THE PRIVATE PLACEMENT
On June 11, 2019, we entered into the Subscription Agreement with Ginkgo providing for the issuance and sale by us to Ginkgo of the
Common Shares at a purchase price per Common Share of $9.00, and the Pre-Funded Warrants at an exercise price of $9.00 per share of Common Stock (the Private Placement), with $8.99 of such exercise
price paid at the closing of the Private Placement. The gross proceeds to us were approximately $80 million. The closing of the Private Placement took place on June 11, 2019.
We intend to use the proceeds of the Private Placement to progress and expand our pipeline, including initiating four new programs in the
first six months following the closing of the Private Placement and five new programs in the next 12 months following the closing of the Private Placement.
The Pre-Funded Warrants are exercisable for one share of Common Stock at an exercise price of $0.01
per Pre-Funded Warrant, subject to adjustment for stock splits, reverse splits, and similar capital transactions as described in the Pre-Funded Warrants. The Pre-Funded Warrants may be exercised at any time until June 11, 2044.
Pursuant to the Subscription
Agreement, we are obligated, among other things, to file a registration statement with the SEC within 60 days following the closing of the Private Placement for purposes of registering the Shares for resale by Ginkgo, and use our commercially
reasonable efforts to have the registration statement declared effective as soon as practicable after filing, and in any event no later than 30 days after filing such registration statement with the SEC, or in the event the SEC reviews and has
written comments to the registration statement, within 90 days following the receipt of such written comments. The Subscription Agreement contains customary terms and conditions for a transaction of this type, including certain customary cash
penalties on us for our failure to satisfy specified filing and effectiveness time periods.
In addition, pursuant to the Subscription
Agreement, Ginkgo agreed that for a period of 180 days after the date of the Subscription Agreement, it will not, without our prior written consent, (i) directly or indirectly, offer, pledge, sell, contract to sell, sell any option or contract
to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase or otherwise transfer or dispose of any Shares or Pre-Funded Warrants, (ii) enter into any swap or any
other agreement or any transaction that transfers, in whole or in part, directly or indirectly, the economic consequence of ownership of any Shares or Pre-Funded Warrants, whether any such swap or transaction
described in clause (i) or (ii) above is to be settled by delivery of Shares or Pre-Funded Warrants, in cash or otherwise or (iii) publicly announce an intention to effect any such swap, agreement or
other transaction described in clauses (i) and (ii).
Ginkgo also agreed, pursuant to the terms of the Subscription Agreement, to a
customary standstill provision for a period of 180 days from the date of the Subscription Agreement, prohibiting Ginkgo, either alone or together with any other person, from taking certain actions with respect to us, including, among other things,
initiating or supporting any proposal or indication of interest for, or offer with respect to any transaction involving the acquisition of greater than 50% of the voting securities or all or substantially all of our assets, seeking to change or
control our management or our board of directors (the Board), soliciting proxies or publicly seeking election of or publicly seeking to place a director on the Board, or publicly seeking the removal of any of our directors.
The foregoing descriptions of the Pre-Funded Warrants and the Subscription Agreement are not complete
and are subject to and qualified in their entirety by reference to the Pre-Funded Warrants and the Subscription Agreement, respectively, copies of which are filed as exhibits hereto and are incorporated herein
by reference. The representations, warranties and covenants contained in the Subscription Agreement were made solely for the benefit of the parties to the Subscription Agreement and may be subject to limitations agreed upon by the contracting
parties. Accordingly, the Subscription Agreement is incorporated herein by reference only to provide investors with information regarding the terms of the Subscription Agreement and not to provide investors with any other factual information
regarding us or our business, and should be read in conjunction with the disclosures in our periodic reports and other filings with the SEC.
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