Section 2.02. Annual Meetings . An annual meeting of the stockholders shall be held for the election of directors and to transact such other business as may properly be brought before the meeting. Any other proper business may be transacted at the annual meeting. The Board of Directors may postpone, reschedule or cancel any annual meeting of stockholders previously scheduled by the Board of Directors.
Section 2.03. Special Meetings . Special meetings of the stockholders for any purpose or purposes may be called by the Board of Directors, the Chairman of the Board of Directors, the Chief Executive Officer or the President of the Corporation, and may not be called by any other person. Business transacted at any special meeting of the stockholders shall be limited to the purposes stated in the notice. The Board of Directors may postpone, reschedule or cancel any special meeting of stockholders previously scheduled by the Board of Directors. Notwithstanding the foregoing, whenever holders of one or more classes or series of preferred stock shall have the right, voting separately as a class or series, to elect directors, such holders may call, pursuant to the terms of the resolution or resolutions adopted by the Board of Directors, special meetings of holders of such Preferred Stock.
Section 2.04. Notice of Meetings and Adjourned Meetings; Waivers of Notice .
(a) Whenever stockholders are required or permitted to take any action at a meeting, a written notice of the meeting shall be given which shall state the place, if any, date and hour of the meeting, the means of remote communications, if any, by which stockholders and proxy holders may be deemed to be present in person and vote at such meeting, the record date for determining the stockholders entitled to vote at the meeting (if such date is different from the record date for stockholders entitled to notice of the meeting) and, in the case of a special meeting, the purpose or purposes for which the meeting is called. Unless otherwise provided by the General Corporation Law of the State of Delaware as the same exists or may hereafter be amended (“ Delaware Law ”), the Certificate of Incorporation or these Bylaws, such notice of any meeting shall be given not less than ten (10) nor more than sixty (60) days before the date of the meeting to each stockholder of record entitled to vote at such meeting. Except as otherwise provided herein or permitted by applicable law, notice of stockholders shall be in writing and delivered personally or mailed to the stockholders at their address appearing on the books of the Corporation. Without limiting the manner by which notice otherwise may be given effectively to stockholders, notice of meetings may be given to stockholders by means of electronic transmission in accordance with applicable law.
(b) Any meeting of the stockholders, annual or special, may be adjourned from time to time to reconvene at the same or some other place, if any. Unless these Bylaws otherwise require, when a meeting is adjourned to another time or place (whether or not a quorum is present), notice need not be given of the adjourned meeting if the time, place, if any, thereof and the means of remote communications, if any, by which stockholders and proxy holders may be deemed to be present in person and vote at such meeting, are announced at the meeting at which the adjournment is taken. At the adjourned meeting, the Corporation may transact any business which might have been transacted at the original meeting. If the adjournment is for more than thirty (30) days, or after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting as of the record date for determining the stockholders entitled to notice of the meeting. If mailed, such notice shall be deemed to be given when deposited in the United States mail, postage prepaid, directed to the stockholder at such stockholder’s address as it appears on the records of the Corporation.
(c) A written waiver of any such notice signed by the person entitled thereto, or a waiver by electronic transmission by the person entitled to notice, whether before or after the time stated therein, shall be deemed equivalent to notice. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except when the person attends the meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. Any stockholder so waiving notice of the meeting shall be bound by the proceedings of the meeting in all respects as if due notice thereof had been given. Business transacted at any special meeting of stockholders shall be limited to the purposes stated in the notice.
Section 2.05. Quorum . Unless otherwise provided in the Certificate of Incorporation or these Bylaws, and subject to Delaware Law, the presence, in person or by proxy, of the holders of a majority of the outstanding capital stock of the Corporation entitled to
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vote at a meeting of stockholders shall constitute a quorum for the transaction of business. If, however, such quorum shall not be present or represented at any meeting of the stockholders, the chairman of the meeting may adjourn the meeting in the manner provided in Section 2.04, without notice other than announcement at the meeting, until a quorum shall be present or represented. A quorum once established, shall not be broken by the subsequent withdrawal of enough votes to leave less than a quorum. At such adjourned meeting at which a quorum shall be present or represented, any business may be transacted which might have been transacted at the meeting as originally notified. Shares of stock of the Corporation belonging to the Corporation or to another corporation, if a majority of the shares entitled to vote in the election of directors of such other corporation is held, directly or indirectly, by the Corporation, shall neither be entitled to vote nor be counted for quorum purposes; provided, however, that the foregoing shall not limit the right of the Corporation, or any subsidiary of the Corporation, to vote stock, including but not limited to its own stock, held by it in a fiduciary capacity.
Section 2.06. Voting; Proxies .
(a) Unless otherwise provided in the Certificate of Incorporation and subject to Delaware Law, each stockholder shall be entitled to one vote for each outstanding share of capital stock of the Corporation held by such stockholder. Any share of capital stock of the Corporation held by the Corporation shall have no voting rights. Except as otherwise provided by law, the Certificate of Incorporation or these Bylaws, in all matters other than the election of directors, the affirmative vote of the majority of the votes cast by the shares of capital stock of the Corporation present in person or represented by proxy at the meeting and entitled to vote on the subject matter shall be the act of the stockholders, provided a quorum is present. Subject to the rights of the holders of any series of preferred stock to elect additional directors under specific circumstances, directors shall be elected by a plurality of the votes cast at a meeting of the stockholders by the holders of stock entitled to vote in the election of directors, provided a quorum is present.
(b) Each stockholder entitled to vote at a meeting of stockholders, or to express consent or dissent to a corporate action in writing without a meeting, may authorize another person or persons to act for such stockholder by proxy, appointed by an instrument in writing, subscribed by such stockholder or by his attorney thereunto authorized, or by proxy sent by cable, telegram or by any means of electronic communication permitted by law, which results in a writing from such stockholder or by his attorney, and delivered to the secretary of the meeting. No proxy shall be voted or acted upon after three (3) years from its date, unless said proxy provides for a longer period. A proxy shall be irrevocable if it states that it is irrevocable and if, and only as long as, it is coupled with an interest sufficient in law to support an irrevocable power. A stockholder may revoke any proxy which is not irrevocable by attending the meeting and voting in person or by delivering to the Secretary of the Corporation a revocation of the proxy or a new proxy bearing a later date.
(c) Voting at meetings of stockholders need not be by written ballot. Votes may be cast by any stockholder entitled to vote in person or by his proxy. In determining the number of votes cast for or against a proposal or nominee, shares abstaining from voting on a matter (including elections) will not be treated as a vote cast, but will be counted for purposes of
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determining a quorum. A non-vote by a broker will be counted for purposes of determining a quorum but not for purposes of determining the number of votes cast.
Section 2.07. Inspector of Elections; Opening and Closing the Polls . The Board of Directors by resolution shall appoint one or more inspectors, which inspector or inspectors may include individuals who serve the Corporation in other capacities, including, without limitation, as officers, employees, agents or representatives, to act at the meetings of stockholders and make a written report thereof. One or more persons may be designated as alternate inspectors to replace any inspector who fails to act. If no inspector or alternate has been appointed to act or is able to act at a meeting of stockholders, the presiding officer of the meeting shall appoint one or more inspectors to act at the meeting. Each inspector, before discharging his or her duties, shall take and sign an oath faithfully to execute the duties of inspector with strict impartiality and according to the best of his or her ability. The inspectors shall have the duties prescribed by law. The presiding officer of the meeting shall fix and announce at the meeting the date and time of the opening and the closing of the polls for each matter upon which the stockholders will vote at a meeting.
Section 2.08. Written Consent of Stockholders Without a Meeting . Any action to be taken at any annual or special meeting of stockholders may be taken without a meeting, without prior notice and without a vote, if a consent or consents in writing, setting forth the action to be so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted and shall be delivered (by hand or by certified or registered mail, return receipt requested) to the Corporation by delivery to its registered office in the State of Delaware, its principal place of business or an officer or agent of the Corporation having custody of the book in which proceedings of meetings of stockholders are recorded. Every written consent shall bear the date of signature of each stockholder who signs the consent, and no written consent shall be effective to take the corporate action referred to therein unless, within 60 days of the earliest dated consent delivered in the manner required by this Section 2.08, written consents signed by a sufficient number of holders to take action are delivered to the Corporation as aforesaid. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall, to the extent required by applicable law, be given to those stockholders who have not consented in writing, and who, if the action had been taken at a meeting, would have been entitled to notice of the meeting if the record date for notice of such meeting had been the date that written consents signed by a sufficient number of holders to take the action were delivered to the Corporation.
Section 2.09. Organization . At each meeting of stockholders, the Chairman of the Board, if one shall have been elected, or in the Chairman's absence or if one shall not have been elected, the director designated by the vote of the majority of the directors present at such meeting, shall act as chairman of, and preside at, the meeting. The Secretary, or in the Secretary's absence or inability to act, the person whom the chairman of the meeting shall appoint secretary of the meeting, shall act as secretary of the meeting and keep the minutes thereof.
Section 2.10. Order of Business . The order of business at all meetings of stockholders shall be as determined by the chairman of the meeting.
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Section 2.11. Nomination of Directors . Only persons who are nominated in accordance with the procedures set forth in these Bylaws shall be eligible to serve as directors. Nominations of persons for election to the Board of Directors of the Corporation may be made at an annual meeting of stockholders (a) by or at the direction of the Board of Directors or (b) by any stockholder of the Corporation who is a stockholder of record at the time of giving of notice provided for in this Section 2.11, who shall be entitled to vote for the election of directors at the meeting and who complies with the notice procedures set forth in this Section 2.11. Such nominations, other than those made by or at the direction of the Board of Directors, shall be made pursuant to timely notice in writing to the secretary of the Corporation. To be timely, a stockholder's notice shall be delivered to or mailed and received at the principal executive offices of the Corporation not later than the close of business on the ninetieth (90 th ) day, nor earlier than the close of business on the one hundred twentieth (120 th ) day in advance of the first anniversary of the preceding year's annual meeting of stockholders; provided, however, that in the event that the date of the annual meeting is advanced more than thirty (30) days prior to such anniversary date or delayed more than sixty (60) days after such anniversary date then to be timely such notice must be received by the Corporation notice not earlier than the close of business on the one hundred twentieth (120th) day prior to such annual meeting and not later than the close of business on the later of the ninetieth (90th) day prior to such annual meeting or the tenth (10th) day following the day on which public announcement of the date of such meeting is first made by the Corporation. In no event shall the public announcement of the new meeting date commence a new notice time period (or extend any notice time period).
Any stockholder notice delivered pursuant to this Section 2.11 shall set forth (a) as to each person whom the stockholder proposes to nominate for election or reelection as a director, (i) all information relating to such person as would be required to be disclosed in solicitations of proxies for the election of such nominees as directors pursuant to Regulation 14A under the Exchange Act; (ii) such person’s written consent to serve as a director if elected; (iii) a description of all direct and indirect compensation or other material monetary agreements, arrangements and understandings during the past three years, and any other material relationships, between or among such stockholder of record and beneficial owner or owners, if any, and their respective affiliates and associates, or other persons acting in concert therewith, on the one hand, and each proposed nominee and his or her respective affiliates and associates or other persons acting in concert therewith, on the other hand, including without limitation all information that would be required to be disclosed pursuant to Rule 404 promulgated under Regulation S-K if the stockholder of record making the nomination and any beneficial owner or owners, if any, or other person on whose behalf the nomination is made, or any affiliate or associate thereof or other person acting in concert therewith, were the “registrant” for purposes of such rule and the nominee were a director or executive officer of such registrant; and (iv) a completed and signed questionnaire, representation or agreement as may be required by the Corporation pursuant to Section 3.03 of Article 3 of these Bylaws, and (b) as to the stockholder giving the notice (i) the name and address, as they appear on the Corporation's books, of such stockholder, and of the beneficial owner, if any, on whose behalf the nomination is being made, (ii) the class and number of shares of the Corporation which are owned (beneficially and of record) by such stockholder and owned by the beneficial owner, if any, on whose behalf the nomination is being made, as of the date of the stockholder’s notice, and a representation that the stockholder will notify the Corporation in writing of the class and number of such shares owned of record and beneficially as of the record date for the meeting promptly following the later of
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the record date or the date notice of the record date is first publicly disclosed, (iii) a description of any agreement, arrangement or understanding with respect to such nomination between or among the stockholder and any of its affiliates or associates, and any others (including their names) acting in concert with any of the foregoing, and a representation that the stockholder will notify the Corporation in writing of any such agreement, arrangement or understanding in effect as of the record date for the meeting promptly following the later of the record date or the date notice of the record date is first publicly disclosed, (iv) a description of any agreement, arrangement or understanding (including, regardless of the form of settlement, any derivative, long or short positions, profit interests, forwards, futures, swaps, options, warrants, convertible securities, stock appreciation or similar rights, hedging transactions and borrowed or loaned shares) that has been entered into as of the date of the proposing stockholder’s notice, by or on behalf of such stockholder with respect to the Corporation’s securities, or any other agreement, arrangement or understanding that has been made, the effect or intent of which is to create or mitigate loss to, manage risk or benefit of share price changes for, or increase or decrease the voting power of, such stockholder with respect to the Corporation's securities, and a representation that the stockholder will notify the Corporation in writing of any such agreement, arrangement or understanding in effect as of the record date for the meeting promptly following the later of the record date or the date notice of the record date is first publicly disclosed; (v) a representation that the proposing stockholder is a holder of record of the shares of the Corporation entitled to vote at the meeting and intends to appear in person or by proxy at the meeting to nominate the person or persons specified in the notice, and (vi) a representation whether the proposing stockholder intends to deliver a proxy statement and/or form of proxy to holders of at least the percentage of the Corporation’s outstanding capital stock required to approve the nomination and/or otherwise to solicit proxies from the stockholders in support of the nomination. For purposes of these Bylaws, a person shall be deemed to be acting in concert with another person if such person knowingly acts toward a common goal relating to the management, governance or control of the corporation in parallel with such other person where (A) each person is conscious of the other person’s conduct or intent and this awareness is an element in their decision-making process and (B) at least one additional factor suggests that persons intend to act in parallel, which additional factors may include attending meetings, conducting discussions or making or soliciting invitations to act in parallel.
The Corporation may require any proposed nominee to furnish such other information as it may reasonably require to determine the eligibility of such proposed nominee to serve as an independent director of the Corporation or that could be material to a reasonable stockholder’s understanding of the independence, or lack thereof, of such nominee. No person shall be eligible to serve as a director of the Corporation unless nominated in accordance with the procedures set forth in this bylaw. The chairman of the meeting shall, if the facts warrant, determine and declare to the meeting that a nomination was not made in accordance with the procedures prescribed by the Bylaws, and if he should so determine, he shall so declare to the meeting and the defective nomination shall be disregarded. Notwithstanding the foregoing provisions of this Section 2.11, a stockholder shall also comply with all applicable requirements of the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder with respect to the matters set forth in this Section 2.11.
Section 2.12. Notice of Business . At any meeting of the stockholders, only such business shall be conducted as shall have been brought before the meeting (a) by or at the
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direction of the Board of Directors or (b) solely with respect to annual meetings, by any stockholder of the Corporation who is a stockholder of record at the time of giving of the notice provided for in this Section 2.12, who shall be entitled to vote at such meeting and who complies with the notice procedures set forth in this Section 2.12. In addition, any proposal of business must be a proper matter for stockholder action. For business to be properly brought before a stockholder meeting by a stockholder, the stockholder must have given timely notice thereof in writing to the secretary of the Corporation. To be timely, a stockholder’s notice shall be delivered to or mailed and received at the principal executive offices of the Corporation not later than the close of business on the ninetieth (90 th ) day, nor earlier than the close of business on the one hundred twentieth (120 th ) day in advance of the first anniversary of the preceding year’s annual meeting of stockholders; provided, however, that in the event that the date of the annual meeting is advanced more than thirty (30) days prior to such anniversary date or delayed more than sixty (60) days after such anniversary date then to be timely such notice must be received by the Corporation no later than the later of the close of business on the seventieth (70 th ) day prior to the date of the meeting or the close of business on the tenth (10 th ) day following the day on which public announcement of the date of the meeting was made. In no event shall the public announcement of the new meeting date commence a new notice time period (or extend any notice time period). A stockholder’s notice to the secretary shall set forth as to each matter the stockholder proposes to bring before the meeting (a) a brief description of the business desired to be brought before the meeting and the reasons for conducting such business at the meeting, (b) the name and address, as they appear on the Corporation’s books, of the stockholder proposing such business and of the beneficial owner, if any, on whose behalf the proposal is being made, (c) the class and number of shares of the Corporation which are owned (beneficially and of record) by such stockholder and owned by the beneficial owner, if any, on whose behalf the proposal is being made, as of the date of the stockholder’s notice, and a representation that the stockholder will notify the Corporation in writing of the class and number of such shares owned of record and beneficially as of the record date for the meeting promptly following the later of the record date or the date notice of the record date is first publicly disclosed, (d) a description of any agreement, arrangement or understanding with respect to such nomination between or among the stockholder and any of its affiliates or associates, and any others (including their names) acting in concert with any of the foregoing, and a representation that the stockholder will notify the Corporation in writing of any such agreement, arrangement or understanding in effect as of the record date for the meeting promptly following the later of the record date or the date notice of the record date is first publicly disclosed, (e) a description of any agreement, arrangement or understanding (including, regardless of the form of settlement, any derivative, long or short positions, profit interests, forwards, futures, swaps, options, warrants, convertible securities, stock appreciation or similar rights, hedging transactions and borrowed or loaned shares) that has been entered into as of the date of the proposing stockholder’s notice, by or on behalf of such stockholder with respect to the Corporation’s securities, or any other agreement, arrangement or understanding that has been made, the effect or intent of which is to create or mitigate loss to, manage risk or benefit of share price changes for, or increase or decrease the voting power of, such stockholder with respect to the Corporation's securities, and a representation that the stockholder will notify the Corporation in writing of any such agreement, arrangement or understanding in effect as of the record date for the meeting promptly following the later of the record date or the date notice of the record date is first publicly disclosed, (f) a representation that the proposing stockholder is a holder of record of the shares of the
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Corporation entitled to vote at the meeting and intends to appear in person or by proxy at the meeting to propose the business specified in the notice, (g) a representation whether the proposing stockholder intends to deliver a proxy statement and/or form of proxy to holders of at least the percentage of the Corporation’s outstanding capital stock required to approve the proposal and/or otherwise to solicit proxies from the stockholders in support of the proposal, (h) any material interest of the stockholder in such business, and (i) any other information relating to such stockholder and beneficial owner, if any, on whose behalf the proposal is being made, required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for the proposal and pursuant to and in accordance with Regulation 14A under the Securities Exchange Act of 1934. Notwithstanding anything in the Bylaws to the contrary, no business shall be conducted at a stockholder meeting except in accordance with the procedures set forth in this Section 2.12. The chairman of the meeting shall, if the facts warrant, determine and declare to the meeting that business was not properly brought before the meeting and in accordance with the provisions of the Bylaws, and if he should so determine, he shall so declare to the meeting and any such business not properly brought before the meeting shall not be transacted. Notwithstanding the foregoing, provisions of this Section 2.12, a stockholder shall also comply with all applicable requirements of the Securities Exchange Act of 1934, and the rules and regulations thereunder with respect to the matters set forth in this Section 2.12.
Section 2.13. Proxy Rules . The foregoing notice requirements of Section 2.12 shall be deemed satisfied by a stockholder with respect to business other than a nomination if the stockholder has notified the Corporation of his, her or its intention to present a proposal at an annual meeting in compliance with the applicable rules and regulations promulgated under Regulation 14A under the Securities Exchange Act of 1934 and such stockholder’s proposal has been included in a proxy statement that has been prepared by the Corporation to solicit proxies for such annual meeting.
Section 2.14. Effect of Noncompliance . Notwithstanding anything in these Bylaws to the contrary: (i) no nominations shall be made or business shall be conducted at any annual meeting except in accordance with the procedures set forth in this Article 2, and (ii) unless otherwise required by law, if a stockholder intending to propose business or make nominations at an annual meeting pursuant to this Article 2 does not provide the information required under this Article 2 to the Corporation promptly following the later of the record date or the date notice of the record date is first publicly disclosed, or the proposing stockholder (or a qualified representative of the proposing stockholder) does not appear at the meeting to present the proposed business or nominations, such business or nominations shall not be considered, notwithstanding that proxies in respect of such business or nominations may have been received by the Corporation. The requirements of this Article 2 shall apply to any business or nominations to be brought before an annual meeting by a stockholder whether such business or nomination are to be included in the Corporation’s proxy statement pursuant to Rule 14a-8 of the Exchange Act or presented to stockholders by means of an independently financed proxy solicitation. The requirements of this Article 2 are included to provide the Corporation notice of a stockholder’s intention to bring business or nominations before an annual meeting and shall in no event be construed as imposing upon any stockholder the requirement to seek approval from the Corporation as a condition precedent to bringing any such business or making such nominations before an annual meeting.
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ARTICLE
3
DIRECTORS
Section 3.01. General Powers . Except as otherwise provided by Delaware Law or the Certificate of Incorporation, the business and affairs of the Corporation shall be managed by or under the direction of the Board of Directors. The Board of Directors may adopt such rules and procedures, not inconsistent with the Certificate of Incorporation, these Bylaws, Delaware Law or other applicable law as it may deem proper for the conduct of its meetings and the management of the Corporation
Section 3.02. Number, Election and Term of Office. The Board of Directors shall consist of not less than three (3) nor more than eleven (11) directors, with the exact number of directors to be determined from time to time solely by resolution adopted by the affirmative vote of a majority of the entire Board of Directors. Except as otherwise provided in the Certificate of Incorporation, each director shall serve for a term ending on the date of the annual meeting of stockholders next following the annual meeting at which such director was elected. Notwithstanding the foregoing, each director shall hold office until such director’s successor shall have been duly elected and qualified or until such director’s earlier death, resignation or removal. Directors need not be stockholders.
Section 3.03. Eligibility for Nomination as a Director . To be eligible to be a nominee for election or reelection as a director of the Corporation, a person must deliver (in accordance with the time periods prescribed for delivery of notice under Section 2.11 of Article 2 of these Bylaws or such period as the Board of Directors may specify) to the Secretary at the principal executive offices of the Corporation a written questionnaire with respect to the background and qualification of such person and the background of any other person or entity on whose behalf the nomination is being made (which form of questionnaire shall be provided by the Secretary upon written request) and a written representation and agreement (in the form provided by the Secretary upon written request) that such person (a) is not and will not become a party to (i) any agreement, arrangement or understanding with, and has not given any commitment or assurance to, any person or entity as to how such person, if elected as a director of the Corporation, will act or vote on any issue or question (a “ Voting Commitment ”) that has not been disclosed in writing to the Corporation or (ii) any Voting Commitment that could limit or interfere with such person’s ability to comply, if elected as a director of the Corporation, with such person’s fiduciary duties under applicable law, (b) is not and will not become a party to any agreement, arrangement or understanding with any person or entity other than the Corporation with respect to any direct or indirect compensation, reimbursement or indemnification in connection with service or action as a director that has not been disclosed therein, and (c) in such person’s individual capacity and on behalf of any person or entity on whose behalf the nomination is being made, would be in compliance, if elected as a director of the Corporation, and will comply with all applicable publicly disclosed corporate governance, conflict of interest, confidentiality and stock ownership and trading policies and guidelines of the Corporation.
Section 3.04. Quorum and Manner of Acting . Unless the Certificate of Incorporation or these Bylaws require a greater number, the presence of a majority of the total number of directors shall constitute a quorum for the transaction of business, and the affirmative
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vote of a majority of the directors present at a meeting at which a quorum is present shall be the act of the Board of Directors. When a meeting is adjourned to another time or place (whether or not a quorum is present), notice need not be given of the adjourned meeting if the time and place thereof are announced at the meeting at which the adjournment is taken. At the adjourned meeting, the Board of Directors may transact any business which might have been transacted at the original meeting. If a quorum shall not be present at any meeting of the Board of Directors, the directors present thereat shall adjourn the meeting, from time to time, without notice other than announcement at the meeting, until a quorum shall be present.
Section 3.05. Time and Place of Meetings . The Board of Directors shall hold its meetings at such place, either within or without the State of Delaware, and at such time as may be determined from time to time by the Board of Directors (or the Chairman in the absence of a determination by the Board of Directors).
Section 3.06. Annual Meeting. The Board of Directors shall meet for the purpose of organization, the election of officers and the transaction of other business, as soon as practicable after each annual meeting of stockholders, on the same day and at the same place where such annual meeting shall be held. Notice of such meeting need not be given. In the event such annual meeting is not so held, the annual meeting of the Board of Directors may be held at such place either within or without the State of Delaware, on such date and at such time as shall be specified in a notice thereof given as hereinafter provided in Section 3.08 herein or in a waiver of notice thereof signed by any director who chooses to waive the requirement of notice.
Section 3.07. Regular Meetings . After the place and time of regular meetings of the Board of Directors shall have been determined and notice thereof shall have been once given to each member of the Board of Directors, regular meetings may be held without further notice being given.
Section 3.08. Special Meetings . Special meetings of the Board of Directors may be called by the Chairman of the Board, the Chief Executive Officer or the President and shall be called by the Chairman of the Board, the Chief Executive Officer, President or Secretary on the written request of three or more directors. Notice of special meetings of the Board of Directors shall be given to each director at least two days before the date of the meeting in such manner as is determined by the Board of Directors.
Section 3.09. Committees . The Board of Directors may designate one or more committees, each committee to consist of one or more of the directors of the Corporation. The Board may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. In the absence or disqualification of a member of a committee, the member or members present at any meeting and not disqualified from voting, whether or not such member or members constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in the place of any such absent or disqualified member. Any such committee, to the extent provided in the resolution of the Board of Directors or by applicable law, shall have and may exercise all the powers and authority of the Board of Directors in the management of the business and affairs of the Corporation, and may authorize the seal of the Corporation to be affixed to all papers which may require it; but no such committee shall have the power or authority in reference to the
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following matter: (a) approving or adopting, or recommending to the stockholders, any action or matter expressly required by Delaware Law to be submitted to the stockholders for approval or (b) adopting, amending or repealing any bylaw of the Corporation. Unless the Board of Directors provides otherwise, at all meetings of such committee, a majority of the then authorized members of the committee shall constitute a quorum for the transaction of business, and the vote of a majority of the members of the committee present at the meeting at which there is a quorum shall be the act of the Committee. Each committee shall keep regular minutes of its meetings and report the same to the Board of Directors when required. Except as otherwise provided in the Certificate of Incorporation, these Bylaws, or the resolution of the Board of Directors designating the committee, a committee may create one or more subcommittees, each subcommittee to consist of one or more members of the committee, and delegate to a subcommittee any or all of the powers and authority of the committee.
Section 3.10. Action by Consent . Unless otherwise restricted by the Certificate of Incorporation or these Bylaws, any action required or permitted to be taken at any meeting of the Board of Directors or of any committee thereof may be taken without a meeting, if all members of the Board or such committee, as the case may be, consent thereto in writing or by electronic transmission, and the writing or writings or electronic transmission or transmissions, are filed with the minutes of proceedings of the Board of Directors or such committee. Such filing shall be in paper form if the minutes are maintained in paper form and shall be in electronic form if the minutes are maintained in electronic form.
Section 3.11. Telephonic Meetings . Unless otherwise restricted by the Certificate of Incorporation or these Bylaws, members of the Board of Directors, or any committee designated by the Board of Directors, may participate in a meeting of the Board of Directors, or such committee, as the case may be, by means of conference telephone or other communications equipment by means of which all persons participating in the meeting can hear each other, and such participation in a meeting shall constitute presence in person at the meeting.
Section 3.12. Resignation . Any director may resign at any time by giving notice in writing or by electronic transmission to the Board of Directors or to the Secretary of the Corporation. The resignation of any director shall take effect upon receipt of notice thereof or at such later time as shall be specified in such notice; and unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective.
Section 3.13. Vacancies . Unless otherwise provided in the Certificate of Incorporation, vacancies on the Board of Directors resulting from death, resignation, removal or otherwise and newly created directorships resulting from any increase in the number of directors may be filled solely by the affirmative vote of a majority of the remaining directors then in office (although less than a quorum) or by the sole remaining director. Each director so elected shall hold office until the earlier of the expiration of the term of office of the director whom he or she has replaced, a successor is duly elected and qualified or the earlier of such director’s death, resignation or removal. If there are no directors in office, then an election of directors may be held in accordance with Delaware Law. Unless otherwise provided in the Certificate of Incorporation, when one or more directors shall resign from the Board, effective at a future date, a majority of the directors then in office, including those who have so resigned, shall have the power to fill such future vacancy or vacancies, the vote thereon to take effect when such
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resignation or resignations shall become effective, and each director so chosen shall hold office as provided in the filling of the other vacancies.
Section 3.14. Removal . Except as may otherwise be provided by the DGCL, any director or the entire Board of Directors may be removed, with or without cause, at an annual meeting or at a special meeting called for that purpose, by the holders of a majority of the shares then entitled to vote at an election of directors.
Section 3.15. Compensation . Unless otherwise restricted by the Certificate of Incorporation or these Bylaws, the Board of Directors shall have authority to fix the compensation of directors, including fees and reimbursement of expenses.
Section 3.16. Preferred Stock Directors . Notwithstanding anything else contained herein, whenever the holders of one or more classes or series of Preferred Stock shall have the right, voting separately as a class or series, to elect directors, the election, term of office, filing of vacancies, removal and other features of such directorships shall be governed by the terms of the resolutions applicable thereto adopted by the Board of Directors pursuant to the Certificate of Incorporation, and such directors so elected shall not be subject to the provisions of Sections 3.02, 3.12 and 3.13 of this Article 3 unless otherwise provided therein.
ARTICLE
4
OFFICERS
Section 4.01. Principal Officers . The officers of the Corporation shall be elected by the Board of Directors and shall include a Chief Executive Officer, a President, a Treasurer and a Secretary. The Board of Directors, in its discretion, may also elect a chairman (who must be a director), one or more vice chairmen (who must be directors) and one or more vice presidents, assistant treasurers, assistant secretaries and other officers. Any two or more offices may be held by the same person.
(a) Chief Executive Officer . The Chief Executive Officer shall, when present, preside at all meetings of the stockholders and, unless a Chairman of the Board of Directors has been elected and is present, shall preside at all meetings of the Board of Directors. He or she shall also have general and active management of the business of the Corporation and shall see that all orders and resolutions of the Board of Directors are put into effect. The Chief Executive Officer, unless some other person is specifically authorized by resolution of the Board of Directors, shall sign all bonds, deeds, mortgages, leases, and other contracts of the Corporation. He or she shall have the power to hire and discharge agents and employees who are not Officers of the Corporation.
(b) President . The President shall be the chief operating and administrative officer of the Corporation. He or she shall have general responsibility for the management and control of the operations and administration of the Corporation and shall perform all duties and have all powers which are commonly incident to the office of chief operating officer or which are delegated to him or her by the Board of Directors. Subject to the direction of the Board of Directors and the Chief Executive Officer, the President shall have power to sign all stock
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certificates, contracts, bonds, mortgages and other instruments of the Corporation and shall have general supervision and direction of all of the other officers (other than the Chief Executive Officer), employees and agents of the Corporation, subject in all cases to the orders and resolutions of the Board of Directors and to the direction of the Chief Executive Officer.
(c) Treasurer . The Treasurer shall supervise and be responsible for all the funds and securities of the Corporation, the deposit of all moneys and other valuables to the credit of the Corporation in depositories of the Corporation, borrowings and compliance with the provisions of all indentures, agreements and instruments governing such borrowings to which the Corporation is a party, the disbursement of funds of the Corporation and the investment of its funds, and in general shall perform all of the duties incident to the office of the Treasurer. The Treasurer shall, when requested, counsel with and advise the other officers of the Corporation and shall perform such other duties as such officer may agree with the Chief Executive Officer, President or as the Board of Directors may from time to time determine.
(d) Secretary . The powers and duties of the Secretary are: (i) to act as Secretary at all meetings of the Board of Directors, of the committees of the Board of Directors and of the stockholders and to record the proceedings of such meetings in a book or books to be kept for that purpose; (ii) to see that all notices required to be given by the Corporation are duly given and served; (iii) to act as custodian of the seal of the Corporation and affix the seal or cause it to be affixed to all certificates of stock of the Corporation and to all documents, the execution of which on behalf of the Corporation under its seal is duly authorized in accordance with the provisions of these Bylaws; (iv) to have charge of the books, records and papers of the Corporation and see that the reports, statements and other documents required by law to be kept and filed are properly kept and filed; and (v) to perform all of the duties incident to the office of Secretary. The Secretary shall, when requested, counsel with and advise the other officers of the Corporation and shall perform such other duties as such officer may agree with the Chief Executive Officer, President or as the Board of Directors may from time to time determine.
Section 4.02. Term of Office; Vacancy; and Remuneration . Each officer shall hold office until his or her successor is elected and qualified, or until his or her earlier death, resignation or removal. Any vacancy in any office shall be filled in such manner as the Board of Directors shall determine. The remuneration of all officers of the Corporation shall be fixed by the Board of Directors.
Section 4.03. Subordinate Officers . The Board of Directors may delegate to any principal officer the power to appoint and to remove any such subordinate officers, agents or employees.
Section 4.04. Removal . Except as otherwise permitted with respect to subordinate officers, any officer may be removed, with or without cause, at any time, by the majority vote of the members of the Board of Directors then in office.
Section 4.05. Resignations . Any officer may resign at any time by giving written notice to the Board of Directors (or to a principal officer if the Board of Directors has delegated to such principal officer the power to appoint and to remove such officer) of such person’s resignation. The resignation of any officer shall take effect upon receipt of notice
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thereof or at such later time as shall be specified in such notice; and unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective.
Section 4.06. Powers and Duties . The officers of the Corporation shall have such powers and perform such duties incident to each of their respective offices and such other duties as may from time to time be conferred upon or assigned to them by the Board of Directors.
ARTICLE
5
CAPITAL STOCK
Section 5.01. Certificates for Stock; Uncertificated Shares . The shares of the Corporation shall be represented by certificates, provided that the Board of Directors of the Corporation may provide by resolution or resolutions that some or all of any or all classes or series of its stock shall be uncertificated shares that may be evidenced by a book entry system maintained by the registrar of such stock. Any such resolution shall not apply to shares represented by a certificate until such certificate is surrendered to the Corporation. Except as otherwise provided by law, the rights and obligations of the holders of uncertificated shares and the rights and obligations of the holders of shares represented by certificates of the same class and series shall be identical. Every holder of stock represented by certificates shall be entitled to have a certificate signed by, or in the name of the Corporation by the Chairman or Vice Chairman of the Board of Directors, or the President or Vice President, and by the Treasurer or an Assistant Treasurer or the Secretary or an assistant Secretary of such Corporation representing the number of shares registered in certificate form. Any or all of the signatures on the certificate may be a facsimile. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the Corporation with the same effect as if such person were such officer, transfer agent or registrar at the date of issue. A Corporation shall not have power to issue a certificate in bearer form.
Section 5.02. Transfer of Shares . Shares of the stock of the Corporation may be transferred on the record of stockholders of the Corporation by the holder thereof or by such holder’s duly authorized attorney upon surrender of a certificate therefor properly endorsed or upon receipt of proper transfer instructions from the registered holder of uncertificated shares or by such holder’s duly authorized attorney and upon compliance with appropriate procedures for transferring shares in uncertificated form, unless waived by the Corporation.
Section 5.03. Authority for Additional Rules Regarding Transfer. The Board of Directors shall have the power and authority to make all such rules and regulations as they may deem expedient concerning the issue, transfer and registration of certificated or uncertificated shares of the stock of the Corporation, as well as for the issuance of new certificates in lieu of those which may be lost or destroyed, and may require of any stockholder requesting replacement of lost or destroyed certificates, bond in such amount and in such form as they may deem expedient to indemnify the Corporation, and/or the transfer agents, and/or the registrars of its stock against any claims arising in connection therewith.
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Section 5.04. Lost, Stolen or Destroyed Stock Certificates; Issuance of New Certificates. The Corporation may issue a new certificate of stock in the place of any certificate theretofore issued by it, alleged to have been lost, stolen or destroyed, and the Corporation may require the owner of the lost, stolen or destroyed certificate, or such owner’s legal representative, to give the Corporation a bond sufficient to indemnify it against any claim that may be made against it on account of the alleged loss, theft or destruction of any such certificate or the issuance of such new certificate.
ARTICLE
6
INDEMNIFICATION AND ADVANCEMENT OF EXPENSES
Section 6.01. Right to Indemnification . The Corporation shall indemnify and hold harmless, to the fullest extent permitted by applicable law as it presently exists or may hereafter be amended, any person (a “Covered Person”) who was or is made or is threatened to be made a party or is otherwise involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (a “proceeding”), by reason of the fact that he or she, or a person for whom he or she is the legal representative, is or was a director or officer of the Corporation or, while a director or officer of the Corporation, is or was serving at the request of the Corporation as a director, officer, employee or agent of another Corporation or of a partnership, joint venture, trust, enterprise or nonprofit entity, including service with respect to employee benefit plans, against all liability and loss suffered and expenses (including attorneys’ fees) reasonably incurred by such Covered Person. Notwithstanding the preceding sentence, except as otherwise provided in Section 6.03, the Corporation shall be required to indemnify a Covered Person in connection with a proceeding (or part thereof) commenced by such Covered Person only if the commencement of such proceeding (or part thereof) by the Covered Person was authorized in the specific case by the Board of Directors of the Corporation.
Section 6.02. Prepayment of Expenses . The Corporation shall to the fullest extent not prohibited by applicable law pay the expenses (including attorneys’ fees) incurred by a Covered Person in defending any proceeding in advance of its final disposition, provided, however, that, to the extent required by law, such payment of expenses in advance of the final disposition of the proceeding shall be made only upon receipt of an undertaking by the Covered Person to repay all amounts advanced if it should be ultimately determined that the Covered Person is not entitled to be indemnified under this Article 6 or otherwise.
Section 6.03. Nonexclusivity of Rights . The rights conferred on any Covered Person by this Article 6 shall not be exclusive of any other rights which such Covered Person may have or hereafter acquire under any statute, provision of the Certificate of Incorporation, these Bylaws, agreement, vote of stockholders or disinterested directors or otherwise.
Section 6.04. Other Sources . The Corporation’s obligation, if any, to indemnify or to advance expenses to any Covered Person who was or is serving at its request as a director, officer, employee or agent of another Corporation, partnership, joint venture, trust, enterprise or nonprofit entity shall be reduced by any amount such Covered Person may collect as indemnification or advancement of expenses from such other Corporation, partnership, joint venture, trust, enterprise or non-profit enterprise.
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Section 6.05. Amendment or Repeal . Any right to indemnification or to advancement of expenses of any Covered Person arising hereunder shall not be eliminated or impaired by an amendment to or repeal of these Bylaws after the occurrence of the act or omission that is the subject of the civil, criminal, administrative or investigative action, suit or proceeding for which indemnification or advancement of expenses is sought.
Section 6.06. Other Indemnification and Advancement of Expenses . This Article 6 shall not limit the right of the Corporation, to the extent and in the manner permitted by law, to indemnify and to advance expenses to persons other than Covered Persons when and as authorized by appropriate corporate action.
ARTICLE
7
GENERAL PROVISIONS
Section 7.01. Fixing the Record Date .
(a) In order that the Corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors, and which record date shall not be more than sixty (60) nor less than ten (10) days before the date of such meeting. If the Board of Directors so fixes a date, such date shall also be the record date for determining the stockholders entitled to vote at such meeting unless the Board of Directors determines, at the time it fixes the record date, that a later date on or before the date of the meeting shall be the date for making such determination. If no record date is fixed by the Board of Directors, the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided that the Board of Directors may fix a new record date for the determination of stockholders entitled to vote at the adjourned meeting and in such case shall also fix as the record date for stockholders entitled to notice of such adjourned meeting the same or an earlier date as that fixed for the determination of stockholders entitled to vote therewith at the adjourned meeting.
(b) In order that the Corporation may determine the stockholders entitled to receive payment of any dividend or other distribution or allotment of any rights or the stockholders entitled to exercise any rights in respect of any change, conversion or exchange of stock, or for the purpose of any other lawful action, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted, and which record date shall be not more than sixty (60) days prior to such action. If no record date is fixed, the record date for determining stockholders for any such purpose shall be at the close of business on the day on which the Board of Directors adopts the resolution relating thereto.
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Section 7.02. Dividends . Subject to limitations contained in Delaware Law and the Certificate of Incorporation, the Board of Directors may declare and pay dividends upon the shares of capital stock of the Corporation, which dividends may be paid either in cash, in property or in shares of the capital stock of the Corporation.
Section 7.03. Year . The fiscal year of the Corporation shall commence on January 1 and end on December 31 of each year. The fiscal year of the Corporation may be changed by the Board of Directors.
Section 7.04. Corporate Seal . The corporate seal shall have inscribed thereon the name of the Corporation, the year of its organization and the words "Corporate Seal, Delaware". The seal may be used by causing it or a facsimile thereof to be impressed, affixed or otherwise reproduced.
Section 7.05. Voting of Stock Owned by the Corporation . The Board of Directors may authorize any person, on behalf of the Corporation, to attend, vote at and grant proxies to be used at any meeting of stockholders of any Corporation (except this Corporation) in which the Corporation may hold stock.
Section 7.06. Form of Records . Any records maintained by the Corporation in the regular course of its business, including its stock ledger, books of account, and minute books, may be kept on, or by means of, or be in the form of, any information storage device or method, provided that the records so kept can be converted into clearly legible paper form within a reasonable time.
Section 7.07. Amendments . These Bylaws or any of them, may be altered, amended or repealed, or new Bylaws may be made, by the stockholders entitled to vote thereon at any annual or special meeting thereof or by the Board of Directors. Unless a higher percentage is required by the Certificate of Incorporation as to any matter which is the subject of these Bylaws, all such amendments must be approved by the affirmative vote of the holders of the majority of the total voting power of all outstanding securities of the Corporation then entitled to vote generally in the election of directors, voting together as a single class or by a majority of the Board of Directors.
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Exhibit 4.1
ritter pharmaceuticals, inc. Incorporated under the Laws of the State of delaware authorized: 50,000,000 common shareS, $0.001 PAR Value per share This Certifies That is the owner of Fully Paid and Non-Assessable Common Stock, $0.001 Par Value of ritter pharmaceuticals, inc. transferable on the books of this Corporation in person or by attorney upon surrender of this Certificate duly endorsed or assigned. This Certificate and the shares represented hereby are subject to the laws of the State of Delaware, and to the Articles of Incorporation and the Bylaws of the Corporation, as now or hereafter amended. This Certificate is not valid until countersigned by the Transfer Agent. In witness whereof, the Corporation has caused this Certificate to be signed by the facsimile signatures of its duly authorized officers and to be sealed with the facsimile seal of the Corporation. Dated: chairman SECRETAR Y Countersigned: corporate Stock Transfer, inc. 3200 Cherry Creek South Drive, Suite 430 Denver, CO 80209 By Transfer Agent and Registrar Authorized Officer CUSIP 767836 10 9 See reverse for certain definitions RITTER PHARMACEUTICALS, INC. CORPORATE DELAWARE 1000
ritter pharmaceuticals, inc. Corporat e stoc k transfer, inc. Transfer fee: As required The following abbreviations, when used in the inscription on the face of this certificate, shall be construed as though they were written out in full according to applicable laws or regulations: TEN COM - as tenants in common TEN ENT - as tenants by the entireties UNIF GIFT MIN ACT - Custodian JT TEN - as joint tenants with right (Cust) (Minor) of survivorship and not as under Uniform Gifts to Minors tenants in common Act (State) Additional abbreviations may also be used though not in the above list. PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNE F OR VALUE RECEIVED,hereby sell, assign and transfer unto Please Print or typewrite name and address including Postal Zip Code of assignee Shares of the Common Stock represented by the within Certificate and do hereby irrevocably constitute and appoint Attorney to transfer the said stock on the books of the within-named Corporation, with full power of substitution in the premises. Dated:20, S ignature: X Signature(s) Guaranteed: S ignature: X THE SIGNATURE(S) TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME(S) AS WRITTEN UPON THE FACE OF THE CERTIFICATE IN EVERY PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATEVER. THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (Banks, Stockbrokers, Savings and Loan Associations and Credit Unions) WITH MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM, PURSUANT TO S.E.C. RULE 17Ad-15.
Exhibit 4.6
RITTER PHARMACEUTICALS, INC.
AMENDMENT
No. 4 TO AMENDED AND RESTATED
INVESTORS’ RIGHTS AGREEMENT
This Amendment No. 4 to Amended and Restated Investors’ Rights Agreement (this “ Amendment ”), dated as of May __, 2015, is made by and among Ritter Pharmaceuticals, Inc., a Delaware corporation (the “ Company ”), and the signatories hereto.
RECITALS
A. The Company and certain of its stockholders are parties to that certain Amended and Restated Investors’ Rights Agreement, dated as of November 17, 2010 (the “ IRA ”), as amended by that certain Amendment No. 1 to Amended and Restated Investors’ Rights Agreement, dated as of January 13, 2011 (“ Amendment No. 1 ”), that certain Amendment No. 2 to Amended and Restated Investors’ Rights Agreement, dated as of February 6, 2012 (“ Amendment No. 2 ”), and that certain Amendment No. 3 to Amended and Restated Investors’ Rights Agreement, dated as of December 4, 2014 (“ Amendment No. 3 ;” Amendment No. 1, Amendment No. 2, Amendment No. 3 and the IRA are collectively referred to herein as the “ Existing Agreement ”). Defined terms used but not otherwise defined herein or amended hereby shall have the meaning therefor set forth in the Existing Agreement.
B. Pursuant to Section 6.1 of the Existing Agreement, the Existing Agreement and any term thereof may only be amended, waived, discharged or terminated by a written instrument referencing the Existing Agreement and signed by the Company and Holders holding a majority of the Registrable Securities, which amendment, waiver, discharge or termination shall be binding on each Holder and each future holder of all securities of a Holder.
D. The Company and the undersigned parties to this Amendment, other than the Company, have the requisite votes to amend, waive and terminate provisions of Existing Agreement set forth below, which amendments, waivers and terminations shall be binding upon the Company, the undersigned parties and the other parties to the Existing Agreement and each of their respective successors and assigns.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing recitals and the mutual promises hereinafter set forth, the parties hereto agree as follows:
1. Effective as of immediately prior to, but conditional upon, the consummation of an Initial Public Offering, automatically and without further action by the Company or any of the parties to the Existing Agreement, Section 5 of the Existing Agreement will terminate in its entirety and be of no further force of effect.
2. The undersigned parties hereby waive, for themselves and all parties to the Existing Agreement, any and all rights relating to, and any and all notices, if any, required (or which were required) to be given by Company under, the Existing Agreement to the extent related to an Initial Public Offering and hereby confirm and agree that no registration rights under the Existing
1 |
Agreement shall apply to, or be exercisable in connection with, the Initial Public Offering. The waiver, confirmation and agreement set forth in the immediately preceding sentence shall be effective for a one (1) year period commencing with the date hereof.
3. Except as expressly set forth in Section 1 and Section 2 of this Amendment, the Existing Agreement shall continue in full force and effect in accordance with its terms.
4. This Amendment may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Delivery of this Amendment by facsimile transmission or electronic mail shall be effective as delivery of a manually executed counterpart hereof.
5. All corporate action on the part of the Company and its directors, officers, and stockholders necessary for the authorization, execution, and delivery of this Amendment by the Company has been taken on or prior to the date hereof.
6. This Amendment shall be governed by and construed and enforced in accordance with the laws of the State of California, without reference to the conflict of laws provisions thereof.
[ Signature Pages Follow ]
2 |
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the date set forth in the first paragraph hereof.
COMPANY | ||
RITTER PHARMACEUTICALS, INC. | ||
By: | ||
Michael D. Step, | ||
Chief Executive Officer |
Signature
Page to Amendment No. 4 to Amended And Restated
Investors’ Rights Agreement, as amended
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the date set forth in the first paragraph hereof.
“INVESTORS” | ||
Javelin Venture Partners, L.P. | ||
By: Javelin Venture Partners GP, L.P. | ||
Its: General Partner | ||
By: Javelin Venture Partner GP, LLC | ||
Its: General Partner | ||
By: | ||
Noah Doyle, Managing Director | ||
Javelin Venture Partners I SPV I, LLC | ||
By: Javelin Venture Partners GP, L.P. | ||
Its: General Partner | ||
By: Javelin Venture Partners GP, LLC | ||
Its: General Partner |
By: | ||
Name: Noah Doyle | ||
Title: Managing Director |
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the date set forth in the first paragraph hereof.
“INVESTORS” | ||
SJ INVESTMENT COMPANY, LLC | ||
By: | ||
Dan Nathanson, Managing Director |
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the date set forth in the first paragraph hereof.
“INVESTORS” | |
Jon Price |
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the date set forth in the first paragraph hereof.
“INVESTORS” | ||
THE KURTZ McDERMOTT FAMILY TRUST | ||
By: | ||
Cynthia Kurtz, Trustee | ||
By: | ||
James McDermott, Trustee |
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the date set forth in the first paragraph hereof.
“INVESTORS” | |
Roger Markowitz |
Exhibit 5.1
Daniel I. Goldberg
Direct Phone: +1 212 549 0380
|
Reed Smith LLP
599 Lexington Avenue
reedsmith.com |
May 21, 2015
Ritter Pharmaceuticals, Inc. | |
1801 Century Park East, Suite 1820 | |
Los Angeles, California 90067 |
Ladies and Gentlemen:
We have acted as U.S. securities counsel to Ritter Pharmaceuticals, Inc., a Delaware corporation (the “ Company ”), in connection with the preparation and filing with the Securities and Exchange Commission (the “ Commission ”) pursuant to the Securities Act of 1933, as amended (the “ Securities Act ”), of a Registration Statement on Form S-1 (File No. 333-202924) (as amended through the date hereof, the “ Registration Statement ”) pertaining to the offer and sale by the Company of shares (the “ Shares ”) of common stock, par value $0.001 (the “ Common Stock ”), with a proposed maximum aggregate offering price of $25,116,000, including shares of Common Stock issuable upon the exercise of an option granted by the Company to the underwriters to purchase additional shares. The Shares are to be sold by the Company pursuant to an underwriting agreement (the “ Underwriting Agreement ”) to be entered into by and between the Company and Aegis Capital Corp., the form of which has been filed as Exhibit 1.1 to the Registration Statement. The Company is also registering warrants to purchase shares of Common Stock to be issued to the representative of the underwriters as additional compensation pursuant to the Underwriting Agreement (the “ Representative’s Warrant ”), as well as the shares of Common Stock issuable upon exercise of the Representative’s Warrant (the “ Representative’s Warrant Shares ”), with a proposed maximum aggregate offering price of $1,092,000.
In rendering the opinion set forth herein, we have examined originals or copies, certified or otherwise identified to our satisfaction, of such documents, corporate records, certificates of public officials and other instruments as we have deemed necessary or advisable.
In such examination, we have assumed the genuineness of all signatures, the legal capacity of natural persons, the authenticity of all items submitted to us as originals, the conformity with originals of all items submitted to us as copies, and the authenticity of the originals of such copies. As to any facts material to the opinions expressed herein that we did not independently establish or verify, we have relied upon statements and representations of officers and other representatives of the Company and public officials.
This opinion is based solely on the Delaware General Corporation Law (including all related provisions of the Delaware Constitution and all reported judicial decisions interpreting the Delaware General Corporation Law and the Delaware Constitution).
NEW YORK ¨ LONDON ¨ HONG KONG ¨ CHICAGO ¨ WASHINGTON, D.C. ¨ BEIJING ¨ PARIS ¨ LOS ANGELES ¨ SAN FRANCISCO ¨ PHILADELPHIA ¨ SHANGHAI ¨ PITTSBURGH ¨ HOUSTON SINGAPORE ¨ MUNICH ¨ ABU DHABI ¨ PRINCETON ¨ NORTHERN VIRGINIA ¨ WILMINGTON ¨ SILICON VALLEY ¨ DUBAI ¨ CENTURY CITY ¨ RICHMOND ¨ GREECE ¨ KAZAKHSTAN
Ritter Pharmaceuticals, Inc. May 21, 2015 Page 2 |
Based upon and subject to the foregoing, we are of the opinion that: (i) the Shares have been duly authorized for issuance and, when issued, delivered and paid for in accordance with the terms of the Underwriting Agreement, the Shares will be validly issued, fully paid and nonassessable; (ii) the Representative’s Warrant, when executed and delivered by the Company in accordance with and in the manner described in the Registration Statement and the Underwriting Agreement, will constitute a valid and binding agreement of the Company enforceable against the Company in accordance with its terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance, moratorium and similar laws affecting creditors’ rights generally and equitable principles of general applicability; and (iii) the Representative’s Warrant Shares, when issued and sold by the Company and delivered by the Company upon valid exercise thereof and against receipt of the exercise price therefor, in accordance with and in the manner described in the Registration Statement and the Representative’s Warrant, will be validly issued, fully paid and non-assessable.
We consent to the inclusion of this opinion as an exhibit to the Registration Statement and further consent to all references to us under the caption “Legal Matters” in the Prospectus. In giving this consent, we do not admit that we are in the category of persons whose consent is required under Section 7 of the Securities Act or the rules and regulations of the Commission.
Very truly yours, | |
/s/ Reed Smith LLP | |
REED SMITH LLP |
Exhibit 10.32
__________ __, 2015
Andrew J. Ritter
1260 So. Beverly Glen
No. 301
Los Angeles, CA 90024
Dear Mr. Ritter:
This letter sets forth the terms of your continued employment with Ritter Pharmaceuticals, Inc. (the “Company”) as of the date of this letter (the “Effective Date”). Except as otherwise provided for specifically, this letter shall supersede and replace any previous letters or agreements with respect to the matters set forth herein. For the avoidance of doubt, the fundraising bonus opportunities provided for in the Executive Compensation Plan, dated September 25, 2013, will remain in effect. You shall continue to remain employed with the Company as the President with all of your current dut i es, authorities and responsibilities as of the Effective Date.
Compensation
Base Salary : You will receive an annual base salary of $310,000, paid semi-monthly in accordance with the Company’s payroll practice.
Bonus Compensation : You will have the opportunity to earn an annual bonus based upon a percentage of your base salary and the achievement of specific performance measures as determined by the Company. Your initial target bonus opportunity percentage equals 40%. The Company will review your base salary and bonus opportunities at least annually for adjustments.
Severance : You will be eligible for severance benefits under the Company’s policy for employees in positions comparable to yours or pursuant to the terms, if any, of a separate agreement with the Company.
Benefits
You will be entitled to continue to receive all employee benefits that the Company customarily makes available to employees in positions comparable to yours. Additionally, you will be eligible to receive equity award grants pursuant to the terms of the Company’s equity compensation plans. Additionally, you will also be entitled to receive up to $180,000, payable over a three-year period, as reimbursement for tuition-related expenses incurred by you in connection with your attending the University of Pennsylvania Wharton School of Business to pursue an MBA.
Governing Law
The validity, interpretation, construction and performance of the provisions of this letter shall be governed by the laws of the State of California without reference to principles of conflicts of laws that would direct the application of the law of any other jurisdiction.
Severability
The invalidity or unenforceability of any provision of this letter will not affect the validity or enforceability of the other provisions of this offer letter, which will remain in full force and effect. Moreover, if any provision is found to be excessively broad in duration, scope or covered activity, the provision will be construed, and to the extent necessary will be deemed to be amended, so as to be enforceable to the maximum extent compatible with applicable law.
Employment Relationship; Modification of Terms of Offer
Please be advised that neither this letter nor any statement made by the Company or its parent, subsidiaries or affiliates is intended to be a contract of employment for a definite period of time. That means that the employment relationship established by this letter is “at will” and either you or the Company may terminate the employment relationship at any time and for any reason, with or without cause or notice. The Company may from time to time and in its own discretion, change the terms and conditions of your employment with or without notice.
To indicate your acceptance, please sign and return the enclosed copy of this letter to me by ______ ___, 2015.
Sincerely, | ||
Ritter Pharmaceuticals, Inc. | ||
By: | ||
Michael D. Step, | ||
Chief Executive Officer | ||
ACCEPTED : | ||
Andrew J. Ritter | ||
Date |
Exhibit 10.33
__________ __, 2015
Ira E. Ritter
226 Wikil Place
Palm Desert, CA 92260
Dear Mr. Ritter:
This letter sets forth the terms of your continued employment with Ritter Pharmaceuticals, Inc. (the “Company”) as of the date of this letter (the “Effective Date”). Except as otherwise provided for specifically, this letter shall supersede and replace any previous letters or agreements with respect to the matters set forth herein. For the avoidance of doubt, the fundraising bonus opportunities provided for in the Executive Compensation Plan, dated September 25, 2013, will remain in effect. You shall continue to remain employed with the Company as the Executive Chairman and Chief Strategic Officer with all of your current dut i es, authorities and responsibilities as of the Effective Date.
Compensation
Base Salary : You will receive an annual base salary of $295,000, paid semi-monthly in accordance with the Company’s payroll practice.
Bonus Compensation : You will have the opportunity to earn an annual bonus based upon a percentage of your base salary and the achievement of specific performance measures as determined by the Company. Your initial target bonus opportunity percentage equals 35%. The Company will review your base salary and bonus opportunities at least annually for adjustments.
Severance : You will be eligible for severance benefits under the Company’s policy for employees in positions comparable to yours or pursuant to the terms, if any, of a separate agreement with the Company.
Benefits
You will be entitled to continue to receive all employee benefits that the Company customarily makes available to employees in positions comparable to yours. Additionally, you will be eligible to receive equity award grants pursuant to the terms of the Company’s equity compensation plans.
Governing Law
The validity, interpretation, construction and performance of the provisions of this letter shall be governed by the laws of the State of California without reference to principles of conflicts of laws that would direct the application of the law of any other jurisdiction.
Severability
The invalidity or unenforceability of any provision of this letter will not affect the validity or enforceability of the other provisions of this offer letter, which will remain in full force and effect. Moreover, if any provision is found to be excessively broad in duration, scope or covered activity, the provision will be construed, and to the extent necessary will be deemed to be amended, so as to be enforceable to the maximum extent compatible with applicable law.
Employment Relationship; Modification of Terms of Offer
Please be advised that neither this letter nor any statement made by the Company or its parent, subsidiaries or affiliates is intended to be a contract of employment for a definite period of time. That means that the employment relationship established by this letter is “at will” and either you or the Company may terminate the employment relationship at any time and for any reason, with or without cause or notice. The Company may from time to time and in its own discretion, change the terms and conditions of your employment with or without notice.
To indicate your acceptance, please sign and return the enclosed copy of this letter to me by ______ ___, 2015.
Sincerely, | ||
Ritter Pharmaceuticals, Inc. | ||
By: | ||
Michael D. Step, | ||
Chief Executive Officer | ||
ACCEPTED : | ||
Ira E. Ritter | ||
Date |
Exhibit 10.34
EXECUTIVE SEVERANCE
&
CHANGE IN CONTROL AGREEMENT
THIS EXECUTIVE SEVERANCE AND CHANGE IN CONTROL AGREEMENT (the “ Agreement ”) is made by and between Ritter Pharmaceuticals, Inc. (the “ Company ”), and Andrew J. Ritter (“ Executive ”) as of ____________ __, 2015.
In consideration of the mutual promises, covenants and obligations contained herein, the Company and Executive agree as follows:
1. At-Will Employment . The Company and Executive acknowledge that Executive’s employment is and shall continue to be at-will, as defined under applicable law. If Executive’s employment terminates for any reason, Executive shall not be entitled to any payments, benefits, damages, awards or compensation other than as provided by this Agreement, or as may otherwise be available in accordance with the Company’s established employee plans and practices in accordance with other agreements between the Company and Executive.
2. Definitions . For purposes of this Agreement, the following terms have the following meanings:
(a) “ Accrued Obligations ” means (i) Executive’s earned but unpaid Base Salary through the Termination Date; (ii) payment of any annual, long-term, or other incentive award which relates to a completed fiscal year or performance period, as applicable, and is payable (but not yet paid) on or before the Termination Date; (iii) a lump-sum payment in respect of accrued but unused vacation days at Executive’s per-business-day Base Salary rate in effect as of the Termination Date; and (iv) any unpaid expense or other reimbursements due pursuant to Company expense reimbursement policy.
(b) “ Affiliate(s) ” means, with respect to any specified Person (as such term is used in Section 13(d) of the Securities Exchange Act of 1934, as amended), any other Person that, directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such specified Person.
(c) “ Annual Bonus ” means Executive’s target annual bonus for the year in which the Change in Control occurs.
(d) “ Base Salary ” means Executive’s base rate of pay as of a specified date.
(e) “ Cause ” means a finding by the Company that Executive has (i) been convicted of a felony or crime involving moral turpitude; (ii) disclosed trade secrets or confidential information of the Company (or any Parent or Subsidiary) to persons not entitled to receive such information; (iii) engaged in conduct in connection with Executive’s employment or service to the Company (or any Parent or Subsidiary), that has, or could reasonably be expected to result in, material injury to the business or reputation of the Company (or any Parent or Subsidiary), including, without limitation, act(s) of fraud, embezzlement, misappropriation and
breach of fiduciary duty; (iv) violated the operating and ethics policies of the Company (or any Parent or Subsidiary) in any material way, including, but not limited to those relating to sexual harassment and the disclosure or misuse of confidential information; (v) engaged in willful and continued negligence in the performance of the duties assigned to Executive by the Company, after Executive has received notice of and failed to cure such negligence; or (vi) breached any material provision of any agreement between Executive and the Company (or any Parent or Subsidiary), including, without limitation, any confidentiality agreement.
(f) “ Change in Control ” means the occurrence of any of the following events:
(i) | Any “person” (as such term is used in sections 13(d) and 14(d) of the Exchange Act) becomes a “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing more than 50% of the voting power of the then outstanding securities of the Company; provided that a Change of Control shall not be deemed to occur as a result of a change of ownership resulting from the death of a shareholder, and a Change of Control shall not be deemed to occur as a result of a transaction in which the Company becomes a subsidiary of another corporation and in which the shareholders of the Company, immediately prior to the transaction, will beneficially own, immediately after the transaction, shares entitling such shareholders to more than 50% of all votes to which all shareholders of the parent corporation would be entitled in the election of directors (without consideration of the rights of any class of stock to elect directors by a separate class vote) |
(ii) | A change in the effective control of the Company which occurs on the date that a majority of members of the Board is replaced during any twelve (12) month period by Directors whose appointment or election is not endorsed by a majority of the members of the Board prior to the date of the appointment or election; or |
(iii) | The consummation of (A) a merger or consolidation of the Company with another corporation where the shareholders of the Company, immediately prior to the merger or consolidation, will not beneficially own, immediately after the merger or consolidation, shares entitling such shareholders to more than 50% of all votes to which all shareholders of the surviving corporation would be entitled in the election of directors (without consideration of the rights of any class of stock to elect directors by a separate class vote); (B) a sale or other disposition of all or substantially all of the assets of the Company; or (C) a liquidation or dissolution of the Company. |
(g) “ Disability ” means total and permanent disability as defined in Section 22(e)(3) of the Code or in the Company’s long-term disability plan. A termination of Executive’s
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employment due to a Disability shall be effective only if the party terminating Executive’s employment first gives at least 15 days’ written notice of such termination to the other party.
(h) “ Good Reason ” means, without Executive’s express written consent, the occurrence of any one or more of the following: (i) a substantial and material diminution in Executive’s duties or responsibilities; (ii) a material reduction in Executive’s Base Salary; or (iii) the relocation of Executive’s principal place of employment to a location more than 50 miles from Executive’s principal work location to a location that is more than 50 miles from the prior location. A termination of employment by Executive for Good Reason shall be effectuated by giving the Company written notice (“ Notice of Termination for Good Reason ”), not later than 90 days following the occurrence of the circumstance that constitutes Good Reason, setting forth in reasonable detail the specific conduct of the Company that constitutes Good Reason and the specific provision(s) of this Agreement on which Executive relied. The Company shall be entitled, during the 30-day period following receipt of a Notice of Termination for Good Reason, to cure the circumstances that gave rise to Good Reason, provided that the Company shall be entitled to waive its right to cure or reduce the cure period by delivery of written notice to that effect to Executive (such 30-day or shorter period, the “ Cure Period ”). If, during the Cure Period, such circumstance is remedied, Executive will not be permitted to terminate employment for Good Reason as a result of such circumstance. If, at the end of the Cure Period, the circumstance that constitutes Good Reason has not been remedied, Executive shall terminate employment for Good Reason on the date of expiration of the Cure Period.
(i) “ Termination Date ” means the date on which Executive’s employment hereunder terminates.
3. Termination Without Cause or by Executive With Good Reason . Subject to Section 6 below, if the Company terminates Executive’s employment without Cause, or the Executive terminates for Good Reason, Executive shall be entitled to: (a) the Accrued Obligations; (b) an amount equal to twelve (12) months of the Base Salary as in effect immediately prior to the Termination Date, paid in a lump sum on the sixtieth (60 th ) day following the Termination Date; (c) medical, dental benefits provided by the Company to Executive and Executive’s spouse and dependents (in each case, as provided in any applicable plan) at least equal to the levels of benefits provided to other similarly situated active employees of the Company and its subsidiaries until the earlier of (i) the twelve (12) month anniversary of the Termination Date or (ii) the date that Executive becomes covered under a subsequent employer’s medical and dental plans; and (d) acceleration of vesting of all equity and equity-based awards.
4. Change in Control Termination . Subject to Section 6 below, in the event that within the one (1) month prior to or the twelve (12) months following a Change in Control the Company terminates Executive’s employment without Cause, or the Executive terminates for Good Reason, then, in lieu of the payments and benefits otherwise due to Executive under Section 3 above, Executive shall be entitled to: (a) the Accrued Obligations; (b) an amount equal to the sum of (twelve (12) months of the Base Salary as in effect on the Termination Date or the date of the Change in Control, whichever is greater; (c) medical, dental benefits provided by the Company to Executive and Executive’s spouse and dependents (in each case, as provided in any applicable plan) at least equal to the levels of benefits provided to other similarly situated active
- 3 - |
employees of the Company and its subsidiaries until the earlier of (i) the twelve (12) month anniversary of the Termination Date or (ii) the date that Executive becomes covered under a subsequent employer’s medical and dental plans; and (d) acceleration of vesting of all equity and equity-based awards.
5. Other Terminations . If Executive’s employment hereunder is terminated (a) by Executive without Good Reason; (b) by the Company for Cause; or (c) due to Executive’s death or Executive’s Disability, Executive and/or Executive’s estate or beneficiaries shall be entitled to the Accrued Obligations.
6. Release . Executive’s entitlement to the payments (other than the Accrued Obligations) and benefits described in Sections 3 and 4 above is expressly contingent upon Executive providing the Company with a signed release satisfactory to the Company (the “ Release ”). To be effective, such Release must be delivered by Executive to the Company no later than 45 days following the Termination Date and must not be revoked during the seven (7) days following such delivery. If such Release is not executed in a timely manner or is revoked, all such payments and benefits shall immediately cease and the Executive shall be required to repay to the Company any such payments that have already been paid to the Executive.
7. Withholding . The Company shall withhold all applicable federal, state and local taxes, social security and workers’ compensation contributions and other amounts as may be required by law with respect to compensation payable to Executive.
8. Modification of Payments . In the event it shall be determined that any payment, right or distribution by the Company or any other person or entity to or for the benefit of Executive pursuant to the terms of this Agreement or otherwise, in connection with, or arising out of, his employment with the Company or a change in ownership or effective control of the Company or a substantial portion of its assets (a “ Payment ”) is a “parachute payment” within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the “ Code ”) on account of the aggregate value of the Payments due to Executive being equal to or greater than three times the “base amount,” as defined in Section 280G(b)(3) of the Code, (the “ Parachute Threshold ”) so that Executive would be subject to the excise tax imposed by Section 4999 of the Code (the “ Excise Tax ”) and the net after-tax benefit that Executive would receive by reducing the Payments to the Parachute Threshold is greater than the net after-tax benefit Executive would receive if the full amount of the Payments were paid to Executive, then the Payments payable to Executive shall be reduced (but not below zero) so that the Payments due to Executive do not exceed the amount of the Parachute Threshold, reducing first any Payments under Section 4(d) above.
9. Section 409A . (a) Notwithstanding anything herein to the contrary, this Agreement is intended to be interpreted and applied so that the payment of the benefits set forth herein either shall either be exempt from the requirements of Section 409A of the Code (“ Section 409A ”) or shall comply with the requirements of such provision.
(b) Notwithstanding any provision of this Agreement to the contrary, if Executive is a “specified employee” within the meaning of Section 409A, any payments or arrangements due upon a termination of Executive’s employment under any arrangement that
- 4 - |
constitutes a “nonqualified deferral of compensation” within the meaning of Section 409A and which do not otherwise qualify under the exemptions under Treas. Regs. Section 1.409A-1 (including without limitation, the short-term deferral exemption or the permitted payments under Treas. Regs. Section 1.409A-1(b)(9)(iii)(A)), shall be delayed and paid or provided, without interest, on the earlier of (i) the date which is six months after Executive’s “separation from service” (as such term is defined in Section 409A and the regulations and other published guidance thereunder) for any reason other than death, and (ii) the date of Executive’s death.
(c) After any Termination Date, Executive shall have no duties or responsibilities that are inconsistent with having a “separation from service” within the meaning of Section 409A and, notwithstanding anything in the Agreement to the contrary, distributions upon termination of employment of nonqualified deferred compensation may only be made upon a “separation from service” as determined under Section 409A and such date shall be the Termination Date for purposes of this Agreement. Each payment under this Agreement or otherwise shall be treated as a separate payment for purposes of Section 409A. In no event may Executive, directly or indirectly, designate the calendar year of any payment to be made under this Agreement which constitutes a “nonqualified deferral of compensation” within the meaning of Section 409A and to the extent an amount is payable within a time period, the time during which such amount is paid shall be in the discretion of the Company.
10. Merger Clause . Effective as of the Effective Date, this Agreement contains the complete, full, and exclusive understanding of Executive and the Company as to its subject matter and shall, on such date, and supersede any prior agreement between Executive and the Company regarding severance benefits. Any amendments to this Agreement shall be effective and binding on Executive and the Company only if any such amendments are in writing and signed by both Parties.
11. Assignment . (a) This Agreement is personal to Executive and, without the prior written consent of the Company, shall not be assigned by Executive otherwise than by will or the laws of descent and distribution, and any assignment in violation of this Agreement shall be void.
(b) This Agreement and all rights of Executive hereunder shall inure to the benefit of, and be enforceable by, Executive’s personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. If Executive should die while any amounts would still be payable to him or her hereunder if he or she had continued to live, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Agreement to Executive’s devisee, legatee or other designee or, should there be no such designee, to Executive’s estate.
(c) The Company shall require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business or assets of the Company (a “ Successor ”) to assume and agree to perform this Agreement in the same manner and to the same extent that the Company would have been required to perform it if no such succession had taken place. As used in this Agreement, (i) the term “ Company ” shall mean the Company as hereinbefore defined and any Successor and any permitted assignee to which this Agreement is assigned and (ii) the term “ Board ” shall mean the Board as hereinbefore
- 5 - |
defined and the board of directors or equivalent governing body of any Successor and any permitted assignee to which this Agreement is assigned.
12. Dispute Resolution . The parties agree that any dispute arising out of or relating to this Agreement or the formation, breach, termination or validity thereof, will be settled by binding arbitration by a panel of three arbitrators in accordance with the commercial arbitration rules of the American Arbitration Association. The arbitration proceedings will be located in Los Angeles County, California. The arbitrators are not empowered to award damages in excess of compensatory damages and each party irrevocably waives any damages in excess of compensatory damages. Judgment upon any arbitration award may be entered into any court having jurisdiction thereof and the parties consent to the jurisdiction of any court of competent jurisdiction located in the State of California.
13. GOVERNING LAW . THIS AGREEMENT SHALL BE DEEMED TO BE MADE IN THE STATE OF CALIFORNIA, AND THE VALIDITY, INTERPRETATION, CONSTRUCTION AND PERFORMANCE OF THIS AGREEMENT IN ALL RESPECT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF CALIFORNIA WITHOUT REGARD TO ITS PRINCIPLES OF CONFLICTS OF LAW.
14. Amendment; No Waiver . No provision of this Agreement may be amended, modified, waived or discharged except by a written document signed by Executive and duly authorized officer of the Company. The failure of a party to insist upon strict adherence to any term of this Agreement on any occasion shall not be considered as a waiver of such party’s rights or deprive such party of the right thereafter to insist upon strict adherence to that term or any other term of this Agreement. No failure or delay by any party in exercising any right or power hereunder will operate as a waiver thereof, nor will any single or partial exercise of any other right or power. No agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by any party, which are not set forth expressly in this Agreement.
15. Severability . If any term or provision of this Agreement is invalid, illegal or incapable of being enforced by any applicable law or public policy, all other conditions and provisions of this Agreement shall nonetheless remain in full force and effect so long as the economic and legal substance of the transactions contemplated by this Agreement is not affected in any manner materially adverse to any party. Upon any such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in a mutually acceptable manner in order that the transactions contemplated hereby be consummated as originally contemplated to the fullest extent possible.
16. Survival . The rights and obligations of the parties under the provisions of this Agreement that relate to post-termination obligations shall survive and remain binding and enforceable, notwithstanding the expiration of the term of this Agreement, the termination of Executive’s employment with the Company for any reason or any settlement of the financial rights and obligations arising from Executive’s employment hereunder, to the extent necessary to preserve the intended benefits of such provisions.
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17. Notices . All notices and other communications required or permitted by this Agreement will be made in writing and all such notices and communications will be deemed to have been duly given when delivered or (unless otherwise specified) mailed by United States certified or registered mail, return receipt requested, postage prepaid, addressed to the Company at its headquarters, and addressed to Executive at his last address on file with the Company, or to such other address as any party may have furnished to the other in writing in accordance herewith, except that notices of change of address shall be effective only upon receipt.
18. Headings and References . The headings of this Agreement are inserted for convenience only and neither constitute a part of this Agreement nor affect in any way the meaning or interpretation of this Agreement. When a reference in this Agreement is made to a Section, such reference shall be to a Section of this Agreement unless otherwise indicated.
19. Counterparts . This Agreement may be executed in one or more counterparts (including via facsimile), each of which shall be deemed to be an original, but all of which together shall constitute one and the same instrument.
IN WITNESS WHEREOF , this Agreement has been executed by the parties as of the date first written above.
RITTER PHARMACEUTICALS, INC. | ||
By: | ||
Name: | Michael D. Step | |
Title: | Chief Executive Officer | |
Executive | ||
Andrew J. Ritter |
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Exhibit 10.35
EXECUTIVE SEVERANCE
&
CHANGE IN CONTROL AGREEMENT
THIS EXECUTIVE SEVERANCE AND CHANGE IN CONTROL AGREEMENT (the “ Agreement ”) is made by and between Ritter Pharmaceuticals, Inc. (the “ Company ”), and Ira E. Ritter (“ Executive ”) as of ____________ __, 2015.
In consideration of the mutual promises, covenants and obligations contained herein, the Company and Executive agree as follows:
1. At-Will Employment . The Company and Executive acknowledge that Executive’s employment is and shall continue to be at-will, as defined under applicable law. If Executive’s employment terminates for any reason, Executive shall not be entitled to any payments, benefits, damages, awards or compensation other than as provided by this Agreement, or as may otherwise be available in accordance with the Company’s established employee plans and practices in accordance with other agreements between the Company and Executive.
2. Definitions . For purposes of this Agreement, the following terms have the following meanings:
(a) “ Accrued Obligations ” means (i) Executive’s earned but unpaid Base Salary through the Termination Date; (ii) payment of any annual, long-term, or other incentive award which relates to a completed fiscal year or performance period, as applicable, and is payable (but not yet paid) on or before the Termination Date; (iii) a lump-sum payment in respect of accrued but unused vacation days at Executive’s per-business-day Base Salary rate in effect as of the Termination Date; and (iv) any unpaid expense or other reimbursements due pursuant to Company expense reimbursement policy.
(b) “ Affiliate(s) ” means, with respect to any specified Person (as such term is used in Section 13(d) of the Securities Exchange Act of 1934, as amended), any other Person that, directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such specified Person.
(c) “ Annual Bonus ” means Executive’s target annual bonus for the year in which the Change in Control occurs.
(d) “ Base Salary ” means Executive’s base rate of pay as of a specified date.
(e) “ Cause ” means a finding by the Company that Executive has (i) been convicted of a felony or crime involving moral turpitude; (ii) disclosed trade secrets or confidential information of the Company (or any Parent or Subsidiary) to persons not entitled to receive such information; (iii) engaged in conduct in connection with Executive’s employment or service to the Company (or any Parent or Subsidiary), that has, or could reasonably be expected to result in, material injury to the business or reputation of the Company (or any Parent or Subsidiary), including, without limitation, act(s) of fraud, embezzlement, misappropriation and
breach of fiduciary duty; (iv) violated the operating and ethics policies of the Company (or any Parent or Subsidiary) in any material way, including, but not limited to those relating to sexual harassment and the disclosure or misuse of confidential information; (v) engaged in willful and continued negligence in the performance of the duties assigned to Executive by the Company, after Executive has received notice of and failed to cure such negligence; or (vi) breached any material provision of any agreement between Executive and the Company (or any Parent or Subsidiary), including, without limitation, any confidentiality agreement.
(f) “ Change in Control ” means the occurrence of any of the following events:
(i) Any “person” (as such term is used in sections 13(d) and 14(d) of the Exchange Act) becomes a “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing more than 50% of the voting power of the then outstanding securities of the Company; provided that a Change of Control shall not be deemed to occur as a result of a change of ownership resulting from the death of a shareholder, and a Change of Control shall not be deemed to occur as a result of a transaction in which the Company becomes a subsidiary of another corporation and in which the shareholders of the Company, immediately prior to the transaction, will beneficially own, immediately after the transaction, shares entitling such shareholders to more than 50% of all votes to which all shareholders of the parent corporation would be entitled in the election of directors (without consideration of the rights of any class of stock to elect directors by a separate class vote)
(ii) A change in the effective control of the Company which occurs on the date that a majority of members of the Board is replaced during any twelve (12) month period by Directors whose appointment or election is not endorsed by a majority of the members of the Board prior to the date of the appointment or election; or
(iii) The consummation of (A) a merger or consolidation of the Company with another corporation where the shareholders of the Company, immediately prior to the merger or consolidation, will not beneficially own, immediately after the merger or consolidation, shares entitling such shareholders to more than 50% of all votes to which all shareholders of the surviving corporation would be entitled in the election of directors (without consideration of the rights of any class of stock to elect directors by a separate class vote); (B) a sale or other disposition of all or substantially all of the assets of the Company; or (C) a liquidation or dissolution of the Company.
(g) “ Disability ” means total and permanent disability as defined in Section 22(e)(3) of the Code or in the Company’s long-term disability plan. A termination of Executive’s
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employment due to a Disability shall be effective only if the party terminating Executive’s employment first gives at least 15 days’ written notice of such termination to the other party.
(h) “ Good Reason ” means, without Executive’s express written consent, the occurrence of any one or more of the following: (i) a substantial and material diminution in Executive’s duties or responsibilities; (ii) a material reduction in Executive’s Base Salary; or (iii) the relocation of Executive’s principal place of employment to a location more than 50 miles from Executive’s principal work location to a location that is more than 50 miles from the prior location. A termination of employment by Executive for Good Reason shall be effectuated by giving the Company written notice (“ Notice of Termination for Good Reason ”), not later than 90 days following the occurrence of the circumstance that constitutes Good Reason, setting forth in reasonable detail the specific conduct of the Company that constitutes Good Reason and the specific provision(s) of this Agreement on which Executive relied. The Company shall be entitled, during the 30-day period following receipt of a Notice of Termination for Good Reason, to cure the circumstances that gave rise to Good Reason, provided that the Company shall be entitled to waive its right to cure or reduce the cure period by delivery of written notice to that effect to Executive (such 30-day or shorter period, the “ Cure Period ”). If, during the Cure Period, such circumstance is remedied, Executive will not be permitted to terminate employment for Good Reason as a result of such circumstance. If, at the end of the Cure Period, the circumstance that constitutes Good Reason has not been remedied, Executive shall terminate employment for Good Reason on the date of expiration of the Cure Period.
(i) “ Termination Date ” means the date on which Executive’s employment hereunder terminates.
3. Termination Without Cause or by Executive With Good Reason . Subject to Section 6 below, if the Company terminates Executive’s employment without Cause, or the Executive terminates for Good Reason, Executive shall be entitled to: (a) the Accrued Obligations; (b) an amount equal to twelve (12) months of the Base Salary as in effect immediately prior to the Termination Date, paid in a lump sum on the sixtieth (60 th ) day following the Termination Date; (c) medical, dental benefits provided by the Company to Executive and Executive’s spouse and dependents (in each case, as provided in any applicable plan) at least equal to the levels of benefits provided to other similarly situated active employees of the Company and its subsidiaries until the earlier of (i) the twelve (12) month anniversary of the Termination Date or (ii) the date that Executive becomes covered under a subsequent employer’s medical and dental plans; and (d) acceleration of vesting of all equity and equity-based awards.
4. Change in Control Termination . Subject to Section 6 below, in the event that within the one (1) month prior to or the twelve (12) months following a Change in Control the Company terminates Executive’s employment without Cause, or the Executive terminates for Good Reason, then, in lieu of the payments and benefits otherwise due to Executive under Section 3 above, Executive shall be entitled to: (a) the Accrued Obligations; (b) an amount equal to the sum of (twelve (12) months of the Base Salary as in effect on the Termination Date or the date of the Change in Control, whichever is greater; (c) medical, dental benefits provided by the Company to Executive and Executive’s spouse and dependents (in each case, as provided in any applicable plan) at least equal to the levels of benefits provided to other similarly situated active
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employees of the Company and its subsidiaries until the earlier of (i) the twelve (12) month anniversary of the Termination Date or (ii) the date that Executive becomes covered under a subsequent employer’s medical and dental plans; and (d) acceleration of vesting of all equity and equity-based awards.
5. Other Terminations . If Executive’s employment hereunder is terminated (a) by Executive without Good Reason; (b) by the Company for Cause; or (c) due to Executive’s death or Executive’s Disability, Executive and/or Executive’s estate or beneficiaries shall be entitled to the Accrued Obligations.
6. Release . Executive’s entitlement to the payments (other than the Accrued Obligations) and benefits described in Sections 3 and 4 above is expressly contingent upon Executive providing the Company with a signed release satisfactory to the Company (the “ Release ”). To be effective, such Release must be delivered by Executive to the Company no later than 45 days following the Termination Date and must not be revoked during the seven (7) days following such delivery. If such Release is not executed in a timely manner or is revoked, all such payments and benefits shall immediately cease and the Executive shall be required to repay to the Company any such payments that have already been paid to the Executive.
7. Withholding . The Company shall withhold all applicable federal, state and local taxes, social security and workers’ compensation contributions and other amounts as may be required by law with respect to compensation payable to Executive.
8. Modification of Payments . In the event it shall be determined that any payment, right or distribution by the Company or any other person or entity to or for the benefit of Executive pursuant to the terms of this Agreement or otherwise, in connection with, or arising out of, his employment with the Company or a change in ownership or effective control of the Company or a substantial portion of its assets (a “ Payment ”) is a “parachute payment” within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the “ Code ”) on account of the aggregate value of the Payments due to Executive being equal to or greater than three times the “base amount,” as defined in Section 280G(b)(3) of the Code, (the “ Parachute Threshold ”) so that Executive would be subject to the excise tax imposed by Section 4999 of the Code (the “ Excise Tax ”) and the net after-tax benefit that Executive would receive by reducing the Payments to the Parachute Threshold is greater than the net after-tax benefit Executive would receive if the full amount of the Payments were paid to Executive, then the Payments payable to Executive shall be reduced (but not below zero) so that the Payments due to Executive do not exceed the amount of the Parachute Threshold, reducing first any Payments under Section 4(d) above.
9. Section 409A . (a) Notwithstanding anything herein to the contrary, this Agreement is intended to be interpreted and applied so that the payment of the benefits set forth herein either shall either be exempt from the requirements of Section 409A of the Code (“ Section 409A ”) or shall comply with the requirements of such provision.
(b) Notwithstanding any provision of this Agreement to the contrary, if Executive is a “specified employee” within the meaning of Section 409A, any payments or arrangements due upon a termination of Executive’s employment under any arrangement that
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constitutes a “nonqualified deferral of compensation” within the meaning of Section 409A and which do not otherwise qualify under the exemptions under Treas. Regs. Section 1.409A-1 (including without limitation, the short-term deferral exemption or the permitted payments under Treas. Regs. Section 1.409A-1(b)(9)(iii)(A)), shall be delayed and paid or provided, without interest, on the earlier of (i) the date which is six months after Executive’s “separation from service” (as such term is defined in Section 409A and the regulations and other published guidance thereunder) for any reason other than death, and (ii) the date of Executive’s death.
(c) After any Termination Date, Executive shall have no duties or responsibilities that are inconsistent with having a “separation from service” within the meaning of Section 409A and, notwithstanding anything in the Agreement to the contrary, distributions upon termination of employment of nonqualified deferred compensation may only be made upon a “separation from service” as determined under Section 409A and such date shall be the Termination Date for purposes of this Agreement. Each payment under this Agreement or otherwise shall be treated as a separate payment for purposes of Section 409A. In no event may Executive, directly or indirectly, designate the calendar year of any payment to be made under this Agreement which constitutes a “nonqualified deferral of compensation” within the meaning of Section 409A and to the extent an amount is payable within a time period, the time during which such amount is paid shall be in the discretion of the Company.
10. Merger Clause . Effective as of the Effective Date, this Agreement contains the complete, full, and exclusive understanding of Executive and the Company as to its subject matter and shall, on such date, and supersede any prior agreement between Executive and the Company regarding severance benefits. Any amendments to this Agreement shall be effective and binding on Executive and the Company only if any such amendments are in writing and signed by both Parties.
11. Assignment . (a) This Agreement is personal to Executive and, without the prior written consent of the Company, shall not be assigned by Executive otherwise than by will or the laws of descent and distribution, and any assignment in violation of this Agreement shall be void.
(b) This Agreement and all rights of Executive hereunder shall inure to the benefit of, and be enforceable by, Executive’s personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. If Executive should die while any amounts would still be payable to him or her hereunder if he or she had continued to live, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Agreement to Executive’s devisee, legatee or other designee or, should there be no such designee, to Executive’s estate.
(c) The Company shall require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business or assets of the Company (a “ Successor ”) to assume and agree to perform this Agreement in the same manner and to the same extent that the Company would have been required to perform it if no such succession had taken place. As used in this Agreement, (i) the term “ Company ” shall mean the Company as hereinbefore defined and any Successor and any permitted assignee to which this Agreement is assigned and (ii) the term “ Board ” shall mean the Board as hereinbefore
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defined and the board of directors or equivalent governing body of any Successor and any permitted assignee to which this Agreement is assigned.
12. Dispute Resolution . The parties agree that any dispute arising out of or relating to this Agreement or the formation, breach, termination or validity thereof, will be settled by binding arbitration by a panel of three arbitrators in accordance with the commercial arbitration rules of the American Arbitration Association. The arbitration proceedings will be located in Los Angeles County, California. The arbitrators are not empowered to award damages in excess of compensatory damages and each party irrevocably waives any damages in excess of compensatory damages. Judgment upon any arbitration award may be entered into any court having jurisdiction thereof and the parties consent to the jurisdiction of any court of competent jurisdiction located in the State of California.
13. GOVERNING LAW . THIS AGREEMENT SHALL BE DEEMED TO BE MADE IN THE STATE OF CALIFORNIA, AND THE VALIDITY, INTERPRETATION, CONSTRUCTION AND PERFORMANCE OF THIS AGREEMENT IN ALL RESPECT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF CALIFORNIA WITHOUT REGARD TO ITS PRINCIPLES OF CONFLICTS OF LAW.
14. Amendment; No Waiver . No provision of this Agreement may be amended, modified, waived or discharged except by a written document signed by Executive and duly authorized officer of the Company. The failure of a party to insist upon strict adherence to any term of this Agreement on any occasion shall not be considered as a waiver of such party’s rights or deprive such party of the right thereafter to insist upon strict adherence to that term or any other term of this Agreement. No failure or delay by any party in exercising any right or power hereunder will operate as a waiver thereof, nor will any single or partial exercise of any other right or power. No agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by any party, which are not set forth expressly in this Agreement.
15. Severability . If any term or provision of this Agreement is invalid, illegal or incapable of being enforced by any applicable law or public policy, all other conditions and provisions of this Agreement shall nonetheless remain in full force and effect so long as the economic and legal substance of the transactions contemplated by this Agreement is not affected in any manner materially adverse to any party. Upon any such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in a mutually acceptable manner in order that the transactions contemplated hereby be consummated as originally contemplated to the fullest extent possible.
16. Survival . The rights and obligations of the parties under the provisions of this Agreement that relate to post-termination obligations shall survive and remain binding and enforceable, notwithstanding the expiration of the term of this Agreement, the termination of Executive’s employment with the Company for any reason or any settlement of the financial rights and obligations arising from Executive’s employment hereunder, to the extent necessary to preserve the intended benefits of such provisions.
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17. Notices . All notices and other communications required or permitted by this Agreement will be made in writing and all such notices and communications will be deemed to have been duly given when delivered or (unless otherwise specified) mailed by United States certified or registered mail, return receipt requested, postage prepaid, addressed to the Company at its headquarters, and addressed to Executive at his last address on file with the Company, or to such other address as any party may have furnished to the other in writing in accordance herewith, except that notices of change of address shall be effective only upon receipt.
18. Headings and References . The headings of this Agreement are inserted for convenience only and neither constitute a part of this Agreement nor affect in any way the meaning or interpretation of this Agreement. When a reference in this Agreement is made to a Section, such reference shall be to a Section of this Agreement unless otherwise indicated.
19. Counterparts . This Agreement may be executed in one or more counterparts (including via facsimile), each of which shall be deemed to be an original, but all of which together shall constitute one and the same instrument.
IN WITNESS WHEREOF , this Agreement has been executed by the parties as of the date first written above.
RITTER PHARMACEUTICALS, INC. | ||
By: | ||
Name: | Michael D. Step | |
Title: | Chief Executive Officer | |
Executive | ||
Ira E. Ritter |
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Exhibit 23.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
As independent registered public accountants, we hereby consent to the use in this Registration Statement on Form S-1/A and related Prospectus of our report dated March 13, 2015 (except for the matters noted in Note 11, as to which the date is April 24, 2015, and except for the effects of the stock split as described in Note 2 and Note 3, as to which the date is May __, 2015) relating to the financial statements of Ritter Pharmaceuticals, Inc., (which report includes an explanatory paragraph relating to the uncertainty of the Company’s ability to continue as a going concern) and to the reference to us under the caption "Experts" which is contained in this Prospectus.
The foregoing consent is in the form that will be signed upon the completion of the reverse stock split described in Note 2 and Note 3 to the financial statements.
/s/ Mayer Hoffman McCann P.C. | |
Orange County, California | |
May 21, 2015 |