On March 12, March 14 and April 2, 2019, the Company received redemption notices from the holder of the Company’s June 2018 Convertible Note, requesting redemptions of and $125,000, respectively,  

On March 20, 2019, the Company filed with the Secretary of State of the State of Delaware a Certificate of Designation of the Rights, Preferences, Privileges and Restrictions (the “Certificate of Designation”) for Series C Convertible Preferred Stock, par value $0.001 per share (the “Series C Preferred Stock”). The Certificate of Designation was previously authorized by the Board of Directors and provides for the issuance of up to 5,000 shares of Series C Preferred Stock.

The Certificate of Designation provides, among other things, that holders of Series C Preferred Stock shall be entitled to receive, at the option of the holder, cumulative dividends at the rate of ten percent (10%) per share per annum of the stated value of the Series C Preferred Stock, to be paid per share of Series C Preferred Stock. Any dividends paid by the Company will first be paid to the holders of Series C Preferred Stock prior and in preference to any payment or distribution to holders of common stock. Dividends on the Series C Preferred Stock are mandatory and cumulative and there are no sinking fund provisions applicable to the Series C Preferred Stock. The Series C Preferred Stock does not have redemption rights. The stated value per share for the Series C Preferred Stock is $1,000 (the “Stated Value”).

In the event of any liquidation, dissolution or winding up of the Company, the Series C Preferred Stock will be paid, prior and in preference to any payment or distribution on any shares of common stock, currently outstanding series of preferred stock, or subsequent series of preferred stock, an amount per share equal to the Stated Value and the amount of any accrued and unpaid dividends. The holders of the Series C Preferred Stock will then receive distributions along with the holders of common stock on a  basis according to the number of shares of common stock the Series C Preferred holders would be entitled if they converted their shares of Series C Preferred Stock at the time of such distribution.

If, at any time while the Series C Preferred Stock is outstanding, the Company effects any reorganization, merger or sale of the Company or substantially all of its assets (each a “Fundamental Transaction”), a holder of the Series C Preferred Stock will have the right to receive any shares of the acquiring corporation or other consideration it would have been entitled to receive if it had been a holder of the number of shares of common stock then issuable upon conversion in full of the Series C Preferred Stock immediately prior to the Fundamental Transaction.

Each share of Series C Preferred Stock is convertible at any time at the holder’s option into that number of fully paid and nonassessable shares of the Company’s common stock determined by dividing the Stated Value by the conversion price of $0.50 per share (subject to adjustment as set forth in the Certificate of Designation). No fractional shares will be issued upon the conversion of the Series C Preferred Stock.

Except as otherwise provided in the Certificate of Designation or as otherwise required by law, the Series C Preferred Stock has no voting rights.

On March 20, 2019 the Company, issued in private placements to accredited investors an aggregate of 3,246 shares of its Series C Preferred Stock, together with warrants to purchase an aggregate of up to 3,895,200 shares of its common stock, with an initial exercise price of $0.50 per share, for aggregate gross proceeds to the Company of approximately $3.2 million. In connection with the private placement, the Company issued and sold to certain lead investors additional warrants to purchase an aggregate of up to 1,000,000 shares of Common Stock, on identical terms to the other warrants issued to investors. Pursuant to the subscription agreements entered into with each of the investors, the Company has agreed to use commercially reasonable efforts to prepare and file with the SEC within 120 days following the closing of the Series C Offering, but not later than August 31, 2019, a registration statement under the Securities Act of 1933, as amended, covering the resale of any common stock issuable to the investors upon the conversion of the Series C Preferred Stock and the exercise of their related warrants.

On March 29, 2019, the board of directors approved a stock option award covering 40,000 shares of common stock to an employee. The option has an exercise price of $0.48 per share and a five-year term.

On April 1, 2019, the Company entered into a Master Services Agreement and Product Specific Agreement (together, the “Samsung Agreement”) with Samsung BioLogics Co., Ltd. (“Samsung”), pursuant to which Samsung will perform technology transfer, process validation, manufacturing and supply services for the commercial supply of the Company’s leronlimab (PRO140) drug substance. Under the terms of the Samsung Agreement, the Company is obligated to make specified minimum purchases from Samsung pursuant to the Company’s forecasted requirements. The first forecast will be delivered to Samsung by March 31, 2020. The Company must provide Samsung with a rolling forecast on a quarterly basis setting forth the total quantity that it expects to require in the following years. 

On April 5, 2019 the Company entered into subscription agreements with certain investors for the sale of 8,730,000 shares of common stock at a purchase price of $0.50 per share in a registered direct offering, pursuant to a registration statement on Form S-3. The investors in the registered direct offering also received warrants to purchase 4,365,000 shares of common stock with an exercise price of $0.50 per share and a five-year term. The Company received net proceeds from the offering of approximately $4.0 million. In addition, the placement agent received warrants covering 785,700 shares of common stock (or 9% of total shares sold to investors) with a per share exercise price of $0.50 and a five-year term and include a cashless exercise provision.