Registration Rights
According to the terms of the Investor Rights Agreement, certain of our stockholders, or their transferees, are entitled to demand, Form
S-3
and piggyback registration rights. These stockholders hold an aggregate of 4,305,731 shares eligible for registration under the Investor Rights Agreement, or approximately 12.97% of our total
outstanding common stock, as of June 23, 2017.
Demand registration rights.
At any time beginning 180 days after the effective
date of this registration statement, a holder or the holders of at least 30% of the registrable securities have the right to demand that we file a registration statement under the Securities Act covering the registration of the registrable
securities requested to be registered by such holders. These registration rights are subject to specified conditions and limitations, including a limitation on the number of such registration statements that can be demanded, restrictions on the
exercise of such demand registration rights during periods of time that may be detrimental to the Company and its stockholders, and the right of the underwriters under certain circumstances to limit the number of shares having registration rights to
be included in any such registration.
Form
S-3
registration rights
.
Holders of shares having registration rights have the right to demand that we file no more than two registration statements for the holders on
Form S-3
in any
12-month
period so long as the aggregate offering price of securities to be sold under the registration statement on
Form S-3
is at least $3,000,000, subject to
specified exceptions, conditions and limitations.
In addition, pursuant to the terms of a registration rights agreement we entered into
with Baker Brothers Life Sciences, L.P., 667, L.P. and 14159, L.P., or collectively, Baker Brothers, Baker Brothers is entitled to certain resale registration rights with respect to shares of the Companys common stock held by Baker Brothers.
Under the agreement, following a demand by Baker Brothers, the Company is obligated to file a resale registration statement on Form
S-3,
or other appropriate form, covering registrable securities held by Baker
Brothers, and to keep such registration statement effective until the earlier of (i) all registrable securities covered by such registration statement have been sold or may be sold freely without limitations or restrictions as to volume or
manner of sale pursuant to Rule 144 of the Securities Act, or (ii) all registrable securities covered by such registration statement otherwise cease to be considered registrable securities pursuant to the terms of the agreement. Under the
agreement, Baker Brothers has the right to one underwritten public offering per calendar year, but no more than three underwritten public offerings in total, to effect the sale or distribution of its registrable securities, subject to specified
exceptions, conditions and limitations.
Piggyback registration rights
. If we register any securities for public sale,
stockholders with registration rights will have the right to include their shares in the registration statement. The underwriters of any underwritten offering will have the right to limit the number of shares having registration rights to be
included in the registration statement, but not below 25% of the total number of shares included in the registration statement. In connection with the filing of the registration statement of which this prospectus is a part, we have obtained a waiver
of such rights from any party to the Investor Rights Agreement who has such rights.
Expenses of registration.
Generally, we are
required to bear all registration and selling expenses incurred by the holders in connection with the demand, Form
S-3
and piggyback registrations described above, other than underwriting discounts and
commissions, in an amount not to exceed $50,000 per registration.
Expiration of registration rights.
The demand, Form
S-3
and piggyback registration rights discussed above will terminate as to a given holder of registrable securities upon the earlier of (1) December 23, 2017, (2) as to any holder of registrable
securities, the first date on which such holder is able to dispose of all of its registrable securities without restriction under Rule 144 of the Securities Act, or (3) the consummation of a liquidation event.
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