Document:

Exhibit
4.1

 

DESCRIPTION
OF THE REGISTRANT’S SECURITIES

REGISTERED
PURSUANT TO SECTION 12 OF THE

SECURITIES
EXCHANGE ACT OF 1934

 

As
of December 31, 2019, PAVmed Inc. (“PAVmed,” the “Company” or “we,” “us” or “our”)
had three classes of securities registered under Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”): (i) common stock, $0.001 par value per share; (ii) warrants to purchase our common stock issued in our initial public
offering and in private placements prior thereto (“Series W Warrants”); and (iii) Series Z warrants to purchase our
common stock (“Series Z Warrants”). Each of the Company’s securities registered under Section 12 of the Exchange
Act are listed on The Nasdaq Stock Market LLC.

 

DESCRIPTION
OF COMMON STOCK

 

In
the discussion that follows, we have summarized selected provisions of our certificate of incorporation, bylaws and the Delaware
General Corporation Law (the “DGCL”) relating to our common stock. This summary is not complete. This discussion is
subject to the relevant provisions of Delaware law and is qualified in its entirety by reference to our certificate of incorporation
and our bylaws. You should read the provisions of our certificate of incorporation and our bylaws as currently in effect for provisions
that may be important to you.

 

Authorized
Capital Stock

 

We
are authorized to issue 100,000,000 shares of common stock, par value $0.001, and 20,000,000 shares of preferred stock, par value
$0.001. On March 23, 2018, we filed a certificate of designation of preferences, rights and limitations for a series of preferred
stock designated as Series B Convertible Preferred Stock (the “Series B Preferred Stock”).

 

As
of December 31, 2019, 40,478,861 shares of our common stock were issued and outstanding. In addition, as of December 31,
2019, we had outstanding: (i) employee stock options to purchase 5,203,529 shares of our common stock at a weighted average exercise
price of $2.68 per share; (ii) warrants to purchase 17,196,857 shares of our common stock at a weighted average exercise price
of $1.68 per share; (iii) unit purchase options to purchase 53,000 units at an exercise price of $5.50 per unit, with each unit
consisting of one share of our common stock and one warrant, and each warrant entitling the holder to purchase one share of our
common stock at an exercise price of $1.60 per share; (iv) the Series B Preferred Stock convertible into 1,158,209 shares of our
common stock; (v) Senior Secured Convertible Notes issued on November 4, 2019 convertible into 8,750,000 shares of our common
stock (assuming such notes were converted in full on such date at the initial fixed conversion price of $1.60 per share); and
(vi) a Senior Secured Convertible Note issued on December 27, 2018 convertible in to 4,843,750 shares of our common stock
(assuming such note was converted in full on such date at the initial fixed conversion price of $1.60 per share). As of December
31, 2019, we also had 2,548,406 shares reserved for issuance, but not subject to outstanding awards, under our long-term incentive
equity plan, and 167,228 shares reserved for issuance under our employee stock purchase plan.

 

As
of December 31, 2019, 1,158,209 shares of Series B Preferred Stock were issued and outstanding.

 

Common
Stock

 

Holders
of common stock are entitled to one vote per share on matters on which our stockholders vote. There are no cumulative voting rights.
Subject to any preferential dividend rights of any outstanding shares of preferred stock, holders of common stock are entitled
to receive dividends, if declared by our board of directors, out of funds that we may legally use to pay dividends. If we liquidate
or dissolve, holders of common stock are entitled to share ratably in our assets once our debts and any liquidation preference
owed to any then-outstanding preferred stockholders is paid. Our certificate of incorporation does not provide the common
stock with any redemption, conversion or preemptive rights, and there are no sinking fund provisions with respect to our common
stock. All shares of common stock that are outstanding are fully-paid and non-assessable.

 

    	1

    	 

    

 

Preferred
Stock

 

Our
certificate of incorporation authorizes the issuance of blank check preferred stock. Accordingly, our board of directors is empowered,
without stockholder approval, to issue shares of preferred stock with dividend, liquidation, redemption, voting or other rights
which could adversely affect the voting power or other rights of the holders of shares of our common stock. In addition, shares
of preferred stock could be utilized as a method of discouraging, delaying or preventing a change in control of us.

 

Series
B Convertible Preferred Stock

 

The
Series B Convertible Preferred stock is senior to our common stock with respect to dividends and, as described below, assets distributed
in liquidation. The Series B Convertible Preferred Stock has no voting rights. The stated value of the Series B Convertible Preferred
Stock is $3.00 per share.

 

The
Series B Convertible Preferred Stock provides for dividends at a rate of 8% per annum of the stated value per share of the Series
B Convertible Preferred Stock. Dividends are payable in arrears on January 1, April 1, July 1, and October 1, 2021. Dividends
accrue and cumulate whether or not declared by our board of directors. All accumulated and unpaid dividends compound quarterly
at the rate of 8% of the stated value per annum. Dividends through October 1, 2021 are payable in additional shares of Series
B Convertible Preferred Stock. Dividends after October 1, 2021 are payable at our election in any combination of shares of Series
B Convertible Preferred Stock, cash or shares of our common stock.

 

In
the event of any voluntary or involuntary liquidation, dissolution or winding up of our company or Deemed Liquidation Event
(as defined in the certificate of designations for the Series B Convertible Preferred Stock), the holders of shares of Series
B Convertible Preferred Stock then outstanding shall be entitled to be paid out of our assets available for distribution to our
stockholders, before any payment shall be made to the holders of our common stock by reason of their ownership thereof, an amount
per share equal to the greater of (i) the stated value of the Series B Convertible Preferred Stock, plus any dividends accrued
but unpaid thereon, or (ii) such amount per share as would have been payable had all shares of Series B Convertible Preferred
Stock been converted into our common stock immediately prior to such liquidation, dissolution, winding up or Deemed Liquidation
Event.

 

At
the holders’ election, a share of Series B Convertible Preferred Stock is convertible into a number of shares of our common
stock determined by dividing the stated value of such share by the conversion price. The conversion price is $3.00, subject to
adjustment for stock dividends, stock splits or similar events affecting our common stock.

 

Dividends

 

We
have not paid any cash dividends on our common stock to date. Any future decisions regarding dividends will be made by our board
of directors. We do not anticipate paying dividends in the foreseeable future but expect to retain earnings to finance the growth
of our business. Our board of directors has complete discretion on whether to pay dividends. Even if our board of directors decides
to pay dividends, the form, frequency and amount will depend upon our future operations and earnings, capital requirements and
surplus, general financial condition, contractual restrictions and other factors the board of directors may deem relevant.

 

    	2

    	 

    

 

Anti-Takeover
Provisions

 

Provisions
of the DGCL and our certificate of incorporation and bylaws could make it more difficult to acquire us by means of a tender offer,
a proxy contest or otherwise, or to remove incumbent officers and directors. These provisions, summarized below, are expected
to discourage certain types of coercive takeover practices and takeover bids that our board of directors may consider inadequate
and to encourage persons seeking to acquire control of us to first negotiate with our board of directors. We believe that the
benefits of increased protection of our ability to negotiate with the proponent of an unfriendly or unsolicited proposal to acquire
or restructure us outweigh the disadvantages of discouraging takeover or acquisition proposals because, among other things, negotiation
of these proposals could result in improved terms for our stockholders.

 

Delaware
Anti-Takeover Statute. We are subject to Section 203 of the DGCL, an anti-takeover statute. In general, Section 203 of the
DGCL prohibits a publicly-held Delaware corporation from engaging in a “business combination” with an “interested
stockholder” for a period of three years following the time the person became an interested stockholder, unless the business
combination or the acquisition of shares that resulted in a stockholder becoming an interested stockholder is approved in a prescribed
manner. Generally, a “business combination” includes a merger, asset or stock sale, or other transaction resulting
in a financial benefit to the interested stockholder. Generally, an “interested stockholder” is a person who, together
with affiliates and associates, owns (or within three years prior to the determination of interested stockholder status did own)
15% or more of a corporation’s voting stock. The existence of this provision would be expected to have an anti-takeover
effect with respect to transactions not approved in advance by the board of directors, including discouraging attempts that might
result in a premium over the market price for the shares of common stock held by stockholders.

 

Classified
Board. Our board of directors is divided into three classes. The number of directors in each class is as nearly equal as possible.
Directors elected to succeed those directors whose terms expire shall be elected for a term of office to expire at the third succeeding
annual meeting of stockholders after their election. The existence of a classified board may extend the time required to make
any change in control of the board when compared to a corporation with an unclassified board. It may take two annual meetings
for our stockholders to effect a change in control of the board, because in general less than a majority of the members of the
board will be elected at a given annual meeting. Because our board is classified and our certificate of incorporation does not
otherwise provide, under Delaware law, our directors may only be removed for cause.

 

Vacancies
in the Board of Directors. Our certificate of incorporation and bylaws provide that, subject to limitations, any vacancy occurring
in our board of directors for any reason may be filled by a majority of the remaining members of our board of directors then in
office, even if such majority is less than a quorum. Each director elected to fill a vacancy resulting from the death, resignation
or removal of a director shall hold office until the expiration of the term of the director whose death, resignation or removal
created the vacancy.

 

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

 

Special
Meetings of Stockholders. Under our bylaws, special meetings of stockholders may be called by the directors, or the president
or the chairman, and shall be called by the secretary at the request in writing of stockholders owning a majority in amount of
the entire capital stock of the corporation issued and outstanding and entitled to vote.

 

No
Cumulative Voting. The DGCL provides that stockholders are denied the right to cumulate votes in the election of directors
unless our certificate of incorporation provides otherwise. Our certificate of incorporation does not provide for cumulative voting.

 

Listing

 

Our
common stock is traded on the NASDAQ Capital Market under the symbols “PAVM.”

 

Transfer
Agent and Registrar 

 

The
transfer agent and registrar for our common stock is Continental Stock Transfer & Trust Company located at 1 State Street,
30th Floor, New York, NY 10004.

 

    	3

    	 

    

 

DESCRIPTION
OF SERIES W WARRANTS

 

The
Series W Warrants are issued under a warrant agreement, dated April 28, 2016, between Continental Stock Transfer & Trust Company,
as warrant agent, and us. In the discussion that follows, we have summarized selected provisions of the warrant agreement. This
summary is not complete. This discussion is subject to the provisions the warrant agreement and is qualified in its entirety by
reference to the warrant agreement. You should read the warrant agreement as currently in effect for provisions that may be important
to you.

 

General

 

We
currently have 381,818 Series W Warrants outstanding. Each Series W Warrant entitles the registered holder to purchase
one share of our common stock at a price of $5.00 per share, subject to adjustment as discussed below. Each warrant is currently
exercisable and expires on January 29, 2022 at 5:00 p.m., New York City time.

 

Notwithstanding
the foregoing, no Series W Warrants will be exercisable for cash unless we have an effective and current registration statement
covering the shares of common stock issuable upon exercise of the warrants and a current prospectus relating to such shares of
common stock. If a registration statement covering the shares of common stock issuable upon exercise of the Series W Warrants
is not effective when the warrants become exercisable, warrant holders may, until such time as there is an effective registration
statement and during any period when we shall have failed to maintain an effective registration statement, exercise the Series
W Warrants on a cashless basis in the same manner as if we called the warrants for redemption and required all holders to exercise
their warrants on a “cashless basis.” In such event, each holder would pay the exercise price by surrendering the
warrants for that number of shares of common stock equal to the quotient obtained by dividing (x) the product of the number of
shares of common stock underlying the warrants, multiplied by the difference between the exercise price of the warrants and the
“fair market value” (defined below) by (y) the fair market value. The “fair market value” for this purpose
will mean the average reported last sale price of the shares of common stock for the 10 trading days ending on the trading day
prior to the date of exercise.

 

Redemption

 

We
may redeem the outstanding Series W Warrants (other than those outstanding prior to this offering held by certain of our senior
managers, our founders and members thereof), at our option, in whole or in part, at a price of $0.01 per warrant:

 

		●	at
                                         any time while the warrants are exercisable,

 

		●	upon
a minimum of 30 days’ prior written notice of redemption,

 

		●	​if,
                                         and only if, the volume weighted average price of our common stock equals or exceeds
                                         $10.00 (subject to adjustment) for any 20 consecutive trading days ending three business
                                         days before we send the notice of redemption, provided that the average daily trading
                                         volume in the stock is at least 20,000 shares per day, and

 

		●	​if,
                                         and only if, there is a current registration statement in effect with respect to the
                                         shares of common stock underlying such warrants.

 

The
right to exercise will be forfeited unless the Series W Warrants are exercised prior to the date specified in the notice of redemption.
On and after the redemption date, a record holder of a Series W Warrant will have no further rights except to receive the redemption
price for such holder’s warrant upon surrender of such warrant.

 

    	4

    	 

    

 

If
we call the Series W Warrants for redemption as described above, we will have the option to require all holders that wish to exercise
warrants to do so on a “cashless basis.” In such event, each holder would pay the exercise price by surrendering the
warrants for that number of shares of common stock equal to the quotient obtained by dividing (x) the product of the number of
shares of common stock underlying the warrants, multiplied by the difference between the exercise price of the warrants and the
“fair market value” (defined below) by (y) the fair market value. In this case, the “fair market value”
shall mean the average reported last sale price of the shares of common stock for the 10 trading days ending on the third trading
day prior to the date on which the notice of redemption is sent to the holders of warrants.

 

Exercise

 

The
exercise price and number of shares of common stock issuable on exercise of the Series W Warrants may be adjusted in certain circumstances
including in the event of a share dividend, extraordinary dividend or our recapitalization, reorganization, merger or consolidation.
However, the Series W Warrants will not be adjusted for issuances of shares of common stock at a price below their respective
exercise prices.

 

The
Series W Warrants may be exercised upon surrender of the warrant certificate on or prior to the expiration date at the offices
of the warrant agent, with the exercise form on the reverse side of the warrant certificate completed and executed as indicated,
accompanied by full payment of the exercise price, by certified or official bank check payable to us, for the number of warrants
being exercised. The warrant holders do not have the rights or privileges of holders of shares of common stock and any voting
rights until they exercise their warrants and receive shares of common stock.

 

Except
as described above, no Series W Warrants will be exercisable and we will not be obligated to issue shares of common stock unless
at the time a holder seeks to exercise such warrant, a prospectus relating to the shares of common stock issuable upon exercise
of the Series W Warrants is current and the shares of common stock have been registered or qualified or deemed to be exempt under
the securities laws of the state of residence of the holder of the warrants. Under the terms of the warrant agreement, we have
agreed to use our commercially reasonable best efforts to meet these conditions and to maintain a current prospectus relating
to the shares of common stock issuable upon exercise of the warrants until the expiration of the warrants.

 

No
fractional shares will be issued upon exercise of the Series W Warrants. If, upon exercise of the warrants, a holder would be
entitled to receive a fractional interest in a share, we will, upon exercise, round up to the nearest whole number the number
of shares of common stock to be issued to the warrant holder.

 

Warrant
Agreement

 

The
Series W Warrants are issued in registered form under a warrant agreement between Continental Stock Transfer & Trust Company,
as warrant agent, and us. The warrant agreement provides that the terms of the Series W Warrants may be amended without the consent
of any holder to cure any ambiguity or correct any defective provision, but requires the approval, by written consent or vote,
of the holders of a majority of the then outstanding warrants in order to make any change that adversely affects the interests
of the registered holders. Notwithstanding the foregoing, we may lower the exercise price or extend the duration of the Series
W Warrants without the consent of the holders.

 

Listing

 

Our
Series W Warrants are traded on the NASDAQ Capital Market under the symbols “PAVMW.”

 

Warrant
Agent and Registrar 

 

The
warrant agent and registrar for our Series W Warrants is Continental Stock Transfer & Trust Company located at 1 State Street,
30th Floor, New York, NY 10004.

 

    	5

    	 

    

 

DESCRIPTION
OF SERIES Z WARRANTS

 

The
Series Z Warrants are issued under an amended and restated warrant agreement, dated June 8, 2018, between Continental Stock Transfer
& Trust Company, as warrant agent, and us. In the discussion that follows, we have summarized selected provisions of the amended
and restated warrant agreement. This summary is not complete. This discussion is subject to the provisions the amended and restated
warrant agreement and is qualified in its entirety by reference to the amended and restated warrant agreement. You should read
the amended and restated warrant agreement as currently in effect for provisions that may be important to you.

 

General

 

We
currently have 16,815,039 Series Z Warrants outstanding. Each Series Z Warrant entitles the registered holder to purchase
one share of our common stock at a price of $1.60 per share, subject to adjustment as discussed below. Each warrant is currently
exercisable and expires on April 30, 2024 at 5:00 p.m., New York City time.

 

Notwithstanding
the foregoing, no Series Z Warrants will be exercisable for cash unless we have an effective and current registration statement
covering the shares of common stock issuable upon exercise of the warrants and a current prospectus relating to such shares of
common stock. If a registration statement covering the shares of common stock issuable upon exercise of the Series Z Warrants
is not effective when the warrants become exercisable, warrant holders may, until such time as there is an effective registration
statement and during any period when we shall have failed to maintain an effective registration statement, exercise the Series
Z Warrants on a cashless basis in the same manner as if we called the warrants for redemption and required all holders to exercise
their warrants on a “cashless basis.” In such event, each holder would pay the exercise price by surrendering the
warrants for that number of shares of common stock equal to the quotient obtained by dividing (x) the product of the number of
shares of common stock underlying the warrants, multiplied by the difference between the exercise price of the warrants and the
“fair market value” (defined below) by (y) the fair market value. The “fair market value” for this purpose
will mean the average daily volume weighted average price for our common stock for the 10 trading days ending on the trading day
prior to the date of exercise.

 

Redemption

 

We
may redeem the outstanding Series Z Warrants (other than those outstanding prior to this offering held by certain of our senior
managers, our founders and members thereof), at our option, in whole or in part, at a price of $0.01 per warrant:

 

		●	at
                                         any time while the warrants are exercisable,

 

		●	​upon
                                         a minimum of 30 days’ prior written notice of redemption,

 

		●	​if,
                                         and only if, the volume weighted average closing price of our common stock equals or
                                         exceeds $9.00 (subject to adjustment) for any 20 out of 30 consecutive trading days ending
                                         three business days before we send the notice of redemption, provided that the average
                                         daily trading volume in the stock during such 30-day period is at least 20,000 shares
                                         per day, and

 

		●	​if,
                                         and only if, there is a current registration statement in effect with respect to the
                                         shares of common stock underlying such warrants.

 

The
right to exercise will be forfeited unless the Series Z Warrants are exercised prior to the date specified in the notice of redemption.
On and after the redemption date, a record holder of a Series Z Warrant will have no further rights except to receive the redemption
price for such holder’s warrant upon surrender of such warrant.

 

    	6

    	 

    

 

If
we call the Series Z Warrants for redemption as described above, we will have the option to require all holders that wish to exercise
warrants to do so on a “cashless basis.” In such event, each holder would pay the exercise price by surrendering the
warrants for that number of shares of common stock equal to the quotient obtained by dividing (x) the product of the number of
shares of common stock underlying the warrants, multiplied by the difference between the exercise price of the warrants and the
“fair market value” (defined below) by (y) the fair market value. In this case, the “fair market value”
shall mean the average daily volume weighted average price the shares of common stock for the 10 trading days ending on the third
trading day prior to the date on which the notice of redemption is sent to the holders of warrants.

 

Exercise

 

The
exercise price and number of shares of common stock issuable on exercise of the Series Z Warrants may be adjusted in certain circumstances
including in the event of a share dividend, extraordinary dividend or our recapitalization, reorganization, merger or consolidation.
However, the Series Z Warrants will not be adjusted for issuances of shares of common stock at a price below their respective
exercise prices.

 

If
a Fundamental Transaction (as defined in the amended and restated warrant agreement for the Series Z Warrants) is completed, then,
upon any subsequent exercise of a Series Z Warrant, the holders of the Series Z Warrants shall have the right to receive, for
each share of our common stock that would have been issuable upon exercise of a Series Z Warrant immediately prior to the occurrence
of such Fundamental Transaction, at the option of each holder (without regard to the beneficial ownership limitation described
below), the number of shares of common stock of the successor or acquiring corporation or of us, if we are the surviving corporation,
and any additional consideration receivable as a result of such Fundamental Transaction by a holder of the number of shares of
our common stock for which the Series Z Warrant is exercisable immediately prior to such Fundamental Transaction (without regard
to the beneficial ownership limitation described below).

 

The
Series Z Warrants may be exercised upon surrender of the warrant certificate on or prior to the expiration date at the offices
of the warrant agent, with the exercise form on the reverse side of the warrant certificate completed and executed as indicated.
Within two trading days following the exercise, the holder will pay in full the exercise price, by certified or official bank
check payable to us, for the number of warrants being exercised. The warrant holders do not have the rights or privileges of holders
of shares of common stock and any voting rights until they exercise their warrants.

 

Except
as described above, no Series Z Warrants will be exercisable and we will not be obligated to issue shares of common stock unless
at the time a holder seeks to exercise such warrant, a prospectus relating to the shares of common stock issuable upon exercise
of the Series Z Warrants is current and the shares of common stock have been registered or qualified or deemed to be exempt under
the securities laws of the state of residence of the holder of the warrants. Under the terms of the amended and restated warrant
agreement, we have agreed to use our commercially reasonable best efforts to meet these conditions and to maintain a current prospectus
relating to the shares of common stock issuable upon exercise of the warrants until the expiration of the warrants.

 

No
fractional shares will be issued upon exercise of the Series Z Warrants. If, upon exercise of the warrants, a holder would be
entitled to receive a fractional interest in a share, we will, upon exercise, round up to the nearest whole number the number
of shares of common stock to be issued to the warrant holder.

 

We
will not effect any exercise of a Series Z Warrant, and a holder shall not have the right to exercise any portion of a Series
Z Warrant, to the extent that after giving effect to such issuance after exercise as set forth on the applicable subscription
form, the holder (together with the holder’s affiliates, and any other persons acting as a group together with the holder
or any of the holder’s affiliates), would beneficially own in excess of 4.99% or 9.99% (at the election of the holder) of
our common stock outstanding.

 

    	7

    	 

    

 

Warrant
Agreement

 

The
Series Z Warrants are issued in registered form under an amended and restated warrant agreement between Continental Stock Transfer
& Trust Company, as warrant agent, and us. The amended and restated warrant agreement provides that the terms of the Series
Z Warrants may be amended without the consent of any holder to cure any ambiguity or correct any defective provision, but requires
the approval, by written consent or vote, of the holders of two-thirds of the then outstanding warrants in order to make any change
that adversely affects the interests of the registered holders. Notwithstanding the foregoing, we may lower the exercise price
or extend the duration of the Series Z Warrants without the consent of the holders.

 

Listing

 

Our
Series Z Warrants are traded on the NASDAQ Capital Market under the symbols “PAVMZ.”

 

Warrant
Agent and Registrar

 

The
warrant agent and registrar for our Series Z Warrants is Continental Stock Transfer & Trust Company located at 1 State Street,
30th Floor, New York, NY 10004.

 

    	8Exhibit
4.10

 

DESCRIPTION
OF THE REGISTRANT’S SECURITIES

REGISTERED
PURSUANT TO SECTION 12 OF THE

SECURITIES
EXCHANGE ACT OF 1934

 

DESCRIPTION
OF OUR CAPITAL STOCK

 

The
following description of our Capital Stock is a summary and does not purport to be complete. It is subject to and qualified in
its entirety by reference to our Amended and Restated Articles of Incorporation (the “Articles of Incorporation”)
and our Amended and Restated Bylaws (the “Bylaws”), each of which are incorporated by reference as an exhibit to the
Annual Report on Form 10-K.

 

Common
Stock

 

We
are currently authorized to issue up to 195,000,000 shares of our common stock, $0.0001 par value, and 5,000,000 shares of preferred
stock, $0.01 par value. As of April 14, 2020 11,572,880 shares of our common stock were issued and outstanding,
and held of record by approximately 116 persons, and no shares of preferred stock were issued and outstanding.

 

Holders
of shares of our common stock are entitled to such dividends as may be declared from time to time by the board in its discretion,
on a ratable basis, out of funds legally available therefrom, and to a pro rata share of all assets available for distribution
upon liquidation, dissolution or other winding up of our affairs. All of the outstanding shares of our common stock are fully
paid and non-assessable.

 

On
January 27, 2016, we filed an amendment of our Amended and Restated Certificate of Incorporation, as amended, to effect a 1-for-15
reverse stock split of our common stock (the “Reverse Stock Split”). The Reverse Stock Split became effective in the
stock market upon commencement of trading on January 28, 2016. As a result of the Reverse Stock Split, every 15 shares of our
pre-Reverse Stock Split common stock were combined and reclassified into one share of our common stock. No fractional shares were
issued in connection with the Reverse Stock Split, and cash paid to stockholders for potential fractional shares was insignificant.
The number of shares of common stock subject to outstanding options, restricted stock units, warrants and convertible securities
were also reduced by a factor of 15 as of January 27, 2016. All historical share and per share amounts reflected throughout this
prospectus have been adjusted to reflect the Reverse Stock Split. The authorized number of shares and the par value per share
of our common stock were not affected by the Reverse Stock Split.

 

Warrants

 

We
have issued and outstanding warrants to purchase an aggregate 481,335 shares of our common stock at an exercise price of $0.01
per share. The warrants expire on May 21, 2023. The exercise price of the warrants is subject to adjustment upon the occurrence
of certain events, such as a split or combination of our common stock or a reorganization or merger to which we are a party. Holders
of our outstanding warrants will receive one right in this offering for each of the shares of common stock into which each warrant
would otherwise be exercisable as set forth on the face of the warrants held by each holder.

 

Preferred
Stock 

 

Our
certificate of incorporation permits us to issue up to 5,000,000 shares of preferred stock in one or more series and with rights
and preferences that may be fixed or designated by our board of directors without any further action by our stockholders. On February
16, 2018, in connection with the adoption of the Rights Agreement, we filed a Certificate of Designation authorizing 500,000 shares
of Series A Junior Participating Preferred Stock. We currently have no shares of preferred stock outstanding.

 

    	 

     

    

 

Subject
to the limitations prescribed in our certificate of incorporation and under Delaware law, our certificate of incorporation authorizes
our board of directors, from time to time by resolution and without further stockholder action, to provide for the issuance of
shares of preferred stock, in one or more series, and to fix the designation, powers, preferences and other rights of the shares
and to fix the qualifications, limitations and restrictions thereof. Although our board of directors has no present intention
to issue any additional preferred stock, the issuance of preferred stock could adversely affect the rights of holders of our common
stock, including with respect to voting, dividends and liquidation, by issuing shares of preferred stock with certain voting,
conversion and/or redemption rights. Such issuance of preferred stock may have the effect of delaying, deferring or preventing
a change of control.

 

Anti-Takeover
Effects of Certain Provisions of Delaware Law and Our Charter Documents

 

The
following is a summary of certain provisions of Delaware law, our certificate of incorporation and our bylaws. This summary does
not purport to be complete and is qualified in its entirety by reference to the corporate law of Delaware and our certificate
of incorporation and bylaws.

 

Board
of Directors; Removal. Pursuant to our certificate of incorporation, the number of directors is fixed by our board of directors.
Our directors each serve one-year terms. Vacancies on our board of directors may be filled by a majority of the remaining members
of the board of directors, even if less than a quorum, and a director may only be removed from office by stockholders upon the
approval of holders of at least 66 2/3% of the outstanding shares entitled to vote at an election of directors.

 

Stockholder
Meetings; Bylaws. Our certificate of incorporation provides that any action taken by our stockholders must be effected at
an annual or special meeting of stockholders and may not be taken by written consent instead of a meeting. In addition, our certificate
of incorporation provides that a special meeting of stockholders may be called only by the board of directors or the holders of
at least 50% of the outstanding shares of capital stock. Our bylaws may be amended either by the board of directors or the holders
of at least 66 2/3% of the entitled to vote at an election of directors.

 

Rights
Agreement. On February 16, 2018, the Company entered into a Rights Agreement with American Stock Transfer & Trust, LLC,
as rights agent. In connection with the adoption of the Rights Agreement, each stockholder of the Company as of February 26, 2018
received one right for each outstanding share of common stock, which entitles the stockholder to purchase from the Company one
one-thousandth of a share of Series A Junior Participating Preferred Stock (the “Preferred Stock”) at an exercise
price of $1.00 per one one-thousandth of Preferred Stock. The Rights Agreement, as amended on November 2, 2018, effectively imposes
a significant penalty upon any person or group that acquires 4.9% or more of the shares of Common Stock without the approval of
the Board. As a result, the overall effect of the Rights Agreement and the issuance of the Rights may be to render more difficult
or discourage a merger, tender or exchange offer or other business combination involving the Company that is not approved by the
Board.

 

Limitation
of Liability

 

As
permitted by the General Corporation Law of the State of Delaware, our certificate of incorporation provides that our directors
shall not be personally liable to us or our stockholders for monetary damages for breach of fiduciary duty as a director, except
for liability:

 

	 	●	for
    any breach of the director’s duty of loyalty to us or our stockholders;
	 	●	for
    acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law;
	 	●	under
    section 174 of the Delaware law, relating to unlawful payment of dividends or unlawful stock purchases or redemption of stock;
    and
	 	●	for
    any transaction from which the director derives an improper personal benefit.

 

As
a result of this provision, we and our stockholders may be unable to obtain monetary damages from a director for breach of his
or her duty of care.

 

    	 

     

    

 

Our
certificate of incorporation provides for the indemnification of our directors and officers to the fullest extent authorized by,
and subject to the conditions set forth in the Delaware law.

 

Delaware
Anti-Takeover Law

 

We
are subject to Section 203 of the Delaware General Corporation Law. Section 203 generally prohibits a public Delaware corporation
from engaging in a “business combination” with an “interested stockholder” for a period of three years
after the date of the transaction in which the person became an interested stockholder, unless:

 

	 	●	prior
    to the date of the transaction, the board of directors of the corporation approved either the business combination or the
    transaction which resulted in the stockholder becoming an interested stockholder;
	 	●	upon
    consummation of the transaction which resulted in the stockholder becoming an interested stockholder, the interested stockholder
    owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, excluding for
    purposes of determining the number of shares outstanding (a) shares owned by persons who are directors and also officers and
    (b) shares owned by employee stock plans in which employee participants do not have the right to determine confidentially
    whether shares held subject to the plan will be tendered in a tender or exchange offer; or
	 	●	on
    or subsequent to the date of the transaction, the business combination is approved by the board of directors and authorized
    at an annual or special meeting of stockholders, and not by written consent, by the affirmative vote of at least 66-2/3% of
    the outstanding voting stock which is not owned by the interested stockholder.

 

Section
203 defines a business combination to include:

 

	 	●	any
    merger or consolidation involving the corporation and the interested stockholder;
	 	●	any
    sale, transfer, pledge or other disposition involving the interested stockholder of 10% or more of the assets of the corporation;
	 	●	subject
    to exceptions, any transaction that results in the issuance or transfer by the corporation of any stock of the corporation
    to the interested stockholder; and
	 	●	the
    receipt by the interested stockholder of the benefit of any loans, advances, guarantees, pledges or other financial benefits
    provided by or through the corporation.

 

In
general, Section 203 defines an interested stockholder as any entity or person beneficially owning 15% or more of the outstanding
voting stock of the corporation or any entity or person affiliated with or controlling or controlled by the entity or person.

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